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A: GR: Laws take effect after 15 days following the XPNs to the XPNs: Administrative rules and regulations
completion of their publication in the Official Gazette or that require publication:
newspaper of general circulation in the Philippines. 1. The purpose of which is to implement or enforce
existing laws pursuant to a valid delegation;
XPN: unless it is otherwise provided by the law. (Art. 2) 2. Penal in Nature;
3. It diminishes existing rights of certain individuals
Note: If the law provided a specific date for its effectivity, it
becomes effective only upon the lapse of said period following Note: If the law is not published, it shall not be effective. Non-
its complete publication and not before. publication is a violation of due process.
Q. How is the 15-day period computed? Q: Honasan questions the authority and jurisdiction of the
DOJ panel of prosecutors to conduct a preliminary
A: The 15-day period may either be on the 15th day or on investigation and to eventually file charges against him,
the 16th day depending on the language used by Congress claiming that since he is a senator with a salary grade of
in fixing the effectivity date of the statute. (Rabuya, p. 8) 31, it is the Office of the Ombudsman, not the DOJ, which
has authority and jurisdiction to conduct the preliminary
th
15 Day - If the law declares that it shall become investigation. DOJ claims that it has concurrent
effective “15 days after its publication” jurisdiction, invoking an OMB-DOJ Joint Circular which
outlines the authority and responsibilities among
th
16 Day - If the law declares that it shall be effective prosecutors of the DOJ and the Office of the Ombudsman
“after 15 days following its publication” in the conduct of preliminary investigations. Honasan
counters that said circular is ineffective as it was never
Q: What is meant by the phrase “unless it is otherwise published. Is OMB-DOJ Circular No. 95-001 ineffective
provided” in the provision on effectivity of laws? because it was not published?
A: The clause "unless it is otherwise provided" refers to the A: No. OMB-DOJ Circular No. 95-001 is merely an internal
date of effectivity and not to the requirement of circular between the two offices which outlines the
publication itself, which cannot, in any event be omitted. authority and responsibilities among prosecutors of the
This clause does not mean that the legislator may make the DOJ and of the Office of the Ombudsman in the conduct of
law effective immediately upon approval, or on any other preliminary investigations. It does not contain any penal
date without its previous publication. provision nor prescribe a mandatory act or prohibit any
under pain of penalty. Further, it does not regulate the
Note: Publication is indispensable in every case, but the legislature conduct of persons or the public, in general. As such
may in its discretion provide that the usual fifteen-day period shall therefore, it need not be published (Honasan, II v. The
be shortened or extended (Umali v. Estanislao, G.R. No. 104037,
Panel of Investigating Prosecutors of the Department of
May 29, 1992, [citing Tañada v. Tuvera, G.R. No. L-63915,
December29, 1986]). Justice, G.R. No. 159747, Jun. 15, 2004).
Q: When will the law take effect if it is made to take effect Q: What must be published in order to comply with the
“immediately” or “upon approval? publication requirement?
A: It shall take effect immediately after publication. The 15- A: Publication must be in full or it is no publication at all
day period after publication is dispensed with but since its purpose is to inform the public of the contents of
publication is not. In cases wherein the law states that it the law. The mere mention of the number of the
shall be effective upon approval, it likewise becomes presidential decree, the title of such decree, its
effective only after its complete publication and not whereabouts, the supposed date of effectivity, and in a
immediately after its signing by the President. mere supplement of the Official Gazette cannot satisfy the
publication requirement. This is not even substantial
Q: CIR issued a Memorandum Order 15-91 imposing a 5% Q: Eduardo was married to Ruby. He then met Tina and
lending investor’s tax on pawnshops. The BIR issued an proposed marriage, assuring her that he was single. They
assessment against Lhuillier demanding payment of got married and lived together. Tina, upon learning that
deficiency tax. Lhuillier contended that the said memo is a Eduardo had been previously married, charged Eduardo
new and additional tax measure on pawnshops which for bigamy for which he was convicted.
Congress should enact. Is the said memorandum valid
even without publication? Eduardo testified that he declared he was “single”
because he believed in good faith that his first wife was
already dead, having not heard from her for 20 years, and
UNIVERSITY OF SANTO TOMAS
2013 GOLDEN NOTES 2
EFFECT AND APPLICATION OF LAWS
that he did not know that he had to go to court to seek for proved (Estate of Boo v. Gee, G.R. No. 18081, March 3,
the nullification of his first marriage before marrying Tina. 1922).
Is Eduardo liable for the crime of bigamy? Note: Processual Presumption – if the foreign law is not properly
alleged and proved, the presumption is that it is the same as our
A: Yes. Eduardo is presumed to have acted with malice or own law (Estate of Suntay v. Suntay, G.R. No. 132524. December
29, 1998).
evil intent when he married Tina. As a general rule, mistake
of fact or good faith of the accused is a valid defense in a
RETROACTIVITY OF LAWS
prosecution for a felony by dolo; such defense negates
malice or criminal intent. However, ignorance of the law is
Q: Do laws have retroactive effect?
not an excuse because everyone is presumed to know the
law. It was the burden of Eduardo to prove that when he
A: GR: Laws shall have no retroactive effect. (lex prospicit,
married Tina, he was of the well-grounded belief that his
non respicit)
first wife was already dead. He should have adduced in
evidence a decision of a competent court declaring the
XPNs: TIN CREEP
presumptive death of his first wife as required by Art. 349
1. Tax laws
of the RPC, in relation to Art. 41 of the FC. Such judicial
2. Interpretative statutes
declaration constitutes proof that Eduardo acted in good
3. Laws creating New Substantive Rights
faith, and would negate criminal intent on his part when he
4. Curative Statutes
married the private complainant (Manuel v. People, G.R.
5. Remedial/procedural
No. 165842, November 29, 2005).
6. Emergency Laws
7. When Expressly provided
Q: Complainants who were connected with the Daily
8. Penal laws favorable to the accused provided,
Informer (a widely circulated newspaper in Western
accused is not a habitual criminal
Visayas) were charged before the MTC by Judge Pamonag
of the crime of libel. Respondent judge conducted a
XPNs to the XPNs: Constitutional limits where
preliminary investigation and thereafter issued warrants
retroactivity would result to: IE
for the arrest of the complainants. Complainants filed an
1. Impairment of obligation of contracts
administrative case against the judge for gross ignorance
2. Ex Post Facto Laws
of the law. They contended that the judge neither has
authority to conduct a preliminary investigation nor to
Note: In case of doubt, laws apply prospectively.
issue warrants for their arrest. The judge said that it was
his first libel case and that he issued the warrants in good
Q: May judicial decisions be given retroactive effect?
faith. Is the respondent guilty of gross ignorance of the
law?
A: No. When a doctrine of the Supreme Court is overruled
and a different view is adopted, the new doctrine should be
A: Judges are expected more than just cursory
applied prospectively and should not apply to parties who
acquaintance with statutes and procedural rules. They must
had relied on the old doctrine and acted on the faith
know the law and apply them properly in good faith. The
thereon. (Rabuya, p. 10)
provisions of Art. 360 of the RPC on the persons authorized
to conduct preliminary investigation in libel cases is so
Q: Does the Family Code contain a retroactivity clause?
elementary. Not to know it constitutes gross ignorance of
the law (Miaque v. Judge Pamonag, A.M. No. MTJ-02-1412.
A: Yes. Art. 256 of the FC provides that the Code shall have
March 28, 2003).
retroactive effect insofar as it does not prejudice or impair
vested or acquired rights in accordance with the NCC or
Q: Cheong Boo, a native of China died intestate in
other laws.
Zamboanga. He left a property worth P100,000. The estate
of the deceased was claimed on one hand by Gee, who
MANDATORY OR PROHIBITORY LAWS
alleged that he was a legitimate child by a marriage
contracted by Boo with Tan Dit in China in 1895. The
Q: What is the status of acts which are contrary to law?
estate was claimed, on the other hand, by Mora Adong
who alleged that she had been lawfully married to Boo in
A: GR: Acts executed against the provisions of mandatory
1896. Gee introduced in evidence a document in Chinese
or prohibitory laws are void. (Art. 5)
stating the marriage ceremony that took place in Amoy,
China. Is the document presented by Gee recognized here
XPNs: Where the law:
in the Philippines?
1. Makes the act valid but punishes the violator, e.g.
Marriage solemnized by a person not authorized
A: Ignorance of a foreign law is not ignorance of the law but
to do so;
of fact because such foreign law must be first alleged and
2. Itself authorizes its validity;
proved as a matter of fact, there being no judicial notice of
3. Makes the act merely voidable;
said foreign law. The Chinese marriage was not adequately
A: It is a legally enforceable claim of one person against A: Waiver is considered void in such instances as: (i) waiver
another, that the other shall do a given act, or shall not do a of future support; (ii) waiver of political rights; (iii) waiver of
given act. (Pineda, Persons, p. 23) future inheritance especially if the waiver is intended to
prejudice creditors.
Q: What are the kinds of rights? Distinguish.
REPEAL OF LAWS
A:
1. Natural Rights – Those which grow out of the nature Q: What are the kinds of repeal? Distinguish.
of man and depend upon personality. e.g. right to life,
liberty, privacy, and good reputation A: Repeal may be:
2. Political Rights – Consist in the power to participate, 1. EXPRESS - if the law expressly provides for such
directly or indirectly, in the establishment or 2. IMPLIED – if the provisions of the subsequent law
administration of government. e.g. right of suffrage, are incompatible or inconsistent with those of the
right to hold public office, right of petition previous law, PROVIDED, it is impossible to
3. Civil Rights– Those that pertain to a person by virtue of reconcile the two laws.
his citizenship in a state or community. e.g. property
rights, marriage, equal protection of laws, freedom of Q: What are the two accepted instances of implied repeal?
contract, trial by jury (Pineda, Persons, p. 24)
a. Rights of personality or human rights; A:
b. Family rights; and 1. When the provisions in the two acts on the same
c. Patrimonial rights: subject matter are irreconcilably contradictory, in
i. Real rights which case, the later act, to the extent of the conflict,
ii. Personal rights. (Rabuya, p. 19) constitutes an implied repeal of earlier one; and
2. When the later act covers the whole subject of the
Q: May rights be waived? earlier one and is clearly intended as a substitute; thus
it will operate to repeal the earlier law (Carmelita
A: GR: Yes. Lledo v. Atty. Cesar V. Lledo, A.M. No. P-95-1167,
February 9, 2010).
XPNs:
1. If waiver is: Q: What is the rule on repeal of repealing laws?
a. Contrary to law, public order, public policy,
morals or good customs. A: It depends upon how the old law is repealed by the
b. Prejudicial to a third person with a right repealing law:
recognized by law. 1. If the old law is expressly repealed and repealing law is
2. If the right is: repealed: the Old law is not revived
a. A natural right, such as right to life. 2. If the old law is impliedly repealed and repealing law is
b. Inchoate, such as future inheritance. repealed: the Old law is revived.
Q: What are the requisites of a valid waiver? Q: When do judicial decisions form part of the law of the
land?
A: AFCUNF
1. Waiving party must Actually have the right he is A: As of the date of the enactment of said law. This is so
renouncing. because the Supreme Court’s interpretation merely
2. He must have Full capacity to make the waiver establishes the contemporaneous legislative intent that the
3. Waiver must be Clear and Unequivocal construed law purports to carry into effect.
Note: When a doctrine is overruled and a different view is Q: May courts apply customs in deciding cases?
adopted, the new doctrine should be applied prospectively and
should not prejudice parties who relied on the old doctrine. A:
1. In civil cases, customs may be applied by the courts in
Q: What is the Doctrine of Stare Decisis? cases where the applicable law is: SOI
a. Silent
A: It is adherence to judicial precedents. Once a question of b. Obscure
law has been examined and decided, it should be deemed c. Insufficient
settled and closed to further argument.
Note: Provided said customs are not contrary to law, public
Note: This doctrine however is not inflexible, so that when in the morals, etc.
light of changing conditions, a rule has ceased to be beneficial to
the society, courts may depart from it.
2. In criminal cases, customs cannot be applied because
nullum crimen nulla poena sine lege (There is neither
DUTY TO RENDER JUDGMENT
crime nor punishment, without a law).
Q: Can the Court decline to render judgment by reason of
Q: In case of silence, obscurity or insufficiency of the law
silence of the law?
with respect to a particular controversy, what rules shall
be applied? (1961, 1971, 1977 Bar Question)
A: No. No judge or court shall decline to render judgment
by reason of the silence, obscurity or insufficiency of the
A: If the law is silent, or is obscure or insufficient with
law (Art. 9).
respect to a particular controversy, the judge shall apply
the custom of the place, and in default thereof, the general
Note: However, this duty is not a license for courts to engage in
judicial legislation. The duty of the courts is to apply or interpret principles of law and justice.
the law, not to make or amend it.
Q: What should first be established before such custom
PRESUMPTION AND APPLICABILITY OF CUSTOM could be considered a source of right?
Q: What is the presumption in case there is doubt in the A: The custom must be proved as a fact, according to the
interpretation or application of laws? rules of evidence (Art. 12, NCC). This fact, however, should
possess the following requisites: (1) plurality of acts, (2)
A: It is presumed that the lawmaking body intended right uniformity of acts, (3) general practice by the great mass of
and justice to prevail (Art. 10). the people of the country or community; (4) continued
practice for a long period of time; (5) general conviction
Q: What are customs? that the practice is the proper rule of conduct; and (6)
conformity with law, morals or public policy (1 Tolentino.
A: These are rules of conduct, legally binding and Civil Code, p. 39; 1 Manresa 82).
obligatory, formed by repetition of acts uniformly observed
as a social rule. LEGAL PERIODS
A: GR: Must be proved as a fact, according to the rules on A: Year – 12 calendar months (CIR v. Primetown Property
evidence. (Art. 12) Group, Inc., 531 SCRA 436))
Month – 30 days, unless designated by their name, in
XPN: Courts may take judicial notice of a custom if which case, they shall be computed according to the
there is already a decision rendered by the same court number of days which they respectively have.
recognizing the custom. Day – 24 hours
Night time – from sunset to sunrise
Q: What are the requisites to make a custom an obligatory Week – 7 successive days regardless of which day it
rule? would start
Calendar week – Sunday to Saturday
A: P-TOP
1. Plurality or Repetition of acts Q: What is the manner of computing a period?
2. Practiced for a long period of Time
3. The community accepts it as a proper way of A: The first day shall be excluded, and the last day included.
acting, such that it is considered Obligatory upon
all. Q: In a case of violation of the Copyright law filed against
4. Practiced by the great mass of the social group. her, Soccoro countered by saying that since the crime was
found out on September 3, 1963, while the information
was filed on September 3, 1965, the crime had already
A: It depends. If the act to be performed within the period a. Succession as to order of succession, amount of
is: successional rights and intrinsic validity of the
testamentary provisions - governed by national law (in
1. Prescribed or allowed by: ROO Philippines) not lex situs
a. the Rules of Court
b. an Order of the court; or b. Contracts involving real property but do not deal
c. any Other applicable statute with title or real rights over the property, the issue
being the contractual rights and liabilities of parties -
The last day will automatically be the next working governed by the proper law of the contract (lex loci
day. voluntatis or lex loci intentionis)
2. Arises from a contractual relationship – the act will still c. In contracts where real property is given as security
become due despite the fact that the last day falls on a by way of mortgage to secure a principle contract (i.e.
Sunday or a legal holiday. loan) - loan is governed by the proper law of the
contract while the mortgage is governed by the lex
CONFLICT OF LAWS situs
Q: When, where and upon whom do the following laws d. While the validity of the transfer of land must be
apply? determined by the lex situs, the validity of the contract
to transfer is determined by the proper law of the
A: contract
1. PENAL LAWS
GR: TERRITORIALITY RULE - Penal laws and laws of 4. Law governing extrinsic validity of contracts, wills and
public security and safety shall be obligatory upon all public instruments.
who live or sojourn in the Philippine territory (Art. 14) GR: Lex loci celebrationis (Art. 17) – forms and
solemnities of contracts, wills and other public
XPNs: Treaty stipulations, Principle of Public instruments shall be governed by the laws of the
International, Laws of Preferential Application. country in which they are executed
e.g. Ambassadors, Ministers, International
agencies enjoying diplomatic immunity XPNs: Philippine law shall apply in the following
cases even though performed abroad:
Note: Consul is not entitled to the privileges and a. Acts are executed before the diplomatic or
immunities of ambassadors or ministers. consular officials of the Philippines.
b. Prohibitory laws concerning persons, their
2. STATUS LAWS acts or property, and those which have for
GR: NATIONALITY RULE - Laws relating to their object public order, public policy and
a. Family rights and duties good customs. (Art. 17)
b. Status and condition
Q: The second clause of the will of Joseph, a Turkish as if executed according to the laws of the Philippines.
citizen and a resident of the Philippines, states that: (Art. 817)
xxx, it is my wish that the distribution of my property 3. Two or more persons cannot make a will jointly, or in the
and everything in connection with this, my will, be same instrument, either for their reciprocal benefit or for
made and disposed of in accordance with the laws in the benefit of a third person (Article 818).
force in the Philippine Islands, requesting all of my
relatives to respect this wish, otherwise, I annul and Note: Wills, prohibited by the preceding article, executed by
cancel beforehand whatever disposition found in this Filipinos in a foreign country shall not be valid in the Philippines,
will favorable to the person or persons who fail to even though authorized by the laws of the country where they may
have been executed (Art. 819).
comply with this request.
4. Capacity to succeed is governed by the law of the nation
Is the clause above-quoted valid?
of the decedent (Article 1039).
A: No, it is void. The second clause of the will regarding the
Q: What law governs the revocation of wills?
law which shall govern it and the condition imposed, is null
and void, being contrary to law. Article 792 of the Civil Code
A:
provides that “Impossible conditions and those contrary to
1. Under Art. 829 of the NCC, a revocation done outside the
law or good morals shall be considered as not imposed and
Philippines by a person who does not have his domicile
shall not prejudice the heir or legatee in any manner
here is valid if done according to:
whatsoever, even should the testator otherwise provide.”
(a) The law of the place where the will was made (lex
Said clause is contrary to law because it expressly ignores
loci celebrationis) or
the testator's national law when, according to Art. 16 of the
NCC, such national law of the testator is the one to govern
(b) The law of his domicil at the time of revocation (lex
his testamentary dispositions. Said condition then is
domicilii)
considered unwritten, hence the institution of legatees is
unconditional and consequently valid and effective.
Note: It ignores the law of the place of revocation
XPN: Art 26, par. 2 of the Family Code (FC), on mixed Q: What if the spouses change nationalities, what law will
marriages where the foreigner obtained a divorce decree govern?
abroad and was thereby capacitated to remarry.
A:
Note: In this case, even though divorce is not recognized in the 1. If the spouses have the same nationality but they acquire
Philippines as a mode of terminating marriage, still the marriage is
a new nationality by their common act – their new national
terminated by virtue of a judgment of divorce and issuance of a
divorce decree by a foreign court. law will govern their personal relations
Q: What law governs the validity of marriage in case of 2. If the husband alone changes his nationality after the
mixed marriages? marriage – the law of the last common nationality of the
spouses would govern
A:
Marriage between a If the marriage is valid 3. If the spouses retain their different nationalities after the
Filipino and foreigner under the law of one of the marriage – National law of both spouses should govern
ABROAD spouses while void under
the law of the other, the Q: What are the rules in determining the domicile of a
validity of the marriage person?
should be upheld, unless
the marriage is universally A:
incestuous or highly If the child is legitimate His domicile of origin is that
immoral (the same rule as of his parents at the time of
MARRIED WOMEN
1. The constructive
domicile of the wife is the
domicile of both spouses,
unless the law allows the
wife to have a separate
domicile for valid and
If the marriage is valid compelling reasons
A:
Extrinsic validity Capacity of parties Intrinsic validity
Barter, sale, donation Lex situs Lex situs Lex situs
Lease of property: creates Lex situs Lex situs Lex situs
real rights
Lease of property: does Lex loci celebrationis Personal law of the Lex voluntatis or lex loci
not create real rights parties intentionis
Pledge, chattel mortgage, Lex situs Lex situs Lex situs
real estate mortgage,
antichresis
Contract of loan: mutuum Lex loci celebrationis Personal law of the Lex loci voluntatis or lex
parties loci intentionis
Contract of loan: Lex situs Lex situs Lex situs
commodatum
Lease of service, agency, Lex loci celebrationis Personal law of parties Lex loci voluntatis or lex
guaranty, suretyship loci intentionis
Note: Agency to alienate
or encumber real property
is governed by lex situs
Lex loci celebrationis Personal law of the Lex loci voluntatis
parties
Liability for loss, destruction, deterioration of goods in transit: law of destination of
Contract of goods (Art. 1753, NCC)
transportation or carriage
(render services) If COGSA applies, limitation on liability applies, unless the shipper declares value of
goods and inserts such declaration in the bill of lading
1. The liability of the airline in case of death, injury to passengers, or loss or damage
to cargo is governed by Warsaw Convention
Note: If contracts involve encumbrances of property, real or personal, apply lex situs. If personal contracts, law on contracts will apply
Q: What is the principle of abuse of rights? A: While Art. 19 lays down the rule of conduct for the
government of human relations, it does not provide a
A: A right, though by itself legal because recognized or remedy. Generally, an action for damages under either Art.
granted by law as such, may become the source of some 20 or Art. 21 would be proper. Art. 21 deals with acts
illegality. When a right is exercised in a manner which does contra bonus mores or contrary to good morals and
not conform with the norms enshrined in Art. 19 and presupposes loss or injury, material or otherwise, which
results in damage to another, a legal wrong is thereby one may suffer as a result of such violation. Under Arts. 19
committed for which the wrongdoer must be held and 21, the act must be intentional. (Rabuya, 2006)
responsible.
Note: Art. 21 fills countless gaps in the statutes, which leave so
Q: What are the elements of abuse of rights? many victims of moral wrongs helpless, even though they suffered
material and moral damages. (Tolentino, p. 70)
A:
1. There is a legal right or duty; Q: Is breach of promise to marry an actionable wrong?
2. Such duty is exercised in bad faith;
3. It is for the sole intent of prejudicing or injuring another. A: GR: No. A breach of promise to marry per se is not an
actionable wrong. There is no provision in the NCC
Q: What is the principle of Damnum Absque Injuria? authorizing an action for breach of promise to marry.
A: Under this principle which literally means damage XPN: When the act is not a mere breach of promise to
without injury, one who merely exercises one’s rights does marry but constitutes one where damages pursuant to
no actionable injury and cannot be held liable for damages. Art. 21 of the NCC may be recovered, such as:
This is premised on the valid exercise of a right (Amonoy v. 1. Where the woman is a victim of moral seduction
Guitierrez, 351 SCRA 731, 2001). (Gashem Shookat Baksh v. CA, G.R. No. 97336,
February 19, 1993).
Note: Injury is the illegal invasion of a legal right; damage is 2. Where one formally sets a wedding and go
the loss, hurt, or harm which results from the injury; and through and spend for all the preparations and
damages are the recompense or compensation awarded for publicity, only to walk out of it when the
the damage suffered. There can be damage without injury matrimony was about to be solemnized
in those instances in which the loss or harm was not the (Wassmer v. Velez, G.R. No. L-20089, December
result of a violation of a legal duty. In such cases, the 26, 1964).
consequences must be borne by the injured person alone
(Panteleon v. American Express, G.R. No. 174269, August Q: Maria met Ayatollah, an Iranian medical student, at the
25, 2010). restaurant where she worked. A few days after, Ayatollah
courted and proposed to marry Maria. The latter accepted
Q: Is there civil liability for moral negligence? his love on the condition that they would get married.
When the couple visited Maria's parents, Ayatollah was
A: None. A person is required to act with prudence towards allowed to sleep with Maria during the few days of their
others, but not with charity; the law imposes diligence and stay. The couple continued to live together in an
not altruism. Hence, the failure to make sacrifices or apartment, but Ayatollah's attitude towards Maria
egoism does not constitute a source of liability. (Tolentino, changed. He maltreated her and when Maria became
p. 69) pregnant, Ayatollah gave her medicine to abort the fetus.
Despite the abuses, Maria continued to live with Ayatollah
Illustration: A person who fails to render assistance to and kept reminding him of his promise to marry her.
a drowning person or to the victim of an accident, However, Ayatollah told her that he could not do so
cannot be held liable for damages (3 Colin & Capitant because he was already married to a girl in Bacolod City.
826). Maria left and filed a complaint for damages against
Ayatollah for the alleged violation of their agreement to
Note: Every person who, contrary to law, wilfully or negligently get married. May damages be recovered for a breach of
causes damage to another, shall indemnify the latter for the same. promise to marry on the basis of Art. 21 of the NCC?
(Art. 20, NCC)
A: Yes. A breach of promise to marry per se is not an
Q: What are the elements of an action under Art. 21 of the actionable wrong. But where a man's promise to marry is
NCC? the proximate cause of the acceptance of his love by a
woman and his representation to fulfill that promise
A: LCI thereafter becomes the proximate cause of the giving of
1. There is an act which is Legal; herself unto him in a sexual congress, proof that the
2. Such act is Contrary to morals, good customs, public promise was only a deceptive device to inveigle her to
order or policy; obtain her consent to the sexual act, could justify the award
3. It is done with Intent to injure. of damages pursuant to Art. 21, not because of such
promise to marry but because of the fraud and deceit
Q: Distinguish juridical capacity from capacity to act. 4. Imbecility – state of a person who while advanced in
age has the mental capacity comparable to that of a
A: child between two and seven years of age
JURIDICAL CAPACITY CAPACITY TO ACT 5. Prodigality – a spendthrift or squanderer
6. Civil Interdiction – an accessory penalty imposed upon
Definition
an accused who is sentenced to a principal penalty not
Fitness to be the subject Power to do acts with legal
lower than reclusion temporal.
of legal relations effect
Acquisition
Note: They do not exempt the incapacitated person from
Inherent (co-exists with Through the fulfillment of certain obligations.
the natural person) specific legal activities
Loss Q: What are the circumstances that modify or limit
Through death and other capacity to act?
Only through death
causes
In relation to the other A: I-PAID-FAT-PIA
Can exist without Cannot exist w/o juridical 1. Insanity
capacity to act capacity 2. Prodigality
Limitation 3. Age
Art. 38 (restriction) 4. Imbecility
Art. 39 (modification/ 5. Deaf-Mute
None
limitation), 6. Family Relations
among others 7. Alienage
8. Trusteeship
Q: What is meant by status? 9. Penalty
10. Insolvency
A: The status of a person is the legal condition or class to 11. Absence
which one belongs in a society. (1 del Viso 32, 2 Sanchez
Roman 110) BIRTH
A: Civil personality is merely the external manifestation of A: GR: Actual/Permanent Personality – Personality begins at
either juridical capacity or capacity to act. Consequently, it birth, not at conception.
may be defines as the aptitude of being the subject of
rights and obligations. (2 Sanchez Roman 114-147) XPN: Presumptive/Temporary – The law considers the
conceived child as born (Conceptus pro natohabetur)
Q: When does civil personality begin in natural persons?
Note: For there to be presumptive personality, the fetus must
A: Birth determines personality, but the conceived child be “born later in accordance with law” and the purpose for
shall be considered born for all purposes that are which such personality is given must be beneficial to the
favourable to it, provided it be born later with the child.
conditions specified in the following article (Art. 40, NCC).
This provision is now superseded by Art. 5 of P.D. No. 603,
A: A fetus with an intra-uterine life of: A: No, Wilma cannot successfully claim that Willy had a
1. Less than 7 months – Must survive for at least 24 hours hereditary share in his father’s estate.
after its complete delivery from the maternal womb
2. At least 7 months – If born alive, it shall be considered Under Art. 4 of the NCC, two persons “who are called to
born even if it dies within 24 hours after complete succeed each other” are presumed to have died at the
delivery. same time, in the absence of proof as to which of them
died first. This presumption of simultaneous death applies
Note: Complete delivery means the cutting of the umbilical cord. in cases involving the question of succession as between
the two who died, who in this case, are mutual heirs, being
Q: Does the conceived child have the right to be father and son.
acknowledged even if it is still conceived?
Q: Suppose, Jaime had a life insurance policy with his wife
A: Yes. It is a universal rule of jurisprudence that a child, Julia, and his son, Willy, as the beneficiaries. Can Wilma
upon being conceived, becomes a bearer of legal rights and successfully claim that one-half of the proceeds should
is capable of being dealt with as a living person. The fact belong to Willy’s estate? (1998 Bar Question)
that it is yet unborn is no impediment to the acquisition of
rights provided it be born later in accordance with law (De A: Yes, Wilma can invoke the presumption of survivorship
Jesus v. Syquia, G.R. No. L-39110, November 28, 1933). and claim that one-half of the proceeds should belong to
Willy’s estate, under Rule 131, Sec.3 (jj), par. 5, Rules of
Q: What do you mean by provisional personality of a Court, as the dispute does not involve succession.
conceived child?
Under this presumption, the person between the ages of 15
A: A conceived child, although as yet unborn, has a limited and 60 is deemed to have survived one whose age was over
and provisional personality. Its personality is essentially 60 at the time of their deaths. The estate of Willy endowed
limited because it is only for purposes favorable to the with juridical personality stands in place and stead of Willy,
child. Its personality is provisional because it depends upon as beneficiary.
the child being born alive later under certain conditions.
COMPARISON OF ART.43 AND RULE 131
DEATH
SURVIVORSHIP RULE UNDER THE NCC
Q: How does civil personality cease?
Q: Explain the survivorship rule under the NCC.
A: It depends upon the classification of persons:
1. Natural persons – by death A: If there is doubt as to who died first between 2 or more
2. Juridical persons – by termination of existence persons who are called to succeed each other, as to which
of them died first,
Q: What rule would apply in case there is doubt as to who
died first? Burden of Proof: Whoever alleges the death of one prior to
the other has the burden of proving such claim.
A: It depends on whether the parties are called to succeed
each other. Absent such proof: Presumption is they all died at the same
1. If successional rights are involved – Art. 43 of the NCC: time. There shall be no transmission of successional rights.
Survivorship Rule, and Rule 131, Sec. 3(kk): (Rule 131, Sec. 3 [kk], Rules of Court)
Presumption of simultaneity of deaths between
persons called to succeed each other, apply. Q: What are the conditions that may warrant the
2. If no successional rights are involved – Rule 131, Sec. 3 application of the survivorship rule?
(jj) of the Rules of Court applies. (Presumption of
survivorship) A: It applies when the following conditions are present:
1. The parties are heirs to one another
Note: Both are to be applied only in the absence of facts. 2. There is no proof as to who died first
3. There is doubt as to who died first
Q: Jaime, who is 65, and his son, Willy, who is 25, died in a
plane crash. There is no proof as to who died first. Jaime’s Q: What is the presumption under the survivorship rule?
only surviving heir is his wife, Julia, who is also Willy’s
mother. Willy’s surviving heirs are his mother, Julia, and A: Presumption of simultaneity of deaths. When two or
his wife, Wilma. more persons who are called to succeed each other die,
they shall be presumed to have died at the same time.
In the settlement of Jaime’s estate, can Wilma successfully
claim that her late husband, Willy, had a hereditary share
Q: What are the requisites for the presumptions on Q: Between Marian and the baby, who is presumed to
survivorship under the Rules of Court to apply? have died ahead?
A: The survivorship shall be determined from the If the baby was alive when completely delivered from the
probabilities resulting from the strength and age of the mother’s womb, then it was born as a person and the
sexes according to the following rules: question of who survived as between the baby and the
mother shall be resolved by the provisions of the Rules of
Age/Sex of decedents at the time of Court on survivorship. This is because the question has
Who presumed to
death nothing to do with succession. Obviously, the resolution of
have survived
Decedent A Decedent B the question is needed just for the implementation of an
Under 15 Under 15 Older insurance contract. Under Rule 13, Sec. 3, (jj), (5) as
Above 60 Above 60 Younger between the baby who was under 15 years old and Marian
Under 15 who was 18 years old, Marian is presumed to have
Under 15 Above 60 survived.
(younger)
Different sexes –
Above 15 BUT Above 15 BUT male In both cases, therefore, the baby never acquired any right
under 60 under 60 Same sex – under the insurance policy. The proceeds of the insurance
Older will then go to the estate of Marian.
Under 15 OR Between 15 and Between 15 and
over 60 60 60 Q: Will Prieto, as surviving biological father of the baby, be
entitled to claim the proceeds of the life insurance on the
Note: The statutory rules in the determination of sequence of life of Marian? (2008 Bar Question)
death do not absolutely apply in a case where indirect and/or
inferential evidence surrounding the circumstances of the deaths A: Since the baby did not acquire any right under the
exists. Where there are facts, known or knowable, from which a insurance contract, there is nothing for Prieto to inherit.
rational conclusion can be made, the presumption does not step in,
and the rule of preponderance of evidence controls. It is the JURIDICAL PERSONS
"particular circumstances from which survivorship can be inferred"
that are required to be certain as tested by the rules of evidence
(Joaquin v. Navarro, G.R. No. L-5426, May 29, 1953).
Q: What are the different kinds of Judicial Persons?
Can Marian’s baby be the beneficiary of the insurance Q: May juridical persons acquire and possess property of
taken on the life of the mother? all kinds, as well as incur obligations and bring civil or
criminal actions?
A: An unborn child may be designated as the beneficiary in
the insurance policy of the mother. An unborn child shall be A: Yes, provided that they are in conformity with the laws
considered a person for purposes favorable to it provided it and regulations of their organization. (Art. 46)
is born later in accordance with the NCC. There is no doubt
As a contract
Special contract
Merely a contract
Sui Generis contract
A: Voidable
2. Marriages in articulo mortis:
a. Ship captain or airplane chief – provided the
4. Irregularity in formal requisites?
marriage is performed:
i. During voyage, even during stopovers
A: Valid, but the party responsible for such irregularity
ii. Between passengers or crew members
shall be civilly, criminally or administratively liable.
b. Military commander of a unit who is a
(Art. 4 par. 2)
commissioned officer – provided the marriage is
performed:
MARRIAGE CEREMONY
i. In absence of chaplain;
ii. Within zone of military operation;
Q: What constitutes a valid marriage ceremony?
iii. Between members of the armed forces or
civilians
A: That which takes place with the:
1. personal appearance of the contracting parties before
the solemnizing officer;
A: No. The marriage will still be valid. The Law permits A: The license shall be valid in any part of the Philippines for
marriages in articulo mortis without marriage license but it a period of 120 days from the date of issue, and shall be
requires the solemnizing officer to make an affidavit and deemed automatically cancelled at the expiration of said
file it. period if the contracting parties have not made use of it.
(Art. 20, FC).
However, such affidavit is not an essential or formal
Note: If the parties contracted marriage after the lapse of 120 days
requisite of marriage, the same with a Marriage Contract.
from the issuance of the marriage license, such marriage shall be
The signing of the marriage contract and the affidavit is considered void for lack of marriage license.
only required for the purpose of evidencing the act, not a
requisite of marriage. It is the obligation of the solemnizing Q: What is the effect in the issuance of a marriage license
officer. It does not affect the validity of marriage (De Loria if a party who is required by law to obtain parental advice
v. Felix, G.R. No. L-9005, Jun. 20, 1958). or undergo marriage counseling failed to do so?
Q: What are the authorized venues of marriage? A: The issuance of marriage license is suspended for 3
months from the completion of publication of the
A: GR: Must be solemnized publicly within the jurisdiction application.
of the authority of the solemnizing officer:
1. Chambers of the judge or in open court Note: The marriage is valid in this case.
2. Church, chapel or temple
3. Office of the consul-general, consul or vice-consul Q: What is the status of the marriage if the parties get
married within said 3-month period?
XPNs:
1. Marriage at the point of death A: It depends.
2. Marriage in remote places 1. If the parties did not obtain a marriage license –
3. Marriage at a house or place designated by the the marriage shall be void for lack of marriage
parties with the written request to the license.
solemnizing officer to that effect. 2. If the parties were able to obtain a marriage
license – the marriage shall be valid without
Note: This provision is only directory, not mandatory. The prejudice to the actions that may be taken against
requirement that the marriage be solemnized in a particular venue
the guilty party.
or a public place is not an essential requisite for the validity of the
marriage.
Q: Who issues the marriage license?
Q: What is the status of a marriage solemnized by a judge
outside of his territorial jurisdiction? A: The local civil registrar of the city or municipality where
either contracting party habitually resides (Art. 9, FC).
A: The marriage is valid. Under Art. 3 of the FC, one of the
Note: Obtaining a marriage license in a place other than where
formal requisites of marriage is the "authority of the
either party habitually resides is a mere irregularity.
solemnizing officer." Under Art. 7, marriage may be
solemnized by, among others, "any incumbent member of
FOREIGN NATIONAL
the judiciary within the court's jurisdiction." Art. 8, which is
a directory provision, refers only to the venue of the
Q: What is required from the contracting parties before a
marriage ceremony and does not alter or qualify the
marriage license can be obtained?
authority of the solemnizing officer as provided in the
preceding provision. Non-compliance herewith will not
A: Each of the contracting parties shall file a separate or
invalidate the marriage. (Navarro v. Domagtoy, A.M. No.
individual sworn application with the proper local civil
MTJ-96-1088. July 19, 1996)
registrar (Art. 11, FC).
Note: Burden of Proof lies with "the party who alleges the
existence of a fact or thing necessary in the prosecution or
defense of an action." Since the divorce was a defense raised
by respondent, the burden of proving the pertinent foreign
law validating it falls squarely upon him. Courts cannot take
judicial notice of foreign laws. The power of judicial notice
must be exercised with caution, and every reasonable doubt
upon the subject should be resolved in the negative (Garcia
v. Recio, G.R. No. 138322, October 2, 2001).
A:
1. Valid
2. Void
3. Voidable
A:
VOID MARRIAGE VOIDABLE MARRIAGE
Status of marriage
Void ab initio Voidable: Valid until annulled
Petition filed
Declaration of Nullity of Marriage Annulment of Marriage
Who may file
GR: Solely by the husband or wife.
XPN: Any real party in interest, only in the following cases: GR: Offended Spouse
1. Nullity of marriage cases commenced before the XPN:
effectivity of A.M. No. 02-11-10 - March 15, 2003. 1.Parents or guardians in cases of insanity
2. Marriages celebrated during the effectivity of the Civil 2.Parents or guardians before the party reaches 21
Code (De Dios Carlos v. Sandoval, G.R. No. 179922, years old on the ground of Lack of Parental Authority
December 16, 2008).
Prescriptive Period
GR: Within 5 years from discovery of the ground
XPN:
No prescriptive period 1. Lifetime of spouse in cases of insanity
2. Before the party reaches 21 in cases where parents
or guardians may file annulment
How may be impugned
Children
GR: Illegitimate;
Property
GR: governed by rules on absolute community
Property relations are governed by rules on co-ownership
XPN: unless another system is agreed upon in marriage
settlement
Judicial Declaration
GR: Not necessary that there is judicial declaration
Necessary
XPN: in case of remarriage
Q: What are the marriages that are void ab initio? Note: The sex or gender at the time of birth shall be
taken into account. He is still, in the eyes of the law, a
A: LAaMB- PIPS-18 man although because of the artificial intervention, he
now has the physiological characteristics of a woman
1. Absence of any of the essential or formal
(Silverio v. Republic, G.R. No. 174689, October22, 2007)
requisites of marriage;
2. Marriages contracted by any party below 18 years
2. If the change is natural – He/she can.
of age even with the consent of parents or
guardians;
Q: Jennifer was registered as a female in her Certificate of
3. Solemnized without License, except those
Live Birth. In her early years, she suffered from clitoral
marriages that are exempt from the license
hypertrophy and was found out that her ovarian
requirement;
structures had minimized. She also alleged that she has no
4. Solemnized by any person not Authorized to
breasts or menstruation. She was diagnosed to have
perform marriages unless such marriages were
Congenital Adrenal Hyperplasia (CAH) a condition where
contracted with either or both parties believing in
persons thus afflicted possess secondary male
good faith that the solemnizing officer had the
characteristics because of too much secretion of
legal authority to do so;
androgen. She then alleged that for all interests and
5. Contracted through Mistake of one of the
appearances as well as in mind and emotion, she has
contracting parties as to the identity of the other;
become a male person. What is Jennifer’s gender or sex?
6. Bigamous or polygamous marriages;
7. Subsequent marriages which are void under Art.
A: Male. Where the person is biologically or naturally
53 FC;
intersex the determining factor in his gender classification
8. Marriages contracted by any party, who at the
would be what the individual, having reached the age of
time of the celebration of the marriage, was
majority, with good reason thinks of his/her sex. Jennifer
Psychologically incapacitated (Art. 36, FC);
here thinks of himself as a male and considering that his
9. Incestuous Marriages (Art. 37, FC);
body produces high levels of androgen, there is
10. Marriages declared void because they are
preponderant biological support for considering him as
contrary to Public policy (Art. 38, FC).
being male. Sexual development in cases of intersex
persons makes the gender classification at birth
ABSENCE OF REQUISITES
inconclusive. It is at maturity that the gender of such
persons is fixed.
Q: What is the status of a marriage between Filipinos if
the parties thereto are of the same sex?
Jennifer has simply let nature take its course and has not
taken unnatural steps to arrest or interfere with what he
A: Void. For a marriage to be valid, it must be between
was born with. And accordingly, he has already ordered his
persons of opposite sexes.
life to that of a male. He could have undergone treatment
and taken steps, like taking lifelong medication, to force his
Q: In case of a change in sex, can the person who has
body into the categorical mold of a female but he did not.
undergone said change be allowed to marry another of
He chose not to do so. Nature has instead taken its due
the same sex as he/she originally had?
course in his development to reveal more fully his male
characteristics.
A: It depends upon the cause for the change in sex.
Q: What if the marriage was a mixed marriage where the A: GR: Void for being bigamous or polygamous, even if
Filipino is 18 years old but the foreigner is below 17 years celebrated abroad and valid there as such.
of age. What is the status of the marriage?
XPN: Valid if it is a terminable bigamous marriage.
A: It depends. If the national law of the foreigner recognizes
17 year old persons to be capacitated to marry, then their Q: When is a marriage considered bigamous?
marriage is valid, otherwise it is void.
A: It is when a person contracts a second or subsequent
Q: What is the effect of lack of authority of solemnizing marriage before the former marriage has been legally
officer? dissolved, or before the absent spouse has been declared
presumptively dead by means of judgment rendered in the
A: GR: The marriage is void ab initio. proper proceedings. (Art. 349, RPC)
A: In the case of Santos v. CA (240 SCRA 20, 1995), the A: Those marriages:
Supreme Court held that being of unsound mind, drug 1. Between ascendants and descendants of any degree;
addiction, habitual alcoholism, lesbianism or homosexuality 2. Between brothers and sisters whether of the full or
may be indicia of psychological incapacity, depending on half blood. (Art. 37, FC)
the degree of severity of the disorder. However, the
concealment of drug addiction, habitual alcoholism, Note: Regardless of whether the relationship between the parties
lesbianism or homosexuality is a ground of annulment of is legitimate or illegitimate.
marriage.
Q: What are the marriages that are void by reason of
Q: Art. 36 of the FC provides that a marriage contracted by public policy?
any party who, at the time of the celebration, was
psychologically incapacitated to comply with the essential A: Marriages between:
marital obligations of marriage, shall be void. 1. Collateral blood relatives (legitimate or Illegitimate) up
th
to the 4 civil degree;
Choose the spouse listed below who is psychologically 2. Step-parents & step-children;
incapacitated. 3. Parents-in-law & children-in-law;
a. Nagger 4. Adopting parent & the adopted child;
b. Gay or Lesbian 5. Surviving spouse of the adopting parent & the adopted
c. Congenital sexual pervert child;
d. Gambler 6. Surviving spouse of the adopted child & the adopter;
e. Alcoholic (2006 Bar Question) 7. Adopted child & legitimate child of the adopter;
8. Adopted children of the same adopter;
A: B and C. To be sure, the existence and concealment of 9. Parties where one, with the intention to marry the
these conditions at the inception of marriage renders the other, kills the latter’s spouse, or his/her spouse. (Art.
marriage contract voidable (Art 46, FC). They may serve as 38, FC)
indicia of psychological incapacity, depending on the
degree and severity of the disorder (Santos v. CA, G.R. No. Note: The list is exclusive. If not falling within this enumeration, the
112019, January 4, 1995). Hence, if the condition of marriage shall be valid. Such as marriages between:
homosexuality, lesbianism or sexual perversion, existing at 1. Adopted and Illegitimate child of the adopter
the inception of the marriage, is of such a degree as to 2. Step brother and step sister
3. Brother-in-law and sister-in-law
prevent any form of sexual intimacy, any of them may
4. Parties who have been guilty of adultery or concubinage
qualify as a ground for psychological incapacity. The law
provides that the husband and wife are obliged to live
Q: Amor gave birth to Thelma when she was 15 years old.
together, observe mutual love, respect and fidelity (Art. 68,
Thereafter, Amor met David and they got married when
FC). The mandate is actually the spontaneous, mutual
she was 20 years old. David has a son, Julian, with his ex-
affection between the spouses/ in the natural order it is
VOIDABLE MARRIAGES
A:
GROUND RATIFICATION WHO MAY FILE WHEN TO FILE
Contracting party who failed to obtain
Marriage of a party 18 years of parental consent: Through free
cohabitation after attaining the age of By the contracting party Within 5 years after
age or over but below 21
21. attaining the age of 21
solemnized without the consent
of the parents, guardian or Parent, guardian, or
Note: The parents cannot ratify the person having legal charge At any time before
person having substitute
marriage. The effect of prescription on such party has reached
parental authority over the of the contracting party
their part is that they are barred from the age of 21
party, in that order contesting it but the marriage is not yet
cleansed of its defect.
Sane spouse who had no At any time before the
knowledge of the other’s death of either party
insanity
At any time before the
Either party was of unsound Insane spouse: Through free
Any relative, guardian or death of either party
mind cohabitation after coming to reason.
person having legal charge
of the insane During a lucid interval
or after regaining
Insane spouse sanity
Injured party: Through free
Consent of either party was Within 5 years after
cohabitation with full knowledge of Injured party
obtained by fraud the discovery of fraud
the facts constituting the fraud.
Within 5 years from
Injured party: Through free the time the force,
Vices of consent such as force,
cohabitation after the vices have Injured party intimidation or undue
intimidation or undue influence
ceased or disappeared. influence disappeared
or ceased
May not be ratified but action may be Within 5 years after
Impotence and STD
barred by prescription only, which is 5 Injured party the celebration of
years after the marriage marriage
Q: Who may file annulment based on unsound mind? Q: Under what conditions, respectively, may drug addiction
be a ground, if at all, for the declaration of nullity of
A: GR: The sane spouse has the legal standing to file the marriage, annulment of marriage, and legal separation?
action for annulment only in cases where he or she (1997 Bar Question)
contracted the marriage without knowledge of the other’s
insanity. A:
Declaration of Nullity a. The drug addiction must
XPNs: When the sane spouse had knowledge of the of Marriage amount to psychological
other’s insanity, action for annulment may be filed only incapacity to comply with the
by the following; essential obligations of
1. Any relative or guardian or person having legal marriage;
charge of the insane b. It must be antecedent
2. The insane spouse during a lucid interval or after (existing at the time of
regaining sanity (Rabuya, p. 301) marriage), grave and
incurable:
Q: What are the circumstances constituting fraud under Annulment of Marriage a. The drug addiction must be
Art. 45(3)? concealed;
b. It must exist at the time of
A: NPSD marriage;
1. Non-disclosure of conviction by final judgment of crime c. There should be no
involving moral turpitude; cohabitation with full
2. Concealment by the wife of the fact that at the time of knowledge of the drug
marriage, she was Pregnant by a man other than her addiction;
husband; d. The case is filed within five (5)
3. Concealment of Sexually transmitted disease, regardless years from discovery.
of nature, existing at the time of marriage; Legal Separation a. There should be no
4. Concealment of Drug addiction, habitual alcoholism, condonation or consent to
homosexuality and lesbianism. (Art. 46) the drug addiction;
b. The action must be filed
Note: Where there has been no misrepresentation or fraud, that is, within five (5) years from the
when the husband at the time of the marriage knew that the wife occurrence of the cause.
was pregnant, the marriage cannot be annulled (Buccat v. Buccat,
c. Drug addiction arises during
G.R. No. 47101, April 25, 1941).
the marriage and not at the
time of marriage.
Q: Aurora prayed for the annulment of her marriage with
Fernando on the ground of fraud in obtaining her consent
after having learned that several months prior to their
marriage, Fernando had pre-marital relationship with a Q: If drug addiction, habitual alcoholism, lesbianism or
close relative of his. According to her, the "non- homosexuality should occur only during the marriage,
divulgement to her of such pre-marital secret" constituted would these constitute grounds for a declaration of nullity
fraud in obtaining her consent w/in the contemplation of or for legal separation, or would they render the marriage
Art. 46 of the FC. Is the concealment by the husband of a voidable (2002 Bar Question)?
pre-marital relationship with another woman a ground for
annulment of marriage? A: In accordance with law, if drug addiction, habitual
alcoholism, lesbianism or homosexuality should occur only
A: No. The non-disclosure to a wife by her husband of his during the marriage, they will:
pre-marital relationship with another woman is not a ground 1. Not constitute as grounds for declaration of nullity. (Art.
for annulment of marriage. For fraud as a vice of consent in 36, FC)
marriage, which may be a cause for its annulment, comes 2. Constitute as grounds for legal separation. (Art. 55, FC);
under Art. 46 of the FC. This fraud, as vice of consent, is and
limited exclusively by law to those kinds or species of fraud 3. Not constitute as grounds to render the marriage
enumerated in Art. 86. voidable. (Arts. 45 and 46 of the FC)
A: GR: No. Presumption is in favor of potency. Whether concealed or not There must be concealment
Q: The day after John and Marsha got married, John told A: They shall take steps to prevent collusion between the
her that he was impotent. Marsha continued to live with parties and to take care that evidence is not fabricated or
John for two years. Is Marsha now estopped from filing an suppressed. Concomitantly, even if there is no suppression
annulment case against John? (2007 Bar Question) of evidence, the public prosecutor has to make sure that the
evidence to be presented or laid down before the court is
A: No. Unlike the other grounds for annulment of voidable not fabricated. Truly, only the active participation of the
marriage which are subject to ratification by continued public prosecutor or the Solicitor General will ensure that
cohabitation, the law does not allow ratification in case of the interest of the State is represented and protected in
impotency. proceedings for declaration of nullity of marriages by
preventing the fabrication or suppression of evidence. (Art.
Q: When may affliction of a sexually transmitted disease 48, FC)
(STD) be a ground for annulment?
Note: The non-intervention of the prosecutor is not fatal to the
validity of the proceedings in cases where the respondent in a
A: Requisites: AESIAF
petition for annulment vehemently opposed the same and where he
a. One of the parties is Afflicted with STD does not allege that evidence was suppressed or fabricated by any
b. STD must be: of the parties (Tuason v. CA, G.R. No. 116607, April 10, 1996).
a. Existing at the time the marriage is celebrated
b. Serious Q: What are the actions prohibited in annulment and
c. apparently Incurable declaration of absolute nullity of marriage cases?
c. The other spouse must not be Aware of the other’s
affliction A: CCSSJ
d. Injured party must be Free from STD. 1. Compromise
2. Confession of judgment
Q: Yvette was found to be positive for HIV virus, considered 3. Stipulation of facts
sexually transmissible, serious and incurable. Her boyfriend 4. Summary judgment
Joseph was aware of her condition and yet married her. 5. Judgment on the pleadings
After two (2) years of cohabiting with Yvette, and in his
belief that she would probably never be able to bear him a Note: What the law prohibits is a judgment based exclusively or
healthy child, Joseph now wants to have his marriage with mainly on defendant's confession (Ocampo v. Florenciano, 107 Phil.
A: A:
1. Void marriages: 1. Cash
GR: The rules on co-ownership under the Civil Code 2. Property
(Valdes v. RTC, G.R. No. 122749. July 31, 1996). 3. Sound security
XPN: Art. 43(2) of the FC in marriages declared Q: What must be done by a person whose prior marriage
void under Art. 40. (Art. 50) was annulled or declared void if he wishes to remarry?
2. Voidable marriages under Art. 45: shall be liquidated in A: He must comply with the requirement provided for in Art.
accordance with Art. 43(2) of the FC. (Art. 50) 52, before he contracts a subsequent marriage, viz:
Note: In both instances under Arts. 40 and 45, the marriages are The recording in the civil registries and registries of
governed either by absolute community of property or conjugal properties of the following: JPDD
partnership of gains unless the parties agree to a complete 1. Judgment of annulment;
separation of property in a marriage settlement entered into before 2. Partition;
the marriage (Dino v. Dino, G.R. No. 178044, January 19, 2011).
3. Distribution of properties; and
4. Delivery of presumptive legitimes.
Q: What are the effects of Final Judgment of Annulment?
LEGAL SEPARATION
A: The effects are:
1. Termination of the marital bond, as if it had never been
GROUNDS
entered into, but the effects thereof are not totally
wiped out.
Q: What are the grounds for legal separation?
2. Children conceived or born before the judgment of
annulment has become final and executor are
A: PALFAC SILA
considered legitimate.
1. Repeated Physical violence or grossly abusive conduct
3. Absolute community property regime or the conjugal
against petitioner, common child, child of petitioner;
partnership property regime is terminated of dissolved
2. Attempt to corrupt or induce petitioner, common child,
and the same shall be liquidated in accordance with the
child of petitioner to engage in prostitution, or
provisions of Arts. 102 and 129.
connivance in such corruption or inducement;
3. Attempt by respondent against Life of petitioner;
Q: What will happen to the liquidation of property, after
4. Final judgment sentencing respondent to imprisonment
final judgment of annulment, if either spouse contracted
of more than 6 years, even if pardoned;
the marriage in bad faith?
5. Drug Addiction or habitual alcoholism of respondent;
A: If either spouse contracted the marriage in bad faith, his Note: It must exist after celebration of marriage
or her share of the next profits of the community property or
conjugal partnership property shall be forfeited in favour of 6. Physical violence or moral pressure to Compel
the common children or if there be none, the children of the petitioner to change religious or political affiliation;
guilty spouse by previous marriage or in default thereof, the 7. Bigamous marriage Subsequently contracted by
innocent spouse. respondent in the Philippines or abroad
Q: William filed a petition for legal separation in 1955 Q: What is the mandatory cooling-off period?
grounded on Juanita’s adulterous relations allegedly
discovered by William in 1945. Was William’s action A: The requirement set forth by law that an action for legal
already barred by prescription? separation shall be in no case tried before 6 months has
elapsed since the filing of the petition, to enable the
A: Yes. Under Art. 102, NCC, an action for legal separation contending spouses to settle differences. In other words, it is
cannot be filed except within 1 year from and after the for possible reconciliation (Art. 58, FC).
plaintiff became cognizant of the cause and within five years
from and after the date when such cause occurred. The 6 months cooling-off period is a mandatory
requirement. Petition shall not be granted if it is not
In this case, William’s action is already barred because of his observed (Pacete v. Carriaga, G.R. No. L-53880 March 17,
failure to petition for legal separation proceedings until ten 1994).
years after he learned of his wife's adultery, which was upon
his release from internment in 1945 (Brown v. Yambao, G.R.
No. L-10699, October 18, 1957).
Art. 101 of the NCC, calling for the intervention of the state A: No. An action for legal separation is purely personal,
attorneys in case of uncontested proceedings for legal therefore, the death of one party to the action causes the
separation (and of annulment of marriages, under Art. 88) death of the action itself – action personalis moritur cum
emphasizes that marriage is more than a mere contract; that persona.
it is a social institution in which the state is vitally interested,
so that its continuation or interruption cannot be made Note: Incases where one of the spouses is dead, or where the
deceased’s heirs continue the suit, separation of property and any
Note: Marriage bond not severed A: Since AIDS is a serious and incurable sexually transmissible
disease, the wife may file an action for annulment of the
2. ACP/CPG shall be dissolved and liquidated; marriage on this ground whether such fact was concealed or
not from the wife, provided that the disease was present at
Note: But offending spouse shall have no right to any share of
the time of the marriage. The marriage is voidable even
the net profits earned by the AC/CP which shall be forfeited in
according w/ Art. 43(2). though the husband was not aware that he had the disease
at the time of marriage.
3. Custody of minor children is awarded to the innocent
spouse (subject to Art. 213, FC); b. If the wife goes to abroad to work as a nurse and refuses
4. Offending spouse is disqualified to inherit from innocent to come home after the expiration of her three-year
spouse by intestate succession; contract there?
5. Provisions in the will of innocent spouse which favors
offending spouse shall be revoked by operation of law; A: If the wife refuses to come home for three (3) months
6. Innocent spouse may revoke donations he/she made in from the expiration of her contract, she is presumed to have
favor of offending spouse; abandoned the husband and he may file an action for judicial
separation of property. If the refusal continues for more than
Note: Prescriptive period: 5 years from finality of decree of one year from the expiration of her contract, the husband
legal separation may file the action for legal separation under Art. 55(10) of
the FC on the ground of abandonment of petitioner by
7. Innocent spouse may revoke designation of offending respondent without justifiable cause for more than one year.
spouse as beneficiary in any insurance policy, even The wife is deemed to have abandoned the husband when
when stipulated as irrevocable. she leaves the conjugal dwelling without any intention of
returning (Art. 101, FC). The intention not to return cannot
Note: An action for legal separation which involves nothing more be presumed during the 30 year period of her contract.
than bed-and-board separation of the spouses is purely personal.
The Civil Code recognizes this by: c. If the husband discovers after the marriage that his wife
1. By allowing only the innocent spouse and no one else to has been a prostitute before they got married?
claim legal separation;
2. By providing that the spouses can, by their reconciliation,
stop or abate the proceedings and even rescind a decree of A: If the husband discovers after the marriage that his wife
legal separation already granted (Lapuz v. Eufemio, G.R. No. was a prostitute before they got married, he has no remedy.
L-31429, January 31, 1972). No misrepresentation or deceit as to character, health, rank,
fortune or chastity shall constitute fraud as legal ground for
Q: May the wife who has been granted legal separation an action for the annulment of marriage (Art. 46, FC).
petition be allowed to revert to her maiden name?
d. If the husband has a serious affair with his secretary and
A: No. The marriage bond not having severed, the woman refuses to stop notwithstanding advice from relatives and
remains to be the lawful wife of the man. friends?
Note: Even under the NCC, the use of the husband's surname during A: The wife may file an action for legal separation. The
the marriage (Art. 370, NCC), after annulment of the marriage (Art. husband’s sexual infidelity is a ground for legal separation
371, NCC) and after the death of the husband (Art. 373, NCC) is (Art. 55, FC). She may also file an action for judicial
permissive and not obligatory except in case of legal separation (Art. separation of property for failure of her husband to comply
372, NCC). Under the present article of our Code, however, the word
with his marital duty of fidelity (Art. 135(4), 101, FC).
"may" is used, indicating that the use of the husband's surname by
the wife is permissive rather than obligatory. We have no law which
provides that the wife shall change her name to that of the husband e. If the husband beats up his wife every time he comes
upon marriage. This is in consonance with the principle that home drunk? (2003 Bar Question)
surnames indicate descent. It seems, therefore, that a married
woman may use only her maiden name and surname. She has an A: The wife may file an action for legal separation on the
option, but not a duty, to use the surname of the husband in any of ground of repeated physical violence on her person (Art.
the ways provided by this Article (Yasin v. Hon. Judge Sharia’h 55(1), FC). She may also file an action for judicial separation
District court, G.R. No. 94986, February 23, 1995).
of property for failure of the husband to comply with his
marital duty of mutual respect (Art. 135(4), Art. 101, FC). She
may also file an action for declaration of nullity of the
Q: How do Declaration of Nullity of Marriage, Annulment of Marriage and Legal Separation differ from each other?
A:
Marriage bond
No effect, marriage bond
Dissolved Dissolved
remains valid
Status of children
GR: Illegitimate
XPN:
1. if donee contracted the marriage in bad faith, such
donations made to said donee shall be revoked by
operation of law.
2. if both spouses to the marriage acted in bad faith, all
donations propter nuptias shall be revoked by operation
of law.
Insurance
If one spouse acted in bad faith, innocent spouse may revoke
his designation as beneficiary in the insurance policy even if
such designation be stipulated as irrevocable. [Art. 43 (4)]
Succession
If one spouse contracted the marriage in bad faith, he shall be
disqualified to inherit from innocent spouse by testate and
intestate succession. [Art. 43 (5)]
RIGHTS AND OBLIGATIONS BETWEEN HUSBAND AND WIFE b. Observe mutual love, respect, fidelity
c. Render mutual help and support
ESSENTIAL OBLIGATIONS 2. Fix the family domicile (Art. 69, FC)
Q: What are the rights and obligations of the spouses? Note: In case of disagreement the Court shall decide.
Q: What are the other obligations of spouses? A: Yes, only as to their property relations during the
marriage subject only to the condition that whatever
A: settlement they may have must be within the limits
1. Exercise the duties and enjoy the rights of parents; provided by the Family Code. However, the nature,
2. Answer for civil liability arising from injuries caused by consequences, and effects of marriage cannot be subject to
children below 18; stipulation. (Rabuya, 2006, p. 398)
3. Exercise parental authority over children’s property
Note: Future spouses may agree upon the regime of absolute
(Republic v. CA, Molina, G.R. No. 108763, February 13,
community of property, conjugal partnership of gains, absolute
1997). separation of property or any other regime.
Q: May the performance of essential marital obligations Q: Are rights over share in the community or conjugal
be compelled by court? property waivable during the marriage?
XPN: Giving support (Arroyo v. Arroyo, G.R. No. L-17014, Note: The waiver must be in a public instrument and recorded in
August 11, 1921) the office of the local civil registrar where the marriage contract
was recorded as well as in the proper registry of property.
Q: When may the Court exempt one spouse from living
with the other? MARRIAGE SETTLEMENTS
Q: What law shall govern the property relations of It is also referred to as Ante Nuptial Agreement or
spouses? Matrimonial Contract. (Pineda, 2008 ed.)
A: GR: Philippine laws shall govern, regardless of place of Q: What are the requisites of a valid MS?
celebration and residence of spouses, in the absence of
contrary stipulation in a marriage settlement. (Art. 80, FC) A: I-SER
1. In writing;
XPN: Lex rei sitae applies: 2. Signed by the parties;
1. Where both spouses are aliens; 3. Executed before the celebration of marriage;
2. With respect to the extrinsic validity of contracts: 4.
rd
Registration (to bind 3 persons)
a. affecting property not situated in the
Philippines; and Note: The provisions in the marriage settlement must be in
b. executed in the country where the property accordance with law, morals or public policy, otherwise such
is located; agreement is void (Paras, book I, p. 516).
3. With respect to extrinsic validity of contracts:
a. entered into in the Philippines; but
Q: May a marriage settlement be modified? GR: Future spouses cannot donate to each other more
than 1/5 of their present property (Excess shall be
A: Yes. For any modification in the MS to be valid: considered void)
1. The requisites for a valid MS must be present;
2. There must be judicial approval; XPN: If they are governed by ACP, then each
3. Subject to the provisions of Arts. 66, 67, 128, 135, spouse can donate to each other in their marriage
and 136. settlements present property without limit,
provided there is sufficient property left for their
Q: What is the effect on the ante-nuptial agreement in support and the legitimes are not impaired.
case the marriage is not celebrated?
2. During the marriage:
A: GR: Everything stipulated in the settlements or contracts
in consideration of the marriage shall be rendered void. GR: Every donation or grant of gratuitous advantage,
direct or indirect, between spouses is considered void.
XPN: Those not dependent upon or is not made in
consideration of the marriage subsists. XPN: Moderate gifts on the occasion of any family
rejoicing.
DONATIONS BY REASON OF MARRIAGE
Note: The aforementioned rules also apply to common law
Q: When are donations considered as donations by reason spouses.
of marriage?
Q: Why are donations between spouses during marriage
A: Those donations which are made before the celebration considered void?
of the marriage, in consideration of the same, and in favor
of one or both of the future spouses. A:
1. To protect unsecured creditors from being defrauded;
Q: What are the requisites for donations propter nuptias 2. To prevent the stronger spouse from imposing upon
(DPN)? the weaker spouse transfer of the latter’s property to
the former;
A: 3. To prevent indirect modification of the marriage
1. Made before celebration of marriage; settlement.
2. Made in consideration of the marriage;
3. Made in favor of one or both of the future spouses. Q: What if the parties agree upon a regime other than
absolute community of property?
Q: What are the requisites if donation be made by one
spouse in favor of the other? A: They cannot donate to each other in their marriage
settlements more than 1/5 of their present property. Any
A: excess is considered void.
1. There must be marriage settlement (MS) stipulating a
property regime other than ACP; Note: Donations of future property are governed by provisions on
2. Donation in the MS be not more that 1/5 of the testamentary succession and formalities of wills.
present property;
3. There must be acceptance by the other spouse.
Q: What are the grounds for filing an action for revocation of a DPN and what are their respective prescriptive periods?
A:
PRESCRIPTIVE PERIOD
GROUNDS (Art. 86)
Period Reckoning Point
1. Marriage is not celebrated Time the marriage was not solemnized
5 yrs
XPN: Those automatically rendered void by law on the fixed date. (art. 1149)
Ground for nullity:
a. Contracted subsequent marriage
Revoked by operation of law
2. Marriage is judicially before prior marriage has been
declared void judicially declared void
Finality of judicial declaration of nullity
b. any other grounds 5 yrs
(if action is to recover property)
Time the donor came to know that the
3. Marriage took place without consent of parents or guardian, when
5 yrs required parental consent was not
required by law
obtained.
4. Marriage is annulled and donee acted in bad faith 5 yrs Finality of decree
5. Upon legal separation (LS), donee being the guilty spouse 5 yrs Time decree of LS has become final
6. Donation subject to resolutory condition which was complied with 5 yrs Happening of the resolutory condition.
From donor’s knowledge of the
7. Donee committed an act of ingratitude 1 yr
commission of an act of ingratitude.
Q: What are the different property regimes which may be adopted by future spouses?
A:
1. Absolute Community of Property (ACP)
2. Conjugal Partnership of Gains (CPG)
3. Absolute Separation of Property (ASOP)
4. Any other regime within limits provided by the FC
A:
ACP CPG ASOP
When it applies
Consist of
Each spouse retains his/her property
All the properties owned by the spouses before the marriage and only the fruits
at the time of marriage become and income of such properties become
community property part of the conjugal properties during the
marriage
Effect of separation in fact
The separation in fact shall not affect the regime of ACP, but:
1. The spouse who leaves the conjugal home or refuses to live therein, without
just cause, shall not have the right to be supported;
2. When consent of one spouse to any transaction of the other is required by law,
judicial authorization shall be obtained in a summary proceeding.
3. In case of insufficiency of community or conjugal partnership property, separate
property of both spouses shall be solidarily liable for the support of the family.
Spouse present shall, upon proper petition in a summary proceeding, be given
judicial authority to administer or encumber any specific separate property of
the other spouse and use the fruits or proceeds thereof to satisfy the latter’s
share. (Arts. 100 & 127, FC)
Effect of dissolution
Upon dissolution and liquidation of the Upon dissolution of the partnership, the
community property, what is divided separate property of the spouses are
equally between the spouses or their returned and only the net profits of the
heirs is the net remainder of the partnership are divided equally between
properties of the ACP. the spouses of their heirs.
Q: What are the grounds for transfer of administration of 3. Property acquired before the marriage by one with
the exclusive property of each spouse? legitimate descendants by former marriage and its
fruits and income, if any;
A: When one spouse: CFAG 4. Those excluded by the marriage settlement.
1. is sentenced to penalty with Civil interdiction;
2. becomes a Fugitive from justice or is hiding as an Q: In absence of evidence, does property acquired during
accused in a criminal case; the marriage belong to the community property?
3. is judicially declared Absent;
4. becomes a Guardian of the other. A: Property acquired during the marriage is presumed to
belong to the community, unless proven otherwise by
Note: Transfer of administration of the exclusive property of either strong and convincing evidence. (Art. 93, FC)
spouses does not confer ownership over the same (Rodriguez v. De
la Cruz, GR No. 3629, September 28, 1907). Q: Mister, without Misis’ consent, executed a special
power of attorney in favor of Drepa in order to secure a
loan to be secured by a conjugal property, which loan was
A: Yes. The settled rule is that the sale or encumbrance of a A: No (Art. 95). However, any winnings therefrom shall
conjugal property requires the consent of both the husband form part of the community property.
and the wife (Guiang v. CA, 353 Phil. 578). The absence of
the consent of one renders the entire sale or encumbrance CHARGES UPON AND OBLIGATIONS OF THE COMMUNITY
null and void, including the portion of the conjugal property PROPERTY
pertaining to the husband who contracted the sale. Neither
would the conjugal partnership be liable for the loan on the Q: What are the charges upon the ACP?
ground that it redounded to the benefit of the family. The
sweeping conclusion that the loan was obtained by the A:
husband in order to finance the construction of housing 1. The support of
units, without however adducing adequate proof, does not a. the spouses
persuade (Homeowners Savings & Loan Bank v. Dailo, G.R. b. their common children
No. 153802, March 11, 2005). c. legitimate children of either spouse;
2. All debts and obligations contracted during the
Q: In a sale of a piece of land that she and her husband, marriage by:
David, owned, Lorenza, who witnessed the sale, signed on a. the designated administrator-spouse for the
the page reserved for witnesses to the deed. When the benefit of the community
buyer sought to register the sale, it was denied by the b. by both spouses
Register of Deeds for lack of the wife's consent to the sale. c. by one spouse with the consent of the other;
Decide. 3. Debts and obligations contracted by either spouse
without the consent of the other to the extent that the
A: The register of deeds is incorrect. A wife, by affixing her family may have been benefited;
signature to a deed of sale on the space provided for 4. All taxes, liens, charges and expenses, including major
witnesses, is deemed to have given her implied consent to or minor repairs, upon the community property;
the contract of sale. The consent need not always be 5. All taxes and expenses for mere preservation made
explicit or set forth in any particular document so long as it during marriage upon the separate property of either
is shown by acts of the wife that such consent or approval spouse used by the family;
was in fact given (Pelayo v. Perez, G.R. No. 141323, June 8, 6. Expenses to enable either spouse to commence or
2005). complete a professional or vocational course, or other
activity for self-improvement;
Note: In this case, it will be noted that the sale was entered into 7. Ante-nuptial debts of either spouse insofar as they
prior to the effectivity of the FC. Because of such, Art. 173, in have redounded to the benefit of the family;
relation to Art. 166 of the NCC would have applied if there was a 8. The value of what is donated or promised by both
finding of lack of the wife's consent. Under said provisions, the sale spouses in favor of their common legitimate children
would have been merely voidable, and not void.
for the exclusive purpose of commencing or
completing a professional or vocational course or
Q: Andres sold a parcel of land belonging to the conjugal
other activity for self-improvement;
partnership to Pepito. Days before the sale, Kumander, his
9. Payment, in case of absence or insufficiency of the
wife, assented to such by signing a document entitled
exclusive property of the debtor-spouse, of:
"Marital Consent" contained in a jurat, which was then
a. Ante-nuptial debts of either spouse which did not
sworn to before the same notary public who notarized the
redound to the benefit of the family;
deed of sale, and then appended to the deed of sale itself.
b. the support of illegitimate children of either
Is the conveyance valid?
spouse;
c. liabilities incurred by either spouse by reason of a
A: It depends. The use of the jurat, instead of an
crime or quasi-delict;
acknowledgment, does not elevate the marital consent into
the level of a public document but instead consigns it to the Note: The payment of which shall be considered as advances
status of a private writing. Hence, the presumption of to be deducted from the share of the debtor-spouse upon
regularity does not apply and the wife still needs to prove liquidation of the community
its genuineness and authenticity as required under the
rules of evidence (Pan Pacific Industrial Sales Co., Inc. v. CA, 10. Expenses of litigation between the spouses.
G.R. No. 125283, February 10, 2006)
XPN: If suit is found to be groundless, it cannot be
Note: The fact that the document contains a jurat, and not an charged against the ACP.
acknowledgment, should not affect its genuineness or that of the
related document of conveyance itself, the Deed of Absolute Sale.
Q: An individual, while single, purchases a house and lot in
In this instance, a jurat suffices as the document only embodies the
manifestation of the spouse's consent, a mere appendage to the 1990 and borrows money in 1992 to repair it. In 1995,
main document (Pan Pacific Industrial Sales Co., Inc. v. CA, G.R. No. such individual is married while the debt is still being paid.
A: No. Ante-nuptial debts of either spouse shall be Q: When may one spouse resort to obtaining court
considered as the liability of the absolute community of approval for any alienation, encumbrance or disposition of
property insofar as they have redounded to the benefit of community property?
the family.
A: In absence of the written consent of the other spouse.
OWNERSHIP, ADMINISTRATION, ENJOYMENT AND
DISPOSITION OF THE COMMUNITY PROPERTY Q: What if the community property is insufficient to cover
the foregoing liabilities?
Q: To whom does the right of administration of the
community property belong to? A: GR: The spouses shall be solidarily liable for the unpaid
balance with their separate properties.
A: GR: It belongs to both spouses jointly.
XPN: Those falling under paragraph 9 of Art. 94.
XPN: If one spouse is incapacitated or otherwise (Ante-nuptial debts, support of illegitimate children,
unable to participate in the administration of the liabilities incurred by spouse by reason of a crime or
common properties – capacitated or able spouse quasi-delict) –in which case the exclusive property
may assume sole powers of administration of the spouse who incurred such debts will be liable.
However, if the exclusive property is insufficient,
But such powers do not include: DAE payment will be considered as advances to be
1. Disposition; deducted from share of debtor-spouse. (Art. 94 (9),
2. Alienation; or FC)
3. Encumbrance
of the conjugal or community property. Q: What is the rule on donating a community property by
a spouse?
Q: In case of disagreement, whose decision shall prevail?
A: GR: A spouse cannot donate any community property
A: That of the husband but subject to recourse to the court without the consent of the other.
by the wife for proper remedy.
XPN: Moderate donations for charity or on occasion
Note: Prescriptive period for recourse is within 5 years from the of family rejoicing or distress. (Art. 98, FC)
date of the contract implementing such decision.
Q: Will the separation in fact between husband and wife
Q: In cases of alienation, disposition or encumbrance of affect the regime of absolute community?
the community property, and one spouse is incapacitated
or unable to participate in the administration of the A: GR: No.
community property, is the approval of one spouse
enough for said alienation, disposition or encumbrance to XPNs:
be valid? 1. Spouse who leaves the conjugal home or refuses
to live therein without just cause has no right
A: No. Both spouses must approve any dispositions or to be supported
encumbrances, and consent of the other spouse regarding 2. When consent of one spouse to any transaction
the disposition must be in writing, otherwise, the matter of the other is required by law, judicial
should be brought to court and the court will give the authorization must be obtained
authority, if proper. 3. If community property is insufficient, the separate
property of both spouses shall be solidarily
Such consent or court approval must be obtained before liable for the support of the family
the alienation, etc., otherwise, such will be void and
obtaining such consent or court approval afterwards will Q: If a spouse abandons without just cause his family or
not validate the act. A void act cannot be ratified. fails to comply with obligations to the family, what are the
remedies of the spouse present?
Q: What if one spouse acts without the consent of the
other or without court approval? A: Petition the court for:
1. Receivership;
A: If one spouse acts without the consent of the other or 2. Judicial separation of property;
without court approval, such disposition or encumbrance is 3. Authority to be the sole administrator of the absolute
void. community.
Q: What are the charges upon the CPG? Q: How is the conjugal partnership terminated?
A: D2-T2-E2-VAS A:
1. Support of the spouses, their common children and 1. Death of either spouse;
the legitimate children of either spouse; 2. Legal separation;
2. Debts and obligations contracted by one without the 3. Annulment;
consent of the other to the extent that the family 4. Judicial separation of property during marriage. (Art.
benefited; 126, FC)
3. Debts and obligations contracted during the marriage
by an administrator-spouse, both spouses or one with LIQUIDATION OF THE CONJUGAL PARTNERSHIP ASSETS
the consent of the other; AND LIABILITIES
4. Taxes, liens, charges, expenses upon conjugal
Q: What are the steps in the liquidation of the CPG?
property;
5. Taxes and expenses for mere preservation of separate
A: R2-D4-IPA
property;
1. Inventory of all the properties;
6. Expenses for professional, vocational or self-
2. Restitution of advances made to each of the spouses;
improvement courses of either spouse;
3. Reimbursement for use of exclusive funds;
7. Ante-nuptial debts to the extent the family has been
4. Debts and obligations of the CP are paid;
benefited;
5. Delivery of exclusive properties;
8. Value of what is donated or promised to common
6. Payment of losses and deterioration of movables
legitimate children for professional, vocation or self-
belonging to each of the spouses;
improvement courses;
7. Division of the net conjugal partnership;
9. Expenses of litigation. (Art. 121, FC)
8. Delivery of the children’s presumptive legitimes;
Note: If the conjugal partnership is insufficient to cover the 9. Adjudication of conjugal dwelling and custody of
foregoing liabilities, spouses shall be solidarily liable for the unpaid children. (Art. 129, FC)
balance with their separate properties.
Q: Upon termination of the marriage by death, how shall
Q: Levy was made on the conjugal partnership of husband the community property be liquidated?
and wife on the basis of liability of the husband as
guarantor. Is the levy proper? A: The community property shall be liquidated in the same
proceeding for the settlement of the estate of the deceased
A: No. The payment of personal debts contracted by the spouse.
husband or the wife before or during the marriage shall not
be charged to the conjugal partnership except as they Q: From where shall the support to be given to the
redounded to the benefit of the family. (Art. 122, FC) surviving spouse and to the children be charged against
during the liquidation?
ADMINISTRATION OF THE CPG
A: The support shall come from the common mass of
Q: To whom does the right to administer the conjugal property and shall be particularly charged against the fruits,
partnership belong? rents or income pertaining to their shares to the inventories
property. But where the support given exceeds the fruits,
A: GR: It belongs to both spouses jointly. rents or income pertaining to their shares, the excess shall
be deducted from their respective shares as these are
XPN: If one spouse is incapacitated or otherwise deemed advances from the inventoried property. (Art. 133,
unable to participate in the administration of the FC)
common properties – capacitated or able spouse may
assume sole powers of administration. Q: In the absence of a judicial settlement proceeding, how
shall the community property be liquidated?
But such powers do not include: DAE
1. Disposition; A: The surviving spouse shall liquidate the community
2. Alienation; or property either, judicially or extrajudicially within 1 year
3. Encumbrance of the conjugal or community property. from the death of the deceased spouse.
Q: In case of disagreement, whose decision shall prevail? Q: What if the conjugal partnership assets are less than
the conjugal partnership liabilities at the time of
A: That of the husband but subject to recourse to the court liquidation of the CP?
by the wife for proper remedy.
A: The surviving spouse and the children shall not be
Note: Prescriptive period for recourse is 5 years from the date of entitled to support.
the contract implementing such decision.
A: CJ-LASA Q: What are the rights of the spouses under the regime of
1. Civil interdiction of the spouse of petitioner; separation of property?
2. Judicial declaration of absence;
3. Loss of parental authority as decreed by the court; A:
4. Abandonment or failure to comply with family 1. Each spouse shall own, dispose of, administer, possess,
obligation; and enjoy his or her own separate property, without
5. Administrator spouse has abused authority; need of the consent of the other.
6. Separation in fact for one year and reconciliation is 2. Each spouse shall own all earnings from his or her
highly improbable. (Art. 135, FC) profession, business or industry and all fruits, natural,
industrial or civil, due or received during the marriage
Note: In cases provided in 1, 2 and 3, the presentation of the final from his or her separate property.
judgment against the guilty or absent spouse shall be enough basis
for the grant of the decree of judicial separation of property. Q: What are the liabilities for family expenses of the
spouses under the regime of separation of property?
Q: What are the effects of judicial separation of property
between spouses? A: GR: Both spouses shall bear the family expenses in
proportion to their income.
A:
1. The absolute community or conjugal partnership is XPN: In case of insufficiency or default thereof, to the
dissolved; current market value of their separate properties.
2. The liability of the spouses to creditors shall be
solidary with their separate properties;
3. Mutual obligation to support each other continues;
A:
ART. 147 ART. 148
Applicability
Presence of legal impediment:
1. No legal impediment to marry; 1. Adulterous relationships
2. Void marriage on the ground of psychological 2. Bigamous/polygamous marriages
incapacity. 3. Incestuous void marriages under Art. 37
4. Void marriages by reason of public policy (Art. 38)
Salaries & wages
Separately owned by the parties. If any is married, his/her
Owned in equal shares
salary pertains to the CPG of the legitimate marriage.
Property exclusively acquired
Belongs to party
Belongs to such party
upon proof of acquisition through exclusive funds
Property acquired by both through their work or industry
Owned in common in proportion to their respective
Governed by rules of co-ownership
contributions
Presumption
Property acquired while living together presumed obtained
No presumption of joint acquisition.
by their joint efforts, work or industry and owned by them
in equal shares.
Actual joint contribution of money, property or industry shall
be owned by them in common proportion.
If one party did not participate in acquisition:
presumed to have contributed through care and
However, their contributions are presumed equal, in the
maintenance of family and household (Buenaventura v.
absence if proof to the contrary
Buenaventura, G.R. No. 127358, March 31, 2005)
Forfeiture
If one of the parties is validly married to another, his/her
When only one is in GF, share of party in BF in the co-
share in the co-ownership shall accrue to the ACP or CPG
ownership be forfeited in favor of:
existing in the marriage.
1. their common children
2. innocent party
If the party who acted in BF is not validly married to another
in default of / waiver by any/all common children, or by
or if both parties are in BF, such share be forfeited in manner
their descendants
provided in the last par. of Art. 147
Proof of actual contribution
Not necessary Necessary
Note: For as long as it is proven that property was acquired during marriage, the presumption of conjugality will attach regardless in whose name
the property is registered.
The presumption is not rebutted by the mere fact that the certificate of title of the property or the tax declaration is in the name of one of the
spouses (Villanueva v. CA, G.R. No. 143286, Apr. 14, 2004).
1. Who would own the riceland, and what property Q: What are the requisites before a suit between
relation governs the ownership? Explain. members of the same family may prosper?
2. Who would own the coconut land, and what
property relation governs the ownership? A:
Explain. 1. Earnest efforts toward a compromise have been
3. Who would own the mango orchard, and what made;
property relation governs the ownership? 2. Such efforts failed;
Explain. (1992 Bar Question) 3. The fact that earnest efforts toward a compromise
have been made but the same have failed appears in
A: the verified complaint or petition.
1. Rico and Cora are the co-owners of the riceland. The
relation is that of co-ownership (Art. 147, Family Code, Note: This rule shall not apply to cases which may not be subject of
first paragraph). compromise under the Art. 2035 of the NCC.
Addendum: However, after Rico's marriage to Letty, Q: In a complaint filed by Manolo against his brother,
the half interest of Rico in the riceland will then Rodolfo, it was alleged that the case "xxx passed through
become absolute community property of Rico and the Barangay and no settlement was forged between the
Letty. plaintiffs and defendant as a result of which Certification
to File Action was issued xxx". Rodolfo moved to dismiss
2. Rico is the exclusive owner of the coconut land. The for failure to comply with a condition precedent - that
relation is a sole/single proprietorship (Art. 148. Family earnest efforts for an amicable settlement among the
Code, first paragraph is applicable, and not Art. 147 parties had been exerted but that none was reached.
Family Code). Decide.
Q: Does the exemption of family home from execution be Note: This enumeration may include the in-laws where the family
set up and proved? home is constituted jointly by the husband and wife. But the law
definitely excludes maids and overseers.
A: Yes. The family home’s exemption from execution must
be set up and proved to the Sheriff before the sale of the Q: On what properties must the family home be
property at public auction. It should be asserted that the constituted?
property is a family home and that it is exempted from
execution at the time it was levied or within a reasonable A: The family home must be part of the properties of the
time thereafter. It is not sufficient that the person claiming absolute community or the conjugal partnership or the
exemption merely alleges that such property is a family exclusive properties of either spouse with the latter’s
home. Failure to do so will estop one from later claiming consent. It may also be constituted by an unmarried head
the said exemption (Spouses Araceli Oliva-De Mesa and of a family on his or her own property.
Ernesto de Mesa v. Spouses Claudio D. Acero Jr. and
Note: Property that is subject of a conditional sale on instalments
Ma.Rufina D. Acero, Sheriff Felixberto L. Samonte and
where ownership is reserved by the vendor to guarantee payment
Registrar Alfredo Santos, G.R. No. 185064, January 16, of the purchase price may be constituted as a family home.
2012).
Q: What is the effect of death of one or both spouses or of
Q: What are the guidelines in the constitution of the the unmarried head of the family upon the family home?
family home?
A: The family home shall continue despite the death of one
A: 1-SAPOC or both spouses or of the unmarried head of the family for
1. FH is deemed constituted from the time of Actual a period of 10 years or for as long as there is a minor
occupation as a family residence; beneficiary and the heirs cannot partition the same unless
2. Only 1 FH may be constituted; the court finds compelling reasons therefor. This rule shall
3. Must be Owned by the person constituting it; apply regardless of whoever owns the property or
4. Must be Permanent; constituted the family home. (Art. 159, FC)
5. Same rule applies to both valid and voidable marriages
and even to common law spouses; (Arts. 147 and 148) Q: What are the requisites in the sale, alienation,
6. It Continues despite death of one or both spouses or donation, assignment or encumbrance of the FH?
an unmarried head of the family for 10 years or as long
as there is a minor beneficiary. A: The following must give their written consent:
1. The person who constituted the FH;
Note: The heirs cannot partition the same unless the court finds
2. The spouse of the person who constituted the FH;
compelling reasons therefor. This rule shall apply regardless of
whoever owns the property or constituted the family home. 3. Majority of the beneficiaries of legal age.
Note: Filiation may be by nature or adoption, legitimate or A: legitimacy of the child may be impugned only on the
illegitimate.
following grounds:
1. Physical impossibility of the husband to have sexual
Q: What are the classifications of filiation?
intercourse with his wife within the first 120 days of
the 300 days which immediately preceded the birth of
A: LILA
the child
GENERAL RULE EXCEPTIONS
2. It is proved that the child could not have been that of
Legitimate the husband
Conceived or born within a valid marriage 3. In case of artificial insemination, the written
authorization or ratification of either parent was
Illegitimate obtained through mistake, fraud, violence,
Conceived and born outside a valid marriage intimidation, or undue influence.
Legitimated
Q: What is the rule on status of child where the mother
Conceived or born outside of wedlock of parents without
contracted another marriage within 300 days after
impediment to marry at the time of conception and had
termination of the former?
subsequently married.
A: The child shall be considered as conceived during the:
Requisites of Legitimation:
1. No legal impediment for parents to marry at time
1. Former marriage– if child is born:
of conception;
a. Before 180 days after the solemnization of the
2. Valid marriage subsequent to child’s birth.
subsequent marriage, provided it is born
Adopted
b. Within 300 days after termination of former
(Please refer to related notes on Adoption laws at page 61)
marriage
2. Subsequent marriage –if a child is born:
a. 180 days after the celebration of the subsequent
marriage;
Illustrations:
th th
1. 180 day takes place before 300 day
th th
2. 180 day takes place after 300 day
Q: Distinguish action to impugn legitimacy and action to without having Note: Must be filed within 5
claim legitimacy. desisted; years.
3. Child was born after
A: the death of husband.
ACTION TO IMPUGN ACTION TO CLAIM Prescription
LEGITIMACY LEGITIMACY GR: During the lifetime of
Remedy the child
1 year – husband reside in
Action to impugn legitimacy Action to claim legitimacy the same municipality or
XPN: Lifetime of the
or illegitimacy (compulsory recognition) city where birth took place
putative father
Real party in interest 2 years – husband reside
NOT in the same
GR: Husband GR: Child In cases where the action is
municipality or city
for the recognition of
3 years – husband is living
XPNs: Heirs, in cases where: XPNs: Heirs of the child, in illegitimate child by “open
abroad
1. Husband died before cases where: and continuous possession”
the expiration of the 1. Child died in state of of the status.
period for bringing the insanity
action; 2. Child died during
2. Husband died after minority
filing the complaint,
Q: Will an infliction of the last stages of tuberculosis be a Note: Questioning legitimacy may not be collaterally attacked. It
ground for impugnation of the legitimacy of the child? can be impugned only in a direct action.
A: Tuberculosis, even in its last stages, is not the kind of PROOF OF FILIATION
serious illness of the husband that will establish physical
impossibility of access (Andal v. Macaraig, 89 Phil.165). Q: What are the different kinds of proof of filiation?
Q: What is the effect of the declaration of a wife against A: Proof of filiation has two kinds:
the legitimacy of the child where the child is conclusive 1. Primary proof consists of the ff:
presumed to be the legitimate child of H and W? a. Record of birth appearing in civil registrar or final
judgment;
A: The child shall still be legitimate, although the mother b. Admission of legitimate filiation in public
may have declared against his legitimacy. This law likewise document or private handwritten instrument
applies to such instances where the mother may have been signed by parent concerned.
sentenced as an adulteress (Art. 167, FC). 2. Secondary consists of the ff:
a. Open and continuous possession of legitimacy;
Q: Who may attack the legitimacy of the child? b. Any means allowed by the Rules of Court and
special laws.
A: GR: Only the husband can contest the legitimacy of the
child. Note: To prove open and continuous possession of the status of an
illegitimate child, there must be evidence of manifestation of the
permanent intention of the supposed father to consider the child
XPNs: Heirs of the husband may impugn the filiation as his, by continuous and clear manifestations of parental affection
of the child within the period prescribed in Art. 170 of and care, which cannot be attributed to pure charity.
the FC only in the following cases:
1. If the husband should die before the expiration of Such acts must be of such a nature that they reveal not only the
the period fixed for brining his action; conviction of paternity, but also the apparent desire to have and
2. If he should die after the filing of the complaint, treat the child as such in all relations in society and in life, not
without having desisted therefrom; or accidentally, but continuously (Jison v. CA, G.R. No. 124853,
February 24, 1998).
3. If the child was born after the death of the
husband. (Art. 171, FC)
indirectly as circumstantial evidence to prove the Q: In an action for partition of estate, the trial court
same” (Antonio Perla v. Mirasol Baring and Randy B. dismissed it on the ground that the respondent, on the
Perla, G.R. No. 172471, November 12, 2012). basis of her birth certificate, was in fact the illegitimate
child of the deceased and therefore the latter's sole heir,
Q: What are the rules in proving filiation? to the exclusion of petitioners. However, trial court failed
to see that in said birth certificate, she was listed therein
A: GR: Primary proof shall be used to prove filiation. as “adopted.” Was the trial court correct in dismissing the
action for partition?
XPN: In absence of primary proof, secondary proof
may be resorted to. A: No. The trial court erred in relying upon the said birth
certificate in pronouncing the filiation of the respondent.
Note: For illegitimate children, if the action is based on par. 2 of However, since she was listed therein as “adopted”, she
Art. 172 (secondary proof), the action may be brought only during should therefore have presented evidence of her adoption
the lifetime of the alleged parent. in view of the contents of her birth certificate. In this case,
there is no showing that she undertook such. It is well-
Q: May a will which was not presented for probate settled that a record of birth is merely prima facie evidence
sufficiently establish filiation? of the facts contained therein. It is not conclusive evidence
of the truthfulness of the statements made there by the
A: Yes. It still constitutes a public document or private interested parties (Rivera v. Heirs of Romualdo Villanueva,
handwritten instrument signed by parent concerned. G.R. No. 141501, July 21, 2006).
Q: When is a prima facie case said to exist? Q: In a complaint for partition and accounting with
damages, Ma. Theresa alleged that she is the illegitimate
A: We explained that a prima facie case exists if a woman daughter of Vicente, and therefore entitled to a share in
declares — supported by corroborative proof — that she the estate left behind by the latter. As proof, she
had sexual relations with the putative father; at this point, presented her birth certificate which Vicente himself
the burden of evidence shifts to the putative father. We signed thereby acknowledging that she is his daughter. Is
explained further that the two affirmative defenses the proof presented by Ma.Theresa sufficient to prove her
available to the putative father are: (1) incapability of claim that she is an illegitimate child of Vicente?
sexual relations with the mother due to either physical
absence or impotency, or (2) that the mother had sexual A: Yes. Citing the earlier case of De Jesus v. Estate of Juan
relations with other men at the time of conception (Charles Dizon, (366 SCRA 499), the Supreme Court held that the
Gotardo v. Divina Buling, G.R. No. 165166, August 15, Ma. Theresa was able to establish that Vicente was in fact
2012). her father. The due recognition of an illegitimate child in a
record of birth, a will, a statement before a court of record,
Q: Rosanna, as surviving spouse, filed a claim for death or in any authentic writing is, in itself, a consummated act
benefits with the SSS upon the death of her husband, of acknowledgment of the child, and no further court action
Pablo. She indicated in her claim that the decedent is also is required. The rule is, any authentic writing is treated not
survived by their minor child, lyn, who was born in 1991. just as a ground for compulsory recognition; it is in itself a
Q: Gerardo and Ma. Theresa, however, admitted that the A: No. In this age of genetic profiling and DNA analysis, the
child was their son. Will this affect the status of the child? extremely subjective test of physical resemblance or
similarity of features will not suffice as evidence to prove
A: No. The admission of the parties that the child was their paternity and filiation before courts of law. This only shows
son was in the nature of a compromise. The rule is that: the the very high standard of proof that a child must present in
status and filiation of a child cannot be compromised. Art. order to establish filiation.
164 of the FC is clear that a child who is conceived or born
during the marriage of his parents is legitimate (Concepcion Note: The birth certificate that was presented by the plaintiff-
v. CA, G.R. No. 123450. August 31, 2005). minor appears to have been prepared without the knowledge or
consent of the putative father. It is therefore not a competent
piece of evidence on paternity. The local civil registrar in this case
Q: What is the effect of Ma. Theresa’s claim that the child
has no authority to record the paternity of an illegitimate child on
is her illegitimate child with her second husband, to the the information of a third person. Similarly, a baptismal certificate,
status of the child? while considered a public document, can only serve as evidence of
the administration of the sacrament on the date specified therein
A: None. This declaration – an avowal by the mother that but not the veracity of the entries with respect to the child's
her child is illegitimate – is the very declaration that is paternity (Macadangdang v. CA, 100 SCRA 73). Thus, certificates
proscribed by Art. 167 of the FC. This proscription is in issued by the local civil registrar and baptismal certificates are per
consonance with, among others, the intention of the law to se inadmissible in evidence as proof of filiation and they cannot be
admitted indirectly as circumstantial evidence to prove the same
lean towards the legitimacy of children (Concepcion v. CA,
(Jison v. CA, 350 Phil. 138; Cabatania v. CA, G.R. No. 124814.
G.R. No. 123450. August 31, 2005). October 21, 2004).
Q: In a petition for issuance of letters of administration, Q: Ann Lopez, represented by her mother Araceli Lopez,
Cheri Bolatis alleged that she is the sole legitimate filed a complaint for recognition and support of filiation
daughter of decedent, Ramon and Van Bolatis. Phoebe, against Ben-HurNepomuceno. She assailed that she is the
the decedent's second wife, opposed the petition and illegitimate daughter of Nepomuceno submitting as
questioned the legitimate filiation of Cheri to the evidence the handwritten note allegedly written and
decedent, asserting that Cheri’s birth certificate was not signed by Nepomuceno. She also demanded for financial
signed by Ramon and that she had not presented the support along with filial recognition. Nepomuceno denied
marriage contract between her alleged parents which the assertions reasoning out that he was compelled to
would have supported her claim. execute the handwritten note due to the threats of the
National People’s Army. RTC ruled in favor of Ann. Is the
In said birth certificate, it was indicated that her birth was trial court correct?
recorded as the legitimate child of Ramon and Van Bolatis,
and contains as well the word "married" to reflect the A: Ann’s demand for support is dependent on the
union between the two. However, it was not signed by determination of her filiation. However, she relies only on
Ramon and Vanemon Bolatis. It was merely signed by the the handwritten note executed by petitioner. The note
attending physician, who certified to having attended to does not contain any statement whatsoever about her
the birth of a child. Does the presumption of legitimacy filiation to petitioner. It is, therefore, not within the ambit
apply to Cherimon? of Article 172(2) vis-à-vis Art. 175 of the FC which admits as
competent evidence of illegitimate filiation an admission of
A: No. Since the birth certificate was not signed by Cher's filiation in a private handwritten instrument signed by the
alleged parents but was merely signed by the attending parent concerned.
physician, such a certificate, although a public record of a
private document is, under Sec. 23, Rule 132 of the Rules of
Court, evidence only of the fact which gave rise to its
UNIVERSITY OF SANTO TOMAS
2013 GOLDEN NOTES 58
PERSONS AND FAMILY RELATIONS
The Court is mindful that the best interests of the child in
cases involving paternity and filiation should be advanced. Q: How may illegitimate children establish their
It is, however, just as mindful of the disturbance that illegitimate filiation should their status be impugned?
unfounded paternity suits cause to the privacy and peace of When must the action to claim illegitimacy be brought?
the putative father’s legitimate family (Ben-
HurNepomuceno v. Archbencel Ann Lopez, represented by A: Illegitimiate children may establish their illegitimate
her mother Araceli Lopez G.R. No. 181258, March 18, 2010). filiation in the same way and on the same evidence as
st
legitimate children. (Art. 175, 1 sentence, FC)
ILLEGITIMATE CHILDREN
The action must be brought in the same period specified in
Q: Who are illegitimate children? Art. 173 of the FC, except when the action is based on the
nd
2 par. of Art. 172 of the FC, in which case the action may
A: Children conceived and born outside a valid marriage: be brought during the lifetime of the alleged parent. (Art.
1. children born of couples who are not legally married or 175, FC)
of common law marriages
2. children born of incestuous marriage LEGITIMATED CHILDREN
3. children born of bigamous marriage
4. children born of adulterous relations between parents Q: Who are legitimated children?
5. children born of marriages which are void for reasons of
public policy under Art. 18 A; Legitimated children are those who, because of the
6. children born of couples below 18, whether they are subsequent marriage of their parents to each other are by
married (which marriage is valid) or not legal fiction, considered legitimate.
7. children born of void marriages under Art. 35, except
where the marriage is void for lack of authority on the Q: What is legitimation?
part of the solemnizing officer, but the parties or either
of them believed in good faith that the solemnizing A: Legitimation is a remedy or process by means of which
officer had authority, in which case the marriage will be those who in fact not born in wedlock and should therefore
considered valid and the children will be considered be ordinarily illegitimate, are by fiction, considered
legitimate. legitimate.
Q: What are the rights of an illegitimate child? Q: Who are entitled to legitimation?
Q: What is the effect of the recognition of an illegitimate A: Legitimation takes place by a subsequent valid marriage
child by the father? between parents.
A: Such recognition would be a ground for ordering the Note: The annulment of a voidable marriage shall not affect
latter to give support to, but not the custody of the child. the legitimation. (Art. 178, FC)
The law explicitly confers to the mother sole parental
authority over an illegitimate child; it follows that only if Q: When does legitimation take place?
she defaults can the father assume custody and authority
over the minor (Briones v. Miguel, G.R. No. 156343, October A: It shall retroact to the time of the child’s birth. (Art 180,
18, 2004). FC)
Q: In what instances may an illegitimate child use the Q: Who may impugn legitimation?
surname of their father?
A: Only by those who are prejudiced in their rights.
A: RAP
1. Filiation has been Recognized by the father through Q: What are the requisites of legitimation?
the record of birth appearing in the civil register
2. Admission in public document A:
3. Private handwritten instrument is made by the father 1. Child must have been conceived and born outside of
wedlock;
Note: Provided that the father has the right to institute an action 2. Child’s parents, at the time of former’s conception,
before the regular courts to prove non-filiation during his lifetime. were not disqualified by any impediment to marry
LEGITIMATE CHILDREN ILLEGITIMATE CHILDREN XPN: It is not necessary that adopter be at least
16 years older:
Surname a. Adopter is the biological parent of the
Bear the surnames of both Bear the surname of either adoptee,
parents (mother and the mother or the father b. Adopter is the spouse of adoptee’s parent.
father) under R.A. 9255
Q: What are the qualifications of an alien who may adopt
Support
under R.A. 8552?
Receive support from:
1. Parents;
A: SD-3
2. Ascendants; and Receive support according to
1. Possesses Same qualifications as those enumerated for
3. in proper cases, provision of FC
Filipino adopters;
brothers and sisters
2. His country has Diplomatic relations with the
under Art. 174.
Philippines;
Legitime 3. GR: Has been living in the Philippines for at least 3
Full Legitimes and other Share is equivalent to ½ of continuous years prior to the application for adoption
successional rights under the share of a legitimate and maintains such residence until adoption decree
the NCC child has been entered.
Period for filing action for claim of legitimacy or
illegitimacy XPNs:
For primary proof: his/her a. He is a former Filipino who seeks to adopt a
whole lifetime relative within the 4
th
civil degree of
His/her whole lifetime
regardless of type of proof consanguinity or affinity,
For secondary proof: b. He is married to a Filipino and seeks to adopt
provided under Art. 172
only during the lifetime of jointly with his spouse a relative within the 4
th
DOMESTIC ADOPTION LAW A: GR: Such person must adopt with his spouse jointly. The
general rule is that husband and wife shall jointly adopt.
WHO CAN ADOPT
XPNs:
Q: Who may adopt? 1. One spouse seeks to adopt the legitimate child of
the other;
A: 2. One spouse seeks to adopt his own illegitimate
1. Filipino citizens; child;
2. Aliens; 3. Spouses are legally separated.
3. Guardians with respect to their ward.
Q: Spouses Primo and Monica Lim, childless, were
Q: What are the qualifications of a Filipino who may entrusted with the custody of two minor children, the
adopt? parents of whom were unknown. Eager of having children
of their own, the spouses made it appear that they were
A: LPG-FEC-16 the children’s parents by naming them Michelle P. Lim and
1. Must be of Legal age; Michael Jude Lim. Subsequently, Monina married Angel
2. In a Position to support and care for his children; Olario after Primo’s death of her husband. She decided to
3. Good moral character; adopt the children by availing the amnesty given under
XPN: In cases where the biological parent is the There is a legal obstacle to the adoption of Sandy by
spouse of the adopter; Andrew and Elena. Andrew and Elena cannot adopt jointly
because they are not married.
2. Deemed a legitimate child of the adopter;
3. Acquires reciprocal rights and obligations arising from
parent-child relationship;
4. Right to use surname of adopter;
Q: Sometime in 1990, Sarah, born a Filipino but by then a INTER-COUNTRY ADOPTION BOARD
naturalized American citizen, and her American husband
Sonny Cruz, filed a petition in the Regional Trial Court of Q: What is the function of Inter-Country Adoption Board?
Makati, for the adoption of the minor child of her sister, a
Filipina, can the petition be granted? (2000 Bar Question) A: The Inter-Country Adoption Board acts as the central
authority in matters relating to inter-country adoption. The
UNIVERSITY OF SANTO TOMAS
2013 GOLDEN NOTES 64
PERSONS AND FAMILY RELATIONS
Board shall ensure that all the possibilities for adoption of Q: What are the rules on the amount of support?
the child under the Family Code have been exhausted and
that the inter-country adoption is in the best interest of the A: Amount of support shall be in proportion to the
child resources or means of the giver and to the necessities of
the recipient. It shall be increased or reduced
Q: What is trial custody? proportionately, according to the increase/reduction of
necessities of the recipient and the resources of the person
A: It is the pre-adoptive relationship which ranges 6 months obliged.
from the time of the placement. It starts from the actual
transfer of the child to the applicant who, as actual Q: What are the different kinds of support?
custodian, shall exercise substitute parental authority over
the person of the child A:
1. Legal – required or given by law;
Note: 2. Judicial – required by court;May be:
1. If unsatisfactory – the relationship shall be suspended by the a. Pendente lite
board and the foreign adoption agency shall arrange for the b. In a final judgment
child’s voluntary care.
3. Conventional – by agreement.
2. If satisfactory – the Board shall submit the written consent of
the adoption to the foreign adoption agency within 30 days
after the request of the latter’s request. Q: What are the rules on support of illegitimate children
of either spouse?
SUPPORT
A: It depends upon the property regime of the spouses.
Q: What is support? 1. ACP:
a. Exclusive property of the debtor spouse shall be
A: It comprises everything indispensable for sustenance, liable.
dwelling, clothing, medical attendance and transportation,
in keeping with the financial capacity of the family, b. If the exclusive property is insufficient, the
including the education of the person entitled to be community is liable.
supported until he completes his education or training for
some Note: The same being considered as advance made by the
absolute community to said spouse.
2. CPG:
profession, trade or vocation, even beyond the age of
a. Property of the debtor-spouse is liable.
majority. (Art. 194, FC)
b. If the debtor spouse has no property or the same
is insufficient, it may be enforced against the
Q: What are the characteristics of support?
conjugal property.
A: PRIM PEN
WHO ARE OBLIGED
1. Personal
2. Reciprocal on the part of those who are by law bound
Q: Who are persons obliged to support each other?
to support each other
3. Intransmissible
A:
4. Mandatory
1. Spouses;
5. Provisional character of support judgment
2. Legitimate ascendants & descendants;
6. Exempt from attachment or execution
3. Parents and their legitimate children, and the
7. Not subject to waiver or compensation
legitimate and illegitimate children of the latter;
4. Parents and their illegitimate children, and the
WHAT IT COMPRISES
legitimate and illegitimate children of the latter;
5. Legitimate brothers and sisters whether full or half-
Q: What comprises support?
blood. (Art. 195, FC)
A: Support comprises of everything indispensable for: SDC
Q: Are brothers and sisters not legitimately related
MET
likewise bound to support each other?
1. Sustenance
2. Dwelling
A: GR: Yes, whether full or half-blood.
3. Clothing
4. Medical attendance
XPN: When the need for support of the brother or
5. Education – includes schooling or training for some
sister, being of age, is due to a cause imputable to the
profession, trade or vocation, even beyond the age of
claimant’s fault or negligence. In this case, the
majority
illegitimate brother or sister has no right to be
6. Transportation – includes expenses going to and from
supported.
school, or to from place of work
Q: Are the spouses still obliged to render mutual support A: Only from the date of judicial or extrajudicial demand.
after final judgment granting the petition?
Note: The right to support does not arise from mere fact of
A: GR: No. The obligation of mutual support ceases after relationship but from imperative necessity without which it cannot
final judgment. be demanded. The law presumes that such necessity does not exist
unless support is demanded.
XPN: In case of legal separation the Court may order
that the guilty spouse shall give support to the OPTIONS
innocent one.
Q: What are the options given to persons giving support?
Q: H and W are living separately. Both had been unfaithful
to each other. After their separation, H had been giving A:
money to W for her support. Subsequently, W brought an 1. To Give a fixed monthly allowance; or
action against H for separate maintenance. Will the action 2. To Receive and maintain the recipient in the giver’s
prosper? home or family dwelling. (Art. 204, FC)
A: Yes. The principle of in pari delicto is applicable. Both are Q: What if support is given by a stranger without the
at fault. Consequently, H cannot avail of himself of the knowledge of the person obliged to give support?
defense of adultery of W. Besides, the act of H in giving
money to W is implied condonation of the adultery of W A: GR: The stranger shall have the right of reimbursement.
(Amacen v. Baltazar, L-10028, May 28, 1958).
XPN: Unless it appears that he gave it without any
Q: May the woman oblige her husband to pay the intention of being reimbursed. (Art. 206, FC)
attorney’s fee for the lawyer who defended her in a
criminal action for adultery instituted against her by the Q: What if the person obliged to give support unjustly
husband? refuses or fails to give support when urgently needed?
4. Purely personal; A:
1. Absence or death of either parent – parent present
Note: It cannot be exercised through agents. shall continue exercising parental authority
2. Remarriage of either parent – it shall not affect the
5. Temporary. parental authority over the children, unless the court
appoints another person to be the guardian of the
Q: What are the rules as to the exercise of parental person or property of the children. (Art. 213, FC)
authority? 3. Legal or de facto separation of parents – the parent
designated by the court.
A:
1. The father and the mother shall jointly exercise Q: What shall the Court take into account in the
parental authority over the persons of their common designation of the parent?
children.
A: All relevant considerations, especially the choice of the
Note: In case of disagreement, the father’s decision shall child over seven years of age except when the parent
prevail unless there is a judicial order to the contrary. chosen is unfit.
2. If the child is illegitimate, parental authority is with the Note: The relevant Philippine law on child custody for spouses
mother. separated in fact or in law (under the second paragraph of Art. 213
of the FC) is also undisputed: “no child under seven years of age
Q: What is “visitation rights”? shall be separated from the mother x x x.” (This statutory awarding
of sole parental custody to the mother is mandatory, grounded on
sound policy consideration, subject only to a narrow exception not
A: It is the right of access of a noncustodial parent to his or
alleged to obtain here.) Clearly then, the Agreement’s object to
her child or children. establish a post-divorce joint custody regime between respondent
and petitioner over their child under seven years old contravenes
Q: Carlitos Silva and Suzanne Gonzales had a live-in Philippine law. The Philippine courts do not have the authority to
relationship. They had two children, namely, Ramon enforce an agreement that is contrary to law, morals, good
Carlos and Rica Natalia. Silva and Gonzales eventually customs, public order, or public policy (Dacasin v. Dacasin, G.R. No.
separated. They had an understanding that Silva would 168785, February 5, 2010).
have the children in his company on weekends. Silva
claimed that Gonzales broke that understanding on Q: What is the rule as to the custody of a child below 7
visitation rights. Hence, Silva filed a petition for custodial years of age?
rights over the children before the RTC. The petition was
opposed by Gonzales who claimed that Silva often A: GR: No child below 7 years of age shall be separated
engaged in gambling and womanizing which she feared from the mother.
could affect the moral and social values of the children. In
the meantime, Suzanne had gotten married to a Dutch XPN: When the court finds compelling reasons to
national. She eventually immigrated to Holland with her consider otherwise
children Ramon Carlos and Rica Natalia. Can Silva be
denied visitation rights? Note: The paramount consideration in matters of custody of a child
is the welfare and well-being of the child
A: GR: No. The use of the word “shall” in Art. 213 of the FC is mandatory in
character. It prohibits in no uncertain terms the separation of a
SUBSTITUTE AND SPECIAL PARENTAL AUTHORITY A: GR: Parents are never deprived of the custody and care
of their children.
Q: What is the order of substitute parental authority?
XPNS:
A: GOC 1. For cause
1. Surviving Grandparent;
Note: the law presumes that the child’s welfare will be
Note: The law considers the natural love of a parent to best served in the care and control of his parents.
outweigh that of the grandparents, such that only when the
parent present is shown to be unfit or unsuitable may the
2. If in consideration of the child’s welfare or well-
grandparents exercise substitute parental authority (Santos v.
CA, G.R. No. 113054, March 16, 1995). being, custody may be given even to a non-
relative.
2. Oldest brother or sister, over 21 years;
Q: What is the basis for the duty to provide support?
XPN: unfit or disqualified
A: Family ties or relationship, not parental authority.
3. Actual Custodian over 21 year;
Note: The obligation of the parents to provide support is not
coterminous with the exercise of parental authority.
XPN: unfit or disqualified (Art. 216, FC)
UNIVERSITY OF SANTO TOMAS
2013 GOLDEN NOTES 70
PERSONS AND FAMILY RELATIONS
Q: What are the distinctions between substitute parental
Q: What is the rule on the parent’s duty of authority and special parental authority?
representation?
A:
A: GR: Parents are duty-bound to represent their SUBSTITUTE PARENTAL SPECIAL PARENTAL
unemancipated children in all matters affecting their AUTHORITY AUTHORITY
interests; Exercised in case of: DAU 1. Exercised concurrently
with the parental
Note: This duty extends to representation in court litigations. 1. Death, authority of the
2. Absence, or parents;
XPN: A guardian ad litem may be appointed by the 3. Unsuitability of 2. Rests on the theory that
court to represent the child when the best interest of parents. while the child is in the
the child so requires. custody of the person
exercising special
Q: What is the scope of the parent’s right to discipline the parental authority, the
child? parents temporarily
relinquish parental
A: Persons exercising parental authority may: authority over the child
1. Impose discipline on minor children as may be to the latter.
required under the circumstances.
Q: What is the liability of persons exercising special
2. Petition the court for the imposition of parental authority over the child?
appropriate disciplinary measures upon the child,
which include the commitment of the child in A: They are principally and solidarily liable for damages
entities or institutions engaged in child care or in caused by the acts or omissions of the child while under
children’s homes duly accredited by the proper their supervision, instruction or custody.
government agency.
Note: Parents, judicial guardians or those exercising substitute
Note: Such commitment must not exceed 30 days. parental authority over the minor are subsidiarily liable for said
acts and omissions of the minor.
Q: What are the limitations on the exercise of the right to
discipline the child and what are its consequences? Q: While Jayson and his classmates were conducting a
science experiment about fusion of sulphur powder and
A: Persons exercising such right is not allowed to: iron fillings under the tutelage of Tabugo, the subject
1. Treat the child with excessive harshness or teacher and employee of St. Joseph College. Tabugo left
cruelty; or her class while it was doing the experiment without
2. Inflict corporal punishment. having adequately secured it from any untoward incident
or occurrence. In the middle of the experiment, Jayson
Otherwise, the following are its consequences: checked the result of the experiment by looking into the
1. Parental authority may be suspended; test tube with magnifying glass and it was moved towards
2. Parent concerned may be held criminally liable his eyes. At that instance, the compound in the test tube
for violation of RA 7160 (Special Protection of spurted out and several particles of which hit his eyes and
Children against Abuse, Exploitation and his left eye was chemically burned for which he had to
Discrimination Act) undergo surgery and had to spend for his medication.
Hence, Jayson was constrained to file the complaint for
Q: To whom may special parental authority be granted? damages against the school and Tabugo. Can the said
school and its teacher, Tabugo, be held liable for the
A: unfortunate incident of Jayson?
1. School, its administrators and teachers;
2. Individual entity or institution engaged in child care. A: Yes. The proximate cause of the student’s injury was the
concurrent failure of petitioners to prevent the foreseeable
mishap that occurred during the conduct of the science
experiment. Petitioners were negligent by failing to
exercise the higher degree of care, caution and foresight
incumbent upon the school, its administrators and
teachers. Art. 218 of the FC, in relation to Art. 2180 of the
NCC, bestows special parental authority on a school, its
administrators and teachers, or the individual, entity or
institution engaged in child care, and these persons have
responsibility over the minor child while under their
supervision, instruction or custody. Authority and
responsibility shall apply to all authorized activities whether
Note: In case of disagreement, the father’s decision shall prevail SUSPENSION OR TERMINATION OF PARENTAL AUTHORITY
unless there is a judicial order to the contrary.
Q: When is parental authority terminated?
Q: When is a parent required to post a bond?
A:
A: If the market value of the property or the annual income 1. Permanent: DED
of the child exceeds Php 50,000. a. Death of parents;
b. Emancipation of the child;
Note: The bond shall not be less than 10% of the value of the c. Death of child.
property or annual income. (Art. 225, FC)
2. Temporary: AGA FIA – it may be revived
Q: What are the kinds of properties of a minor?
a. Adoption of the child;
Distinguish.
b. Appointment of general Guardian;
c. Judicial declaration of Abandonment;
A:
d. Final judgment divesting parents of PA;
ADVENTITIOUS PROSFECTITIOUS e. Incapacity of parent exercising PA;
1. Earned or f. Judicial declaration of Absence.
acquired by the
child through his 1. Property Q: What are the grounds for suspension of PA?
work or industry given by the
by onerous or parents to the A: CHAIN B
gratuitous title; child for the 1. Gives Corrupting orders, counsel and example;
2. Owned by the latter to 2. Treats child with excessive Harshness and cruelty;
child; administer; 3. Subjects/allows child be subjected to Acts of
3. Child is also the 2. Owned by the lasciviousness;
usufructuary, but parents; 4. Conviction of crime with penalty of civil Interdiction ;
the child’s use of 3. Parents are 5. Culpable Negligence of parent or person exercising PA;
the property shall usufructuary; 6. Compels child to Beg.
be secondary to 4. Property
all collective daily administered Note: If the person exercising PA has subjected the child or allowed
needs of the by the child. him to be subjected to sexual abuse, he/she shall be permanently
family; deprived of PA.
4. Administered by
the parents.
GR: Parental authority and responsibility are inalienable Q: What are the matters subject to summary proceedings?
and may not be transferred and renounced.
A:
XPN: In case authorized by law. 1. Petition for judicial authority to administer or
encumber specific separate property of the
Note: Parents may exercise authority over their children’s abandoning spouse.
property. 2. Petition for an order providing for disciplinary
measures over a child.
Q: Under the Child Abuse Law (R.A. 7610), when will 3. Petition for approval of bond of parents who exercise
parental authority over the minor? parental authority over the property of their children.
4. Judicial declaration of presumptive death.
A: When an ascendant, stepparent or guardian of the 5. Action of a child for delivery of presumptive legitime
minor, induces, delivers or offers him to any person who 6. Judicial determination of family domicile in case of
would keep or have in his company such minor, twelve (12) disagreement between the spouses
years or under or who in ten (10) years or more his junior, 7. Objection of one spouse as to the profession of the
in any public or private place, hotel, motel, beer joint, other.
discotheque, cabaret, pension house, sauna or massage 8. Action entrusting parental authority over foundlings,
parlor, beach and/or other tourist resort or similar places. abandoned, neglected or abused children to heads of
institutions.
Q: What is corporal punishment? 9. Annulment by wife of the husband's decision in the
administration and enjoyment of community or
A: It is the infliction of physical disciplinary measures to a conjugal property.
student. This is absolutely prohibited under the Family 10. Appointment of one of the spouses as sole
Code (Sta. Maria, Jr., Persons and Family Relations Law). administrator but only when the other spouse is
absent, or separated in fact, or has abandoned the
Note: While a teacher is administratively liable or civilly liable in other or the consent is withheld (Uy v. CA, G.R. No.
the event that he or she inflicts corporal punishment to a student,
109557, November 29, 2000 ).
it has been held that where there was no criminal intent on the
part of the teacher who angrily and repeatedly whipped a student
resulting in slight physical injuries to the said student and where Q: How shall matters subject to summary proceedings be
the purpose of the teacher was to discipline a student, the said decided?
teacher cannot be held feloniously liable for the criminal offense of
slight physical injuries (Bagajo v. Marave, G.R. No. L-33345, A: All cases requiring summary court proceedings shall be
November 20, 1978, also cited by Sta. Maria, Jr., Persons and decided in an expeditious manner, without regard to
Family Relations Law). technical rules.
A: Some right or interest in property that has become fixed Note: If an action for recognition was filed prior to the effectivity of
or established, and is no longer open to doubt or the FC, Art. 173 of the FC cannot be given retroactive effect
controversy. Rights are vested when the right to because it will prejudice the vested rights of petitioners
enjoyment, present or prospective, has become the transmitted to them at the time of the death of their father,
property of some person as present interest. Eutiquio Marquino. "Vested right" is a right in property which has
become fixed and established and is no longer open to doubt or
controversy. It expresses the concept of present fixed interest,
Q: Is a decree of nullity of the first marriage required
which in right reason and natural justice should be protected
before a subsequent marriage can be entered into validly? against arbitrary State action (Marquino v. IAC, G.R. No. 72078,
June 27, 1994).
A: GR: Under the Art. 40 of the FC, the absolute nullity of a
previous marriage may be invoked for purposes of FUNERALS
remarriage on the basis solely of a final judgment declaring
such previous marriage void. Q: What are the rules regarding funeral?
XPN: If the second marriage, however, took place prior A: General Guidelines:
to the effectivity of the FC, there is no need for judicial 1. Duty and right to make arrangements in funerals in
declaration of nullity of the first marriage pursuant to accordance with Art. 199, FC:
the prevailing jurisprudence at that time. (Rabuya, a. Spouse,
2006, p. 265) b. Descendants in the nearest degree,
c. Ascendants in the nearest degree,
Note: Art. 40 is applicable to remarriages entered into after d. Brothers and Sisters
the effectivity of the FC on August 3, 1988 regardless of the
date of the first marriage. Besides, under Art. 256 of the FC,
Note: In case of descendants of the same degree, or of
said Article is given "retroactive effect insofar as it does not
brothers and sisters, the oldest shall be preferred.
prejudice or impair vested or acquired rights in accordance
with the Civil Code or other laws" (Atienza v. Brillantes, A.M.
In case of ascendants, the paternal shall have a better right.
No. MTJ-92-706, March 29, 1995).
USE OF SURNAMES A: No. Before a person can legally change his given name,
he must present proper or reasonable cause or any
Q: What are the grounds for change of name which have compelling reason justifying such change. In addition, he
been held valid? must show that he will be prejudiced by the use of his true
and official name. Under the Civil Register Law, a birth
A: CLEARED certificate is a historical record of the facts as they existed
1. One has Continuously used and been known since at the time of birth. Thus, the sex of a person is determined
childhood by a Filipino name and was unaware of alien at birth, visually done by the birth attendant (the physician
parentage; or midwife) by examining the genitals of the infant.
2. The change results as a Legal consequence, as in Considering that there is no law legally recognizing sex
legitimation; reassignment, the determination of a person’s sex made at
3. There is a sincere desire to adopt a Filipino name to the time of his or her birth, if not attended by error, is
Erase signs of former alienage, all in good faith and immutable (Silverio v. Republic, G.R. No. 174689, October
without prejudicing anyone; 22, 2007).
4. The change will Avoid confusion;
5. The name is: Q: What are the procedural requirements for a petition for
a. Ridiculous, change of name?
b. Extremely difficult to write or pronounce,
c. Dishonorable. A:
1. 3 years residency in the province where the change is
Q: The petition filed by the parents in behalf of their sought prior to the filing;
minor son Julian Lin Carulasan Wang sought the dropping 2. Must not be filed within 30 days prior to an election;
of the latter's middle name, "Carulasan." The parents 3. Petition must be verified.
averred that their plan for Julian to study in Singapore and
adjust to its culture necessitates the drop since in that
Q: What is the Rule with regard to the use of surname by a
country, middle names or the mother's surname are not
child who is (1) legitimate, (2) legitimated, (3) adopted
carried in a person's name. They therefore anticipate that
and (4) illegitimate?
Julian may be subjected to discrimination on account of
his middle name, which is difficult to pronounce in light of
A:
Singapore's Mandarin language which does not have the
CHILD CONCERNED SURNAME TO BE USED
letter "R" but if there is, Singaporeans pronounce it as "L."
Legitimate
Should the petition for the dropping of his middle name Father’s
be granted? Legitimated
Adopted Adopter’s
A: No. Petitioners’ justification for seeking the change in Mother’s or Father’s if
the name of their child, that of convenience, was Illegitimate requisites of R.A. 9255 are
characterized by the Supreme Court as amorphous, to say complied with
the least, and would not warrant a favorable ruling. As Conceived prior to
Father’s
Julian is only a minor and has yet to understand and annulment of marriage
appreciate the value of any change in his name, it is best Conceived after annulment
Mother’s
that the matter be left to his judgment and discretion when of marriage
he reaches legal age.
FACTUAL CIRCUMSTANCE
SURNAME TO BE USED
The State has an interest in the names borne by individuals OF THE WIFE
and entities for purposes of identification, and that a 1. first name and maiden
Valid marriage (before
change of name is a privilege and not a right, such that name + husband’s
husband dies)
before a person can be allowed to change the name given surname
Art 370
him either in his birth certificate or civil registry, he must 2. first name + husband’s
Note: The Supreme Court, in granting the petition, predicated its b. If the child is considered illegitimate, then she
ruling upon the statutory principle that adoption statutes, being should follow the surname of her mother.
humane and salutary, should be liberally construed to carry out the
beneficent purposes of adoption. The modern trend is to consider
Q: Instead of a judicial action, can administrative
adoption not merely as an act to establish a relationship of
paternity and filiation, but also as an act which endows a child with proceedings be brought for the purpose of making the
legitimate status. (In the Matter of the Adoption of Stephanie above corrections?
Nathy Astorga Garcia, G.R. No. 148311. March 31, 2005)
A: Under R.A. 9048, only typographical errors are allowed
Q: Giana was born to Andy and Aimee, who at the time of to be corrected administratively. The change of status from
Giana’s birth were not married to each other. While Andy legitimate to illegitimate is not a typographical error and
was single at that time, Aimee was still in the process of even assuming that it is, its administrative correction is not
securing a judicial declaration of nullity on her marriage to allowed under R.A. 9048. Typographical errors involving
her ex-husband. Gianna’s birth certificate, which was status, age, citizenship, and gender are expressly excluded
signed by both Andy and Aimee, registered the status of from what may be corrected administratively.
Gianna as “legitimate”, her surname carrying that of
Andy’s, and that her parents were married to each other. The change of the surname is also not allowed
Can a judicial action for correction of entries in Gianna’s administratively. R.A. 9048 provides for an administrative
birth certificate be successfully maintained to: procedure for change of first name only and not for change
of surname.
a. Change her status from “legitimate” to “illegitimate”;
and Q: Assuming that Aimee is successful in declaring her
former marriage void, and Andy and Aimee subsequently
A: A judicial action cannot be maintained to change the married each other, would Gianna be legitimated (2008
status of Gianna from “legitimate” to “illegitimate” child of Bar Question)?
Andy and Aimee. While it is true that Gianna is the
biological daughter of Andy and Aimee conceived and born A: No, Gianna will not be legitimated. While the court may
without marriage between them, Gianna is presumed, have declared the marriage void ab initio and, therefore, no
Q: What is the remedy of an interested party, a relative or A: Six (6) months after its publication in a newspaper of
a friend of the absentee to protect the latter's interest? general circulation.
Q: Discuss the distinctions between declaration of presumptive death for purpose of contracting subsequent marriage and
opening succession and declaration of absence under Rules of Court.
A:
DECLARATION OF PRESUMPTIVE DEATH FOR PURPOSE OF: DECLARATION OF ABSENCE
OPENING OF SUCCESSION CONTRACTING SUBSEQUENT MARRIAGE
Applicable laws
Arts. 390-396, Civil Code Arts. 41-44, Family Code Rule 107, Rules of Court
Who may file petition
1. Spouse present;
2. Heirs instituted in the will;
3. Relatives who will succeed by
Absentee’s co-heirs, heirs, assigns,
Spouse present intestacy; or
representative or successors-in-interest
4. Those who have over the property of
the absentee some right
subordinated to the condition of his
Q: What shall be recorded in the civil register? Q: What are the events authorized to be entered in the
civil register?
A: The following, concerning the civil status of persons:
1. Acts A:
2. Events 1. Birth
3. Judicial decrees 2. Marriages
3. Naturalization
Q: What is civil status? 4. Death
A: The circumstances affecting the legal situation or sum Q: What are the judicial decrees authorized to be entered
total of capacities or incapacities of a person in view of his in the civil register?
age, nationality and family membership (Beduya v.
Republic, G.R. L-71639, May 29, 1964). It also includes all A:
his personal qualities and relations, more or less permanent 1. Legal separation
in nature, not ordinarily terminable at his own will, such as 2. Annulments of marriage
A: GR: No entry in a civil register shall be changed or RULE 108, RULES OF COURT
corrected without a judicial order.
Q: May clerical or typographical errors be corrected under
XPNs: Rule 108 of the Rules of Court?
1. Clerical or typographical errors and
2. Change of first name or nickname which can be A: No. The correction or change of clerical or typographical
corrected or changed administratively by the errors can now be made through administrative
concerned city or municipal civil registrar or proceedings and without the need for a judicial order. In
consul general in accordance with the provisions effect, RA 9048 removed from the ambit of Rule 108 of the
of RA 9048 (Clerical Error Law). Rules of Court the correction of such errors. Rule 108 now
applies only to substantial changes and corrections in
Q: What is a clerical or typographical error? entries in the civil register. (Silverio v. Republic, G.R. No.
174689, October 22, 2007)
A: Refers to a mistake committed in the performance of
clerical work in writing , copying, transcribing or typing an Q: What is a first name?
entry in the civil register that is harmless and innocuous,
such as misspelled name or misspelled place of birth or the A: Refers to a name or nickname given to a person which
like, which is visible to the eyes or obvious to the may consist of one or more names in addition to the middle
understanding, and can be corrected or changed only by and last names.
reference to other existing record or records: Provided, that
no correction must involve the change of , nationality, age, Q: John Lloyd Cruzada filed a petition for the change of
status or sex of the petitioner. (Section 2(c), RA 9048) his first name and sex in his birth certificate in the RTC. He
alleged that his name was registered as “John Lloyd
Q: Zirxthoussous delos Santos filed a petition for change Cruzada” in his certificate of live birth. His sex was
of name with the Office of the Civil Registrar of registered as “male”. Further, he alleged that he is a male
Mandaluyong City under the administrative proceeding transsexual. Prior to filing the petition, he underwent sex
provided in RA No. 9048. He alleged that his first name reassignment surgery Thailand. Thus, he seeks to have his
sounds ridiculous and is extremely difficult to spell and name in his birth certificate changed from “John Lloyd” to
pronounce. After complying with the requirements of the “Joanna,” and his sex from “male” to “female” on the
law, the Civil Registrar granted his petition and changed ground of sex reassignment pursuant to Articles 407 to
CLASSIFICATION OF PROPERTY
Q: What is property?
Q: What are the classifications of property?
A: It is an object or a right which is appropriated or
susceptible of appropriation by man, with capacity to A:
satisfy human wants and needs (Pineda, 1999) 1. As to mobility
a. Immovable or real property
It is any object which is, or may be, appropriated. (Art. 414) b. Movable or personal property
2. As to ownership
Q: What are the requisites for a thing to be considered as a. Public dominion
property? b. Private ownership
3. As to alienability
A: USA a. Alienable
1. Utility – capacity to satisfy human wants b. Inalienable
2. Substantivity/ Individuality – It has a separate and 4. As to individuality
autonomous existence. It can exist by itself and a. Specific property
not merely as a part of a whole. (Paras, Civil Code b. Generic property
of the Philippines, vol. 2, 2008 ed.) 5. As to susceptibility to touch
3. Appropriability – susceptibility to a. Tangible
ownership/possession, even if not yet actually b. Intangible
appropriated 6. As to susceptibility to substitution
a. Fungible
Q: What properties are not susceptible of appropriation? b. Non fungible
7. As to accession
A:
a. Principal
1. Common things (res communes) – Those properties
b. Accessory
belonging to everyone. While in particular no one
8. As to existence
owns common property, still in another sense, res
a. Existing or present property (res existentes)
communes are really owned by everybody in that their
b. Future property (res futurae)
use and enjoyment are given to all of mankind.
9. As to consumability
Examples: air, wind, sunlight. (Paras, Civil Code of the
a. Consumable
Philippines, vol. 2, 2008 ed.)
b. Non-consumable
10. As to divisibility
XPN: Those that may be appropriated under certain
a. Divisible
conditions in a limited way.
b. Indivisible
e.g. Electricity
HIDDEN TREASURE
2. Not susceptible due to physical impossibility
e.g. Sun Q: What is the concept of hidden treasure?
3. Not susceptible due to legal impossibility A: Any hidden and unknown deposit of money, jewelry or
e.g. Human body other precious objects, the lawful ownership of which does
not appear. (Art 439)
Q: Is the human body a real or personal property?
Q: What is the meaning of “other precious objects”?
A: The human body, whether alive or dead, is neither real
nor personal property. It is not even property at all, in that
A: Under the ejusdem generis rule, the phrase should be
it generally cannot be appropriated.
understood as being similar to money or jewelry.
While a human being is alive, he cannot, as such, be the
Q: Is oil or gold considered as hidden treasure?
object of a contract, for he is considered outside the
commerce of man. He may donate part of his blood, may
A: No, these are natural resources. The Regalian Doctrine
even sell part of his hair, but he cannot sell his body (Paras,
applies and not the provisions on hidden treasure.
Civil Code of the Philippines, vol. 2, 2008).
Note: Under the R.A. 7170 or the Organ Donation Act of 1991, Q: What is the rule regarding discovery of hidden
donation of all or a part of a human body may only occur after a treasure?
person’s “death” (i.e., the irreversible cessation of circulatory and
A: GR: If the finder is the owner of the land, building, or
other property where it is found, the entire hidden treasure
belongs to him.
Note: If the things found be of interest to science or the arts, the However, the notes and coins may have become res nullius
State may acquire them at their just price, which shall be divided in
considering that Banco de las Islas Filipinas is no longer a
conformity with the rule stated. (Art. 438)
juridical person and has apparently given up looking for
Q: Is a trespasser who discovers hidden treasure on a land them and Adam, the first one to take possession with intent
owned by another entitled to any rights to such treasure? to possess shall become the sole owner.
A: A trespasser (one prohibited to enter, or not given the Q: Assuming that either or both Adam and Blas are
authority to enter) who discovers hidden treasure is not adjudged as owners, will the notes and coins be deemed
entitled to any share of the treasure. (Paras, Civil Code of part of their absolute community or conjugal partnership
the Philippines, p. 199, vol. 2, 2008) of gains with their respective spouses? (2008 Bar
Question)
Q: What is the meaning of “By Chance”?
A: Yes. The hidden treasure will be part of the absolute
A: The finder had no intention to search for the treasure. community or conjugal property, of the respective
There is no agreement between the owner of the property marriages. (Arts. 91, 93 & 106, FC)
and the finder for the search of the treasure.
Alternative Answer: It is not hidden treasure and therefore,
Q: Adam, a building contractor, was engaged by Blas to not part of the absolute or conjugal partnership of the
construct a house on a lot which he (Blas) owns. While spouses. But the finder of the lost movable, then his reward
digging on the lot in order to lay down the foundation of equivalent to one-tenth of the value of the vault’s contents,
the house, Adam hit a very hard object. It turned out to be will form part of the conjugal partnership. If the
the vault of the old Banco de las Islas Filipinas. Using a government wants to acquire the notes and coins, it must
detonation device, Adam was able to open the vault expropriate them for public use as museum pieces and pay
containing old notes and coins which were in circulation just compensation.
during the Spanish era. While the notes and coins are no
longer legal tender, they were valued at P 100 million ACCESSION
because of their historical value and the coins’ silver and
nickel content. The following filed legal claims over the Q: What is the right of accession?
notes and coins:
A: That right of ownership of which an owner of a thing has
i) Adam, as finder; over the products of said thing (accession discreta), as well
ii) Blas, as owner of the property where they were as to all things inseparably attached or incorporated
found; thereto whether naturally or artificially (accession
iii) Bank of the Philippine Islands, as successor-in- continua). (Pineda Property, p.116, 2009 ed.)
interest of the owner of the vault; and
iv) The Philippine Government because of their
Q: Is accession a mode of acquiring ownership?
historical value.
Who owns the notes and coins?
A: No. It is not one of the modes enumerated under Art.
712 (different modes of acquiring ownership). It is therefore
A: Hidden treasure is money jewelry or other precious
safe to conclude that accession is not a mode of acquiring
objects the ownership of which does not appear (Art. 439).
ownership. The reason is simple: accession presupposes a
FRUITS
Note: Natural fruits are the spontaneous products of the soil, and
the young and other products of animals. Industrial fruits are those
produced by lands of any kind through cultivation or labor. Civil
fruits are the rents of buildings, the price of leases of lands and
other property and the amount of perpetual or life annuities or
other similar income.
Q: What is the rule if the planter and owner of the land are different?
A: As to:
Gathered Fruits
Planter in GF Planter in BF
Reimbursed for expenses for production,
Planter Keeps fruits
gathering and preservation
No necessity to reimburse the planter of
Owner Gets fruits, pay planter expenses
expenses since he retains the fruits
Standing Crops
Planter in GF Planter in BF
Reimbursed for expenses, Loses everything; No right of
Planter
for production, gathering and preservation reimbursement
Owns fruits provided he pays planter
Owner expenses for production, gathering and Owns fruits
preservation
Q: Give the rule when the land owner is the builder, planter or sower.
A:
Land Owner and Builder, Planter or Sower Owner of Materials
Good Faith Good Faith
1. Remove materials if w/o injury to works,
Acquire building etc. after paying indemnity for value of materials. plantings or constructions; or
2. Receive indemnity for value of materials
Bad Faith Good Faith
1. Remove materials, w/ or w/o injury and be
Acquire building etc. after paying value of materials AND indemnity for indemnified for damages; or
damages, subject to the right of the owner of materials to remove 2. Be indemnified for value of materials and
damages
Good Faith Bad Faith
Lose materials w/o being indemnified and pay
Acquire w/o paying indemnity and right to damages
damages
Bad Faith Bad Faith
As though both acted in good faith
(in pari delicto)
Q: Give the rule when land owner is not builder, planter or sower.
A:
Land Owner Builder, Planter, Sower and Owner of Materials
Good Faith Good Faith
LO has option to: In case land owner exercises (1), builder has the right to
1. Acquire improvements after paying indemnity which could either retain until indemnity is paid and cannot be required to
be: pay rent
a. Original costs of improvements
b. Increase in the value of the whole
2. Sell the land to builder and planter or collect rent from sower
unless the value of the land is considerably greater than the
building etc., in which case, the builder and planter shall pay rent
under the terms fixed by the parties
Good Faith Bad Faith
1. Option to: 1. Lose improvements without right to be indemnified
a. Acquire improvements without paying indemnity and collect
damages 2. Recover necessary expenses for preservation of land
Q: Give the rule when the land owner, builder, planter, sower and owner of materials are different persons.
A:
Land Owner Builder, Planter, Sower Owner of Materials
Good Faith Good Faith Good Faith
1. Acquire improvements and pay 1. Right of retention for necessary and 1. Collect value of materials primarily
indemnity to builder, planter, sower and useful expenses; from BPS and subsidiarily from LO if
be subsidiarily liable to owner of materials former is insolvent
for value of materials and
2. Remove only if w/o injury
2. Either 2. Pay value of materials to its owner
a. Sell the land to builder and planter
except if its value is considerably
more
b. Rent to sower
Good Faith Good Faith Bad Faith
1. Option to: 1. Right of retention for necessary and 1. Loses materials without right to
a. Acquire improvements and pay useful expenses. indemnity
indemnity to builder, planter, sower
b. 2. Keeps building etc. without indemnity 2. Pays damages
i. Sell to builder, planter except if the to owner of materials and collects
value of land is considerably more, damages from him
then, forced lease
ii. Rent to sower
Q: When can the owner of the land appropriate as his own Q: Felix cultivated a parcel of land and planted sugar cane,
the works, sowing or planting of the builder, planter or believing it to be his own. When the crop was eight
sower? months old, and harvestable after two more months, a
resurvey of the land showed that it really belonged to
A: Only when the builder, planter, or sower believes that he Fred. What are the options available to Fred? (2000 Bar
has the right to so build, plant, or sow because he thinks he Question)
owns the land or believes himself to have a claim of title
(Morales v. CA, G.R. No. 12196, January28, 1998). A: As to the pending crops planted by Felix in good faith,
Fred has the option of allowing Felix to continue the
Note: Improvements made prior to the annotation of the notice of cultivation and to harvest the crops, or to continue the
lis pendens are deemed to have been made in good faith. After cultivation and harvest the crops himself. In the latter
such annotation, the builder can no longer invoke the rights of a
option, however, Felix shall have the right to a part of the
builder in good faith (Carrascoso v. CA, G.R. No. 123672,
December14, 2005).
expenses of cultivation and to a part of the net harvest,
both in proportion to the time of possession. (Art. 545)
Q: May the owner of the land choose neither to pay the
building nor to sell the land and demand the removal of Q: Because of confusion as to the boundaries of the
the structures and restoration of possession of the lot? adjoining lots that they bought from the same subdivision
Decide. company, X constructed a house on the adjoining lot of Y
in the honest belief that it is the land that he bought from
A: The owner has the option of paying the value of the the subdivision company.
building or selling the land. He cannot refuse either to pay
or sell and compel the owner of the building to remove it What are the respective rights of X and Y with respect to
from the land where it is erected. He is entitled to such X's house?
removal only when, after having chosen to sell the land, the
other party fails to pay for the same (Ignacio v. Hilario, 76 A: The rights of Y, as owner of the lot, and of X, as builder of
Phil 606, 1946). a house thereon, are governed by Art. 448 which grants to
Y the right to choose between two remedies: (a)
appropriate the house by indemnifying X for its value plus
Q: Pecson owned a commercial lot on which he built a 2. In the meantime that Pedro is not yet paid, who is
building. For failure to pay realty taxes, the lot was sold at entitled to the rentals of the building, Pedro or Pablo?
public auction to Nepomuceno, who in turn sold it to the
spouses Nuguid. The sale, however, does not include the A: Pablo is entitled to the rentals of the building. As the
building. The spouses subsequently moved for the owner of the land, Pablo is also the owner of the building
delivery of possession of the said lot and apartment. being an accession thereto. However, Pedro who is entitled
Pecson filed a motion to restore possession pending to retain the building is also entitled to retain the rentals.
determination of the value of the apartment. May Pecson He, however, shall apply the rentals to the indemnity
claim payment of rentals? payable to him after deducting reasonable cost of repair
and maintenance.
A: Yes, Pecson is entitled to rentals by virtue of his right of
retention over the apartment. The construction of the Q: What is the effect if the building built on the land
apartment was undertaken at the time when Pecson was owned by another is sold to pay for the land’s value?
still the owner of the lot. When the Nuguids became the
A: The builder becomes part-owner of the land.
uncontested owner of the lot, the apartment was already in
existence and occupied by tenants.
Q: When may the landowner compel the removal of the
building built on his land?
Art. 448 does not apply to cases where the owner of the
land is the builder but who later lost the land; not being
A: The landowner may not seek to compel the owner of the
applicable, the indemnity that should be paid to the buyer
building to remove the building from the land after refusing
must be the fair market value of the building and not just
to pay for the building or to sell the land. He is entitled to
the cost of construction thereof. To do otherwise would
such removal only when, after having chosen to sell the
unjustly enrich the new owner of the land.
land, the other party fails to pay for said land (Ignacio v.
Note: While the law aims to concentrate in one person the
Hilario, G.R. L-175, April 30, 1946).
ownership of the land and the improvements thereon in view of
the impracticability of creating a state of forced co-ownership, it Q: What is the rule when the land’s value is considerably
guards against unjust enrichment insofar as the good-faith more than the improvement?
builder’s improvements are concerned. The right of retention is
considered as one of the measures to protect builders in good A: The landowner cannot compel the builder to buy the
faith. land. In such event, a “forced lease” is created and the
court shall fix the terms thereof in case the parties disagree
Q: Pending complete reimbursement, may the spouses thereon (Depra v. Dumalo, No. L-57348, May 16, 1985).
Nuguid benefit from the improvement?
rd
Q: What is the rule when landowner sells the land to a 3
A: No. Since spouses Nuguid opted to appropriate the person who is in bad faith?
improvement for themselves when they applied for a writ
rd
of execution despite knowledge that the auction sale did A: Builder must go against the 3 person but if the latter
not include the apartment building, they could not benefit has paid the land owner, a case against such land owner
rd
from the lot’s improvement until they reimbursed the may still be filed by the builder and the 3 person may file a
rd
improver in full, based on the current market value of the 3 party complaint against land owner.
property (Pecson v. CA, G.R. No. 115814, May 26, 1995).
Q: What is the recourse left to the parties where the Q: What if the improvements cannot be removed without
builder fails to pay the value of the land? causing damage to the property?
A: While the Civil Code is silent on this point, guidance may A: The usufructuary may set off the improvements he may
be had from these decisions: have made on the property against any damage to the
1. In Miranda v. Fadullon, G.R. No. L-8220, October 29, same. (Art 580)
1955, the builder might be made to pay rental only,
leave things as they are, and assume the relation of
LAND ADJOINING RIVER BANKS
lessor and lessee;
2. In Ignacio v. Hilario, G.R. L-175, April 30, 1946, owner
ALLUVION
of the land may have the improvement removed; or
3. In Bernardo v. Bataclan, G.R. No. L-44606, November
Q: What is alluvium or alluvion?
28, 1938, the land and the improvement may be sold
in a public auction, applying the proceeds first to the
A: It is the gradual deposit of sediment by natural action of
payments of the value of the land, and the excess if
a current of fresh water (not sea water), the original
any, to be delivered to the owner of the house in
identity of the deposit being lost. Where it is by sea water,
payment thereof. (Filipinas College Inc. v. Timbang,
it belongs to the State. (Government of Philippine Islands v.
G.R. No. L-12812, September 29, 1959).
Cabangis, G.R. No. L-28379, March 27, 1929)
Q: Will the landowner upon demand for payment
Note: Art. 457 states “To the owners of the lands adjoining
automatically become the owner of the improvement for
the banks of the rivers belongs the accretion which they
failure of the builder to pay for the value of the land?
gradually receive from the effects of the current of the
waters.
A: No. There is nothing in Arts. 448 and 546 which would
justify the conclusion that upon failure of the builder to pay
Q: Distinguish accretion from alluvium?
the value of the land, when such is demanded by the
landowner, the land owner becomes automatically the A: Accretion is the process whereby the soil is deposited
owner of the improvement under Art. 445. while alluvium is the soil deposited.
Q: The Church, despite knowledge that its intended Q: What are the requisites of alluvium?
contract of sale with the National Housing Authority
(NHA) had not been perfected, proceeded to introduce A: GRA
improvements on the disputed land. On the other hand, 1. Deposit be Gradual and imperceptible
NHA knowingly granted the Church temporary use of the 2. Resulted from the effects of the current of the
subject properties and did not prevent the Church from water
making improvements thereon. Did the Church and NHA 3. The land where the accretion takes place is
act in bad faith? Adjacent to the banks of a river
A: Yes. The Church and the NHA, both acted in bad faith, Q: What is the effect if all the requisites are present?
hence, they shall be treated as if they were both in good
faith (National Housing Authority v. Grace Baptist Church, A: The riparian owner is automatically entitled to the
G.R. No. 156437, March 1, 2004). accretion.
USUFRUCTUARY Q: When does the alluvion start to become the property
of the riparian owner?
Q: What are the rights of the usufructuary over
improvements he introduced on the property held in A: From the time that the deposit created by the current of
usufruct? water becomes manifest. (Heirs of Navarro v. IAC, GR. No.
68166, February 12, 1997)
A: GR: The usufructuary is not entitled to indemnity for the
expenses he had incurred in the making of the Q: When does the rule on alluvion not apply?
improvements.
A: The rule does not apply to man-made or artificial
accretions to lands that adjoin canals or esteros or artificial
Q: What if the deposits accumulate, not through the 4. There must be Abandonment by the owner of the bed.
effects of the current of the water, but because of the
constructions made by the owner purely for defensive Note: Abandonment pertains to the decision not to bring
back the river to the old bed (Reyes-Puno, p.53).
purposes against the damaging action of the water?
Q: What is the effect when the river bed is abandoned?
A: The deposits are still deemed to be alluvion and will
belong to the riparian owner.
A: River beds which are abandoned through the natural
change in the course of the waters ipso facto belong to the
Q: What if the deposit is brought about by sea water?
owners whose lands are occupied by the new course in
A: It belongs to the State and forms part of the public proportion to the area lost. However, the owners of the
domain. lands adjoining the old bed shall have the right to acquire
the same by paying the value thereof, which value shall not
Q: Must alluvial deposits be registered? exceed the value of the area occupied by the new bed. (Art
461)
A: Yes, though automatically it is owned by the riparian
owner (Heirs of Navarro v. IAC, G.R. No. 68166, February Note: The rule on abandoned river bed does not apply to cases
where the river simply dries up because there are no persons
12, 1997).
whose lands are occupied by the waters of the river.
A: It becomes of public dominion whether it is navigable or Q: What are the requisites of avulsion?
floatable.
A: CAP
Q: What are the requisites? 1. Transfer is caused by the Current of a river, creek,
or torrent.
A: NAPA
2. Transfer is sudden or Abrupt
1. There must be a Natural change in the course of the
3. The Portion of the land transported is known or
waters of the river; otherwise, the bed may be the
identifiable.
subject of a State grant (Reyes-Puno, p.54)
2. The change must be Abrupt or sudden; Q: What if land from one tenement is transferred to
3. The change must be Permanent; another by forces of nature other than the river current?
A: GR: Original owner retains title. Note: There is no accession when islands are formed by the
branching of a river; the owner retains ownership of the isolated
XPNs: The owner must remove (not merely claim) the piece of land.
transported portion within 2 years to retain
ownership, otherwise, the land not removed shall BY OBJECT
belong to the owner of the land to which it has been
adjudicated in case of: REAL OR IMMOVABLE
1. Abandonment; or
2. Expiration of 2 years, whether the failure to Q: What are the categories of immovable property?
remove be voluntary or involuntary, and
irrespective of the area of the portion known A: Real Property by: NIDA
to have been transferred. 1. Nature – Those which cannot be carried from
place to place
ISLANDS 2. Incorporation – Those which are attached to an
immovable in a fixed manner and considered as
Q: What are the rules on ownership with regard to an integral part thereof, irrespective of its
formation of islands? ownership
3. Destination – Things placed in buildings or on
A: lands by the owner of the immovable or his agent
LOCATION OWNER in such a manner that it reveals the intention to
If formed on the sea attach them permanently thereto
4. Analogy – Classified by express provision of law.
W/in territorial waters State
Outside territorial waters First country to occupy IMMOVABLE BY NATURE & INCORPORATION
If formed on lakes or navigable/ floatable rivers
State Par. 1, Art. 415. Land, buildings, roads and constructions of
If formed on non-navigable/ floatable rivers all kinds adhered to the soil.
Nearer in margin to one Owner of nearer margin is
bank the sole owner Q: Are barong-barongs immovable property?
Island divided longitudinally
If equidistant A: No. They are not permanent structures but mere
in halves
superimpositions on land.
Q: Eduave is the owner of land forming part of an island in
a non-navigable river. Said land was eroded due to a Q: Where buildings are sold to be demolished
typhoon, destroying the bigger portion thereof and immediately, are the buildings immovable or movable?
improvements thereon. Due to the movements of the
river deposits on the part of the land that was not eroded, A: The sale involves movable property. What are really sold
the area was increased. Later, Eduave allowed Dodong to are the materials.
introduce improvements thereon and live there as a
caretaker. However, Dodong however later denied Q: What is the effect of demolition of a house?
Eduave’s claim of ownership so the latter filed action to
A: Once a house is demolished, its character as an
quiet title over the property. Who has a better right to
immovable ceases. This is because a house is classified as
the land?
an immovable property by reason of its adherence to the
soil on which it is built (Bicerra v. Teneza, G.R. No. L-16218,
A: Eduave. Clearly, the land in question is an island that
November 29, 1962).
appears in a non-floatable and non-navigable river, and it is
not disputed that Eduave is the owner of the parcel of land
Q: May a building be mortgaged apart from the land on
along the margin of the river and opposite the island.
which it was built?
Applying Art. 465, the island belongs to the owner of the
parcel of land nearer the margin. More accurately, because A: Yes. While it is true that a mortgage of land necessarily
the island is longer than the property of Eduave, he is includes, in the absence of stipulation of the improvements
deemed ipso jure the owner of that portion which thereon, buildings, still a building by itself may be
corresponds to the length of his property along the margin mortgaged apart from the land on which it has been built.
of the river. If however, the riparian owner fails to assert Such a mortgage would still be a real estate mortgage for
his claim thereof, the same may yield to the adverse the building would still be considered immovable property
possession of the third parties, as indeed even accretion to even if dealt with separately and apart from the land (Yee v.
land titled under the Torrens system must itself still be Strong Machinery Company, G.R. No. 11658, February15,
registered. Dodong thus may acquire said land by 1918).
acquisitive prescription. But here, Dodong’s possession
cannot be considered to be in good faith, so 30 years of
Q: Are trees immovable or movable? Q: What are the requisites for machinery to be considered
real property?
A:
1. Real property by nature - if they are spontaneous A: COTE
products of the soil 1. The industry or work must be Carried on in a building
2. Real property by incorporation - If they have been or on a piece of land;
planted thru cultivation or labor 2. The machinery must:
a. Be placed by the Owner of the tenement or his
Note: The moment trees are detached or uprooted from the land it
agent;
is considered as personal property. However, in case of uprooted
timber, they are still not considered as personal property because
b. Tend directly to meet the needs of the said
timber is an integral part of the timber land. industry or work; and
c. Be Essential and principal to the industry or work,
IMMOVABLE BY INCORPORATION and not merely incidental thereto.
Par. 3, Art. 415. Everything attached to an immovable in a Q: Is machinery placed by a tenant or by a usufructuary
fixed manner, in such a way that it cannot be separated considered real property?
therefrom without breaking the material or deterioration
of the object. A: No. Since it is placed by a person having only a
temporary right, it does not become immobilized.
Q: What is res vinta?
Note: Where a tenant places the machinery under the express
provision of lease that it shall become a part of the land belonging
A: These are immovables by incorporation, which when to the owner upon the termination of the lease without
separated from the immovable, regain their condition as compensation to the lessee, the tenant acts as an agent of the
movable. owner and the immobilization of the machineries arises from the
act of the owner in giving by contract a permanent destination to
IMMOVABLE BY INCORPORATION & BY DESTINATION the machinery (Valdez v. Central Altagracia, 225 U.S. 58, 1912).
Q: What is the effect of temporary separation of movables The living quarters, if attached to the immovable platform
from the immovables to which they are attached? with permanence, becomes an immovable as well.
Permanence means they cannot be separated without
A: 2 views destroying the platform or the quarters. On the other hand,
1. They continue to be regarded as immovables. if the attachment is not permanent, or not merely
2. Fact of separation determines the condition of superimposed on the platform, then the living quarters are
the objects thus recovering their condition as movable property.
movables.
c. Are the trees, plants and flowers immovable or movable
Q: Petitioners contend that the machines that were the property? (2007 Bar Question)
subjects of the Writ of Seizure were placed in the factory
built on their own land. Indisputably, they were essential A: The trees, plants and flowers are also immovable, having
and principal elements of their chocolate making industry. been “planted” in the garden area, under Art. 415 (2) which
Hence, although each of them was movable or personal provides that “Trees, plants and growing fruits, while they
property on its own, all of them have become immobilized are attached to the land or form an integral part of the
by destination because they are essential and principal immovable” are likewise immovable property.
elements in the industry. Petitioners argue that said Q: The City Assessor sought to impose realty tax on steel
machines are real properties pursuant to Art. 415 (5) of towers of MERALCO. The taxes were paid under protest,
the NCC and are not, therefore, the proper subjects of a MERALCO contending that the towers were exempt from
Writ of Seizure. However, the lease agreement entered taxation and that they were personal and not real
into by the petitioners provides that the machines in properties. Decide.
question are to be considered as personal property. How
should the machines be classified? A: The towers are personal properties. They are not
buildings adhered to the soil (Art. 415 par. 1); they are not
A: That machines should be deemed personal property attached to an immovable in a fixed manner and they can
pursuant to the Lease Agreement—is good only insofar as be separated without substantial damage or deterioration,
the contracting persons are concerned. Hence, while the and they are not machineries intended for works on the
parties are bound by the Lease Agreement, third persons land (Board of Assessment Appeals v. Meralco, G.R. No. L-
acting in good faith are not affected by its stipulation 15334, January 31, 1964).
characterizing the subject machinery as personal (Serg’s
Products, Inc. v. PCI Leasing and Finance, Inc., 338 SCRA PERSONAL OR MOVABLE
504, August 22, 2000).
Q: What are movable properties?
Q: Manila Petroleum Co. (MPC) owned and operated a
petroleum operation facility off the coast of Manila. The A: SOFTSS
facility was located on a floating platform made of wood 1. Movables Susceptible of appropriation which are not
and metal, upon which was permanently attached the included in Art. 415;
heavy equipment for the petroleum operations and living 2. Real property which by any Special provision of law
quarters of the crew. The floating platform likewise considers as personalty
contained a garden area, where trees, plants and flowers e.g. growing crops under the Chattel Mortgage Law.
were painted. The platform was tethered to a ship, the 3. Forces of nature which are brought under the control
MV101, which was anchored to a seabed. of science
Note: Sacred and religious objects are considered outside the Q: What are properties in private ownership of private
commerce of man. They are neither public nor private party. persons or entities?
PUBLIC DOMINION A: All properties not belonging to the State or its political
subdivision are properties of private ownership pertaining
Q: What are the kinds of property of public dominion? to private persons, either individually or collectively.
A: Properties which are: USD Q: What is the patrimonial property of the State?
1. For public Use;
2. Intended for public Service and not for public use; and A: It is the property not devoted to public use, public
3. For the Development of the national wealth. (Art. 420) service, or the development of the national wealth. It is
intended rather for the attainment of the economic ends of
the State, that is, for subsistence. It is owned by the State in
its private or proprietary capacity.
A: Art. 420 states that canals constructed by the State are A: The juridical relation of a person over a thing by virtue of
of public ownership; conversely, canals constructed by which said person has the exclusive power or authority to
private persons within private lands are of private receive all the benefits and advantages arising from said
ownership (Santos v. Moreno, G.R. No. L-15829, thing, save those restricted by law or the recognized rights
December4, 1967). of others.
Q: The City of Cebu obtained a loan which was to be paid Q: What are the kinds of ownership?
with its own funds. Part of the proceeds of this loan was
used to fund the construction of the City’s sewage system. A: FNSC
NAWASA sought to expropriate the sewage system. This 1. Full ownership – Includes all the rights of an owner;
was opposed with the arguments that there was no
payment of just compensation; NAWASA offered Note: Naked ownership + Usufruct
unliquidated assets and liabilities. NAWASA averred, as an
alternative course of action, that the property is one for 2. Naked ownership – Ownership where the rights to the
public use and under the control of the legislature. Decide use and to the fruits have been denied;
whether the property is patrimonial property of the city or
property for public use. Note: Full ownership – Usufruct
A: The property is patrimonial and not subject to legislative 3. Sole ownership – Ownership is vested in only one
control. It is property of the city, purchased with private person;
funds and not devoted to public use (it is for profit). It is
therefore patrimonial under the Civil Code. Nor can the 4. Co-ownership– Ownership is vested in 2 or more
system be considered “public works for public service” persons. There is Unity of the property, and plurality of
under Art. 424 because such classification is qualified by the subjects.
ejusdem generis; it must be of the same character as the
preceding items. (City of Cebu v. NAWASA, G.R. No. 12892, Q: What are the characteristics of ownership?
April 20, 1960)
A:
BY NATURE 1. Elastic – Power/s may be reduced and thereafter
automatically recovered upon the cessation of the
Q: How are properties classified according to limiting rights.
consumability? 2. General – The right to make use of all the possibilities
or utility of the thing owned, except those attached to
A: other real rights existing thereon.
1. Consumable property – That which cannot be used 3. Exclusive –There may be two or more owners, but only
according to its nature without being consumed or one ownership.
being eaten or used up 4. Independent – Other rights are not necessary for its
2. Non-Consumable property – That which can be used existence.
according to its nature without being consumed or 5. Perpetual – Ownership lasts as long as the thing exists.
being eaten or used up. It cannot be extinguished by nonuser but only by
adverse possession.
Q: What are the attributes of ownership? Q: A contract of lease executed by Alava (lessor) and Anita
Lao (lessee) was not registered with the Register of Deeds.
A:
Aside from Anita, Rudy Lao also leased a portion of the
1. Right to enjoy (jus utendi)
same property where he put up his business. At that time,
2. Right to the fruits (jus fruendi)
Rudy knew that Anita and her husband were the owners
3. Right to abuse (jus abutendi)
of the said building. He also knew that she had leased
4. Right to dispose (jus dispodendi)
that portion of the property, and that Jaime Lao, their son,
5. Right to recover (jus vindicandi)
managed and maintained the building, as well as the
6. Right to accessories (jus accessiones)
business thereon. Rudy eventually purchased the entire
7. Right to possess (jus possidendi)
property from Alava. Rudy then filed a complaint for
unlawful detainer against Jaime alleging that the latter
REMEDIES TO RECOVER POSSESSION
had occupied a portion of his property without any lease
agreement and without paying any rentals, and prayed
ACTIONS TO RECOVER OWNERSHIP AND POSSESSION OF
that an order be rendered directing Jaime to vacate the
REAL PROPERTY
premises. Should the complaint be dismissed?
Q: What are the legal remedies to recover possession of A: Yes. The records in this case show that the respondent
one’s property? has been in possession of the property in question, not by
mere tolerance or generosity of Rudy, but as the manager
A: of his mother, who conducted her business in the building
1. Personal property- Replevin which stood on a portion of the property leased from Alava.
2. Real property Jaime’s possession was in behalf of his mother, and not in
a. Accion Interdictal his own right.
i. Forcible Entry
ii. Unlawful detainer Q: What is the effect of non-registration of the contract of
b. Accion Publiciana lease?
c. Accion Reinvindicatoria
A: Although the lease contract was not filed with the
DISTINCTIONS BETWEEN ACCION REIVINDICATORIA, Register of Deeds, nevertheless, Rudy was bound by the
ACCION PUBLICIANA, ACCION INTERDICTAL terms and conditions of said contract. The lease, in effect
became a part of the contract of sale. However, Rudy had
Q: What is accion interdictal? no cause of action for unlawful detainer against Anita
because of the subsisting contract of lease; hence, he could
A: A summary action to recover physical or material not file the complaint against her (Lao v. Lao, G.R. No.
possession only and it must be brought within one year 149599, May 16, 2000).
from the time the cause of action arises.
1. Forcible Entry
DISTINCTION BETWEEN FORCIBLE ENTRY AND UNLAWFUL
2. Unlawful detainer
DETAINER
v. Sps. Ong, G.R. 132197, August Note: Plaintiff’s title must be founded on positive right or title and
16, 2005). not merely on the lack or inefficiency of the defendant’s title. In
other words, he shall not be permitted to rely upon the defects of
As to necessity of demand the defendant’s title. (Art. 434)
No previous demand for the Demand is jurisdictional if
defendant to vacate is the ground is non-payment Q: Why is the plaintiff not allowed to rely on the weakness
necessary. of rentals or failure to of defendant’s title?
comply with the lease
contract. A:
As to necessity of proof of prior physical possession 1. Possibility that neither the plaintiff nor the defendant
is the true owner of the property. In which case, the
Plaintiff must prove that he Plaintiff need not have been defendant who is in possession will be preferred.
was in prior physical in prior physical possession. 2. One in possession is presumed to be the owner and he
possession of the premises cannot be obliged to show or prove a better title
until he was deprived Note: The fact that petitioners
3. Possessor in the concept of an owner is presumed to
thereof by the defendant. are in possession of the lot does
not automatically entitle them be in good faith and he cannot be expected to be
to remain in possession (Ganilla carrying every now and then his proofs of ownership
v. CA, G.R. No. 150755, June 28, over the property
2005). 4. He who relies on the existence of a fact, should prove
As to when 1 year period is counted from that fact. If he cannot prove, the defendant does not
have to prove.
1 year period is generally 1 year period is counted
counted from the date of from the date of last
actual entry of the land. demand or last letter of DISTINCTION BETWEEN REAL AND PERSONAL RIGHTS
demand.
Q: Distinguish real from personal rights
ACTIONS FOR RECOVERY OF POSSESSION OF MOVABLE
PROPERTY A:
Real Right Personal Right
Q: What is replevin? Creation
Created by title alone
A: It is the remedy when the complaint prays for the It is not directly created
recovery of the possession of personal property. Created by both title and over a thing but is
mode directly over a thing exercised through another
Q: May a property in custodia legis be subject of a against whom the action is
replevin suit? to be brought.
Object
A: No. A property validly deposited in custodia legis cannot
be subject of a replevin suit (Calub v. CA, G.R. No. 115634, Incorporeal or intangible.
Apr. 27, 2000). Generally corporeal or Object covers all the
tangible. Object is specific present and future
REQUISITES FOR RECOVERY OF PROPERTY property or thing. property of the debtor.
(Art. 2236)
Subjects
Q: What are the requisites in an action to recover
property? (a) One definite active
subject (e.g.
owner)
A: (b) One indefinite
1. Clearly identify the land he is claiming in passive subject
accordance with the title/s on which he bases his (a) An active subject
which is the whole
right of ownership; and (creditor)
world
(b) A definite passive
Right of pursuit is
Note: Burden of proof lies on the party who asserts the subject (debtor)
affirmative of an issue. The description should be so
therefore
definite that an officer of the court might ho to the available. Real
locality where the land is situated and definitely locate right follows its
it. object in the hands
of any possessor
2. Prove that he has a better title than the Enforceability
defendant Enforceable only against
a. Best proof is a Torrens certificate. the original debtor or his
Enforceable against the
b. Tax receipts, tax declarations are only prima transferee charged with
whole world
facie evidence of ownership; it is rebuttable. notice of the personal
rights
Q: When are animal young considered as existing? Q: What are the basic principles in accession continua?
Q: To whom does the offspring of animals belong when Q: Who owns the movables subject to adjunction?
the male and female belong to different owners?
A: The owner of the principal by law becomes owner of the
A: Under the Partidas, the owner of the female was resulting object and should indemnify the owner of the
considered also the owner of the young, unless there is a accessories for the values thereof.
contrary custom or speculation.
Q: What are the tests to determine the principal?
The legal presumption, in the absence of proof to the
contrary, is that the calf, as well as its mother belongs to A: VVUM
the owner of the latter, by the right of accretion (US v. 1. That of greater Value- If two things are of equal value.
Caballero, G.R. No. 8608, September 26, 1913). (Art. 468)
2. That of greater Volume- If two things are of equal
Note: This is also in accord with the maxim “pratus sequitor volume. (Art. 468)
ventrem.” 3. That to which the other has been United as an
ornament, or for its use or perfection- If it cannot be
FOR MOVABLES determined from Art. 467. (Art. 467)
4. That which has greater Merits, utility and volume if
ACCESSION CONTINUA things.
Q: What is the basic principle of accession with respect to Q: How is ownership determined if the adjunction
movable property? involves three or more things?
A: Accession exists only if separation is not feasible. A: The court should first distinguish the principal and apply
Otherwise, separation may be demanded. Art. 466 in an equitable manner such that the principal
acquires the accessory, indemnifying the former owner
Q: Enumerate different kinds of accession continua as thereof for its value.
regard movables.
Q: How about if the adjunction involves three or more
A: AMS things?
1. Adjunction or conjunction
2. Mixture A: The principal should first be distinguished, after, Art. 466
3. Specification will be applied in an equitable manner, such that the
principal acquires the accessory, indemnifying the former
Q: What is adjunction? owner thereof for its value.
A: The process by virtue of which two movable things Note: Art. 466 states that “Whenever two movable things
belonging to different owners are united in such a way that belonging to different owners are, without bad faith, united in such
they form a single object and each of the things united a way that they form a single object, the owner of the principal
thing acquires the accessory, indemnifying the former owner
preserves its own nature. (Art. 466)
thereof for its value.”
2. Receive payment for the Q: What are the properties that can be subject of an
value of materials and action for quieting of title?
damages
A: Only real properties could be the subject matter of
Q: Distinguish adjunction, mixture and specification. quieting of title. Art. 476 makes reference only to real
property without hinting to include personal property.
A: (Pineda, p. 192)
May involve 1 Q: What are the requisites for an action to quiet title?
Involves at least 2 Involves at least 2
thing(or more) but
things things
form is changed A: LCDR
1. Plaintiff must have a Legal or equitable title to, or
Accessory follows Co-ownership Accessory follows interest in the real property which is the subject
the principal results the principal matter of the action;
2. There must be Cloud in such title;
Things mixed or 3. Such cloud must be Due to some
The new object
confused may a. Instrument;
retains or
Things joined either retain or b. Record;
preserves the
retain their nature lose their c. Claim;
nature of the
respective d. Encumbrance; or
original object
natures e. Proceeding which is apparently valid but is in
truth invalid, ineffective, voidable or
RULES FOR DETERMINING THE PRINCIPAL AND unenforceable, and is prejudicial to the plaintiff’s
ACCESSORY title; and
4. Plaintiff must
a. Return to the defendant all benefits he may have
Q: What are the factors to determine the principal and the
received from the latter; or
accessory?
b. reimburse him for expenses that may have
redounded to his benefit.
A: Primary Factors (Importance/purpose)
1. The thing which is incorporated to another thing Q: What are the reasons for quieting of title?
as an ornament is the accessory. The other is the
principal A:
2. The thing to which is added to or joined to 1. Prevent future litigation on the ownership of the
another for the use or perfection of the latter is property
the accessory. The other is the principal. 2. Protect true title & possession
3. To protect the Real interest of both parties
Secondary Factors 4. To determine and make known the precise state of
1. The one which has a greater value shall be title for the guidance of all
considered principal
2. If they have equal value, the one with greater Q: State the rules in actions for Quieting of Title.
volume shall be considered principal (Art. 467-
468. A:
1. These put an end to vexatious litigation in respect to
Note: In painting and sculpture, writings, printed matter, engraving property involved; plaintiff asserts his own estate &
and lithographs, the board, metal, stone, canvas, paper or generally declares that defendant’s claim is without
parchment shall be deemed the accessory thing. (Art. 468)
foundation
2. Remedial in nature
QUIETING OF TITLE
3. Not suits in rem nor personam but suits against a
particular person or persons in respect to the res
Q: What is an action for quieting of title?
(quasi in rem)
4. May not be brought for the purpose of settling a
A: It is a proceeding in equity, the purpose of which is the
boundary disputes.
declaration of the invalidity of a claim on a title or the
5. Applicable to real property or any interest therein.
invalidity of an interest in property adverse to that of the
The law, however, does not exclude personal property
plaintiff, and thereafter to free the plaintiff and all those
from actions to quiet title.
claiming under him from any hostile claim thereon. (Pineda,
6. An action to quiet title brought by the person in
p. 191)
possession of the property is IMPRESCRIPTIBLE.
7. If he is not in possession, he must invoke his remedy
Note: An action to quiet title is quasi in rem - an action in
personam concerning real property where judgment therein is
within the prescriptive period.
enforceable only against the defeated party and his privies.
A: It is intended to procure the cancellation, or delivery of, Q: May an action filed within the period of limitations, still
release of an instrument, encumbrance, or claim be barred?
constituting a claim on plaintiff’s title, and which may be
used to injure or vex him in the enjoyment of his title. A: Yes, by laches. (See Arts. 1431, 1433, 1437)
Q: Differentiate an action to quiet title from an action to Q: Is an action to quiet title imprescriptible?
remove cloud on title.
A: Yes. Even though the NCC does not include an action to
A: quiet title as one of those actions which are imprescriptible,
the SC in this case held that such action is imprescriptible.
ACTION TO REMOVE
ACTION TO QUIET TITLE The basis of the court is Art. 480. The imprescriptibility of
CLOUD ON TITLE
an action to quiet title is a general principle from American
To put an end to troublesome For the removal of a jurisprudence (Bucton v. Gabar, G.R. No. L-36359,
litigation with respect to the possible foundation for a January31, 1974).
property involved future hostile claim
A remedial action A preventive action CO-OWNERSHIP
Involving a present adverse To prevent a future cloud
claim on the title CHARACTERISTICS OF CO-OWNERSHIP
IN GENERAL
Q: Edgardo donated a parcel of land to a barangay subject
Q: What is co-ownership?
to the condition that it shall be used for the construction
of a public plaza within 5 years from execution of the
A: It is a state where an undivided thing or right belongs to
Deed of Donation. Otherwise, the deed shall have no force
2 or more persons (Art. 484). It is the right of common
and effect and ownership of the land will revert to the
dominion which two or more persons have in a spiritual (or
donor. The barangay took possession of the property and
ideal) part of the thing which is not physically divided.
allowed the construction of buildings by public and private
entities. Edgardo filed a complaint for quieting of title and
Q: What are the characteristics of co-ownership?
recovery of possession of the area donated against the
barangay claiming that the donation had ceased to be A: PRES-LG
effective, for failure to comply with the conditions of the 1. Plurality of subjects / owners;
donation. Was the action to quiet title properly made? 2. There is no mutual Representation by the co-owners;
3. It exists for the common Enjoyment of the co-owners;
A: No. The action to quiet title is unavailing until the
4. There is a Single object which is not materially divided;
donation shall have first been revoked. In the case at bar,
5. It has no distinct Legal personality
A: POL
1. Plurality of owners;
2. Object, which is an undivided thing or right;
3. Each co-owner’s right must be Limited only to his ideal
share of the physical whole
A: The sale will affect only his own share but not those of
the other co-owners who did not consent to the sale.
A:
CO-OWNERSHIP JOINT OWNERSHIP
Tenancy in common Joint Tenancy
As to the extent of ownership
Each co-owner is the owner of his own ideal share. Each joint owner owns the whole thing.
As to disposition
Each co-owner may dispose of his undivided share without the Joint owner may not dispose of his own share without of all the
other co-owners’ consent. rest, because he really has no ideal share.
As to transfer of shares in case of death
Upon the death of a joint owner, his share goes to the other
Upon the death of a co-owner, his ideal share goes to his heirs.
joint owners by accretion.
A:
CO-OWNERSHIP ORDINARY PARTNERSHIP
No legal personality Has legal personality
Can be created without the formalities of a Can be created only by contract, express or
contract implied
By contract or by will By contract only
Agreement to exist for more than 10 years is
No term limit is set by law
void
No mutual representation There is mutual representation
Not dissolved by the death/incapacity of a co-
Dissolved by death or incapacity of a partner
owner
A co-owner can dispose of his share w/o the
A partner cannot be substituted w/o the
consent of the others hence in a way a co-
consent of the others
owner is substituted
Profits of a co-owner depend on his Profits may be stipulated upon (for e.g., profit-
proportionate share sharing agreements)
For collective enjoyment For profit
No public instrument is needed even if the May be made in any form except when real
object of the co-ownership is an immovable property is contributed
CONCEPT OF COMMON AREAS, AMENDMENT 2. GR: When the enabling or master deed is revoked
In relation to the right Q: What is the rule as regards to the right to demand
of a co-owner, they Require the consent of all co- partition?
require the consent of owners
the majority A: GR: Every co-owner has the right to demand partition.
A:
1. The partition of a thing owned in common shall not
prejudice third persons, who shall retain the rights of
Q: Differentiate necessary, useful and expenses of pure Q: Is the failure or refusal of a co-owner to contribute pro
luxury. rata to his share in expenses tantamount to renunciation?
A: Necessary expenses are those made for the preservation A: No, there must be an express renunciation, otherwise he
of the thing, or those without which the thing would is required to reimburse the others for the expenses they
deteriorate or be lost, or those that augment the income of incurred.
the things upon which are expended, or those incurred for
cultivation, production, upkeep, etc. (Mendoza v De Q: What is the effect of renunciation?
Guzman, 52 Phil. 171)
A: It is in effect a dacion en pago since there is a change in
Useful expenses incurred for the preservation of the realty the object of the obligation (i.e. from sum of money to
in order that it may produce the natural, industrial, and civil interest in the co-ownership). Consequently, the consent of
fruits it ordinarily produce. (Marcelino v. Miguel, 53 OG the other co-owners is necessary.
5650)
Note: Dacion en pago is a juridical concept whereby a debtor pays
Ornamental expenses add value to the thing only for off his obligations to the creditor by the conveyance of ownership
certain persons in view of their particular whims, neither of his property as an accepted equivalent of performance or
essential for preservation nor useful to everybody in payment. The end result may be the same, but the concept is
general. entirely different from that of a purchase (Damicog v. Desquitada,
CV – 43611, October 3, 1983).
Q: When may acts of preservation made in the property of
the co-owners? Q: Can the renunciation be made without the consent of
any unpaid creditor?
A: At the will of one of the co-owners, but he must, if
practicable, first notify the others of the necessity of such A: No, for it is in effect a novation by substitution, it will
repairs. prejudice the rights of the unpaid creditor.
Q: What are those acts which require the majority consent Note: Novation by substitution is the substitution of the person of
the debtor.
of the co-owners?
A: Expenses to improve or embellish the thing shall be A: Redemption of the whole property by a co-owner does
decided upon by the majority. (Art. 489, NCC) not vest in him sole ownership over said property.
Redemption within the period prescribed by law will inure
Note: There is no majority unless the resolution is approved by the to the benefit of all co-owners. Hence, it will not put an end
co-owners who represent the controlling interest in the object of
the co-ownership (par. 2 Art. 492)
A: Possession is the holding of a thing or the enjoyment of a Note: Only personal knowledge of the flaw in one’s title or
right (Art. 523) mode of acquisition can make him possessor in bad faith. It is
not transmissible even to an heir.
Q: What are the requisites of possession?
Possession in good faith ceases from the moment defects in
A: PAP his title are made known to the possessor.
1. Possession in fact or holding or control of a thing
or right; 9. Constructive possession- does not mean that a man
2. Animus possidendi or the deliberate intention to has to have his feet on every square meter of ground.
possess;
3. Possession by virtue of one’s own right Q: What kind of possession can serve as title?
Q: What is the distinction between Right to Possession A: Possession with title in fee simple.
and Right of Possession?
Q: Differentiate possession and occupation
A: Right to Possession is an incident or attribute of
A:
ownership over a thing. It is also known as jus possidendi,
POSSESSION OCCUPATION
and attribute of ownership. On the other hand, Right of
Apply to properties whether Applies only to property
Possession is an independent right, separate from
with or without an owner without an owner
ownership. It is also known as jus possessiones.
Possession does not confer Occupation confers
ownership ownership
Q: What are the degrees of possession? Distinguish.
There can be no
There can be possession
A: NJJS occupation without
without ownership
1. Possession with No right or title- possessor knows that ownership
his possession is wrongful,
2. With Juridical title - possession peaceably acquired and Q: Is it possible for a person who has been declared as the
will not ripen into full ownership as long as there is no owner of a certain property not to be entitled to its
repudiation of the concept under which property is possession?
held.
3. With Just title or title sufficient to transfer ownership, A: Yes. Possession and ownership are distinct legal
but not from the true owner - ripens to full ownership concepts. Ownership confers certain rights to the owner
by the lapse of time. among which are the right to enjoy the thing owned and
4. With a title in fee Simple - springs from ownership; the right to exclude other persons from possession thereof.
highest degree of possession. On the other hand, possession is defined as the holding of a
thing or the enjoyment of a right. Literally, to possess
means to actually and physically occupy a thing with or
Q: What are the classes of possession?
without a right. Thus a person may be declared an owner
but not entitled to possession (Heirs of Roman Soriano v.
A: OVAL-OH-GBC
CA, GR No. 128177, August 15, 2001).
1. In one’s Own name – possessor claims the thing for
himself Note: Possession is merely one of the attributes ownership. (Jus
2. Voluntary – by virtue of an agreement Possidendi)
3. In the name of Another – held by the possessor for
another; agent, subject to authority and ratification; if
not authorized, negotiorum gestio
4. Legal – by virtue of law;
e.g. possession in behalf of incapacitated
Q: What are the ways of acquiring possession? A: Possession in good faith ceases from the moment
defects in his title are made known to the possessor.
A: FAMS
1. By Material occupation/exercise of a right This interruption of good faith may take place:
2. By Subjection of the thing/right to our will 1. at the date of summons or
3. By proper Acts and legal Formalities established for 2. that of the answer if the date of summons does
acquiring such right (Art. 531) not appear at the date
Q: What are the essential elements of possession? Q: What is the effect in case possession ceases to be in
good faith?
A:
1. Corpus –refers to the existence of the thing and its A: Possessor in bad faith is required to pay rent or in case
holding; and vacate the property, in both cases he is required to pay
2. Animus – refers to the intent to possess the thing. damages to the lawful owner or possessor of the property.
Q: What if the possession is acquired by a stranger? Q: Jose offered to sell his lot to Rosario which the latter
accepted. They executed a document containing the sale.
A: Where possession is acquired not by an agent or Later, Rosario sought the execution of the formal deed of
representative but by a stranger without agency, sale, but Jose could not continue the sale because he sold
possession is not acquired until the act of the agent or the lot to Emma with whom he executed a formal deed of
representative is ratified (Art. 532). sale. Informed that the sale in favor of Emma was not
registered, Rosario registered her adverse claim. Later,
Q: What are the acts which do not give rise to possession? Emma registered her deed of sale and a TCT was issued to
her but with Rosario’s adverse claim. Emma then took
A: Possession through: FAT-V possession of the lot. Who has a better right to the land?
1. Force or intimidation as long as there is a possessor
who objects thereto. (Art. 536) A: Rosario. To merit the protection of Art 1544 (double
2. Acts executed clandestinely and without the sale) it is essential that the buyer of the realty must act in
knowledge of the possessor which means that: good faith in registering his deed of sale. Rosario’s prior
a. acts are not public; and purchase of the land was made in good faith; she was the
b. unknown to the owner or possessor only buyer at that time. Her good faith did not cease after
3. Mere Tolerance by the owner or the lawful possessor. Jose told him of the second sale to Emma. Because of that
4. Acts executed by Violence. (Art 537) information, Rosario wanted an audience with Emma but
was snubbed by the latter. In order to protect her right,
Q: What kind of possession can serve as a title for Rosario registered her adverse claim. Said recording is
acquiring dominion? deemed to be in good faith and emphasize Emma’s bad
faith (Carbonell v.CA G.R. No. L-29972, January 26, 1976).
A: Only the possession acquired and enjoyed in the concept
of owner. (Art. 540) Q: Is Emma entitled to the improvements she introduced
in the lot?
EFFECTS OF POSSESSION
A: No. Emma’s rights to the improvements she introduced
POSSESSOR IN GOOD FAITH are governed by Arts. 546 and 547 (necessary and useful
expense made by possessor in good faith). These provisions
Q: When is a possessor in good faith? seem to imply that the possessor in bad faith has neither
the right of retention of useful improvements nor the right
A: When he is not aware that there exists in his title or to demand refund for useful expenses (Carbonell v.CA G.R.
mode of acquisition any flaw which invalidates it. (Art. 526) No. L-29972, January 26, 1976).
Q: What are the requisites in order to be considered a Q: What are the rights of a possessor?
possessor in good faith?
A:
A: GOOD FAITH BAD FAITH
1. Ostensible title or mode of acquisition As to fruits received
2. Vice or defect in the title Reimburse fruits received or
3. Possessor is ignorant of the vice or defect and must Entitled while possession is
which lawful possessor
have an honest belief that the thing belongs to him. in good faith
would have received
As to pending fruits
Liable to the lawful No right to such pending
possessor for expenses of fruits
Q: When are fruits considered received? Q: What is the effect of voluntary surrender of property?
A: A: It is a waiver of the possessor’s right of retention but his
1. Natural and industrial fruits- from the time they are right to be refunded may still be enforced, unless he also
gathered or severed waived the same.
2. Civil fruits - from the time of their accrual and not their
actual receipt. (Art. 544) Q: May a possessor remove the useful improvements he
introduced?
Q: What if there are ungathered natural or industrial fruits
at the time good faith ceases?
A: Yes, but only by a possessor in good faith and only when
A: The possessor shall share in the expenses of cultivation, no substantial damage or injury would be caused to the
net harvest, and charges in proportion to the time of principal thing. (Art. 547)
possession. (Art 545)
Note: However, this right of removal is only subordinate to the
Q: What are the options of the owner in case there are owner’s right to keep the improvements himself by paying the
pending fruits at the time good faith ceases? expenses incurred or the concomitant increase in the value of the
property caused by the improvements.
A:
1. To pay the possessor in good faith indemnity for his EXPENSES FOR PURE LUXURY
cultivation expenses and charges and his share in the
net harvest; or Q: What are luxurious expenses?
2. To allow him to finish the cultivation and gathering of
the growing fruits.
A: Expenses incurred for improvements introduced for pure
luxury or mere pleasure.
Q: What if the possessor refuses, for any reason, to finish
the cultivation and gathering?
Q: Are luxurious expenses refundable?
A: He forfeits the right to be indemnified in any other
manner. (Art. 545, par. 3) A: No, even if the possessor is in good faith.
RIGHT TO BE REIMBURSED Note: But he may remove the luxurious improvements if the
principal thing suffers no injury thereby, and if his successor in the
NECESSARY AND USEFUL EXPENSES possession does not prefer to refund the amount expended. (Art.
548)
Q: What are necessary expenses?
POSSESSOR IN BAD FAITH
A: Expenses incurred to preserve the property, without
which, said property will physically deteriorate or be lost. Q: When is a possessor in bad faith?
Q: May mistake upon a doubtful questions or difficult Q: What are the acts which do not give rise to possession?
question of law be the basis of possession in good faith?
A: Possession through: FAT-V
A: Yes. Mistake upon a doubtful or difficult questions of law 1. Force or intimidation as long as there is a possessor
(provided such ignorance is not gross and therefore who objects thereto. (Art. 536)
inexcusable) may be a basis of good faith. It is true that 2. Acts executed clandestinely and without the
“ignorance of the law excuses no one” but error in the knowledge of the possessor which means that:
application of the law, in the legal solutions arising from a. acts are not public; and
such application, and the interpretation of doubtful b. unknown to the owner or possessor
doctrine can still make a person ignorance of the law may 3. Mere Tolerance by the owner or the lawful possessor.
be based on an error of fact. (Paras, p. 463) 4. Acts executed by Violence. (Art 537)
Note: Mistake upon a doubtful or difficult question of law refers to Q: What kind of possession can serve as a title for
the honest error in the application or interpretation of doubtful or acquiring dominion?
conflicting legal provisions/doctrines, and not to the ignorance of
the law. (Art. 526, par. 3) A: Only the possession acquired and enjoyed in the concept
of owner. (Art. 540)
Q When Dolorico died, his guardian Ortiz continued the
cultivation and possession of the property, without filing
any application to acquire title. In the homestead
UNIVERSITY OF SANTO TOMAS
2013 GOLDEN NOTES 118
PROPERTY
LOSS OR UNLAWFUL DEPRIVATION OF A MOVABLE c. Possessor is in the concept of an owner.
Q: During his lifetime, Velasco acquired Lot A from Q: Why is there no right of retention in case of bad faith?
spouses Sacluti and Obial evidenced by a deed of sale. In
1987, spouses Padilla entered the said property as A: As punishment for his bad faith.
trustees by virtue of a deed of sale executed by the Rural
Bank. The Padilla’s averred that the Solomon spouses Q: Is there right of removal?
owned the property which was identified as Lot
B. However, it was proved during trial that the land A: None, whether in good faith or bad faith. Necessary
occupied by spouses Padilla was Lot A in the name of expenses affect the existence or substance of the property
Velasco, whereas the land sold by the bank to the spouses itself.
Padilla was Lot B. The heirs of Velasco demanded that
spouses Padilla vacate the property, but they refused. Note: Improvements be so incorporated to the principal
Thus, the heirs filed a complaint for accion publiciana. thing that their separation must necessarily reduce the
Who has the better right of possession? value of the thing not curable by ordinary repairs.
A: The heirs of Velasco has the better right. Accion Q: What are the rights of a possessor with regard to useful
publiciana, or for recovery of the right to possess is an expenses?
action filed in the RTC to determine the better right to
possession of realty independently of the title. The A: If in good faith:
objective of the plaintiffs in accion publiciana is to recover 1. Right to refund
possession only, not ownership. Lot A was the subject of a 2. Right of retention until paid
cadastral case. The OCT was issued to Sacluti and Obial who 3. Right of removal, provided:
sold the same to Artemio. From the date of sale, until a. without damage to the principal thing
Artemio’s death, he was in continuous possession of the b. subject to the superior right of the prevailing
land. party to keep the improvements by paying
the expenses or the increase in value of the
Q: Has the action already prescribed? thing
A: No. The remedy of accion publiciana prescribes after the Q: What are the rights of a possessor with regard to
lapse of ten years. In the present case, the action was filed expenses for pure luxury?
with the RTC in 1991. Spouses Padilla dispossessed the
heirs of Velasco of the property in 1987. At the time of the A:
filing of the complaint, only 4 years had elapsed from the GOOD FAITH BAD FAITH
time of dispossession. The real right of possession is not
Right of removal, Provided: same rights, but liable only
lost till after the lapse of 10 years (Spouses Padilla v.
1. without injury to for the value of the
Velasco, G.R. No. 169956, January 19, 2009).
principal thing; ornaments at the time he
2. successor in possession enters into possession, in
Q: What are the presumptions in favor of a possessor?
does not prefer to refund case he prefers to retain
A: GCENCE amount expended.
1. Good faith
2. Continuity of initial good faith
3. Enjoyment in the same character in which possession
was acquired until the contrary is proved
4. Non-interruption in favor of the present possessor
5. Continuous possession by the one who recovers
possession of which he was wrongfully deprived
6. Extension of possession of real property to all
movables contained therein.
A:
With respect to GOOD FAITH BAD FAITH
On capital Charged to owner Charged to owner
Taxes and
On fruits Charged to possessor Charged to owner
Charges
Charges Pro rata Charge to owner
Possessor must return value of fruits already
received as well as value of fruits which the
Gathered or severed fruits Possessor is entitled to the fruits owner or legitimate possessor should be
entitled
(does not apply to possessor in BF)
Cultivation expenses of gathered Possessor is not entitled to be
Possessor is entitled to be reimbursed
fruits reimbursed
Share pro-rata between possessor and
Pending or ungathered fruits owner of expenses, net harvest, and Owner is entitled to the fruits
charges
indemnity to possessor in pro rata:
(owner’s option)
Production expenses of pending
a. money No indemnity
fruits
b. allowing full cultivation and
gathering of all fruits
Improvements no longer existing No reimbursement No reimbursement
Liability for accidental loss or Liable if acting with fraudulent intent
Liable in every case
deterioration or negligence, after summons
Improvements due to time or nature Inure to the owner or lawful possessor Inure to the owner or lawful possessor
1. To Alienate or mortgage the right of usufruct (Art. 572, Q: What if the expenses exceed the proceeds of the
NCC) growing fruits?
XPN: parental usufruct (Arts. 225, 226 FC) A: The owner has no obligation to reimburse the difference.
(Art. 567, NCC)
2. In a usufruct to Recover property/real right, to bring the
action and to oblige the owner thereof to give him the Q: May the usufructuary lease the thing in usufruct even
proper authority and the necessary proof to bring the without the owner’s consent
action (Art. 578, NCC)
A: Yes, but not being the owner, he cannot alienate, pledge
3. In a usufruct of part of a Common property, to exercise or mortgage the thing itself.
all the rights pertaining to the co-owner with respect to the
administration and collection of fruits or interests. Q: May the usufructuary alienate, pledge, or mortgage the
right of usufruct?
Q: Can usufructuary exercise acts of ownership?
A: Yes, he, being the owner of the right itself. (Art. 572,
A: GR: A usufructuary cannot exercise acts of ownership NCC)
such as alienation or conveyance.
Note: If the animals all perish w/o fault but due to contagious
Q: What are the rights and obligations of the usufructuary disease/uncommon event –deliver remains saved. If the young of
with respect to consumable things? animals perished in part due to accident, usufruct continues on
remaining portion. If the usufruct is constituted on sterile animals,
A: The usufructuary shall have the right to make use of the they are considered as if fungible and have the obligation to
replace same kind and quality.
consumable thing. At the termination of the usufruct, the
usufructuary has the obligation to:
Q: What are the effects of failure to post a bond or
1. If the thing has been appraised, pay its appraised
security?
value;
2. If the thing has not been appraised:
A:
a. Return the same quantity and quality; or
1. The owner shall have the following options:
b. Pay its current price at such termination.
a. receivership of realty;
b. sale of movables;
Q: What if the damages exceed the value of the
c. deposit of securities; or
improvements?
d. investment of money; or
e. retention of the property as administrator.
A: The usufructuary is liable for the difference as indemnity.
2. The net product shall be delivered to the usufructuary;
3. The usufructuary cannot collect credit due or make
Q: What if the improvements exceed the amount of
investments of the capital without the consent of the
damages?
owner or of the court until the bond is given.
A: He may remove the portion of the improvements
Q: What are the effects of failure to give security?
representing the excess in value if it can be done without
injury; otherwise, the excess in value accrues to the owner.
A:
Q: Why do improvements accrue to the owner? 1. On the rights of the naked owner
a. May deliver the property to the usufructuary
A: Because there is no indemnity for improvements. b. May choose retention of the property as
administrator
Q: What are the obligations of the usufructuary? c. May demand receivership or administration of
the real property, sale of movable, conversion or
A: deposit of credit instruments or investment of
1. Before the usufruct cash or profits
a. Make an inventory 2. On the rights of the usufructuary
b. Give security a. Cannot posses the property until he gives security
2. During the usufruct b. Cannot administer property
a. Take care of property c. Cannot collect credits that have matured nor
invest them except the court or naked owner
consents
A: Such as are required by the wear and tear due to the Rights Limitations
natural use of the thing and are indispensable for its Can alienate the thing in
Alienation
preservation. (Art. 592, NCC) usufruct
Cannot alter the form and
Note: GR: Usufructuary has no liability when the thing deteriorates Alteration
substance
due to wear and tear. He is obliged to return the thing in such Cannot do anything
state.
Enjoyment prejudicial to the
XPN: when there is fraud or negligence
usufructuary
Can construct any works
Q: What are extraordinary repairs? and make any
improvement provided it
Construction and
A: does not diminish the value
Improvement
1. Those required by the wear and tear due to the or the usufruct or prejudice
natural use of the thing but not indispensable for its the rights of the
preservation. usufructuary.
2. Those required by the deterioration of or damage to
the thing caused by exceptional circumstances and are Q: What is the effect of the death of the naked owner on
indispensable for its preservation. the usufruct?
Q: Who pays for extraordinary repairs? A: It does not terminate the usufruct. His rights are
transmitted to his heirs.
A: Depends on the kind of extraordinary repairs: (Art. 594,
NCC) Q: Is renunciation an assignment of right?
1. If made by the owner - he can make them but to his
expense and he shall have the right to demand from A: No, it is really abandonment by the usufructuary of his
the usufructuary the payment of legal interest on the right and does not require the consent of the naked owner
amount expended during the duration of the usufruct. but it is subject to the rights of creditors.
A: If both of them paid premium: both will share in the 2. Total Loss of the thing
insurance proceeds. If it was only the owner who paid, then
proceeds will go to him alone. Note: If the loss is only partial, the usufruct continues with
the remaining part.
Q: What is the effect of improper use of the thing by the
usufructuary? 3. Death of the usufructuary; unless a contrary intention
appears, since a usufruct is constituted essentially as a
A: The owner may demand the delivery of and lifetime benefit for the usufructuary or in
administration of the thing with responsibility to deliver net consideration of his person
fruits to usufructuary. 4. Termination of right of the person constituting the
usufruct
Q: On 1 January 1980, Minerva, the owner of a building 5. Expiration of the period or fulfilment of the resolutory
granted Petronila a usufruct over the property until 01 condition
June 1998 when Manuel, a son of Petronila, would have 6. Renunciation by the usufructuary.
reached his 3oth birthday. Manuel, however, died on 1
June 1990 when he was only 26 years old. Note: It partakes the nature of a condonation or donation, it
must comply with the forms of donation.
Minerva notified Petronila that the usufruct had been
extinguished by the death of Manuel and demanded that 7. Merger of the usufruct and ownership in the same
the latter vacate the premises and deliver the same to the person who becomes the absolute owner thereof.
former. Petronila refused to vacate the place on the (Art. 1275, NCC)
ground that the usufruct in her favor would expire only on
th
1 June 1998 when Manuel would have reached his 30 EASEMENTS
th
birthday and that the death of Manuel before his 30
birthday did not extinguish the usufruct. Whose CHARACTERISTICS
contention should be accepted? (1997 Bar Question)
Q: What is an easement or servitude?
A: Petronila’s contention is correct. Under Article 606 of the
Civil Code, a usufruct granted for the time that may elapse A: It is an encumbrance imposed upon an immovable for
before a third person reaches a certain age shall subsist for the benefit of:
the number of years specified even if the third person 1. another immovable belonging to a different owner; or
should die unless there is an express stipulation in the 2. for the benefit of a community or one or more persons
contract that states otherwise. to whom the encumbered estate does not belong by
virtue of which the owner is obliged to abstain from
In the case at bar, there is no express stipulation that the doing or to permit a certain thing to be done on his
consideration for the usufruct is the existence of Petronila’s estate. (Arts. 613- 614, NCC)
A: A:
1. It must be imposed for reasons of public use 1. In adjoining walls of building, up to common elevation
2. It must be in favor of a town or village indemnity must 2. In dividing walls of gardens and yards (urban)
be paid 3. In dividing fences, walls and live hedges of rural
tenements
Note: The right to make the water flow thru or under 4. In ditches or drains between tenements
intervening or lower estates
Rebuttal of presumption:
Q: What are the requisites for drawing water or for 1. Title
watering of animals? 2. By contrary proof
3. By signs contrary to the existence of the servitude
A: (Arts. 660 & 661, NCC)
1. Owner of the dominant estate has the capacity to
dispose of the water; Note: If the signs are contradictory, they cancel each
2. The water is sufficient for the use intended other.
3. Proposed right of way is the most convenient and the
least onerous to third persons. Q: Who spends for the cost of repairs and construction of
4. Pay indemnity to the owner of the servient estate (Art. party walls?
643)
A: The part-owners. They are obliged to contribute in
EASEMENT OF AQUEDUCT proportion to their respective interests.
A: For legal purposes, it is considered continuous and A: GR: Yes, any owner may free himself from the obligation
apparent even though the flow of water may not be to contribute by renouncing his rights in the party wall.
continuous or its use depends upon the needs of the
dominant estate or upon a schedule of alternate days or XPN: When the party wall actually supports his
hours. (Art. 646, NCC) building, he cannot refuse to contribute for the
expenses or repair and construction. (Art. 662, NCC)
PARTY WALL
XPN to XPN: If the owner renounces his part-
Q: What is a party wall? ownership of the wall, in this case he shall bear the
expenses of repairs and work necessary to prevent
A: A common wall which separates two estates, built by any damage which demolition may cause to the
common agreement at the dividing line such that it party wall. (Art. 663, NCC)
occupies a portion of both estates on equal parts.
Q: May an owner increase the height of a party wall?
Note: It is a kind of compulsory co-ownership.
A: Yes, provided that he must:
Q: Distinguish easement of party wall from co-ownership. 1. do so at his own expense;
2. pay for any damage caused even if it is temporary;
A: 3. He must bear the cost of maintaining the portion
PARTY WALL CO-OWNERSHIP added;
Shares of co-owners cannot Can be divided physically; a 4. He must pay the increased cost of preservation of the
be physically segregated but co-owner cannot point to wall (Art. 664, NCC);
they can be physically any definite portion of the 5. He shall be obliged to reconstruct the wall at his
identified property belonging to him expense if necessary for the wall to bear the increased
height and if additional thickness is required, he shall
None of the co-owners may
provide the space therefore from his own land.
use the community property
No limitation as to use of the
for his exclusive benefit
party wall for exclusive DRAINAGE OF BUILDINGS
because he would be
benefit of a party
invading on the rights of the Q: Define drainage of buildings
others
Any owner may free himself A: It is the right to divert the rain waters from one’s own
from contributing to the cost roof to the neighboring estate.
Partial renunciation is
of repairs and construction
allowed
of a party wall by renouncing
ALL his rights
A: COMPULSORY EASEMENTS
1. No adequate outlet
2. The outlet must be at the point where egress is easiest Q: How are easements acquired?
and establishing a conduit for the drainage of water
3. Proper indemnity A: FART-P
1. By Title – All easements:
LATERAL AND SUBJACENT SUPPORT a. Continuous and apparent (Art. 620)
b. Continuous non-apparent (Art. 622)
Q: Can there be a stipulation or testamentary provision c. discontinuous, whether apparent or non-
allowing excavations that could cause danger to an apparent (Art. 622)
adjacent land or building? 2. By Prescription of ten years –
continuous and apparent (Art. 620)
A: No, the same shall be void. (Art. 685, NCC) 3. By deed of Recognition
4. By Final judgment
Q: What should be done first before making an 5. By Apparent sign established by the owner of the
excavation? two adjoining estates
A: Any proprietor who intends to make any excavation shall
Q: How is the prescriptive period computed?
notify all owners of adjacent lands.
A:
VOLUNTARY EASEMENT
a. Positive easement - the period is counted from the day
Q: When is an easement voluntary? when the owner of the dominant estate begins to
exercise it
A: it is voluntary when it is established by the will of the b. Negative easement- from the day a notarial
owners. prohibition is made on the servient estate
Q: What is the doctrine of attractive nuisance? A: If the thing is found by the court not to be a nuisance,
the owner can claim damages.
A. One who maintains on his estate or premises an
attractive nuisance without exercising due care to prevent Note: A private person or a public official extra judicially abating a
children from playing therewith or resorting thereto, is nuisance shall be liable for damages if he causes unnecessary injury
liable to a child of tender years who is injured thereby, even or if the alleged nuisance is later declared by the courts to be not
if the child is technically a trespasser in the premises. (Jarco real nuisance.
Marketing Corp. v. CA, 117 SCAD 818, 321 SCRA 375, 1991)
Q: Does the right to question the existence of a nuisance
Q: What is the basis for liability? prescribe?
A:
1. It must be attractive
2. Dangerous to children of tender years.
Q: What are the essential features or elements of a true A: Yes, provided all the donees are living at the time of
donation? donation. (Art. 756, NCC)
Q: Up to what extent may a donation cover? A: It is a condition established in the deed of donation
which has for its effect the restoration or return of the
A: It may comprehend all the present property of the property donated to the donor or his estate or in favor of
donor, or part thereof, provided he reserves, in full other persons who must be living at the time of the
ownership or in usufruct, sufficient means for the support donation for any cause or circumstances. (Art. 757, NCC)
of himself, and of all relatives who, at the time of the
acceptance of the donation, are by law entitled to be Note: If the reversion is in favor of other persons who are not all
supported by the donor. (Art. 750, NCC) living at the time of the donation, the reversion stipulated shall be
void, but the donation shall remain valid.
Q: Can future properties be subject of donation? Q: What is the standing of the donation where the donor
did not reserved property or assets for himself sufficient
A: No, donations cannot comprehend future properties for his support and all his relatives legally dependent upon
him?
Note: Future property means anything which the donor cannot
dispose of at the time of the donation. (Art. 751, NCC)
A: It is valid. It is merely reducible to the extent that the
support to himself and his relatives is impaired or
Q: Can future inheritance or the inchoate right to inherit
prejudiced (Agapito v. De Joya, [CA]. 40 Off. Gaz. P. 3526).
be donated?
Q: May a property, the acquisition of which is subject to Q: What are the kinds of donation?
suspensive condition, be donated?
A:
A: Yes, because once the condition is fulfilled, it retroacts to 1. According to motive or cause: SRMO
the day the contract is constituted. (Art. 1187, par. 1, NCC) a. Simple
Q: What is a simple donation? A: Donations made to conceived and unborn children may
be accepted by those who would legally represent them if
A: One which is not subject to any condition they were already born. (Art. 742, NCC)
A: One wherein the donor imposes on the donee a Q: When is a donation perfected?
condition dependent on the happening of a future event or
past event unknown to the parties. A: Donation is perfected from the moment the donor
knows of the acceptance by the donee (Art. 734, NCC).
A: All those who are not specially disqualified by law. DOUBLE DONATIONS
A: An unborn child may be a donee but not a donor. A: When the same thing has been donated to two or more
persons.
As a donee, donations made to conceived and unborn
children may be accepted by those persons who would Q: What is the rule in case of a double donation?
legally represent them if they were already born. (Art. 742,
NCC) A: The rule on double sale under Article 1544 shall be
applicable:
Note: If the conceived child did not become a person, the donation 1. Movable – Owner who is first to possess in good
is null and void. An unborn child cannot be a donor because it is faith
2. Immovable –
REVOCATION OR REDUCTION
Q: What is the rule in case of an excessive or in officious
donation?
GROUNDS FOR REVOCATION AND REDUCTION
A:
Q: What are the grounds for revocation of donation?
1. A donor may not donate more than what he can give
by will. If he donates more than what he cannot give
A:
by will, the donation will become excessive and to
1. Under Art. 760
insist on it, the legitimism of the compulsory heirs will
a. Birth of a donor’s child or children (legitimate,
be impaired. Legitimism is reserved for the compulsory
legitimated, or illegitimate) after the donation,
heirs and the same cannot be impaired or disposed of
even though born after his death.
by the testator.
b. Appearance of a donor’s child who is missing and
thought to be dead by the donor
2. The donee cannot receive by way of donation more
c. Subsequent adoption by the donor of a minor
than what he may receive by will. If the donee can
child.
receive by donation (devise or legacy) more than what
the testator is allowed by law to give, the donation is
2. Under Art. 764 –When the donee fails to comply with
inofficious and it may be suppressed totally or reduced
any of the conditions which the donor imposed upon
as to its excess.
the donee.
IN FRAUD OF CREDITORS
3. Under Art. 765 – by reason of ingratitude
a. If the donee should commit some offense against
Q: What is the remedy in case of donations executed in
the person, the honor or the property of the
fraud of creditors?
donor, or of his wife or children under his
parental authority
A: The creditors may rescind the donation to the extent of b. If the donee imputes to the donor any criminal
their credits. The action is known as accion pauliana. offense, or any act involving moral turpitude,
even though he should prove it, unless the crime
Note: If the donor did not reserved enough assets to pay his or act has been committed against the donee
creditors whom he owned before the donation, the donation is himself, his wife or children under his authority
presumed to be in fraud of creditors. c. If he unduly refuses him support when the donee
is legally or morally bound to give support to the
VOID DONATIONS donor
Q: What are the donations prohibited by law? Q: What are the grounds for reduction of donation?
A: Donations made: LAW SCRA POP A: The same grounds for revocation under Art. 760. The
1. By individuals, associations or corporations not donation shall be reduced insofar as it exceeds the portion
permitted by Law to make donations; that may be freely disposed of by will, taking into account
2. By persons guilty of Adultery or concubinage at the the whole estate of the donor at the time of the birth,
time of donation; appearance, or adoption of a child. (Art. 761, NCC)
3. By a Ward to the guardian before the approval of
accounts; Q: Can a donation be revoked once it is perfected?
4. By Spouses to each other during the marriage or to
A: Once a donation is perfected, it cannot be revoked
persons of whom the other spouse is a presumptive
without the consent of the donee except on grounds
heir.
provided by law (Arts. 760, 764, 765, NCC)
5. Between persons found guilty of the same Criminal
offense in consideration thereof;
th Q: Is revocation or reduction automatic?
6. To Relatives of such priest, etc. within the 4 degree,
or to the church to which such priest belongs; A: No. The emergence of the circumstances enumerated in
7. To an Attesting witness to the execution of donation, if Art. 760 do not automatically revoke or reduce the
there is any, or to the spouse, parents or children or donation. The revocation or reduction is authorized only if
anyone claiming under them; the amount or value of the property donated exceeds the
8. To the Priest who heard the confession of the donor disposable free portion.
during the latter’s last illness, or the minister of the
A: In the event that two or more causes are present, the PRESCRIPTION
earliest among them shall be the starting point in the
reckoning of the period of prescription of the action.
Q: What is the period of prescription of action for
Q: Can a donor execute a donation subject to a condition? revocation or reduction?
INGRATITUDE
1. Failure of the donor to reserve sufficient means for support (Art. 750, NCC)
Any time by the donor Not transmissible Donation reduced to Donee is entitled to the
or by relatives entitled
extent necessary to fruits as owner of the
to support during the Note: the duty to give and
provide support (Art. property donated (Art.
donor’s lifetime (Art. right to receive support are
personal (Art. 195, FC) 750, NCC) 441, NCC)
750, NCC)
2. Inofficiousness for being in excess of what the donor can give by will (Art. 750, 771, NCC)
[Same as in #1
Donee appropriates fruits
Revocation]
not affected by reduction
[Same as in #1 [Same as in #1
(Art. 441, NCC). When
W/in 4 years from birth Revocation] Reduction]
st donation is revoked for
of 1 child, legitimation
any of the cause
(recognition), adoption, To children & Donation reduced to
mentioned in article 760,
judicial declaration of descendants of donor extent necessary to
the donee shall not return
filiation or receipt of upon his death provide support (Art.
the fruits except from the
info of existence of the (Art. 763, 2, NCC) 750, NCC)
filing of the complaint
child believed to be
(Art. 768, NCC).
dead. (Art. 763, NCC)
Q: What are the basic requirements of prescription as a Note: An absolutely simulated or fictitious title is void and cannot
mode of acquiring ownership? be a basis for ordinary prescription. (Pineda Succession and
Prescription, p. 646, 2009)
A:
1. Actual possession of a property, which is susceptible of Q: What is a valid title?
prescription
2. Possession must be in the concept of an owner and A: A title which is sufficient to transmit ownership of the
not that of a mere holder (Art. 1118) property or right being conveyed had the transferor or
3. Possession must be public or open (Art. 1118) grantor been the real owner thereof.
4. Possession must be peaceful (Art. 1118)
5. Possession must be continuous and not interrupted EXTRAORDINARY
(Art. 1118)
6. Possession must be adverse, that is, exclusive and not Q: What is extraordinary prescription?
merely tolerated
7. Possession must satisfy the full period required by law
A: Prescription where the possessor is in bad faith. It does
(Pineda Succession and Prescription, p. 606, 2009)
not require good faith or just title but possession for a
period longer than ordinary acquisitive prescription.
ORDINARY (Pineda Succession and Prescription, p. 607, 2009)
A: It requires possession of things in good faith and with A: Through uninterrupted possession for 8 years, without
just title for the time fixed by law. need of any other condition. (Art. 1132)
GOOD FAITH
Q: How about ownership and other real rights over
immovables?
Q: When is a possessor in good faith?
A: They prescribe through uninterrupted adverse
A: If he is not aware of the existence of any flaw or defect possession for 30 years, without need of title or of good
in his title or mode of acquisition which invalidates it (Art. faith. (Art. 1137)
526 in relation to Art. 1128) and has reasonable belief that
the person from whom he received the thing was the
Q: What are the requisites of extraordinary prescription?
owner thereof, and could transmit his ownership. (Art.
1127) A: CLAS G
1. Capacity of the possessor to acquire by prescription;
Q: When must good faith exist? 2. Susceptibility of object to prescription;
3. Adverse possession of the character prescribed by law;
A: It must exist not only from the beginning but throughout 4. Lapse of time required by law;
the entire period of possession fixed by law. (Pineda 5. Good faith of possessor or proof of just title.
Succession and Prescription, p. 643, 2009)
REQUISITES
JUST TITLE
Q: What are the basic requirements of prescription as a
Q: What does just title mean? mode of acquiring ownership?
A:
A: It means that the possessor obtained the possession of
1. Capacity to acquire by prescription;
the property through one of the modes recognized by law
2. A thing capable of acquisition by prescription;
for acquiring ownership but the transferor or grantor was
3. Possession of the thing under certain conditions; and
not the owner of the property or he has no power to
4. Lapse of time provided by law
transmit the right. (Art. 1129)
Note: Just title is never presumed, it must be proved. (Art. Note: The first two requisites apply to both ordinary and
1130, NCC) extraordinary prescription, but the last two requisites vary for each
kind.
Q: Emilio died, leaving 8 children. In 1960, His eldest child, Q: Anthony bought a piece of untitled agricultural land
Flores, took possession of and cultivated the land, caused from Bert. Bert, in turn, acquired the property by forging
the cancellation of the tax declaration in Emilio’s name Carlo’s signature in a deed of sale over the property. Carlo
covering a parcel of land and caused the issuance of had been in possession of the property for 8 years,
another in his own name. The co-heirs of Flores declared it for tax purposes, and religiously paid all taxes
discovered the cancellation. Upon Flores’ death, the heirs due on the property. Anthony is not aware of the defect in
of his sisters together with his surviving sisters filed a Bert’s title, but has been in actual physical possession of
complaint in 1999 against the heirs of Flores for partition the property from the time he bought it from Bert, who
of the lot and declaration of nullity of the documents. Did had never been in possession. Anthony has since then
the heirs of Flores acquire ownership over the lot by been in possession of the property for 1 year. Can
extraordinary acquisitive prescription? Anthony acquire ownership of the property by acquisitive
prescription? How many more years does he have to
A: Yes. While the action to demand partition of a co-owned possess it to acquire ownership?
property does not prescribe, a co-owner may acquire
ownership thereof by prescription, where there exists a A: Yes, Anthony can acquire ownership of the property by
clear repudiation of the co-ownership, and the co-owners ordinary acquisitive prescription which requires just title
are apprised of the claim of adverse and exclusive and good faith (Art. 1117, NCC). There was just title
ownership. In this case, the respondents never possessed because a deed of sale was issued in his favor even though
the lot, much less asserted their claim thereto until 1999 it was forged, which fact he was not aware of. He needs to
when they filed the complaint for partition. In contrast, possess the land in good faith and in the concept of owner
Flores took possession of the lot after Emilio’s death and for a total of 10 years in order to acquire ownership. Since
exercised acts of dominion thereon- tilling and cultivating Anthony possessed the land for only one year, he has not
the land, introducing improvements, and enjoying the completed the 10-year period. Even if Anthony tacks the 8-
produce thereof. The statutory period of prescription year period of possession by Carlo who in the deed of sale
is supposed to be his grantor or predecessor in interest, the acquisition of the property by the transferor.
period is still short of ten years. (Art. 1133, Pineda Succession and
Prescription, p. 651, 2009)
Q: If Carlo is able to legally recover his property, can he 1. An action to recover a
require Anthony to account for all the fruits he has registered land by the owner
harvested from the property while in possession? 2. Right to petition for the
issuance for the issuance of a
A: Since Anthony is a possessor in good faith, Anthony Registered Lands Writ of Possession filed by the
cannot be made to account for the fruits he gathered (P.D. 1529) applicant for registered land
before he was served with summons. A possessor in good
faith is entitled to the fruits received before the possession Note: Similarly, an action to recover
was legally interrupted by the service of summons (Art. possession of a registered land never
544, NCC). After Anthony was served with summons, he prescribes.
became a possessor in bad faith and a builder, planter, 1. Action legal to
sower in bad faith. He can also be made to account for the demand a right
fruits but he may deduct expenses for the production of way Imprescriptible
gathering and preservation of the fruits (Art. 443, NCC). 2. To abate a
nuisance
Q: If there are standing crops on the property when Carlo Action to quiet
recovers possession, can Carlo appropriate them? (2008 title if plaintiff is Imprescriptible
Bar Question) in possession
Applies to both action and defense.
A: The value of the standing crops must be prorated
depending upon the period of possession and the period of Void contracts
Note: However, an action to annul a voidable
growing and producing the fruits. Anthony is entitled to a contract prescribes after 4 years
part of the net harvest and a part of the expenses of
Action to
cultivation in proportion to his period of possession.
demand
However, Carlo may allow Anthony to gather these growing As long as the co-ownership is
partition
fruits as an indemnity for the expenses of cultivation. If recognized expressly or impliedly (Art.
Note:
Anthony refuses to accept this concession, he shall lose the 494)
Distinguished
right to indemnity under Art. 443. (Art. 545, par. 3, NCC).
from laches
Right of reversion or reconveyance to
EXTINCTIVE
the State of the public properties
registered and which are not capable of
Q: What is extinctive prescription? private appropriation or private
acquisition does not prescribe
A: It refers to the time within which an action may be Property of
brought, or some act done, to preserve a right (Pineda public dominion Note: In contrast, where private property is
Succession and Prescription, p. 660, 2009 ed). taken by the Government for public use
without first acquiring title thereto either
through expropriation or negotiated sale , the
Q: What is the basis of extinctive prescription? owner’s action to recover the land or the
value thereof does not prescribe.
A: It based on the probability, born of experience, that the
alleged right which accrued in the past never existed or has PRESCRIPTION OR LIMITATION OF ACTIONS
already been extinguished; or if it exists, the inconvenience
caused by the lapse of time should be borne by the party
Q: What are the respective prescriptive periods of actions
negligent in the assertion of his right (Tolentino, Civil Code
specified under the Civil Code?
of the Philippines, Vol. IV, p. 2).
A:
NO PRESCRIPTION APPLICABLE ACTIONS PRESCRIPTIVE PERIOD
When it is possessed through a crime 8 years (good faith)or 4
such as robbery, theft, or estafa. years (bad faith) from the
time the possession is lost
Recover Movables
Note: The person who cannot invoke the (Art. 1140, Pineda Succession
By Offender right of prescription is the offender or person and Prescription, p. 666,
who committed the crime or offense, not a 2009)
subsequent transferee who did not 30 years (Recover
participate in the crime or offense, unless the
Recover Immovables ownership) (Art. 1141)
latter knew the criminal nature of the
10 years (Recover real right
Note: Art. 1156 refers only to civil obligations which are Q: What are the different kinds of prestation?
enforceable in court when breached. It does not cover natural
obligations (Arts. 1423-1430) because these are obligations that A:
cannot be enforced in court being based merely on equity and OBLIGATION TO OBLIGATION TO OBLIGATION NOT
natural law and not on positive law (Pineda, Obligations and GIVE DO TO DO
Contracts, 2000 ed., p3).
Consists in the
Covers all kinds of
ELEMENTS OF AN OBLIGATION delivery of a Consists in
works or services
movable or refraining from
whether physical
Q: What are the elements of an obligation? immovable thing doing some acts
or mental
to the creditor
A: JAPO i.e. – Easement
1. Juridical tie or vinculum juris or efficient cause – is prohibiting building
the efficient cause by virtue of which the debtor proprietor or
i.e. – Contract for
has become bound to perform the prestation possessor from
i.e. – Sale, professional
(Pineda, Obligations and Contracts, 2000, p.2). committing
deposit, pledge, services like
nuisance(Art. 682),
Note: The vinculum juris is established by:
donation, painting,
restraining order or
1. law (i.e. – relation of husband and wife for antichresis modeling, singing,
injunction (Pineda,
support) etc.
Obligations and
2. bilateral acts (i.e. – contracts)
Contracts, p. 3,
3. unilateral acts (i.e. – crimes and quasi-delicts)
(Tolentino, Civil Code Vol. IV, 1999 ed. p.59) 2000)
2. Active subject [creditor (CR) or obligee] – is the Note: It is the conduct that must be observed by the
one who is demanding the performance of the debtor/obligor. (Pineda, Obligations and Contracts, p. 2, 2000)
obligation. It is he in whose favor the obligation is
constituted, established or created (Pineda, Q: What are the requisites of a valid prestation?
Obligations and Contracts, 2000, p.2).
A:
3. Passive subject [debtor (DR) or obligor] – is the 1. Possible, physically and juridically;
one bound to perform the prestation to give, to 2. Determinate, or at least determinable according to
do, or not to do (Pineda, Obligations and pre-established elements or criteria; and
Contracts, 2000 ed., p. 2). 3. Has a possible equivalent in money (Tolentino, Civil
Code Vol. IV, p. 58, 1999 ed).
Note: When there is a right there is a corresponding
obligation. Right is the active aspect while obligation is CLASSIFICATION OF OBLIGATIONS
the passive aspect. Thus, it is said that the concepts of
credit and debt are two distinct aspects of unitary Q: What are the kinds of obligation?
concept of obligation. (Pineda, Obligations and
Contracts, p. 2, 2000) A: From the viewpoint of:
1. Sanction
4. Object or prestation – it is the subject matter of a. Civil – gives a right of action to compel their
the obligation which has an economic value or performance
susceptible of pecuniary substitution in case of b. Natural – not based on positive law but on
noncompliance. It is a conduct that may consist of equity and natural law; does not grant a right
giving, doing, or not doing something. (Pineda, of action to enforce their performance, but
Obligations and Contracts, p. 2, 2000) after voluntary fulfillment by the obligor,
they authorize retention of what has been
delivered/ rendered by reason thereof.
Q: Do obligations arising from contracts have the force of Q: What is presumptive consent?
law between the parties?
A: Since a quasi-contract is a unilateral contract created by
A: Yes. Obligations arising from contracts have the force of the sole act or acts of the gestor, there is no express
law between the parties and should be complied with in consent given by the other party. The consent needed in a
good faith (Art. 1159). contract is provided by law through presumption (Pineda,
Obligations and Contracts, p. 15, 2000).
Q: What are the requisites for a contract to give rise to
obligations ex contractu? Q: What are the principal forms of quasi-contracts?
A: A:
1. It must contain all the essential requisites of a 1. Negotiorum gestio (inofficious manager) – arises when
contract (Art. 1318) a person voluntarily takes charge of the management
2. It must not be contrary to law, morals, good of the business or property of another without any
customs, public order, and public policy. (Art. power from the latter (Art. 2144).
1306) 2. Solutio indebiti (unjust enrichment)–takes place when
a person received something from another without
Q: What is compliance in good faith? any right to demand for it, and the thing was unduly
delivered to him through mistake (Art. 2154).
A: It is performance in accordance with the stipulation,
clauses, terms and conditions of the contract (Pineda, Note: The delivery must not be through liberality or some other
Obligations and Contracts, 2000 ed., p. 12). cause.
Note: The contract is the “law” between the parties (Art. 1159). Q: What is the rule in case of excess of payment of
interest?
Q: May a party unilaterally evade his obligation in the
contract? A: If the borrower pays interest when there has been no
stipulation therefor, the provisions of the Code concerning
A: GR: Neither party may unilaterally evade his obligation in solutio indebiti, or natural obligations, shall be applied, as
the contract. the case may be.
XPNs: Unilateral evasion is allowed when the: Note: If the payment of interest is made out of mistake, solutio
1. contract authorizes such evasion indebiti applies; hence, the amount must be returned to the
2. other party assents thereto debtor. If the payment was made after the obligation to pay
interest has already prescribed, natural obligation applies; hence,
the creditor is authorized to retain the amount paid.
Q: What governs obligations arising from contracts?
*For further discussion on quasi contracts, please see page
A: GR: These obligations shall be governed primarily by the
399 on Credit Transactions
stipulations, clauses, terms and conditions of the parties’
agreements.
OBLIGATIONS EX DELICTO
XPN: Contracts with prestations that are
Q: What is delict?
unconscionable or unreasonable (Pineda, Obligations
and Contracts, 2000 ed., p. 12-13).
A: It is an act or omission punished by law.
Q: Is civil action implicitly instituted in criminal case? Q: When is Art.2176 on quasi-delict inapplicable?
XPNs: No. When the offended party: Note: However, if the act that breaches the contract is tortuous,
1. Waives the civil action the pre-existing contractual relation will not bar the recovery of
2. Reserves the right to institute it separately damages (Singson v. BPI, G.R. No. L-24837, June 27, 1968)
3. Institutes the civil action prior to the criminal
action (Rule 111, Sec. 1, Rules of Court) 2. When the fault or negligence is punished by law as a
crime, Art. 100 of RPC shall be applicable.
Q: What is the effect of acquittal in criminal case?
3. If the action for quasi-delict is instituted after 4 years, it is
A: GR: The acquittal of the accused in criminal case on the deemed prescribed. (Afialda v.Hisole, 85 Phil 67)
ground of reasonable doubt does not preclude the filing of
a subsequent civil action and only preponderance of 4. When the injury suffered by a person is the result of a
evidence is required to prove the case. fortuitous event without human intervention.
XPN: When the acquittal is based on the reason that: 5. If there is no damage or injury caused to another. (Walter
1. The accused did not commit the crime charged; A. Smith & Co. v. Cadwallader Gibson Lumber Company, 55
or Phil 517)
2. There is a declaration in the decision of acquittal
that no negligence can be attributed to the * For further discussion on quasi delict, see page 471 on
accused and that the fact from which the civil torts and damages
action might arise did not exist (Art. 29)
DISTINGUISHED FROM CULPA CONTRACTUAL AND CULPA Q: What are the conditions for natural obligations to
CRIMINAL arise?
Note: The enumeration is not exclusive. The following also Q: What is the basis and purpose of estoppel?
constitute natural obligations:
1. Support given to unrecognized illegitimate children by A: Estoppel is based on public policy, fair dealing, good faith
their putative parents, including support given to
and justice and its purpose is to forbid one to speak against
illegitimate children by the putative parents despite
judgment denying their recognition; his own act, representation or commitments to the injury
2. Interest voluntarily paid for the use of money even if no of one who reasonably relied thereon (Pineda, Obligations
interest is agreed upon in writing may be considered as and Contracts, 2000 ed. p. 644)
a natural obligation (Art. 1956; 1960);
3. Support given to relatives for whom the law made no Q: What are the kinds of estoppel?
provisions for their support; and
4. Indemnification given to a woman seduced, although A:
the seducer was acquitted of the charge of seduction.
1. Estoppel by deed (technical estoppel)
a. Estoppel by deed proper – a party signs a
Q: May natural obligations be converted into civil
document which bars him from denying the
obligations?
truth of any material facts asserted in it. It
applies only between the same parties, their
A: Yes, by way of novation. The natural obligation becomes
privies and cannot be used against strangers
a valid cause for a civil obligation after it has been affirmed
(Pineda, Obligations and Contracts, 2000 ed.
or ratified anew by the debtor (Pineda, Obligations and
p. 655)
Contracts, 2000 ed, p. 634).
b. Estoppel by record – truth set forth in a
record, whether judicial or legislative, cannot
A natural obligation may be subject to a contract of
be denied (Pineda, Obligations and
guaranty so that a creditor may proceed against the
Contracts, 2000 ed. p. 655)
guarantor although he has no right of action against the
c. Estoppel by court record - the parties are
principal debtor. But when the debtor himself offers a
precluded from:
guaranty for his natural obligation, he impliedly recognizes
i. raising questions involving matters which
his liability, thereby transforming the obligation from
were directly adjudged because of the
natural into a civil one (De Leon, Comments and Cases on
principle of res judicata - Estoppel by
Credit Transactions, 2010 ed, p. 240.).
judgment or direct estoppel by judgment
ii. from raising questions involving matters
Note: Compliance with a natural obligation is discretionary. If a
person chose to fulfil, he cannot recover what he had delivered in that have not been adjudged but could
compliance therewith. Fulfillment places the debtor into estoppels have been placed in issue and decide in
from recovering what had been paid or delivered (Pineda, the previous case because of their relation
Obligations and Contracts, 2009 ed., pg. 696) to the issues therein - Collateral estoppel
by judgment (Pineda, Obligations and
Q: What is the effect of partial performance? Contracts, 2000 ed. p. 654)
2. Estoppel in pais (equitable estoppel)
A: If only a part of the natural obligation has been fulfilled, a. by conduct or by acceptance of benefits
this partial payment cannot be recovered. It is converted b. by representation or concealment
into civil obligation if it is legally susceptible of confirmation c. by silence
or ratification. d. by omission
e. by laches
However, if the fulfilled portion is not susceptible of
confirmation or ratification, this portion can be the basis of LACHES
a cause of action for recovery of what has been delivered
because it has not been converted into legal obligation. Q: What is laches?
(Pineda, Obligations and Contracts, 2000 ed, p. 634-635)
A: It is the failure or neglect, for an unreasonable length of
ESTOPPEL time, to do that which by exercising due diligence could or
should have been done earlier; its negligence or omission
Q: What is estoppel? to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has
A: It is an admission or representation rendered conclusive abandoned it or declined to assert it. It is also known as
upon the person making it, and cannot be denied or stale demands (Lim Tay vs. Court of Appeals, 293 SCRA 634;
disproved as against the person relying thereon (Art. 1431) Pineda, Obligations and Contracts, 2000 ed. p. 609).
A: It is based upon grounds of public policy which requires A: It depends upon the kind of obligation
for the peace of society, discouragement of state claims.
SPECIFIC GENERIC
Q: What are the elements of laches?
Deliver the thing which is
neither of superior nor
A:
Deliver the thing agreed inferior quality if quality and
1. Conduct on the part of the defendant or one under
upon (Art. 1165) circumstances have not been
whom he claims, giving rise to the situation
stated by the partiies (Art.
complained of;
1246)
2. Delay asserting complainant’s right after he had
knowledge of the defendant’s conduct and after he Take care of the thing with
has opportunity to exercise it; the proper diligence of a If the object is generic, but
3. Lack of knowledge or notice on the part of the good father of a family the source is specified or
defendant that the complainant would assert the right unless the law requires or delimited, the obligation is
on which he bases his suit; parties stipulate another to preserve the source
4. Injury or prejudice to the defendant in the event relief standard of care (Art.1163)
is accorded to the complainant (Pineda, Obligations Delivery of another thing
and Contracts, 2000 ed. p. 610). Deliver all accessions,
within the same genus as the
accessories and fruits of the
thing promised if such thing
Q: Distinguish laches from prescription thing even though they may
is damaged due to lack of
not have been mentioned
care or a general breach is
A: (Art. 1166)
committed
LACHES PRESCRIPTION Pay damages in case of
Concerned with the Concerned with the Pay damages in case of
breach of obligation by
effect of delay fact of delay breach of obligation by
reason of delay, fraud,
Principally a question reason of delay, fraud,
negligence, contravention of
of inequity of negligence, contravention of
It is a matter of time the tenor thereof (Art.
permitting a claimed to the tenor thereof (Art. 1170)
1170,)
be enforced
Obligation is not
Not statutory Statutory
Fortuitous event extinguished (genus nun
Applies in equity Applies at law
extinguishes the obligation quam peruit – genus never
Based on fixed of time
perishes)
Not based on fixed of (Pineda, Obligations
time and Contracts, 2000
ed. p. 609-610) Q: In failing to deliver a thing, what are the remedies of
the creditor?
Note: The doctrine of laches is inapplicable when the claim was
filed within the prescriptive period set forth under the law (Pineda, A:
Obligations and Contracts, 2000 ed. p. 610). SPECIFIC OBLIGATION GENERIC OBLIGATION
Specific performance
NATURE AND EFFECTS OF OBLIGATIONS (delivery of any thing
Specific performance
belonging to the same
Q: What are the types of real obligation? species)
A: Ask that the obligation be
Rescission (action to rescind
a. Determinate/specific – particularly designated or complied with at the
under Art. 1380,)
physically segregated from all others of the same class. debtor’s expense
b. Indeterminate/Generic– is designated merely by its Resolution or specific
Resolution (action for
class or genus. performance, with damages
cancellation under Art. 1191)
c. Limited generic– generic objects confined to a in either case (Art. 1191)
particular class (e.g. an obligation to deliver one of my
Damages, in both cases (Art. 1170)
horses) (Tolentino, Civil Code of the Philippines, Vol. IV,
2002 ed, p. 91) Note: May be exclusive or in addition to the above-mentioned
remedies(Pineda, Obligations and Contracts, 2000 ed, p. 37)
A: A:
1. When obligation is based on law, quasi-delict, quasi- 1. Positive - to do
contract or crime, the specific provisions of the 2. Negative - not to do
applicable law, shall determine when the delivery shall
be done or effected Q: What are the remedies in personal obligations?
2. When the obligation is subject to a suspensive
condition, the obligation to deliver arises from the A:
happening of the condition 1. Positive personal obligations
3. When the obligation is subject to a suspensive term or a. not purely personal act- to have obligation
period, the obligation arises from the constitution, executed at debtor's expense plus damages
creation or perfection of the obligation b. purely personal act- damages only.
4. When there is no condition or term (period), the
obligation to deliver arises from the constitution, Note: Same rule applies if obligation is done in contravention
creation or perfection of the obligation (Pineda, of the terms of the obligation. Furthermore, it may be
Obligations and Contracts, 2000 ed, p. 31). decreed that what has been poorly done be undone (Art.
1167).
Q: What is the nature of the right of the creditor with
2. Negative personal obligation – to have the prohibited
respect to the fruits?
thing undone at the expense of the debtor plus
damages. However, if thing cannot be physically or
A:
legally undone, only damages may be demanded (8
1. Before delivery – personal right
Manresa 58).
2. After delivery – real right
Note: The creditor has a right to the fruits of the thing from the Q: Is specific performance a remedy in personal
time the obligation to deliver it arises. However, he shall acquire no obligations?
real right over it until the same has been delivered to him (Art.
1164). A: No. Otherwise this may amount to involuntary servitude
which is prohibited by the Constitution (Pineda, Obligations
Q: Distinguish personal right from real right and Contracts, 2000 ed., p. 41).
When the obligation consists in not doing, and the obligor Note: In reciprocal obligations, the moment one party is ready to
does what has been forbidden him, it shall also be undone comply with his obligation, delay by the other begins. There is no
at his expense. (Art.1168) need for demand from either party.
Q: What are the instances where the remedy under Art. Q: What are the kinds of delay or default?
1168 is not available?
A:
A: 1. Mora solvendi – default on the part of the
1. Where the effects of the act which is forbidden are debtor/obligor
definite in character – even if it is possible for the a. Ex re – default in real obligations (to give)
creditor to ask that the act be undone at the expense b. Ex personae – default in personal obligations (to
of the debtor, consequences contrary to the object of do)
the obligation will have been produced which are 2. Mora accipiendi – default on the part of the
permanent in character. creditor/obligee
2. Where it would be physically or legally impossible to 3. Compensatio morae – default on the part of both the
undo what has been undone – because of: debtor and creditor in reciprocal obligations
a. the very nature of the act itself;
b. a provision of law; or MORA SOLVENDI
c. conflicting rights of third persons.
Q: What are the requisites of mora solvendi?
Note: In either case, the remedy is to seek recovery for damages.
(Art.1168) A:
1. Obligation pertains to the debtor;
DELAY (MORA) 2. Obligation is determinate, due and demandable, and
liquidated;
Q: When does delay or default arise? 3. Obligation has not been performed on its maturity
date;
A: Those obliged to deliver or to do something incur in 4. There is judicial or extrajudicial demand by the
delay from the time the obligee (creditor) judicially or creditor;
extrajudicially demands from them the fulfillment of their 5. Failure of the debtor to comply with such demand.
obligation.
Q: Does mora solvendi apply in natural obligations?
In reciprocal obligations, neither party incurs in delay if the
other does not comply or is not ready to comply in a proper A: No, because performance is optional or voluntary on the
manner with what is incumbent upon him. From the debtor’s part. It does not grant a right of action to enforce
moment one of the parties fulfills his obligations, delay by their performance.
the other begins (Art. 1169).
Q: Does mora solvendi apply in negative obligations?
Note: The interest shall commence from the filing of the XPN: When different dates for the performance
complaint when there is no extrajudicial demand. of obligation is fixed by the parties.
2. When it has for its object a determinate thing, debtor Q: What are reciprocal obligations?
may bear the risk of loss of the thing even if the loss is
due to fortuitous event. A: These are obligations created and established at the
3. Rescission or resolution same time, out of the same cause and which results in the
mutual relationship between the parties.
Q: May the debtor’s liability be mitigated even if he is
guilty of delay? Q: When does a party incur in delay in reciprocal
obligations?
A: Yes. If the debtor can prove that loss would nevertheless
transpire even if he had not been in default, the court may
A: In reciprocal obligations, one party incurs in delay from
equitably mitigate his liability (Art. 2215 (4); Pineda,
the moment the other party fulfills his obligation, while he
Obligations and Contracts, 2000 ed., p. 47)
himself does not comply or is not ready to comply in a
proper manner with what is incumbent upon him.
MORA ACCIPIENDI
Q: In reciprocal obligations, when is demand necessary in
Q: What are the requisites of mora accipiendi?
order for a party to incur in delay?
A:
A: Only when the respective obligations are to be
1. Offer of performance by a capacitated debtor;
performed on separate dates.
2. Offer must be to comply with the prestation as it
should be performed; and
Q: What is the effect of non-compliance of both parties in
3. Refusal of the creditor without just cause.
reciprocal obligations?
Q: What are the effects of mora accipiendi?
A: If neither party complies with his prestation, default of
one compensates for the default of the other.
A:
1. Responsibility of debtor is limited to fraud and gross
Q: What may cause the cessation of the effects of mora?
negligence
2. Debtor is exempted from risk of loss of thing; creditor
A:
bears risk of loss
1. Renunciation (express/implied); or
3. Expenses by debtor for preservation of thing after
2. Prescription.
delay is chargeable to creditor
4. If the obligation bears interest, debtor does not have
FRAUD
to pay from time of delay
5. Creditor liable for damages
Q: What is fraud?
6. Debtor may relieve himself of obligation by consigning
the thing
A: It is an intentional evasion of the faithful performance of
the obligation (8 Manresa 72). It is also known as deceit or
COMPENSATIO MORAE
dolo.
Q: What are the rules on default?
Q: What are the kinds of fraud?
A:
A:
1. Unilateral obligations
1) Fraud in obtaining consent or that employed by a
GR: Default or delay begins from extrajudicial or
person to induce another to enter into a contract,
judicial demand – mere expiration of the period fixed
without which the latter would not have agreed
is not enough in order that DR may incur delay.
to (Art. 1338, Civil Code).
XPNs:
2) Fraund in performance of the obligation or the
a. The obligation or the law expressly so
intentional evasion of the normal fulfilment of the
dictates;
obligation.
b. Time is of the essence;
c. Demand would be useless, as debtor has
rendered it beyond his power to perform; or
d. Debtor has acknowledged that he is in
default.
Note: Responsibility arising from fraud is demandable in all If the obligor is guilty of fraud, bad faith, malice or wanton
obligations. Any waiver of an action for future fraud is void. (Art. attitude, he shall be responsible for all damages which may
1171) be reasonably attributed to the non-performance of the
obligation.
Q: May an action arising from fraud be waived?
Q: What are the effects of contributory negligence of the
A: With respect to fraud that has already been committed, creditor?
the law does not prohibit renunciation of the action for
damages based on the same. However, the law does A: GR: It reduces or mitigates the damages which he can
prohibit any waiver of an action for future fraud since the recover.
same is contrary to law and public policy. Waiver for future
fraud is void (Art. 1171). XPN: If the negligent act or omission of the creditor is
the proximate cause of the event which led to the
Note: Waiver of past fraud is valid since such can be deemed an act
of generosity. What is renounced is the effect of fraud, particularly damage or injury complained of, he cannot recover
the right to indemnity.
Q: What are the remedies of the defrauded party? Q: What are the kinds of negligence or culpa?
A: A:
1. Specific performance (Art. 1233) 1. Culpa contractual (contractual negligence) – which
2. Resolution of the contract (Art. 1191) result from breach of contract
3. Damages, in either case 2. Culpa aquiliana (civil negligence or tort or quasi-delict)
– this acts or omissions that cause damage to another,
NEGLIGENCE there being no contractual relation between the
parties. (Art. 2176)
Q: Distinguish fraud from negligence 3. Culpa criminal (criminal negligence) – which results in
the commission of a crime or a delict.
A:
FRAUD NEGLIGENCE
There is no deliberate
There is deliberate intention intention to cause damage
to cause damage or injury even if the act was
done voluntarily
Liability cannot be mitigated Liability may be mitigated
GR: Waiver for future
negligence may be allowed
in certain cases
A:
CULPA CONTRACTUAL CULPA AQUILIANA CULPA CRIMINAL
(CONTRACT) (QUASI-DELICT) (DELICT)
Existence of Negligence
Negligence is merely an incident in Negligence is substantive and Negligence is substantive and
the performance of an obligation independent independent
Contractual Relations
There is always a pre-existing There is no pre-existing There is no pre-existing
contractual relation contractual relation contractual relation
Source of Obligation
The source of obligation of
defendant to pay damages is the The source of obligation is The source of obligation is an act
breach or non-fulfillment of the defendant’s negligence itself or omission punishable by law
contract
Proof of Negligence
Proof of the existence of the
Accused shall be presumed
contract and of its breach or non- The negligence of the defendant
innocent until the contrary is
fulfillment is sufficient prima facie must be proved
proved beyond reasonable doubt
to warrant recovery
Defense Available
Defense of “good father of a
Defense of “good father of a
family” in the selection &
family”in the selection & s
supervision of the employees is
upervision of the employees is not
not a proper complete defense Defense of “good father of a
a proper defense
though it may mitigate damages. family”in the selection &
supervision of the employees is a
The employee’s guilt is
Respondeat superior or command proper and complete defense
automatically the employer’s civil
responsibility or the master and
guilt, if the former is insolvent
servant rule
Proof needed
Proof of guilt beyond reasonable
Preponderance of evidence Preponderance of evidence
doubt
A: No. The mere difficulty to foresee the happening is not Q: MIAA entered into a compromise agreement with ALA.
impossibility to foresee the same (Republic v. Luzon MIAA failed to pay within the period stipulated. Thus, ALA
Stevedoring Corp., G.R. No. L-21749, Sept. 29, 1967). filed a motion for execution to enforce its claim. MIAA
filed a comment and attributed the delays to its being a
Q: Is there liability for loss due to fortuitous event? government agency and the Christmas rush. Is the delay of
payment a fortuitous event?
A: GR: There is no liability for loss in case of fortuitous
event. A: No. The act-of-God doctrine requires all human agencies
to be excluded from creating the cause of the mischief.
XPNs: LaNS-PCBaG Such doctrine cannot be invoked to protect a person who
1. Law has failed to take steps to forestall the possible adverse
2. Nature of the obligation requires the assumption consequences of loss or injury. Since the delay in payment
of risk in the present case was partly a result of human
3. Stipulation participation - whether from active intervention or neglect -
Q: Sacramento Steel Corporation (SSC) is a business entity Note: The debtor is liable with all his property, present and future,
manufacturing and producing steel and steel products. It for the fulfillment of his obligations, subject to the exemptions
entered into a credit agreement with respondent provided by law (De Leon, Obligations and Contracts, 2003 ed,
International Exchange Bank (IEB). As security for its p.71).
obligations, SSC executed 5 separate deeds of chattel
mortgage constituted over various equipment found in its Q: What is substitute performance?
steel manufacturing plant.
A: It is a remedy of the creditor in case of non-performance
Subsequently, SSC defaulted in the payment of its by the debtor where another party performs the obligation
obligations. IEB’s demand for payment went unheeded. or the same is performed at the expense of the debtor.
Meanwhile, Metropolitan Bank and Trust Company
(Metro Bank) filed a motion for intervention as a creditor Q: When may there be substitute performance?
of SSC. It contends that the mortgage contracts between
IEB and SSC were entered into to defraud the latter’s A:
creditors. Thus, it prayed for the rescission of the chattel 1. Positive personal obligation:
mortgaged executed by SSC in favor of IEB. Will the action a. If not purely personal – substitute performance;
to rescind the mortgage prosper? the obligation shall be executed at debtor’s cost if
he fails to do it. (Art. 1167)
A: No. Jurisprudence is clear that the following successive b. Purely personal – no substitute performance may
measures must be taken by a creditor before he may bring be demanded because of the personal
an action for rescission of an allegedly fraudulent contract: qualifications taken into consideration. The only
(1) exhaust the properties of the debtor through levying by remedy is damages.
attachment and execution upon all the property of the 2. Real obligation:
debtor, except such as are exempt by law from execution; a. Generic thing – substitute performance; delivery
(2) exercise all the rights and actions of the debtor, save may be made by a person other than the debtor
those personal to him (accion subrogatoria); and (3) seek since the object is merely designated by its class
rescission of the contracts executed by the debtor in fraud or genus. The creditor may ask that the obligation
of their rights (accion pauliana). It is thus apparent that an be complied with at the expense of the debtor
action to rescind, or an accion pauliana, must be of last (1165).
resort, availed of only after the creditor has exhausted all b. Specific thing – specific performance may be
the properties of the debtor not exempt from execution or demanded, that is, the creditor may compel the
after all other legal remedies have been exhausted and debtor to make the delivery.
have been proven futile (Metropolitan Bank and Trust
Company v. International Exchange Bank, G.R. No. 176008, RESCISSION
August 10, 2011).
Q: What is rescission under Article 1191?
Q: While the case was pending, Felix donated his parcels
of land in favor of his children. Judgment was rendered A: It refers to the cancellation of the contract or reciprocal
against Felix. When the sheriff, accompanied by counsel of obligation in case of breach on the part of one, which
Philam, sought to enforce the alias writ of execution, they breach is violative of the reciprocity between the parties.
discovered that Felix no longer had any property and that This is properly called resolution.
Q: What are the characteristics of the right to rescind? Q: Ong and spouses Robles executed an "agreement of
purchase and sale" of 2 parcels of land. Pursuant to the
A: contract they executed, Ong partially paid the spouses the
1. Can be demanded only if plaintiff is ready, willing and by depositing it with the bank. Subsequently, Ong
able to comply with his own obligation and defendant deposited sums of money with the BPI in accordance with
is not; their stipulation that Ong pay the loan of the spouse with
2. Not absolute; BPI. To answer for Ong’s balance, he issued 4 post-dated
3. Needs judicial approval in the absence of a stipulation checks which were dishonored. Ong failed to replace the
allowing for extra-judicial rescission, in cases of non- checks and to pay the loan in full. Can the contract
reciprocal obligations; entered into by Ong and the spouses be rescinded?
4. Subject to judicial review if availed of extra-judicially;
5. May be waived expressly or impliedly; and A: No. The agreement of the parties in this case may be set
6. Implied to exist in reciprocal obligations therefore aside, but not because of a breach on the part of Ong for
need not be expressly stipulated upon. failure to complete payment of the purchase price. Rather,
his failure to do so brought about a situation which
Q: May an injured party avail of both fulfillment and prevented the obligation of the spouses to convey title
rescission as remedy? from acquiring an obligatory force.
A: GR: The injured party can only choose between The agreement of purchase and sale shows that it is in the
fulfillment and rescission of the obligation, and cannot have nature of a contract to sell. Ong’s failure to complete
both. payment of the purchase price is a non-fulfillment of the
condition of full payment which rendered the contract to
XPN: If fulfillment has become impossible, Article 1191 sell ineffective and without force and effect. The breach
allows the injured party to seek rescission even after contemplated in Article 1191 is the obligor’s failure to
he has chosen fulfillment. (Ayson-Simon v. comply with an obligation. In this case, Ong’s failure to pay
Adamos,G.R. No. L-39378, Aug. 28 1984) is not even a breach but merely an event which prevents
the vendor’s obligation to convey title from acquiring
Q: Vermen and Seneca entered into an "offsetting binding force.
agreement", where Seneca is obliged to deliver
construction materials to Vermen, who is obliged to pay Note: In a contract to sell, the payment of the purchase price is a
Seneca and to deliver possession of 2 condominium units positive suspensive condition, the failure of which is not a breach,
to Seneca upon its completion. Seneca filed a complaint casual or serious, but a situation that prevents the obligation of the
for rescission of the offsetting against Vermen alleging vendor to convey title from acquiring an obligatory force.
that the latter had stopped issuing purchase orders of (Ongv.CA, G.R. No. 97347, July 6, 1999)
construction materials without valid reason, thus resulting
in the stoppage of deliveries of construction materials on DAMAGES
its part, in violation of the Offsetting Agreement. Can the
agreement be rescinded? Q: When does liability for damages arise?
A: Yes, because the provisions of the offsetting agreement A: Those liable under Art. 1170 shall pay damages only if
are reciprocal in nature. Article 1191 of the Civil Code aside from the breach of contract, prejudice or damage was
provides the remedy of rescission (more appropriately, the caused (Berg v. Teus, G.R. No. L-6450, Oct 30, 1954).
term is "resolution") in case of reciprocal obligations, where
Note: If action is brought for specific performance, damages
one of the obligors fails to comply with that is incumbent
sought must be asked in the same action; otherwise the damages
upon him. are deemed waived (Daywalt v. Augusitinian Corp, 39 Phil 567).
The question of whether a breach of contract is substantial Q: What are the kinds of damages?
depends upon the attendant circumstances. Seneca did not
fail to fulfill its obligation in the offsetting agreement. The A: MENTAL
discontinuance of delivery of construction materials to 1. Moral
Vermen stemmed from the failure of Vermen to send 2. Exemplary
purchase orders to Seneca. Vermen would never have been 3. Nominal
able to fulfill its obligation in allowing Seneca to exercise 4. Temperate
the option to transfer from Phase I to Phase II, as the 5. Actual
construction of Phase II has ceased and the subject 6. Liquidated
Note: When the creditor could not collect in any manner, accion Q: What does a constructive fulfillment of a condition
pauliana may be resorted by him to rescind a fraudulent alienation entail?
of property (Regalado, v. Luchsinger and Co., 5 Phil 625).
A: The condition shall be deemed fulfilled when the obligor
Q: What are the requisites of accion pauliana? voluntarily prevents its fulfillment (Art. 1186)
A: IAP-PL Note: No person shall profit by his own wrong. Mere intention to
1. Defendant must be Indebted to plaintiff; prevent the happening of thee condition will not be enough
2. The fraudulent act performed by the debtor without actually preventing the fulfillment.
subsequent to the contract gives Advantage to
The doctrine applies only to suspensive condition. (Taylor v. Uy
another; Tieng Piao, 43 Phil. 873)
3. The creditor is Prejudiced by such act;
4. The creditor must have Pursued all properties of Q: Ramon, the judicial administrator of the estate of Juan,
the debtor subject to execution; and found out that Rodriguez had enlarged the area of the
5. The creditor has no other Legal remedy. land which he purchased from Juan before his death.
Thus, Ramon demanded Rodriguez to vacate the portion
ACCION DIRECTA allegedly encroached by him. Rodriguez refused and
contested there was indeed a conditional sale with the
Q: What is accion directa? balance of the purchase price payable within five years
from the execution of the deed of sale. Ramon then filed
A: It is the right of a person to go directly against another an action for recovery of possession of the disputed lot. Is
who has no privity to the contract. (Arts. 1652, 1608, 1729, the contract of sale a conditional one?
1893)
A: No. The stipulation that the "payment of the full
1) Art. 1652 – subsidiary liability of sublessee for the consideration based on a survey shall be due and payable in
rent. 5 years from the execution of a formal deed of sale" is not a
XPN: When it appears from the tenor of the period or Note: In case of loss, deterioration or improvement of the thing
other circumstances that it was established for the before the arrival of the day certain, rules in conditional obligation
benefit of one of the parties. shall be observed.
Q: What is the effect of the term being for the benefit of Q: What must a creditor ask the court before he can
either the CR or the DR? demand payment?
A: A: If the time of payment is not fixed, the court must fix the
1. When it is for the benefit of the Creditor – Creditor same before any action for collection may be entertained,
may demand the performance of the obligation at any unless, the prior action of fixing the term or period will be a
time but the DR cannot compel him to accept payment formality and will serve no purpose but delay.
before the expiration of the period (e.g. “on demand”)
ALTERNATIVE OBLIGATION /
2. When it is for the benefit of the Debtor – Debtor may FACULTATIVE OBLIGATION
oppose any premature demand on the part of the CR
for performance of the obligation, or if he so desires, Q: What is an alternative obligation?
he may renounce the benefit of the period by
performing his obligation in advance. (Manresa) A: It is one where the debtor is alternatively bound by
different prestations but the complete performance of one
Q: What is the effect of a fortuitous event in an obligation of them is sufficient to extinguish the obligation.
with a period?
Q: What is a facultative obligation?
A: It only relieves the contracting parties from the
fulfillment of their respective obligation during the term or A: It is one where the debtor is bound to perform one
period. prestation or to deliver one thing with a reserved right to
choose another prestation or thing as substitute for the
Q: When may the court fix the period? principal.
Effect of culpable loss Q: In alternative obligations, when does the choice made
Culpable loss obliges the take effect?
debtor to deliver Culpable loss of
substitute prestation any object due will give A: The choice made takes effect only upon communication
without liability to rise to liability to debtor of the choice to the other party and from such time the
debtor obligation ceases to be alternative (Art. 1201; Art. 1205).
Liability of the debtor
The creditor shall have Note: The notice of selection or choice may be in any form
provided it is sufficient to make the other party know that the
the right of indemnity
Substitution has been election has been made (Tolentino, Civil Code of the Philippines,
for damages when, 2002 ed, p. 205).
made and
through the fault of the
communicated to the
debtor, all the things Q: When will alternative obligation become a simple
creditor, the obligor is
which are alternatively obligation?
liable for the loss of the
the object of the
thing on account of
obligation have been lost A:
delay, negligence or
or the compliance of the 1. When the debtor has communicated the choice to the
fraud
obligation has become creditor.
impossible. 2. When debtor lose the right to choice among the
Void prestation prestations whereby the debtor is alternatively bound,
If principal obligation is If one prestation is void, only one is practicable (Art. 1202).
void, the creditor cannot the others free from 3. When the choice has been expressly given to the
compel delivery of the vices preserve the creditor and his choice has been communicated to the
substitute validity of the obligation debtor.
Impossibility of prestation
If various prestations are Q: Does the choice made by the DR require the
If there is impossibility to
impossible to perform concurrence of the CR? What happens when through the
deliver the principal
except one, this one CR’s fault, selection is deemed impossible?
thing or prestation, the
must be delivered.
obligation is
If all prestations are A: No. To hold otherwise would destroy the very nature of
extinguished, even if the
impossible to perform, the right to select given to the DR. Once a choice is made, it
substitute obligation is
the obligation is can no longer be renounced and the parties are bound
valid
extinguished thereto.
Loss of substitute
Where the choice is When choice is rendered impossible through the CR’s fault,
Loss of substitute before
given to the creditor, the the DR may bring an action to rescind the contract with
the substitution through
loss of the alternative damages (Art. 1203).
the fault of the debtor
through the fault of the
doesn’t make him liable
debtor renders him Q: What are the effects of loss of objects in alternative
liable for damages obligations?
lost the obligation price/value of any of Q: What is the rule as regards the joint or solidary
them with indemnity for character of an obligation?
damages
CR may claim any of A: GR: When two or more creditors or two or more debtors
CR may choose those subsisting OR he concur in one and the same obligation, the presumption is
Some
from among the may choose any of those that the obligation is joint.
but not
remainder or that were lost, but it is the
all are
which remains if price/value of with right XPNs: The obligation shall be solidary when: ELN-CJ
lost 1. Expressly stipulated that there is solidarity;
only one subsists to damages that can be
claimed 2. Law requires solidarity;
Only 3. Nature of the obligation requires solidarity;
Deliver that which remains. In case of fault of 4. Charge or condition is imposed upon heirs or
one
DR, CR has a right to indemnity for damages legatees and the will expressly makes the charge
remains
or condition in solidum (Manresa); or
JOINT AND SOLIDARY OBLIGATIONS
5. Solidary responsibility is imputed by a final
Q: What are joint obligations? Judgment upon several defendants (Gutierrez v.
Gutierrez, 56 Phil 177).
A: It is one where the credit or debt shall be presumed to
be divided into as many equal shares as there are creditors Q: Chua bought and imported to the Philippines dicalcium
or debtors, the credit or debts being considered distinct phosphate. When the cargo arrived at the Port of Manila,
from one another (Art. 1208). it was discovered that some were in apparent bad
condition. Thus, Chua filed with Smith, Bell, and Co., Inc.,
It is where each debtor is liable only for a proportionate the claim agent of First Insurance Co., a formal statement
part of the debt and each creditor is entitled only to a of claim for the loss. No settlement of the claim having
proportionate part of the credit. been made, Chua then filed an action. Is Smith, Bell, and
Co., solidarily liable upon a marine insurance policy with
Q: What are solidary obligations? its disclosed foreign principal?
A: It is where each of the debtors obliges to pay the entire A: No. Article 1207 of the Civil Code clearly provides that
obligation, and where each one of the creditors has the "there is a solidary liability only when the obligation
right to demand from any of the debtors, the payment or expressly so states, or when the law or the nature of the
fulfillment of the entire obligation (Art. 1207; Pineda, obligation requires solidarity." The well-entrenched rule is
Obligations and Contracts, 2000 ed, p. 139). that solidary obligation cannot lightly be inferred. It must
be positively and clearly expressed (Smith, Bell & Co., Inc. v.
Q: Distinguish joint from solidary obligation CA, G.R. No. 110668, Feb. 6, 1997).
A: Each one of the debtors is obliged to pay the entire Note: example of words that connote solidary obligation: a) joint
obligation, and each one of the creditors has the right to and several; b) in solidum; c) individually and collectively; d) each
demand from any of the debtors the payment or fulfillment will pay the whole value; e) “I promise to pay” and there are two or
of the entire obligation. more signatures
Q: What are the effects of assignment of rights in a A pledge or mortgage is one and indivisible by provision of
solidary obligation? law, and the rules applies even if the obligation is joint and
not solidary (Art. 2089).
A: GR: Solidary creditor cannot assign his right because it is
Note: A joint obligation gives rise to indemnity for damages
predicated upon mutual confidence, meaning personal
from the time anyone of the debtors does not comply with
qualification of each creditor had been taken into
his undertaking. The debtors who may have been ready to
consideration when the obligation was constituted (Art. fulfill their promises shall not contribute to the indemnity
1213). beyond the corresponding portion of the price of the thing or
of the value of the service in which the obligation consists
XPNs: (Art. 1224).
1. Assignment to co-creditor; or
2. Assignment is with consent of co-creditor. 2. Obligations that are deemed divisible:
a. When the object of the obligation involves:
Q: To whom must payment be made in a solidary i. certain number of days of work;
obligation? ii. accomplishment of work by
metrical unit;
A: GR: To any of the solidary creditors. iii. Analogous things which are by
their nature susceptible of partial
XPN: If demand, judicial or extra-judicial, has been performance (Art. 1225)
made by one of them, payment should be made to him.
(Art. 1214)
A: GR: No. The creditor cannot demand the fulfillment of Q: If the parties mutually disagree as regards the
the obligation and the satisfaction of the penalty at the obligation, may it be cancelled?
same time (Art. 1227).
A: Yes. That is in the nature of “mutual desistance” – which
XPNs: is a mode of extinguishing obligations. It is a concept that
1. When the right has been clearly granted derives from the principle that since mutual agreement can
to him; create a contract, mutual disagreement by the parties can
2. If the creditor has decided to require cause its extinguishment (Saura v. Development Bank of the
the fulfillment of the obligation, the Phils., G.R. No. 24968, Apr. 27, 1972).
performance thereof should become
impossible without his fault, the penalty PAYMENT OR PERFORMANCE
may be enforced. (Art. 1227)
Q: Is the term “payment,” as used in the Code, limited to
Q: What is the effect of incorporating a penal clause in an appreciable sums of money?
obligation?
A: No. Payment may consist not only in the delivery of
money but also the giving of a thing (other than money),
A: GR: The penalty fixed by the parties is a compensation or the doing of an act, or not doing of an act.
substitute for damages in case of breach.
Note: Payment means not only the delivery of money but
XPNs: Damages shall still be paid even if there is a also the performance, in any other manner, of an
penal clause if: SRG obligation. (Art. 1232)
1. there is a Stipulation to the contrary
2. the debtor Refuses to pay the agreed penalty
A: GR: No, the creditor is not bound. Q: Can the debtor or creditor be compelled to
perform/accept partial prestations (indivisibility)?
XPNs:
1. When made by a third person who has interest in A: GR: Debtor cannot be compelled by the creditor to
the fulfillment of the obligation perform obligation in parts and neither can the debtor
2. Contrary stipulation (Art. 1236) compel the creditor to accept obligation in parts.
Q: What are the rights of a third person who paid the XPNs: When:
debt? 1. partial performance has been agreed upon
2. part of the obligation is liquidated and part is
A: unliquidated
1. With knowledge and consent of the debtor: 3. to require the debtor to perform in full is
a. can recover entire amount paid (absolute impractical
reimbursement)
b. can be subrogated to all rights of the creditor. Q: Is the acceptance by a creditor of a partial payment an
2. Without knowledge or against the will of the debtor – abandonment of its demand for full payment?
can recover only insofar as payment has been
beneficial to the debtor (right of conditional A: No. When creditors receive partial payment, they are not
reimbursement) ipso facto deemed to have abandoned their prior demand
for full payment.
A: In Eastern Shipping Lines, Inc. v. CA, it was held that Note: It applies only to contractual obligations, it cannot be applied
absent any stipulation, the legal rate of interest in to obligations arising from torts.
obligations which consists in the payment of a sum of
money is 12% per annum to be reckoned from the time of Q: Does the exchange rate at the time of the
filing of the complaint therein until the said foreign establishment of the obligation apply in all cases?
judgment is fully satisfied (C.F. Sharp & Co., Inc. v.
Northwest Airlines, Inc., G.R. No. 133498, Apr. 18, 2002). A: No. The rule that the value of the currency at the time of
the establishment of the obligation shall be the basis of
PAYMENT BY NEGOTIABLE INSTRUMENT payment finds application only when there is an official
pronouncement or declaration of the existence of an
Q: Diaz & Company obtained a loan from Pacific Banking extraordinary inflation or deflation.
Corp which was secured by a real estate mortgage over
two parcels of land owned by the plaintiff Diaz Realty. APPLICATION OF PAYMENTS
ABC rented an office space in the building constructed on
the properties covered by the mortgage contract. The Q: What does the concept of application of payments
parties then agreed that the monthly rentals shall be paid mean?
directly to the mortgagee for the lessor's account, either
to partly or fully pay off the aforesaid mortgage A: It is the designation of the debt to which the payment
indebtedness. Thereafter, FEBTC purchased the credit of must be applied when the debtor has several obligations of
Diaz & Company in favor of PaBC, but it was only after 2 the same kind in favor of the same creditor (Art. 1252).
years that Diaz was informed about it. Diaz asked the
FEBTC to make an accounting of the monthly rental Q: What are the requisites of application of payments?
payments made by Allied Bank. Diaz tendered to FEBTC
the amount of P1,450,000.00 through an Interbank check, A:
in order to prevent the imposition of additional interests, 1. There is only one debtor and creditor
penalties and surcharges on its loan but FEBTC did not 2. The debtor owes the creditor two or more debts which
accept it as payment, instead, Diaz was asked to deposit are of the same kind or identical
the amount with the FEBTC’s Davao City Branch Office. 3. All debts are due and demandable
Was there a valid tender of payment? 4. The payment made by the debtor is not sufficient to
A: Yes. True, jurisprudence holds that, in general, a check cover or settle all debts (Pineda. Obligations and
does not constitute legal tender, and that a creditor may Contracts, 2000 ed. p. 251)
validly refuse it. It must be emphasized, however, that this
dictum does not prevent a creditor from accepting a check Q: What is the governing rule in case the debtor fails to
as payment. In other words, the creditor has the option and ascertain which debt his payment is to be applied?
the discretion of refusing or accepting it (FEBTC v. Diaz
Realty Inc., G.R. No. 138588, Aug. 23, 2001). A: The choice may be transferred to the creditor as when
the debtor makes payment and does not make application
Q: Who has the burden of proving payment in an action and debtor accepts a receipt in which the application is
for sum of money? made. In such a case, the debtor cannot complain of the
application the creditor has made unless there be a cause
A: The party who pleads payment as a defense has the for invalidating the contract (Art. 1252).
burden of proving that such payment has, in fact, been
made. Note: The debtor has the preferential right to choose which debt of
the several debts shall be due (Art. 1252).
A: When: DOPE Note: The impossibility must be after the constitution of the
1. It Disappears in such a way that its existence is obligation. If it was before, there is nothing to extinguish.
unknown;
2. It goes Out of commerce; Q: What is the effect of partial loss?
3. It Perishes; or
4. Its Existence is unknown or if known, it cannot be A:
recovered. 1. Due to the fault or negligence of the debtor – CR has
the right to demand the rescission of the obligation or
Q: What is the effect of loss of the thing which is the to demand specific performance, plus damages, in
object of the obligation? either case.
2. Due to fortuitous event:
A: If the obligation is a: a. Substantial loss – obligation is extinguished.
1. Determinate obligation to give: b. Unsubstantial loss – the CR shall deliver the thing
GR: The obligation is extinguished when the promised in its impaired condition. (Art. 1264)
object of the obligation is lost or destroyed. (Art.
1262) Q: What is the effect when the thing is lost in the
possession of the debtor?
XPNs: LAS-CD-PCG
a. Law provides otherwise (Art. 1262) A: GR: It is presumed that loss is due to DR’s fault.
b. Nature of the obligation requires the
Assumption of risk (Ibid) XPN: Presumption shall not apply in case loss is due to
c. Stipulation to the contrary (Ibid) earthquake, flood, storm or other natural calamity (Art.
d. Debtor Contributed to the loss (Ibid) 1262)
e. Loss the of the thing occurs after the debtor
incurred in Delay (Ibid) XPN to the XPN: Debtor still liable even if loss is due to
f. When debtor Promised to deliver the same fortuitous event when:
thing to two or more persons who do not 1. Debtor incurred in delay; or
have the same interest (Art. 1165) 2. Debtor promised to deliver the thing to two or
g. When the debt of a certain and determinate more persons with different interests (par. 3, Art.
thing proceeds from a Criminal offense (Art. 1165)
1268)
h. When the obligation is Generic (Art. 1263) Q: What does rebus sic stantibus mean?
A: It is an act of liberality by virtue of which the creditor, Q: What is confusion or merger of rights?
without receiving any price or equivalent, renounces the
enforcement of the obligation, as a result of which it is A: It is the merging or convergence of the rights of a
extinguished in its entirety or in that part or aspect of the creditor and debtor in one and the same person with
same to which the condonation or remission refers (Pineda, regard to the same obligation.
Obligations and Contracts, 2000 ed, p. 267)
Example of merger: A makes a check payable to bearer,
Q: What are the requisites of condonation? and hands the check to C, who hands it to D who finally
hands it to A. Here A owes himself. This is a clear case of
A: GAIDE merger, and hence the obligation of A is extinguished.
1. Must be Gratuitous;
2. Acceptance by the debtor; Q: When is there a confusion or merger of rights?
3. Must not be Inofficious;
4. Formalities provided by law on Donations must A: The meeting in one person of the qualities of a creditor
be complied with if condonation is express; and and debtor of the same obligation. (Sanchez Roman)
5. An Existing demandable debt.
Q: What are the requisites of confusion or merger of
Q: What is the effect of the delivery of a private document rights?
evidencing a credit?
A:
A: The delivery of a private document evidencing a credit, 1. Merger in the same person of the characters of
made voluntarily by the creditor to the debtor, implies the both a creditor and debtor (Art. 1275);
renunciation of the action which the former had against the 2. Must take place in the persons of a principal
latter. creditor and a principal debtor(Art. 1276); and
3. Merger is definite and complete.
If in order to nullify this waiver it should be claimed to be
inofficious, the debtor and his heirs may uphold it by
proving that the delivery of the document was made in
virtue of payment of the debt (Art. 1271).
A: The creditor and debtor becomes the same person Q: What is compensation?
involving the same obligation. Hence, the obligation is
extinguished. (Art. 1275) A: It is a mode of extinguishing obligations that take place
when two persons, in their own right, are creditors and
Q: Can there be partial confusion? debtors of each other (Art. 1278)
A: Yes. It will be definite and complete up to the extent of Note: It is the offsetting of the respective obligation of two persons
the concurrent amount or value, but the remaining who stand as principal creditors and debtors of each other, with
obligation subsists (Pineda, Obligations and Contracts, 2000 the effect of extinguishing their obligations to their concurrent
amount.
ed, p. 278).
Q: What are the requisites of compensation?
Q: What is the effect when confusion or merger is
revoked?
A: PriSDue-LiDeCoP
1. Each one of the obligors must be bound
A: If the act which created the confusion is revoked for
Principally, and that he be at the same time a
some causes such as rescission of contracts, or nullity of the
principal creditor of the other except guarantor
will or contract, the confusion or merger is also revoked.
who may set up compensation as regards what
The subject obligation is revived in the same condition as it
the creditor may owe the principal (Art. 1279,
was before the confusion.
1280);
Note: During such interregnum, the running of the period of 2. Both debts consist in sum of money, or if the
prescription of the obligation is suspended (Pineda, Obligations things due are consumable, they be of the Same
and Contracts, 2000 ed, p. 279). kind and also of the same quality if the latter has
been stated;
Q: What is the effect of confusion or merger in relation to 3. Both debts are Due;
the guarantors? 4. Both debts are Liquidated and Demandable;
5. Neither debt must be retained in a Controversy
A: commenced by third person and communicated
1. Merger which takes place in the person of the in due time to the debtor (neither debt is
principal debtor or principal creditor benefits the garnished) (Art. 1279); and
guarantors. The contract of guaranty is extinguished. 6. Compensation must not be Prohibited by law.
2. Confusion which takes place in the person of any of (Art. 1290)
the guarantors does not extinguish the obligation (Art.
1276). Note: When all the requisites mentioned in Art. 1279 of the
Civil Code are present, compensation takes effect by
Q: What is the effect of confusion or merger in one debtor operation of law, and extinguishes both debts to the
concurrent amount, even though the creditors and debtors
or creditor in a joint obligation?
are not aware of the compensation. (Art. 1290)
A: Q: What is novation?
COMPENSATION PAYMENT
A mode of extinguishing to A: It is the substitution or change of an obligation by
the concurrent amount, the Payment means not only another, resulting in its extinguishment or modification,
obligations of those persons delivery of money but also either by changing the object or principal conditions, or by
who in their own right are performance of an substituting another in the place of the debtor or by
reciprocally debtors and obligation subrogating a third person to the rights of the creditor
creditors of each other (Pineda, Obligations and Contracts, 2000 ed, p. 298).
Capacity of parties not
necessary Debtor must have capacity Q: What are the requisites of novation?
to dispose of the thing paid;
Reason: Compensation creditor must have capacity A: OIC -SN
operates by law, not by the to receive payment 1. Valid Old obligation
act of the parties 2. Intent to extinguish or to modify the old
The performance must be obligation
There can be partial 3. Capacity and consent of all the parties to the new
complete and indivisible
extinguishment of the obligation (except in case of expromission where
unless waived by the
obligation
creditor the old debtor does not participate)
Legal compensation takes 4. Substantial difference of the old and new
Takes effect by the act of obligation – on every point incompatible with
place by operation of law
the parties and involves each other (implied novation)
without simultaneous
delivery or action 5. Valid New obligation
delivery
Parties must be mutually It is not necessary that the
debtors and creditors of parties be mutually debtors Q: What are the two-fold functions of novation?
each other and creditors of each other
A:
Q: Distinguish compensation from confusion. 1. It extinguishes the old obligation; and
2. Creates a new obligation in lieu of the old one.
A:
COMPENSATION CONFUSION Q: What are the kinds of novation?
(Arts. 1278-1279) (Arts. 1275-1277)
Two persons who are One person where A:
mutual debtors and qualities of debtor and 1. As to essence
creditors of each other creditor are merged a. Objective or real novation – changing the object or
At least two obligations One obligation principal conditions of the obligation (Art. 1291).
b. Subjective or personal novation – change of the
parties.
Q: Distinguish compensation from counterclaim or set-off
i. Substituting the person of the debtor
(passive novation) – may be made
A:
without the knowledge of or against the
COUNTERCLAIM /
COMPENSATION will of the latter, but not without the
SET-OFF
consent of the creditor.
Need not to be
a) Delegacion – the substitution is initiated by the
pleaded; takes place by
old debtor himself (delegante) by convincing
operation of law and
another person (delegado) to take his place
extinguishes
It must be pleaded to and to pay his obligation to the creditor.
reciprocally the two
be effectual b) Expromission – the substitution of the old debtor
debts as soon as they
by a new debtor is upon the initiative or
exist simultaneously, to
proposal of a third person.
the amount of their
respective sums.
Note: If it is the creditor who initiated the change of
Generally, both debts Does not require that debtor, it is considered expromission
must be liquidated debts are liquidated
Legal or conventional Judicial compensation ii. Subrogating a third person to the rights
compensation provided that the of the creditor (active novation)
governed by the Civil requirements of Rules
3. As to extent of their effects Q: In case of delegacion, what is the effect if the new
a. Total or extinctive – obligation is originally debtor is insolvent?
extinguished.
b. Partial or modificatory – original obligation is not A: GR: Insolvency of the new debtor (delegado), who has
extinguished but merely modified. been proposed by the original debtor (delegante) and
accepted by the creditor (delegatario), shall not revive the
4. As to their origin action of the latter against the original obligor. (Art. 1295)
a. Legal novation – by operation of law (Art. 1300 and
1302) XPN: Original debtor shall be held liable:
b. Conventional novation – by agreement of the 1. Insolvency was already existing and of
parties (Art. 1300 and 1301) public knowledge, or known to the
debtor (Art. 1295);
5. As to presence of absence of condition 2. Insolvency of the new debtor was
a. Pure – new obligation is not subject to a condition already existing and known to the
b. Conditional – when the creation of the new original debtor at the time of the
obligation is subject to a condition. delegation of the debt to the new
debtor. (Art. 1295)
Q: What are the rights of the new debtor?
Q: What are the requisites of expromission?
A:
1. With the debtor’s consent – right of reimbursement A:
and subrogation. 1. Substitution is upon the initiative or proposal of a third
2. Without the consent of the old debtor or against his person who will step into the shoes of the debtor;
will – right to beneficial reimbursement. 2. Creditor must give his consent to the proposal of the
third person.
Q: Is novation presumed? 3. Old debtor must be released from the obligation with
the consent of the creditor.
A: No. Novation is never presumed, it must be proven as a
fact either by: Q: In case of expromission, what is the effect in case the
1. Explicit declaration – if it be so declared in new debtor is insovent or could not fulfill the obligation?
unequivocal terms; or
2. Material incompatibility – that the old and the A: If substitution is without the knowledge or against the
new obligations be on every point incompatible will of the debtor, the new debtor’s insolvency or
with each other. (Art. 1292) nonfulfillment of the obligation shall not give rise to any
liability on the part of the original debtor. (Art. 1294)
Q: Is creditor’s consent mandatory in the substituting the
person of the creditor? Note: If the old debtor gave his consent and the new debtor could
not fulfill the obligation, the old debtor should be liable for the
A: Yes. The consent of the creditor is mandatory both in payment of his original obligation.
delegacion and expromission. (Art. 1293) It may be express
or implied from his acts but not from his mere acceptance
of payment by a third party, for there is no true transfer of
debt.
Delegacion Expromission
Person who initiated the substitution Old debtor Third person
It may be express or implied from his acts but not from his mere acceptance of
Consent of the creditor
payment by a third party.
With or without the knowledge of the
With the consent of the old debtor
Consent of the old debtor debtor or against the will of the old
(since he initiated the substitution)
debtor
Consent is needed but it need not be
Consent of third person Consent is needed
given simultaneously
Intention of substitution Released from the obligation with the consent of the creditor
With the debtor’s consent – right of
reimbursement and subrogation
With the debtor’s consent – right of
Rights of the new debtor
reimbursement and subrogation Without the consent of the old debtor or
against his will – right to beneficial
reimbursement
Shall not revive the action of the latter
With the debtor’s consent - If the old
against the original obligor
debtor gave his consent and the new
debtor could not fulfill the obligation,
Original debtor shall be held liable:
the old debtor should be liable for the
1. Insolvency was already
payment of his original obligation.
existing and of public
Insolvency or nonfulfillment of the
knowledge, or known to the
obligation of the new debtor Without the consent of the old debtor or
debtor
against his will – the new debtor’s
2. Insolvency of the new debtor
insolvency or nonfulfillment of the
was already existing and
obligation shall not give rise to any
known to the original debtor
liability on the part of the original
at the time of the delegation
debtor.
of the debt to the new debtor.
Q: SDIC issued to Danilo a Diners Card (credit card) with Q: What are the effects of novation?
Jeannete as his surety. Danilo used this card and initially
paid his obligations to SDIC. Thereafter, Danilo wrote SDIC A:
a letter requesting it to upgrade his Regular Diners Club 1. Extinguishment of principal also extinguishes the
Card to a Diamond (Edition) one. As a requirement of accessory, except:
SDIC, Danilo secured from Jeanette her approval and the
latter obliged. Danilo's request was granted and he was a. Mortgagor, pledgor, surety or guarantor agrees to
issued a Diamond (Edition) Diners Club Card. Danilo had be bound by the new obligation (Tolentino, Civil
incurred credit charged plus appropriate interest and Code of the Philippines, Vol. IV, 1999 ed, p. 395)
service charge. However, he defaulted in the payment of b. Stipulation made in favor of a third person such
this obligation. Was the upgrading a novation of the as stipulation pour atrui (Art. 1311), unless
original agreement governing the use of Danilo Alto's first beneficiary consents to the novation. (Art. 1296)
credit card, as to extinguish that obligation? 2. If old obligation is:
a. Void – novation is void (Art. 1298)
A: Yes. Novation, as a mode of extinguishing obligations, b. Voidable – novation is valid provided that the
may be done in two ways: by explicit declaration, or by annulment may be claimed only by the debtor or
material incompatibility. when ratification validates acts. (Art. 1298)
c. If the old obligation was subject to a suspensive
There is no doubt that the upgrading was a novation of the or resolutory condition, the new obligation shall
original agreement covering the first credit card issued to be under the same condition, unless it is
Danilo Alto, basically since it was committed with the intent otherwise stipulated. (Art. 1299)
of cancelling and replacing the said card. However, the 3. If old obligation is conditional and the new obligation
novation did not serve to release Jeanette from her surety is pure:
obligations because in the surety undertaking she expressly a. if resolutory and it occurred – old obligation
waived discharge in case of change or novation in the already extinguished; no new obligation since
agreement governing the use of the first credit card (Molino nothing to novate.
v. Security Diners International Corp., G.R. No. 136780, Aug. b. if suspensive and it did not occur – it is as if there
16, 2001). is no obligation; thus, there is nothing to novate
new obligation
becomes valid
Defense
Debtor cannot set up a
defense against the The debtor can still set up the
new creditor which he defense (available against the
could have availed old creditor) against the new
himself of against the creditor
old creditor
A: GR: Contracts take effect only between the parties or Q: Fieldmen's Insurance issued, in favor of MYT, a
their assigns and heirs, except where the rights and common carrier, accident insurance policy. 50% of the
obligations arising from the contract are not transmissible premium was paid by the driver. The policy indicated that
by their nature, by stipulation, or by provision of law (Art. the Company will indemnify the driver of the vehicle or his
1311). representatives upon his death. While the policy was in
force, the taxicab driven by Carlito, met with an accident.
Res inter alios acta aliis neque nocet prodest (a thing done Carlito died. MYT and Carlito's parents filed a complaint
between others does not harm or benefit others) – a against the company to collect the proceeds of the policy.
contract can only obligate the parties who entered into it, Fieldmen’s admitted the existence thereof, but pleaded
or their successors who assumed their personalities, and lack of cause of action on the part of the parents. Decide.
that, concomitantly, a contract can neither favor nor
prejudice third persons. (Vitug, Civil Law. 2006 ed. p. 134) A: Carlito’s parents who, admittedly, are his sole heirs have
a direct cause of action against the Company. This is so
Note: With respect to the heir, he shall not be liable beyond the because pursuant to the stipulations, the Company will also
value of the property he received from the decedent. (Art. 1311) indemnify third parties. The policy under consideration is
typical of contracts pour autrui, this character being made
XPNs: more manifest by the fact that the deceased driver paid
1. Rights and obligations that are not transmissible 50% of the premiums (Coquia v. Fieldmen’s Insurance Co.,
by their nature, or by the stipulation or by Inc.,G.R. No. L-23276, Nov. 29, 1968).
provisions of law. (Art. 1311)
2. Stipulation pour autrui (stipulation in favor of a OBLIGATORY FORCE OF CONTRACTS
third person) – benefits clearly and deliberately
conferred by parties to a contract upon third Q: What is the obligatory force of contracts?
persons (Art. 1311) and which stipulation is
merely part of a contract entered into by the A: The parties are bound from the moment the contracts
parties, neither of whom acted as agents of the are perfected by mere consent not only from the fulfillment
third person and which favor can be demanded of what has been expressly stipulated but also to all the
by the third person if duly accepted by him before consequences which, according to their nature, may be in
it could be revoked. keeping with good faith, usage and law (Art. 1315).
When the provisions of a contract are valid, the parties are bound Q: Is contract of adhesion valid?
by such terms under the principle that a contract is the law
between the parties (P.L. UY Realty Corporation v. ALS A: Yes. It is not entirely prohibited since the one who
Management and Development Corporation and Antonio S. adheres to the contract is, in reality, free to reject it
Litonjua, G.R. No. 166642, October 24, 2012).
entirely, and if he adheres, he gives his consent (Premiere
Development Bank v. Central Surety & Insurance Company,
Q: Villamor borrowed a large amount from Borromeo, for
Inc., G.R. No. 176246 [2009]). However, it is void when the
which he mortgaged his property but defaulted. Borromeo
weaker party is imposed upon in dealing with the dominant
pressed him for settlement. The latter instead offered to
bargaining party, and its option is reduced to the
execute a promissory note containing a promise to pay his
alternative of “taking or leaving it,” completely depriving
debt as soon as he is able, even after 10 years and that he
such party of the opportunity to bargain on equal footing
waives his right to prescription. What are the effects of
(Keppel Cebu Shipyard, Inc. v. Pioneer Insurance and Surety
said stipulation to the action for collection filed by
Corporation, G.R. Nos. 180880-81 [2009]).
Borromeo?
Q: What is the rule in interpreting contracts of adhesion?
A: None. The rule is that a lawful promise made for a lawful
consideration is not invalid merely because an unlawful
A: In interpreting such contracts, however, courts are
promise was made at the same time and for the same
expected to observe greater vigilance in order to shield the
consideration. This rule applies although the invalidity is
unwary or weaker party from deceptive schemes contained
due to violation of a statutory provision, unless the statute
in ready-made covenants (Premiere Development Bank v.
expressly or by necessary implication declares the entire
Central Surety Insurance Company, Inc., G.R. No. 176246
contract void. Thus, even with such waiver of prescription,
[2009]). In case of doubt which will cause a great
considering that it was the intent of the parties to
imbalance of rights against one of the parties, the contract
effectuate the terms of the promissory note, there is no
shall be construed against the party who drafted the same
legal obstacle to the action for collection filed by Borromeo
(Magis Young Achiever’s Learning Center v. Manalo, G.R.
(Borromeo v. CA,G.R. No. L-22962, Sept. 28, 1972).
No. 178835 [2009])
Note: Where an agreement founded on a legal consideration
contains several promises, or a promise to do several things, and a Q: May a third person determine the performance of a
part only of the things to be done are illegal, the promises which contract? Does it automatically bind the contracting
can be separated, or the promise, so far as it can be separated, parties?
from the illegality, may be valid (Borromeo v. CA,G.R. No. L-22962,
Sept. 28, 1972). A: Yes. The determination of the performance may be left
to a third person. However, decision shall not be binding
MUTUALITY OF CONTRACTS until it has been known to both the contracting parties (Art.
1309). Moreover, the determination made shall not be
Q: What is the principle of mutuality of contracts? obligatory if it is evidently inequitable. In such case, the
courts shall decide what is equitable under the
A: The contract must bind both contracting parties and its circumstances (Art. 1310).
validity or compliance cannot be left to the will of one of
them (Art. 1308). AUTONOMY OF CONTRACTS
Note: A contract containing a condition whose efficacy or Q: What is the principle of autonomy of contracts?
fulfillment is dependent solely on the uncontrolled will of one of
the parties is void. (Garcia v. Rita, Gr. No. L-20175, October 30,
1967; PNB v. CA, G.R. No. 88880, April 30, 1991) A: It is the freedom of the parties to contract and includes
the freedom to stipulate provided the stipulations are not
However, the termination of the contract does not necessarily contrary to law, morals, good customs, public order or
require mutuality, and it can even be validly left to one party by public policy (Art. 1306).
agreement or under a resolutory facultative condition. (Vitug, Civil
Law. 2006 ed. p. 134) Note: Courts cannot make for the parties better or more equitable
agreements than they themselves have been satisfied to make, or
Q: What is a contract of adhesion? rewrite contracts because they operate harshly or inequitably as to
one of the parties, or alter them for the benefit of one party and to
A: A contract of adhesion is defined as one in which one of the detriment of the other, or by construction, relieve one of the
parties from terms which he voluntarily consented to, or impose
the parties imposes a ready-made form of contract, which
on him those which he did not. (Angel Bautista v. Court of Appeals,
the other party may accept or reject, but which the latter G.R. No. 123655, January 19, 2000)
cannot modify. One party prepares the stipulation in the
A: It is the manifestation of the meeting of the offer and Q: What are the elements of a valid offer and acceptance?
the acceptance upon the thing and the cause which are to
constitute the contract (Art. 1319). A:
1. Definite – unequivocal
Note: Consent is essential to the existence of a contract; and 2. Intentional
where it is wanting, the contract is non-existent. 3. Complete – unconditional
Q: What are the elements of consent? Note: We follow the cognitive theory and not the mailbox theory.
Under our Civil Law, the offer and acceptance concur only when
the acceptance has reached the knowledge of the offeror, and not
A: LM-CR
at the time of sending the acceptance.
1. Legal capacity of the contracting parties;
Q: What are the requisites of a valid offer?
Note: Contracting parties must be juristic entities at
the time of the consummation of the contract. Stated
otherwise, to form a valid and legal agreement it is A:
necessary that there be a party capable of contracting 1. Must be certain (Art. 1345)
and a party capable of being contracted with. Hence, 2. May be made orally or in writing, unless the law
if any one party to a supposed contract was already prescribes a particular form
dead at the time of its execution, such contract is
undoubtedly simulated and false and, therefore, null Note: The person making the offer may fix the time, place and
and void by reason of its having been made after the manner of acceptance, all of which must be complied with. (Art.
death of the party who appears as one of the 1321)
contracting parties therein. The death of a person
terminates contractual capacity (Milagros De Belen
Q: When does offer become ineffective?
Vda. De Cabalu, et. al. v. SPS. Renato Dolores Tabu
and Laxamana, G.R. No. 188417, September 24,
2012). A:
1. Death, civil interdiction, insanity or insolvency of either
2. Manifestation of the conformity of the party before acceptance is conveyed
contracting parties; 2. Express or implied revocation of the offer by the
3. Parties’ Conformity to the object, cause, terms offeree
and condition of the contract must be intelligent, 3. Qualified or conditional acceptance of the offer, which
spontaneous and free from all vices of consent; becomes counter-offer
and 4. Subject matter becomes illegal or impossible before
4. The conformity must be Real. acceptance is communicated
5. Period given to the offerree to signify his acceptance
Q: The husband assumed sole administration of the has already lapsed
family’s mango plantation since his wife worked abroad.
Subsequently, without his wife’s knowledge, the husband Q: What is the rule on complex offer?
entered into an antichretic transaction with a company,
giving it possession and management of the plantation A:
with power to harvest and sell the fruits and to apply the 1. Offers are interrelated – contract is perfected if all the
proceeds to the payment of a loan he got. What is the offers are accepted
standing of the contract? (2011 Bar Question) 2. Offers are not interrelated – single acceptance of each
offer results in a perfected contract unless the offeror
A: It is considered a continuing offer by the parties; has made it clear that one is dependent upon the
perfected only upon the wife’s acceptance or the court’s other and acceptance of both is necessary.
authorization.
Note: To determine the degree of the intimidation, the age, sex Q: When does fraud vitiate consent?
and condition of the person shall be borne in mind. (Art. 1335)
A: There is fraud when through the insidious words or
Q: What is the effect on the validity of a contract if machinations of one of the contracting parties, the other is
consent is reluctant? induce to enter into a contract which, without them, he
would not have agreed to (Art. 1338).
A: A contract is valid even though one of the parties
entered into it against his wishes and desires or even Note: Insidious words refers to a deceitful scheme or plot with an
against his better judgment. Contracts are also valid even evil design, or a fraudulent purpose (Pineda, Obligations and
though they are entered into by one of the parties without Contracts. 2000 ed. p. 414).
hope of advantage or profit (Martinez v. Hongkong and
Shanghai Banking Corp., GR No. L-5496, Feb. 19, 1910) Q: What are the kinds of fraud?
A:
1. Fraud in the perfection of the contract
Q: What are the kinds of contracts? According to the nature of the vinculum which they
produce:
A: a. Unilateral Contracts – are those which give rise to
1. Consensual contracts which are perfected by the mere an obligation only to one of the parties. (e.g.
meeting of the minds of the parties. (Art. 1305) Commodatum)
2. Real contracts that require delivery for perfection – b. Bilateral Contracts – are those which give rise to
creation of real rights over immovable property must reciprocal obligations for both parties. (e.g. Sale)
be written.
3. Solemn contracts– contracts which must appear in According to their cause:
writing, such as: a. Onerous (e.g. Sale)
a. Donations of real estate or of movables if the b. Gratuitous (e.g. Commodatum)
value exceeds P5,000;
b. Partnership to which immovables are According to the risks involved:
contributed; a. Commutative Contracts – are those where each
c. Contract of antichresis – requires the of the parties acquire an equivalent of his
amount of principal and interest be prestation and such equivalent is pecuniarily
specified; appreciable and already determined from the
d. Sale of piece of land or interest therein is moment of the perfection of the contract. (e.g.
through an agent; Lease)
e. Stipulation to charge interest; b. Aleatory Contracts – are those which are
f. Stipulation limiting common carrier's duty of dependent upon the happening of an uncertain
extraordinary diligence to ordinary diligence; event, thus, charging the parties with the risk of
g. Chattel mortgage; or loss or gain. (e.g. Insurance)
h. Transfer of large cattle (Sec. 22, Act No.
1147; Art. 1581); According to their names or norms regulating them:
DEFECTIVE CONTRACTS
Note: Inexistent contracts are not perfected contracts. Rescissible, voidable, unenforceable and void contracts are perfected contracts.
Rescissible, voidable, and unenforceable contracts are valid and binding unless otherwise declared by the court upon a petition commenced for
such purpose or upon being raised as a defense. Rescissible and voidable contracts are valid, binding and enforceable unless otherwise declared
by the court upon a petition commenced for such purpose or upon being raised as a defense.
BASIC DISTINCTIONS
VOID and
BASIS RESCISSIBLE VOIDALBE UNENFORCEABLE
INEXISTENT
Illegality (void) or
Incapacity of one of Entered without authority or in excess
Economic damage or absence of any of
Origin of the parties to give thereof; non-compliance with Statute of
lesion; declaration essential requisites
defect consent or vitiated Frauds; incapacity of both parties to give
by law of a contract
consent consent
(inexistent)
rd
Damage/ One of parties or 3 To other party not
Not necessary Not necessary
prejudice person necessary
Valid & legally Valid & legally Inoperative until ratified; not
Legal effect enforceable until enforceable until enforceable in court without proper None
judicially rescinded judicially annulled ratification
Rescission or Annulment of Declaration of nullity
Remedy/ action Just a personal defense
rescissory action contract of contract
Must be a direct Attacked directly or
Nature of action Direct action needed Indirect attack allowed
action indirectly
Generally rd
Contracting party; 3 persons cannot
Who can file the contracting party;
XPN: CRs who are rd Must be contracting party unless interest are
action XPN: 3 person
defrauded directly affected
prejudiced
Susceptibility of Yes, but not of
Yes Yes No
ratification ratification proper
Action for
Action for Action for recovery; specific
Action for rescission declaration of nullity
Susceptibility annulment performance or damages prescribes (10
prescribes after 4 or putting of defense
prescription prescribes after 4 years if basis written contract; 6 years if
years of nullity does not
years unwritten)
prescribe
A:
VOID RESCISSIBLE
Defect is inherent in Defect is in its effects,
DEFINITION AND ESSENTIAL REQUISITES OF A CONTRACT A: A sale is absolute when no condition is imposed and
OF SALE ownership passes to the vendee upon delivery of the thing
subject of the sale.
Q: What is a contract of sale?
A: By the contract of sale, one of the contracting parties Q: When is a deed of sale considered absolute in nature?
obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other to pay therefor a A: A deed of sale is considered absolute in nature where
price certain in money or its equivalent. (Art. 1458, NCC) there is neither a stipulation in the deed that title to the
property sold is reserved in the seller until the full payment
Note: Gross inadequacy of price does not affect a contract of sale, of the price, nor one giving the vendor the right to
except as it may indicate a defect in the consent, or that the parties unilaterally resolve the contract the moment the buyer fails
really intended a donation or some other act or contract (Art. to pay within a fixed period.
1470)
Q: When is a sale conditional?
Q: What are the different kinds of sales?
A: It is conditional where the sale contemplates a
A: As to:
contingency, and in general, where the contract is subject
1. Nature of the subject matter:
to certain conditions, usually in the case of the vendee, the
a. Sale of real property;
full payment of the agreed purchase price and in the case
b. Sale of personal property
of the vendor, the fulfillment of certain warranties. (De
2. Value of the things exchanged:
Leon, p. 15)
a. Commutative sale;
b. Aleatory sale
Q: Distinguish a conditional sale from an absolute sale
3. Whether the object is tangible or intangible:
a. Sale of property (tangible or corporeal);
A:
CONDITIONAL SALE ABSOLUTE SALE
Note: A tangible object is also called chose in
possession One where the title to the
One where the seller is
property is not reserved to
granted the right to
b. Sale of a right (assignment of a right, or a the seller or if the seller is
unilaterally rescind the
credit or other intangibles such as copyright, not granted the right to
contract predicated on the
trademark, or good will); rescind the contract based
fulfillment or non-
on the fulfillment or non-
fulfillment, as the case may
Note: An intangible object is a chose in action. fulfillment, as the case may
be, of the prescribed
be, of the prescribed
condition.
4. Validity or defect of the transaction: condition.
a. Valid
b. Rescissible Q: What is the effect of the non-performance of the
c. Voidable condition or if the condition did not take place?
d. Unenforceable
e. Void A: Where the obligation of either party to a contract of sale
5. Legality of the object: is subject to any condition which is not performed, such
a. Licit object party may refuse to proceed with the contract or he may
b. Illicit object waive performance of the condition. Unlike in a non-
6. Presence or absence of conditions: fulfillment of a warranty which would constitute a breach
a. Absolute of the contract, the non-happening of the condition,
b. Conditional although it may extinguish the obligation upon which it is
7. Wholesale or retail: based, generally does not amount to a breach of a contract
a. Wholesale of sale.
b. Retail
8. Proximate inducement for the sale: Q: When is a conditional sale considered an absolute sale?
a. Sale by description
b. Sale by sample A: A deed of sale is absolute in nature although
c. Sale by description and sample denominated a “conditional sale” absent such stipulations
9. When the price is tendered: reserving title to the vendor until full payment of the
a. Cash sale purchase price, nor any stipulation giving them the right to
b. Sale on installment plan unilaterally rescind the contract in case of non-payment.
A: No, it is not. The stipulation is not a condition which car to D. B now comes to Court to ask for annulment of the
affects the efficacy of the contract of sale. It merely sale made by C to D on the principle of nemo dat quod non
provides the manner by which the full consideration is to habet. Since, A, the first seller was not able to transfer
be computed and the time within which the same is to be ownership to C because he was not the owner at the time
paid. But it does not affect in any manner the effectivity of of delivery, then C cannot also transfer ownership to D (Tsai
the contract (Heirs of San Andres v. Rodriguez, G.R. No. v. CA).
135634, May 31, 2000).
Q: Jose, as co-owner, sold the entire land in favor of his
Q: What are the elements of a contract of sale? minor daughter, Ida. Alleging that Jose had fraudulently
registered it in his name alone, his sisters, sued him for
A: ANE recovery of 2/3 share of the property. Ida did not pay for
1. Accidental elements – dependent on parties’ the land. Is the sale valid?
stipulations; Examples:
a. Conditions A: No. Jose did not have the right to transfer ownership of
b. Interest the entire property to petitioner since 2/3 thereof belonged
c. time & place of payment to his sisters. Also, Ida could not have given her consent to
d. penalty the contract, being a minor at the time. Consent of the
2. Natural elements – those that are inherent even contracting parties is among the essential requisites of a
in absence of contrary provision. contract, including one of sale, absent which there can be
E.g. warranties no valid contract. Moreover, Ida admittedly did not pay any
3. Essential elements – for validity: centavo for the property, which makes the sale void. Article
a. Consent 1471 of the Civil Code provides: If the price is simulated,
b. Determinate subject matter the sale is void, but the act may be shown to have been in
c. Consideration reality a donation, or some other act or contract (Labagala
v. Santiago, G.R. No. 132305, Dec. 4, 2001).
Q: What is the effect and/or consequence of the absence
of consent of the owner in a contract of sale of said Q: Is there a formal requirement for the validity of a
property? contract of sale?
A: GR: The contract of sale is void. One of the essential A: GR: None. A contract of sale may be made in writing, or
requirements of a valid contract of sale is the consent of by word of mouth, or partly in writing and partly by word of
the owner of the property. The buyer acquires no better mouth, or may be inferred from the conduct of the parties.
title to the goods than the seller had. He cannot give what (Art. 1483) Contracts shall be obligatory, in whatever form
he does not have— quod non habet. A stream cannot rise they have been entered into, provided all the essential
higher than its source. requisites for their validity are present.
Note: The principle of Nemo dat quod non habet pertains to XPNS:
the effect of delivery of the subject matter pursuant to a valid a) If the law requires a document or other special form,
contract of sale, which is at the consummation stage of the the contracting parties may compel each other to
contract. It does not pertain to the validity of the contract of
observe that form. (Art. 1357)
sale upon perfection (Villanueva, Law on Sales, 2004 edition,
pg. 104). b) Under Statute of Frauds, the following contracts must
be in writing; otherwise, they shall be unenforceable:
XPNS: 1. Sale of personal property at a price not less than
a) When the owner of the goods is, by his conduct, P500;
precluded from denying the seller’s authority to 2. Sale of a real property or an interest therein;
sell. (Art. 1505) 3. Sale of property not to be performed within a
b) year from the date thereof;
1) Factors’ acts, recording laws, or any other 4. When an applicable statute requires that the
provision of law enabling the apparent owner contract of sale be in a certain form. (Art. 1403,
of the goods to dispose them as if he were the par.2)
true owner;
2) Sales made under the order of a court of Q: Are there instances where the Statute of Frauds is not
competent jurisdiction; essential for the enforceability of a contract of sale?
3) Sales made pursuant to a special law;
4) Purchases made in a merchant’s store or fairs or A: Yes.
markets. (Art. 1505) 1. When there is a note or memorandum in writing
and subscribed to by the party or his agent
Example: A, the seller sold a car owned by B, to C, the (contains essential terms of the contract);
buyer. The contract of sale is valid since ownership at the 2. When there has been partial
time of perfection is not required. A was able to deliver the performance/execution (seller delivers with the
car in the absence of the knowledge of B. Later, C sold the intent to transfer title/receives price);
Q: What are the obligations of the seller? A: No. The most that sale do is to create the obligation to
transfer ownership. It is only a title and not a mode of
A: DDTWTP transferring ownership.
1. Deliver the thing sold;
2. Deliver fruits & accessions/accessories accruing Q: What then transfers ownership?
from perfection of sale;
3. Transfer the ownership; A: It is tradition or delivery, which is a consequence of the
4. Warranties; sale that transfers ownership.
5. Take care of the thing, pending delivery, with
proper diligence; Q: Differentiate mode and title.
6. Pay for the expenses of the deed of sale unless
there is a stipulation to the contrary A: Mode is the legal means by which dominion or
ownership is created, transferred, or destroyed; title only
constitutes the legal basis by which to affect dominion or such as the full payment thereto. The second
ownership. (Villanueva, p. 15, 2009 ed.) of the purchase price, buyer of the property
cannot be deemed a who may have had
CONTRACT TO SELL buyer in badactual or constructive
faith. There is no double knowledge of such
Q: What is a contract to sell? sale in such case. Title defect in the seller’s
A: A contract to sell may be defined as a bilateral contract to the property will title, or at least was
whereby the prospective seller, while expressly reserving transfer to the buyer charged with the
the ownership of the subject property despite delivery after registration
obligation to discover
thereof to the prospective buyer, binds himself to sell the because there is no such defect, cannot be a
said property exclusively to the prospective buyer upon defect in the owner- registrant in good
fulfillment of the condition agreed upon, that is, full seller’s title per se, butfaith. Such second
payment of the purchase price (Coronel v. Court of Appeals, the latter, of course, buyer cannot defeat the
G.R. No. 103577, October 7, 1996). may be sued for first buyer’s title. In
damages by the
case a title is issued to
Q: What is the difference between a contract to sell and a intending buyer. the second buyer, the
conditional contract of sale? first buyer may seek
reconveyance of the
A: property subject of the
CONTRACT TO SELL CONDITIONAL sale.
CONTRACT OF SALE (Reyes v. Tuparan, G.R. No. 188064, June 1, 2011; Coronel v.
The prospective seller The first element of Court of Appeals, G.R. No. 103577, October 7, 1996).
does not as yet agree or consent is present,
consent to transfer although it is Q: Distinguish a contract of sale from a contract to sale
ownership of the conditioned upon the
property subject of the happening of a A:
contract to sell until the contingent event which CONTRACT OF SALE CONTRACT TO SELL
happening of an event, may or may not occur. As regards transfer of ownership
which may be the full Ownership is transferred to
Ownership is transferred
payment of the the buyer upon delivery of
upon full payment of the
purchase price. What the object to him.
purchase price.
the seller agrees or
obliges himself to do is Note: Vendor has lost and
Note: Prior to full payment,
to fulfill his promise to cannot recover ownership until
ownership is retained by the
sell the subject property and unless the contract is
seller.
when the entire amount resolved or rescinded
of the purchase price is As to numbers of contracts involved
delivered to him. There are two contracts:
Upon the fulfillment of If the suspensive 1. The contract to sell
the suspensive condition is fulfilled, the
condition which is the contract of sale is There is only one contract Note: Preparatory sale
full payment of the thereby perfected, such executed between the
purchase price, that if there had already seller and the buyer. 2. The deed of absolute sale
ownership will not been previous delivery
Note: The principal contract is
automatically transfer of the property subject
executed after full payment of
to the buyer although of the sale to the buyer, the purchase price.
the property may have ownership thereto Payment as a condition
been previously automatically transfers Full payment of the price is
delivered to him. The to the buyer by a positive suspensive
Non-payment of the price is
prospective seller still operation of law condition.
a resolutory condition.
has to convey title to without any further act
Vendor loses ownership
the prospective buyer having to be performed Note: Failure to fully pay the
over the property and
by entering into a by the seller. price is not a breach but an
cannot recover it until and
contract of absolute event that prevents the
unless the contract is
sale. obligation of the vendor to
resolved or rescinded. convey title from becoming
There being no previous Upon the fulfillment of effective.
sale of the property, a the suspensive Remedies available
third person buying condition, the sale 1. SpecifichPerformance
1. Resolution
such property despite becomes absolute and 2. Rescission
2. Damages
the fulfillment of the this will definitely affect 3. Damages
suspensive condition the seller’s title
A: The agreement could not have been a contract to sell Q: Ursal and Spouses Monesets entered into a “Contract
because the sellers herein made no express reservation of to Sell” of a house and lot. A downpayment was to be paid
ownership or title to the subject parcel of land. The by Ursal and subsequently the balance of the price is to be
Coronels had already agreed to sell the house and lot they paid every month until it is fully paid. After 6 months, the
inherited from their father, completely willing to transfer monthly installments were stopped because the spouses
full ownership of the subject house and lot to the buyer if did not give Ursal the transfer of certificate title.
the documents were then in order. However, the TCT was Subsequently, the Spouses Monesets sold the property to
then still in the name of their father, that is why they Dr. Canora. The same property was also mortgaged by the
caused the issuance of a new TCT in their names upon spouses to a rural bank. When the spouses failed to pay
receipt of the down payment. As soon as the new TCT is the rural bank, the bank moved to foreclose the mortgage.
issued in their names, they were committed to immediately Does Ursal have vested ownership over the property?
execute the deed of absolute sale. Only then will the
obligation of the buyer to pay the remainder of the A: No. In such contract, the prospective seller expressly
purchase price arise. This suspensive condition was reserves the transfer of title to the prospective buyer, until
fulfilled. Thus, the conditional contract of sale became the happening of an event, which in this case is the full
obligatory, the only act required for the consummation payment of the purchase price. In this case, the parties not
thereof being the delivery of the property by means of the only titled their contract as “Contract to Sell Lot and House”
execution of the deed of absolute sale in a public but specified in their agreement that the vendor shall only
instrument, which they unequivocally committed execute a deed of absolute sale on the date of the final
themselves to do as evidenced by the "Receipt of Down payment by the vendee. Since the contract in this case is
Payment." (Coronel, et al. v. CA, G.R. No. 103577, Oct. 7, a contract to sell, the ownership of the property remained
1996) with the Monesets even after petitioner has paid the down
payment and took possession of the property. In other
Q: Instead of executing a deed of Absolute Sale in favor of words, petitioner did not acquire ownership over the
Ramona, the Coronels sold the property to Catalina and subject property as she did not pay in full the equal price of
unilaterally and extrajudicially rescinded the contract with the contract to sell (Ursal v. Court of Appeals, et. al, G.R.
Ramona. Ramona then filed a complaint for specific No. 142411, Oct. 14, 2005).
performance. Will Ramona’s action prosper?
Q: Caguiat offered to buy Spouses Herrera’s lot and
A: Yes. Under Article 1187, the rights and obligations of the subsequently gave the spouses a partial payment. In turn,
parties with respect to the perfected contract of sale the spouses gave Caguiat the corresponding receipt
became mutually due and demandable as of the time of stating that respondent promised to pay the balance of
fulfillment or occurrence of the suspensive condition. the purchase price on or before a fixed date. Caguiat’s
Hence, petitioner-sellers' act of unilaterally and counsel wrote the spouses informing them of his
extrajudicially rescinding the contract of sale cannot be readiness to pay the balance of the price and requesting
justified, there being no express stipulation authorizing the them to prepare the final deed of sale. However, the
sellers to extrajudicially rescind the contract of sale. spouses’ counsel sent a letter to Caguiat stating that the
(Coronel, et al. v. CA, G.R. No. 103577, Oct. 7, 1996) wife is leaving for abroad and that they are cancelling the
transaction. The spouses allowed Caguiat to recover the
Q: Project Movers Realty and Development Corporation partial payment he paid them. Is the transaction a
(PMRDC) was indebted to Keppel Bank for P200M. To pay contract of sale?
the debt, PMRDC conveyed to the bank 25 properties.
Adao occupies one of the properties conveyed. The bank
A: No. In this case, the "Receipt for Partial Payment" shows
demanded Adao to vacate the property but he refused.
that the true agreement between the parties is a contract
Hence, an ejectment case was filed against Adao. In his
to sell. First, ownership over the property was retained by
defense, Adao assailed that he had a Contract to Sell
petitioners and was not to pass to respondent until full
entered between PMRDC and Adao. To prove full payment
payment of the purchase price. In effect, petitioners have
of the property, he presented an affidavit. The lower court
the right to rescind unilaterally the contract the moment
ordered that Keppel banks should respect the contract to
respondent fails to pay within the fixed period. Second, the
sell because when the bank acquired the properties by
agreement between the parties was not embodied in a
way of dacion en pago, it merely stepped into the shoes of
Q: What are the instances when a contract to sell may be 4. Dacion en Pago
resorted to? DACION EN PAGO
SALE
Q: Who may enter into a contract of sale? Q: Who are those relatively incapacitated to enter into a
contract of sale?
A: GR: Any person who has capacity to contract or enter
into obligations, may enter into a contract of sale, A:
whether as party-seller or as party-buyer. 1. Spouses (Art. 1490, NCC)
2. Agents, Guardians, Executors and Administrators,
XPNs: Public Officers and Employees, Court Officers and
1. Minors, insane and demented persons and deaf- Employees, and others specially disqualified by law.
mutes who do not know how to write (Art. 1491, NCC)
2. Persons under a state of drunkenness or during
hypnotic spell Q : What is the status of the following contracts of sale?
3. Husband and wife - sale by and between spouses
A:
Note: Rationale for the prohibition: 1. That entered into by minors:
a) To prevent a spouse from defrauding his creditors a. Merely voidable, subject to annulment or
by transferring his properties to the other spouse ratification
b) To avoid a situation where the dominant spouse
b. Action for annulment cannot be instituted by the
would unduly take advantage of the weaker spouse
c) To avoid an indirect violation of the prohibition person who is capacitated since he is disqualified
against donations between spouses under Article from alleging the incapacity of the person with
133 of the Civil Code (Medina v. Collector of Internal whom he contracts (with partial restitution in so
Revenue, 1 SCRA 302) far as the minor is benefited) where necessaries
are sold and delivered to a minor or other person
XPN to XPN: without capacity to act, he must pay a reasonable
1. Where necessaries are sold and delivered to a price (Art. 1489)
minor or other person without capacity to act, he
must pay a reasonable price therefor. 2. Sale by & between spouses (Art. 1490):
2. In case of sale between spouses: a. Status of prohibited sales between spouses:
a. when separation of property was agreed upon GR: Null and void
in the marriage settlements; or
b. when there has been a judicial separation of XPN: In case of sale between spouses:
property agreed upon between them
i. When a separation of property was agreed
ABSOLUTE INCAPACITY upon in the marriage settlements; or
ii. When there has been a judicial separation of
Q: Who are those absolutely incapacitated to enter into a property agreed upon between them
contract of sale?
rd
b. Contract of sale with 3 parties:
A:
1. Unemancipated minors (Art. 1327, NCC); GR: Under the law on sales, it would seem that a
2. Insane or demented persons, and deaf-mutes who do spouse may, without the consent of the other spouse,
not know how to write (Art. 1327, NCC) enter into sales transactions in the regular or normal
pursuit of their profession, vocation or trade. (in
Q: May a capacitated person file an action for annulment relation with Art. 73, Family Code)
using as basis the incapacity of the incapacitated party?
XPN: Even when the property regime prevailing was
A: No. He is disqualified from alleging the incapacity of the the conjugal partnership of gains, the Supreme Court
person whom he contracts (Art. 1397, NCC); held the sale by the husband of a conjugal property
without the consent of the wife is void, not merely
Q: In a defective contract, where such defect consists in voidable under Art. 124 of the Family Code since the
the incapacity of a party, does the incapacitated party resulting contract lack one of the essential elements of
have an obligation to make restitution? full consent. (Guiang v. CA, G.R. No. 125172, June 26,
1998)
A: GR: The incapacitated person is not obliged to make any
restitution. 3. Between Common Law Spouses - also null and void.
XPN: insofar as he has been benefited by the thing or In Calimlim-Canullas v. Fortun, the Court decided that
price received by him. (Art. 1399, NCC) sale between common law spouses is null and void
because Art. 1490 prohibits sales between spouses to
prevent the exercise of undue influence by one spouse
over the other, as well as to protect the institution of
marriage. The prohibition applies to a couple living as
A: The following are the only persons who can question the
sale between spouses:
1. The heirs of either of the spouses who have been
prejudiced;
2. Prior creditors; and
3. The State when it comes to the payment of the
proper taxes due on the transactions
A: AGE-COP
RELATIVELY INCAPACITATED
PROPERTIES INVOLVED STATUS OF SALE RATIFICATION
TO BUY
Property entrusted to them for Can be ratified after the
Agents administration or sale inhibition has ceased
XPN: When principal gave his consent
Property of the ward during period of Reason: the only wrong that
Guardian
guardianship subsists is the private wrong to
the ward, principal or estate;
and can be condoned by the
private parties themselves
Voidable Note: Contracts entered by
guardian in behalf of ward are
Property of the estate under rescissible if ward suffers lesion
Executors and administrators
administration by more than ¼ of the value of
property. Sale by guardian of
property belonging to a ward
without Court approval is void
regardless of the lesion, hence,
cannot be ratified.
Property and rights in litigation or
Court officers and employees levied upon on execution before the Cannot be ratified
court under their jurisdiction
Void
Others specially disqualified
Reason: It is not only a private
by law
wrong, but also a public wrong.
Property of the State entrusted to (Villanueva, Law on Sales, p. 58)
Pubic officers and employees
them for administration
Note: Prohibitions are applicable to sales in legal redemption, compromises and renunciations.
EFFECT OF SALE IN VIOLATION OF THE PROHIBITION: 1) With respect to guardians, agents, executors/administrators, the sale shall only be
voidable because in such cases only private interests are affected – defect can be cured by ratification; 2) with respect to Public
officers/employees, justices, judges, lawyers, clerks of courts, and those specially disqualified by law, the sale shall be null and void since public
interest being involve therein (De Leon, Comments and Cases on Sales and Lease, 7th edition, pg 168)
Q: Atty. Leon G. Maquera acquired his client’s property as litigation by the lawyer provided for in the Civil Code since
payment for his legal services, then sold it and as a the prohibition applies only to a sale or assignment to the
consequence obtained an unreasonable high fee for lawyer by his client during the pendency of the litigation.
handling his client’s case. Did he validly acquire his client’s The transfer actually takes effect after the finality of the
property? judgment and not during the pendency of the case. As such
it is valid stipulation between the lawyer and client.
A: No. Article 1491 (5) of the New Civil Code prohibits
lawyer’s acquisition by assignment of the client’s property SPECIAL DISQUALIFICATIONS
which is the subject of the litigation handled by the lawyer.
Also, under Article 1492, the prohibition extends to sales in Q: Who are those persons specially disqualified by law to
legal redemption. (In Re: Suspension from the Practice of enter into contracts of sale?
Law in the territory of Guam of Atty. Leon G. Maquera, B.M.
No. 793, July 30, 2004) A: ALIEN-UnOS
1. ALIENs who are disqualified to purchase private
Q: The stipulation between the lawyer and counsel is as agricultural lands (Art. XII Secs. 3 & 7)
follows, “the attorney’s fees of the Atty. X will be ½ of 2. Unpaid seller having a right of lien or having
whatever the client might recover from his share in the stopped the goods in transitu, is prohibited from
property subject of the litigation.” Is the stipulation valid? buying the goods either directly or indirectly in
the resale of the same at public/private sale which
A: Yes. The stipulation made is one of a contingent fee he may make (Art. 1533 [5]; Art. 1476 [4])
which is allowed by the CPE and the CPR. It does not violate
the prohibition of acquisition of property subject of the
A: Note: Where land is sold for a lump sum and not so much per unit
1. Things of measure or number, the boundaries of the land stated in the
contract determine the effects and scope of the sale, not the area
a. Determinate or determinable
thereof. The vendors are obligated to deliver all the land included
b. Lawful (licit), otherwise contract is void within the boundaries, regardless of whether the real area should
c. Should not be impossible (within the be greater or smaller than that recited in the deed. This is
commerce of men) particularly true where the area is described as "humigit
kumulang," that is, more or less. (Semira v. CA, G.R. No. 76031,
Note: From the viewpoint of risk or loss, not until the object Mar. 2, 1994)
has really been made determinate can we say that the object
has been lost, because “genus never perishes.” Q: Lino entered into a contract to sell with Ramon,
undertaking to convey to the latter one of the five lots he
2. Rights owns, without specifying which lot it was, for the price of
A: Yes, if they are transmissible. (Art. 1347) A: GR: No. Seller must have the right to transfer ownership
at the time of delivery or consummation stage. He need not
Q: When is a thing determinate? be the owner at the time of perfection of the contract.
A: When it is particularly designated or physically XPN: Foreclosure sale wherein the mortgagor should be
segregated from all others of the same class. (Art. 1460, the absolute owner.
NCC)
Q: When is ownership transferred by the seller to the
Q: When is a thing determinable? buyer?
A: When the thing is capable of being made determinate A: GR: The ownership of the thing sold is acquired by the
without the necessity of a new or further agreement vendee from the moment it is delivered to him in any ways
between the parties. (Art. 1460, NCC) specified in articles 1497 to 1501. This is the case when the
sale is absolute.
PARTICULAR KINDS
XPN: Any other manner signifying an agreement that the
Q: What may be objects of sale? possession is transferred from vendor to vendee. The sale
in this exception is a conditional one.
A:
1. Existing Goods – owned/ possessed by seller at the Q: EJ was subjected to a buy-bust operation where police
time of perfection officers posed to buy 500 pesos worth of “S”. She was
2. Future Goods – goods to be manufactured, raised, then charged with a violation of the Dangerous Drugs Act
acquired by seller after perfection of the contract or for trafficking drugs. EJ uses as defense her lack of
whose acquisition by seller depends upon a possession of the object of the sale. Would her contention
contingency (Art. 1462) free her from liability?
3. Sale of Undivided Interest or Share
a. Sole owner may sell an undivided interest. (Art. A: No. Though she was not in possession of the object of
1463) Ex. A fraction or percentage of such sale, Article 1459 merely requires that the vendor must
property have the right to transfer ownership of the object sold at
b. Sale of an undivided share in a specific mass of the time of delivery. In the case at bar, though Beth is not
fungible goods makes the buyer a co-owner of the owner, she had the right to dispose of the prohibited
the entire mass in proportion to the amount he drug. Ownership was thereafter acquired upon her delivery
bought. (Art. 1464) to the men in the alley after her payment of the price.
c. A co-owner cannot sell more than his share (People v. Ganguso, G.R. No. 115430, Nov. 23, 1995)
(Yturralde v. CA)
4. Sale of Things in Litigation Q: Spouses De Leon alleged that they are the owners of a
a. Sale of things under litigation is rescissible if parcel of land which was inherited by the husband from
entered into by the defendant , without the his father. They engaged the services of Atty. Juan to take
approval of the litigants or the court (Art. 1381) care of the documents of the properties of his parents.
The lawyer let them sign voluminous documents. After the
Note: If the property involved belongs to a ward and death of Atty. Juan, some documents surfaced and
the guardian enters into a contract involving such revealed that their properties had been conveyed by sale
property without court approval, the contract is void, or quitclaim to the husband's brothers and sisters and to
not merely rescissible.
Atty. Juan and his sisters, when in truth and in fact, no
such conveyances were ever intended by them. His
b. No rescission is allowed where the thing is legally
rd signature in the deed was forged. The land in question
in the possession of a 3 person who did not
was subsequently sold to Alcantara by Rodolfo De Leon,
acted in bad faith.
one of the brothers. The spouses demanded annulment of
5. Things subject to Resolutory Condition. Ex. Things
the document and reconveyance but it was refused.
acquired under legal or conventional right of
Likewise, Alcantara averred that she bought the land in
redemption, or subject to reserva troncal. (Art. 1465)
question in good faith and for value. Was there a right to
6. Indeterminate Quantity of Subject Matter
transfer ownership of the land?
a. The fact that the quantity is not determinate shall
not be an obstacle to the existence of the
A: None. It is during the delivery that the law requires the 5. When a person who is not the owner sells and
seller to have the right to transfer ownership of the thing delivers a thing, and subsequently acquired title
sold. In general, a perfected contract of sale cannot be thereto
challenged on the ground of the seller’s non-ownership of 6. When the seller has a voidable title which has not
the thing sold at the time of the perfection of the contract. been avoided at the time of the sale
Undisputed is the fact that at the time of the sale, Rodolfo 7. Sale by co-owner of the whole property or a
de Leon was not the owner of the land he delivered to definite portion thereof
petitioner. Thus, the consummation of the contract and the 8. Special rights of unpaid seller
consequent transfer of ownership would depend on
whether he subsequently acquired ownership of the land. A Q: What are the instances when the Civil Code recognizes
comparison of the genuine signatures of Hermoso de Leon sale of things not actually or already owned by the seller
with his purported signature on the Deed of Extrajudicial at the time of sale?
Partition with Quitclaim will readily reveal that the latter is
a forgery. (Alcantara-Daus v. Spouses De Leon, G.R. No. A:
149750, June 16, 2003) 1. Sale of a thing having potential existence (Art.1461,
NCC)
SALE BY A PERSON WHO DOES NOT OWN THE THING 2. Sale of future goods (Art. 1462, NCC)
SOLD 3. Contract for the delivery at a certain price of an article,
which the seller in the ordinary course of business
Q: Is the sale of a good made by a person who does not manufactures/ procures for the general market,
own it valid? whether the same is on hand at the time or not (Art.
1467, NCC)
A: In the case of sale of property, ownership is not required
at the time of perfection in order for the sale to be valid. PRICE
Ownership is material only at the time of delivery but only
for the purpose of transferring ownership and does not Q: What is a price?
affect the validity of the contract of sale. This is because
validity is determined not at the time of performance but at A: Price signifies the sum stipulated as the equivalent of the
the time of perfection. If the seller is still not the owner of thing sold and also every incident taken into consideration
the thing subject of the sale at the time of delivery, then for the fixing of the price put to the debit of the buyer and
the contract of sale does not become void. It is still valid. agreed to by him. (Villanueva, p. 52)
The remedy of the buyer is rescission under Art. 1191 and
damages. Note: A definite agreement on the manner of payment of the price
is an essential element in the formation of a binding and
Note: What the law requires is that the seller has the right to enforceable contract of sale. (Co v. CA, G.R. No. 123908, Feb. 9,
transfer ownership at the time the thing sold is delivered. 1998)
Perfection per se does not transfer ownership which occurs upon
the constructive delivery of the thing sold. A perfected contract of Q: What are the requisites of price?
sale cannot be challenged on the ground of non-ownership on the
part of the seller at the time of its perfection (Quijada v. CA, 299 A: Must be:
SCRA 69) 1. Real
2. In money or its equivalent
Note: Future inheritance cannot be the subject of sale.
3. Certain or ascertainable at the time of the
perfection of the contract
Q: What is the legal effect of sale by a non-owner?
Q: When is price certain?
A: GR: The buyer acquires no better title to the goods than
the seller had; caveat emptor (buyer beware).
A:
1. If there is a stipulation
XPNs:
2. If it be with reference to another thing certain
1. Estoppel – when the owner of the goods is by his
3. If the determination of the price is left to the judgment
conduct precluded from denying the seller’s
of specified person(s)
authority to sell
4. By reference to certain fact(s) as referred to in Art.
2. When the contrary is provided for in recording
1472 (Art. 1469)
laws
3. When the sale is made under statutory power of Note: If the price is based on estimates, it is uncertain.
sale or under the order of a court of competent
jurisdiction
4. When the sale is made in a merchant’s store in
accordance with the Code of Commerce and
special laws
Q: Can the fixing of the price be left to the discretion of Q: When is the time to determine the adequacy or
one of the contracting parties? inadequacy of price?
A: GR: No. The price cannot be fixed unilaterally by one of A: In determining the adequacy or inadequacy of the price,
the contracting parties. the price obtaining at the time of the execution of the
contract shall be considered, and not the price obtaining
XPN: If the other party agreed or consented. (Art. thereafter (Pineda, p. 47, 2010 ed.)
1473, NCC)
Q: How is inadequacy of price proved?
Q: What is the effect when the price in unilaterally fixed
by one of the contracting parties without consent of the A: Allegation of inadequacy of price must be proved by
other party? sufficient evidence. Without being substantiated with
evidence, it is a mere speculation. (Pineda, p. 47, 2010 ed.)
A: There is no meeting of the minds. The sale is
inefficacious (Pineda, p. 54, 2010 ed.) Q: What is the effect on the contract of sale in case of a
breach in the agreed manner of payment?
Q: What is the effect of gross inadequacy of price?
A: None. It is not the act of payment of price that
A: GR: It does not affect the validity of the sale if it is fixed determines the validity of a contract of sale. Payment of the
in good faith and without fraud price has nothing to do with the perfection of the contract,
as it goes into the performance of the contract. Failure to
XPN: CoRDS pay the consideration is different from lack of
1. If Consent is vitiated (may be annulled or consideration. Failure to pay such results in a right to
presumed to be equitable mortgage) demand the fulfillment or cancellation of the obligation
2. If the parties intended a Donation or some other under an existing valid contract. On the other hand, lack of
act/ contract consideration prevents the existence of a valid contract.
3. If the price is so low as to be “Shocking to the (Sps. Bernardo Buenaventura and Consolacion Joaqui v. CA,
conscience” GR No. 126376, Nov. 20, 2003)
4. If in the event of Resale, a better price can be
obtained WHEN NO PRICE IS AGREED UPON BY THE PARTIES
Q: What is the effect if the price is simulated? Q: What is the effect of failure to determine the price?
A: Reasonableness of price is a question of fact. Its A: Payment is considered option money when it is given as
determination is dependent upon the circumstances of a separate and distinct consideration from the purchase
each particular case. The market value is a good standard in price. Consideration in an option contract may be anything
determining the reasonable price. (Pineda, p. 55) or undertaking of value.
Q: What is market value? Note: An option is not itself a purchase, but merely secures the
privilege to buy. It is not a sale of property but a sale of right to
A: It is that reasonable sum which a property would purchase. He does not sell his land; he does not then agree to sell
it; but he does sell something, i.e., the right or privilege to buy at
command in a fair sale by a man willing but not obliged to
the election or option of the other party. Its distinguishing
sell to another who is willing but not obliged to buy. characteristic is that it imposes no binding obligation on the person
holding the option, aside from the consideration for the offer
Q: In an action for specific performance with damages, X (Limson v. CA, G.R. No. 135929, 2001).
alleged that there was an agreement to purchase the lot
of Y. As regards the manner of payment, however, Y’s Q: What is an earnest money or “arras”?
receipts contradicted the testimony of X. The receipts
failed to state the total purchase price or prove that full A: This is the money given to the seller by the prospective
payment was made. For this reason, it was contended that buyer to show that the latter is truly interested in buying
there was no meeting of their minds and there was no the property, and its aim is to bind the bargain. (Pineda, p.
perfected contract of sale. Decide. 75)
A: The question to be determined should not be whether Q: What is the effect of giving an earnest money?
there was an agreed price, but what that agreed price was.
The sellers could not render invalid a perfected contract of A: It is statutory rule that whenever earnest money is given
sale by merely contradicting the buyer’s obligation in a contract of sale, it shall be considered as part of the
regarding the price, and subsequently raising the lack of price and as proof of the perfection of the contract. It
agreement as to the price. (David v. Tiongson, G.R. No. constitutes an advance payment and must, therefore be
108169, Aug. 25, 1999) deducted from the total price. (Adelfa Properties, Inc. v. CA,
240 SCRA 265)
Q: Distinguish the failure to pay the consideration from
lack of consideration. Note: Option money may become earnest money if the parties so
agree.
A:
FAILURE TO PAY LACK OF Q: What is the effect of rescission on earnest money
CONSIDERATION CONSIDERATION received?
As to validity of contract of sale
Contract is valid because it is the A: When the seller seeks to rescind the sale, he is obliged to
existence of the price and not return the thing which was the object of the contract along
the act of payment of price that with fruits and interest. (Art. 1385, NCC)
determines the validity of a Lack of consideration
contract of sale. Q: Distinguish option money from earnest money.
prevents the existence
of a valid contract.
Note: Payment of the price has A:
nothing to do with the perfection of OPTION MONEY EARNEST MONEY
the contract, but merely goes into Money given as distinct
the performance of the contract. Forms part of the purchase
consideration for an
As to resultant right price
option contract
Failure to pay the consideration Applies to a sale not Given only when there is
The contract of sale is
results in a right to demand the yet perfected already a sale
null and void and
fulfillment or cancellation of the Prospective buyer is not When given, the buyer is
produces no effect
obligation under an existing required to buy. bound to pay the balance.
whatsoever
valid contract. If sale did not materialize, it
If buyer does not decide
must be returned.
OPTION MONEY VIS-A-VIS EARNEST MONEY to buy, it cannot be
(Villanueva, p. 87, Pineda,
recovered.
p.77)
Q: What is option money?
Q: Bert offers to buy Simeon's property under the
A: The distinct consideration in case of an option contract. following terms and conditions: P1 million purchase price,
It does not form part of the purchase price hence, it cannot 10% option money, the balance payable in cash upon the
be recovered if the buyer did not continue with the sale. clearance of the property of all illegal occupants. The
option money is promptly paid and Simeon clears the
Q: What are the rules in the conception stage about the Q: What is the effect of a separate consideration in an
offer? option contract?
A: A:
RULE 1. With separate consideration:
a. Contract is valid
Offer is Prior to acceptance, may be withdrawn at b. Offeror cannot withdraw offer until after
floated will by offeror but no authority to modify it expiration of the option
Must be accepted within the period, c. Is subject to rescission and damages but not
otherwise, extinguished at the end of specific performance
With a 2. Without separate consideration:
period and may be withdrawn at will by
period a. the option contract is not deemed perfected
offeror but must not be arbitrary,
otherwise, liable for damages b. offer may be withdrawn at any time prior to
acceptance
With a Extinguished by happening/ non-happening
condition of condition Note: However, even though the option was not supported by a
consideration, the moment it was accepted, contract of sale is
without perfected (Art. 1324).
Continues to be valid depending upon
period/
circumstances of time, place and person
condition Q: What are the obligations of the offeror?
With a
counter- Original offer is extinguished A:
offer 1) Not to offer to any third party the sale of the object of
the option during the option period;
2) Not to withdraw the offer or option during the option
Q: What is an option contract? period;
3) To hold the subject matter for sale to the offeree in
A: An option contract is a contract by which the owner of the event that the latter exercises his option during
the property agrees with another person that he shall have the option period.
the right to buy his property at a fixed price within a certain
time. It is binding upon the promisor if the promise is Q: What is the effect of acceptance and withdrawal of the
supported by a consideration distinct from the price. An offer?
option contract is likewise a separate and distinct contract
from a contract of sale. A: If the offer had already been accepted and such
acceptance has been communicated before the withdrawal
Q: What is the nature of an option contract? is communicated, the acceptance creates a perfected
contract, even if no consideration was as yet paid for the
A: It is a preparatory contract in which one party grants to option. In which case, if the offeror does not perform his
another, for a fixed period and at a determined price, the obligations under the perfected contract, he shall be liable
privilege to buy or sell, or to decide whether or not to enter for all consequences arising from the breach thereof based
into a principal contract. It binds the party who has given on any of the available remedies such as specific
the option not to enter into the principal contract with any performance, or rescission with damages in both cases.
other person during the period designated, and within that
period, to enter into such contract with the one whom the Q: What is the right of first refusal?
option was granted, if the latter should decide to use the
option. It is a separate and distinct contract. A: A right of first refusal is a contractual grant, not of the
sale of a property, but of the first priority to buy the
Note: If the option is perfected, it does not result in the perfection property in the event the owner sells the same.
or consummation of the sale. (Diaz, p.7)
Note: Where a time is stated in an offer for its acceptance, the
Q: What is the period within which to exercise the option? offer is terminated at the expiration of the time given for its
acceptance (Pineda, p. 76, 2010 ed.)
A:
1. Within the term stipulated Q: When can the owner offer the sale of the property to a
2. If there is no stipulation, the court may fix the term third person?
Q: How is an option exercised? A: Only after the grantee fails to exercise its right under the
same terms and within the period contemplated can the
A: A notice of acceptance must be communicated to offeror owner validly offer to sell the property to a third person,
even without actual payment as long as payment is again under the same terms as offered to the grantee.
delivered in the consummation stage.
Q: In a 20-year lease contract over a building, the lessee is Q: Differentiate an option contract from a right of first
expressly granted a right of first refusal should the lessor refusal
decide to sell both the land and building. However, the
lessor sold the property to a third person who knew about A: An option contract is a preparatory contract in which one
the lease and in fact agreed to respect it. Consequently, party grants to another, for a fixed period and at a
the lessee brings an action against both the lessor-seller determined price, the privilege to buy or sell, or to decide
and the buyer (a) to rescind the sale and (b) to compel whether or not to enter into a principal contract.
specific performance of his right of first refusal in the
sense that the lessor should be ordered to execute a deed In a right of first refusal, while the object may be
of absolute sale in favor of the lessee at the same price. determinate, the exercise of the right would be dependent
The defendants contend that the plaintiff can neither seek not only on the grantor’s eventual intention to enter into a
rescission of the sale nor compel specific performance of a binding juridical relation with another but also on terms,
"mere" right of first refusal. Decide the case. (1998 Bar including the price, that are yet to be firmed up. (Diaz, p.
Question) 54)
A: The action filed by the lessee, for both rescission of the OPTION CONTRACT RIGHT OF FIRST REFUSAL
offending sale and specific performance of the right of first Principal contract; stands Accessory; cannot stand on
refusal which was violated, should prosper. If the right of on its own its own
first refusal was violated and the property wa sold to a Needs separate Does not need separate
buyer who was aware of the existence of such right, the consideration consideration
resulting contract is rescissible by the person in whose There must be subject
Subject matter and price
favour the right of first refusal was given and although no matter but price not
must be valid
particular price was stated in the covenant granting the important
right of first refusal, the same price by which the third-party Not conditional Conditional
buyer bought the property shall be deemed to be the price There is no offer to sell, but There is an offer to sell
by which the righ of first refusal shall therefore be only an opportunity for
exercisable (Equitorial Realty Development, Inc. v. Mayfair the buyer to enter into a
Theater, Inc., 264 SCRA 483) contract of sale
Not subject to specific Subject to specific
Note: The offer of the person in whose favor the right of first refusal performance performance
was given must conform with the same terms and conditions as
those given to the offeree.
Q: Is it necessary that the right of first refusal be
embodied in a written contract?
Q: Andres leased his house to Iris for a period of 2 years,
at the rate of P25, 000 monthly, payable annually in
A: Yes, the grant of such right must be clear and express.
advance. The contract stipulated that it may be renewed
for another 2-year period upon mutual agreement of the
Note: It is applicable only to executory contracts and not to
parties. The contract also granted Iris the right of first contracts which are totally or partially performed.
refusal to purchase the property at any time during the
lease, if Andres decides to sell the property at the same If a particular form is required under the Statute of Frauds: sale is
price that the property is offered for sale to a third party. valid & binding between the parties but not to 3rd persons.
Twenty-three months after execution of the lease
contract, Andres sold the house to his mother who is not a
A: GR: No. The sublessee is a stranger to the lessor who is Q: What is the rule on the inspection of goods?
bound to respect the right of first refusal in favor of the
lessee only. A: GR: If the goods have not yet been previously examined,
the buyer is not deemed to have accepted them unless and
XPN: When the contract of lease granted the lessee until he has had reasonable to examine them (Art. 1584,
the right to assign the lease, the assignee would be NCC)
entitled to exercise such right as he steps into the
shoes of the original assignee (Villanueva, p. 164, 2009 XPNS:
ed.). 1. The buyer had reasonable time to inspect the
goods but he failed to do so
PERFECTION 2. Stipulation to the contrary
3. C.O.D. sales
Q: When is a contract of sale deemed perfected?
Q: What is the effect and/or consequence of a qualified
A: GR: It is deemed perfected at the moment there is acceptance?
meeting of minds upon the thing which is the object of the
contract and upon the price. (Art.1475, par.1) A: It constitutes merely a counter-offer which must in turn
be accepted to give rise to a valid and binding contract
Note: The acceptance of the offer must be absolute. It must be (Villanueva, p. 171, 2009 ed.).
plain, unequivocal, unconditional and without variance of any sort
from the proposal.
A: None. The non-appearance of the parties before the Q: Petitioners are the co-owners of undivided shares of
notary public who notarized the deed does not necessarily two parcels of land. Respondent Paraiso Development
nullify nor render the parties' transaction void ab initio. Corporation purchased from them their respective shares
Article 1358, NCC on the necessity of a public document is except for two shares. A Contract to Sell was then
only for convenience, not for validity or enforceability. established, where the petitioner affixed their signatures
Where a contract is not in the form prescribed by law, the thereon. However, the petitioners decided to withdraw
parties can merely compel each other to observe that form, from the said agreement and along with it the request for
once the contract has been perfected. the rescission of the contract which they said they never
signed. They allege there is inability to understand the
Note: Contracts are obligatory in whatever form they may have consequences of the contract. Was the contract perfected
been entered into, provided all essential requisites are present. between the parties?
(Penalosa v. Santos, G.R. No. 133749, Aug. 23, 2001)
A: It is well-settled that contracts are perfected by mere
Q: DBP sought to consolidate its ownership with Paragon consent, upon the acceptance by the offeree of the offer
Paper Industries, Inc. Medrano, President and General made by the offeror. From that moment, the parties are
Manager of Paragon, was instructed to contact all bound not only to the fulfillment of what has been
minority stockholders to convince them to sell their shares expressly stipulated but also to all the consequences which,
to DBP at the price of 65% of the par value. He was able to according to their nature, may be in keeping with good
contact all except for one who was in Singapore. Medrano faith, usage and law. To produce a contract, the acceptance
testified that all have agreed to sell their shares to DBP. must not qualify the terms of the offer. However, the
Paragon made proposals to DBP and the sale was acceptance may be express or implied. For a contract to
approved by a DBP resolution subject to terms and arise, the acceptance must be made known to the offeror.
conditions. However, the required number of shares Accordingly, the acceptance can be withdrawn or revoked
contained in the conditions was not delivered by before it is made known to the offeror. In the case at bar,
Medrano. Is the sale perfected? the Contract to Sell was perfected when the petitioners
consented to the sale to the respondent of their shares in
A: No. DBP imposed several conditions to its acceptance the subject parcels of land by affixing their signatures on
and it is clear that Medrano indeed tried in good faith to the said contract. Such signatures show their acceptance of
comply with the conditions given by DBP but unfortunately what has been stipulated in the Contract to Sell and such
failed to do so. Hence, there was no birth of a perfected acceptance was made known to respondent corporation
contract of sale between the parties (DBP v. Medrano and when the duplicate copy of the Contract to Sell was
PMO, G.R. No. 167004. Feb. 7, 2011). returned to the latter bearing petitioners' signatures
(Rizalino, substituted by his heirs, vs. Paraiso Development
Q: Licup, through a letter, offered to buy parcels of land to Corporation, G.R. No. 157493, February 5, 2007).
The Holy See and Philippine Realty Corporation (PRC). He
enclosed a check for P100,000.00 to “close the Q: When is an auction sale perfected?
transaction” and accepted the responsibility of removing
informal settlers. Msgr. Cirilos, representative of the Holy A: A sale by auction is perfected when the auctioneer
See and PRC signed the conforme portion of the letter and announces its perfection by the fall of the hammer, or in
accepted the check. A stop-payment order was issued by other customary manner. (Art. 1476, par.2)
Licup and the latter requested that the titles to the land
instead be given to SSE. Msgr. Cirilos wrote SSE requesting Q: Does the seller have the right to bid in an auction sale?
to remove the informal settlers, otherwise, the
P100,000.00 would be returned. SSE replied with an A: Yes. The seller has the right to bid provided that such
“updated proposal” that they will comply provided that right was reserved and notice was given to that effect
the purchase price is lowered. The proposal was rejected. (Pineda, p. 53)
The parcel of land was sold to another third person. Is
there a perfected contract of sale between the two
parties?
CONSUMMATION Requisites:
a. The seller must have control over the thing
Q: How does the consummation stage in a contract of sale b. The buyer must be put under control
take place? c. There must be intention to deliver the thing for
purposes of ownership
A: It takes place by the delivery of the thing together with
the payment of the price. i. Tradicion Symbolica – delivery of certain
symbols representing the thing
Note: The ownership of the thing is acquired by the buyer in any of ii. Tradicion Instrumental – delivery of the
the ways specified by law or in any manner agreed upon by the instrument of conveyance
parties.
iii. Traditio Longa Manu – Delivery of thing
by mere agreement; when seller points
Q: A and PDS Development Corp. executed a contract to
to the property without need of actually
sell a parcel of land. A died without having completed the
delivering
installment on the property. His heirs then took over the
iv. Tradicion Brevi Manu – the buyer, being
contract to sell and assumed his obligations by paying the
already in possession of the thing sold
selling price of the lot from their own funds, and
due to some other cause, merely
completed the payment. To whom should the final Deed
remains in possession after the sale is
of Absolute Sale be executed by PDS?
effected, but now in concept of owner.
E.g.From lessee to becoming an owner
A: Having stepped into the shoes of the deceased with
v. Constitutum Possessorium – the seller
respect to the said contract, and being the ones who
remains in possession of the property in
continued to pay the installments from their own funds, A’s
a different capacity. E.g. From owner to
heirs became the lawful owners of the said lot in whose
lessee
favor the deed of absolute sale should have been executed
by vendor PDS (Dawson v. Register of Deeds of Quezon City,
3. Quasi-tradition – delivery of rights, credits or
G.R. No. 120600 Sept. 22, 1998).
incorporeal property, made by:
a. Placing titles of ownership in the hands of the
TRANSFER OF OWNERSHIP
buyer;
b. Allowing buyer to make use of rights
Q: When is ownership deemed transferred?
4. Tradition by operation of law – Execution of a public
instrument is equivalent to delivery. But to be
A: The thing shall be understood as delivered, when it is
effective, it is necessary that the seller have such
placed in the control and possession of the vendee.
control over the thing sold that, at the moment of sale,
its material delivery could have been made.
Note: The most that sale do is to create the obligation to transfer
ownership. It is only the title while the mode of transferring
ownership is delivery. GR: There is presumption of delivery
Note: Seller bears expenses of delivery. A: Delivery should be coupled with intention of delivering
the thing, and acceptance on the part of the buyer to give
Q: What are the different kinds of delivery? legal effect of the act. Without such intention, there is no
such tradition.
A:
1. Actual – thing sold is placed under the control and Q: How is incorporeal property delivered?
possession of buyer/agent;
2. Constructive – does not confer physical possession of A:
the thing, but by construction of law, is equivalent to 1. When sale is made through a public instrument (Art.
acts of real delivery. 1498, NCC)
2. By placing the titles of ownership in the possession of
the buyer
A: No. The issuance of a sales invoice does not prove Q: When should the object be delivered?
transfer of ownership of the thing sold to the buyer; an
invoice is nothing more than a detailed statement of the A:
nature, quantity and cost of the thing sold and has been 1. Stipulated time
considered not a bill of sale. 2. If there is none, at a reasonable hour.
The registration certificate signed by the spouses does not Q: Where is the place of delivery?
conclusively prove that constructive delivery was made nor
that ownership has been transferred to the respondent A:
spouses. Like the receipt and the invoice, the signing of the 1. That agreed upon
said documents was qualified by the fact that it was a 2. Place determined by usage of trade
requirement of Union Motor for the sale and financing 3. Seller’s place of business
contract to be approved. In all forms of delivery, it is 4. Seller’s residence
necessary that the act of delivery, whether constructive or 5. In case of specific goods, where they can be found
actual, should be coupled with the intention of delivering
the thing. The act, without the intention, is insufficient. Q: What are the effects of a sale of goods on installment?
Inasmuch as there was neither physical nor constructive
delivery of a determinate thing, (in this case, the subject A:
motor vehicle) the thing sold remained at the seller’s risk. 1. Goods must be delivered in full except when stipulated
The Union Motor should therefore bear the loss of the 2. When not examined by the buyer – it is not accepted
subject motor vehicle after its agent allegedly stole the until examined or at least had reasonable time to
same (Union Motor Corp. v. CA, G.R. No. 117187, July 20, examine
2001).
Q: When is the seller not bound to deliver the thing sold?
Q: Can delivery be effected through a carrier?
A:
A: GR: Yes, if the seller is authorized. Delivery to carrier is 1. If the buyer has not paid the price;
delivery to the buyer. 2. No period for payment has been fixed in the contract;
XPN: 3. A period for payment has been fixed in the contract
1. A contrary intention appears but the buyer has lost the right to make use of the
2. Implied reservation of ownership under Art. 1503, time.
pars 1, 2, 3.
Q: When may the buyer suspend payment of the price?
Q: What are the kinds of delivery to carrier?
A: GR:
A: 1. If he is disturbed in the possession or ownership
1. FAS (Free Along Side) – when goods are delivered of the thing bought
alongside the ship, there is already delivery to the 2. If he has well-grounded fear that his possession
buyer or ownership would be disturbed by a vindicatory
2. FOB (Free On Board) – when goods are delivered at the action or foreclosure of mortgage.
point of shipment, delivery to carrier by placing the
goods on vessel is delivery to buyer XPN:
3. CIF (Cost, Insurance, Freight) – 1. Seller gives security for the return of the price in a
a. When buyer pays for services of carrier, delivery proper case;
to carrier is delivery to buyer, carrier as agent of 2. A stipulation that notwithstanding any such
buyer; contingency, the buyer must make payment;
b. When buyer pays seller the price – from the 3. Disturbance or danger is caused by the seller;
moment the vessel is at the port of destination, 4. If the disturbance is a mere act of trespass;
there is already delivery to buyer 5. Upon full payment of the price.
4. COD (Collect On Delivery) – the carrier acts for the
seller in collecting the purchase price, which the buyer Q: Is payment of the purchase price essential to transfer
must pay to obtain possession of the goods. ownership?
Q: What are the seller’s duties after delivery to the A: Unless the contract contains a stipulation that ownership
carrier? of the thing sold shall not pass to the purchaser until he has
fully paid the price, ownership of the thing sold shall be
A: transferred to the vendee upon the actual or constructive
1. To enter on behalf of the buyer into such contract delivery thereof (Diaz, p. 48).
reasonable under the circumstances;
2. To give notice to the buyer regarding necessity of
insuring the goods.
Q: What is the effect if the buyer refuses to accept despite A: It is a contract in the nature of an option to purchase if
delivery of the object of the sale? the goods prove to be satisfactory, the approval of the
buyer being a condition precedent.
A: Delivery is completed. Since delivery of the subject
matter of the sale is an obligation on the part of the seller, Q: In this kind of sale, when is ownership deemed
the acceptance thereof by the buyer is not a condition for transferred?
the completeness of the delivery (Villanueva, p. 117)
A:
Note: Thus, even with such refusal of acceptance, delivery 1. When buyer signifies approval or acceptance to the
(actual/constructive), will produce its legal effects. (e.g. seller or does any act adopting the transaction
transferring the risk of loss of the subject matter to the buyer who 2. If buyer did not signify approval or acceptance, but
has become the owner thereof) (Villanueva, p. 117)
retains the goods without giving notice of rejection
Under Art. 1588, when the buyer’s refusal to accept the goods is after the expiration of the period fixed or of
without just cause, the title thereto passes to him from the reasonable time (Art. 1502, NCC)
moment they are placed at his disposal. (Villanueva, p. 117)
Q: What are the rules in case of sale on trial, approval or
WHEN DELIVERY DOES NOT TRANSFER TITLE satisfaction?
2. Same immediate seller 4. If the marriage has been legally dissolved, when and
3. Two or more different buyers how the marriage relation terminated
4. Both sales are valid 5. Full names and addresses of all occupants of the land
and those of the adjoining owners, if known, and, if
Q: What is the rule on double sale? not known, it shall state the extent of the search made
to find them.
A: First in time, priority in right
Q: Suppose the applicant is a non-resident of the
Note: Rule on Double Sale regarding immovables: Philippines, what are the requirements?
GR: Apply Art.1544
XPN: Sale of registered lands – apply Torrens System A: He shall file with his application an instrument in due
form appointing an agent or representative residing in the
Q: What are the rules according to Article 1544 of the Civil Philippines, giving his full name and postal address, and
Code? shall therein agree that the service of any legal process in
the proceedings under or growing out of the application
A: made upon his agent or representative shall be of the same
1. Movable – Owner who is first to possess in good faith legal effect as if made upon the applicant within the
2. Immovable – Philippines.
a. First to register in good faith
b. No inscription, first to possess in good faith Q: In the registration of a voluntary instrument, is a
c. No inscription & no possession in good faith – duplicate of certificate of title required?
Person who presents oldest title in good faith
A: GR: Yes. No voluntary instrument shall be registered by
Q: Does prior registration by the second buyer of a the Register of Deeds, unless the owner's duplicate
property subject of a double sale confer ownership or certificate is presented with such instrument.
preferred right in his favor over that of the first buyer? XPN: In cases expressly provided for in the decree or
upon order of the court, for cause shown.
A: Prior registration of the disputed property by the second
buyer does not by itself confer ownership or a better right Q: What is the effect of the production of a duplicate
over the property. Article 1544 requires that such certificate of title?
registration must be coupled with good faith.
A: It shall be conclusive authority from the registered
Knowledge gained by the first buyer of the second sale owner to the Register of Deeds to enter a new certificate or
cannot defeat the first buyer's rights except where the to make a memorandum of registration in accordance with
second buyer registers in good faith the second sale ahead such instrument, and the new certificate or memorandum
of the first, as provided by the Civil Code. shall be binding upon the registered owner and upon all
persons claiming under him, in favor of every purchaser for
Knowledge gained by the second buyer of the first sale value and in good faith.
defeats his rights even if he is first to register the second
sale, since such knowledge taints his prior registration with Q: What are the other payments to be made by the seller
bad faith (Art. 1544) (Uraca, et. al v. CA, G.R. No. 115158, in the registration of property?
Sept. 5, 1997)
A: The seller should pay capital gains tax and documentary
PROPERTY REGISTRATION DECREE registration fees. The rate of capital gains tax is 6% of
capital gains based on purchase price, fair market value or
Q: What are the rules in the application for land zonal value, whichever is higher.
registration?
Q: Spouses Guimba are the registered owners of a parcel
A:
of land. The wife entrusted her copy of the Owner’s
1. The application for land registration shall be in writing
and signed by the applicant or the person duly Duplicate Certificate of Title to De La Cruz as collateral for
authorized in his behalf. It shall be sworn in the place a loan. Later on, De La Cruz received a phone call from the
where it was signed. wife, informing her that she had changed her mind and
2. If there is more than one applicant, the application will no longer obtain the loan, consequently asking for her
shall be signed and sworn to by and in behalf of each. TCT back. However, the certificate had been deposited in
a bank. When she inquired at the bank, they told her that
Q: What shall be contained in the application? the certificate was not there. The wife received a telegram
from Abad reminding her of the maturity of her mortgage.
A: The spouses were not aware of any actual mortgage
1. Description of the land
involving their property until the receipt of such telegram.
2. Citizenship and civil status of the applicant
Hence, the spouses filed an adverse claim. Abad, in his
3. If married, the name of the wife or husband
answer, alleged that spouses Guimba made a connivance
with De La Cruz to defraud him. Is Abad an innocent 3. In sheriff’s sales (Art. 1570)
holder for value? 4. Tax sales (Art. 1547, last paragraph)
A: The main purpose of land registration, covered by PD Note: In the above sales, there is no warranty of title or quality on
the part of the seller. The purchaser who buys without checking
1529, is to facilitate transactions relative to real estate by the title of the vendor is assuming all risks of eviction.
giving the public the right to rely upon the face of the
Torrens certificate of title. Therefore, as a rule, the In sheriff’s sales, the sheriff does not guarantee the title to real
purchaser is not required to explore further than what the property and it is not incumbent upon him to place the buyer in
Certificate indicates on its face. This rule however possession of such property (Pineda sales, p. 275).
applies only to innocent purchasers for value and in good
faith; it excludes a purchaser who has knowledge of a Q: Is caveat emptor applicable in sales of registered land?
defect in the title of the vendor, or of facts sufficient to
induce a reasonably prudent man to inquire into the status A: No. The purchaser of a registered land under the Torrens
of the property. Under Section 32 of PD 1529, an innocent system is merely charged with notice of the burdens and
purchaser for value is deemed to include an innocent claims on the property which are inscribed on the face of
mortgagee for value. By insisting on the application of PD certificate of title. (Pineda sales, p. 275)
1529 in his favor, petitioner begs the question. He invokes
Sections 52 and 53 of the law, which Q: Does caveat emptor apply in judicial sales?
protects innocent mortgagees for value, but which the RTC
has already determined he was not. As already discussed, A: Yes. The purchaser in a judicial sale acquires no higher or
such factual determination by the trial court is conclusive, better title or right than that of the judgment debtor. If it
because he did not question it in the proper forum. The happens that the judgment debtor has no right, interest, or
logical consequence, therefore, is the inapplicability of the lien on and to the property sold, the purchaser acquires
said law to his factual situation. Preliminarily, we should none (Pineda sales, p. 280).
stress that the remedy of appeal by certiorari under Rule 45
of the Rules of Court contemplates only questions of law, Q: Juliet offered to sell her house and lot, together with all
not of fact. Therefore, a party who files a Rule 45 petition the furniture and appliances therein, to Dehlma. Before
waives the opportunity to inquire into the findings of fact of agreeing to purchase the property, Dehlma went to the
the lower court. Coming to the present case, the Register of Deeds to verify Juliet’s title. She discovered
paramount question regarding the good faith of petitioner that while the property was registered in Juliet’s name
is obviously one of fact. (Abad v. Spouses Guimba, G.R. No. under the Land Registration Act, as amended by the
157002, July 29, 2005) Property Registration Decree, it was mortgaged to Elaine
to secure a debt of P80, 000. Wanting to buy the property,
Q: Explain the principle of prius tempore, potior jure. Dehlma told Juliet to redeem the property from Elaine,
and gave her an advance payment to be used for purposes
A: Knowledge by the first buyer of the second sale cannot of releasing the mortgage on the property. When the
defeat the first buyer’s rights except when the second mortgage was released, Juliet executed a Deed of
buyer first registers in good faith the second sale. Absolute Sale over the property which was duly registered
Conversely, knowledge gained by the second buyer of the with the Registry of Deeds, and a new TCT was issued in
first sale defeats his rights even if he is first to register, Dehlma’s name. Dehlma immediately took possession
since such knowledge taints his registration with bad faith over the house and lot and the movables therein.
nd
to merit the protection of Art. 1544 (2 par.), the second Thereafter, Dehlma went to the Assessor’s Office to get a
realty buyer must act in good faith in registering his deed of new tax declaration under her name. She was surprised to
sale (Diaz, p. 125). find out that the property was already declared for tax
purposes in the name of XYZ Bank which had foreclosed
Note: Where one sale is absolute and the other is a pacto de retro the mortgage on the property before it was sold to her.
transaction where the period to redeem has not yet expired, Art. XYZ Bank was also the purchaser in the foreclosure sale of
1544 will not apply (Pineda, p. 223). the property. At that time, the property was still
unregistered but XYZ Bank registered the Sheriff’s Deed of
Q: What does the principle of caveat emptor mean? Conveyance in the day book of the Register of Deeds
under Act 3344 and obtained a tax declaration in its name.
A: It literally means, ‘Let the buyer beware’. The rule Was Dehlma a purchaser in good faith? (2008 Bar
requires the purchaser to be aware of the supposed title of Question)
the vendor and one who buys without checking the
vendor’s title takes all the risks and losses consequent to A: Yes, Dehlma is a purchaser in good faith. She learned
such failure (Agcaoili, p. 184) about the XYZ tax declaration and foreclosure sale only
after the sale to her was registered. She relied on the
Q: In what particular sale transactions does caveat emptor certificate of title of her predecessor-in-interest. Under the
apply? Torrens System, a buyer of registered lands is not required
by law to inquire further than what the Torrens certificate
A: indicates on its face. If a person proceeds to but it relying
1. Sales of animals (Art. 1574) on the title, that person is considered a buyer in good faith.
2. Double sales (Art. 1544)
The “priority in time” rule could not be invoked by XYZ Bank Q: What is the effect suppose the buyer chooses to
because the foreclosure sale of the land in favour of the continue with the sale of the remaining goods?
bank was recorded under Act 3344, the law governing
transactions affecting unregistered land, and thus, does not A: The remaining goods shall pass in ownership to the
bind the land. buyer but subject to proportionate reduction of the price.
But this is applicable only if the goods are divisible or
Q: Who as between Dehlma and XYZ Bank has a better capable of being divided (Pineda, p. 122, 2010 ed.). If
right to the house and lot? indivisible, the only option available is the avoidance of the
sale.
A: Between Dehlma and the bank, the former has a better
right to the house and lot. Q: Who bears the risk of loss or deterioration?
XPN: In an obligation to deliver a generic thing, the loss Q: What is a Document of Title?
or destruction of anything of the same kind does not
extinguish the obligation (Art. 1263, NCC) A: A document used in the ordinary course of business in
the sale or transfer of goods , as proof of the possession or
Q: What is the effect when the loss occurred at the time of control of the goods , or authorizing or purporting to
perfection of the contract of sale? authorize the possessor of the document to transfer or
receive, either by endorsement or by delivery, goods
A: GR: When the object of the contract is entirely lost, the represented by such document (Art. 1636).
contract shall be without effect.
Q: What may be considered as a document of title?
XPN: In case of partial loss, the buyer may choose
between withdrawing from the contract and A: A document of title of goods includes any bill of lading,
demanding the remaining part. If he chooses the dock warrant, quedan, or warehouse receipt or order
latter, he shall pay the remaining part’s corresponding (Villanueva, p. 301, 2009 ed.)
price in proportion to the total sum agreed upon. (Art.
1493, NCC) Q: What is the purpose of the Documents of Title?
A: XPN:
1. Owner 1. When the document is first surrendered; or
2. Person to whom the possession or custody of the 2. When its negotiation is enjoined.
document has been entrusted by the owner
a. If bailee undertakes to deliver the goods to such Note: The bailee shall in no case be compelled to deliver the
person actual possession of the goods until the document is:
b. If document is in such form that it may be 1. Surrendered to him; or
2. Impounded by the court.
negotiated by delivery.
(Art. 1519, NCC)
received has been broken by reason of the 3. Special Right to Resell the Goods
dishonor of the instrument, the insolvency of the Exercised when:
buyer, or otherwise. a. Goods are perishable,
b. Stipulated the right of resale in case of
Note: The mere delivery of a negotiable instrument default, or
does not ipso facto extinguish the obligation of the c. Buyer in default for unreasonable time
buyer to pay because the instrument which has been
delivered may be dishonoured. In which case, the seller
4. Special Right to Rescind
is still an unpaid seller. (US v. Bedoya, 14 Phil. 398)
Requisites:
Note: It includes an agent of the seller to whom the bill of lading a. Expressly stipulated OR buyer is in default
has been indorsed, or consignor or agent who has himself paid, or for unreasonable time
is directly responsible for the price, or any other person who is in b. Notice needed to be given by seller to buyer
the position of a seller (Pineda, p. 197, 2010 ed)
Q: What are the instances when possessory lien is lost?
Q: When may the seller still be considered as unpaid even
though the title to the goods has passed to the buyer? A:
1. Seller delivers without reserving ownership in goods or
A: Whenever the seller was only paid partially, he remains right to possess them
an unpaid seller (Pineda, p. 197, 2010 ed.) 2. Buyer or agent lawfully obtains possession of goods
3. Waiver
Q: What are the remedies of an Unpaid Seller?
Note: Seller loses lien when he parts with goods (but still, stoppage
A: in transitu can be exercised)
I. Ordinary
1. Action for Price Q: What is the right of stoppage in transitu?
Exercised when:
a. ownership has passed to buyer; A: The seller may resume possession of the goods at any
b. price is payable on a day certain time while they are in transit, and he will then become
c. goods cannot readily be resold for entitled to the same rights in regard to the goods as he
reasonable price and Art. 1596 is would have had if he had never parted with the possession.
inapplicable (Art. 1530, NCC)
2. Action for Damages – In case of wrongful neglect
or refusal by the buyer to accept or pay for the Q: When are goods considered to be in transit?
thing sold
II. Special A:
1. Possessory Lien – Seller not bound to deliver if 1. After delivery to a carrier or other bailee and before
buyer has not paid him the price. This remedy the buyer or his agent takes delivery of them; and
presupposes that the sale is on credit. It is 2. If the goods are rejected by the buyer, and the carrier
exercisable only in following circumstances: or other bailee continues in possession of them. (Art.
a. goods sold without stipulation as to credit 1531, par. 1)
b. goods sold on credit but term of credit has
expired Q: When are goods deemed to be no longer in transit?
c. buyer becomes insolvent
A:
Note: When part of goods delivered, may still exercise 1. After delivery to the buyer or his agent
right on goods undelivered 2. If the buyer/agent obtains possession of the goods at a
point before the destination originally fixed;
2. Stoppage in Transitu 3. If the carrier or the bailee acknowledges that he holds
the goods in behalf of the buyer/ his agent;
Requisites: I-CSENT-U 4. If the carrier or bailee wrongfully refuses to deliver the
a. Insolvent buyer goods to the buyer or his agent. (Villanueva, p. 181)
b. The sale of goods must be on credit
c. Seller must Surrender the negotiable Q: How is stoppage in transit carried out?
document of title, if any
d. Seller must bear the Expenses of delivery of A: The seller may:
the goods after the exercise of the right. a. Take actual possession of the goods
e. Seller must either actually take possession of b. Give notice of his claim to the carrier or other
the goods sold or give Notice of his claim to bailee who is in possession of the goods
the carrier or other person in possession
f. Goods must be in Transit
g. Unpaid seller
court then issued a writ of execution and the sheriff levied Q: What is the rule when the seller delivers goods which
the subject car. B contends that this is a violation of the are mixed with other goods of different description not
Recto law because having elected specific performance, A included in the contract?
can no longer foreclose the subject car. Is this correct?
A: The buyer may accept the goods which are in accordance
A: No. A evidently chose the remedy of specific with the contract and reject the rest. (Art. 1522, NCC)
performance. The sheriff levied upon the car by virtue of
an execution and not as an incident of a foreclosure Q: What if the subject matter is indivisible?
proceeding. The rule is that in installment sales, if the
action instituted is for specific performance and the A: The buyer may reject the whole of the goods. (Art. 1522,
mortgaged property is subsequently attached and sold, the NCC)
sale thereof does not amount to a foreclosure of the
mortgage. Hence, the seller-creditor is entitled to a Q: What is the duty of the seller with regard to accessions
deficiency judgment (Industrial Finance Corporation v and accessories?
Ramirez, G.R. No. L-43821 May 26, 1977)
A: The seller has the duty to preserve the thing and its
Q: A mortgaged a diamond ring to M as a security for a accessions and accessories from the time of the perfection
loan which was to be paid 2 years thereafter. Since A of the contract of sale. (Art. 1537, NCC)
failed to pay M, she then foreclosed the mortgaged
property. However, it turned out that the proceeds of the Note: In case of loss or deterioration, the seller is liable for
damages or the buyer may seek rescission with damages. However,
sale were insufficient, thus, M filed an action for specific
if loss or deterioration is due to a fortuitous event, the seller is not
performance. A contends that this is a violation of the liable. (Art. 1538, NCC)
Recto law since the foreclosure of the chattel bars
subsequent recovery. Is this correct? Q: What is the rule when the sale of immovable is by unit
of measure or number?
A: No. A is not correct in invoking the Recto law since it is
only applicable in case of sale of personal property through A: GR: The seller must deliver all that may have been stated
installment. In the given case, the amount being claimed by in the contract.
A was to be paid 2 years thereafter as a lump sum, not
through installments. Moreover, the transaction is a loan XPN: If impossible to deliver all, the buyer may choose
not a sale. between:
1. proportional reduction of the price
Q: Does Recto Law cover a contract to sell movables? 2. rescission of the contract, provided the deficiency is
at least 1/10 of the area stated in the contract (Art.
A: No. Because when the suspensive condition upon which 1539, NCC)
the contract is based fails to materialize, it would extinguish
the contract, and consequently there is no contract to Q: What is the prescription period for the action of
rescind (Villanueva, p. 381, 2009 ed.). rescission of contract?
PERFORMANCE OF CONTRACT A: 6 months from the day of delivery. (Art. 1543, NCC)
Q: What is the rule when the seller delivers goods lesser Q: How is payment made by the buyer?
than what he has contracted to sell?
A: Price is paid at the time and place stipulated in the
A: contract. It is made to the person in whose favor the
1. The buyer may reject the goods delivered and he shall obligation has been constituted or his successor in interest,
have no liability or any person authorized to receive. (Villanueva, p. 297,
2. The buyer may accept the goods delivered, but he will 2009 ed.)
pay the contract price, if he has knowledge that the
seller is not going to deliver all the goods contracted Q: When is interest required to be paid?
for (Art. 1522, NCC)
A: SFD
Q: What is the rule when the seller delivers goods greater 1. When it is Stipulated
than what he has contracted to sell? 2. When the object delivered produced Fruits or
income
A: 3. When the buyer is in Default from the time of
1. The buyer may accept only the goods which were demand (Villanueva, p. 297, 2009 ed.)
included in the contract and reject the excess.
2. The buyer may accept the entire goods delivered and Q: What is the Realty Installment Buyer Act?
he shall pay for them at the contract rate. (Art. 1522,
NCC) A: Commonly known as the “957 Law.” It is embodied in
R.A. 6552 which provides for certain protection to
Q: What are express warranties? XPN: warranty not applicable when non-apparent
burden or servitude is recorded in the Registry of
A: Any affirmation of fact or any promise by the seller Property – unless there is expressed warranty
relating to the thing if the natural tendency of such that the thing is free from all burdens and
affirmation or promise is to induce the buyer to purchase encumbrances
the same, and if the buyer purchases the thing relying
thereon. (Art. 1546) 4. Warranty against Hidden Defects
Q: Petitioner De Guzman purchased from Rspondent Q: What is the effect of a breach of warranty against
Toyota Cubao a white Toyota Hi-Lux 2.4 SS double cab eviction?
motor vehicle, 1996 model, for a price of P508,000. He
paid a downpayment of P152,400, leaving a balance of A: The buyer shall have the right to demand the seller:
P355,600. Later on, he demanded that the engine of the 1. The return of the value which the thing sold had
vehicle be replaced for it had a crack after travelling along at the time of the eviction, be it greater or lesser
Marcos Highway while raining hard. Petitioner claims the than the price of the sale
replacement is based on an implied warranty. On the 2. The income or fruits, if he has been ordered to
other hand, respondent answered that the said damage deliver them to the party who won the suit
was not covered by a warranty. Decide. against him
3. The costs of suit which caused the eviction, and,
A: In the absence of an existing express warranty on the in a proper case, those of suit brought against the
part of the respondent, as in this case, the allegations in vendor for the waranty
petitioner's complaint for damages were clearly anchored 4. The expenses of contract if buyer has paid them
on the enforcement of an implied warranty against hidden 5. The damages and interests and ornamental
defects, i.e., that the engine of the vehicle which expenses if sale was made in bad faith.
respondent had sold to him was not defective. By filing this
case, petitioner wants to hold respondent responsible for Note: Vendor is liable for any hidden defect even if he is not aware.
breach of implied warranty for having sold a vehicle with (Caveat Venditor)
defective engine. Such being the case, petitioner should
have exercised this right within six months from the Purchaser must be aware of the title of the vendor. (Caveat
Emptor)
delivery of the thing sold. Since petitioner filed the
complaint on April 20, 1999, or more than nineteen months
Q: What are the rights of buyer in case of partial eviction?
counted from November 29, 1997 (the date of the delivery
of the motor vehicle), his cause of action had become time-
A:
barred (De Guzman v. Toyota Cubao, G.R. No. 141480,
1. Restitution (with obligation to return the thing w/o
November 29, 2006).
other encumbrances than those which it had when he
Q: What are the effects of waiver of an implied warranty? acquired it)
2. Enforcement of warranty against eviction (Paras, p.
A: 153 and Art. 1556)
1. Seller in bad faith and there is waiver against eviction –
void WARRANTY AGAINST HIDDEN DEFECT
2. When buyer without knowledge of a particular risk,
made general renunciation of warranty – is not a Q: What is a hidden defect?
waiver but merely limits liability of seller in case of
eviction A: A hidden defect is one which is unknown or could not
3. When buyer with knowledge of risk of eviction have been known to the buyer. (Diaz, p. 145)
assumed its consequences and made a waiver – seller
Note: Seller does not warrant patent defect; Caveat emptor (buyer
not liable (applicable only to waiver of warranty
beware)
against eviction)
Q: What is a redhibitory defect?
WARRANTY AGAINST EVICTION
A: It is a defect in the article sold against which defect the
Q: What is a warranty against eviction? seller is bound to warrant. The vice must constitute an
imperfection, a defect in its nature, of certain importance;
A: In a contract of sale, unless a contrary intention appears, and a minor defect does not give rise to redhibition (De
there is an implied warranty on the part of the seller that Leon, Comments and Cases on Sales and Lease, 2005 ed, p.
when the ownership is to pass, and that the buyer shall 318).
from that time have and enjoy the legal and peaceful
st
possession of the thing (Art. 1547, 1 paragraph). Q: What is a redhibitory defect on animals?
Q: What is covered by a warranty against eviction? A: If the hidden defect of animals, even in case a
professional inspection has been made, should be of such a
A: It covers eviction by a final judgment based on a right nature that expert knowledge is not sufficient to discover it,
prior to the sale or an act imputable to the vendor, the the defect shall be considered as redhibitory.
vendee is deprived of the whole or of a part of the thing
purchased. Q: When is the sale of animal void?
The vendor shall answer for the eviction even though A: The sale is void if animal is:
nothing has been said in the contract on the subject. (Art. 1. Suffering from contagious diseases;
1548, NCC)
2. Unfit for the use or service for which they were Q: Is there a waiver of warranty against hidden defects
purchased as indicated in the contract when the lessee inspected the premises and pushed
through with the contract?
Q: When is a vendor responsible for hidden defects?
A: Yes. Under Arts. 1561 and 1653 of the Civil Code, the
A: If the hidden defects which the thing sold may have: lessor is responsible for warranty against hidden defects,
1. Render it unfit for the use for which it is intended, but he is not answerable for patent defects or those, which
or are visible, and which can be seen upon inspection (Jon and
2. Diminish its fitness for such use to such an extent Marissa De Ysasi v. Arturo and Estela Arceo, G.R. No.
that, had the vendee been aware thereof, he 136586, Nov. 22, 2001).
would not have acquired it or would have given a
lower price for it (Art. 1561). Q: What are the specific implied warranties in sale of
goods?
Q: Up to what extent does the seller warrant against
hidden defects? A:
1. Warranty of fitness
A: The seller is responsible to the vendee for any hidden
faults or defects in the thing sold, even though he was not GR: No implied warranty
aware thereof.
XPN:
Q: When is the seller not answerable for the defects of the a. Buyer manifests to the seller the particular
thing sold? purpose for which the goods are required; and
b. Buyer relies upon the seller’s skill or judgment
A: 2. Warranty of merchantability – That goods are
1. For patent defects or those which are visible reasonably fit for the general purpose for which they
2. Even for those which are not visible if the buyer is an are sold.
expert who, by reason of his trade or profession,
should have known them (Art. 1561) REMEDIES IN CASE OF BREACH OF WARRANTY
3. If the contrary has been stipulated, and the vendor
was not aware of the hidden faults or defects in the Q: What are the remedies of the buyer in case of breach of
thing sold (Art. 1566) warranty?
EXTINGUISHMENT OF THE SALE Q: Can any other person exercise the right to repurchase?
Q: What are the causes for extinguishment of sale? A: Yes. By any person to whom the right of repurchase may
be transfereed, or in case of legl redemption, by the person
A: A contract of sale is extinguished by: so entitled by law. (Villanueva, p. 517, 2009 ed.)
1. Same causes as all other obligations, namely:
a. Payment or performance Note: Right to repurchase must be reserved at the time of
b. Loss of the thing due perfection of sale. (Pineda, p. 333)
c. Condonation or remission of the debt
d. Confusion or merger of the rights of creditor Q: How is the right to repurchase reserved?
and debtor
e. Compensation A: By a stipulation to that effect in the contract of sale.
f. Novation Because it is not a right granted to the vendor by the
g. Annulment vendee, but is a right reserved by the vendor.
h. Rescission
i. Fulfillment of resolutory condition Q: Can the reservation be made in a separate instrument
j. Prescription apart from the contract of sale?
2. Conventional Redemption
3. Legal redemption A: No. Once the instrument of absolute sale is executed,
and any right thereafter granted the vendor in a separate
Q: What is redemption? instrument cannot be a right of repurchase but some other
right like the option to buy in the instant case. (Villanueva,
A: It is a mode of extinguishment wherein the seller has the p. 517, 2009 ed.)
right to redeem or repurchase the thing sold upon return of
the price paid. Q: What happens in case the contract of sale is void?
Q: What are the kinds of redemption? A: Since the underlying contract of sale was inoperative
and consequently void, then the right of repurchase
A: reserved would also be void. (Villanueva, p. 518, 2009 ed.)
1. Legal
2. Conventional EQUITABLE MORTGAGE
Ceballos offered to redeem the property from Mercado May exist prior to or after
for the price of P30, 000.00 but the latter's wife refused The right must be imbedded in the perfection of the sale,
since the same was already transferred in their names by a contract of sale upon its or be imbedded in
virtue of the Deed of Absolute Sale. As a consequence, perfection another contract upon
Ceballos filed the case contending that the Contract perfection
should be declared as an equitable mortgage. Is the Does not need a separate Separate consideration is
contention of Ceballos correct? consideration to be valid and needed for it to be valid
effective and effective
A: No. The instances when a contract, regardless of its Redemption period cannot Period for an option right
nomenclature, may be presumed to be an equitable exceed 10 years may exceed 10 years
mortgage are enumerated in Art. 1602 of the Civil Code. Notice is required for its
Here, none of those circumstances were present. The exercise accompanied with
original transaction was a loan. Ceballos failed to pay the Only notice is required
tender of
loan; consequently, the parties entered into another payment/consignment
agreement — the assailed, duly notarized Deed of Absolute Its exercise results into
Sale, which superseded the loan document. Ceballos had Its exercise extinguishes a
the perfection of a
the burden of proving that she did not intend to sell the existing contract of sale
contract of sale
property and that Mercado did not intend to buy it; and (Villanueva, pp. 519-520, 2009 ed.)
that the new agreement did not embody the true intention
of the parties. (Ceballos v. Intestate Estate of the Late Q: On May 19, 1951, the spouses-sellers executed a public
Emigdio Mercado, G.R. No. 155856, May 28, 2004) instrument of absolute sale in favor of the buyer for a
consideration which is sufficiently adequate. A few days
Q: Eulalia was engaged in the business of buying and thereafter, the buyers executed in favor of the sellers an
selling large cattle. In order to secure the financial capital option to buy within one year, the property subject of the
she advanced for her employees (biyaheros) she required absolute sale, which option was extended for a month.
them to surrender TCT of their properties and to execute Prior to the expiration of said one-year period, the buyer
the corresponding Deeds of Sale in her favor. Domeng sold said property to a third person.
Bandong was not required to post any security but when
Eulalia discovered that he incurred shortage in cattle If the spouses-sellers would file an action for reformation
procurement operation, he was required to execute a of instrument where they seek reformation of the
deed of sale over a parcel of land in favor of Eulalia. She absolute sale into one of equitable mortgage, will said
sold the property to her grandniece Jocelyn who action prosper?
thereafter instituted an action for ejectment against the
Spouses Bandong. To assert their right, Spouses Bandong A: No, it will not prosper. If a seller has been granted
filed an action for annulment of sale against Eulalia and merely an option to buy (not a right to repurchase) within a
Jocelyn alleging that there was no sale intended but only certain period, and the price paid by the buyer is adequate,
equitable mortgage for the purpose of securing the the sale is absolute and cannot be construed nor presumed
shortage incurred by Domeng in the amount of P70, to be one of equitable mortgage, even if the period within
000.00 while employed as “biyahero” by Eulalia. Was the which to exercise the option has been extended. (Villarica,
deed of sale between Domeng and Eulalia a contract of et. al. v. CA, G.R. L-19196, Nov. 29, 1968)
sale or an equitable mortgage?
Note: SC held that in this case, there was no sale a retro and that
A: It is an equitable mortgage. In executing the said deed of the right of repurchase is not a right granted the seller by the buyer
sale, Domeng and Eulalia never intended the transfer of in a separate instrument. Such right is reserved by the vendor in
ownership of the subject property but to burden the same the same instrument of the sale as one of the stipulations in the
with an encumbrance to secure the indebtedness incurred contract.
by Domeng on the occasion of his employment with Eulalia.
Also, once the instrument of absolute sale is executed, the seller
The agreement between Dominador and Eulalia was not
can no longer reserve the right of repurchase and any right
avoided in its entirety so as to prevent it from producing thereafter granted the seller by the buyer cannot be a right of
any legal effect at all. Instead, the said transaction is an repurchase but some other rights, like that of an option to buy.
equitable mortgage, thereby merely altering the
relationship of the parties from seller and buyer, to PERIOD OF REDEMPTION
mortgagor and mortgagee, while the subject property is not
transferred but subjected to a lien in favor of the latter Q: What is the period of redemption?
(Sps. Raymundo, et al. v. Sps. Bandong, G.R. No. 171250,
Jul. 4, 2007). A:
1. No period agreed upon – 4 years from date of contract
DISTINGUISHED FROM OPTION TO BUY 2. When there is agreement – should not exceed 10
years; but if it exceeded, valid only for the first 10
REDEMPTION OPTION TO BUY years.
Forms part of the contract of Principal and preparatory 3. When period to redeem has expired & there has been
sale contract a previous suit on the nature of the contract – seller
Rationale: no redemption due to erroneous belief that Note: Art. 1623 does not prescribe any distinctive method for
it is equitable mortgage which can be extinguished by notifying the redemptioner.
paying the loan.
Q: Is tender of payment necessary for redemption to take
4. When period has expired & seller allowed the period effect?
of redemption to expire – seller is at fault for not
having exercised his rights so should not be granted a A: Tender of payment is not necessary; offer to redeem is
new period enough.
Note: Tender of payment is sufficient but it is not in itself a Q: What is the effect of failure to redeem?
payment that relieves the seller from his liability to pay the
redemption price. A: There must be judicial order before ownership of real
property is consolidated to the buyer a retro.
Q: When does period of redemption begin to run?
Q: Can the vendor a retro be compelled to redeem?
A:
1. Right of legal pre-emption or redemption shall be A: No. There is no obligation on the part of the vendor a
exercised within 30 days from written notice by the retro to repurchase. He may or may not exercise the right
buyer – deed of sale not to be recorded in Registry of to repurchase (Pineda, p. 402, 2010 ed).
Property unless accompanied by affidavit that buyer
has given notice to redemptioners Q: What is a trust de son tort?
2. When there is actual knowledge, no need to give
written notice; period of redemption begins to run A: It is a trust created by the purchase or redemption of
from actual knowledge property by one other than the person lawfully entitled to
do so and in fraud of the other.
Q: Can there an extension of the time to redeem?
Q: Do constructive trusts arise only out of fraud or duress?
A: Yes. Parties may extend the period to redeem as long as
the total period shall not exceed ten years. However, such A: No. A constructive trust, otherwise known as a trust ex
extension can only be granted when the original period has maleficio, a trust ex delicto, a trust de son tort, an
not yet expired. Otherwise, there exists only a promise to involuntary trust, or an implied trust, is a trust by operation
sell on the buyer’s part (Pineda, pp. 381-382, 2010 ed.). of law which arises contrary to intention and in invitum,
against one who, by fraud, actual or constructive, by duress
EXERCISE OF THE RIGHT TO REDEEM or abuse of confidence, by commission of wrong, or by any
form of unconscionable conduct, artifice, concealment, or
Q: What are the obligations the vendor a retro if he questionable means, or who in any way against equity and
desires to redeem? good conscience, either has obtained or holds the legal
right to property which he ought not, in equity and good
A: The vendor a retro must pay or reimburse the vendee a conscience, hold and enjoy. It has been broadly ruled that a
retro the following: breach of confidence, although in business or social
1. Price of the sale relations, rendering an acquisition or retention of property
2. Expenses of the contract by one person unconscionable against another, raises a
3. Other legitimate expenses constructive trust. It is raised by equity in respect of
4. Necessary and useful expenses (Pineda, pp. 397- property, which has been acquired by fraud, or where,
398, 2010 ed.) although acquired originally without fraud, it is against
equity that it should be retained by the person holding it.
Q: Is written notice mandatory for the right of redemption (Arlegui v. CA G.R. No. 126437, Mar. 6, 2002)
to commence?
Note: "A constructive trust is substantially an appropriate remedy
A: Yes, the notice must be in writing stating the execution against unjust enrichment. It is raised by equity in respect of
of the sale and its particulars. It may be made in a private or property, which has been acquired by fraud, or where, although
public document. (Pineda, p. 400) acquired originally without fraud, it is against equity that it should
be retained by the person holding it." (76 Am. Jur. 2d, Sec. 222, p.
447 cited in Arlegui v. CA G.R. No. 126437, Mar. 6, 2002)
Q: Is there a prescribed form for an offer to redeem?
LEGAL REDEMPTION
A: There is no prescribed form for an offer to redeem to be
properly effected. Hence, it can either be through a formal
Q: What is legal redemption?
tender with consignation of the redemption price within
the prescribed period. What is paramount is the availment
A: Also referred to as “retracto legal”, it is the right to be
subrogated upon the same terms and conditions stipulated
in the contract, in the place of one who acquires the thing Note: Failure of the owner or developer to comply with the
by purchase or by dation in payment or by other obligations under this and the preceding provisions shall constitute
transaction whereby ownership is transmitted by onerous a violation punishable under Sections 38 and 39 of the Decree.
title.
Q: How is “sale” or “sell” defined under the Decree?
Q: What are the instances of legal redemption?
A: Shall include:
1. Every disposition, or attempt to dispose, for a
A:
valuable consideration, of a subdivision lot,
1. Sale of a co-owner of his share to a stranger (Art.
including the building and other improvements
1620)
thereof, if any, in a subdivision project or a
2. When a credit or other incorporeal right in litigation is
condominium unit in a condominium project;
sold (Art. 1634)
2. contract to sell;
3. Sale of an heir of his hereditary rights to a stranger
3. contract of purchase and sale;
(Art. 1088)
4. exchange;
4. Sale of adjacent rural lands not exceeding 1 hectare
5. attempt to sell;
(Art. 1621)
6. option of sale or purchase;
5. Sale of adjacent small urban lands bought merely for
7. solicitation of a sale;
speculation (Art. 1622)
8. offer to sell, directly or by an agent, or by a
circular, letter, advertisement or otherwise; and
Q: Are there other instances when the right of legal
9. a. privilege given to a member of a cooperative,
redemption is also granted?
corporation, partnership, or any association
and/or
A:
b. the issuance of a certificate or receipt
1. Redemption of homesteads
evidencing or giving the right of participation in,
2. Redemption in tax sales
or right to, any land in consideration of payment
3. Redemption by judgment debtor
of the membership fee or dues. (Deemed sale)
4. Redemption in extrajudicial foreclosure
5. Redemption in judicial foreclosure of mortgage
Q: How are the terms “buy” and “purchase” defined under
the Decree?
Q: What is the basis of legal redemption?
A: Shall include any contract to buy, purchase, or otherwise
A: It is created partly for reason of public policy and partly
acquire for a valuable consideration a subdivision lot,
for the benefit and convenience of the redemptioner to
including the building and other improvements, if any, in a
afford him a way out of what might be a disagreeable or
subdivision project or a condominium unit in a
inconvenient association into which he has been in trust. It
condominium project.
is intended to minimize co-ownership. (Pineda, p. 407, 2010
ed.) Q: What is a subdivision project?
Q: When does legal redemption period begin to run? A: A tract or a parcel of land registered under Act No. 496
which is partitioned primarily for residential purposes into
A: The right of legal redemption shall not be exercised individual lots with or without improvements thereon, and
except within 30 days from the notice in writing by the offered to the public for sale, in cash or in installment
prospective seller, or seller, as the case may be. The deed terms.
of sale shall not be recorded in the Registry of Property
unless accompanied by an affidavit of the seller that he has Note: It shall include all residential, commercial, industrial and
given written notice thereof to all possible redemptioners. recreational areas as well as open spaces and other community
(Art. 1623, NCC) and public areas in the project.
Q: After issuance of the registration certificate, may the condominium unit, revoke the registration of any
owner or dealer already sell subdivision lots or subdivision project or condominium project and the license
condominium units? to sell any subdivision lot or condominium unit in said
project by issuing an order to this effect, with his findings in
A: No. He must first obtain a license to sell the project respect thereto, if upon examination into the affairs of the
within two weeks from the registration of such project. owner or dealer during a hearing, it shall appear there is
satisfactory evidence that the said owner or dealer:
Q: When is a license to sell issued? 1. is insolvent; or
2. has violated any of the provisions of this Decree
A: After an examination of the registration statement filed or any applicable rule or regulation of the
by said owner or dealer and all the pertinent documents Authority, or any undertaking of his/its
attached thereto, the Authority is convinced that the owner performance bond; or
or dealer is of good repute, that his business is financially 3. has been or is engaged or is about to engage in
stable, and that the proposed sale of the subdivision lots or fraudulent transactions; or
condominium units to the public would not be fraudulent. 4. has made any misrepresentation in any
prospectus, brochure, circular or other literature
Q: What is the purpose of the requirement of posting of a about the subdivision project or condominium
performance bonds before a license to sell may be issued? project that has been distributed to prospective
buyers; or
A: It is to guarantee the construction and maintenance of 5. is of bad business repute; or
the roads, gutters, drainage, sewerage, water system, 6. does not conduct his business in accordance with
lighting systems, and full development of the subdivision law or sound business principles.
project or the condominium project and the compliance by
the owner or dealer with the applicable laws and rules and Note: Where the owner or dealer is a partnership or corporation or
an unincorporated association, it shall be sufficient cause for
regulations.
cancellation of its registration certificate and its license to sell, if
any member of such partnership or any officer or director of such
Q: Is a license to sell and performance bond required in all corporation or association has been guilty of any act or omission
subdivision and condominium projects? which would be cause for refusing or revoking the registration of
an individual dealer, broker or salesman.
A: No. The following transactions are exempt from said
requirements: Q: What is the duration of the registration of dealers,
1. Sale of a subdivision lot resulting from the brokers and salesmen?
partition of land among co-owners and co-heirs.
2. Sale or transfer of a subdivision lot by the original A: On the thirty-first day of December of each year.
purchaser thereof and any subsequent sale of the
same lot. However, in the case of salesmen, their registration shall
3. Sale of a subdivision lot or a condominium unit by also cease upon termination of their employment with a
or for the account of a mortgagee in the ordinary dealer or broker.
course of business when necessary to liquidate a
bona fide debt. Note: Renewal of registration for the succeeding year shall be
granted upon written application therefore made not less than
thirty nor more than sixty days before the first day of the ensuing
Q: When may a license to sell be suspended? year and upon payment of the prescribed fee, without the
necessity of filing further statements or information, unless
A: specifically required by the Authority.
1. Upon verified complaint by a buyer of a subdivision lot
or a condominium unit in any interested party, the All applications filed beyond said period shall be treated as original
Authority may, in its discretion, immediately suspend applications.
the owner's or dealer's license to sell pending
investigation and hearing of the case. Q: When can there be refusal or revocation of registration
2. The NHA may motu proprio suspend the license to sell as dealers, brokers or salesmen?
if, in its opinion, any information in the registration
statement filed by the owner or dealer is or has A: Such registration may be refused or revoked by the NHA
become misleading, incorrect, inadequate or if, after reasonable notice and hearing, it shall determine
incomplete or the sale or offering for a sale of the that such applicant or registrant has:
subdivision or condominium project may work or tend 1. violated any provision of this Decree or any rule
to work a fraud upon prospective buyers. or regulation made hereunder; or
2. made a material false statement in his application
Q: When may a license to sell or registration of a for registration; or
subdivision or condominium project be revoked? 3. been guilty of a fraudulent act in connection with
any sale of a subdivision lot or condominium unit;
A: The Authority may, motu proprio or upon verified or
complaint filed by a buyer of a subdivision lot or
Q: May the parties waive compliance with the decree? THE CONDOMINIUM ACT (RA 4726)
A: No installment payment shall be forfeited in favor of the Note: It may include, in addition, a separate interest in other
owner or developer when the buyer, after due notice to the portions of such real property.
owner or developer, desists from further payment due to
the failure of the owner or developer to develop the Q: What comprises a real right in condominium?
subdivision or condominium project according to the
approved plans and within the time limit for complying with A: The real right in condominium may be ownership or any
the same. (Sec. 23, P.D. 957) other interest in real property recognized by law, on
property in the Civil Code and other pertinent laws.
Q: What is the remedy of the buyer in case of non-
compliance by the owner or developer of the approved Q: What is a condominium unit?
plans within the time limit?
A: It is a part of the condominium project intended for any
A: Such buyer may, at his option, be reimbursed the total type of independent use or ownership, including one or
amount paid including amortization interests but excluding more rooms or spaces located in one or more floors (or
delinquency interests, with interest thereon at the legal part or parts of floors) in a building or buildings and such
rate. (Sec. 23, P.D. 957) accessories as may be appended thereto.
A: No. Section 23 of P.D. 957 does not require that a notice A: It is the entire parcel of real property divided or to be
be given first by the buyer to the seller before a demand for divided in condominiums, including all structures thereon,
refund can be made as the notice and demand can be made
in the same letter or communication (Villanueva, p. 408, Q: What are common areas?
2009 ed.)
A: The entire project excepting all units separately granted
Q: What are the rights of the buyer in case he defaults in or held or reserved.
his installment payment due to causes other than the
failure of the owner or developer to develop the project? Q: What is meant by “to divide” real property?
fifty percent interest in the common areas are opposed 8. Any reasonable restriction not contrary to law, morals or
to repair or restoration or remodeling or modernizing of public policy regarding the right of any condominium owner
the project; or to alienate or dispose of his condominium.
4. the project or a material part thereof has been
condemned or expropriated and that the project is no
Note: The enabling or master deed may be amended or revoked
longer viable, or that the condominium owners holding
upon registration of an instrument executed by the registered
in aggregate more than seventy percent interest in the
owner or owners of the property and consented to by all registered
common areas are opposed to continuation of the
holders of any lien or encumbrance on the land or building or
condominium regime after expropriation or
portion thereof. The term “registered owner” shall include the
condemnation of a material portion thereof; or
registered owners of condominiums in the project. Until
5. the conditions for such partition by sale set forth in the
registration of a revocation, the provisions of RA. No. 4726 shall
declaration of restrictions, duly registered in accordance
continue to apply to such property (Sec. 4, R.A. 4726).
with the terms of the Act, have been met.
A: Such declaration of restrictions, among other things, may Note: Such right to partition or dissolution may be
also provide: conditioned upon:
1. As to any such management body; a. failure of the condominium owners to rebuild
within a certain period;
a. For the powers thereof, including power to
b. specified inadequacy of insurance proceeds;
enforce the provisions of the declarations of c. specified percentage of damage to the building;
restrictions; d. a decision of an arbitrator; or
b. For maintenance of insurance policies, e. upon any other reasonable condition.
insuring condominium owners against loss
by fire, casualty, liability, workmen's Q: What is the duty of the Register of Deeds as regards
compensation and other insurable risks, and this declaration of restrictions?
for bonding of the members of any
management body; A: The Register of Deeds shall enter and annotate the
c. Provisions for maintenance, utility, declaration of restrictions upon the certificate of title
gardening and other services benefiting the covering the land included within the project, if the land is
common areas, for the employment of patented or registered under the Land Registration or
personnel necessary for the operation of the Cadastral Acts.
building, and legal, accounting and other
professional and technical services; Q: What are the restrictions imposed by the law upon
d. For purchase of materials, supplies and the corporations which is also the management body of the
like needed by the common areas; condominium project?
e. For payment of taxes and special
assessments which would be a lien upon the A: The restrictions are as follows:
entire project or common areas, and for 1. The corporate purposes of such a corporation
discharge of any lien or encumbrance levied shall be limited to the:
against the entire project or the common a. holding of the common areas, either in
areas; ownership or any other interest in real
f. For reconstruction of any portion or portions property recognized by law,
of any damage to or destruction of the b. management of the project, and
project; c. to such other purposes as may be necessary,
g. The manner for delegation of its powers; incidental or convenient to the
h. For entry by its officers and agents into any accomplishment of said purposes.
unit when necessary in connection with the 2. The articles of incorporation or by-laws of the
maintenance or construction for which such corporation shall not contain any provision
body is responsible; contrary to or inconsistent with the:
i. For a power of attorney to the management a. provisions of the Act;
body to sell the entire project for the benefit b. enabling or master deed; or
of all of the owners thereof when partition c. declaration of restrictions of the project.
of the project may be authorized under
Section 8 of the Condominium Act, which Q: May the management body acquire and hold, for the
said power shall be binding upon all of the benefit of the condominium owners, tangible and
condominium owners regardless of whether intangible personal property and dispose of the same by
they assume the obligations of the sale or otherwise?
restrictions or not.
2. The manner and procedure for amending such A: Yes, unless otherwise provided for by the declaration of
restrictions: Provided, That the vote of not less restrictions.
than a majority in interest of the owners is
obtained. Note: The beneficial interest in such personal property shall be
3. For independent audit of the accounts of the owned by the condominium owners in the same proportion as
management body; their respective interests in the common areas.
4. For reasonable assessments to meet authorized
A transfer of a condominium shall transfer to the transferee
expenditures, each condominium unit to be
ownership of the transferor's beneficial interest in such personal
assessed separately for its share of such expenses property.
in proportion (unless otherwise provided) to its
owners fractional interest in any common areas; Q: What is a condominium corporation?
5. For the subordination of the liens securing such
assessments to other liens either generally or A: A corporation specially formed for the purpose, in which
specifically described; the holders of separate interest shall automatically be
members or shareholders, to the exclusion of others, in Q: What is the effect of involuntary dissolution of a
proportion to the appurtenant interest of their respective condominium corporation for any of the causes provided
units in the common areas. by law?
Q: How is a condominium corporation liquidated? A: The amount of any such assessment plus any other
charges thereon, such as interest, costs (including
A: Liquidation of the corporation shall be effected by a sale attorney's fees) and penalties, as such may be provided for
of the entire project as if the corporation owned the whole in the declaration of restrictions, shall be and become a lien
thereof, subject to the rights of the corporate and of upon the condominium assessed.
individual condominium creditors.
Note: Effect of payment: Upon payment of said assessment and
Q: What should the Court do if, in an action for partition charges or other satisfaction thereof, the management body shall
of a condominium project or for the dissolution of cause to be registered a release of the lien.
condominium corporation on the ground that the project
or a material part thereof has been condemned or Q: What are the rules as regards the lien created in case of
expropriated, the Court finds that the conditions provided unpaid assessments, etc?
for in the Condominium Act or in the declaration of
restrictions have not been met? A: GR: Such lien shall be superior to all other liens
registered subsequent to the registration of said notice of
A: The Court may decree a reorganization of the project, assessment
declaring which portion or portions of the project shall
continue as a condominium project, the owners thereof, XPNs:
and the respective rights of said remaining owners and the 1. real property tax liens are superior;
just compensation, if any, that a condominium owner may 2. when declaration of restrictions provide for the
be entitled to due to deprivation of his property. subordination thereof to any other liens and
encumbrances.
Note: Upon receipt of a copy of the decree, the Register of Deeds
shall enter and annotate the same on the pertinent certificate of Q: What is the rule as regards enforcement of the lien?
title.
A: Such liens may be enforced in the same manner
Q: If real property has been divided into condominiums, provided for by law for the judicial or extra-judicial
how will it be assessed for taxation purposes? foreclosure of mortgages of real property.
A: Succession is a mode of acquisition by virtue of which A: Purely personal rights are extinguished by death. Hence,
the property, rights and obligations to the extent of the they are not transmitted to the heirs.
value of the inheritance of a person, are transmitted
through his death to another or others either by his will or GR: patrimonial rights are transmissible to the heirs
by operation of law. (Art. 774)
XPN:
Q: What are the requisites of succession? 1. Otherwise provided by law
2. by the will of the testator.
A: DATE
1. Death of decedent; GR: Rights and obligations arising from contracts are
2. Acceptance of the inheritance by the successor; binding upon the heirs.
3. Transmissible estate;
4. Existence and capacity of successor, designated XPN: when the rights and obligations arising are not
by decedent or law. transmissible by
a. Their nature
Q: What is an inheritance? b. Stipulation
c. Provided by law
A: The inheritance includes all the property, rights and
obligations of a person which are not extinguished by his Q: What are the rights that are extinguished by death?
death. (Art 776)
A: PAPULP
Note: The heirs succeed not only to the rights of the deceased but 1. Partnership rights
also to his obligations. 2. Agency
3. Personal easements
Q: What is the relation of “Inheritance” to “Succession”? 4. Usufruct
5. Legal support
A: Inheritance refers to the objective element of 6. Parental authority
succession, to the mass or totality of the patrimony of a
deceased person. Succession, on the other hand refers to Q: May heirs be held liable for the debts or obligations of
the legal mode by which inheritance is transmitted. the decedent?
Q: Who is a decedent? A: GR: No. It is the estate that pays for the debts left by the
decedent.
A: Person whose property is transmitted through
succession whether or not he left a will. If the decedent left XPN: It is true that the heirs assume liability for the debts of
a will, he is also called a testator. (Art. 774 & 775) the decedent, although it is limited only to the extent of the
value of the inheritance received (Estate of Hemady v.
Q: What is transferred by death in succession? Luzon Surety Co., G.R. No. L-8437, Nov. 28, 1956)
A: Only the property, rights and obligations not It is only after the debts are paid that the residue of the
extinguished by death are transmitted to the heirs. estate is distributed among the successors.
With respect to obligations arising from contracts, while the
Q: Are after-acquired properties of the decedent same is transmissible to the heirs, the latter’s liability shall,
transmissible? however, be limited only up to the value of the property
they received from the decedent. (Art. 1311)
A: GR: Property acquired during the period between the
execution of the will and the death of the testator is not Note: The heirs are not personally liable with their own individual
included. properties for the monetary obligations/debts left by the
decedent.
XPN: When a contrary intention expressly appears in the
will. (Art. 793) Q: Before his death, A borrowed from X P1, 000 evidenced
by a promissory note. A died without paying the debt. He
Note: Applies only to legacies and devises and not to institution of left no property but he is survived by his son, B, who is
heirs. making good in the buy and sell business. Subseqeuntly, X
brought an action against B for the collection of P1,000
The inheritance of a person includes not only the property and the plus legal interest thereon on the groud that, since B is the
transmissible rights and obligations existing at the time of his only heir of A, he has inherited from the latter not only
the latter’s property, but also all his rights and obligations. When she died, her claim or right to the parcels of land in
Will the action prosper? Reason. litigation was not extinguished by her death but was
transmitted to her heirs upon her death. Her heirs have
A: The action will not prosper. Money debts are obligations thus acquired interest in the properties in litigation and
which are intransmissible for they do not constitute a part became parties in interest in the case (Bonilla v. Barcena, et
of the inheritance. This is so because they must be al., G.R. No. L-41715, June 18, 1976).
liquidated in the testate or intestate proceedings for the
settlement of the estate of the decedent. It is the estate of Q: Can the heir enter into a contract of sale, conveyance
the deceased, instead of the heirs, which is vested and or any disposition pertaining to his interest in the
charged with his rights and obligations which survive after inheritance even pending the settlement of the estate?
his death. After the money debts are paid, what is left of
the estate is distributed among the heirs of the deceased. A: Yes, because his hereditary share/interest in the
For this purpose, it has been held that it is the estate rather decedent’s estate is transmitted or vested immediately
than the heir which must be considered as the continuation from the moment of decedent’s death. This is, however,
of the decedent’s personality. Consequently, the subject to the outcome of the settlement proceedings.
decedent’s estate is a juridical person. (Limjoco v. Fragante,
80 Phil 776). From this, it is clear that X cannot hold B liable Q: What is the nature of the transaction entered into by
for the payment of the obligation. the heir pertaining to his hereditary share in the estate
pending the settlement of the estate?
Q: Is a contract of guaranty extinguished by death?
A: The effect of such transaction is to be deemed limited to
A: No, because a contract of guaranty does not fall in any of what is ultimately adjudicated to the heir. However, this
the exceptions under Art. 1311 (relativity of contracts). A aleatory character of the contract does not affect the
guarantor’s obligation is basically to pay the creditor if the validity of the transaction.
principal debtor cannot pay. Payment does not require any
personal qualifications. The personal qualifications become Q: Can an heir sell any particular part of the estate?
relevant only at the time the obligation is incurred but not
so at the time of discharge or fulfillment of the obligation A: An heir can sell his undivided share of the inheritance
(Estate of Hemady v. Luzon Surety Co., Inc., G.R. No. L-8437, but not any particular part of the estate. (Flora v. Prado,
Nov. 28, 1956). GR. No. 156879) An heir can validly convey a property of
the estate only in so far as his individual share in the co-
Q: The wife died while the action for legal separation was ownership is concerned. (Aguirre v. CA, GR. No. 122249)
pending. Her children, however, wanted to continue the
action. They ask that they be allowed to substitute their Q: Can an heir alienate or dispose his interest over his
deceased mother, arguing that the action should be future inheritance during the lifetime of the decedent?
allowed to continue. Decide.
A: GR: Contracts entered into upon future inheritance are
A: The children cannot be substituted in an action for legal void. (Art 1347, par. 2)
separation upon the death of their mother who filed the
case. An action for legal separation is purely personal on XPN: Partition inter vivos (Art 1080)
the part of the innocent spouse because such an action
affects the marital status of the spouses. (Bonilla v. Q: What are the requisites for the contract to be classified
Barcena, G.R. No. L-41715, June 18, 1976) as one upon future inheritance?
It is clear that the moment of death is the determining KINDS OF SUCCESSION AND SUCCESSORS
point when the heirs acquire a definite right to the
inheritance, whether such right be pure or conditional. The Q: What are the kinds of succession?
possession of hereditary property is therefore deemed
transmitted to the heir without interruption and from the A:
moment of death of the decedent, in case the inheritance is 1. Testamentary Succession- That which results from the
accepted. designation of an heir, made in a will executed in the
form prescribed by law. (Art 779)
The right of the heirs to the property of the deceased vests 2. Legal or Intestate Succession- That which takes place
in them even before judicial declaration of their being heirs if a person dies without a will, or with a void will, or
in the estate or intestate proceedings. one which has subsequently lost its validity.
3. Mixed Succession- that effected partly by will and
Note: It is immaterial whether a short or long period of time partly by operation of law. (Art 780)
elapses between the death of the predecessor and the entry in the 4. Compulsory Succession- That which takes place
possession of the properties of the inheritance, because the right is compulsorily by operation of law with respect to the
always deemed to retroact to the moment of death.
legitime in favor of compulsory heirs.
Q: What is the interest of the heir over the inheritance
Q: What are the kinds of heirs?
prior to the death of the decedent?
Note: An heir is one who succeeds to the whole (universal) or Q: Suppose a person is named to succeed to an entire
aliquot part of the estate. Devisee or legatee is one who estate. The estate, however, consists of only one parcel of
succeeds to definite, specific, and individualized properties. land. Is he an heir or a devisee?
2. Compulsory – called by law to succeed to a portion of A: It depends on the manner of his designation in the will.
the testator’s estate known as legitime. Those who Here, because he is called to inherit the entire estate, he is
succeed by force of law to some portion of the an heir.
inheritance, in an amount predetermined by law, of
which they cannot be deprived by the testator, except Q: In what instances do the distinctions between heirs and
by a valid disinheritance devisees/legatees become significant?
Reason: Here, there is really no delegation because the Q: What is the parol evidence rule with respect to
testator has already set the parameters required by law, interpretation of the wills?
namely:
a. The specification of property or sums of money A: When there is an imperfect description, or when no
b. The specification of classes or causes. person or property exactly answers the description,
mistakes and omissions must be corrected, if the error
In effect, the third person will only be carrying out the will appears from the context of the will or from extrinsic
of the testator as determined by these parameters. evidence, excluding the oral declarations of the testator as
to his intention; and when an uncertainty arises upon the
Note: Should the testator dispose of the whole or part of his face of the will, as to the application of any of its provisions,
property for prayers and pious works for the benefit of his soul, in the testator's intention is to be ascertained from the words
general terms and without specifying its application, the executor, of the will, taking into consideration the circumstances
with the court's approval shall deliver one-half thereof or its
under which it was made, excluding such oral declarations.
proceeds to the church or denomination to which the testator may
belong, to be used for such prayers and pious works, and the other (Art.789)
half to the State, for the purposes mentioned in article 1013. (Art.
1029, NCC)
2. Patent (Extrinsic) ambiguities – Those which are Q: What are the requisites of testamentary capacity?
apparent on the face of the will. E.g. Uncertainty
which arises upon the face of the will as to the A:
application of any of its provisions. (Art. 789) 1. All persons not expressly prohibited by law
2. At least 18 years of age; and
Example: Testator gives a devise “to some of the 3. Of sound mind
eleven children of my only brother"
Note: It shall be sufficient if the testator was able at the time
Q: What are the steps in resolving the ambiguities? of making the will to know the:
a. nature of the estate to be disposed of;
b. proper objects of his bounty; and
A: c. character of the testamentary act.
1. Examine the will itself;
2. Refer to extrinsic evidence or the surrounding Q: What is meant by sound mind?
circumstances, except oral declarations of the testator
as to his intention. A: To be of sound mind, it is not necessary that the testator
be in full possession of all his reasoning faculties or that his
Q: What law governs the validity of wills? mind be wholly unbroken, unimpaired or unshattered by
disease, injury or other cause. It shall be sufficient if the
A: testator was able at the time of making the will to know the
1. As to extrinsic validity - refers to the forms and nature of the estate to be disposed of, the proper objects
solemnities required by law. It is governed by: of his bounty, and the character of the testamentary act.
a. As to time - the law in force at the time of the
making of the will. The requirement that the testator be of sound mind is
b. As to place - the will can be executed in essential only at the time of the making of the will (or
accordance to the formalities of the testator’s execution). If he is not of sound mind at that time, the will
nationality, domicile, residence or the place is invalid regardless of his state of mind before or after such
where the will was executed depending on the execution. In other words, the will of an incapable will not
place where it is executed and the nationality of be validated by supervening capacity.
the testator.
2. As to Intrinsic validity- refers to the legality of Note: Conversely, if the testator was of sound mind at the time of
provisions in the will. It is governed by: the making of the will, the will is valid even if the testator should
a. As to time- the law in force at the time of the later on become insane and die in that condition. In other words,
decedent’s death. supervening incapacity does not invalidate an effective will.
b. As to place- the national law of the testator
governs the intrinsic validity of the will regardless Q: If there is no proof as to the soundness of the mind of
of the place of execution. the testator at the time he executed his will, what is the
status of his will assuming that he complies with all other
Place of execution Applicable Law requisites for its validity?
Testator is a Filipino
Philippines New Civil Code (NCC) A: The will is valid. The law presumes that every person is of
sound mind, in the absence of proof to the contrary.
Foreign country Law of the place of
execution Such presumption of soundness of mind, however, does
Testator is an alien not arise if the testator was:
Philippines NCC or 1. Publicly known to be insane, one month, or less,
National law before making his will;
Foreign country 1.National law; 2. Under guardianship at the time of the making of
2. Law of the place of the will.
A: The person who maintains the validity of the will has the Q: What are included in the due execution of the will?
burden of proving that the testator made the will during a
lucid interval. A: It includes a determination of whether
1. the testator was of sound and disposing mind at the
Q: Is there a difference between testamentary capacity time of its execution,
and testamentary power? 2. that he freely executed the will and was not acting
under duress, fraud, menace or undue influence and
A: No. Testamentary capacity refers to the ability as well as 3. that the will is genuine and not forgery,
the power to make a will. In American law, testamentary 4. that he was of proper testamentary age
capacity is concerned with the ability of the testator while 5. that he is not expressly prohibited by law from
the testamentary power involves a privilege under the law. making a will.
Hence, although a person may have testamentary capacity,
it does not necessarily follow that he has testamentary Q: What are the effects of a will executed by an alien
power. In the Philippines, however, such distinction is lost abroad?
altogether. As a matter of fact, the term testamentary
power is sometimes understood to refer to the power of A: The will of an alien who is abroad produces effect in the
the testator to designate the person or persons who are to Philippines if made with the formalities prescribed by the
succeed him in his property and transmissible rights and law of the place in which he resides, or according to the
obligations. formalities observed in his country, or in conformity with
those which the Civil Code prescribes. (Art. 816)
Q: Is a person suffering from civil interdiction qualified to
make a will? Q: What are the effects of a will executed by an alien in
the Philippines?
A: Yes. He is deprived only of the power to dispose of his
properties through acts inter vivos but not through acts A: It shall produce the same effect as if it was executed in
mortis causa. (Art. 34, Revised Penal Code) the Philippines if it is executed in accordance with the law
of the country where he is a citizen or subject, and which
Q: Is a married woman required to obtain the consent of might be proved and allowed by the law of his own country.
the husband and the authority of the court before she can (Art. 817)
make a will?
Q: Is a joint will executed by a Filipino in a foreign country
A: No. A married woman may make a will without the valid?
consent of her husband, and without the authority of the
court. (Art 802) A: No. The same holds true even if it is authorized by the
law of the country where the joint will was executed. (Art.
Note: A married woman may dispose by will all her separate
819) A joint will is against the public policy of the
property as well as her share of the conjugal partnership or
absolute community property. (Art 803) Philippines.
A:
1. Order of succession
2. Amount of successional rights Q: Is it presumed that the testator knows the dialect of
3. Intrinsic validity of testamentary provisions the locality where he resides?
4. Capacity to succeed. (Art. 16; Art. 1039)
A: If the testator resides in a certain locality, it can be
Q: What are the formal requirements common to both presumed that he knows the dialect or the language in the
notarial and holographic wills? said locality. (Abangan v. Abangan, G.R. No. 13431, Nov. 12,
1919)
A:
1. Law governing extrinsic validity of wills; Note: The fact that the testator knew the language need not
2. In writing; appear on the face of the will. This fact may be proven by extrinsic
3. In a language or dialect known to the testator. evidence.
Note: The object of the solemnities surrounding the execution of Q: Does this rule apply to witnesses in a notarial or
wills is to close the door against bad faith and fraud, to avoid attested will?
substitution of wills and testaments and to guarantee their truth
and authenticity. A: No. The rule only applies to the testator, whether in
notarial or holographic will. Further, Art. 805 is clear that
Q: Is the rule that every will must be in writing the attestation clause need not be in the language known
mandatory? to the witnesses.
A: Yes. If the will is not in writing, it is void and cannot be Q: What are the formalities in the execution of a notarial
probated. will?
Note: Philippine laws do not recognize the validity of “noncupative A: WESA-PNAN
wills,” which are oral wills declared or dictated by the testator and 1. In Writing;
dependent merely on oral testimony.
2. Executed in a language or dialect known to the
testator;
Q: In case of a holographic will, what is the requirement
3. Subscribed at the end thereof by the testator
for its validity?
himself or by the testator’s name written by some
other person in his presence, and by his express
A: It must be entirely handwritten by the testator himself.
direction;
(Art. 810)
4. Attested and subscribed by three or more
credible witnesses in the presence of the testator
Q: What are the rules in relation to notarial or attested
and of one another;
wills?
5. The testator or the person requested by him to
write his name must also sign every Page, except
A: Notarial or attested will may be:
the last, on the left margin in the presence of the
1. entirely handwritten by a person other than the
witnesses;
testator;
2. partly handwritten by the testator himself and Note: All the pages must be signed by the testator. The
partly handwritten by another person; exception pertains to the signature at the left margin
3. entirely printed, engraved or lithographed; or and not the signature itself. Signature at the left margin
4. partly handwritten (whether by testator or on the last page is no longer a mandatory requirement
another person) and partly printed, engraved or since the testator will already sign it at the end of the
lithographed. will.
A: Lack of one of the requisites is a fatal defect which will It is not necessary that the testator or the witnesses should
render the will null and void actually see the other subscribe their names to the
instrument provided that he is in the position to see them
Q: Where must the testator sign the will? sign if he chooses. Thus signing must be considered in the
presence of Hannah who was reading a book on the couch
A: The signature of the testator of the will must be at the beside the table.
end of the will, which may be in the logical end (last
testamentary disposition) or physical end (non dispositive Q: In an ordinary will, may the testator validly delegate
provisions). the signing to someone else?
Q: What is the effect of testamentary dispositions placed A: Yes. A will is valid if it is signed by way of the testator’s
in the will after the signature of the testator? name written by some other person in his presence, and by
his express direction.
A: Where the signature is followed by dispositive
provisions, even the portion of the instrument preceding Q: May a notary public serve as one of the instrumental
the signature cannot be probated, because the instrument witnesses?
must be considered as a whole.
A: No. The notary public before whom the will was
Note: Signing before the end invalidates not only the dispositions acknowledged cannot be considered as the third
that come after but the entire will, because then one of the instrumental witness since he cannot acknowledged before
statutory requirements of signing at the end would not have been himself having signed the will. He cannot split his
complied with (Azuela v. CA 487 SCRA 119). personality into two so that one will appear before the
other to acknowledged his participation in the making of
Q: Is a fingerprint sufficient signature? the will. To permit such a situation to obtain would be
sanctioning a sheer absurdity (Cruz v. Villasor, 52 SCRA 31)
A: In notarial will, it is allowed as long as it is voluntarily
made but not in holographic will because it presupposes SPECIAL RULES FOR HANDICAPPED TESTATORS
that he knows how to write.
Q: What are the special requirements if the testator is
Q: Is a cross a sufficient signature? deaf or mute?
A: In the post mortem probate of holographic wills, the Note: Full signature refers to the testator’s habitual, usual and
following rules are to be observed as to the number of customary signature.
witnesses to be presented:
Q: What is the effect if the insertion, cancellation, erasure
1. If the will is not contested, it shall be necessary or alteration is not authenticated with the testator’s full
that at least one witness who knows the signature?
handwriting and signature of the testator
explicitly declares that the will and the signature A: It is considered as not made, but the will is not
are in the handwriting of the testator. invalidated. It does not affect the validity of the will itself.
2. If the will is contested, at least three of such The will is not thereby invalidated as a whole, but at most
witnesses shall be required. only as regards the particular words erased, corrected or
3. In the absence of any competent witness and if inserted. (Kalaw v. Relova, 132 SCRA 237, 1984), citing
the court deems it necessary, expert testimony Velasco v. Lopez, (1 Phil 720, 1903), unless the portion
may be resorted to. (Art. 811) involved is an essential part of the will, such as the date.
Q: In the probate of a holographic will, the will was Note: Where the testator himself crossed out the name of the heir
named, and substituted the name of another, without
contested. Is the requirement for at least three witnesses
authentication, it was held that this did not result in making the
to explicitly declare that the signature in the will is the person whose name was crossed as heir. The effect of this is that
genuine signature of the testator mandatory or the entire will is voided or revoked for the simple reason that
permissive? nothing remains in the will after that which could remain valid
(since one of the essential part of the will, the designation of heir,
A: The requirement is mandatory. In the case of Ajero v. is avoided by lack of proper authentication) (Kalaw v. Relova, 132
Court of Appeals, the Court held that “the object of the SCRA 237).
solemnities surrounding the execution of wills is to close
the door against bad faith and fraud, to avoid substitution JOINT WILLS
of wills and testaments and to guaranty their truth and
authenticity. Q: Are joint wills allowed in the Philippines?
Therefore, the laws on this subject should be interpreted in A: Two or more persons cannot make a will jointly, or in the
such a way as to attain these primordial ends. But, on the same instrument, either for their reciprocal benefit or for
other hand, also one must not lose sight of the fact that it is the benefit of a third person. (Art. 818)
not the object of the law to restrain and curtail the exercise
of the right to make a will. Wills, prohibited by Article 818, executed by Filipinos in a
foreign country shall not be valid in the Philippines, even
Q: May the contents and due execution of a lost though authorized by the laws of the country where they
holographic will be established merely through oral may have been executed. (Art. 819)
testimonies of witness who allegedly seen the same?
Note: Mutual wills – Separate wills although containing reciprocal
provisions are not prohibited, subject to the rule on disposition
A: No. The execution and contents of a lost or destroyed
captatoria.
holographic will may not be proved by the bare testimony
of witnesses who have seen or read such will. The will itself
Q: What is the reason why joint wills are prohibited?
must be presented; otherwise, it shall produce no effect
(Gan v. Yap, 104 Phil. 509; id.)
A: Whether in the Philippines or in foreign country, Filipino
citizens are prohibited from executing joint wills because it
Q: May a holographic will which was lost or could not be
is a matter of public policy. Joint wills may lead to the
found be proved by means of a photostatic copy
commission of parricide. (In re Will of Bilbao, 87 Phil. 114;
(photocopy)?
Dacanay v. Florendo)
A: Yes. A photostatic copy or xerox copy of the holographic
Q: John and Paula. British citizens at birth, acquired
will may be allowed because comparison can be made with
Philippine citizenship by naturalization after their
the standard writings of the testator. (Rodelas v. Aranza,
marriage. During their marriage the couple acquired
119 SCRA 16)
substantial landholdings in London and in Makati. Paula
Q: When may the testator revoke a will? A: It takes place when certain acts or events take place
subsequent to the making of a will, which nullify or render
A: A will may be revoked by the testator at any time before inoperative either the will itself or some testamentary
his death. Any waiver or restriction of this right is void. (Art. disposition therein.
828)
Rationale: The law presumes a change of mind on the part
Q: May the right of the testator to revoke the will be of the testator due to certain changed circumstance
waived or restricted? pertaining to the family relations or in the status of the
property.
A: No, the testator’s right to revoke during his lifetime is
absolute because a will is ambulatory. It can neither be Q: What are the instances when revocation by implication
waived nor restricted. As a matter of fact, even if the will of law takes place?
has already been admitted to probate during the testator’s
lifetime, it may still be revoked. This necessarily follows A:
from the principle that “a testament is of force after men 1. Upon the termination of the subsequent marriage in
are dead; otherwise it is of no strength at all while the Article 41 of the FC through the filing of the affidavit of
testator lives.” reappearance, the spouse who contracted the
marriage in bad faith shall be disqualified to inherit
Q: What law governs in case of revocation? from the innocent spouse by testate and intestate
succession. Hence, any testamentary disposition in the
A: will of the innocent spouse in favour of the guilty
1. If the revocation takes place in the Philippines, spouse shall be revoked by implication of law (Art. 43,
whether the testator is domiciled in the Philippines or par. 5, FC).
in some other country – Philippine laws 2. If both spouses of the subsequent marriage referred in
2. If the revocation takes place outside the Philippines: Art. 41 of the FC acted in bad faith, testamentary
a. by a testator who is domiciled in the Philippines – dispositions by one in favour of the other are revoked
Philippine laws by operation of law (Art. 44, FC).
b. by a testator who is not domiciled in this country 3. In case of annulment, the spouse who contracted the
– marriage in bad faith shall be disqualified to inherit
i. Laws of the place where the will was made, or from the innocent spouse by testate and intestate
ii. Laws of the place in which the testator had his succession. Hence, any disposition in the will of the
domicile at the time of revocation. (Art. 829) innocent spouse in favour of the guilty spouse shall be
revoked by operation of law (Art. 50 in relation to Art.
Q: What is the rule in case of revocation based on false or 43, par. 5, FC).
illegal cause? 4. Upon issuance of the decree of legal separation,
provisions in favor of the offending spouse made in
A: Revocation based on a false or illegal cause is null and the will of the innocent spouse shall be revoked by
void. operation of law (Art. 63, par. 4, FC).
A: Yes, the Doctrine of Presumed Revocation applies, which Q: The will contains a statement whereby the testator
provides that: where a will which cannot be found, is shown recognizes his illegitimate child. This will was revoked.
to have been in the possession of the testator when last May the revoked will be used as basis for proving the said
seen, the presumption is, in the absence of other recognition?
competent evidence, that the same was cancelled or
destroyed. The same presumption arises where it is shown A: Yes. Recognition in a will of an illegitimate child does not
that the testator had ready access to the will and it cannot lose its legal effect even if the will is revoked.
be found after his death (Gago v. Mamuyac G.R. No. 26317,
Jan. 29, 1927). REPUBLICATION AND REVIVAL OF WILLS
Note: The presumption is, however, not conclusive and anyone Q: What is Republication of wills?
may prove the contrary to rebut the presumption.
A: It is the re-execution or the re-establishment by a
Q: What is the Doctrine of Dependent Relative testator of a will which is void or a will which the testator
Revocation? had once revoked.
A: Where the testator’s act of destruction is connected with Q: What are the two ways of republishing wills?
the making of another will, so as fairly to raise the inference
that the testator meant the revocation of the old to depend A:
upon the efficacy of the new disposition intended to be 1. By Reproduction - the contents of a previous will are
substituted, the revocation will be conditional and reproduced in a subsequent will
dependent upon the efficacy of the new disposition; and if, 2. By Execution of a Codicil - such codicil referring to
for any reason, the new will intended to be made as a the previous will to be republished
substitute is inoperative, the revocation fails and the
original will remains in full force. But a mere intent to make Q: Can there be republication by execution of a codicil if
at some time a will in place of that which is destroyed will the previous will is void as to its form?
not render the destruction conditional. It must appear that
the revocation is dependent upon teh valid execution of a A: No. If the previous will is void as to its form, it can only
new will (Molo v. Molo, G.R. No. L-2538, Sept. 21, 1951). be republished by reproducing the provisions thereof in a
subsequent will.
Simply put, for this doctrine to operate, the testator must
have intended that the revocation of his first will be Q: What is Revival of wills?
dependent on the validity of his second will. In this case the
intention of the testator is clear: He does not want to die A: It is the process of renewing the operative force of a will
intestate. which had once been revoked by the testator.
Note: Failure of the new testamentary disposition upon whose Q: What is the rule on revival of wills?
validity the revocation depends is equivalent to the non-fulfillment
of a suspensive condition and thus prevents the revocation of the
original will. A:
1. If there is an EXPRESS REVOCATION
Q: Mr. Reyes executed a will completely valid as to form. - The revocation of the second will does not revive
A week later, however, he executed another will which the first will
expressly revoked his first will, which he tore his first will - The previous will can only be revived by
to pieces. Upon the death of Mr. Reyes, his second will republication
was presented for probate by his heirs, but it was denied
due to formal defects. Assuming that a copy of the first 2. If there is an IMPLIED REVOCATION
A: It is a special proceeding mandatorily required for the Q: What are the questions that can be determined by a
purpose of establishing the validity of a will. probate court?
No will shall pass either real or personal property unless it is A: GR: Probate courts cannot inquire into the intrinsic
proved and allowed in accordance with the Rules of Court. validity of will. The only questions that can be determined
(Art. 838) by a probate court are the:
In testate succession, there can be no valid partition among 1. When the defect of the will is apparent on the
the heirs, until after the will has been probated. face and the probate of the will may become a
useless ceremony if it is intrinsically invalid;
Q: May the parties agree to waive the probate 2. For practical considerations as when there is
proceedings? preterition of heirs, or testamentary provisions
are of doubtful legality (E.g. when the will is void
A: No. It is a mandatory requirement. Until admitted to on its face or in case of incapacity to be a legatee
probate, no right can be claimed thereafter. or devisee because he is also prohibited to be a
done of the decedent, (Sec. 1028, NCC);
Q: Is the principle of estoppel applicable in probate 3. By agreement of the parties to determine first the
proceedings? intrinsic validity of the will.
A: No. These proceedings involve public interest and the Q: The testator devised a part of his estate to his
application therein of the principle of estoppel would seem concubine, which fact of concubinage was stated in his
inimical to public policy when it will block the will. On probate, the court ruled that the will was validly
ascertainment of truth surrounding the execution of a executed but the devise in favor of the concubine is null
testament. and void. Can the probate court pass upon the intrinsic
validity of the testamentary provision stated in the will?
Q: Does prescription apply to probate of wills?
A: Yes. While as a general rule, in probate proceedings, the
A: The statute of limitations is not applicable to probate of court’s area of inquiry is limited to an examination and
wills (Imprescriptibility of Probate) resolution of the extrinsic validity of the will, given
exceptional circumstances, the probate court is not
Rationale: Probate proceedings are not established in the powerless to do what the situation constrains it to do and
interest of the surviving heirs, but primarily for the pass upon certain provisions of the will, as in this case.
protection of the expressed wishes of the testator. (Nepomuceno v. CA, G.R. No. 62952, Oct. 9, 1985)
Q: What are the characteristics of a probate proceeding? Note: The SC held as basis it’s finding that in the event of probate
of the will, or if the court rejects the will, probability exists that the
A: case will come up once again on the same issue of the intrinsic
1. Special proceeding; validity or nullity of the will, the same will result in waste of time,
2. Proceeding in rem; effort, expense plus added anxiety.
3. Not contentious litigation;
4. Mandatory; Q: Can a probate court decide on questions of ownership?
5. Imprescriptible;
A: GR: A probate court has no jurisdiction to decide
questions of ownership.
Q: What are the grounds for disallowance of a will? A: The person who intervenes must have an interest in the
estate or in the will, or in the property to be affected by it,
A: FIFUSM either as executor or claimaint of the estate, and an
1. The Formalities required by law have not been interested party is one who would be benefited by the
complied with; estate such as an heir or one who has a claim against the
2. The testator was Insane or otherwise mentally estate like a creditor.
incapable of making a will, at the time of its
execution; INSTITUTION OF HEIRS
3. The will was executed through Force or under
duress, or influence of fear or threats; Q: How is institution of heir defined under Article 840?
4. The will was procured by Undue and improper
pressure and influence, on the part of the A: Institution of heir is an act by virtue of which a testator
beneficiary or some other person; designates in his will the person or persons who are to
5. The Signature of testator was procured by fraud. succeed him in his property and transmissible rights and
6. The testator acted by Mistake or did not intend obligations (Art. 840, NCC).
that the instrument he signed should be his will at
the time of affixing his signature thereto.(Art. Note: Institution cannot be allowed to affect the legitime.
839)
There can be an instituted heir only in testamentary succession.
Q: When do the following constitute as grounds for
disallowance? Q: What are the requisites of a valid institution?
1. Violence A:
1. The will must be extrinsically valid;
A: When in order to compel the testator to execute a
Note: The testator must have the testamentary capacity to
will, serious or irresistible force is employed
make the institution.
2. Intimidation
2. The institution must be intrinsically valid;
A: When the testator is compelled by a reasonable and Note: The legitime must not be impaired, the person
well-grounded fear of an imminent and grave evil instituted must be identified or identifiable, and there is no
upon his person or property of his spouse, preterition.
descendants, or ascendants, to execute the will
3. The institution must be effective.
3. Undue Influence
Note: No repudiation by the heir; testator is not predeceased
A: When a person takes improper advantage of his by the heir.
power over the will of another, depriving the latter of
a reasonable freedom of choice. Q: Can there be a valid will which does not institute an
heir?
4. Mistake
A: Yes, a will is valid even if it contains only a provision for
A: Pertains to the “mistake in execution” which may disinheritance or if only legacies and devises are contained
either be: in the will even though it does not contain an institution of
1. mistake as to the identity or character of the heir, or such institution should not comprise the entire
instrument which he signed, or estate, and even though the person so instituted should not
2. mistake as to the contents of the will itself. accept the inheritance or should be incapacitated to
succeed (Art. 841).
Q: What is the effect if the grounds for disallowance is
proved? Q: What are the three principles in the institution of heirs?
Note: If the prohibition is relative with respect to persons, time or Q: What are the rules for casual and mixed conditions?
place, such conditions is valid and must be complied with unless
the testator renders it impossible for the heir to marry at all. A: GR: The condition may be fulfilled any time, either
before or after the testator’s death unless the testator
Q: What is a Disposition Captatoria? provides otherwise.
A: Any disposition made upon the condition that the heir XPN:
shall make some provision in his will in favor of the testator 1. If the condition is fulfilled at any time before the
or of any other person shall be void (Art. 875). Here, both death of the testator, the condition is deemed
the condition and the disposition are void but the validity fulfilled, unless the testator provides otherwise.
of the other provisions, including the will itself, shall not be 2. If condition is already fulfilled at the time of the
affected. execution:
a. Testator is unaware- The condition is
deemed complied with or fulfilled.
Q: What is the effect of a Suspensive Condition? Note: A disposition with a suspensive term does not prevent the
instituted heir from acquiring his rights and transmitting them to
A: his heirs even before the arrival of the term.
1. Heir, Devisee, or legatee acquires no rights until the
condition is fulfilled. Reason: The right of the heir instituted subject to a term is
2. If he dies before the condition is fulfilled, he transmits vested at the time of the testator's death - he will just wait
no rights to his heirs, even though he survived the for the term to expire. Before the arrival of the term, the
testator. property should be delivered to the intestate heirs but a
caucion muciana must be posted by them (Art. 885 par. 2)
Reason: Capacity to succeed by the conditional heir
must be determined both at the time of the death of If the heir dies after the testator but before the term
the testator and at the time of the fulfillment of the expires, he transmits his rights to his own heirs because of
condition. the vested right.
3. Once the condition is fulfilled, its effects retroact to Suspensive Term Suspensive Condition
the moment of the death of the testator. The right of the heir The instituted heir does
4. If the suspensive condition is not fulfilled, the estate instituted subject to a not acquire any
will be placed under administration until: term is vested at the successional right upon
a. The condition is fulfilled, in which case the estate time of the testator’s the death of the testator
should be given to the instituted heir; death. Hence, if he dies as long as teh condition
b. It becomes obvious that it cannot be fulfilled, in after the testator but is not yet fulfilled.
which case, the estate should be given to the before the term Hence, upon the death
intestate heirs. expires, he can transmit of the instituted heir,
his rights to his own prior to the fulfillment
Q: Must there be actual or strict fulfillment of the heirs. of the condition, no
condition, or is constructive or substantial fulfillment right is transmitted to
sufficient? his heirs.
A:
1. Suspensive term - the legal heir shall be considered as
called to the succession until the arrival of the period.
Q: The testatrix devised a parcel of land to Dr. Rabadilla. It A: There is total omission when the heir:
was provided that Dr. Rabadilla will acquire the property
subject to the obligation, until he dies, to give Maria 100 1. Receives nothing under the will whether as heir,
piculs of sugar, and in the event of non-fulfillment, the legatee, or devisee;
property will pass to the nearest descendants of the
testatrix.
3. The heir will receive nothing by way of intestate Note: The surviving spouse is not included. An adopted child is by
succession. (e.g. if the heir is not mentioned in legal fiction considered a compulsory heir in the direct line.
the will nor a recipient of a donation inter vivos
and all of the estate is disposed by will) Q: What are the distinctions and similarities between
ineffective disinheritance and preterition?
Q: What are the effects of preterition?
A:
A: INEFFECTIVE PRETERITION
1. Preterition annuls the institution of heirs; DISINHERITANCE
2. Devices and legacies are valid insofar as they are not Distinctions
inofficious; A testamentary Omission in the
3. If the omitted compulsory heir dies before the disposition depriving tetsator’s will of the
testator, the institution shall be effectual, without any compulsory heir of forced heirs or any of
prejudice to the right of representation. his share in the legitime them
for a cause authorized
Example: X has two legitimate children: A and B. X by law
makes a will which results in the preterition of A. A The institution remains The institution of heirs
predeceases X but leaves a legitimate child A-1, who is valid, but must be is completely annulled.
himself completely omitted from the inheritance (A-1 reduced insofar as the Hence, the annulment
being entitled to succeed X by representation). There legitime has been is in toto, unless there
is preterition, not because A was preterited but impaired. Such nullity of are in addition,
because A-1 was preterited (Balane, Jottings and institution is limited testamentary
Jurisprudence in Civil Law: Succession, 2010 ed.). In only to that portion of dispositions in the
such case, the descendant of A can now file an action which, the disinherited form of legacies and
to annul the institution of heirs. heir has been devices which shall
unlawfully deprived of. remain valid so long as
Note: The effect of annulling the institution of heirs will open they are not
intestacy except for the legacies and devices which must be inofficious.
respected.
The omission is By mere mistake or
intentional in which inadvertence resulting
Q: May the omission of an illegitimate child in a will be
case the institution of in the fact that the
equal to preterition?
heir is not wholly void compulsory heir
but only in so far as it receives nothing at all.
A: Yes. Art. 854 does not distinguish. It is immaterial
prejudices the legitime There is total
whether the heir omitted in the testator’s will is legitimate
of the person deprivation.
or illegitimate provided that he is a compulsory heir in the
deisinherited
direct line.
Similarities
Q: May the omission of an adopted child amount to In both cases, the omitted heir and the
preterition? imperfectly disinherited heir get at least their
legitime
A: Yes. It is submitted that an adopted child is by legal Both legacies and devises remain valid insofar as
fiction considered a compulsory heir in the direct line. the legitime has not been impaired.
Besides an adopted child is by law given all of the Both legacies and devises refer to compulsory
successional rights of a legitimate child. heirs.
Note: The rule is absolute with respect to a voluntary heir and a COMPLETION OF
devisee or legatee. THE LEGITIME
Q: What is the effect if the heir repudiated or renounced Q: What can the compulsory heir do if the testator left
his inheritance? title less than the legitime belonging to the former?
A: An heir who renounced his inheritance, whether as A: Any compulsory heir to whom the testator has left by
compulsory or as voluntary heir, does not transmit any right any title less than the legitime belonging to him may
to his own heirs. demand that the same be fully satisfied. (Art. 906)
Note: An heir who repudiated his inheritance, may represent the Note: Testamentary dispositions that impair or diminish the
person whose inheritance he has renounced (Art. 976). The reason legitime of the compulsory heirs shall be reduced on petition of the
for this is found in Art. 971 (2nd sentence): “the representative does same, insofar as they may be inofficious or excessive. (Art. 907)
not succeed the person represented but the one whom the person
represented would have succeeded.
Q: If the testator instituted only one heir and allotted only Q: What are the different kinds of substitution?
an aliquot part, what will happen to the remainder?
A:
A: If the testator has instituted only one heir, and the 1. Simple/common – takes place when the heir
institution is limited to an aliquot part of the inheritance, instituted:
legal succession takes place with respect to the remainder a. predeceases testator;
of the estate. b. repudiates the inheritance; or
c. is incapacitated to succeed
Q: If the testator instituted several heirs as sole heirs but
what was allotted was only part of the inheritance, what Note: Simple substitution without a statement of the causes,
will happen? to which it refers, shall comprise the 3 above mentioned
situations unless the testator has otherwise provided.
A: If the testator instituted several heirs as sole heirs but
allotted only an aliquot part of the inheritance and together 2. Brief/compendious – when two or more persons are
they do not cover the whole inheritance, or the whole free substituted for one or for two or more heirs.
portion, each part shall be increased proportionately.
3. Reciprocal – one heir designated as substitute for
Q: What if such allotment exceeds the whole of the instituted heir while latter is simultaneously instituted
inheritance, what will happen? What will be the extent of as substitute for former.
deduction, if any?
GR: The substitute shall be subject to the same charges and
A: If each of the instituted heirs has been given an aliquot conditions imposed upon the instituted heir.
part of the inheritance and the parts together exceed the
whole inheritance, or the whole free portion, as the case XPN:
may be, each part shall be reduced proportionately. 1. If the testator has expressly provided the contrary
2. If the charges or conditions are personally
SUBSTITUTION OF HEIRS applicable only to the heir instituted. (Art 862)
A:
1. To preserve the inheritance;
2. To deliver the inheritance;
There are various 3. To make an inventory of the inheritance.
liberalities, one that is
immediate and the other Note: The first heir receives property, either upon the death of the
or others eventual, but There are two liberalities testator or upon the fulfillment of any suspensive condition
with only one of them which are both effective imposed by the will.
effective (because but successively enjoyed.
The first heir is almost like a usufructuary with right to enjoy the
ultimately either the property. Thus, like a usufructuary, he cannot alienate the
instituted heir succeeds or property. The first heir is obliged to make an inventory but he is
it is the substitute). not required to furnish a bond.
The first heir instituted is
The testator so directs the obliged to preserve the Q: What is the effect of alienation of the property subject
transmission of his property for the benefit of to the fideicommissary substitution by the first heir?
property that one or more one or more succeeding
heirs enjoy and may freely heirs and his power of A: The transfer is not valid. The fiduciary cannot alienate
dispose of the same. alienation is curtailed or at the property either by an act inter vivos or mortis causa. He
least limited. is bound to preserve the property and transmit it to the
Has a further social effect second heir or fideicommissary.
as it limits the free
No other purpose than to
circulation of property and Note:
prevent the succession of a. If the fiduciary registers the property in his name without
for such reason many laws
the intestate heirs. the fideicommissary substitution, innocent parties are
prohibit the same or limit
protected. However, if the property is unregistered, the
it.
buyer acquires only the seller’s right; i.e., subject to the
There is only one transfer. There are 2 transfers fieocommissary substitution
No absolute disposition b. The fideicommissary is a sort of naked owner; ownership is
because it is subject to the consolidated in him upon transmission of the property to
condition that he will him.
preserve and transmit the
Has the free and absolute
same to the Q: What is the period of the fiduciary’s tenure?
disposition and control
fideicommissary. And also,
over the property.
there is control on the A:
property but there is a 1. Primary rule – the period indicated by the testator
limit to the circulation of 2. Secondary rule – if the testator did not indicate a
the property. period, then the fiduciary’s lifetime
The fideicommissary is
limited to relatives within Q: Is the fiduciary allowed to make deductions to the
The identity of the
one degree from the first inheritance?
substitute does not matter.
heir or fiduciary: parent–
child. A: GR: The fiduciary should deliver the property intact and
undiminished to the fideicommisary heir upon arrival of the
Q: What are the elements/requisites of fideicommissary period
substitution?
XPN: The only deductions allowed, in the absence of a
A: contrary provision in the will are:
1. There must be a first heir or fiduciary; 2. Legitimate expenses
2. An absolute obligation is imposed upon the fiduciary to 3. Credits
preserve and to transmit to a second heir the property at a 4. Improvements
given time;
3. There is a second heir who must be one degree from the Note: The coverage of legitimate expenses and improvements are
first heir; limited to necessary and useful expenses, but not to ornamental
expenses.
4. The first and second heir must both be living and
qualified at the time of the death of the testator.
Q: What are the distinctions between a fiduciary in
Note: That it should be imposed on the free portion and not on the
fideicomissary substitution and a trustee in a trust?
legitime.
A:
FIDUCIARY TRUSTEE
Can only be designated May be designated
expressly by means of a either expressly by acts
Q: How should an absolute obligation to preserve and to When the property passes to the fideicommissary, there is
transmit be imposed upon the fiduciary? no more prohibition to alienate.
A: The obligation to preserve and transmit must be given Q: If the testator gives the usufruct to different persons
clearly and expressly (1) by giving it a name successively, what rules will apply?
“fideicommissary substitution” or (2) by imposing upon the
first heir the absolute obligation to preserve and deliver the A: The provisions on fideicommissary substitution also
property to the second heir. apply in a case where the testator gives the usufruct to
various persons successively.
st
Q: If the testator provided that the 1 heir shall enjoy the
property during his life and that upon his death it shall Q: What are the different dispositions related or
pass to another expressly designated by the testator, but analogous to fideicommissary substitutions which the law
without imposing the obligation to preserve the property, considers as void?
is there fideicommissary substitution in this case?
A:
A: None. There is no fideicommissary substitution but 1. Fideicommissary substitutions which are not made in
merely a legacy of the usufruct of the property. an express manner, either by giving them this name,
or imposing upon the fiduciary the absolute obligation
Q: What does “one degree” mean? to deliver the property to a second heir
2. Provisions which contain a perpetual prohibition to
A: "One degree" refers to the degree of relationship; it alienate and even a temporary one, beyond the limit
means “one generation”. As such, the fideicommissary can fixed in Art. 863 (20 years)
only be either a parent or child of the first heir (Palacios v. 3. Those which impose upon the heir the charge of
Ramirez, G.R. No. L-27952, 1982). paying to various persons successively, beyond the
limit prescribed in Art. 863, a certain income or
Note: The relationship is always counted from the first heir. pension
However, fideicommissary substitutions are also limited to one 4. Those which leave to a person the whole or part of the
transmission. Upon the lapse of time for the first heir, he transmits hereditary property in order that he may apply or
the property to the second heir. In other words, there can only be invest the same according to secret instructions
one fideicommissary transmission such that after the first, there communicated to him by the testator (Art. 867)
can be no second fideicommissary substitution.
Q: What is the effect of the nullity of the fideicommissary
Q: Why must both the first and second heir be living and
substitution?
qualified at the time of the death of the testator?
A: The nullity of the fideicommissary substitution does not
A: The fideicommissary inherits not from the first heir but
prejudice the validity of the institution of the heirs first
from the testator, thus, the requirement that the
designated; the fideicommissary clause shall simply be
fideicommissary be alive or at least conceived at the time
considered as not written. (Art. 868, Civil Code)
of the testator’s death.
Q: Raymond, single, named his sister Ruffa in his will as a
devisee of a parcel of land which he owned. The will
contrary case, to the compulsory heirs; but the Note: The prohibition does not cover an onerous disposition (sale)
former and the latter shall reimburse each other because this involves an exchange of values.
in cash for what respectively belongs to them.
(Art. 912) The devisee who is entitled to a Q: What are the rules governing succession in the direct
legitime may retain the entire property, provided descending line?
its value does not exceed that of the disposable
portion and of the share pertaining to him as A:
legitime. 1. Rule of preference between lines – descending line is
preferred over the ascending line
Note: If the heirs or devisees do not choose to avail 2. Rule of proximity – nearer excludes the more remote
themselves of the right granted by the preceding article, any 3. Right of representation, in case of predecease,
heir or devisee who did not have such right may exercise it; incapacity and disinheritance
should the latter not make use of it, the property shall be sold 4. If all the legitimate children repudiate their legitime,
at public auction at the instance of any one of the interested the next generation of legitimate descendants,
parties. (Art. 913)
succeed in their own right.
The testator may devise and bequeath the free portion as he
may deem fit. (Art. 914) Q: What are the rules governing succession in the
ascending line?
RULES ON LEGITIME
A:
1. Rule of proximity – nearer excludes the more remote
Q: Can the testator deprive the compulsory heirs their
2. Division by line
legitimes?
3. Equal division within the line
A: GR: No. The testator cannot deprive the compulsory
Q: What is/are the remedy(ies) available to a compulsory
heirs of their legitimes.
heir whose legitime has been impaired?
XPN: When the testator validly disinhirited his heir and
A:
when there partition of the hereditary estate for a period
1. In case of preterition – annulment of institution of heir
not exceeding twenty (20) years, which prohibition can
and reduction of devises and legacies
apply even to the legitime of the compulsory heirs.
2. In case of partial impairment – completion of legitime
Note: Only the legitime is reserved. The free portion may be
3. In case of inofficious donation – collation
disposed of by will.
Q: Is the renunciation or compromise of future legitime
Q: Must compulsory heirs accept their legitimes? allowed?
A: No. There is no obligation on the compulsory heirs to A: No. The renunciation or compromise is prohibited and
accept. considered null and void.
Q: What are the kinds of legitime? Q: What is the scope of the prohibition?
A: A:
1. Fixed – If the amount (fractional part) does not vary or 1. Any renunciation of future legitimes, whether for a
change regardless of whether there are concurring valuable consideration or not;
compulsory heirs or not. 2. Any waiver of the right to ask for the reduction of an
a. legitimate children and descendants (legitimate innoficious donation;
children’s legitime is always ½) 3. Compromise between the compulsory heirs
b. legitimate parents and ascendants (When there themselves during the lifetime of the testator.
are no legitimate children and descendants, Art.
887 (1)) Note: The prohibition is not applicable in cases of:
1. Renunciations or compromises made after the death of
2. Variable – If the amount changes or varies in
the testator;
accordance with whom the compulsory heir concur. 2. Donations or remissions made by the testator to the
compulsory heirs as advances of their legitime.
Note: Factors which affect the legitime:
1. Identity of the concurring compulsory heirs
Q: What is the order of preference in reducing
2. Number of concurring compulsory heirs.
testamentary dispositions and donations?
Q: What are the limitations imposed on the testator
regarding his rights of ownership? A: Method of reduction:
1. Reduce pro rata the non-preferred legacies and
A: The testator cannot make donations inter vivos which devises (Art.911[2]), and the testamentary
impinge upon the legitime or which are inofficious. dispositions (to heirs) (Art. 907). Among these
Q: What is the effect of donations to the inheritance of an Q: Is a legacy or devise subject to collation?
heir?
A: Property left by will (like a legacy or devise) is not
A: Donations inter vivos given to children shall be charged deemed subject to collation if the testator has not
to their legitime, unless otherwise provided by the testator. otherwise provided, but the legitime shall in any case
Reason: Donations to the compulsory heirs are advances to remain unimpaired. This means that the legacy or devise
the legitime. should be imputed to the free portion, not to the legitime.
Q: What is collation?
XPN:
1. When testator should have so expressly provided;
2. When compulsory heir repudiates his inheritance
A:
1. Any property/right received by gratuitous title during
testator’s lifetime
2. All that may have been received from decedent during
his lifetime
3. All that their parents have brought to collation if alive
Step 1: INVENTORY Determination of the gross value of the estate at the time of
(Gross Value of Estate) the death of the testator
Step 2: DEDUCT Determination of all the debts and charges which are
OBLIGATIONS chargeable against the estate
Note: The deceased was the spouse who was at the point of death at
the time of marriage (Tolentino, Civil Code, 1992 ed.)
Surviving spouse where the marriage was solemnized under ½ of the hereditary estate (Free portion = ½)
articulo mortis and the deceased died within 3 months from
the time of marriage but the parties have been living as
huband and wife for more than 5 years prior to the marriage
Note: The share of the surviving spouse shall have preference over
those of the illegitimate children whose share may suffer reduction
pro rata because there is no preference as among themselves.
Two or more legitimate children, surviving spouse, and Legitimate children = ½ of the hereditary estate in equal
illegitimate children portions
Surviving spouse = a share equal to that of each legitimate
child
Illegitimate children = ½ of the share of each legitimate child
Free portion = whatever remains
Note: The share of the surviving spouse shall have preference over
those of the illegitimate children whose share may suffer reduction
pro rata because there is no preference as among themselves.
A: The following are compulsory heirs: A: Yes. Legitimate children” includes adopted children and
1. Legitimate children and descendants, with legitimated children.
respect to their legitimate parents and
ascendants; Under R.A. 8552 or the Domestic Adoption Law adopted
2. In default of the foregoing, legitimate parents and children have the same rights granted to the legitimate
ascendants, with respect to their legitimate children. Adopted children, for all intents and purposes are
children and descendants; considered as legitimate children.
3. The widow or widower;
4. Acknowledged natural children, and natural The adopted child enjoys successional rights as a legitimate
children by legal fiction; child, he would exclude the legitimate parents and
5. Other illegitimate children referred to in article ascendants but the relationship does not extend to other
287. relatives of the adopter, thus, disqualifying the adopted
from directly inheriting from the adopter’s ascendants.
Note: Compulsory heirs mentioned in Nos. 3, 4, and 5 are not
excluded by those in Nos. 1 and 2; neither do they exclude one Q: Is formal or judicial adoption necessary before the
another.
adopted child can inherit from the adopter?
In all cases of illegitimate children, their filiation must be duly
proved. A: Yes, because adoption is a juridical act, a proceeding in
rem, which creates between two persons a relationship
The father or mother of illegitimate children of the three classes similar to that which results from legitimate paternity and
mentioned, shall inherit from them in the manner and to the filiation.
extent established by this Code. (Art. 887)
Without the benefit of formal (judicial) adoption, the
Q: What are the classifications of compulsory heirs? adopted child is neither a compulsory nor a legal heir.
Hence, he is not entitled to inherit.
3. Concurring compulsory heirs – Those who succeed Note: Children conceived and born outside of wedlock of parents
who, at the time of the conception of the former, were not
together with the primary or secondary compulsory
disqualified by any impediment to marry each other, or were so
heirs. E.g. Surviving spouse and illegitimate children disqualified only because either or both of them were below
and descendants. eighteen (18) years of age, may be legitimated (Art. 177, Family
Code as amended by R.A. 9858).
Q: In what ways may compulsory heirs inherit?
Note: Under the Family Code, there is no more distinction between Purpose: To prevent persons who are outsiders to the
acknowledged natural children and illegitimate children. They are family from acquiring, by chance or accident, property
all considered as illegitimate. which otherwise would have remained with the said family.
In short, to put back the property to the line from which it
Compulsory heirs of a person who is illegitimate:
1. Legitimate children and descendants; originally came.
2. Illegitimate children and descendants;
3. In default of the foregoing, illegitimate parents Note: Other terms used to refer to reserva troncal:
only; 1. Lineal
4. Surviving spouse. 2. Familiar
3. Extraordinaria
4. Semi-troncal
Q: When do legitimate parents and ascendants inherit?
5. Pseudo-troncal
3. Accidental Loss of all the reservable properties Q: In order for reserva troncal to take place, how should
4. Renunciation or waiver by the reservatarios the property be transmitted from the origin to the
5. Registration under Act 496 without the reservable propositus?
character being annotated if it falls into the hands
of a buyer in good faith for value A: The transmission from the origin to the propositus must
6. By Prescription – reservista seeks to acquire (30 be by gratuitous title.
years – immovable; 8 years- movable)
Q: Can the origin alienate the property?
Q: Differentiate reserva minima and reserva maxima.
A: Yes. While the origin owns the property, there is no
A: reserva yet, and therefore, he has the perfect right to
RESERVA MINIMA RESERVA MAXIMA dispose of it, in any way he wants, subject, however to the
rule on inofficious donations.
All of the properties which the
All of the properties which
descendant had previously
the descendant had Q: Who must be the propositus?
acquired by gratuitous title
previously acquired by
from another ascendant or
gratuitous title from another A: The propositus must be a legitimate descendant or half-
from a brother or sister must
ascendant or from a brother brother/sister of the origin of the property.
be considered as passing to
or sister must be included in
the ascendant- reservista Note: To give rise to reserve troncal, the propositus must not have
the ascendants legitime
partly by operation of law and any legitimate children, otherwise, the reservable property will be
insofar as such legitime can
partly by force of the inherited by the latter
contain.
descendant’s will.
The presence of illegitimate children of the propositus will not
Q: A son received from his mother P200,000 by virtue of a prevent his legitimate parents or ascendants from inheriting the
reserved property.
will. The son had properties of his own amounting to
P400,000. When the son died without issue, he left a will The propositus is the descendant whose death gives rise to the
giving all his estate to his father. How much is the reserva troncal, and from whom therefore the third degree is
reservable property? counted.
A: Since the father’s legitime is only ½, he received the Q: Can the propositus alienate the property?
P600,000 in two capacities: P300,000 as a compulsory heir
– and which was received therefore as a legitime or by A: Yes. While propositus is still alive, there is no reserva yet,
operation of law and P300,000 as a voluntary heir. therefore, he is the absolute owner of the property, with
According to the theory of reserva minima, the reservable full freedom to alienate or dispose or encumber.
property is only P 100,000 on the theory that half of the
P200,000 received from the origin (mother in this case) was Note: The propositus is referred to as the “arbiter of the reserva”.
given to the father as his legitime or by operation of law.
Therefore, the reservable property is only P100,000 (Paras, Q: Who is the reservista in reserva troncal?
Civil Code of the Philippines Annotated, 2008 ed.).
A: The reservista is the ascendant who inherits from the
Note: According to Manresa, in view of the silence of the law on propositus by operation of law. It is he who has the
the matter, the principle of reserve minima should be followed. obligation to reserve.
This seems also teh opinion of Scaevola (Paras, Civil Code of the
Philippines Annotated, 2008 ed.). Note: The relationship between the reservista and the propositus
must be legitimate.
Q: Who are the parties in reserva troncal?
If he inherited the property from the propositus, not by legal
A: succession or by virtue of legitime, there is no obligation to
1. Origin reserve.
2. Propositus
3. Reservista Q: Does the reservista own the reservable property?
4. Reservatartios/Reservees
A: Yes. The reservista is an absolute or full owner, subject
Q: Who must be the origin in reserva troncal? to a resolutory condition. If the resolutory condition is
fulfilled, the reservista’s ownership of the property is
A: The origin of the property must be an ascendant, brother terminated.
or sister of the propositus.
Resolutory condition: If at the time of the reservista’s
Note: The origin must be a legitimate relative because reserva death, there should still exist relatives within the third
troncal exists only in the legitimate family. degree (reservatarios) of the propositus and belonging to
the line from which the property came.
Q: Can the reservista alienate the property? Q: Is there right of representation in reserva troncal?
A: Yes, unlike in fideicommisary substitution where the A: Yes. There is representation in reserva troncal, but the
fiduciary heir cannot alienate the property because he is representative must also be within the third degree from
merely considered a usufruct, the reservista can alienate the propositus. (Florentino v. Florentino)
the property being the owner thereof but subject to the
reservation. Note: The reservatarios inherit the property from the propositus,
not from the reservista.
Q: Is the reservista required to furnish a bond?
Reserva troncal is governed by the following rules on intestate
A: GR: He is required to furnish a bond, security or succession: (Applicable when there are concurring relatives within
the third degree)
mortgage to guarantee the safe delivery later on to the
1. Proximity - “The nearer excludes the farther”
reservatarios of the properties concerned, in the proper 2. “The direct line is preferred over the collateral line”
cases. 3. “The descending line is preferred over the ascending
line”
XPN: The bond, security or mortgage is not needed
when the property has been registered or annotated in Q: What are the rights of the reservatarios?
the certificate of title as subject to reserva troncal.
A:
Note: Upon the reservista’s death the ownership of the reserved 1. To ask for the inventory of all reservable property
properties is automatically vested to the reservatarios who are 2. The appraisal of all reservable movable property
existing. Hence, the reservista cannot dispose the reserved
3. The annotation in the registry of deeds of the
property by will if there are reservatarios existing at the time of his
death. reservable character of all reservable immovable
property
Q: Who are the reservatarios? 4. Constitution of the necessary mortgage
Q: Who are the relatives within the third degree from the
propositus?
A:
1. Parents;
2. Grandparents;
3. Full and half blood brothers and sisters;
4. Great grandparents,
5. Nephews and nieces.
A:
1. Death of the reservista; and
2. The fact that the reservatarios survived the reservista.
But the children or descendants of the disinhirted heir can A: If at the time the legacy or devise is made, the thing did
take his place and preserve the disinhirited heir’s to the not belong to the legatee or devisee but later on he
legitime. acquires it, then:
1. If he acquired it by gratuitous title, then the
Q: What is the effect of disinheritance without cause? legacy or devise is void.
A: Disinheritance without a specification of the cause, or Reason: The purpose of the testator that the
for a cause the truth of which, if contradicted, is not property would go to the devisee or legatee has
proved, or which is not one of those set forth in this Code, already been accomplished with no expense to
shall annul the institution of heirs insofar as it may the legatee or devisee.
prejudice the person disinherited; but the devises and
legacies and other testamentary dispositions shall be valid 2. If he acquired it by onerous title, the legacy or
to such extent as will not impair the legitime. (Art. 918) devise is valid and the estate may be required to
reimburse the amount.
LEGACIES AND DEVISES
Q: Suppose the property bequeathed or devised has been
Q: What can be bequeathed or devised? pledged or mortgaged, who has the obligation to free the
property from such encumbrance?
A: Anything within the commerce of man or which is
alienable. A: GR: The pledge or mortgage must be paid by the estate.
Q: Who may be charged with legacies and devices? XPN: If the testator provides otherwise. However, any
other charge such as easements and usufruct, with
A: which the thing bequeathed is burdened, shall be
1. Any compulsory heir respected by the legatee or devisee.
2. Any voluntary heir
3. Any legatee or devisee Q: What is a legacy of credit?
4. The estate, represented by the executor or
administrator (Jurado, p. 345) A: It takes place when the testator bequeaths to another a
credit against a third person. In effect, it is a novation of
Q: Can the testator bequeath or devise a thing or property the credit by the subrogation of the legatee in the place of
belonging to someone else? the original creditor.
XPN: If the testator acquires it after making his will. Q: Is a legacy or devise considered payment of a debt, if
the testator has a standing indebtedness to the legatee or
2. The testator knows that he does not own but ordered devisee?
its acquisition –
A: No, because if it is, then it would be a useless legacy or
If the thing given as devise or legacy is not owned by devise since it will really be paid.
the testator at the time he made the will but he orders
his estate to acquire it, it is a valid legacy or devise. Q: What is the order of payment of legacies and devises?
The testator knew that he did not own it. There is no
mistake. A:
1. Remuneratory legacies or devises
Q: What is the effect if the thing or property bequeathed 2. Legacies or devises declared by testator to be
or devised belonged to the legatee or devisee at the time preferential
the will was executed? 3. Legacies for support
4. Legacies for education
A: The legacy or devise is ineffective even if the legatee or 5. Legacies or devises of a specific determinate thing
devisee alienates the thing after the will is made. which forms part of the estate
6. All others pro rata
Q: Suppose the legatee or devisee acquired the property
after the will has been executed? Suppose he acquired the Note: The order of preference abovementioned is applicable when:
thing by onerous title? What would be the effect? 1. There are no compulsory heirs and the entire estate is
distributed by the testator as legacy/devise; or
Note: GR: The alienation of the property revokes the legacy Q: What are the rules on exclusion and concurrence in
or devise notwithstanding the nullity of the transaction. intestate succession?
However, if the nullity is based on vitiated consent, the legacy
or devise is not revoked because there was no intention to
revoke (Fernandez v. Dimagiba, G.R. No. L-23638, 1967). A:
1. Legitimate children
XPN: If the sale is pacto de retro and the testator a. Exclude parents, collaterals and State
reacquired it during his lifetime. b. Concur with surviving spouse and illegitimate
children
3. Total loss of the thing bequeathed. c. Are excluded by no one
Note: The loss of the thing bequeathed must not be 2. Illegitimate children
attributed to the heirs. a. Exclude illegitimate parents, collaterals and State
b. Concur with surviving spouse, legitimate children,
4. If the legacy is a credit against a third person or the and legitimate parents
remission of a debt, and the testator, subsequent to c. Are excluded by no one
the making of the will, brings an action against the
debtor for payment. 3. Legitimate parents
a. Exclude collaterals and the State
LEGAL OR INTESTATE SUCCESSION b. Concur with illegitimate children and surviving
spouse
Q: What is legal or intestate succession? c. Are excluded by legitimate children
5. Surviving spouse
a. Excludes collaterals other than brothers, sister, 2. In the absence of legitimate children and descendants,
nephews and nieces, and State the illegitimate children (of the illegitimate child) and
b. Concurs with legitimate children, illegitimate their descendants succeed to the entire estate,
children, legitimate parents, illegitimate parents, without prejudice to the concurrent right of the
brothers, sisters, nephews and nieces surviving spouse.
c. Is excluded by no one
3. In the absence of children and descendants, whether
6. Brothers and Sister, nephews and nieces legitimate or illegitimate, the third in the order of
a. Exclude all other collaterals and the State succession to the estate of the illegitimate child is his
b. Concur with surviving spouse illegitimate parents. If both parents survive and are
c. Are excluded by legitimate children, illegitimate entitled to succeed, they divide the estate share and
children, legitimate parents and illegitimate parents share alike. Although the law is silent, if the surviving
spouse of the illegitimate child concurs with the
7. Other collaterals illegitimate parents, the surviving spouse shall be
a. Exclude collaterals in remoter degrees and the State entitled to one-half of the estate while the illegitimate
b. Concur with collaterals in the same degree parents get the other half.
c. Are excluded by legitimate children, illegitimate
children, legitimate parents, illegitimate parents, Note: In the ascending line, only the illegitimate parents are
surviving spouse, brothers and sisters, and nephews entitled to inherit from the illegitimate child; the other
and nieces illegitimate descendants are not so entitled.
Q: What is the order of preference between lines in legal 5. Although the law is silent, illegitimate brothers and
or intestate succession? sisters who survive alone shall get the entire
inheritance. The legitimate children of the illegitimate
A: Succession takes place: parents are not entitled to inherit from the illegitimate
First, in the direct descending line; child by virtue of Article 992 of the NCC.
Second, in the direct ascending line;
Finally, in the collateral line. 6. The State. (id., pp. 691-692)
A:
1. The legitimate children and descendants of a person
who is an illegitimate child are preferred over other
intestate heirs, without prejudice to the right of
concurrence of illegitimate children and the surviving
spouse.
Note: When the law speaks of brothers and sisters, nephews and
nieces as legal heirs of an illegitimate child, it refers to illegitimate
brothers and sisters as well as to the children, whether legitimate or
illegitimate, of such brothers and sisters (Manuel v. Ferrer, 247 SCRA
476)
Illegitimate parents alone The whole estate
Illegitimate parents and children of any kind Illegitimate parents = excluded
Children
a. Child alone (legitimate or illegitimate) = whole estate
b. Legitimate and illegitimate children = each illegitimate gets
½ share of one legitimate child
Legitimate brothers and sister alone The whole estate, with a brother/sister of the half-blood
inheriting ½ the share of a brother/sister of the full blood
Legitimate brothers and sisters, nephews and nieces The whole estate, observing the 2:1 proportion of full and half
blood fraternity and the nephews and nieces inheriting by
representation in the proper cases
Nephews and nieces with Uncles and aunts Uncles and Aunts = excluded
Nephews and nieces = whole estate per capita, but observing
the 2:1 proportion for the full and half blood
Illegitimate brothers and sisters alone The whole estate, observing the 2:1 proportion of full and half
blood fraternity
Illegitimate brothers, sisters, nephews and nieces No article governing, but Arts. 1005 and 1008 may be applied
by analogy, hence, they acquire the whole estate
Nephews and nieces alone The whole estate per capita, but observing the 2:1 proportion
for the full and half blood
Other collaterals The whole estate, per capita, the nearer in degree excluding
the more remote
State The whole estate
Q: What is the effect of representation? A: Representation takes place in the direct descending line,
never in the ascending.
A: Whenever there is succession by representation, the
division of the estate shall be made per stirpes, in such Note: The representative himself must be capable of succeeding
manner that the representative or representatives shall not the decedent.
inherit more than what the person they represent would
An illegitimate child can represent his father, provided that the
inherit, if he were living or could inherit (Art. 974).
father was also illegitimate.
Note: Per stirpes means inheritance by group, all those within the
group inheriting in equal shares. Q: Does right of representation apply in the collateral
line?
Q: When does right of representation arise?
A: Right of representation takes place only in favor of
A: Representation may arise either because of: children of brothers or sisters, whether full or half blood
1. predecease and only if they concur with at least one uncle or aunt.
2. incapacity
Note: This rule applies only when the decedent does not have
3. disinheritance
descendants.
(D)†
If the child to be represented is If the child to be represented is
LEGITIMATE – only legitimate children/ ILLEGITIMATE – both legit & illegit
descendants can represent him children/ descendants can represent him
Predeceased D Predeceased D
Since X and Y both predeceased D, only X1 can represent X. X2 cannot by virtue of the iron curtain
rule. Both Y1 and Y2 can represent Y
A:
TESTAMENTARY SUCCESSION INTESTATE SUCCESSION
With respect to LEGITIME in case of predecease, In case of predecease and incapacity
incapacity and disinheritance
1. If the right of representation takes place, 1. If the right of representation takes place,
then the representative succeeds to the then the representative succeeds to the
vacant portion. vacant portion.
2. If representation is not available, then the co- Note: Representation takes place in case of
heirs of the same degree shall succeed to it in predecease and incapacity with respect to
their own right and not by accretion since inheritance conferred by law. Hence, it takes place
in legal or intestate succession.
there is no accretion with respect to the
legitime
2. If representation is not available, then the
vacant portion shall go to the co-heirs in their
3. In default of the above, the vacant portion
own right
shall go to the other secondary and/or other
compulsory heirs
3. In default thereof, then the vacant share shall
Note: Substitution cannot take place with respect to legitime go to the heirs in the next order of intestacy
Note: Representation does not take place in repudiation. In default thereof, it shall go to the heirs in the next
order of intestacy
Note: Substitution cannot take place with respect to legitime
CAPACITY TO SUCCEED BY WILL OR INTESTACY institution to which such priest or minister may
belong;
PERSONS INCAPABLE OF SUCCEEDING
3. A Guardian with respect to testamentary
Q: What does absolute incapacity to succeed mean? dispositions given by a ward in his favor before
the final accounts of the guardianship have been
A: It means the person is incapacitated to succeed in any approved, even if the testator should die after the
form, whether by testate or intestate succession. approval thereof; nevertheless, any provision
made by the ward in favor of the guardian when
Q: Who are absolutely incapacitated to succeed? the latter is his ascendants, descendant, brother,
sister, or spouse, shall be valid;
A:
1. Those not living at the time of death of the testator 4. Any attesting Witness to the execution of a will,
2. Those who cannot be identified. (Art. 845) the spouse, parents, or children, or any one
3. Those who are not permitted by law to inherit. (Art. claiming under such witness, spouse, parents, or
1027) children;
A: GR: In order to judge the capacity of the heir, devisee, or 5. Any Physician, surgeon, nurse, health officer or
legatee, his qualification at the time of the death of the druggist who took care of the testator during his
decedent shall be the criterion. last illness;
XPN: If the institution, devise or legacy should be Note: Number 5 is an absolute disqualification.
conditional (suspensive condition), the capacity is to be
determined not only at the time of the death of the 6. Individuals, associations and corporations not
decedent but also at the time of the fulfillment of the permitted by law to inherit.
condition.
Q: What are the requisites for a priest to be disqualified
Q: What is the governing law in determining the capacity from inheriting?
to succeed of the heir, devisee, legatee?
A:
A: Law of the nation of the decedent 1. The will was made during the last illness of the
testator;
RELATIVE INCAPACITY TO SUCCEED 2. The spiritual ministration must have been extended
during the last illness;
Q: What is relative incapacity to succeed? 3. The will was executed during or after the spiritual
ministration.
A: It means the person is incapacitated to succeed because
of some special relation to the testator Q: Who are covered by this disqualification to inherit?
A: PRG-WPI Q: If the confession was made before the will was made,
1. The Priest who heard the confession of the can the priest inherit upon the death of the sick person, if:
testator during his last illness, or the minister of
the gospel who extended spiritual aid to him 1. The priest is the son of the sick person?
during the same period; 2. The priest was the sick person’s brother?
Q: Will the disqualification still apply if there are other 5. Person convicted of Adultery or concubinage with
witnesses to the will? the spouse of the testator
6. Person who by Fraud, violence, intimidation, or
A: It depends upon compliance with the requisite number undue influence should cause the testator to
of witnesses. If, notwithstanding the disqualified witness, make a will or to change one already made
the number of witnesses is sufficient, the former is not 7. Person who by the same means Prevents another
disqualified. from making a will, or from revoking one already
made, or who supplants, conceals, or alters the
Q: What must be present for the disqualification of latter's will
physician to apply? 8. Person who Falsifies or forges a supposed will of
the decedent. (Art. 1032)
A:
1. The will was made during the last illness Note: Grounds 1, 2, 3, 5 and 6 are the same grounds as in
2. The sick person must have been taken cared of during disinheritance.
his last illness Numbers 6, 7 and 8 cover six (6) acts which relate to wills:
3. Medical attendance was made 1. Causing the testator to make a will
4. The will was executed during or after he was being 2. Causing the testator to change an existing will
taken care of 3. Preventing the decedent from making a will
4. Preventing the testator from revoking his will
Effect of subsequent reconciliation if disinheritance has Q: What is the effect of repudiation if an heir is both a
already been made on any of the grounds which are also testate and legal heir?
causes for unworthiness
The moment the testator uses one of the causes for A: If an heir is both a testate and legal heir, the repudiation
unworthiness as a ground for disinheritance, he thereby of the inheritance as a testate heir, he is understood to
submits it to the rule on disinheritance. (Rabuya, Civil Law have repudiated in both capacities. However, should he
Reviewer, pp. 644-649; 704-708) repudiate as a legal heir, without knowledge of being a
testate heir, he may still accept the inheritance as a testate
ACCEPTANCE AND REPUDIATION OF THE INHERITANCE heir.
Q: What are the three principal characteristics of Q: What is the remedy if the heir repudiates the
acceptance and repudiation? inheritance to the prejudice of his creditors?
A:
1. Confers upon each heir the exclusive ownership of
property adjudicated.
2. After the partition, the co-heirs shall be reciprocally
bound to warrant the title to (warranty against
eviction) and the quality of (warranty against hidden
defects) each property adjudicated.
3. The obligation of warranty shall cease in the following
cases:
a. When the testator himself has made the partition
unless his intention was otherwise, but the
legitime shall always remain unimpaired.
b. When it has been expressly stipulated in the
agreement of partition, unless there has been bad
faith.
c. When the eviction was due to a cause subsequent
to the partition, or has been caused by the fault
of the distributee of the property.
Q: What does mean? A: No. Lyons himself manifested his desire not to be part of
the development project. Thus, no partnership was formed.
A: Under the Code of Commerce, cuentas en participacion The mortgage of the land was immaterial to the existence
means a sort of an accidental partnership constituted in of the partnership. It is clear that Henry, in buying the San
such a manner that its existence was only known to those Juan Estate, was not acting for any partnership composed
who had an interest in the same, there being no mutual of himself and Lyons, and the law cannot be distorted into a
agreement between the partners, and without a corporate proposition which would make Lyons a participant in this
name indicating to the public in some way that there were deal contrary to his express determination. (Lyons v.
other people besides the one who ostensibly managed and Rosenstock, G.R. No. 35469, Mar. 17, 1932)
conducted the business, governed under article 239 of the
Code of Commerce (Bourns v. Carman, G.R. No. L-2880, Q: Catalino and Ceferino acquired a joint tenancy over a
Dec. 4, 1906). parcel of land under a verbal contract of partnership. It
was stipulated that each of the said purchasers should pay
Q: What are the typical incidents of partnership? one-half of the price and that an equal division should be
made between them of the land thus purchased. Despite
A: Catalino’s demand for an equal division between them,
1. The partners share in profits and losses. (Arts. Ceferino refused to do so and even profited from the
1767,1797-98) fruits of the land. Are they partners or co-owners?
2. They have equal rights in the management and
conduct of the partnership business. (Art. 1803) A: They are co-owners because it does not appear that they
3. Every partner is an agent of the partnership, and entered into any contract of partnership but only for the
entitled to bind the other partners by his acts, for the sole purpose of acquiring jointly or by mutual agreement of
purpose of its business. (Art. 1818). He may also be the land under the condition that they would pay ½ of the
liable for the entire partnership obligations. price of the land and that it be divided equally between
4. All partners are personally liable for the debts of the them. (Gallemit v. Tabiliran, G.R. No. 5837, Sept. 15, 1911)
partnership with their separate property (Arts. 1816,
1822-24) except limited partners are not bound
beyond the amount of their investment (Art 1843).
5. A fiduciary relation exists between the partners. (Art.
1807)
6. On dissolution, the partnership is not terminated, but
continues until the winding up of partnership is
completed. (Art 1828)
A:
1. Unemancipated minors;
2. Insane or demented persons;
3. Deaf-mutes who do not know how to write;
4. Persons who are suffering from civil interdiction;
and
5. Incompetents who are under guardianship
A:
PARTNERSHIP CO-OWNERSHIP COPORATION
Creation
Created by contract or by mere
Created by law Created by law
agreement of the parties
Juridical Personality
Has juridical personality separate Has juridical personality separate
and distinct from that of each None and distinct from that of each
partner corporators
Purpose
Common enjoyment of a thing or Depends in Articles of
Realization of profits
right Incorporation (AOI)
Duration/ Term of Existence
10 years maximum (May be 50 years maximum, extendible for
No limitation extended by new agreement, Art. not more than 50 years in any one
494, Civil Code) instance
Number of incorporators
Minimum of 2 persons Minimum of 2 persons Minimum of 5 persons
Commencement of Juridical Personality
From the moment of execution of From the date of issuance of the
None
the contract of partnership certificate of incorporation
Disposal/ Transferability of Interest
Partner may not dispose of his Stockholder has a right to transfer
individual interest unless agreed Co-owner may freely do so shares without prior consent of
upon by all partners other stockholders
rd
Power to Act with 3 Persons
In absence of stipulation to
contrary, a partner may bind Co-owner cannot represent the Management is vested with the
partnership – each partner is co-ownership BOD
agent of partnership
Effect of Death
Death of a partner results in Death of co-owner does not Death of stockholder does not
dissolution of partnership necessarily dissolve co-ownership dissolve the corporation
Dissolution
May be dissolved at any time by
May be dissolved anytime by the Can only be dissolved with the
the will of any or all of the
will of any or all of the co-owners consent of the State
partners
amount became due but Isabelo defaulted payment. Is Q: What are the rules regarding distribution of profits and
Mariano entitled to file a case for the recovery of the losses?
unrealized profit of the partnership?
A:
A: No. The essence of a partnership is to share in the profits 1. Distribution of profits
and losses, thus, Mariano should shoulder the losses with a. The partners share in the profits according to
Isabelo (Moran Jr., v. CA, G.R. No. L-59956, Oct. 31, 1984). their agreement
b. In the absence of such:
Q: Is it necessary for the parties to agree upon a system of i. Capitalist partner – in proportion to his
sharing losses? contribution
ii. Industrial partner – what is just and equitable
A: No, for the obligation is implied in the partnership under the circumstances
relation. If only the share of each partner in the profits has 2. Distribution of losses
been agreed upon, the share of each in the losses shall be a. The partners share in the losses
in the same proportion. according to their agreement
b. In the absence of such, according to
Note: The definition of partnership under Article 1767 refers to their agreement as to profits but the industrial
“profits” only and is silent as to “losses.” The reason is that the
partner shall not be liable for losses.
object of partnership is primarily the sharing of profits, while the
distribution of losses is but a “consequence of the same.” Be that
c. In the absence of profit agreement, in
as it may, the right to share in the profits carries with it the duty to proportion to his capital contribution, but the
contribute to the losses, of any. purely industrial partner shall not be liable for the
losses.
Q: To form a lending business, it was verbally agreed that
Noynoy would act as financier while Cory and Kris would Q: What is the rule regarding a stipulation which excludes
take charge of solicitation of members and collection of a partner in the sharing of profits and losses?
loan payments. They agreed that Noynoy would receive
70% of the profits while Cory and Kris would earn 15% A: GR: Stipulation is void but the partnership subsists
each. The parties executed the 'Articles of Agreement'
which formalized their earlier verbal agreement. Later, XPN: Industrial partner is not liable for losses [Art.
Noynoy filed a complaint against Cory and Kris for 1797(2)]. However, he is not exempted from liability
misappropriation of funds allegedly in their capacities as insofar as third persons are concerned.
Noynoy’s employees. In their answer, Cory and Kris
asserted that they were partners and not mere employees Note: If the industrial partner has contributed capital other
of Noynoy. What kind of relationship existed between the than his services, he shall also receive a share in the profits in
proportion to his capital.
parties?
A: A partnership was formed among the parties. The RULES TO DETERMINE EXISTENCE
"Articles of Agreement" stipulated that the signatories shall
Q: What are the rules to determine the existence of
share the profits of the business in a 70-15-15 manner, with
partnership?
Noynoy getting the lion's share. This stipulation clearly
proved the establishment of a partnership. (Santos v.
A:
Spouses Reyes, G.R. No.135813, Oct. 25, 2001)
1. Except as provided by Art. 1825 (partnership by
Q: Jose conveyed his lots in favor of his four sons in order estoppel), persons who are not partners as to each
for them to build their residences. His sons sold the lots other are not partners as to third persons;
since they found the lots impractical for residential 2. Co-ownership or co-possession does not of itself
purposes because of high costs of construction. They establish a partnership, whether such co-owners or co-
derived profits from the sale and paid income tax. The possessors do or do not share any profits made by the
sons were required to pay corporate income tax and use of the property;
income tax deficiency, on the theory that they formed an 3. The sharing of gross returns does not of itself establish
unregistered partnership or joint venture taxable as a a partnership, whether or not the persons sharing
corporation. Did the siblings form a partnership? them have a joint or common right or interest in any
property from which the returns are derived;
A: No. The original purpose was to divide the lots for 4. The receipt by a person of a share of the profits of a
residential purposes. If later, they found out that it is not business is prima facie evidence that he is a partner in
feasible to build their residences on the lots, they can the business, but no such inference shall be drawn if
dissolve the co-ownership by reselling said lots. The division such profits were received in payment:
on the profit was merely incidental to the dissolution of the a. As a debt by installments or otherwise;
co-ownership which was in the nature of things a b. As wages of an employee or rent to a landlord;
temporary state (Obillos, Jr. v. CIR, G.R. No. L-68118, Oct. c. As an annuity to a widow or representative of a
29, 1985) deceased partner;
Note: However, when a partnership is shown to exist, the XPN: If property or real rights have been contributed
presumption is that it continues in the absence of evidence to the to the partnership:
contrary, and the burden of proof is on the person asserting its 1. Personal property
termination (De Leon, Comments and Cases on Partnership,
a. Less than P3,000 – may be oral
Agency, and Trust, 2010 ed., p. 43)
b. P 3,000 or more – must be:
i. in a public instrument; and
Q: Can a person who alleges the existence of partnership
ii. registered with SEC (Art. 1772)
prove it by evidence of an agreement wherein the parties
call themselves partners?
Note: Even if the partnership is not
registered with SEC, the partnership is still
A: No, since use of the term “partner” in popular sense, or valid and possesses a distinct personality
as a matter of business convenience, will not necessarily (Paras, Civil Code of the Philippines
import an intention that a legal partnership should result. Annotated, Volume 5, p. 412, 1969 6th ed)
But while the use of “partnership” or “partners” in an
alleged oral agreement claimed to have constituted 2. Real property or real rights – must be:
partnership is not conclusive that partnership did not exist, a. in a public instrument (Art. 1771)
non-use of such terms is entitled to weight (De Leon, b. with an inventory of said property
Comments and Cases on Partnership, Agency, and Trust, i. signed by the parties
2010 ed., p. 43). ii. attached to the public instrument (Art.
1773)
EFFECTS OF AN UNLAWFUL PARTNERSHIP iii. registered in the Registry of Property of the province,
where the real property is found to bind third
Q: What are the consequences of a partnership formed for persons (Paras, p. 412)
an unlawful purpose?
3. Limited partnership – must be registered as such
A: with SEC, otherwise, it is not valid as a limited
1. The contract is void ab initio and the partnership partnership but may still be considered a general
never existed in the eyes of the law partnership with juridical personality (Paras, Civil
2. The profits shall be confiscated in favor of the Code of the Philippines Annotated, Volume 5, p.
th
government 412, 1969 6 ed)
3. The instruments or tools and proceeds of the
crime shall also be forfeited in favor of the Note: An agreement to enter in a partnership at a
government future time, which “by its terms is not performed within
4. The contributions of the partners shall not be a year from the making thereof” is covered by the
Statute of Frauds. [Art. 1403(2)] Such agreement is
confiscated unless they fall under No.3 (De Leon,
unenforceable unless the same be in writing or at least
Comments and Cases on Partnership, Agency, and evidenced by some note or memorandum therof
Trust, 2010 ed., p. 57). subscribed by the parties. (De Leon, Comments and
Cases on Partnership, Agency and Trusts, 2010 ed., p.
Q: Is judicial decree necessary to dissolve an unlawful 63)
partnership?
Q: If the requirements under Art. 1773, as regards
A: No, however, it may sometimes be advisable that a contribution of real property to a partnership, has not
judicial decree of dissolution be secured for the been complied with, what is the status of the partnership?
convenience and peace of mind of the parties (De Leon,
Comments and Cases on Partnership, Agency, and Trust, A: The contract of partnership is void. Nonetheless, a void
2010 ed., p. 57-58). partnership under Art. 1773, in relation to Art. 1771, may
still be considered by the courts as an ordinary contract as derived therefrom as a common fund with the intention
regards the parties thereto from which rights and to produce profits for them in proportion to their
obligations to each other may be inferred and enforced respective shares in the inheritance as determined in a
(Torres v. CA, G.R. No. 134559, Dec. 9 1999) project of partition. What is the effect of such agreement
on the existing co-ownership?
Note: Torres v. CA does not involve third persons.
A: The co-ownership is automatically converted into a
Q: What must be done in order that the partnership may partnership. From the moment of partition, A and B, as
be effective as against third persons whenever immovable heirs, are entitled already to their respective definite shares
property is contributed? of the estate and the income thereof, for each of them to
manage and dispose of as exclusively his own without the
A: To be effective against third persons, the transfer of real intervention of the other heirs, and, accordingly, he
property to the partnership must be duly registered in the becomes liable individually for all the taxes in connection
Registry of Property of the province or city where the therewith.
property contributed is located. (Art. 1771)
If, after such partition, an heir allows his shares to be held
Q: Can there be a partnership based on a verbal
in common with his co-heirs under a single management to
agreement, and without such agreement being registered
be used with the intent of making profit thereby in
with SEC?
proportion to his share, there can be no doubt that, even if
no document or instrument were executed for the purpose,
A: Yes. Article 1772 requires that partnerships with a capital
for tax purposes, at least, an unregistered partnership is
of P3,000 or more must register with SEC. However, this
formed (Ona v. Commissioner of Internal revenue, 45 SCRA
registration requirement is not mandatory. Article 1768
74 [1972]).
explicitly provides that the partnership retains its juridical
personality even if it fails to register. The failure to register
Q: What is the limitation on the parties’ freedom to
the contract of partnership does not invalidate the same as
choose the transaction or transactions they will engage
among the partners, so long as the contract has the
in?
essential requisites, because the main purpose of
registration is to give notice to third parties, and it can be
A: The only limitation is that the object must be lawful and
assumed that the members themselves knew of the
for the common benefit of the members. The limitation
contents of their contract. Non-compliance with this
arises not only from the express provisions of the law, but
directory provision of the law will not invalidate the
from the general principles of morality and justice (De Leon,
partnership.
Comments and Cases on Partnership, Agency, and Trust,
A partnership may be constituted in any form, except 2010 ed., p. 56).
where immovable property of real rights are contributed
thereto, in which case a public instrument shall be PARTNERSHIP TERM
necessary. Hence, based on the intention of the parties, a
Q: When does a partnership commence to exist?
verbal contract of partnership may arise. (Sunga-Chan v.
Chua, G.R. No. 143340, Aug. 15, 2001)
A: A partnership begins from the moment of the execution
Note: Registration is merely for administration and licensing of the contract, unless it is otherwise stipulated (Art 1784).
purposes; hence, it shall not affect the liability of the partnership
and the members thereof to third persons. [Art. 1772, (2)] Note: Since under Artilce 1784, a partnership commences from the
time of execution of the contract if there is no contrary stipulation
as to the date of effectivity of the same, its registration in the
Q: A partnership was entered into between Mauricio and
Securities and Exchange Commission is not essential to give it
Severino to operate a fishpond. Neither partner juridical personality (De Leon, Comments and Cases on Partnership,
contributed a fishpond or a real right over any fish pond. Agency, and Trust, 2010 ed., p. 86)
Their capital contributions were in cash in the amount of
P1,000 each. While the partnership contract was done in a Q: What is a “future partnership”?
public instrument, no inventory of the fishpond to be
operated was attached in the said instrument. Is there a A: It is a kind of partnership where the partners may
valid contract of partnership? stipulate some other date for the commencement of the
partnership. Persons who enter into a future partnership do
A: Yes. There is a valid contract of partnership despite the not become partners until or unless the agreed time has
lack of inventory. The purpose of the partnership was not arrived or the contingency has happened (De Leon,
to engage in the fishpond business but to operate a Comments and Cases on Partnership, Agency and Trusts,
fishpond. Neither said fishpond nor a real right to any fish 2010 ed. p.87).
pond was contributed to the partnership (Agad v. Mabato,
G.R. No. L-24193, June 28, 1968). Note: As long as the agreement for a partnership remains inchoate
or unperformed, the partnership is not consummated (De Leon,
Q: A and B are co-owners of an inherited property. They Comments and Cases on Partnership, Agency, and Trust, 2010 ed.,
agreed to use the said common properties and the income p. 87).
b. Notorious or open partnership – It is known line with the business authorized by its charter (Tuason v.
not only to the partners, but to the public as Bolaños, G.R. No. L-4935, May 28, 1954).
well.
Q: What are the different kinds of partners?
7. Purpose
a. Commercial or trading – One formed for the A:
transaction of business. A. Under the Civil Code
b. Professional or non-trading – One formed for
the exercise of a profession 1. Capitalist – Contributes money or property to the
common fund
Q: What are the different kinds of partnership under the 2. Industrial – Contributes only his industry or personal
Spanish Civil Code? service
rd
3. General – One whose liability to 3 persons extends to
A: his separate or personal property
rd
1. Sociedad Anonima – similar to anonymous partnership 4. Limited – One whose liability to 3 persons is limited
2. Sociedad Colectiva – general or collective partnership to his capital contribution
3. Sociedad de Cuentas en Participacion – joint account 5. Managing – Manages the affairs or business of the
partnership partnership; he may be appointed either in the articles
4. Sociedad Mercantile Regular Colectiva – mercantile of partnership or after the constitution of the
partnership company partnership. He is also known as general or real
5. Sociedad Leonila – partnership by which the entire partner.
profits should belong to some of the partners in 6. Liquidating – Takes charge of the winding up of
exclusion of the rest partnership affairs upon dissolution
7. Partner by estoppel – Is not really a partner but is
rd
Q: Who may be partners? liable as a partner for the protection of innocent 3
persons; he is also known as the partner by implication
A: GR: Any person capacitated to contract may enter into a or nominal partner or a quasi-partner
contract of partnership. 8. Continuing partner – Continues the business of a
partnership after it has been dissolved by reason of
XPNs: the admission of a new partner, retirement, death or
1. Persons who are prohibited from giving each expulsion of one of the partners
other any donation or advantage cannot enter 9. Surviving partner – Remains after a partnership has
into a universal partnership. (Art. 1782) been dissolved by death of any partner
10. Sub-partner – Is not a member of the partnership;
Note: A husband and wife, however, may enter into a contracts with a partner with reference to the latter's
particular partnership or be members thereof. (De Leon, share in the partnership
Comments and Cases on Partnership, Agency and Trusts,
2010 ed., p. 78)
B. Other Classifications
2. Persons suffering from civil interdiction
11. Ostensible – Takes active part and known to the
3. Persons who cannot give consent to a contract:
public as partner in the business, whether or not he
a. Minors
has an actual interest in the firm. Thus, he may be an
b. Insane persons
actual or a nominal partner.
c. Deaf-mutes who do not know how to write
12. Secret – Takes active part in the business but is
not known to be a partner by outside parties
Q: What is the principle of delectus personae?
13. Silent – Does not take any active part in the
business although he may be known to be a partner. If
A: This refers to the rule that is inherent in every
he withdraws from the partnership, he must give
partnership, that no one can become a member of the
notice to those persons who do business with the firm
partnership association without the consent of all the
to escape liability in the future
partners.
14. Dormant – Does not take active part in the
business and is not known or held out as a partner; the
Note: Even if a partner will associate another person in his share in
the partnership, the associate shall not be admitted into the term is also synonymous with a “sleeping partner”
partnership without the consent of all the partners, even if the 15. Original partner-one who is a member of the
partner having an associate should be a manager (Art. 1804). partnership from the time of its organization
16. Incoming patner- a person lately, or about to be,
Q: May a corporation enter into a partnership with taken into an existing partnership as a member
another corporation? 17. Retiring partner- one withdrawn from the
partnershop; a withdrawing partner
A: As a rule, it is illegal for two corporations to enter into a
partnership. Nevertheless, a corporation may enter into a
joint venture with another if the nature of the venture is in
GENERAL LIMITED
Extent of Liability
Personally liable for partnership obligations Liability extends only to his capital contributions
Right in Management
When manner of management has not agreed upon,
all general partners have an equal right in the No participation in management
management of the business
Contribution
Contribute money, property or industry Contribute cash or property only, not services
If Proper Party to Proceedings By or Against Partnership
Not proper party to proceedings by/against
partnership, unless:
1. He is also a general partner; or
Proper party to proceedings by/against partnership
2. Where the object of the proceeding is to
enforce a limited partner’s right or liability to
the partnership
Assignment of Interest
Interest is not assignable without consent of other
Interest is freely assignable
partners
Firm Name
It must also operate under a firm name, followed by
the word “Limited.”
Q: What is the rule in case where unanimity of action is 3. One partner may employ his co-partner to do work for
stipulated? him outside of and independent of the co-partnership, and
become personally liable therefor
A: The partners may stipulate that none of the managing
partners shall act without the consent of the others. 4. Where the services rendered are extra-ordinary
GR: In such a case, the unanimous consent of all the 5. Where one partner is entrusted with the management of
managing partners shall be necessary for the validity of the partnership business and devotes his whole time and
their acts. attention thereto, at the instance of the other partners who
are attending to their individual business and giving no time
XPN: Imminent danger of grave or irreparable injury for the or attention to the business of the firm (De Leon, Comments
partnership, in which case, a partner may act alone without and Cases on Partnership, Agency, and Trust, 2010 ed., p.
the consent of the partner who is absent or under 121).
disability, without prejudice to his liability for damages.
RIGHTS AND OBLIGATIONS OF PARTNERSHIP
Q: Azucena and Pedro acquired a parcel of land and a
building. Azucena obtained a loan from Tai Tong Co., Q: What are the relations created by a contract of
secured by a mortgage which was executed over the land partnership?
and building. Arsenio, representative of Tai Tong, insured
it with Travellers Multi Indemnity Corporation. The A: A contract of partnership gives rise to at least four
building and the contents thereof were razed by fire. distinct juridical relations, namely:
Travellers failed to pay the insurance. Hence, Azucena and
Pedro filed a case against Travellers wherein Tai Tong 1. Relations among the partners themselves
Q: What is the effect if a partner fails to contribute the Q: What are the requisites before capitalist partners are
property which he promised to deliver to the partnership? compelled to contribute additional capital?
A: A:
1. Partner become ipso jure a debtor of the partnership 1. Imminent loss of the business of the partnership;
even in the absence of any demand (Art. 1786) 2. Majority of the capitalist partners are of the opinion
2. Remedy of the other partner is not rescission but that an additional contribution to the common fund
specific performance with damages and interest from would save the business;
defaulting partner from the time he should have 3. Capitalist partner refuses deliberately to contribute
complied with his obligation. (not due to financial inability);
4. There is no agreement to the contrary.
Note: When the capital or a part hereof which a partner is bound
to contribute consists of goods, their appraisal must be made in Note: The refusal of the partner to contribute his additional share
the manner prescribed in the contract of partnership, and in the reflects his lack of interest in the continuance of the partnership.
absence of stipulation, it shall be made by experts chosen by the (De Leon, Comments and Cases on Partnership, Agency and Trusts,
partners, and according to current prices, the subsequent changes 2010 ed. p. 101)
therof being for the account of the partnership. (Art. 1787)
It is to be noted that the industrial partner is exempted from the
Q: What are the rules regarding contribution of money to requirement to contribute an additional share. Having contributed
the partnership? his entire industry, he can do nothing further (De Leon, Comments
and Cases on Partnership, Agency, and Trust, 2010 ed., p. 101).
A: To CRIP
1. Contribute on the date fixed the amount the Q: What are the obligations of managing partners who
partner has undertaken to contribute to the collect his personal receivable from a person who also
partnership; owes the partnership?
2. Reimburse any amount the partner may have
taken from the partnership coffers and converted A:
to his own use; 1. Apply sum collected to 2 credits in proportion to their
3. Indemnify the partnership for the damages amounts
caused to it by delay in the contribution or 2. If he received it for the account of partnership, the
conversion of any sum for the partner’s personal whole sum shall be applied to partnership credit
benefit;
4. Pay the agreed or legal interest, if the partner Requisites:
fails to pay his contribution on time or in case he 1. At least 2 debts, one where the collecting partner
takes any amount from the common fund and is creditor and the other, where the partnership is
converts it to his own use. the creditor
2. Both debts are demandable
Q: What is the rule regarding obligation to contribute to 3. Partner who collects is authorized to manage and
partnership capital? actually manages the partnership
Note: The debtor is given the right to prefer payment of the credit
A: Unless there is a stipulation to the contrary, the partners
of the partner if it should be more onerous to him in accordance
shall contribute equal shares to the capital of the with his right to application of payment (Art. 1252; De Leon,
partnership (Art 1790). It is not applicable to an industrial Comments and Cases on Partnership, Agency and Trusts, 2010 ed.
partner unless, besides his services, he has contributed p. 103)
capital pursuant to an agreement.
Q: What is the reason for applying payment to partnership
Q: Is the capitalist partner required to contribute credit?
additional capital?
A: The law safeguards the interests of the partnership by
A: GR: A capitalist partner is not bound to contribute to the preventing the possibility of their being subordinated by
partnership more than what he agreed to contribute. the managing partner to his own interest to the prejudice
of the other partners (De Leon, Comments and Cases on
XPN: Partnership, Agency and Trusts, 2010 ed. p. 102)
1. in case of imminent loss of the business
2. there is no agreement to the contrary. Q: What is the obligation of a partner who receives share
of partnership credit?
He is under obligation to contribute an additional share
to save the venture. If he refuses to contribute, he shall A: To bring to the partnership capital what he has received
be obliged to sell his interest to the other partners. even though he may have given receipt for his share only.
Q: May a person who has not directly transacted in behalf XPN: The courts may equitably lessen this
of an unincorporated association be held liable for a responsibility if through the partner’s extraordinary
contract entered into by such association? efforts in other activities of the partnership, unusual
profit has been realized. (Art. 1794)
A: Yes. The liability for a contract entered into on behalf of
an unincorporated association or ostensible corporation Q: Can damages be subject to set-off?
may lie in a person who may not have directly transacted
on its behalf, but reaped benefits from that contract (Lim A: GR: The damages caused by a partner to the partnership
Tong Lim v. Philippine Fishing Gear Industries Inc., G.R. No. cannot be offset by the profits of benefits which he may
136448, Nov. 3, 1999) have earned for the partnership by his industry.
Q: What are the rules regarding the prohibition to engage Ratio: The partner has the obligation to secure benefits for
in another business? the partnership. Hence, the profits which he may have
earned pertain as a matter of law or right, to the
A: partnership
INDUSTRIAL PARTNER CAPITALIST PARTNER
Prohibition XPN: If unusual profits are realized through the
Relative: Cannot extraordinary efforts of the partner at fault, the courts may
Absolute: Cannot engage in business equitably mitigate or lessen his liability for damages. This
engage in business for (with same kind of rule rests on equity.
himself unless the business with the
partnership expressly partnership) for his Note that even in this case, the partner at fault is not
permits him to do so own account, unless allowed to compensate such damages with the profi ts
there is a stipulation to earned. The law does not specify as to when profi ts may be
the contrary considered “unusual.” The question depends upon the
Remedy circumstances of the particular case.
Capitalist partner, who
Capitalist partners may: Q: What is the duty of the partners with respect to
violated shall:
1. Exclude him from keeping the partnership books?
1. Bring to the
the firm
common fund any
2. Avail themselves of A: The partnership books shall be kept, subject to any
profits accruing to
the benefits which agreement between partners, at the principal place of
him from said
he may have business of the partnership. (Art. 1805)
transaction; and
obtained
2. Personally bears
3. Damages, in either Q: To whom does the duty to keep partnership belong?
all losses (Art.
case (Art. 1789)
1808)
A: The duty to keep true and correct books showing the
Q: Joe and Rudy formed a partnership to operate a car firm’s accounts, such books being at all times open to
repair shop in Quezon City. Joe provided the capital while inspection of all members of the firm, primarily rests on the
Rudy contributed his labor and industry. On one side of managing or active partner (De Leon, Comments and Cases
their shop, Joe opened and operated a coffee shop, while on Partnership, Agency, and Trust, 2010 ed., p. 131).
on the other side, Rudy put up a car accessories store.
May they engage in such separate businesses? Why? Q: What is the duty of the partners with respect to
(2001 Bar Question) information affecting the partnership?
A: Joe, the capitalist partner, may engage in the restaurant A: Partners shall render on demand true and full
business because it is not the same kind of business the information of all things affecting the partnership to:
partnership is engaged in. On the other hand, Rudy may not 1. any partner; or
engage in any other business unless their partnership 2. legal representative of any deceased or any
expressly permits him to do so because as an industrial partner under legal disability. (Art. 1806)
partner he has to devote his full time to the business of the
partnership (Art. 1789). Note: Under the same principle of mutual trust and confidence
among partners, there must be no concealment between them in
all matters affecting the partnership. The information, to be sure,
Q: What is the rule with regard to the obligation of a must be used only for a partnership purpose (De Leon, Comments
partner as to damages suffered by the partnership and Cases on Partnership, Agency, and Trust, 2010 ed., p. 134).
through his fault?
Q: How are partners accountable to each other as formal accounting even before dissolution of the
fiduciary? partnership cannot be doubted. An example under No. (4)
of Article 1809 is where a partner has been assigned abroad
A: Every partner must account to the partnership for any for a long period of time in connection with the partnership
benefit, and hold as trustee for it any profits derived by him business and the partnership books during such period
without the consent of the other partners from any being in the possession of the other partners.
transaction connected with the formation, conduct, or
liquidation of the partnership or from any use by him of its Q: Describe the partners’ inspection rights.
property. (Art. 1807)
A: The partners’ inspection rights are not absolute. He can
Q: Does this duty terminate upon the dissolution of the be restrained from using the information gathered for
partnership? other than partnership purpose.
A: The duty of a partner to act with utmost good faith Q: What does the phrase “any reasonable hour” mean?
towards his copartners continues throughout the entire life
of the partnership even after dissolution for whatever A: Article 1805 declares that the rights of the partners with
reason or whatever means, until the relationship is respect to partnership books can be exercised at “any
terminated, i.e., the winding up of partnership affairs is reasonable hour.” This phrase has been interpreted to
completed (De Leon, Comments and Cases on Partnership, mean reasonable hours on business days throughout the
Agency, and Trust, 2010 ed., p. 134). year and not merely during some arbitrary period of a few
days chosen by the managing partners (De Leon, Comments
RIGHTS OF PARTNERS and Cases on Partnership, Agency, and Trust, 2010 ed., p.
132).
Q: What are the rights of partners among themselves?
Q: Describe the nature of action for accounting
A:
1. Right to reimbursement for amounts advanced to the A: An action for accounting, asking that the assets of the
partnership and to indemnification for risks in partnership be accounted for, sold and distributed
consequence of management (Art. 1796); according to the agreement of the partners is a personal
2. Right on the distribution of profits and losses (Art. action which under the Rules of Court, may be commenced
1797) and tried where the defendent resides or may be found or
3. Right to associate another person with him in his share where the plaintiffs reside, at the election of the latter.
without the consent of the other partners. (Art. 1804)
Note: The fact that the some of the assets of the partnership are
Note: Such partnership formed between a member of a real property does not materially change the nature of the action.
partnership and a third person for a division of the profits It is an action in personam because it is an action against a person
coming to him from the partnership enterprise is termed for the performance of a personal duty on his part, and not an
subpartnership. (De Leon, Comments and Cases on action in rem where the action is against the thing itself. It is only
Partnership, Agency and Trusts, 2010 ed. p. 129-130) incidental that part of the assets of the partnership subject to
accounting or under liquidation happen to be real property (De
4. Right to free access and to inspect and copy at any Leon, Comments and Cases on Partnership, Agency, and Trust, 2010
ed., p. 143).
reasonable hour the partnership books. (Art. 1805)
5. Right to formal account as to partnership affairs:
Q: What are the rules regarding distribution of profits and
a. If he is wrongfully excluded from the partnership
losses?
business or possession of its property by his co-
partners;
A:
b. If the right exist under the terms of any
1. Distribution of profits
agreement;
a. The partners share in the profits according to
c. As provided by Art. 1807;
their agreement
d. Whenever there are circumstances render it just
b. In the absence of such:
and reasonable.
i. Capitalist partner – in proportion to his
5. Right to have the partnership dissolved.
contribution
6. Property rights of a partner (Art. 1810)
ii. Industrial partner – what is just and equitable
under the circumstances
Q: Is a partner entitled to formal account during the
existence of the partnership?
Note: If the industrial partner has contributed capital
other than his services, he shall also receive a share
A: GR: During the existence of the partnership, a partner is in the profits in proportion to his capital.
not entitled to a formal account of partnership affairs.
2. Distribution of losses
XPNs: However, in the special and unusual situations a. The partners share in the losses according to
enumerated under Article 1809, the justifi cation for a their agreement
6. Notice to partner of any matter relating to partnership Q: What are the remedies available to the creditors of a
affairs operates as notice to partnership except in case partner?
of fraud:
a. Knowledge of partner acting in the particular A:
matter acquired while a partner 1. Separate or individual creditors should first secure a
b. Knowledge of the partner acting in the particular judgment on their credit; and
matter then present to his mind 2. Apply to the proper court for a charging order
c. Knowledge of any other partner who reasonably subjecting the interest of the debtor-partner in the
could and should have communicated it to the partnership for the payment of the unsatisfied amount
acting partner (Art. 1821) of the judgment debt with interest thereon.
rd
7. Partners and the partnership are solidarily liable to 3
persons for the partner's tort or breach of trust (Art.
1822-24)
8. Liability of incoming partner is limited to:
a. His share in the partnership property for
existing obligations
b. His separate property for subsequent
obligations (Art. 1826)
9. Creditors of partnership are preferred in partnership
property & may attach partner's share in partnership
assets (Art. 1827)
A:
ACTS OF A PARTNER EFFECT
With binding effect except:
1. When the partner so acting has in fact no
authority to act for the partnership in the
particular matter, and
Acts for apparently carrying on in the usual way 2. The person with whom he is dealing has
the business of the partnership knowledge of the fact that he has no such
authority.
(par.1, Art. 1818)
Do not bind partnership unless authorized by
Acts not in the ordinary course of business
other partners (par. 2, Art. 1818)
Acts of strict dominion or ownership:
1. Assigning partnership property in trust for
creditors ;
GR: One or more but less than all the partners
2. Disposing of goodwill of business;
have no authority
3. Doing an act which would make it impossible
to carry on the ordinary business of
XPNs:
partnership;
1. authorized by the other partners; or
4. Confessing a judgment;
5. Entering into a compromise concerning a
2. partners have abandoned the business
partnership claim or liability;
(par. 3, Art. 1818)
6. Submitting partnership claim or liability to
arbitration;
7. Renouncing claim of partnership
Partnership is not liable to 3rd persons having
Acts in contravention of a restriction on authority actual or presumptive knowledge of the
restriction (par. 4, Art. 1818)
A:
TYPE OF CONVEYANCE EFFECT
Conveyance passes title but partnership can recover unless:
1.
a. Conveyance was done in the usual way of business, and
Title in the partnership’s name; b. The partner so acting has the authority to act for the
Conveyance in partnership name partnership; or
2. The property which has been conveyed by the grantee or a person
claiming through such grantee to a holder for value without
knowledge that the partner, in making the conveyance, has exceeded
his authority
Conveyance does not pass title but only equitable interest, provided:
Title in the partnership’s name;
1. Conveyance was done in the usual way of business, or
Conveyance in partner's name
2. The partner so acting has the authority to act for the partnership
Conveyance passes title but the partnership may recover such property if
the partners’ act does not bind the partnership:
Title in the name of 1 or more partners, and the
1. The partner so acting has no authority to act for the partnership,
record does not disclose the right of the
and
partnership; Conveyance in name of partner/s in
2. The person with whom he is dealing has knowledge of the fact
whose name title stands
unless the purchaser of his assignee, is a holder for value, without
knowledge
rd
Title in name of 1 or more or all partners or 3
Conveyance will only pass equitable interest, provided:
person in trust for partnership; Conveyance
1. The act is one within the authority of the partner, and
executed in partnership name or in name of
2. Conveyance was done in the usual way of the business
partners
Title in the names of all the partners;
Conveyance will pass all the rights in such property
Conveyance executed by all the partners
Q: Can a partner be expelled from the partnership? XPNs: Partners shall not be liable when:
1. the dissolution, being by act of any partner, the
A: In the absence of an express agreement to that effect, partner acting for the partnership had knowledge
there exists no right or power of any member, or even a of the dissolution; or
majority of the members, to expel all other members of the 2. the dissolution, being by the death or insolvency
firm at will. Nor can they at will forfeit the share or interest of a partner, the partner acting for the
of a member or members and compel him or them to quit partnership had knowledge or notice of the death
the fi rm, even paying what is due him (De Leon, Comments or insolvency (Art. 1833)
and Cases on Partnership, Agency, and Trust, 2010 ed., p.
227). Q: After the dissolution of a partnership, can a partner still
bind the partnership?
Q: What is the effect of dissolution on the authority of a
partner? A: GR: Yes. A partner continues to bind partnership even
after dissolution in the following cases:
A: GR: The partnership ceases to be a going concern 1. Transactions to wind up partnership affairs or to
complete transactions unfinished at dissolution;
XPN: The partner’s power of representation is 2. Transactions which would bind partnership if
confined only to acts incident to winding up or dissolution had not taken place, provided the
other party/obligee:
a. Had extended credit to partnership prior to 1. Those to creditors, in the order of priority as
dissolution; AND Had no knowledge/notice provided by law, except those to limited partners
of dissolution; or on account of their contributions, and to general
b. Did not extend credit to partnership; Had partners
known partnership prior to dissolution; AND 2. Those to limited partners in respect to their share
Had no knowledge/notice of dissolution/fact of the profits and other compensation by way of
of dissolution not advertised in a newspaper income on their contributions
of general circulation in the place where 3. Those to limited partners in respect to the capital
partnership is regularly carried on. of their contributions
4. Those to general partners other than for capital
XPNs: Partner cannot bind the partnership anymore and profits
after dissolution where dissolution is due to 5. Those to general partners in respect to profits
unlawfulness to carry on business. 6. Those to general partners in respect to capital
(Art. 1863)
XPN to XPN: Winding up of partnership affairs
1. Partner has become insolvent Note: Subject to any statement in the certificate or to subsequent
2. Act is not appropriate for winding up or for agreement, limited partners share in the partnership assets in
completing unfinished transactions respect to their claims for capital, and in respect to their claims for
profits or for compensation by way of income on their contribution
3. Completely new transactions which would bind
respectively, in proportion to the respective amounts of such
the partnership if dissolution had not taken claims.
place with third persons in bad faith.
4. Partner is unauthorized to wind up partnership WINDING UP
affairs, except by transaction with one who:
a. Had extended credit to partnership prior to Q: What takes place during the winding up of the
dissolution; AND Had no knowledge or notice partnership?
of dissolution; or
b. Did not extend credit to partnership prior to A: It is during this time after dissolution that partnership
dissolution; Had known partnership prior to business or affairs are being settled. (De Leon, Comments
dissolution; AND Had no knowledge/notice and Cases on Partnership, Agency, and Trust, p. 229, 2005
of dissolution/fact of dissolution not ed)
advertised in a newspaper of general
circulation in the place where partnership is Q: What are the ways of winding up?
regularly carried on.
A: The winding up of the dissolved partnership may be
Q: Does the dissolution of a partnership discharge existing done either:
liability of a partner?
1. Judicially, under the control and direction of the proper
A: GR: No. court upon cause shown by any partner, his legal
representative, or his assignee; or
XPN: Said liability is discharged when there is an 2. Extrajudicially, by the partners themselves without
agreement between: intervention of the court (De Leon, Comments and Cases on
1. Partner himself; Partnership, Agency, and Trust, 2010 ed., p. 247).
2. Person/s continuing the business; and
3. Partnership creditors Q: What is the nature of the action for liquidation?
Q: Discuss the liability of the estate of a deceased partner A: An action for the liquidation of a partnership is a
personal one; hence, it may be brought in the place of
A: In accordance with Article 1816, the individual property residence of either the plaintiff or the defendant (De Leon,
of a deceased partner shall be liable for all obligations of Comments and Cases on Partnership, Agency, and Trust,
the partnership incurred while he was a partner. Note that 2010 ed., p. 247).
the individual creditors of the deceased partner are to be
preferred over partnership creditors with respect to the Q: Who are the persons authorized to wind up?
separate property of said deceased partner (De Leon,
Comments and Cases on Partnership, Agency, and Trust, A:
2010 ed., p. 245). 1. Partners designated by the agreement
2. In the absence of such, all partners who have not
Q: What is the order of priority in the distribution of wrongfully dissolved the partnership
assets during the dissolution of a limited partnership? 3. Legal representative of last surviving partner who is
not insolvent
A: In setting accounts after dissolution, the liabilities of the
partnership shall be entitled to payment in the following Note: The court may, in its discretion, after considering all the facts
order: and circumstances of the particular case, appoint a receiver to
A: The rights of a partner vary depending upon whether he Q: A partnership was formed with Magdusa as the
is the innocent or guilty partner. manager. During the existence of the partnership, two
1. Rights of partner who has not caused the partners expressed their desire to withdraw from the firm.
dissolution wrongfully: Magdusa determined the value of the partners share
a. To have partnership property applied for which were embodied in the document drawn in the
the payment of its liabilities and to receive handwriting of Magdusa but was not signed by all of the
in cash his share of the surplus partners. Later, the withdrawing partners demanded for
b. To be indemnified for the damages caused payment but were refused. Considering that not all
by the partner guilty of wrongful partners intervened in the distribution of all or part of the
dissolution partnership assets, should the action prosper?
c. To continue the business in the same
name during the agreed term of the A: No. A partner’s share cannot be returned without first
partnership, by themselves or jointly with dissolving and liquidating the partnership, for the return is
others dependent on the discharge of creditors, whose claims
enjoy preference over those of the partner, and it is self-
evident that all members of the partnership are interested accounting, etc. Emnace counters, contending that
in its assets and business, and are entitled to be heard in prescription has set in. Decide.
the matter of the firm’s liquidation and distribution of its
property. The liquidation prepared by Magdusa not signed A: Prescription has not yet set in. Prescription of the said
by the other partners is not binding on them. (Magdusa v. right starts to run only upon the dissolution of the
Albaran, G.R. No. L-17526, June 30, 1962) partnership when the final accounting is done. Contrary to
Emnace’s protestations, prescription had not even begun to
Since the capital was contributed to the partnership, not to run in the absence of a final accounting. The right to
partners, it is the partnership that must refund the equity demand an accounting accrues at the date of dissolution in
of the retiring partners. Since it is the partnership, as a the absence of any agreement to the contrary. When a final
separate and distinct entity that must refund the shares of accounting is made, it is only then that prescription begins
the partners, the amount to be refunded is necessarily to run (Emnace v. CA, G.R. No. 126334, Nov. 23, 2001).
limited to its total resources. In other words, it can only pay
out what it has in its coffers, which consists of all its assets. Q: Pauline, Patricia and Priscilla formed a business
(Villareal v. Ramirez, G.R. No. 144214, July 14, 2003) partnership for the purpose of engaging in neon
advertising for a term of five (5) years. Pauline
Q: What is partner’s lien? subsequently assigned to Philip her interest in the
partnership. When Patricia and Priscilla learned of the
A: The right of every partner to have the partnership assignment, they decided to dissolve the partnership
property applied, to discharge partnership liabilities and before the expiration of its term as they had an
surplus assets, if any, distributed in cash to the respective unproductive business relationship with Philip in the past.
partners, after deducting what may be due to the On the other hand, unaware of the move of Patricia and
partnership from them as partners. Priscilla but sensing their negative reaction to his
acquisition of Pauline’s interest, Philip simultaneously
Q: What are the effects when the business of a dissolved petitioned for the dissolution of the partnership. Is the
partnership is continued? dissolution done by Patricia and Priscilla without the
consent of Pauline or Philip valid? Explain (1995 Bar
A: Question).
1. Creditors of old partnership are also creditors of the
new partnership who continues the business of the old A: Under Art 1830(1)(c), the dissolution by Patricia and
one without liquidation of the partnership affairs. Priscilla is valid and did not violate the contract of
2. Creditors have an equitable lien on the consideration partnership even though Pauline and Philip did not consent
paid to the retiring/deceased partner by the purchaser thereto. The consent of Pauline is not necessary because
when retiring/deceased partner sold his interest she had already assigned her interest to Philip. The consent
without final settlement with creditors. of Philip is also not necessary because the assignment to
3. Rights of retiring/estate of deceased partner: him of Pauline’s interest did not make him a partner, under
a. To have the value of his interest ascertained as of Art. 1813.
the date of dissolution; and
b. To receive as ordinary creditor the value of his Q: Does Philip have any right to petition for the
share in the dissolved partnership with interest or dissolution of the partnership before the expiration of its
profits attributable to use of his right, at his specified term? Explain (1995 Bar Question)
option.
A: No, Philip has no right to petition for dissolution because
Note: The right to demand on accounting of the value of his he does not have the standing of a partner. (Art. 1813)
interest accrues to any partner or his legal representative after
dissolution in the absence of an agreement to the contrary. LIMITED PARTNERSHIP
Prescription begins to run only upon the dissolution of the
partnership, when the final accounting is done. Q: What is limited partnership?
Q: Who are the persons required to render an account? A: One formed by two or more persons having as members
one or more general partners and one or more limited
A: partners, the latter not being personally liable for
1. Winding up partner; partnership debts (Art. 1843)
2. Surviving partner; and
3. Person or partnership continuing the business Q: What are the characteristics of limited partnership?
Q: When is the certificate or articles of limited partnership RIGHTS AND OBLIGATIONS OF A LIMITED PARTNER
cancelled?
Q: What are the specific rights of a limited partner?
A:
1. When the partnership is dissolved A: To:
2. When all the limited partners ceased to be such (Art. 1. have partnership books kept at principal place of
1864) business;
2. inspect/copy books at reasonable hours;
3. have on demand true and full information of all Q: What are the requirements for the admission of a
things affecting partnership; substituted limited partner?
4. have formal account of partnership affairs
whenever circumstances render it just and A:
reasonable; 1. All the members must consent to the assignee
5. ask for dissolution and winding up by decree of becoming a substituted limited partner or the limited
court; partner, being empowered by the certificate must give
6. receive share of profits/other compensation by the assignee the right to become a limited partner;
way of income; and 2. The certificate must be amended in accordance with
7. receive return of contributions, provided the Art. 1865; and
partnership assets are in excess of all its liabilities. 3. The certificate as amended must be registered in the
SEC.
Q: What are the liabilities of a limited partner?
Q: What is the basis of preference given to limited
A: partners over other limited partners?
AS CREDITOR AS TRUSTEE
Specific property stated as contributed A: Priority or preference may be given to some limited
Deficiency in
but not yet contributed/ wrongfully partners over other limited partners as to the:
contribution 1. return of their contributions;
returned
Money/other property wrongfully paid/ 2. their compensation by way of income; or
Unpaid 3. any other matter.
conveyed to him on account of his
contribution
contribution
Note: In the absence of such statement in the certificate, even if
there is an agreement, all limited partners shall stand on equal
Q: What transactions are allowed or prohibited in a
footing in respect of these matters.
limited partnership?
Q: What are the requisites for return of contribution of a
A:
limited partner?
1. Allowed
a. Granting loans to partnership
A:
b. Transacting business with partnership
1. All liabilities of the partnership have been paid or if
c. Receiving pro rata share of partnership assets
they have not yet been paid, the assets of the
with general creditors if he is not also a general
partnership are sufficient to pay such liabilities;
partner
2. The consent of all the members (general and limited
2. Prohibited
partners) has been obtained except when the return
a. Receiving/holding partnership property as
may be rightfully demanded; and
collateral security
3. The certificate of limited partnership is cancelled or
b. Receiving any payment, conveyance, release from
rd amended
liability if it will prejudice right of 3 persons
Q: When is the return of contribution of a limited partner
Note: The prohibition is not absolute because there is no
prohibition if the partnership assets are sufficient to discharge a matter of right?
partnership liabilities to persons not claiming as general or limited
partners. A: When all liabilities of the partnership, except liabilities to
general partners and to limited partners on account of their
Q: Who is a substituted limited partner? contributions, have been paid or there remains property of
the partnership sufficient to pay them and the certificate is
A: A person admitted to all the rights of a limited partner cancelled or so amended as to set forth the withdrawal or
who has died or assigned his interest in the partnership reduction:
1. on the dissolution of the partnership;
Q: What are the rights and liabilities of a substituted 2. upon the arrival of the date specified in the
limited partner? certificate for the return; or
3. after the expiration of 6 month notice in writing
A: GR: He has all the rights and powers and is subject to all given by him to the other partners if no time is
the restrictions and liabilities of his assignor. fixed in the certificate for the return of the
contribution or for the dissolution of the
XPN: Those liabilities which he was ignorant of at the partnership.
time that he became a limited partner and which could
not be ascertained from the certificate Note: Even if a limited partner has contributed property, he has
only the right to demand and receive cash for his contribution. The
exceptions are:
1. When there is stipulation to the contrary in the
certificate; or
1. Contribution of property
To the partnership
2. Contribution of money and money converted to personal
use
Since limited partners are not principals in the transaction of a
3. Prohibition in engaging in business for himself
partnership, their liability as a rule, is to the partnership, not to
4. Contribute additional capital
the creditors of the partnership. The general partners cannot,
5. Managing partner who collects debt
however waive any liability of the limited partners to the
6. Partner who receives share of partnership credit
prejudice of such creditors.
7. Damages to partnership
8. Render information
9. Accountable as fiduciary
rd
Obligations of partners to 3 persons
3. Duty to render on demand true and full information As in a general partnership, the creditor of a limited partner
affecting partnership to any partner or legal representative may, in addition to other remedies allowed under existing laws,
of any deceased partner or of any partner under legal apply to the proper court for a charging order subjecting the
disability. interest in the partnership of the debtor partner for the
4. Duty to account to the partnership as fiduciary. payment of his obligation.
A: A:
1. Between persons who are present – the acceptance of 1. There are two or more principals;
the agency may also be implied of the principal 2. They have all concurred in the appointment of the
delivers his power of attorney to the agent and the same agent; and
latter receives it without any objection (Art. 1871) 3. Agent is appointed for a common transaction or
2. Between persons who are absent – the acceptance of undertaking (De Leon, Comments and Cases on
the agency cannot be implied from the silence of the Partnership, Agency and Trusts, 2010, p. 569)
agent except:
a. When the principal transmits his power of Q: What is the “Theory of imputed knowledge”?
attorney to the agent, who receives it without
any objection; A: The importance of the duty to give information of
b. When the principal entrusts to him by letter or material facts becomes readily apparent when it is borne in
telegram a power of attorney with respect to the mind that knowledge of the agent is imputed to the
business in which he is habitually engage as an principal even though the agent never communicated such
agent and he did not reply to the letter or knowledge to the principal (De Leon, Comments and Cases
telegram. (Art. 1872) on Partnership, Agency, and Trust, 2010 ed., p. 343).
Note: Acceptance by the agent may also be express or implied Q: What are the exceptions to the theory of imputed
from his acts which carry out the agency, or from his silence or knowledge?
inaction according to the circumstances. (Art. 1870)
A:
Q: What is the nature of the relationship between 1. Where the agent’s interests are adverse to those of the
principal and agent? principal;
2. Where the agent’s duty is not to disclose the
A: It is fiduciary in nature that is based on trust and information, as where he is informed by way of confidential
confidence (De Leon, Comments and Cases on Partnership, information; and
Agency and Trusts, 2010, p. 337). 3. Where the person claiming the benefit of the rule
colludes with the agent to defraud the principal.
Q: What are the qualifications of a principal?
Note: The theory of imputed knowledge ascribes the knowledge of
A: the agent to the principal, not the other way around. The
1. Natural or juridical person knowledge of the principal cannot be imputed to his agent (Sunace
2. He must have capacity to act International Management Services, Inc. vs. National Labor
Relations Commission, 480 SCRA 146, 2006)
Note: If a person is capacitated to act for himself or his own right,
he can act through an agent. Q: What are the kinds of agents?
Note: An innocent agent has a right later on to recover from A: GR: What a man may do in person, he may do thru
the guilty or negligent agent. (Art. 1217) another.
Q: What are the instances when the agent may incur XPNs:
personal liability? 1. Personal acts – personal performance is required
by law or public policy or the agreement of the
A: parties, the doing of the act by a person on behalf
1. Agent expressly bound himself; of another does not constitute performance by
2. Agent exceeds his authority; the latter.
3. Acts of the agent prevent the performance on the part 2. Criminal acts or acts not allowed by law – an
of the principal; attempt to delegate an act to another authority
4. When a person acts as agent without authority or to do an act which, if done by the principal would
without a principal; or be illegal, is void. (De Leon, Comments and Cases
5. A person who acts as an agent of an incapacitated on Partnership, Agency and Trusts, 2010, pp. 334-
principal unless the third person was aware of the 335)
incapacity at the time of the making of the contract.
(De Leon, Comments and Cases on Partnership, Q: A granted B the exclusive right to sell his brand of
Agency, and Trust, 2010 ed. pp. 484-490) Maong pants in Isabela, the price for his merchandise
payable within 60 days from delivery, and promising B a
Q: Can agency be presumed? commission of 20% on all sales. After the delivery of the
merchandise to B but before he could sell any of them, B’s
A: GR: Agency is not presumed. The relation between store in Isabela was completely burned without his fault,
principal and agent must exist as a fact. Thus, it is held that together with all of A's pants. Must B pay A for the lost
where the relation of agency is dependent upon the acts of pants? Why? (1999 Bar Question)
the parties, the law makes no presumption of agency, and it
is always a fact to be proved, with the burden of proof A: The contract between A and B is a sale not an agency to
resting upon the person alleging the agency to show, not sell because the price is payable by B upon 60 days from
only the fact of its existence, but also its nature and extent. delivery even if B is unable to resell it. If B were an agent,
he is not bound to pay the price if he is unable to resell it.
XPNS: As a buyer, ownership passed to B upon delivery and, under
1. Operation of law Art. 1504, the thing perishes for the owner. Hence, B must
2. To prevent unjust enrichment (De Leon, Comments and still pay the price.
Cases on Partnership, Agency, and Trust, 2010 ed., p. 375).
Q: Is mere representation of an alleged agent sufficient to
Q: Can agency be created by necessity? prove the existence of a principal-agent relationship?
A: No. What is created is additional authority in an agent A: No. The declarations of the agent alone are generally
appointed and authorized before the emergency arose. insufficient to establish the fact or extent of agency. It is a
Q: When is the act of an agent binding to the principal? Q: When is the principal not bound by the act of the
agent?
A:
1. When the agent acts as such without expressly A:
binding himself or does not exceed the limits of 1. GR: When the act is without or beyond the scope of
his authority (Art. 1897) his authority in the principal’s name.
2. If principal ratifies the act of the agent which
exceeded his authority (Art. 1898) XPNs:
3. Circumstances where the principal himself was, a. Where the acts of the principal have contributed
rd
or ought to have been aware (Art. 1899) to deceive a 3 person in good faith
4. If such act is within the terms of the power of b. Where the limitation upon the power created by
attorney, as written. (Art.1900 & 1902) the principal could not have been known by the
rd
5. Principal has ratified, or has signified his 3 person
willingness to ratify the agent’s act (Art 1901) c. Where the principal has placed in the hands of
the agent instruments signed by him in blank
Q: Does knowledge of a fact by an agent bind the d. Where the principal has ratified the acts of the
principal? agent
A: GR: Knowledge of agent is knowledge of principal. 2. When the act is within the scope of the agent’s
authority but in his own name, except when the
XPNs: transaction involves things belonging to the principal.
1. Agent’s interests are adverse to those of the (Art. 1883)
principal;
2. Agent’s duty is not to disclose the information Note: The limits of the agent’s authority shall not be
(confidential information); or considered exceeded should it have been performed in a
3. Where the person claiming the benefit of the rule manner more advantageous to the principal than that
specified by him.
colludes with the agent to defraud the principal
(De Leon, Comments and Cases on Partnership,
RIGHTS OF AGENTS
Agency, and Trust, 2010 ed. p. 344)
Q: What are the instances when the agent may retain in
Q: What are the effects of the acts of an agent?
pledge the object of the agency?
A:
A:
1. With authority
1. If principal fails to reimburse the agent the necessary
a. In principal’s name – valid
sums, including interest, which the latter advanced for
b. In his own name – not binding on the principal;
the execution of the agency (Art. 1912); or
agent and stranger are the only parties, except
2. If principal fails to indemnify the agent for all damages
regarding things belonging to the principal or
which the execution of the agency may have caused
when the principal ratifies the contract or derives
the latter, without fault or negligence on his part. (Art.
benefit therefrom
1913)
2. Without authority
a. In principal’s name – unenforceable but may be
Q: What is the rule where two persons deal separately
ratified, in which case, may be validated
with the agent and the principal?
retroactively from the beginning
b. In his own name – valid on the agent, but not on
A: If the two contracts are incompatible with each other,
the principal
the one of prior date shall be preferred. This is subject
however to the rule on double sale under Art. 1544.
Q: CX executed a special power of attorney authorizing DY
to secure a loan from any bank and to mortgage his
Note: Rules of preference in double sale
property covered by the owner’s certificate of title. In 1. Personal property – possessor in good faith
securing a loan from M Bank, DY did not specify that he 2. Real property
was acting for CX in the transaction with the bank. Is CX a. Registrant in good faith
liable for the bank loan? (2004 Bar Question) b. Possessor in good faith
c. Person with the oldest title in good faith (Art.
A: While as a general rule the principal is not liable for the 1544)
contract entered into by his agent in case the agent acted in
If agent acted in good faith, the principal shall be liable for
his own name without disclosing his principal, such rule
damages to the third person whose contract must be rejected. If
does not apply if the contract involves a thing belonging to agent is in bad faith, he alone shall be liable. (Art. 1917)
the principal. In such case, the principal is liable under Art.
1883. The contract is deemed made in his behalf (Sy-Juco v.
Sy-Juco, G.R. No. L-13471, Jan. 12, 1920).
Relates to the
subject/business with which
Refers to the manner or
the agent is empowered to
mode of agent’s action
deal or act
Limitations of authority are Without significance as
operative as against those against those with neither
who have/charged with knowledge nor notice of
knowledge of them them
Not expected to be made
known to those with whom
Contemplated to be made
the agent deals (De Leon,
known to third persons
Comments and Cases on
dealing with the agent
Partnership, Agency, and
Trust, 2010 ed. p. 344)
A:
1. If the agent acted only as a middleman with the task of
merely bringing together the vendor and vendees;
2. If the agent informed the principal of the
gift/bonus/profit he received from the purchaser and
his principal did not object thereto; or
3. Where a right of lien exists in favor of the agent.
XPN: Principal takes advantage of a contract or receives benefits made under false representation
of his agent
Mismanagement of the business by the agent
rd
1. Principal still responsible for the acts contracted by the agent with respect to 3 persons;
2. Principal, however, may seek recourse from the agent
Tort committed by the agent
Principal civilly liable so long as the tort is committed by the agent while performing his duties in
furtherance of the principal’s business
rd
Agent in good faith but prejudices 3 parties
Principal is liable for damages
EXPRESS vs. IMPLIED AGENCY Q: What are the distinctions between apparent authority
and authority by estoppel?
Q: Distinguish express and implied agency
A:
A: Apparent Authority Authority by Estoppel
EXPRESS AGENCY IMPLIED AGENCY Arises when the principal, by
That which is though not
As to definition his culpable negligence,
actually granted, the
One where the agent permits his agent to exercise
principal knowingly
has been actually powers not granted to him,
One which is implied from permits the agent to
authorized by the even though the principal may
the acts of the principal, exercise or holds him out
principal, either orally have no notice or knowledge
as possessing
or in writing of the agent’s conduct
As to authority Founded in conscious Founded on the principal’s
When it is incidental to permission of acts negligence in failing properly
the transaction or beyond the powers to supervise the affairs of the
reasonably necessary to granted agent
When it is directly accomplish the purpose of
conferred by words the agency, and therefore, AGENCY BY ESTOPPEL
the principal is deemed to
have actually intended the Q: When is there an agency by estoppel?
agent to possess
A: When one leads another to believe that a certain person
Q: What is the scope of the agent’s authority as to third is his agent, when as a matter of fact such is not true, and
persons? the latter acts on such misrepresentation, the former
cannot disclaim liability, for he has created an agency by
A: It includes not only the actual authorization conferred estoppel. (Paras, Civil Code of the Philippines Annotated,
th
upon the agent by his principal but also that which is Vol. V, p. 558, 6 ed)
apparent or impliedly delegated to him. (De Leon,
Comments and Cases on Partnership, Agency, and Trust, Q: What are the rules regarding estoppel in agency?
2010 ed. p.493)
A:
Q: Is the third person required to inquire into the 1. Estoppel of agent – One professing to act as agent for
authority of the agent? another may be estopped to deny his agency both as
against his asserted principal and the third persons
A: interested in the transaction in which he engaged.
1. Where authority is not in writing – Every person
dealing with an assumed agent must discover upon his 2. Estoppel of principal
peril, if he would hold the principal liable, not only the a. As to agent – One who knows that another is
fact of the agency but the nature and extent of the acting as his agent and fails to repudiate his acts,
authority of the agent. or accepts the benefits, will be estopped to deny
2. Where authority is in writing – 3rd person is not the agency as against the other.
required to inquire further than the terms of the b. As to sub-agent – To estop the principal from
written power of attorney. denying his liability to a third person, he must
have known or be charged with knowledge of the
Note: A third person with whom the agent wishes to contract on fact of the transaction and the terms of the
behalf of the principal may require the presentation of the power agreement between the agent and sub-agent.
of attorney or the instructions as regards the agency (Art. 1902). c. As to third persons – One who knows that
another is acting as his agent or permitted
Q: When is the principal bound by the actual or apparent another to appear as his agent, to the injury of
authority of the agent? third persons who have dealt with the apparent
agent as such in good faith and in the exercise of
A: The principal is bound by the acts of the agent on his reasonable prudence, is estopped to deny the
behalf, whether or not the third person dealing with the agency.
agent believes that the agent has actual authority, so long
as the agent has actual authority, express or implied. 3. Estoppel of third persons – A third person, having dealt
with one as agent may be estopped to deny the
Q: What is doctrine of apparent authority? agency as against the principal, agent, or third persons
in interest.
A: The principal is liable only as to third persons who have
been led reasonably to believe by the conduct of the 4. Estoppel of the government – The government is not
principal that such actual authority exists, although none estopped by the mistake or error on the part of its
has been given. agents.
Q: Distinguish implied agency from agency by estoppel A: He is one engaged in the purchase and sale of personal
property for a principal, which, for this purpose, has to be
A: placed in his possession and at his disposal.
IMPLIED AGENCY AGENCY BY ESTOPPEL
As to liability between principal and agent Q: Who is a broker?
If caused by the “agent”,
Agent is a true agent,
he is not considered a A: He is a middleman or intermediary who in behalf of
with rights and duties
true agent, hence, he has others and for a commission or fee negotiates
of an agent
no rights as such contracts/transactions relating to real or personal property.
As to liability to third persons
1. If caused by the Q: What is factorage?
principal, he is liable,
1. The principal is rd
but only if the 3 A: It is the compensation of a factor or commission agent.
always liable
person acted on the
2. The agent is
misrepresentation; Q: What is ordinary commission?
never personally
2. If caused by the agent
liable
alone, only the agent A: It is the compensation for the sale of goods which are
is liable placed in the agent’s possession or at his disposal.
Q: Distinguish a general agent from a special agent? A: It is the fee which is given in return for the risk that the
agent has to bear in the collection of credits.
A:
General Agent Special Agent Note: The purpose of the guarantee commission is to compensate
Scope of Authority the agent for the risks he will have to bear in the collection of the
credit due the principal. (De, Leon, Comments and Cases on
Specific acts in Partnership, Agensy and Trust, 2010, p. 516)
All acts connected with pursuance of particular
the business or instructions or with Q: Who is a del credere agent?
employment in which restrictions necessarily
he is engaged implied from the act to A: He is the agent who guarantees payment of the
be done customer’s account in consideration of the commission.
Nature of Service Authorized (De, Leon, Comments and Cases on Partnership, Agensy and
Involves continuity of Trust, 2010, p. 516)
No continuity of service
service
Extent to which the Agent may Bind the Principal Note: A del credere agent may sue in his name for the purchase
May bind his principal price in the event of non-performance by the buyer (De, Leon,
Cannot bind his Comments and Cases on Partnership, Agensy and Trust, 2010, p.
by an act within the
principal in a manner 517)
scope of his authority
beyond or outside the
although it may be
specific acts which he is AGENCY COUCHED IN GENERAL TERMS
contrary to the latter’s
authorized to perform
special instructions
Termination of Authority Q: What is an agency couched in general terms?
Duty imposed upon the
Apparent authority A: One which is created in general terms and is deemed to
third party to inquire
does not terminate by comprise only acts of administration (Art. 1877).
makes termination of
mere revocation of his
the relationship
authority without Q: What is meant by acts of administration?
effective upon
notice to the third party
revocation
Construction of Principal’s Instruction A: Those which do not imply the authority to alienate for
the exercise of which an express power is necessary (De
Strictly construed as
Merely advisory in Leon, Comments and Cases on Partnership, Agency and
they limit the agent’s
nature Trusts, 2010, p. 408-409).
authority
Note: When the special power of attorney is executed and Q: When is an agency created by operation of law?
acknowledged before a notary public or other competent official in
a foreign country, it cannot be admitted in evidence unless it is A:
certified as such by a secretary of embassy or legation, consul
1. When the agent withdraws from the agency for a
general, consul, vice consul, or consular agent or by any officer in
the foreign service of the Philippines stationed in the foreign valid reason, he must continue to act until the
country in which the record is kept of said public document and principal has had a reasonable opportunity to
authenticated by the seal of his office. (Medina v. Natividad, G.R. take the necessary steps like the appointment of
No. 177505, Nov. 27, 2008) a new agent to remedy the situation caused by
the withdrawal (Art. 1929).
The failure to have the special power of attorney (executed in a 2. In case a person declines an agency, he is bound
foreign country) authenticated is not merely a technicality – it is a to observe the diligence of good father of the
question of jurisdiction. Jurisdiction over the person of the real
family in the custody and preservation of the
party-in-interest was never acquired by the courts. (Ibid.)
A: GR: The principal must comply with all the obligations Q: What are the modes of extinguishing an agency?
which the agent may have contracted within the scope of
his authority. A: EDWARD
1. Expiration of the period
XPN: Where the agent exceeded his authority.
2. Death, civil interdiction, insanity or insolvency of 4. it is created not only for the interest of the
principal or of the agent principal but also for the interest of third persons
3. Withdrawal by the agent (Art. 1930)
4. Accomplishment of the object or the purpose of
the agency XPN to the XPN: When the agent acts to defraud the
5. Revocation principal.
6. Dissolution of the firm or corporation which
entrusted or accepted the agency. (Art. 1919) Q: What are the kinds of revocation?
Note: The list is not exclusive; May also be extinguished by the A: Revocation may either be express or implied (De Leon,
modes of extinguishment of obligations in general whenever they Comments and Cases on Partnership, Agency, and Trust,
are applicable, like loss of the thing and novation. 2010 ed. p. 590; Art. 1920)
Agency may be terminated: (1) by agreement (No.s 1 and 4); (2) by
the subsequent acts of the parties which may be either: (a) by the Q: How is agency impliedly revoked?
act of both parties or by mutual consent; or (b) by unilateral act of
one of them (Nos. 3 and 5; (3) by operation of law (Nos. 2 and 6). A: Principal:
(De Leon, Comments and Cases on Partnership, Agency, and Trust, 1. appoints a new agent for the same business or
2010 ed., p. 574-575) transaction (Art. 1923);
2. directly manages the business entrusted to the
Q: What is “presumption of continuance of agency”? agent (Art. 1924); or
3. after granting general power of attorney to an
A: It means that when once shown to have existed, an agent, grants a special one to another agent
agency relation will be presumed to have continued, in the which results in the revocation of the former as
absence of anything which shows its termination. (De Leon, regards the special matter involved in the latter
Comments and Cases on Partnership, Agency, and Trust, (Art. 1926)
2010 ed., p. 574))
Note: A special power of attorney is not revoked by a
Q: What are the essential elements for continuance of subsequent general power of attorney given to another
agency? agent, unless that the latter refers also to the act authorized
under the special power (Tolentino, Civil Code of the
Philippines, Vol. V, p. 436)
A: Both principal and agent must be:
1. Present Q: How is agency revoked when the agent has been
2. Capacitated appointed by two or more principals?
3. Solvent (De Leon, Comments and Cases on
Partnership, Agency, and Trust, 2010 ed., p. 575) A: Any one of the principals is granted the right to revoke
the power of attorney without the consent of the others
Q: Can the heirs continue the agency? (Art. 1927)
Good faith here means that the third person was not aware
of the death of the principal at the time that he contracted
with said agent (Rallos v. Felix Go Chan, G.R. No. L-24332,
Jan. 31, 1978).
XPNs:
1. If the original circumstances are restored within a
reasonable period of time, the agent's authority
may be revived;
2. Where the agent has reasonable doubts as to
whether the principal would desire him to act, his
authority will not be terminated if he acts
reasonably; or
Q: X is indebted to Y in the amount of P50, 000 with the Q: When will a compromise become voidable?
stipulation that the same shall earn interest at 40% per
annum. When X failed to pay, Y sued him. In an effort to A: A compromise which there is a mistake, fraud, violence,
settle the case, X offered to pay the principal but begged intimidation, undue influence or falsity of documents. (Art.
for the reduction of the interest. Y refused, hence, trial 2038)
was conducted. Can the judge reduce the rate of interest?
Note: However, one of the parties cannot set up a mistake of fact
A: Yes. The courts may mitigate the damage to be paid by as against the other if the latter, by virtue of the compromise, has
the losing party who has shown a sincere desire for a withdrawn from a litigation already commenced. (Art. 2038)
compromise. (Art. 2031)
Q: A and B entered into a compromise agreement. A week parties who are duty bound to abide by it and observe
thereafter, B filed an action in court seeking to annul the strictly its terms and conditions”. (Esguerra v. CA, GR
compromise agreement contending that it is one-sided. Is 119310, February 3, 1997))
the action proper?
A: It includes all transactions involving the purchase or loan Note: Generally, no fiduciary relationship is created by bailment.
of goods, service, or money in the present with a promise No trustee-beneficiary relationship is created.
to pay or deliver in the future.
Q: Who are the parties in a contract of bailment?
Q: What is security?
A:
A: It is something given, deposited, or serving as a means to 1. Bailor- the giver; the party who delivers the
ensure the fulfillment or enforcement of an obligation or of possession or custody of the thing bailed
protecting some interest in the property. 2. Bailee-the recipient; the party who receives the
possession or custody of the thing thus delivered
Q: What is the significance of credit?
Q: What are the contractual bailments with reference to
A: By virtue of the use of credit, more exchanges are compensation?
possible: persons are able to enjoy a thing today but pay it
for later, and through the banking system, the transfer of A:
actual money is eliminated by cancellation of debts and 1. For the sole benefit of the bailor (gratuitous)
credits. e.g. gratuitous deposit, commodatum
Q: What are the kinds of credit transactions? 2. For the sole benefit of the bailee (gratuitous)
e.g. commodatum, mutuum
A:
1. As contracts of security 3. For the benefit of both parties (mutual-benefit
a. Contracts of real security – These are bailments)
contracts supported by collateral/s or
burdened by an encumbrance on property e.g. deposit for compensaton, involuntary deposit,
such as mortgage and pledge pledge and bailments for hire:
b. Contracts of personal security – These are a. hire of things – temporary use
contracts where performance by the b. hire of service – for work or labor
principal debtor is not supported by c. hire of carriage of goods – for carriage
collateral/s but only by a promise to pay or d. hire of custody – for storage
by the personal undertaking or commitment
of another person such as in surety or LOAN
guaranty
2. As to their existence Q: What is loan?
a. Principal contracts– They can exist alone.
Their existence does not depend on the A: It is a contract where one of the parties delivers to
existence of another contract (e.g. another, either something not consumable so that the
commodatum and mutuum) latter may use the same for a certain time and return it, in
b. Accessory contracts – They have to depend which case is called a commodatum; or money or other
on another contract. These accessory consumable things, upon the condition that the same
contracts depend on the existence of a amount of the same kind and quality shall be paid, in which
principal contract of loa (e.g. guaranty case the contract is simply called a loan or mutuum (Art.
proper, suretyship, pledge, mortgage and 1933, NCC).
antichresis)
3. As to their consideration
A: It is a contract where one of the parties (bailor) delivers 2. Precarium – one whereby the bailor may demand
to another (bailee) something not consumable so that the the thing loaned at will in the following cases:
latter may use the same for a certain time and thereafter a. if the duration of the contract had not
returns it. been stipulated;
b. if the use to which the thing loaned
Q: What are the characteristics of a contract of should be devoted had not been
commodatum? stipulated; or
c. if the use of the thing is merely by
A: tolerance of the owner
1. Real contract – delivery of the thing loaned is
necessary for the perfection of the contract Note: The word “owner” in Art. 1947 (2) is not proper because the
2. Unilateral contract – once subject matter is delivered, bailor need not be the owner of the thing (Pineda, Credit
it creates obligations on the part of only one of the Transactions and Quasi contracts, p. 26, 2006 ed, Art. 1938).
parties (the borrower)
3. Essentially gratuitous Q: What are the consequences of the purely personal
4. Purpose is to transfer the temporary use of the thing character of commodatum?
loaned
5. Principal contract A: GR: Commodatum is purely personal in character hence
6. Purely personal contract death of either bailor or bailee extinguishes the contract
(Art. 1939, NCC)
Q: What are the elements of commodatum?
XPN: By stipulation, the commodatum is transmitted
A: There must be: to the heirs of either or both party.
1. a bailor and bailee
2. the bailee acquires the use of the thing In case of lease of the thing subject of commodatum:
3. it must be gratuitous
GR: The bailee can neither lend nor lease the object of
Q: What could be the subject of commodatum? the contract to a third person.
A: GR: Under Art. 1933, the subject matter of commodatum XPN: Members of the bailee’s household may make
must be non-consumable because the thing must be use of the thing loaned.
returned.
Note: Members of the bailee’s household are not
considered as third persons.
XPN: Consumable goods may be the object of
commodatum if the purpose is not to consume them
XPN to the XPN:
such as when they were loaned merely for ad
Contrary stipulation; or
ostentationem or exhibition purposes. After the affair,
Nature of the thing forbids such use.
the same and identical goods shall be returned to the
lender or bailor (Art. 1936, NCC). Note: Household members are those permanently living or residing
within the same residence including the household helpers.
A: XPNs:
COMMODATUM LEASE use of the fruits is
Real contract Consensual stipulated;
Object is a non-consumable Object may even be work or enjoyment of the fruits is
and non fungible thing service stipulated; or
Essentially gratuitous Onerous enjoyment of the fruits is
If the bailor is not aware of incidental to its use
Provisions governing Subject Matter
the flaws, he is not liable for
warranty are made Real or personal property
the resulting danger caused
applicable
by such.
Generally non-consumable
Only personal property
MUTUUM things but may cover
consumables if the purpose of
Q: What is mutuum? the contract is for exhibition.
Ownership of the thing
A: It is a contract whereby one of the parties called the Retained by the bailor Passes to the debtor
“lender” delivers to another called the “borrower”, money Thing to be returned
or other consumable thing subject to the condition that the Equal amount of the
Exact thing loaned
same amount of the same kind and quantity shall be paid. same kind and quality
Who bears risk of loss
Bailor Debtor
When to return
Q: What are the characteristics of a contract of mutuum? In case of urgent need even
before the expiration of term Only after the expiration
A: (the contract is in the of the term
1. Borrower acquires ownership of the thing (Art meantime suspended)
1953). Contract
2. If the thing loaned is money, payment must be Contract of use Contract of consumption
made in the currency which is legal tender in the
Philippines and in case of extraordinary deflation or Q: Distinguish mutuum from Lease and barter
inflation, the basis of payment shall be the value of
the currency at the time of the creation of the A:
obligation (Art 1249 and 1250).
MUTUUM LEASE
3. If fungible thing was loaned, the borrower is obliged
Object may be any
to pay the lender another thing of the same kind, Object is money or any
thing, whether movable
quality and quantity even if it should change in consumable (fungible)
or immovable, fungible
value. thing
or non-fungible
Note: Mere issuance of checks does not perfect the contract of
There is transfer of No transfer of
loan. It is only after the checks have been encashed that the ownership ownership
contact may be deemed perfected. Further, when the movable Creditor-debtor Lessor-lessee
thing delivered in loan is not to be returned to the bailor, but may relationship relationship
be substituted or replaced with another equivalent thing, it is a Unilateral Bilateral
fungible thing.
MUTUUM BARTER
Q: Distinguish commodatum from mutuum Subject matter is
Subject matter are non-
money or other
A: fungible things
fungible things
COMMODATUM MUTUUM May be gratuitous or
Object Always onerous
onerous
Non-consumable and Non- Money or consumable While in mutuum, there There is a mutual sale
fungible thing is transfer of resulting in the transfer
Cause ownership, there is no of ownership on both
Gratuitous, otherwise it is a May or may not be sale sides
lease gratuitous The money or
Purpose consumable thing
Use or temporary possession of The parties do not
loaned is not returned
the thing loaned but return the things subject
Consumption but the same amount
of the exchange
of the same kind and
GR: not its fruit because the quantity shall be paid.
Q: What may be the object of mutuum? Q: Does destruction of the thing loaned extinguish one’s
obligation in a simple loan?
A: Money or fungible and consumable things.
A: The destruction of the thing loaned does not extinguish
Q: Can loan of money be payable in kind? one’s obligation to pay because his obligation is not to
return the thing loaned but to pay a generic thing.
A: Yes, if there is an agreement between the parties (Art.
1958, NCC). Q: Who are the parties to a commodatum? Distinguish.
A: It depends on the object of the contract of loan. GR: The bailee must bring to the knowledge of the
bailor such expenses before incurring the same.
Money – governed by Arts. 1249 and 1250, NCC
XPN: In case there is urgency and delay would cause
GR: Payment shall be made in the currency stipulated. imminent danger.
XPN: If not, that currency which is legal tender in the Note: If the extraordinary expenses arise on the occasion of
Philippines. the actual use of the thing loaned by the bailee, the expenses
shall be borne by the bailor and bailee equally, even though
Note: In case of extraordinary inflation – value of the the bailee is without fault (Art. 1949, NCC)
currency at the time of the creation of the obligation.
3. To be liable for damages for known hidden defects.
Consumable or fungible thing – debtor or borrower shall pay 4. Cannot exempt himself from payment of expenses or
another thing of the same kind, quality and quantity even damages by abandonment of the thing to bailee.
if it should change in value. If cannot be done, the value of
the thing at the time of its perfection (delivery) shall be the Q: When is the bailor liable for hidden defects?
basis of the payment of the loan (Art 1955).
A: When the following requisites are present:
Q: May a person be imprisoned for non-payment of debt? 1. there was a flaw or defect in the thing loaned;
2. the flaw or defect is hidden;
A: No. This is because of the constitutional provision under 3. the bailor is aware thereof;
Article III, Section 3 of the 1987 Constitution which 4. he does not advise the bailee of the same; and
expressly provides that no person shall be imprisoned for 5. the bailee suffers damages by reason of said flaw
non-payment of a debt or poll tax. or defect.
A: Action for recovery of damages on the ground of quasi- A: No. The bailor in commodatum need not be the owner of
delict because of negligence or bad faith. the thing loaned. It is sufficient that he has possessory
interest over subject matter (Art. 1938, NCC).
Q: What is the effect if both parties are aware of the flaws
or defects? Note: A mere lessee or usufructuary may gratuitously give the use
of the thing leased or in usufruct, provided there is no prohibition
A: The bailee is deemed to have assumed a risk. The bailor against such.
is not liable for the damages suffered by the bailee by
reason thereof. BAILEE
5. there is deviation from the Q: Will the stipulation that the bailee may make use of the
purpose fruits of the thing loaned impair the essence of
Not liable for the deterioration of commodatum?
As to the the thing loaned caused by the
ordinary wear and tear of the A: No. It will not impair the essence of commodatum
deterioration
thing loaned. (Art. 1943) because the actual cause or consideration therefore is still
of the thing
the liberality of the bailor or lender.
loaned
Note: When there are two or more
bailees, their liability is solidary. Q: Is there right of retention in commodatum?
RIGHTS OF A BAILEE A: GR: No. The bailee cannot retain the thing loaned on the
ground that the bailor owes the bailee.
Q: What are the rights of a bailee?
XPN: The bailee has the right of retention for claims of
A: FRUD damages which the bailee incurred or suffered by
-Use of the thing; reason of the hidden defects or flaws of the thing
-Make use of the fruits of the thing when such right is loaned, of which he was not informed or advised by the
stipulated in the contract; bailor.
-Not answerable for the deterioration of the thing
loaned due to the use thereof and without his fault; Note: The reason for the general rule that there is no right of
and retention is that “bailment implies a trust that as soon as the time
-Right of retention for damages due to hidden defects has expired or the purpose accomplished, the bailed property must
or flaws of the thing of which he was not advised by be returned to the bailor.” Also, Art. 1287 provides that
compensation shall not be proper when one of the debts arises
the bailor.
from the obligations of a bailee in commodatum (Art. 1287,
reworded)
Q: Art. 1178 of the NCC provides that all rights acquired by
virtue of an obligation are transmissible. Is the right to use Q: Suppose during the said retention of the bailee by
the thing by virtue of a contract of commodatum reason of hidden defects, the thing is lost due to a
transmissible? fortuitous event. Can the bailor hold the bailee liable for
said loss based on Art.1942 (2)?
A: No, it is not transmissible for 2 reasons:
A: No, the bailee cannot be held liable for the loss. Art.
-Art. 1178 provides that the transmissibility of said 1942 (2) contemplates wrongful retention or a situation
acquired rights are either subject to the laws or to a where the bailee is not entitled to retain the thing loaned.
contrary sipulation; and
-Art. 1939 provides that a contract of commodatum is Note: Article 1942 (2) provides that the bailee is liable for the loss
purely personal in character. of the thing, even if it should be through a fortuitous event if he
keeps it longer than the period stipulated, or after the
Note: To rule otherwise would be to run counter to the purely accomplishment of the use for which the commodatum has been
personal character of the commodatum and to the proviso that constituted.
transmissibility is subject to the law governing such obligations.
Q: What if the bailee is entitled to payment or
Q: What is the legal effect if the bailee pays for the use of reimbursement of expenses incurred or damages suffered
the thing? and the bailor offers the thing loaned as payment for said
expenses or damages, would such offer be valid or not, in
A: The contract ceases to be commodatum; it becomes view of the prohibition under Art. 1952 which states that
lease. the bailor cannot exempt himself from the payment of
expenses or damages by abandoning the thing to the
Q: In commodatum, does the bailee acquire the use of the bailee?
fruits of the thing?
A: The offer is not valid.It may be considered as dation in
A: No. The bailee in commodatum acquires only the use of payment. In this case, the abandonment done by the bailor
the thing loaned but not its fruits (Art. 1935, NCC). was made in favor of the bailee for the payment of the
expenses incurred by the latter, hence, a violation of what
Q: Is a stipulation that the bailee may make use of the the law has expressly prohibited under Article 1952.
fruits of the thing loaned valid?
Q: When is the bailee not entitled to reimbursement for
A: Yes. It is understood that the enjoyment of the fruits the expenses he incurred?
must only be incidental to the use of the thing. It should
not be the main cause; otherwise, the contract is not a A: If, for the purpose of making use and preservation of the
commodatum but a usufruct (Art. 1940, NCC). thing, the bailee incurs expenses other than those ordinary
and extraordinary expenses.
Q: Before he left for Riyadh to work as a mechanic, Pedro Q: What is the rule on interests?
left his van with Tito, with the understanding that the
latter could use it for one year for his personal or family A: GR: No interest shall be due unless it is stipulated in
use while Pedro works in Riyadh. He did not tell Tito that writing. (Art. 1956, NCC)
the brakes of the van were faulty. Tito had the van tuned
up and the brakes repaired. He spent a total amount of XPN: In case of interest on damages or indemnity for
P15,000.00. After using the vehicle for two weeks, Tito damages, it need not be in writing.
discovered that it consumed too much fuel. To make up
for the expenses, he leased it to Annabelle. Two months Q: What is the basis of the right to interest?
later, Pedro returned to the Philippines and asked Tito to
return the van. A: It only arises by reason of the contract (stipulation in
writing) for the use of money or by reason of delay or
Unfortunately, while being driven by Tito, the van was failure to pay principal on which interest is demanded due
accidentally damaged by a cargo truck without his fault. to a breach of an obligation (Baretto v. Santa Marina, No.
11908, feb. 4, 1918).
Who shall bear the P15,000.00 spent for the repair of the
van? Explain. If the obligation consists of the payment of a sum of
money, and the debtor incurs delay, the indemnity for
A: The contract between Pedro and Tito is one of damages shall be the payment of legal interest (Philrock,
commodatum. Of the P15, 000.00 spent, Pedro, the bailor, Inc. v. Construction Industry Arbitration Commission, G.R.
shall bear the expenses for the repair of the faulty brakes, Nos. 132848-49, June 25, 2001)
they being extraordinary expenses incurred due to the non-
disclosure by the bailor of the defect or fault; Tito, on the Q: Can there be interest in equitable mortgage?
other hand, shall shoulder "that part of the P15,000.00
spent for the tune-up”, said expense being ordinary for the A: No. Interest could not be collected on equitable
use and preservation of the van. mortgage because the same is not stipulated in writing (Tan
v. Valdehueza, G.R. No. L-38745, Aug. 6, 1975).
Q: Who shall bear the costs for the van's fuel, oil and
other materials while it was with Tito? Explain. (2005 Bar Note: One which, although it lacks the proper formalities or other
Question) requisites of a mortgage required by law, nevertheless reveals the
intention of the parties to burden real property as a security for a
debt, and contains nothing impossible or contrary to law.
A: The costs for the fuel and other materials are considered
ordinary expenses, and consequently Tito, the bailee, shall
Q: Can paid unstipulated interest be recovered?
shoulder them (Art. 1941, NCC)
A: If paid by mistake the debtor may recover as in the case
Q: Does Pedro have the right to retrieve the van even
of solutio indebiti or undue payment. However if payment
before the lapse of one year? Explain. (2005 Bar Question)
is made voluntarily, no recovery can be made as in the case
of natural obligation. (Art. 1960)
A: No, Pedro cannot demand the return of the van until
after the expiration of the one-year period stipulated.
Q: Siga-an granted a loan to Villanueva in the amount
However, if in the meantime he should have urgent need of
of P540,000.00. Such agreement was not reduced to
the van, he may demand its return or temporary use.
writing. Siga-an demanded interest which was paid by
Villanueva in cash and checks. The total amount
Q: Who shall bear the expenses for the accidental damage
Villanueva paid accumulated to P1,200,000.00. Upon
caused by the cargo truck, granting that the truck driver
advice of her lawyer, Villanueva demanded for the return
and truck owner are insolvent? Explain. (2005 Bar
of the excess amount of P660,000.00 which was ignored
Question)
by Siga-an.
1. Is the payment of interest valid?
A: Both Tito and Pedro shall bear equally the costs of the
2. Is solutio indebiti applicable? Explain. (2012 Bar
extraordinary expenses, having been incurred on the
Question)
occasion of actual use of the van by Tito, the bailee, even
though he acted without fault. [Art. 1949(2), NCC]
A:
1. No. Payment of monetary interest is allowed only if:
INTEREST AND THE SUSPENSION OF THE USURY LAW
a. there was an express stipulation for the
Q: What is interest?
payment of interest; and
A: It is the compensation to be paid by the borrower for the
b. the agreement for the payment of
use of the money lent to him by the lender.
interest was reduced in writing.
XPN: When: the debtor incurs in delay, he has to pay interest by way of
1. judicially demanded; or damages (Angel Jose Warehousing v. Chelda Enterprises, 23
2. there is express stipulation made by the parties – SCRA 119).
that the interest due and unpaid shall be added
to the principal obligation and the resulting total Q: What is the rationale behind the invalidity of
amount shall earn interest. unconscionable Interest rate in a loan despite the
suspension of the Usury law?
Note: Compounding of interest may be availed only when there is
a written stipulation in the contract for the payment of interest. A: The Supreme Court said nothing in said circular (Circular
905) suspending Usury Law grants lender authority to raise
Q: What is floating interest? interest rates to levels which will either enslave their
borrowers or lead to a hemorraghing of their assets
A: It is the interest stipulated by banks which is not fixed (Almeda v. CA, G.R. No. 113412, Apr. 17, 1996)
and made to depend upon the prevailing market
conditions, considering the fluctuating economic In the case of Medel v. CA, G.R. No. 131622, Nov. 27, 1998,
conditions. the court ruled that while stipulated interest of 5.5% per
month on a loan is usurious pursuant to CBC No. 905, the
Q: Is a stipulation for floating interest valid? same must be equitably reduced for being iniquitous,
unconscionable and exorbitant. It is contrary to morals. It
A: No. A stipulation for a floating rate of interest in a letter was reduced to 12% per annum in consonant with justice
of credit in which there is no reference rate set either by it and fairplay.
or by the Central Bank, leaving the determination thereof
to the sole will and control of the lender bank is invalid. The Court had previously tagged a 5% monthly interest rate
While it may be acceptable for practical reasons given the agreed upon as “excessive, iniquitous, unconscionable and
fluctuating economic conditions for banks to stipulate that exorbitant, contrary to morals, and the law.” We need not
interest rates on a loan not be fixed and instead be made unsettle the principle we had affirmed in a plethora of
dependent on prevailing market conditions, there should cases that stipulated interest rates of 3% per month and
be a reference rate upon which to peg such variable higher are excessive, iniquitous, unconscionable, and
interest rates (Consolidated Bank and Trust Corp. (Solid exorbitant (Arthur F. Mechavez vs. Marlyn M,
Bank) v. CA, G.R. No. 114672, Apr. 19, 2001). Bermudez, G.R. No. 185368, Oct. 11, 2012).
Q: In an action for Recovery of damages for injury to Q: Samuel borrowed P300,000.00 housing loan from the
person and loss of property, a judgment was rendered bank at 18% per annum interest. However, the promissory
ordering the defendant Mark to pay Ron with legal note contained a proviso that the bank "reserves the right
interest of 12% from the filing of the complaint until paid. to increase interest within the limits allowed by law." By
The decision became final and executory. Christopher virtue of such proviso, over the objections of Samuel, the
argues that the rate of 12% under Central Bank Circular bank increased the interest rate periodically until it
416 was misapplied. How much by way of legal interest reached 48% per annum. Finally, Samuel filed an action
should a judgment debtor pay the judgment creditor? questioning the right of the bank to increase the interest
rate up to 48%. The bank raised the defense that the
A: The legal interest rate of 6% per annum will apply. The Central Bank of the Philippines had already suspended the
judgments spoken of and referred to under Central Bank Usury Law. Will the action prosper or not? Why? (2001 Bar
Circular 416 are judgments in litigations involving loans or Question)
forbearances of money, goods or credits. Any other kind of
monetary judgments which has nothing to do with, or A: The action will prosper. While it is true that the interest
involving loans or forbearance of any money goods or ceilings set by the Usury Law are no longer in force, it has
credits does not fall within the coverage of said law. been held that PD No. 1684 and CB Circular No. 905 merely
Coming to the case at bar, the decision herein sought to be allow contracting parties to stipulate freely on any
executed is one rendered in an Action for Damages for adjustment in the interest rate on a loan or forbearance of
injury to persons and loss of property and does not involve money but do not authorize a unilateral increase of the
any loan, much less forbearances of any money, goods or interest rate by one party without the other's consent (PNB
credits (Reformina v. Tomol, 139 SCRA 260). v. CA, G.R. No. 107569, Nov. 8, 1994). To say otherwise will
violate the principle of mutuality of contracts under Article
Q: What is the effect of a usurious transaction? 1308 of the Civil Code. To be valid, therefore, any change of
interest must be mutually agreed upon by the parties
A: The principal debt remaining without stipulation for (Dizon v. Magsaysay, G.R. No. L-23399, May 31, 1974). In
payment of interest can still be recovered by judicial action. the present problem, the debtor not having given his
In case of such demand, and the debtor incurs in delay, the consent to the increase in interest, the increase is void.
debt earns interest from the date of the demand. Such
interest is not due to stipulation, for the imposition of a
usurious interest void. Rather, it is due to the general
provision of law that in obligations to pay money, where
5. The depositary cannot use the thing deposited, unless: DEPOSIT SALE
a. Permitted by the depositor; or
Ownership
b. Preservation of the thing requires its use, but only
Retained by depositor. Transferred to buyer.
for said purpose.
Q: What is the nature of advance payment in a contract of
Q: Distinguish deposit from:
sale?
1. Mutuum;
2. Commodatum;
A: A so called deposit of an advance payment in the case of
3. Agency;
a sale is not the deposit contemplated under Art. 1962. It is
4. Lease; and
that advance payment upon which ownership is transferred
5. Sale.
to the seller once it is given subject to the completion of
payment by the buyer under an agreement (Cruz v. Auditor
A:
General, No. L-12233, May 30, 1959).
DEPOSIT MUTUUM
Purpose
Safekeeping/custody Consumption Q: Is a contract of deposit gratuitous?
When to return
Upon expiration of the A: GR: A contract of deposit is generally gratuitous.
Upon demand of the
term granted to the
depositor
borrower XPNs:
Subject Matter 1. Agreement to the contrary by the parties
Movable (extrajudicial) Money or other
2. When the depositary is engaged in the business abandoning the ruling in Sia v. CA, making it conform with
of storing goods (warehouseman) for the General Banking Law of 2000.
compensation and not out of pure generosity
3. If the parties agreed that compensation be paid Fixed, savings and current deposits in banks and other
4. Where the property is saved from destruction similar institutions are not true deposits but are considered
without knowledge of the owner, the latter is simple loans because they earn interest. (Art. 1980, NCC)
bound to pay the other person just compensation
(as in case of involuntary deposit) Q: Is ownership necessary in a contract of deposit?
Q: What are the kinds of deposit? A: No. The depositor need not be the owner of the thing
deposited because the purpose of the contract is
A: safekeeping and not transfer of ownership.
1. Judicial (sequestration)
2. Extra-judicial Note: A deposit may also be made by two or more persons each of
a. Voluntary – the delivery is made by the will of the whom believes himself entitled to the thing deposited with a third
depositor (Art. 2005) person, who shall deliver it in a proper case to the one to whom it
belongs.
b. Necessary – made in compliance with a legal
obligation, or on the occasion of any calamity, or
PARTIES TO A CONTRACT OF DEPOSIT
by travelers in hotels and inns, or by travelers
with common carriers (Art. 1996)
Q: Who are the parties to a contract of deposit?
Q: Distinguish judicial from extra-judicial deposit?
A:
1. Depositary – to whom the thing is deposited
A:
2. Depositor – the one who deposits the thing
JUDICIAL EXTRA-JUDICIAL
Creation Q: May the depositary change the manner of the deposit?
Will of the contracting
Will of the court
parties A: Yes, if he may reasonably presume that the depositor
Purpose would consent to the change if the latter knew of the facts
Security or to ensure the of the situation. However, before the depositary may make
right of a party to property such change, he shall notify the depositor thereof and wait
Custody and safekeeping
or to recover in case of for his decision, unless delay would cause danger (Art.
favorable judgment 1974, NCC).
Subject Matter
Movables or immovables Q: What is the degree of care required?
Movables only
but generally immovables
Cause A: The depositary shall observe the diligence of a good
Generally gratuitous but father of a family in the performance of his obligations to
Always onerous
may be compensated protect and preserve the thing deposited, unless a higher
When must the thing be returned degree of diligence is stipulated by the parties.
Upon order of the court or
Upon demand of depositor
when litigation is ended Q: Is a guardian a depositary of the ward’s property?
In whose behalf it is held
Depositor or third person A: The guardian is not holding the funds of the ward merely
Person who has a right for safekeeping exclusively but also intended for the latter’s
designated
maintenance and support. Losses, if any without the fault
Q: What is the nature of the rent of safety deposit boxes? of the guardian shall be deducted from the funds of the
ward (Phil. Trust Co. v. Ballesteros, No. L-8261, April 20,
A: The rent of safety deposit boxes is an ordinary contract 1956).
of lease of things and not a special kind of deposit because
the General Banking Law of 2000 has excluded the renting Q: When the deposit consists of money, what must be
out of safety deposit box where the bank shall act as agent returned upon the extinguishment of contract?
or depositary with the obligation to keep the funds,
securities and other effects which it receives duly separate A: The provision of Article 1896 shall apply wherein the
from the bank’s own assets and liabilities. money deposited must be returned together with interest
on the sums he has applied to his own use from the day on
The case of Sia v. CA, G.R. No. 102970, May 13, 1993 which he did so, and on those which he still owes after the
enunciating that a rent of a safety deposit box is a special extinguishment of thedeposit. The imposition of interest is
kind of deposit, was decided under the former General in the form of penalty for the use of money for himself
Banking Act. However, SC has not yet decided a case there being no agreement to pay the interest at the outset,
otherwise, the contract will be a mutuum.
Note: The provision applies only when the depositary has died and A:
left heir/s who took possession of the thing in the concept of an 1. Payment for necessary expenses for preservation
owner and sold it in good faith to a third person. a. If the deposit is gratuitous – reimburse depositary
b. With compensation – no need for
Q: What is the right of the depositary if he has not been reimbursement; expenses borne by depositary
paid the amount due to him?
2. GR: Pay losses incurred by depositary due to the
A: The depositary may retain the thing in pledge until full character of the thing deposited.
payment of what may be due him by reason of the deposit
(Art. 1994, NCC). XPNs:
a. When at the time of deposit, the depositor was
Q: May the depositary sell the thing retained in pledge? not aware of the dangerous character of the thing
or was not expected to know it;
A: Yes, Article 2108 provides that if, without the fault of the b. When the depositor notified the depositary; or
pledgee, there is danger, destruction, impairment, or c. When the depositary was aware of it without
diminution in value of the thing pledged, he may cause the advice from the depositor.
same to be sold at public auction. The proceeds of the
auction shall be a security for the principal obligation in the 3. In case of an onerous deposit, to pay the
same manner as the thing originally pledged (Pineda, p. 93, compensation agreed upon as consideration for the
2006 ed). deposit
A: GR: Upon demand or at will, whether or not a period has 7. When the thing deposited is delivered sealed and
been stipulated. closed:
a. return the thing in the same condition
XPNs: b. pay damages if seal be broken through his fault
1. Thing is judicially attached while in the c. keep the secret of the deposit when seal is
depositary’s possession. broken w/ or w/o his fault
2. Depositary was notified of the opposition of a d. However, the depositary is authorized to open
third person to the return or the removal of the the seal or lock when:
thing deposited (Art. 1988, NCC) i. there is presumed authority (i.e. the key
3. When the thing is stolen and the period of 30 is delivered)
days from notice to the true owner for him to ii. out of necessity
claim it had not yet lapsed, the depositary cannot
return the thing deposited to the depositor. This 8. GR: Pay for any loss or damage that may arise due to
is intended to protect the true owner. his fault
4. In case of gratuitous deposit, if the depositary has
a justifiable reason for not keeping the deposit. If XPN: Liability of loss through fortuitous event
the depositor refuses, the depositary may secure
its consignation from the court (Art. 1989, NCC). XPNs to XPN (Art. 1979): Even in case of loss through
fortuitous event, still liable if (USAD):
VOLUNTARY DEPOSIT a. Stipulated
b. he Uses thing w/o depositor’s permission
Q: What are the obligations of a depositary in voluntary c. he Delays its return
deposit? d. he Allows others to use it (even if he himself
is authorized to use it)
A:
1. To keep the thing safely and return it 9. Return the thing deposited with all its fruits,
2. Exercise same diligence as he would exercise over his accessions, and accessories (Art. 1983)
own property
3.
rd
Not to deposit the thing with a 3 person, except: 10. Pay interest on sums converted to personal use if the
a. When expressly authorized by stipulation; and deposit consists of money
b. When the preservation of the thing requires its
use (Art. 1977) Q: When is a voluntary deposit extinguished?
NECESSARY DEPOSIT Q: Venus was the owner of Suzuki Grand Vitara which was
insured with Pioneer Insurance for loss and damage.
Q: When is deposit considered as necessary? When she arrived and checked in at Heaven’s Hotel before
midnight, its parking attendant, John, got the key to said
A: Vitara. At about one in the morning, Venus was awakened
1. When it is in compliance with a legal obligation; in her room by a telephone call from the Hotel Chief
2. It takes place on the occasion of any calamity, such as Security Officer who informed her that her Vitara was
fire, storm, flood, pillage, shipwreck, or other similar carnapped while it was parked unattended at the parking
events; area of the bank near the hotel. May the insurance
3. Made by passengers with common carriers; or company, by right of subrogation, recover from the hotel
4. Made by travelers in hotels or inns. the damages it paid to Venus?
Q: When can the keepers of hotels or inns be held A: Yes. The contract of necessary deposit existed between
responsible for loss of thing in case of deposit? the insured Venus and the hotel. Article 1962, in relation to
Article 1998, of the Civil Code defines this contract. Plainly,
A: When both are present: Venus deposited for safekeeping her vehicle through the
1. they have been previously informed by guest hotel’s employee. From Venus’ delivery, when she handed
about the effects the latter brought in, and the keys to John, the contract was perfected. Thus, there is
2. the guest has taken precautions prescribed for the obligation of safely keeping it and returning it.
their safekeeping. Ultimately, the hotel is liable for the loss of Venus’ vehicle
(Durban Apartments Corporation vs. Pioneer Insurance
Note: They are liable regardless of the degree of care Surety Corporation, G.R. No. 179419, January 12, 2011).
exercised when:
a. loss or injury is caused by his employees or even Q: Can the keepers of the hotels or inns exercise the right
by strangers (Art. 2000); or
of retention?
b. loss is caused by act of thief or robber when there
is no use of arms or irresistible force (Art. 2001).
A: Yes, as security for credits incident to the stay at the
Q: What are the instances when the keepers of hotels or hotel (in the nature of a pledge created by operation of
inns are not liable for loss of thing in case of deposit? law).
A: They are not liable when: Q: What is the effect of obtaining food or accommodation
1. loss or injury is caused by force majeure; in a hotel or inn without payment?
2. loss due to the acts of guests, his family, his
employees, or visitors; and A: The act is equivalent to estafa under Art. 315 of the
3. loss arises from the character of the goods (Art. Revised Penal Code
2002)
JUDICIAL DEPOSIT
Q: Are hotel or inn keepers still liable regardless of the
posting of notices exempting themselves from any Q: When does judicial deposit (sequestration) take place?
liability?
A: When an attachment or seizure of property in litigation
A: Yes. Hotel/Inn-keepers cannot escape or limit liability by is ordered by a court (Art. 2005, NCC)
stipulation or the posting of notices. Any stipulation
Note: It is auxiliary to a case pending in court. The purpose is to
between the hotel keeper and the guest whereby the
maintain the status quo during the pendency of the litigation or to
responsibility of the former (Arts. 1998-2001) is suppressed insure the right of the parties to the property in case of a favorable
or diminished shall be void (Art. 2003). judgment (De Leon, Comments and cases on credit transaction, p.
154, 2010).
Q: What is the extent of the liability of the hotel keepers Q: When will the properties sequestered cease to be in
in case of loss? custodia legis?
A: It is a contract where a person binds himself solidarily Q: What is the similarity between guaranty and warranty?
with principal debtor.
A: Each is an undertaking by one party to another to
Q: Distinguish guaranty from suretyship. indemnify or make good the assured against some possible
default or defect in the contemplation of the parties
A:
GUARANTY SURETYSHIP Q: What are the kinds of guaranty?
Surety is an original
Collateral undertaking
promissory undertaking A:
Guarantor-secondarily 1. General classification
Surety-primarily liable
liable a. Personal – guaranty where an individual
Guarantor binds himself Surety undertakes to personally assumes the fulfillment of the principal
to pay if the principal pay if principal obligation;
cannot pay does not pay b. Real – guaranty is property, movable, or
Insurer of solvency of immovable.
Insurer of the debt
debtor 2. As to its origin
Guarantor can avail of a. Conventional – constituted by agreement of the
the benefit of excussion Surety cannot avail of parties
and division in case the benefit of excussion b. Legal – imposed by virtue of a provision of law
creditor proceeds and division c. Judicial – required by a court to guarantee the
against him eventual right of the parties in a case.
3. As to consideration
Q: What is the similarity between guaranty and a. Gratuitous – guarantor does not receive any price
suretyship? or remuneration for acting as such.
b. Onerous – one where the guarantor receives
A: Both guarantor and surety promise or undertake to valuable consideration for his guaranty
answer for the debt, default or miscarriage of another 4. As to person
person. a. Single – constituted solely to guarantee or secure
performance by the debtor of the principal
Q: What are the characteristics of guaranty and obligation.
suretyship? b. Double or subguaranty – constituted to secure
the fulfillment of the obligation of a guarantor by
A: ACCUNCS a sub-guarantor
1. Accessory 5. As to scope and extent
2. Consensual a. Definite – where the guaranty is limited to the
3. Conditional principal obligation only, or to a specific portion
4. Unilateral thereof.
5. Nominate b. Indefinite or simple – where the guaranty
6. Cannot be presumed included all the accessory obligations of the
7. Subsidiary principal, e.g. costs, including judicial costs.
8. Covered by the Statute of Frauds
EFFECTS OF GUARANTY
Note: In case of guaranty, the guarantor must be a person distinct
from the debtor because a person cannot be the personal Q: What are the obligations that may be secured in a
guarantor of himself. A person cannot be both the primary debtor contract of guaranty?
and the guarantor of his own debt as this is inconsistent with the
very purpose of a guarantee which is for the creditor to proceed A:
against a third person if the debtor defaults in his obligation.
1. Valid obligations
A: It must be expressed and in writing (par. 2, Art. 1403, A: Guaranty is unilateral. It exists for the benefit of the
NCC); otherwise, it is unenforceable unless ratified. It need creditor and not for the benefit of the principal who is not a
not be in a public instrument. party to the contract of guaranty. The creditor has every
right to take all possible measures to secure the payment of
Note: Guaranty, as a contract, requires the expression of the his credit. Hence, it can be constituted without the
consent of the guarantor in order to be bound. It cannot be knowledge and even against the will of the principal debtor.
presumed because of the existence of a contract or principal
obligation. It shall be unenforceable by action unless made in Q: What is the effect of subsequent loss of required
writing. qualifications?
Q: Is acceptance necessary in a contract of guaranty? A: The supervening loss of required qualifications will not
generally end the guaranty. However, the creditor is given
A: GR: The acceptance of the creditor is not essential in the right to demand substitution of guarantor.
such contracts.
Q: When is the qualification of the guarantor lost?
XPN: When there is a mere offer of a guaranty or a
conditional guaranty wherein the obligation does not A:
become binding until it is accepted by the creditor and 1. Conviction of a crime involving dishonesty
notice of such acceptance is given to the guarantor. 2. Insolvency
Q: In case of doubt, in whose favor should a contract of Q: What is the effect of absence of direct consideration or
guaranty or surety be resolved? benefit to guarantor?
A: GR: Strict construction against the creditor and liberal in A: Guaranty or surety agreement is regarded valid despite
favor of the guarantor or surety; terms cannot be extended the absence of any direct consideration received by the
beyond the stipulation. guarantor or surety, such consideration need not pass
directly to the guarantor or surety; a consideration moving
XPN: In cases of compensated sureties. to the principal will suffice.
Q: State the general character of guaranty. Q: What is the rule when a married woman is a guarantor?
A: GR: Generally gratuitous (Art. 2048, NCC) A: GR: Binds only her separate property.
Q: What are the rights of a third person who pays for the
debt guaranteed or secured? A: His obligation will survive. His estate will be answerable.
If the estate has no sufficient assets, the guarantor shall be
A: liable.
1. If payment is made without the knowledge or against
the will of the debtor: Q: What is the rule with respect to jurisdiction in an action
a. Guarantor can recover only insofar as the based on a contract of guaranty?
payment has been beneficial to the debtor (Art.
1236) A: The guarantor shall be subject to the jurisdiction of the
b. Guarantor cannot compel the creditor to court of the place where the obligation is to be complied
subrogate him in his rights. (Art. 1237) with.
2. If payment is made with the knowledge or consent of
the debtor – Subrogated to all the rights which BENEFIT OF EXCUSSION
creditor had against the debtor.
Q: What is the benefit of excussion?
Q: What is the extent of guarantor’s liability?
A: It is a right by which the guarantor cannot be compelled
A: to pay the creditor unless the latter has exhausted all the
1. Where the guaranty is definite – It is limited in whole properties of the principal debtor and has resorted to all
or in part to the principal debt to the exclusion of legal remedies against such debtor (Art. 2058).
accessories.
2. Where the guaranty is indefinite or simple – It shall Q: What are the requisites of benefit of exhaustion or
comprise not only the principal obligation but also all excussion?
its accessories, including the judicial costs provided
that the guarantor shall only be liable for those cost A:
incurred after he has been judicially required to pay. 1. The guarantor must set up the right of excussion
against the creditor upon the latter’s demand for
Q: What are the situations when a guarantor may lawfully payment from him; and
be required to pay more than the original obligation of the 2. He must point out to the creditor the available
principal debtor? property of the debtor (not exempted from execution)
found within the Philippine territory (Art. 2060, NCC).
A:
1. If upon demand, a guarantor fails to pay the Q: May a complaint be filed against the debtor and
obligation, he can be held liable for interest, even if in guarantor simultaneously in one case before the
thus paying, the liability becomes more than that in exhaustion of all the properties of the debtor?
the principal obligation. The increased liability is not
because of the contract but because of the default and A: Yes. There is nothing procedurally objectionable in
the necessity for judicial collection. It should be noted, impleading the guarantor as a co-defendant. As a matter of
however, that the interest runs from the time the fact, the Rules of Court on permissive joinder of parties
complaint is filed, not from the time the debt becomes explicitly allow it. If the creditor obtained a favorable
due and demandable (Tagawa v. Aldanese, No.18636, judgment against the debtor and guarantor, the latter is
Sept. 28, 1922 ). entitled to a deferment of the execution of the said
judgment against him until all properties of the debtor shall
2. Creditors suing on a surety bond may recover from the have been exhausted to satisfy the latter’s obligation
surety, as part of their damages, interest at the legal involved in the case.
rate, judicial cost and attorney’s fees when
appropriate even if the surety would thereby become Note: Just because the guarantor was sued at the same time as the
liable to pay more than the total amount stipulated in debtor does not mean that the creditor has already made the
the bond (Dino v. CA, G.R. No. 89775, Nov. 26, 1995). demand on the guarantor.
3. A penalty clause may also increase the liability of the Q: What is the effect of declaration of insolvency with
surety (General Insurance Surety Co. v. Republic, G.R. respect to the right of excussion?
No. L-13873, Jan. 31, 1963).
A: Just because the debtor has been declared insolvent in
insolvency proceeding does not necessarily mean that he
Q: What is the effect of guarantor’s death? cannot pay, for part of the debtor’s assets may still be
available to the creditor. One good proof of the debtor’s
A: His heirs are still liable to the extent of the value of the inability to pay is an unsatisfied writ of execution which has
inheritance because the obligation is not purely personal been returned by the implementing sheriff (Machetti v.
and is therefore transmissible. Hospicio de San Jose, 43 Phil. 297, Feb. 7, 1920).
Q: What is the effect of the debtor’s death? Q: When is there no benefit of excussion?
A: Should there be several guarantors of only one debtor A: Yes. If the guarantor desires to set up defenses as are
for the same debt, the obligation to answer for the same is granted him by law, he may have the opportunity to do so
divided among all. (Joint liability) (Art. 2065) (Art. 2062).
Note: GR: Creditor can claim from the guarantors only up Q: What are the consequences of the guarantor’s
to the extent they are respectively bound to pay. appearance or non-appearance in the case against the
debtor?
XPN: When solidarity has been stipulated.
A:
Should any of the guarantors become insolvent, his share 1. If he does not appear and judgment is rendered
shall be borne by the other guarantors including the paying against the debtor, he cannot set up defenses which
guarantor in the same joint proportion in accordance with he could have set up had he appeared; moreover, he
the rule in solidary obligations. cannot question the decision anymore;
The right to be reimbursed from his co- guarantors is 2. If he appears such as by filing an answer in
acquired ipso jure by virtue of said payment. intervention, he may lose or may win the case. If he
losses, he is still entitled to the benefit of excussion.
Q: What is the effect of payment made by a co-guarantor There is no waiver of his benefit of excussion by his
not by virtue of a judicial demand or by reason of appearance in the case.
insolvency?
Q: What is the effect of compromise between the creditor
A: The paying co-guarantor cannot directly seek and the principal debtor?
reimbursement from the other co-guarantors. He has to
pursue first the claim against the principal debtor alone. A: If the compromise is beneficial to the guarantor, it is
st
(Sadaya v. Sevilla, 126 Phil. 101) valid; otherwise, it is not binding upon him (1 sentence,
Art. 2063, NCC).
Q: Distinguish benefit of division from benefit of Q: What is the effect of compromise between the creditor
contribution. and the guarantor to the principal debtor?
Q: What is the rule on the right of indemnity and XPN: If ratified by the debtor.
reimbursement of the guarantor who paid the debt?
Q: Can the guarantor proceed against the principal debtor
A: GR: Guarantor is entitled to be reimbursed by Debtor even before having paid the creditor?
for:
1. total amount of the debt paid; A: GR: No.
2. legal interest from the time payment was made
known to the debtor; XPNs:
3. expenses incurred after notifying debtor that
demand to pay was made upon him; and 1. When he is sued for payment;
4. damages in accordance with law. 2. In case of insolvency of the principal debtor;
3. When the debtor has bound himself to relieve him
XPNs: from the guaranty within a specified period, and
1. Guaranty is constituted without the knowledge or this period has expired.
against the will of the debtor. 4. When the debt has become demandable by reason
of the expiration of the period of payment;
Effect: Guarantor may only recover so much as 5. After the lapse of ten years, when the principal
was beneficial to the debtor. obligation has no fixed period for its maturity,
unless it be of such nature that it cannot be
rd
2. Payment by 3 persons who does not intend to be extinguished except within a period longer than
reimbursed. ten years;
6. If there are reasonable grounds to fear that the
Effect: deemed a donation and as such requires principal debtor intends to abscond; or
the consent of debtor. 7. If the principal debtor is in imminent danger of
becoming insolvent.
Q: What is the right of the guarantor after the payment of
the debt is made to the creditor? Note: In all these cases, the cause of action of the guarantor is
either to obtain release from the guaranty, or to demand a security
A: Right of subrogation. The guarantor is subrogated to all that shall protect him from any proceedings by the creditor and
st from the danger of insolvency of the debtor (Art. 2071, NCC).
the rights which the creditor had against the debtor (1
par., Art. 2067)
Q: What is the remedy of a person who becomes a
guarantor at the request of another for the debt of a third
Q: What happens when guarantor pays without notice to
person who is not present?
the debtor?
A: He has the option of suing either the principal debtor or
A: The debtor may interpose against the guarantor
the requesting party (Art. 2072, NCC).
defenses available to the debtor as against the creditor at
the time payment was made.
Note: The provision applies when the guarantor has actually paid
the debt.
Note: GR: Guarantor must first notify the debtor before paying,
otherwise, if the debtor pays again, the guarantor can only collect
from the creditor and the guarantor will have no cause of action SUB-GUARANTY
against the debtor even if the creditor becomes insolvent (Art.
2070). Q: What is double or sub-guaranty?
XPN: Guarantor may still recover from debtor if the following A: It is one constituted to guarantee the obligation of the
circumstances concur: guarantor.
1. Guaranty is gratuitous; Note: In case of insolvency of the guarantor for whom he bound
2. Guarantor was prevented by fortuitous event from himself, he is responsible to the co-guarantors in the same terms
notifying the debtor; and as the guarantors (Art. 2075, NCC).
3. Creditor was insolvent.
A: A bond, when required by law, is commonly understood Q: What is the effect of a surety bond filed for an alien
to mean an undertaking that is sufficiently secured, and not staying in the country which is forfeited for violating its
cash or currency. Whenever surety bonds are submitted, terms?
they are subject to any objections as to their sufficiency or
as to the solvency of the bondsman. A: The effect of the violation is that its subsequent
unauthorized cancellation thru mistake or fraud does not
Q: What is a Bondsman? relieve the surety. A bond surrendered thru mistake or
fraud may, therefore, be considered as a valid and
A: A bondsman is a surety offered in virtue of a provision of subsisting instrument (Far Eastern Surety and Ins. Co., v. CA,
law or a judicial order. He must have the qualifications GR No. L-12019, Oct 16, 1958).
required of a guarantor and in special laws like the Rules of
Court. Q: What is the rule when the performance of a bond is
rendered impossible?
Q: What are the qualifications to a property bond?
A: It is the surety’s duty to inform the court of the
A: The necessary qualifications of sureties to a property happening of the event so that it may take action or decree
bond shall be as follows: in the discharge of the surety when the performance of the
1. Each of them must be a resident owner of real bond is rendered impossible by an act of God, or the
estate within the Philippines; obligee, or the law. (People v. Otiak Omal & Luzon Co., Inc.,
2. Where there is only one surety, his real estate GR. No. L-14457, June 30, 1961)
must be worth at least the amount of the
undertaking;
3. In case there are two or more sureties, they may
justify severally in amounts less than that
expressed in the undertaking, if the entire sum
justified is equivalent to the whole amount of bail
demanded (Sec. 12, Rule 114, Rules of Court).
A:
PLEDGE CHATTEL MORTGAGE REAL ESTATE MORTGAGE ANTICHRESIS
Definition
An accessory contract whereby a
Chattel mortgage is a It is a contract whereby the
debtor delivers to the creditor or A contract whereby the CR
contract by virtue of which a debtor secures to the
a third person a movable or acquires the right to
personal property is recorded creditor the fulfillment of a
personal property, or document receive the fruits of an
in the Chattel Mortgage principal obligation, specially
evidencing incorporeal rights, to immovable of the debtor,
Register as a security for the subjecting to such security,
secure the fulfillment of a with the obligation to
performance of an obligation. immovable property or real
principal obligation with the apply them to the payment
rights over immovable
condition that when the of interest, if owing, and
property, in case the
obligation is satisfied, the thing thereafter to the principal
principal obligation is not
delivered shall be returned to the of his credit.
paid or complied with at the
pledgor with all its fruits and
time stipulated.
accessions, if any.
Object of the contract
movable or personal property, or immovable property or real
Personal property
document evidencing incorporeal rights over immovable fruits of an immovable
rights property
Necessity of delivery
Property is delivered to the
Property must be delivered Delivery is not necessary Delivery is not necessary
creditor
Q: What are the obligations that can be secured by pledge, A: GR: No.
mortgage and antichresis?
XPN: If the third party pledgor or mortgagor expressly
A: agreed to be bound solidarily with the principal
1. Valid obligations debtor.
2. Voidable obligations
Q: Is mortgage constituted to secure future advances Q: ABC loaned to MNO P40,000 for which the latter
valid? pledged 400 shares of stock in XYZ Inc. It was agreed that
if the pledgor failed to pay the loan with 10% yearly
A: Yes. It is a continuing security and not discharged by interest within four years, the pledgee is authorized to
repayment of the amount named in the mortgage, until the foreclose on the shares of stock. As required, MNO
full amount of the advances is paid. However, a chattel delivered possession of the shares to ABC with the
mortgage can only cover obligations existing at the time the understanding that the shares would be returned to MNO
mortgage is constituted and not to obligations subsequent upon the payment of the loan. However, the loan was not
to the execution of the mortgage. paid on time. A month after 4 years, may the shares of
stock pledged be deemed owned by ABC or not? Reason.
Q: What is the nature of an assignment of rights to (2004 Bar Question)
guarantee an obligation of a debtor?
A: The shares of stock cannot be deemed owned by ABC
A: It is in effect a mortgage and not an absolute conveyance upon default of MNO. They have to be foreclosed. Under
of title which confers ownership on the assignee (Manila Article 2088, NCC, the creditor cannot appropriate the
Banking Corp. v. Teodoro, Jr., G.R. No. 53955, Jan. 13, 1989) things given by way of pledge. And even if the parties have
stipulated that ABC becomes the owner of the shares in
ACCOMMODATION MORTGAGE case MNO defaults on the loan, such stipulation is void for
being a pactum commissorium.
Q: Who is an accommodation mortgagor?
Q: To secure a loan obtained from a rural bank, Purita
A: He is a third person who is not a party to a principal assigned her leasehold rights over a stall in the public
obligation and secures the latter by mortgaging or pledging market in favor of the bank. The deed of assignment
his own property. provides that in case of default in the payment of the
loan, the bank shall have the right to sell Purita's rights
Q: What is the extent of the liability of an accommodation over the market stall as her attorney-in-fact, and to apply
mortgagor? the proceeds to the payment of the loan.
A: It extends up to the loan value of their mortgaged 1. Was the assignment of leasehold rights a mortgage or a
property and not to the entire loan itself. cession? Why?
2. Assuming the assignment to be a mortgage, does the
Note: Accommodation is also applicable to pledge since the law provision giving the bank the power to sell Purita's rights
provides that “third parties who are not parties to the principal constitute pactum commissorium or not? Why? (2001 Bar
obligation may secure the latter by pledging or mortgaging their Question)
own property” (Art. 2085, Civil Code). It is also applicable to
antichresis since Art. 2139 states that the last paragraph of Art.
2085 shall be applicable to a contract of antichresis. A:
1. The assignment was a mortgage, not a cession, of the
PACTUM COMMISSORIUM leasehold rights. A cession would have transferred
ownership to the bank. However, the grant of authority to
Q: What is pactum commisorium? the bank to sell the leasehold rights in case of default is
proof that no such ownership was transferred and that a
A: It is a stipulation whereby the thing pledged or mere encumbrance was constituted. There would have
mortgaged or subject of antichresis shall automatically been no need for such authority had there been a cession.
become the property of the creditor in the event of non-
payment of the debt within the term fixed. Such stipulation 2. No, the clause in question is not a pactum
is null and void. commissorium. It is pactum commissorium when default in
the payment of the loan automatically vests ownership of
Q: What are the elements of pactum commissorium? the encumbered property in the bank. In the problem
given, the bank does not automatically become owner of
A: the property upon default of the mortgagor. The bank has
1. There is a pledge, mortgage or antichresis of a to sell the property and apply the proceeds to the
property by way of security; and indebtedness.
2. There is an express stipulation for the automatic
appropriation by the creditor of the property in case of Q: Spouses Uy Tong purchased seven motor vehicles from
non-payment Bayanihan Investment payable in installments. It was
agreed that if the spouses should fail to pay their
Note: What are prohibited are those stipulations executed or made obligation, Bayanihan will automatically be the owner of
simultaneously with the original contract, and not those the apartment which the spouses has a leasehold right.
subsequently entered into. The spouses after paying the downpayment, failed to pay
the balance, hence, Bayanihan filed an action for specific
performance against the spouses. The judgment provided
that in case the spouses failed to pay the obligation within
Q: What are the kinds of pledge? A: He may invoke Art. 559, NCC. The defense that
pawnshop owner acquired ownership of the thing in good
A: faith is not available.
1. Conventional - by agreement of parties
2. Legal - by operation of law Note: Art. 559 – The possession of movable property acquired in
good faith is equivalent to a title. Nevertheless, one who has lost
any movable or has been unlawfully deprived thereof, may recover
Note: A thing lawfully pledged to one creditor, cannot be pledged
it from the person in possession of the same.
to another as long as the 1st pledge subsists. (Mission de San
Vicente v. Reyes 19 Phil 524)
If the possessor of a movable lost or of which the owner has been
unlawfully deprived, has acquired it in good faith at a public sale,
the owner cannot obtain its return without reimbursing the price
paid therefore.
A: The purpose of the requirements is to forestall fraud, XPN: Unless there is stipulation to the contract (Art. 2100,
because a debtor may attempt to conceal his property from NCC)
his creditors when he sees it in danger of execution by
simulating a pledge thereof with an accomplice (Tec Bi & Note: Pledgee is liable for the loss or deterioration of the thing
pledged caused by the acts or negligence of the agents or
Co. v. Chartered Bank of India, 41 Phil. 576).
employees of the pledgee.
3. Apply the fruits, income, dividends, or interests Q: What is the effect of the return of the thing pledged to
produced or earned by the property, to interests or the pledgor by the pledgee?
expenses first, then to the principal. (Art. 2102, NCC)
A: The pledge shall be extinguished. Any stipulation to the
4. GR: Cannot use the thing pledged without authority. contrary shall be void (Art. 2110, NCC).
(Art. 2104)
Q: What is the presumption when the thing is found in the
XPNs: possession of the pledgor subsequent to the perfection of
a. If the pledgor had given him authority or the pledge?
permission to use it;
b. If the use of the thing is necessary for its A: There is prima facie presumption that the thing pledged
preservation but only for that purpose. has been returned by the pledgee to the pledgor or owner,
in any of the following circumstances:
5. Return the thing pledged to the pledgor when the 1. If the thing is found in the possession of the
principal obligation is fulfilled or satisfied it. pledgor or owner after the pledge had been
perfected; or
Q: Does the debtor continue to be the owner of the thing 2. If the thing is found in the possession of a third
in case the same is expropriated by the State? person who received it from the pledgor or owner
nd
after the perfection of the pledge (2 par., Art.
A: No. Ownership is transferred to the expropriating 2110, NCC).
authority.
Note: It is presumed that the accessory obligation of pledge has
Note: The creditor may bring actions pertaining to the owner of been remitted when the thing pledged, after its delivery to the
the thing pledged in order to recover it from, or defend it against a creditor, is found in the possession of the debtor, or of a third
third person (Art. 2103, NCC). person who owns the thing (Art. 1274, NCC).
Q: Can the debtor ask for the return of the thing pledged Q: What is the requisite for the renunciation or
against the will of the creditor? abandonment of the pledge by the pledgee?
st
A: GR: No. A: There must be a statement in writing to that effect (1
sentence, Art. 2111, NCC).
XPNs:
1. If the debtor has paid the debt and its interest, Note: The renunciation of the pledge is not contrary to law, public
with expenses in a proper case (Art. 2105, NCC). order, public policy, morals or good customs. Further, Art. 1356 of
the NCC, which speaks of the form of contracts, must be complied
2. If the thing is in danger of destruction or
with.
impairment provided, the pledgor offers an
acceptable substitute for it which is of the same
Q: Is acceptance or return of the thing necessary for the
kind and not of inferior quality and without
validity of the renunciation under Art. 2111?
prejudice to the application of Art. 2108
whenever warranted. (Art. 2107)
A: No. it is not a case of donation where acceptance is
necessary to make the donation valid.
Q: Can the pledgee cause the sale of the thing pledged in
public auction where the obligation is not yet due?
Q: Suppose the thing was not returned, is there extinction
of the pledge?
A: Yes, if without the fault of the pledgee, there is danger of
destruction, impairment or diminution in value of the thing
A: Yes. Even if the thing was not returned, as long as there
pledged. The proceeds of the auction shall be security for
is an effective renunciation, abandonment or waiver, the
the principal obligation in the same manner as the thing
pledge is already extinguished.
originally pledged (Art. 2108, NCC).
The pledgor is considered a depositor and the pledgee shall
Q: What are the rights of the creditor who is deceived on
become a depositary of the thing. Accordingly, the law on
the substance or quality of the thing pledged?
deposit will apply.
A: To demand:
Q: What happens when the property was not sold at the
1. from the pledgor an acceptable substitute of the
first auction (such as when there are no participating
thing; or
bidders)?
2. the immediate payment of the principal
obligation (Art. 2109, NCC).
A: There will be another setting for the second auction
following the same formalities.
Note: The remedies are alternative and not cumulative. Only one
may be chosen. The law used the conjunctive “or”. Either one is
more convenient than annulment.
Q: What is the remedy of the pledgee if no sale was OBM and the measure of such damages is interest at
effected on the second auction? the legal rate of 6% per annum on the amounts due
and unpaid at the expiration of the periods
A: The pledgee is now allowed to appropriate the thing respectively provided in the contracts (Integrated
pledged. This is an exception to the prohibition against Realty Corp. v. PNB, G.R. No. 60705, June 28, 1989)
pactum commissorium.
Q: What is the rule when two or more things are pledged?
Q: What is deed of acquittance?
A: The pledgee may choose which he will cause to be sold,
st
A: It is a document of the release or discharge of the unless there is a stipulation to the contrary (1 sentence,
pledgor from the entire obligation including interests and Art. 2119, NCC)
expenses. This shall be executed by the pledgee after
appropriating the thing in case a no sale was made in a Q: What is the restriction on the right of the pledgee
st
second auction. under the 1 sentence of Art. 2119?
Q: Who can bid in the public auction? A: He may only demand the sale of only as many of the
nd
things as are necessary for the payment of the debt (2
A: sentence, Art. 2119, NCC).
1. The public
2. Pledgor/owner/debtor – shall be preferred if same RIGHTS OF PLEDGOR
terms as the highest bidder is offered
3. Pledgee/creditor – he must not be the only bidder, Q: What are the rights of the pledgor?
otherwise, his bid is invalid and void
A:
Q: May a third person pay the pledgor’s debt? 1. Right to dispose the thing pledged, provided there is
consent of the pledgee (Art. 2097, NCC)
A: Yes, if he has any interest in the fulfillment of the
principal obligation (Art. 2117, NCC). Note: The pledge however, shall continue in possession.
Q: What is the rule when what has been pledged is a 2. Right to ask that the thing pledged be deposited (Art.
“credit”? 2104 and Art. 2106, NCC)
A: The pledgee may collect and receive the amount due. He 3. Right to substitute thing pledged (Art. 2107, NCC)
shall apply the same to the payment of his claim, and
deliver the surplus, should there be any, to the pledgor (Art. Q: When may the owner ask that the thing pledged be
2118, NCC). deposited judicially or extrajudicially?
Q: What is a pledge created by operation of law? Q: What are the effects of sale of the thing pledged?
Q: When does the mortgage lien attach in case of new or Q: Petitioner obtained a loan of P20K from defendant
future improvements? Rural Bank of Kawit. The loan was secured by a REM over
a parcel of land. The mortgage contract states that the
A: On the date of the registration of the mortgage (Luzon mortgage will cover the payment of the loan of P20K and
Lumber and Hardware Co., Inc, v. Quiambao, G.R. No. L- such other loans or other advances already obtained or to
5638, Mar. 20, 1954). be obtained by the mortgagors from the bank. The loan of
P20k was fully paid. Thereafter they again obtained a loan
Q: What is dragnet clause? of P18K, secured by the same mortgage. The spouses
defaulted. The bank extra judicially foreclosed the
A: It is a mortgage provision which is specifically phrased to mortgage. Was the foreclosure sale valid?
subsume all debts of past or future origin. It is a valid and
legal undertaking, and the amounts specified as A: Yes. It has long been settled that mortgages given to
consideration in the contracts do not limit the amount for secure future advancements are valid and legal contracts;
which the pledge or mortgage stands as security, if from that the amounts named as consideration in said contract
the four corners of the instrument, the intent to secure do not limit the amount for which the mortgage may stand
future and other indebtedness can be gathered. A pledge as security, if from the four corners of the instrument the
or mortgage given to secure future advancements is a intent to secure future and other indebtedness can be
continuing security and is not discharged by the repayment gathered. A mortgage given to secure advancement is a
of the amount named in the mortgage until the full amount continuing security and is not discharged by repayment of
of all advancements shall have been paid (Premiere the amount named in the mortgage, until the full amount
Development Bank v. Central Surety & Insurance, Inc., G.R. of the advancements is paid (Mojica v. CA, G.R. No. 94247,
No. 176246 [2009]). Sept. 11, 1991).
Q: May a mortgage credit be alienated or assigned to a Q: Does an action for foreclosure of mortgage survive the
third person? death of mortgagor?
A: Yes, in whole or in part, with the formalities required by A: Yes, because the claim is not a pure money claim but an
law (Art. 2128, NCC). action to enforce a mortgage lien. Being so, the judgment
rendered therein may be enforced by a writ of execution.
Q: What are the requisites to be followed for assignment The action may be prosecuted by the interested person
of credit? against the executor or administrator independently of the
testate or intestate proceedings of the settlement of the
A: An assignment of a credit, right or action shall produce mortgagor’s estate “for the reason that such claims cannot
no effect as against third persons, unless it appears in a in any just sense be considered claims against the estate,
public instrument, or the instrument is recorded in the but the right to subject specific property to the claim arises
Registry of Property in case the assignment involves real from the contract of the debtor whereby he has during life
property (Art. 1625, NCC). set aside certain property for its payment, and such
property does not, except in so far as its value may exceed
Q: May the creditor claim from the third person in the debt, belong to the estate” (Testamentaria de Don
possession of the property payment of the credit? Amadeo Matute Olave v. Canlas, No. L-12709, Feb. 28,
1962).
A: Yes, up to the extent secured by the property which the
third party possesses, in terms and with the formalities Q: What are the options or remedies of the mortgagee in
which the law establishes (Art. 2129, NCC). case of death of the debtor?
A: Note: GR: The redemption must be made within one year after the
1. Judicial – governed by Rule 68, Rules of Court sale, if the mortgagee is a bank, banking or credit institutions (Sec.
78, R.A. 337).
2. Extrajudicial– mortgagee is given a SPA to sell the
mortgaged property (Act No. 3135) XPN:,If the mortgagor is a juridical person, it can exercise the right
to redeem the foreclosed property until, but not after, the
Q: What is the nature of judicial foreclosure? registration of the certificate of foreclosure sale or within three
months after foreclosure, whichever is earlier. Thereafter, such
A: It is an action quasi in rem (Ocampo v. Domalanta, 20 mortgagor loses its right of redemption (Sec. 47, General Banking
SCRA 1136). Law)
A: It must contain the correct number of the certificate of A: No, they are imbued with public policy considerations
title and the correct technical description of the real and any waiver thereon would be inconsistent with the
property to be sold (San Jose v. CA, GR No. 106953, Aug. 19, intent and letter of the law. It would thus be converting
1993). into a private sale what ought to be a public auction.
Q: Where should the notice be posted? Q: May a mortgagor enjoin the implementation of a writ
of possession on the ground that there is a pending case
A: The notice of sale should be posted in at least 3 public for annulment of the extrajudicial foreclosure of the REM?
places in the city or municipality where the property is
situated: A: No. As a rule, any question regarding the validity of the
mortgage or its foreclosure cannot be a legal ground for
a. Sheriff’s Office; refusing the issuance of a writ of possession. Regardless of
b. Assessor’s Office; and whether or not there is a pending suit for annulment of the
c. Register of Deed mortgage or the foreclosure itself, the purchaser is entitled
to a writ of possession, without prejudice to the outcome of
Q: What is the purpose of notice of sale? the case. Hence, an injunction to prohibit the issuance of
writ of possession is entirely out of place. Prohibition does
A: To inform the public of the nature and condition of the not lie to enjoin the implementation of a writ of possession.
property sold, and of the time, place and terms of the sale. Once the writ of possession has been issued, the trial court
has no alternative but to enforce the writ without delay
Q: MBTC granted a loan to spouses Peñafiel, who (Sps. Ong v. CA, G.R. No. 121494, June 8, 2000).
mortgaged their two (2) parcels of land in Mandaluyong.
The spouses defaulted in the payment. MBTC instituted an Q: Can the mortgagee recover the deficiency?
extrajudicial foreclosure proceeding under Act No. 3135.
The Notice of Sale was published in Maharlika Pilipinas, A: If there be a balance due to the mortgagee after applying
which has no business permit in Mandaluyong and its list the proceeds of the sale, the mortgagee is entitled to
of subscribers shows that there were no subscribers from recover the deficiency (DBP v. Mirang, G.R. No. L-29130,
Mandaluyong. Did MBTC comply with the publication Aug. 8, 1975).
requirement under Section 3, Act No. 3135?
Note: In judicial foreclosure, the Rules of Court specifically gives
A: No. Maharlika Pilipinas is not a newspaper of general the mortgagee the right to claim for deficiency in case a deficiency
circulation in Mandaluyong where the property is located. exists (Sec. 6, Rule 70).
To be a newspaper of general circulation, it is enough that
it is published for the dissemination of local news and While Act No. 3135 governing extrajudicial foreclosures of
general information, that it has a bona fide subscription list mortgage does not give a mortgagee the right to recover deficiency
after the public auction sale, neither does it expressly or Q: What are the requisites for valid right of redemption?
impliedly prohibit such recovery.
A:
Q: What is stipulation of upset price? 1. Must be made within one year from the time of the
registration of the sale.
A: It is a stipulation of minimum price at which the property 2. Payment of the purchase price of the property plus 1%
shall be sold to become operative in the event of a interest per month together with the taxes thereon, if
foreclosure sale at public auction. It is null and void. any, paid by the purchaser with the same rate of
interest computed from the date of registration of the
REDEMPTION sale; and
3. Written notice of the redemption must be served on
Q: What is redemption? the officer who made the sale and a duplicate filed
with the proper Register of Deeds (Rosales v. Yboa,
A: Transaction by which the mortgagor reacquires or buys G.R. No. L-42282, Feb. 28, 1983).
back the property which may have passed under the
mortgage or divests the property of the lien which the Note: The redemptioner should make an actual tender in good
mortgage may have created. faith of the full amount of the purchase price as provided above,
i.e., the amount fixed by the court in the order of execution or the
amount due under the mortgage deed, as the case may be, with
Q: What are the kinds of redemption?
interest thereon at the rate specified in the mortgage, and all the
costs, and judicial and other expenses incurred by the bank or
A: institution concerned by reason of the execution and sale and as a
1. Equity of redemption – right of mortgagor to redeem result of the custody of said property less the income received
the mortgaged property after his default in the from the property (Heirs of Quisimbing v. PNB, G.R. No. 178242,
performance of the conditions of the mortgage but Jan. 20, 2009).
before the sale of the mortgaged property or
confirmation of sale. It applies in case of judicial Q: Is the period of redemption a prescriptive period?
foreclosure.
2. Right of redemption – right of the mortgagor to A: No. The period of redemption is not a prescriptive period
redeem the mortgaged property within one year from but a condition precedent provided by law to restrict the
the date of registration of the certificate of sale. It right of the person exercising redemption.
applies in case of extrajudicial foreclosure.
If a person exercising the right of redemption has offered to
Q: X and Y, judgment creditors of A, obtained the transfer redeem the property within the period fixed, he is
of the title of the mortgaged property in their names. considered to have complied with the condition precedent
Earlier, A executed a mortgage over the same property in prescribed by law and may thereafter bring an action to
favor of FGU Insurance. The latter mortgage was enforce redemption.
registered. When A defaulted, FGU foreclosed the
property. A certificate of sale was thereafter issued in If, on the other hand, the period is allowed to lapse before
FGU’s favor, which was confirmed by the RTC. However, the right of redemption is exercised, then the action to
before the new TCT could be issued, X and Y filed their enforce redemption will not prosper, even if the action is
respective motion for intervention and to set aside the brought within the ordinary prescriptive period.
judgment alleging that they are the new owners of the
property and the failure of FGU to implead X and Y in the Q: D obtained a loan from C secured by a REM over a
action for foreclosure deprived the latter of due process. parcel of land. When D defaulted, C extrajudicially
Is the contention of X and Y correct? foreclosed the property. C was declared the highest bidder
in the auction. On October 29, 1993, C caused the
A: No. Subordinate lien holders acquire only a lien upon the registration of the certificate of sale. On November 9,
equity of redemption vested in the mortgagor, and their 1994 D filed a complaint for annulment of the extrajudicial
rights are strictly subordinate to the superior lien of the foreclosure and auction sale. Can D redeem the property
mortgagee. Such equity of redemption does not constitute beyond the one year redemption period?
a bar to the registration of the property in the name of the
mortgagee. Registration may be granted in the name of the A: No. D lost any right or interest over the subject property
mortgagee but subject to the subordinate lien holders’ primarily because of his failure to redeem the same in the
equity of redemption, which should be exercised within manner and within the period prescribed by law. His
ninety (90) days from the date the decision becomes final. belated attempt to question the legality and validity of the
This registration is merely a necessary consequence of the foreclosure proceedings and public auction must
execution of the final deed of sale in the foreclosure accordingly fail. (Sps. Landrito v. CA G.R. No. 133079, Aug.
proceedings (Looyuko v. CA, G.R. No. 102696, July 12, 9, 2005)
2001).
Q: Can a mortgagor, whose property has been
extrajudicially foreclosed and sold, validly execute a
Foreclosure sale
outstanding obligation
One year redemption period
+ interest stipulated in the agreement
Note:
XPN: If the mortgagee is a bank or credit institution, there is one year right of redemption.
Equity of redemption – right of the mortgagor not to be divested of the ownership of the mortgaged
property and to stop the foreclosure sale by paying the mortgagee debt within 90-120 days from entry of
judgment and even beyond, until finality of order confirming the sale.
Q: What are the obligations of an antichretic creditor? Q: What are the characteristics of chattel mortgage?
A: To: A:
1. pay the taxes and charges assessable against the 1. It is a formal contract because it must be embodied in
property like real estate taxes and others; a public instrument and recorded in the Chattel
2. bear the necessary expenses for the preservation Mortgage Register;
of the property;
3. bear the expenses necessary for the repair of the 2. It is an accessory contract because its existence
property; and depends upon an existing valid principal obligation;
4. apply the fruits received for payment of the
outstanding interests, if any, and thereafter of the 3. It is a unilateral contract because the obligation is only
principal. on the part of the creditor to free the chattel from
encumbrance upon the payment of the principal
Q: What is the rule on the application of the fruit upon the obligation;
debt?
4. It does not convey dominion but is only a security (In
A: It must be expressly agreed between the creditor and re: Du Tec Chuan, No. 11156, March 28, 1916);
the debtor that the former, having been given possession of
the properties given as security, is to apply their fruits to 5. It creates a real right or a lien which is being recorded
the payment of interest, if owing, and thereafter to the and follows the chattel wherever it goes (Northern
principal of his credit (Art. 2132, Civil Code). Motors, Inc. v. Coquia, No. L-40018, Dec. 15, 1975).
Q: When can the antichretic debtor reacquire the Q: What are the requisites in a chattel mortgage?
possession of his property?
A:
A: The debtor can only demand the return of the property 1. GR: It covers only movable property
after having fully paid his obligations to the creditor. It is
not fair for the debtor to regain the possession of the XPN: When the parties treat as personalty that which
property when his debt has not been fully paid. Until there is according to its nature realty.
is full payment of the obligation, the property shall stand as
security therefor (Macapinlac v. Gutierrez Repide, No. 2. Registration with the Chattel Mortgage Register.
18574, Sept. 20, 1922). 3. Description of the property.
rd
4. Accompanied by an affidavit of good faith to bind 3
Q: How can the creditor be exempted from the obligations persons.
imposed by Art. 2135?
Note: The absence of an affidavit of good faith does not affect the
A: The creditor may compel the debtor to re-enter into the validity of the contract.
property.
Q: What are the laws that govern chattel mortgages?
Note: Article 2135. The creditor, unless, there is a stipulation to the
contrary, is obliged to pay the taxes and charges upon the estate. A:
He is also bound to bear the expenses necessary for its 1. Chattel Mortgage Law (Act No. 1508)
preservation and repair. 2. Provisions of the Civil Code on pledge
Q: What is the remedy of the creditor in case of Note: In case of conflict between nos. 1 and 2, the former
nonpayment of his credit? shall prevail.
Q: What are the similarities between chattel mortgage Q: Distinguish contract of chattel mortgage from contract
and pledge? of real estate mortgage
A: A:
1. Both are executed to secure performance of a REAL ESTATE
CHATTEL MORTGAGE
principal obligation; MORTGAGE
2. Both are constituted only on personal property; Subject matter
3. Both are indivisible; Personal property Real property
4. Both constitute a lien on the property; As to Guaranty of Future Obligations
5. In both cases, the creditor cannot appropriate the Cannot guaranty future
property to himself in payment of the debt; obligations because it May guaranty future
6. When the debtor defaults, the property must be requires immediate obligations
sold for the payment of the creditor recording
7. Extinguished by the fulfillment of the principal
obligation or by the destruction of the property REGISTRATION
pledged or mortgaged.
Q: What is the legal significance of registration?
Q: What may be the subject matter of chattel mortgage?
A: It is tantamount to the symbolic delivery of the mortgage
A: to the mortgagee, which is equivalent to actual delivery
1. Shares of stock in a corporation; (Meyers v. Thein, No. 5577, Feb. 21, 1910).
2. Interest in business;
3. Machinery and house of mixed materials treated by Q: What s the period within which the registration should
parties as personal property and no innocent third be made?
person will be prejudiced thereby (Makati Leasing and
Finance Corp. v. Weaver Textile Mills, Inc., No. L-58469, A: The law does not provide any specific time. Yet, the law
May, 16, 1983); is substantially and sufficiently complied with where the
4. Vessels, the mortgage of which have been recorded registration is made by the mortgagee before the
with the Philippine Coast Guard in order to be mortgagor has complied with his principal obligation and no
effective as to third persons; right of innocent third persons is prejudiced.
5. Motor vehicles, the mortgage of which had been
registered both with the Land Transportation Q: What is the difference in registration of real mortgage
Commission and the Chattel Mortgage Registry in and chattel mortgage?
order to affect third persons;
6. House which is intended to be demolished; or A: A deed of real estate mortgage is considered registered
7. Growing crops and large cattle (pars. 2 and 3, Sec. 7, once recorded in the entry book. However, chattel
Act No. 1508). mortgage must be registered not only in the entry book but
also in the Chattel Mortgage Register (Associated Insurance
Note: Section 7 of the Chattel Mortgage Law does not demand and Surety Co. v. Lim Ang, (CA) 52 Off. Gaz. 5218).
specific description of every chattel mortgaged in the deed of
mortgage, but only requires that the description of the mortgaged
property be such as to enable the parties to the mortgage or any Q: When should the registration of the chattel mortgage
other person to identify the same after a reasonable investigation be made?
and inquiry (Saldana v. Phil. Guaranty Co., Inc., No. L-13194, Jan.
29, 1960); otherwise, the mortgage is invalid. A: The law is silent on the time or period when registration
should be made. The Court of Appeals has held though that
Q: What is affidavit of good faith? “the law is substantially and sufficiently complied with
where the registration is made by the mortgagee before
A: It is an oath in a contract of chattel mortgage wherein the mortgagor has complied with his principal obligation
the parties “severally swear that the mortgage is made for and no right of innocent third persons is prejudiced
the purpose of securing the obligation specified in the (Ledesma v. Perez, 2 C.A. Rep. 126).
conditions thereof and for no other purposes and that the
same is a just and valid, existing obligation and one not Q: In case of foreclosure sale in chattel mortgage, may the
entered into for the purpose of fraud.” creditor recover deficiency if the redemption price is less
than the debt secured?
Note: The absence of the affidavit vitiates the mortgage only as
against third persons without notice like creditors and subsequent A: GR: CR may recover deficiency.
encumbrances, but its absence is not fatal between the parties.
XPN: When the chattel mortgage is used to secure the
purchase of personal property in installments (Recto
Law).
Q: What is the effect of ratification of the owner of the Q: Can solutio indebiti be applied because of doubtful or
business? difficult question of law?
A: Ratification produces the effect of an express agency; A: Yes, there can be payment because of “doubtful or
and this is true even if the business is not successful (Art difficult question of law” may lead to solutio indebiti
2149, NCC). because of the mistake committed. (Art. 2155, NCC)
Q: What are the liabilities of the owner even if there is no Q: What is the liability of a person who accepts an undue
ratification? payment in bad faith?
A: A:
1. Liability for the obligation incurred in his interest. 1. He shall pay legal interest if a sum of money is involved,
2. Liability for necessary and useful expenses and for or shall be liable for fruits received or which should have
damages. been received if the thing produces fruits.
3. Damages suffered by the gestor while performing his
duties as such. (Art 2150, NCC) 2. He shall furthermore be answerable for any loss or
impairment of the thing from any cause, and for damages
Q: What is the rule if the owner is a minor? to the person who delivered the thing, until it is recovered
(Art. 2159).
A: Even if the owner is a minor, he is still liable under the
article for he should not be unjustly enriched at another’s Q: What is the effect of acceptance in good faith if there
expense (Rotea v. Delupio, 67 Phil. 330) was mistake in the payment?
demand them from any possessor within thirty (30) days from the 9. conditional donations
unlawful seizures. 10. premiums for 2 year – insurers
Q: What is the extent of liability of a debtor for his Q: Who are the debtors under FRIA law?
obligations?
A: Debtor shall refer to, unless specifically excluded by a
A: The debtor is liable with all his property, present and provision of this Act,
future, for the fulfillment of his obligations, subject to the 1. a sole proprietorship duly registered with the
exemptions provided by law. (Art. 2236) Department of Trade and Industry (DTI)
2. a partnership duly registered with the Securities
ORDER OF PREFERENCE OF CREDIT and Exchange Commission (SEC)
3. a corporation duly organized and existing under
Q: What is the order of preference of credits? Philippine laws, or
4. an individual debtor who has become insolvent as
A: defined herein.
1. Those credits which enjoy preference with respect to
specific movable, excluded all others to the extent of Q: What are the classes of creditors?
the value of the personal property to which the
preference refers (Article 2246). A:
2. If there are two or more credits with respect to the 1. Secured creditors;
same specific movable property, they shall be satisfied 2. Unsecured creditors;
pro-rata, after the payment of duties, taxes, and fees 3. Trade creditors and suppliers; and
due the State or any subdivision thereof (Art. 2247, 4. Employees of the debtor.
NCC).
3. Those credits which enjoy preference in relation to Q: Who are excluded from the above definition?
specific real property or real rights, exclude all others
to the extent of the value of the immovable or real A: The term debtor does not include banks, insurance
right to which the preference refers (Art. 2248). companies, pre-need companies, and national and local
4. If there are two or more credits with respect to the government agencies or units.
same specific real property or real rights, they shall be
satisfied pro rata, after the payment of the taxes and Q: What are the tests to determine insolvency?
assessments upon the immovable property or real
right (Art. 2249, NCC). A:
5. The excess, if any, after the payment of the credits 1. Equity test – A state of inability of a person to pay his
which enjoy preference with respect to specific debts at maturity.
property, real or personal, shall be added to the free 2. Balance sheet test – The assets, if all made
property which the debtor may have, for the payment immediately available, would not be sufficient to
of the other credits (Art. 2250, NCC). discharge the balance.
6. Those credits which do not enjoy any preference with
respect to specific property and those which enjoy Q: What are the remedies of an insolvent debtor?
preference, as to the amount not paid, shall be
satisfied according to the following rules: A:
a. In the order established in Article 2244; 1. Petition the court to suspend payments of his debts; or
b. Common credits referred to in Article 2245 shall 2. To be discharged from his debts and liabilities by
enjoy no preference and shall be paid pro rata voluntary or involuntary insolvency proceedings (Sec.
regardless of dated (Art. 2251, NCC). 1)
Q: What is the rule regarding obligation arising from Q: What is the effect of insolvency proceedings filed by
transactions utilizing ATM networks? individual debtors?
A: The state of a person whose liabilities are more than his Note: The result is different if the petitioner is a corporation
assets. The term is frequently used in the more restricted because under the Revised Rules on Corporate Recovery, all claims
sense to express inability of a person to pay his debts as whether secured or unsecured are stayed.
they become due in the ordinary course of his business.
Q: What are the powers of the Rehabilitation Receiver? Q: List the procedures after preparation to approval of
Rehabilitation Plan
A: The rehabilitation receiver shall be deemed an officer of
the court with the principal duty of preserving and A:
maximizing the value of the assets of the debtor during the 1. Consultation with Debtor and Creditors.
rehabilitation proceedings, determining the viability of the 2. Creditor Approval of Rehabilitation Plan - The Plan is
rehabilitation of the debtor, preparing and recommending deemed to have been approved by a class of creditors
a Rehabilitation Plan to the court, and implementing the if members of the said class holding more than fifty
approved Rehabilitation Plan and other powers provided in percent (50%) of the total claims of the said class vote
FRIA. in favor of the Plan.
3. Submission of Rehabilitation Plan to the Court.
Note: The rehabilitation receiver shall not take over the 4. Filing of Objections to Rehabilitation Plan by creditor
management and control of the debtor but may recommend the under the following grounds:
appointment of a management committee over the debtor. (a) The creditors' support was induced by fraud;
However, the court may appoint and direct the rehabilitation (b) The documents or data relied upon in the
receiver to assume the powers of management of the debtor, or Rehabilitation Plan are materially false or
appoint a management committee that will undertake the misleading; or
management of the debtor. (c) The Rehabilitation Plan is in fact not supported by
the voting creditors.
Q: What are the grounds for Removal of the Rehabilitation 5. Hearing on the Objections.
Receiver? 6. Confirmation of the Rehabilitation Plan. –The court
may confirm the Rehabilitation Plan notwithstanding
A: unresolved disputes over claims if the Rehabilitation
1. Incompetence, gross negligence, failure to perform or Plan has made adequate provisions for paying such
failure to exercise the proper degree of care; claims.
2. Lack of a particular or specialized competency required 7. Termination of proceedings.
by the specific case;
3. Illegal acts or conduct in the performance of his duties Q: What is the Effect of Confirmation of the Rehabilitation
and powers; Plan?
4. Lack of qualification or presence of any
disqualification; A:
5. Conflict of interest that arises after his appointment; 1. It shall be binding upon the debtor and all persons
and who may be affected by it, including the creditors;
6. Manifest lack of independence. 2. The debtor shall comply with the provisions of the
Rehabilitation Plan and shall take all actions necessary
Note: The rehabilitation receiver may be removed at any time by to carry out the Plan;
the court eithermotu proprio or upon motion by any creditor/s 3. Payments shall be made to the creditors in accordance
holding more than fifty percent (50%) of the total obligations of the with the provisions of the Rehabilitation Plan;
debtor. 4. Contracts and other arrangements between the
debtor and its creditors shall be interpreted as
Q: What is the effect of Sale or Disposal of Encumbered continuing to apply to the extent that they do not
Property of the Debtor and Assets of Third Parties Held by conflict with the provisions of the Rehabilitation Plan;
Debtor? 5. Any compromises on amounts or rescheduling of
timing of payments by the debtor shall be binding on
A: The court may authorize the sale, transfer, conveyance creditors regardless of whether or not the Plan is
or disposal of encumbered property of the debtor, or successfully implement; and
property of others held by the debtor pertaining to third 6. Claims arising after approval of the Plan that are
parties under a financial, credit or other similar transactions otherwise not treated by the Plan are not subject to
if (a) such sale or disposal is necessary for the continued any Suspension Order.
operation of the debtor's business; and (b) the debtor has
made arrangements to provide a substitute lien or Q: What is the Period for Confirmation of the
ownership right that provides an equal level of security for Rehabilitation Plan.
the counter-party's claim or right.
A: The court shall have a maximum period of one (1) year
Note: Third parties who have in their possession or control from the date of the filing of the petition to confirm a Plan,
property of the debtor shall not transfer, conveyor otherwise Otherwise, it may upon motion or motu propio, be
dispose of the same to persons other than the debtor, unless upon converted into one for the liquidation of the debtor.
prior approval of the rehabilitation receiver.
Q: What are the effects of filing of the petition? Q: Who may refrain from voting during the creditor’s
meeting?
A:
1. No disposition in any manner of his property may be A: Creditors who are unaffected by the Suspension Order
made by the petitioner except insofar as concerns the may refrain from attending the meeting and from voting
ordinary operations of commerce or of industry in therein. Such persons shall not be bound by any agreement
which he is engaged; [(Sec. 95 (e)] determined upon at such meeting, but if they should join in
the voting they shall be bound in the same manner as are
2. No payments may be made by the petitioner except in the other creditors. (Sec. 98)
the ordinary course of his business or industry [(Sec.
95 (f)]; and; Q: What is the effect of disapproval of petition?
3. Upon motion, the court may issue an order suspending A: If the decision of the meeting be negative as regards the
any pending execution against the individual debtor. proposed agreement or if no decision is had in default of
Provide, That properties held as security by secured such number or of such majorities, the proceeding shall be
creditors shall not be the subject of such suspension terminated without recourse. In such case, the parties
order. (Sec. 96) concerned shall be at liberty to enforce the rights which
correspond to them. (Sec. 99)
Note: No creditor shall sue or institute proceedings to collect his
claim from the debtor from the time of the filing of the petition for LIQUIDATION
suspension of payments and for as long as proceedings remain
pending except:
(a) those creditors having claims for personal labor,
Q: Discuss the steps in Liquidation of INSOLVENT
maintenance, expense of last illness and funeral of the JURIDICAL DEBTORS.
wife or children of the debtor incurred in the sixty (60)
days immediately prior to the filing of the petition; and A:
(b) secured creditors. A. Voluntary Liquidation –
1. Filing of verified petition for liquidation with the court
Q: Who are the creditors affected by the filing of the containing the following:
petition? a. a schedule of the debtor's debts and liabilities
including a list of creditors with their addresses,
A: Only creditors included in the schedules filed by the amounts of claims and collaterals, or securities, if
debtor shall be cited to appear and to take part in the any;
meeting. (Sec. 5) Hence, those who did not appear because b. an inventory of all its assets including receivables
they were not informed of the proceedings are unaffected and claims against third parties; and
by the same. c. the names of at least three (3) nominees to the
position of liquidator.
Q: Who are the creditors not affected by order of
2. If the court finds the petition sufficient in form and
suspension of payments?
substance it shall, within five (5) working days issue
the Liquidation Order.
A:
3. Publication of the petition or motion in a newspaper of
1. Those having claims for personal labor, maintenance,
general circulation once a week for two (2)
expenses of the last illness and funeral of wife or child
consecutive weeks.
of debtor, incurred during the 60 days immediately
4. Election/Appointment of Liquidator
preceding the filing of the petition; and
5. Determination of claims.
2. Those having legal or contractual mortgages. (Sec. 9) 6. Submit Liquidation Plan.
change to: secured creditors who failed to attend the 7. Implementation of the Plan (e.g. Selling of assets at
meeting or refrained from voting therein. public auction, payment of claims)
8. Discharge of Liquidator.
Q: When is a petition for suspension of payments deemed
rejected? B. Involuntary Liquidation
1. Three (3) or more creditors the aggregate of whose
A: claims is at least either One million pesos
1. When the number of creditors representing at least (Php1,000,000,00) or at least twenty-five percent
3/5 of the liabilities not attend; (Secs. 8, 10) or (25%0 of the subscribed capital stock or partner's
2. When the two majorities required are not in favor of contributions of the debtor, whichever is higher, may
the proposed agreement (Sec. 10). apply for and seek the liquidation of an insolvent
debtor by filing a petition for liquidation of the debtor
with the court. The petition shall show that:
(a) there is no genuine issue of fact or law on the
claims/s of the petitioner/s, and that the due and
demandable payments thereon have not been
made for at least one hundred eighty (180) days 5. Liquidation of the debtor’s assets and payment of his
or that the debtor has failed generally to meet its debts (Sec. 119);
liabilities as they fall due; and 6. Composition, if agreed upon (Sec. 63);
(b) there is no substantial likelihood that the debtor 7. Discharge of Liquidator (Sec 122)
may be rehabilitated. 8. Appeal
2. If the petition or motion is sufficient in form and
substance, the court shall issue an Order: Q: What are the documents to accompany the petition?
(1) directing the publication of the petition or motion
in a newspaper of general circulation once a week A: 1. A verified schedule must contain:
for two (2) consecutive weeks; and a. A full and true statement of all debts and
(2) directing the debtor and all creditors who are not liabilities of the insolvent debtor; and
the petitioners to file their comment on the b. An outline of the facts giving rise or which might
petition or motion within fifteen (15) days from give rise to a cause of action against such
the date of last publication. insolvent debtor; (Sec. 15)
3. If, after considering the comments filed, the court
determines that the petition or motion is meritorious, 2. A verified inventory, which must contain:
it shall issue the Liquidation Order a. An accurate description of all the personal and
real property of the insolvent exempt or not from
4. Publication of the petition or motion in a newspaper of
execution including a statement as to its value,
general circulation once a week for two (2)
location and encumbrances thereon; and
consecutive weeks.
b. An outline of the facts giving rise or which might
5. Election/Appointment of Liquidator
give rise to a right of action in favor of the
6. Determination of claims.
insolvent debtor. (Sec. 16)
7. Submit Liquidation Plan.
8. Implementation of the Plan (e.g. Selling of assets at
Q: What is the effect of filing petition?
public auction, payment of claims)
9. Discharge of Liquidator. A: Once the petition is filed, it ipso facto takes away and
deprives the debtor petitioner of the right to do or commit
Note: During the pendency of or after a rehabilitation court- any act of preference as to creditors, pending the final
supervised or pre-negotiated rehabilitation proceedings, three (3) adjudication. (Philippine Trust Co. v. National Bank, 42 Phil
or more creditors whose claims is at least either One million pesos 413)
(Php1,000,000.00) or at least twenty-five percent (25%) of the
subscribed capital or partner's contributions of the debtor, INVOLUNTARY INSOLVENCY
whichever is higher, may also initiate liquidation proceedings.
Q: Who may file for involuntary liquidation?
INSOLVENCY OF INDIVIDUAL DEBTORS
A: Any creditor or group of creditors with a claim of, or with
VOLUNTARY INSOLVENCY claims aggregating at least Php500, 000.00 may file a
verified petition for liquidation with the court of the
Q: Who may apply for voluntary liquidation? How is this province or city in which the individual debtor resides.
done?
Q: What are the acts of insolvency?
A: An individual debtor whose properties are not sufficient
to cover his liabilities, and owing debts exceeding A:
Php500,000.00, may apply to be discharged from his debts 1. Such person is about to depart or has departed from
and liabilities by filing a verified petition with the court of the Philippines, with intent to defraud his creditors;
the province or city in which he has resided for six (6) 2. Being absent from the Philippines, with intent to
months prior to the filing of such petition with the following defraud his creditors, he remains absent;
attachments: 3. He conceals himself to avoid the service of legal
1. A schedule of debts and liabilities and process for purpose of hindering or delaying or
2. Inventory of assets. defrauding his creditors;
4. He conceals, or is removing, any of his property to
Q: What is the procedure for voluntary insolvency? avoid its being attached or taken on legal process;
5. He has suffered his property to remain under
A: attachment or legal process for 3 days for the purpose
1. Filing of the petition by the debtor praying for the of hindering or delaying or defrauding his creditors;
declaration of insolvency (Sec.103); 6. He has confessed or offered to allow judgment in favor
2. Issuance Liquidation order (Sec.104); of any creditor or claimant for the purpose of
3. Publication of petition or motion in a newspaper of hindering or delaying or defrauding any creditor or
general circulation once a week for two consecutive claimant;
weeks [Sec. 112 (d)]; 7. He has willfully suffered judgment to be taken against
4. Election and appointment of Liquidator [Sec. 112 (j)]; him by default for the purpose of hindering or delaying
or defrauding his creditors;
Q: Distinguish voluntary insolvency from involuntary Q: Is the assignee required to give a bond?
insolvency.
A: After his election, the assignee is required to give a bond
A: for the faithful performance of his duties.
VOLUNTARY
INVOLUNTARY INSOLVENCY
INSOLVENCY Note: Courts have the power to appoint receivers to hold the
Filed by any creditor or group of property of individuals or corporations although no insolvency
Filed by the debtor.
creditors. proceedings are involved. A receiver appointed by a court before
Only 1 creditor is the institution of the insolvency proceedings may be appointed the
3 or more creditors are required. permanent assignee in such proceedings.
required.
No requirement for Requirements for creditors:
Q: What are the effects of Liquidation Order? Q: When may a partnership be declared insolvent?
A: Upon the issuance of the Liquidation Order: A: A partnership may be declared insolvent by a petition of
(a) the juridical debtor shall be deemed dissolved the partners and may be done during the continuation of
and its corporate or juridical existence the partnership business or after its dissolution and before
terminated; the final settlement thereof.
(b) legal title to and control of all the assets of the
debtor, except those that may be exempt from A partnership may be declared insolvent notwithstanding
execution, shall be deemed vested in the the solvency of the partners constituting the same.
liquidator or, pending his election or (Campos Rueda & Co. v. Pacific Commercial Co., G.R. No. L-
appointment, with the court; 18703 Aug. 28, 1922)
(c) all contracts of the debtor shall be deemed
terminated and/or breached, unless the Q: Who may petition for declaration of insolvency of a
liquidator, within ninety (90) days from the date partnership?
of his assumption of office, declares otherwise
and the contracting party agrees; A:
(d) no separate action for the collection of an 1. Voluntary insolvency – By all the partners or any of
them;
unsecured claim shall be allowed. Such actions
2. Involuntary insolvency – By one or more of the
already pending will be transferred to the
partners or three or more creditors of the partnership.
Liquidator for him to accept and settle or contest.
If the liquidator contests or disputes the claim,
Q: What are the properties included in the insolvency
the court shall allow, hear and resolve such
proceedings?
contest except when the case is already on
appeal. In such a case, the suit may proceed to
A:
judgment, and any final and executor judgment 1. All the property of the partnership; and
therein for a claim against the debtor shall be 2. All the separate of each of the partners except:
filed and allowed in court; and a. Separate properties of limited partners (Art. 1843,
(e) no foreclosure proceeding shall be allowed for a NCC)
period of one hundred eighty (180) days. b. Properties which are exempt by law
Q: What are the rights of secured creditors? Q: What is the effect of insolvency of partnership or any
partner?
A: The Liquidation Order shall not affect the right of a
secured creditor to enforce his lien in accordance with the A:
applicable contract or law. A secured creditor may: 1. A partnership may be declared insolvent
(a) waive his right under the security or lien, prove notwithstanding the solvency of the partners
his claim in the liquidation proceedings and share constituting the same.
in the distribution of the assets of the debtor; or 2. A partnership is not necessarily insolvent because one
(b) maintain his rights under the security or lien: of its members is insolvent. The solvent members are
bound to wind up the partnership affairs.
If the secured creditor maintains his rights under the 3. Under the law, a partnership is automatically dissolved
security or lien: by the insolvency of any partner or of the partnership
(1) the value of the property may be fixed in a
manner agreed upon by the creditor and the
liquidator. When the value of the property is less
than the claim it secures, the liquidator may
convey the property to the secured creditor and
the latter will be admitted in the liquidation
proceedings as a creditor for the balance. If its
value exceeds the claim secured, the liquidator
may convey the property to the creditor and
waive the debtor's right of redemption upon
receiving the excess from the creditor;
(2) the liquidator may sell the property and satisfy
the secured creditor's entire claim from the
proceeds of the sale; or
(3) the secure creditor may enforce the lien or
foreclose on the property pursuant to applicable
laws.
Q: In the filing of claims in an insolvency proceeding, what debts may and may not be proved?
A:
DEBTS THAT MAY BE PROVED DEBTS THAT MAY NOT BE PROVED
The debts which may be proved against the estate of the debtor
in insolvency proceedings are the following: The following debts are not provable or allowed in insolvency
proceedings:
1. All debts due and payable from the debtor at the time of
adjudication of insolvency; (Sec. 53, Insolvency Law) 1. Claims barred by the statute of limitations; (Sec. 29, 73)
2. All debts existing at the time of the adjudication of 2. Claims of secured creditors with a mortgage or pledge in
insolvency but not payable until a future time, a discount their favor unless they surrender the security; (Sec. 59)
being made if no interest is payable by the terms of the 3. Claims of creditors who hold an attachment or execution
contract; on the property of the debtor duly recorded and not
3. Any debt of the insolvent arising from his liability as dissolved; (Sec. 32)
indorser, surety, bail or guarantor, where such liability 4. Claims on account of which a fraudulent preference was
became absolute after the adjudication of insolvency but made or given; (Sec. 61)
before the final dividend shall have been declare; (Sec. 54) 5. Support, as it does not arise from any business
4. Other contingent debts and contingent liabilities contracted transaction but from the relation of marriage; and
by the insolvent if the contingency shall happen before the 6. A claim for unliquidated damages arising out of a pure
order of final dividend; (Sec. 55); and tort, which neither constitutes a breach of an express
5. Any debt of the insolvent arising from his liability to any contract nor results in any unjust enrichment of the
person liable as bail, surety, or guarantor or otherwise, for tortfeasor that may form the basis of an implied
the insolvent, ho shall have paid the debt in full, or in part. contract.
(Sec. 56)
Note: After the close of the insolvency proceedings and the Q: What is discharge?
happening of the contingency, the creditor may pursue any
available remedy for the collection of his claim. A: Discharge, under the Insolvency Law, is the formal and
judicial release of an insolvent debtor from his debts with
Q: How are claims arising or acquired after insolvency the exception of those expressly reserved by law.
treated?
Note: Only natural persons may ask for discharge; corporations
A: cannot ask for discharge. (Sec. 52) When granted, takes effect not
1. Claim arose after commencement of proceedings – An from its date, but from the commencement of the proceedings in
obligation coming in force after the initiation of the insolvency.
proceedings is not generally a proper claim to be
proved. Q: When insolvent debtor may apply for discharge?
2. Claim owned by insolvent purchased after insolvency – A: A debtor may apply to the RTC for a discharge at anytime
One indebted to an insolvent will not be permitted to after the expiration of 3 months from the adjudication of
interpose as an offset, a claim owned by the insolvent insolvency, but not later than 1 year from such adjudication
which he has purchased after the insolvency. of insolvency, unless the property of the insolvent has not
been converted into money (Sec. 64) without his fault,
Q: What are the alternative rights of a secured creditor? thereby delaying the distribution of dividends among the
creditors in which case the court may extend the period
A:
1. To maintain his rights under his security or lien and Any creditor may oppose the discharge by filing his
ignore the insolvency proceedings, in which case, it is objections thereto, specifying the grounds of his
the duty of the assignee to surrender to him the opposition. After the debtor has filed and served his
property encumbered; verified answer, the court shall try the issue or issues raised
(Sec. 66).
2. To waive his right under the security or lien and
thereby share in the distribution of the assets of the
debtor; or
Q: What is a contract of lease? A: A lease of personal property with option to buy, where
title is transferred at the end of the contract provided rents
A: A contract by which one of the parties agrees to give the have been fully paid.
other for a fixed time and price the use or profit of a thing
or of his service to another who undertakes to pay some Q: Distinguish lease from sale
rent, compensation or price.
A:
A contract of lease is a consensual, bilateral, onerous and LEASE SALE
commutative contract by which one person binds himself Only the use or
to grant temporarily, the use of a thing or the rendering of Ownership is
enjoyment is
some service to another who undertakes to pay some rent, transferred
transferred
compensation, or price (4 Sanchez Roman 736). Transfer is temporary Transfer is permanent
Seller must be the
Q: What are the characteristics of a contract of lease? Lessor need not to be
owner at the time of
the owner
delivery
A: The price of the object
1. Consensual; (distinguished from the Usually, the selling price
2. Bilateral; rent) is usually not is mentioned
3. Commutative; mentioned
4. Principal contract;
5. Nominate; Q: Distinguish lease from usufruct
6. Subject matter must be within the commerce of man;
7. Purpose is to allow enjoyment or use of a thing; A:
8. Purpose to which the thing will be devoted should not LEASE USUFRUCT
be immoral; Ownership on the part Ownership of the thing
9. Onerous; of the lessor is not on the part of the
10. Period is temporary; necessary grantor is necessary
11. Period may be definite or indefinite; and
GR: Personal right
12. Lessor need not be the owner. Real right
XPN: Real right
Q: What are the kinds of lease?
Includes all possible
Limited to the use
uses and enjoyment of
A: specified in the contract
the thing
1. Lease of things (immovable/ movable) – One of the
Lessor places and
parties binds himself to give to another the enjoyment Owner allows the
maintains the lessee in
or use of a thing for a price certain. usufructuary to use and
the peaceful enjoyment
enjoy the property
of the thing
Period: definite or indefinite but not more than 99
May be for an indefinite
years. (Art. 1634) Definite period
period
Note: It may be made orally but if the lease of real property is Created by law,
Created by contract as a
for more than one year, it must be in writing (Statute of contract, last will or
general rule
Frauds). prescription
Lessee has no duty to Usufructuary has duty
2. Lease of work (contract for a piece of work) – One of make repairs to make repairs
the parties binds himself to produce a result out of his Lessee has no duty to Usufructuary has a duty
work or labor for a certain price. pay taxes to pay taxes
Lessee cannot
Note: Duties of a contractor who furnishes work and Usufructuary may
constitute a usufruct of
materials: constitute a sublease
the property leased
1. to deliver;
2. to transfer ownership; and Q: Who are persons disqualified to become lessees?
3. to warrant eviction and hidden defects.
A: Persons disqualified to buy referred to in article 1490
3. Lease of service – One party binds himself to render to and 1491, are also disqualified to become lessees of the
the other some service for a price certain. things mentioned therein. (Article 1646)
Article 1491. The following persons cannot acquire by purchase, A: Even if not recorded with the Registry of Property, the
even at a public or judicial auction, either in person or through the lease is binding between the parties. However, if third
mediation of another: persons have to be bound, the contract must be recorded.
(1) The guardian, the property of the person or persons who Note: However, if a purchaser has actual knowledge of the
may be under his guardianship; existence of the lease, which knowledge is equivalent to
registration, he is bound by the lease. (Quimson vs. Suarez, 45 Phil.
(2) Agents, the property whose administration or sale may 901)
have been intrusted to them, unless the consent of the
principal has been given; Q: What are the effects if lease of real property is NOT
registered?
(3) Executors and administrators, the property of the estate
under administration;
A:
(4) Public officers and employees, the property of the State or 1. The lease is not binding on third persons
of any subdivision thereof, or of any government-owned or 2. Such third person is allowed to terminate the
controlled corporation, or institution, the administration of lease in case he buys the property from the
which has been intrusted to them; this provision shall apply owner-lessor
to judges and government experts who, in any manner 3. Actual knowledge of existence and duration of
whatsoever, take part in the sale; lease, is equivalent to registration
(5) Justices, judges, prosecuting attorneys, clerks of superior
and inferior courts, and other officers and employees Q: What is meant by proper authority?
connected with the administration of justice, the property
and rights in litigation or levied upon an execution before the A: Proper authority means a power of attorney to
court within whose jurisdiction or territory they exercise their constitute the lease.
respective functions; this prohibition includes the act of
acquiring by assignment and shall apply to lawyers, with Q: When is a proper authority required?
respect to the property and rights which may be the object of
any litigation in which they may take part by virtue of their
A:
profession;
1. Husband – with respect to the paraphernal real estate
(6) Any others specially disqualified by law. of the wife;
2. Father or Guardian – with respect to the property of
Q: Are foreigners disqualified to lease lands in the the minor or the ward;
Philippines? 3. Manager – with respect to the property under
administration.
A: GR: Yes
Q: Who is a manager?
XPN: lease of lands for residential purposes (Smith,
Bell and Co. vs. Register of Deeds, 96 Phil 53) A:
1. administrator of a conjugal property
Q: What is the form required of a contract of lease of 2. administrator of a co-ownership
things? 3. administrator of state patrimonial property
A: Lease may be made orally, but if the lease of real Q: Is the husband the administrator of the paraphernal
property is for more than a year, it must be in writings real property?
under the statute of frauds.
A: No, unless such administrator has been transferred to
Note: Where the written contract of lease called for the erection him by virtue of a public document. (Art. 110, FC)
by the tenant, of a building of strong wooden materials, but what
he actually did construct on the leased premises was semi-concrete Q: A husband was properly given his wife authority to
edifice at a much higher cost, in accordance with a subsequent oral administer the paraphernal real property. Does this
agreement with the lessor, oral evidence is admissible to prove the necessarily mean that just because the husband is now
verbal modification of the original terms of the lease. (Paterno v.
the administrator, he can lease said property without any
Jao Yan, GR. No. L-12218, February 28, 1961)
further authority?
Q: What is the purpose in recording a lease?
A: It depends.
1. If the lease will be for one year or less, no other
A: A lease does not have to be recorded in the Registry of
authority is required.
Property to be binding between the parties; registration is
2. If the lease on the real property will be for more favor of the lessee. Hence, oridinarily the lessee, at the
than a year, then a special power of attorney end of the original period, may either:
(aside from the public instrument transferring a. leave the premises; or
administration) is required. (Art.1878, NCC) b. remain in possession
3. Furthermore, whether it be a) or b), if the lease is 4. In co-ownership, assent of co-owner is needed,
to be recorded, there must be a special power of otherwise, it is void or ineffective as against non-
attorney. (Art 1647, NCC). consenting co-owners
5. Where according to the terms of the contract, the
Note: If it is the wife who is administering her paraphernal real lease can be extended only by the written consent of
estate, the husband has no authority whatever, to lease, in any the parties thereto, no right of extension can rise
way, or administer the property. without such written consent
6. If the option is given to the lessor, the lessee cannot
Q: If a father, who is administering the real estate of his renew the lease against the former’s refusal
minor son, wants to record the lease, should he ask for 7. The lessor may impose additional conditions after the
judicial permission? expiration of the original period
8. Par. 2, Art. 1687, NCC provides that in the event that
A: Yes (Art. 1647, NCC). But even if no judicial authorization the lessee has occupied the leased premises for over a
is asked, such defect cannot be invoked by a lessee who has year, courts may fix a longer term of lease
dealt with him. (Summers v. Mahinay, [CA] 40 O.G. [11th S]
No. 18, p.40). Only the son or his own heirs may question Note: The power of the courts to establish a grace period is
the validity of the transaction. potestative or discretionary, depending on the particular
circumstances of the case.
DURATION OF LEASE
Q: What is perpetual lease?
Q: What is the duration of the lease?
A: A lease contract providing that the lessee can stay in the
A: premises for as long as he wants and for as long as he can
1. With determinate or fixed period – Lease will be for the pay the rentals and its increase.
said period and it ends on the day fixed without need
of a demand Note: It is not permissible. It is a purely potestative condition
2. No fixed period because it leaves the effectivity and enjoyment of leasehold rights
a. For rural lands (Art. 1682, NCC) – It shall be all to the sole and exclusive will of the lessee.
time necessary for the gathering of fruits which
the whole estate may yield in 1 year, or which it Q: Is an agreement that the duration of lease shall subsist
may yield once for an indefinite period provided that the payment of
b. For urban lands rentals is up-to-date (Perpetual lease)?
3. If rent is paid daily, lease is from the day to day
4. If rent is paid weekly, lease is from week to week A: No. It is a purely potestative condition because it leaves
5. If rent paid monthly, lease is from month to month the effectivity and enjoyment of leasehold rights to the sole
6. If rent is paid yearly, lease is from year to year and exclusive will of the lessee.
Q: When is the lessee entitled to a reduction of rent? Q: What is tacita reconducion (implied new lease)?
A: GR: In case of the loss of more than one-half of the fruits A: A lease that arises if at the end of the contract the lessee
through extraordinary and unforeseen fortuitous events. should continue enjoying the thing leased for 15 days with
the acquiescence of the lessor, unless a notice to the
XPN: Stipulation to the contrary. contrary had previously been given by the either party.
Note: It is applicable only to lease of rural lands. Q: What are the requisites for tacita reconducion?
Q: What are the effects of an implied new lease? A: To deliver the thing leased to the lessee.
2. Accessory obligations contracted by a third person are Q: What are the rules on lease of things when lessee is an
extinguished (Art. 1672, NCC) alien?
3. Other terms of the original contract are revived
A:
Note: The terms that are revived are only those which are 1. Personal property – 99 year limit applies.
germane to the enjoyment of possession, but not those with
2. Aliens cannot lease public lands, and cannot acquire
respect to special agreements which are by nature foreign to
the right of occupancy or enjoyment inherent in a contract of private lands except through succession
lease. 3. If lease of real property (private lands), maximum of
25 years renewable for another 25 years (P.D. 713)
LEASE OF THINGS 4. Under the Investor ‘s Lease Act of 1995, the 25 year
period was extended to 50 years provided the
Q: Is lease of real property a real right? following conditions are met:
a. Lessee must make investments
A: GR: Lease of a real property is a personal right b. Lease is approved by DTI
c. If terms are violated, DTI can terminate it
XPNs: It is a real right:
1. If it is for more than one year and to be Note: The ILA did not do away with P.D. 713, under ILA
the consent of DTI is required, while in P.D. 713 no
enforceable – must be writing
consent is required.
2. If it is registered with Registry of Property -
regardless of its period
Q: What is rent?
Q: What are the effects if the lease of real property is not
A: The compensation either in money, provisions, chattels
registered?
or labor, received by the lessor from the lessee.
A:
Q: What are the requisites of rent?
1. It is not binding on third persons;
2. Such third person is allowed to terminate the lease in
A:
case he buys the property from the owner-lessor;
1. Not fictitious or nominal, otherwise the contract
3. Actual knowledge of existence and duration of lease is
becomes gratuitous;
equivalent to registration; or
2. Capable of determination; and
4. A stranger who knows of the existence of the lease,
3. May be in the form of products, fruits, or construction,
but was led to believe that the lease would expire
as long as it has value.
soon or before the new lease in favor of him begins,
the stranger can still be considered innocent.
Note: Owner has the right to fix the rent because the contract is Q: Who are the parties to a sublease?
consensual and not imposed by law, but increasing the rent is not
an absolute right of the lessor. The new rate must be reasonable A:
and in no case shall the lessor be allowed to increase the rental
1. Lessor
when the term has not yet expired, unless, the tenant consents
(Paras, p. 262) 2. Sublessor (original lessee in the contract of lease)
3. Sublessee
If the rent is fixed for the first time, courts cannot interfere, but if it
is a renewal, the courts can settle the disagreements. Q: Does the lessee have the right to sublease the
property?
Q: What is the right of a purchaser of a leased property?
A: Yes, unless expressly stipulated.
A: GR: Purchaser of thing leased can terminate the lease.
XPNs: Note: If the prohibition to sublease is not express but only implied,
1. Lease is recorded in Registry of Property; the sublease will still be allowed. (Art.1650)
2. There is a stipulation in the contract of sale that
There must be no express prohibition for sublease in a contract of
the purchaser shall respect the lease;
lease. Also, the duration of sublease cannot be longer than that of
3. Purchaser knows the existence of the lease; the lease to which it is dependent
4. Sale is fictitious; or
5. Sale is made with a right of repurchase. Q: May a lessee sublease a leased property without the
consent of the lessor? (1999 Bar Question)
SUBLEASE
A: Yes, provided that there is no express prohibition against
Q: What is sublease? subleasing. Under the law, when in the contract of lease of
things, there is no express prohibition, the lessee may
A: It is an agreement between a sublessor and sublessee sublet the thing leased without prejudice to his
whereby the former grants temporarily the enjoyment or responsibility for the performance of the contract toward
use of the same thing, service or work subject of the the lessor (Art. 1650, NCC).
original contract of lease to the latter in exchange for
compensation or price, respecting the terms and conditions In case there is a sublease of the premises being leased, the
of original contract of lease between the lessor and lessee. sublessee is bound to the lessor for all the acts which refer
to the use and preservation of the thing leased in the
Q: What are the juridical relationships in a sublease manner stipulated between the lessor and the lessee (Art.
arrangement? 1651, NCC).
Note: These relationships co-exist and are intimately As to the lessee, the latter shall still be responsible to the
related to each other but are distinct from one another lessor for the rents; bring to the knowledge of the lessor
(Albano, p. 748). every usurpation or untoward act which any third person
may have committed or may be openly preparing to carry
Q: What is the nature of sublease? out upon the thing leased; advise the owner the need for all
repairs; to return the thing leased upon the termination of
A: It is a separate and distinct contract of lease wherein the the lease just as he received it, save what has been lost or
original lessee becomes a sublessor to a sublessee. impaired by the lapse of time or by ordinary wear and tear
or from an inevitable cause; responsible for the
Q: Alfonso was the owner of a building being leased to deterioration or loss of the thing leased, unless he proves
Beatriz. The contract allowed subleasing of the building, that it took place without his fault.
thus, Beatriz subleased it to Charlie. Charlie directly paid
his rent to Alfonso after the lease expired. Was Charlie Q: What is the responsibility of the lessee to the lessor in
correct? case he subleases the property?
A: No. There are two (2) distinct leases involved, the A: By express provision of Article 1650, NCC, the lessee is
principal lease and the sublease. In such agreement, the still responsible for the performance of his obligations
personality of the lessee does not pass on to or is acquired toward the lessor.
by the sublessee. Thus, the payment to the lessor was not
payment to the sublessor. Alfonso was a stranger to the
sublease agreement. (Emilia Blas vs. Court of Appeals,
1989)
A: GR: No juridical relationship between lessor and Q: Distinguish sublease from assignment of lease.
sublessee.
XPNs: A:
1. All acts which affect the use and preservation of
SUBLEASE ASSIGNMENT OF LEASE
the thing leased
2. For any rent due to the lessor from the lessee There are 2 leases and 2
There is only one
which the latter failed to pay, the lessor must distinct juridical
juridical relationship,
collect first from the lessee, and if the lessee is relationships although
that of the lessor and
insolvent, the sublessee becomes liable immediately connected
the assignee, who is
(subsidiary liability) and related to each
converted into a lease
other
Q: When is a sub-lessee liable to the lessor? Personality of the lessee Personality of the lessee
does not disappear disappears
A: Lessee does not
1. All acts which refer to the use and preservation of the Lessee transmits
transmit absolutely his
thing leased in the manner stipulated between the absolutely his rights to
rights and obligations to
lessor and the lessee the assignee
the sublessee
2. The sublessee is subsidiary liable to the lessor for any Sublessee, generally,
rent due from the lessee does not have any Assignee has a direct
direct action against the action against the lessor
Q: What is the extent of the subsidiary liability of the lessor
sublessee?
REMEDIES IN SUBLEASE
A: The sublessee shall be responsible only to the amount of
rent due from him, in accordance with the terms and Q: What is accion directa?
conditions of the sublease contract, at the time the demand
was made by the lessor (Art. 1652, NCC). A: A direct action which the lessor may bring against a
sublessee who misuses the subleased property.
Q: Is mere failure of the lessee to pay rentals sufficient to
make the sublessee subsidiarily liable to the lessor? Q: What are the remedies when either the lessor or the
lessee did not comply with his obligations?
A: No. There must be a judgment cancelling the lessee’s
principal lease contract or ousting the lessee from the A: RED
premises before the sub-lessee becomes subsidiarily liable. 1. Rescission and damages;
(Wheelers Club Int’l, Inc. vs. Bonifacio, Jr.,G.R. No. 139540, 2. Damages only (contract will be allowed to remain
2005) in force); or
3. Ejectment
Q: Can rights under a contract of lease be assigned?
Q: What are the grounds for ejectment?
A: GR: Lessee cannot assign the lease without consent of
lessor (Art. 1649, NCC) A:
1. When the period agreed upon has expired
XPN: Stipulation to the contrary 2. Lack of payment of the price stipulated
3. Violation of any of the conditions agreed upon in
Q: When does an assignment of lease take place? the contract
4. When the lessee devotes the thing leased to any
A: It exists when the lessee made an absolute transfer of his use or service not stipulated which caused the
leasehold rights in a contract, and he has disassociated deterioration thereof. (Art. 1673, NCC)
himself from the original contract of lease (Pineda, p. 451)
Q: What are the grounds for judicial ejectment under the
Note: The assignment has the effect of novation consisting in the Rental Reform Act of 2002?
substitution. There being a novation, the consent of lessor is
necessary to effect assignment unless the contract of lease allows
the lessee to assign (Pineda, p. 452) A:
1. Assignment of lease or subleasing of residential
Q: What is the effect of assignment of lease? units in whole or in part, including the acceptance
of boarders or bedspacers, without the written
A: The personality of the original lessee disappears and consent of the lessor;
there only remain in the juridical relation of two persons: 2. Rental payment in arrears for 3 months; Provided,
that in case of refusal by the lessor to accept the
payment of the rent, the lessee may deposit the Q: What if the value has not been agreed upon in a
amount in court or with the city or municipal contract of lease of service?
treasurer, as the case may be, or in the bank in
the name of and with notice to the lessor, within A: When no rate has been fixed, the same shall be
one month after the refusal of the lessor to determined by the courts according to the uses and
accept payment. customs of the place and the evidence, unless the services
by agreement were to be rendered gratuitously. (Pineda
Q: Jane leased a truck to Ed for 2 years. After 1 year from Sales, p. 444, 20002 ed)
delivery, the truck was destroyed by a strong typhoon.
What is the effect of the destruction of the truck with LEASE OF RURAL AND URBAN LANDS
respect to the lease?
Q: What is a rural land (Product-Producing Lands)?
A: It depends. If the thing leased is totally destroyed by a
fortuitious event, the lease is extinguished. If the A: Regardless of site, if the principal purpose is to obtain
destruction is partial, the lessee may choose between: (1) products from the soil, the lease is of rural lands. Hence, as
proportional reduction of rent or, (2) rescission of lease. used here, rural lands are those where the lessee
(Art. 1655, NCC) principally is interested in soil products.
Q: What is a contract for lease of services? A: Lands leased principally for purposes of residence are
called urban lands.
A: A contract whereby one party binds himself to render
some service to the other party consisting his own free RIGHTS AND OBLIGATIONS
activity of labor, and not its result and the other party binds OF LESSORS AND LESSEES
himself to pay a remuneration therefor (Pineda Sales, p.
440-441, 2002 ed). Q: What are the obligations of the lessor?
Note: In either case, rescission may be availed of if the main Q: What is the effect of the destruction of the thing
purpose of the lease is to provide a dwelling place and the property leased?
becomes uninhabitable.
A:
Q: What are the effects if the lessor fails to make urgent 1. Total destruction by fortuitous event – Lease is
repairs? extinguished.
2. Partial destruction
A: The lessee may: a. Proportional reduction of rent; or
1. order repairs at the lessor’s cost; b. Rescission of the lease.
2. sue for damages;
3. suspend the payment of the rent; or Q: When may lessee suspend payment of rent?
4. ask for rescission, in the case of substantial
damage to him. A: When the lessor fails to:
1. undertake urgent repairs; or
Q: Suppose the contract of lease was silent as to who will 2. maintain the lessee in peaceful and adequate
pay for repair expenses, who shall make the same? enjoyment of the property leased.
A: Note: For the intervening period, the lessee does not have to pay
1. Major Repairs – Lessor the rent.
2. Minor Repairs – Lessee
Q: When does the suspension become effective?
Q: What is the remedy of the lessee if the lessor fails to
make major or necessary repairs? A: The right begins:
1. In the case of repairs – from the time of the
A: Lessee may ask for: (1) Rescission of contract and demand and it went unheeded
indemnification for damages or, (2) Indemnification only, 2. In case of eviction – from the time the final
while the contract remains in force. (Art. 1659, NCC) judgment for eviction becomes effective
Q: What are the obligations of the lessee? Q: What are the kinds of trespass in lease?
A: TRUE-PRU A:
1. Pay the price of the lease according to the terms 1. Trespass in the fact (perturbation de mere hecho) –
stipulated physical enjoyment is reduced. Lessor will not be
2. Use the thing leased as a diligent father of a liable.
family devoting it to the use stipulated, and in the 2. Trespass in the law (perturbation de derecho) – a 3rd
absence of stipulation, to that which may be person claims legal right to enjoy the premises. Lessor
inferred from nature of thing leased, according to will be held liable.
the custom of the place
3. Pay the Expenses of the deed of lease Q: What are the alternative remedies of the aggrieved
4. Notify the lessor of Usurpation or untoward acts party in case of non-fulfillment of duties?
5. To notify the lessor of need for Repairs
6. To Return the property leased upon termination A:
of the lease in the same condition as he receive it 1. Rescission and damages
except when what has been lost or impaired by 2. Damages only, allowing the contract to remain in force
lapse of time, ordinary wear and tear or (specific performance)
inevitable cause/ fortuitous event
7. Tolerance of urgent repairs which cannot be Q: What are the remedies of the lessee if the lessor
deferred until the end of lease (par. 1, Art. 1662, refuses to accept rentals?
NCC)
A:
Q: A leased his land to B. B made useful improvements on 1. Tender of payment
the land. Upon the expiration of the lease contact, B seeks 2. Consignation
for reimbursement of the useful improvements from A.
Should A reimburse B? Q: What is the effect of failure to comply with the
requirements by the lessee?
A: The lessor may pay for one-half (1/2) of the value of the
improvements which the lessee made in good faith, which A: It is a ground for ejectment of the lessee. (Alfonso vs.
are suitable for the use for which the lease is intended, and Court of Appeals, G.R. No. 76824, December 20, 1988)
SPECIAL RULES FOR LEASE OF RURAL AND URBAN LANDS A: No, the duration of the lease has not been changed.
There was a fixed period for the lease and therefore the
RURAL LANDS nature of the fruit trees or valuable improvements is
immaterial. (Iturralde v. Garduno, 9 Phil. 605)
Q: What is the effect of sterility of land in case of rural
lease? Q: If at the end of the lease, there are still pending crops,
who will own them?
A: There is no reduction. The fertility or sterility of the land
has already been considered in the fixing of the rent. A: The lessee. However, a contrary stipulation will prevail.
Q: What is the effect of damage caused by a fortuitous Q: What is the rule for land tenancy on shares?
event on the rural lease?
A: This refers to the contracts of aparceria. Land tenancy on
A: shares are primarily governed by special laws (ex:
1. Ordinary fortuitous event – no reduction. The lessee Agricultural Tenancy Act, RA 1199), and suppletorily, by the
being the owner of crops must bear the loss. Res perit stipulations of the parties, the provisions on partnership,
domino and the customs of the place.
2. Extraordinary fortuitous event –
a. More than one-half of the fruits were lost, there Q: Who is a tenant?
is a reduction (XPN: specific stipulation to the
contrary) A: A tenant is a person, who, himself, and with the aid of
b. Less than one-half, or if the loss is exactly one- available from within his immediate farm household,
half, there is no reduction cultivates the land belonging to, or possessed by another,
with the latter’s consent for the purpose of production,
Note: The rent must be reduced proportionately. sharing the produce with the landholder under the share
tenancy system, or paying to the landlord a price certain or
Q: X leased his land to Y for the purpose of growing crops ascertainable in produce, or in money or both, under the
thereon. Due to an extraordinary fortuitous event, more leasehold tenancy system. (Pangilinan v. Alvendia, GR no.
than one-half of the crops were. In the lease contract, the 10690, June 28, 1957)
rent was fixed at an aliquot (proportional) part of the
crops. Is Y entitled to a reduction in rents? Q: What is included in an immediate farm household?
A: No, because here the rent is already fixed at an aliquot A: This includes the members of the family of the tenant,
part of the crops. Thus, every time the crops decrease in and such other person/s, whether related to the tenant or
number, the rent is reduced automatically. If therefore, the not, who are dependent upon him for support, and who
tenant here refuses to give the stipulated percentage, he usually help him operate the farm enterprise.
can be evicted. (Hijos de I. dela Rama v. Benedicto, 1 Phil.
495) Q: Can a tenant work for different landowners?
Q: What is the rule for reduction of rent? A: It is prohibited for a tenant, whose holding is 5 hectares
or more, to contract work at the same time on two or more
A: The reduction on rent can be availed of only if the loss separate holdings belonging to different landholders
occurs before the crops are separated from their stalk, root, without the knowledge and consent of the landholder with
or trunk. If the loss is afterwards, there is no reduction of whom he had first entered into the tenancy relationship.
rent. (Sec. 24, RA 1199)
Q: What is the duration of rural lease with an unspecified Q: What are the grounds for ejectment of the tenant on
duration? shares?
A: No. The landlord is required by law, if the tenant does Q: What are the remedies of the aggrieved party in case of
not voluntarily abandon the land or turn it over to him, to non-compliance of the other party’s obligations under
ask the court for an order of dispossession of the tenant. Arts.1654 (obligations of lessor) and 1657 (obligations of
(Sec. 49, RA 1199, as amended by RA 2263) lessee)?
URBAN LANDS A:
1. Rescission with damages
Q: What are the rules applicable to repairs which an urban 2. Damages only allowing the lease to subsists
lessor is liable?
Q: What are the restrictions in exercising the right to
A: rescind?
1. Special stipulation
2. If none, custom of the place. A: JAS
1. Breach must be Substantial and fundamental (de
Q: What are the rules when the duration of lease is not minimis non curat lex – the law is not concerned
fixed? with trifles).
2. It requires Judicial action.
A: 3. It can be filed only by the Aggrieved party.
1. If there is a fixed period - the lease would be for the
said period. Q: In case of action to rescind, may the other party validly
2. If there are no fixed period - apply the following: request for time within which to comply with his duties?
a. rent paid daily – lease is from day to day
b. rent paid weekly – lease is from week to week A: No. The aggrieved party seeking rescission will prevail.
c. rent paid monthly – lease from month to month Under Article 1659, NCC, the court has no discretion to
d. rent paid yearly – lease from year to year refuse rescission, unlike the situation covered by Art. 1191,
NCC, in the general rules on obligations [Bacalla v.
TERMINATION OF LEASE Rodriguez, et. al., C.A. 40 O.G. (supp.), Aug. 30, 1941]
Q: When does immediate termination of lease apply? Q: How is the amount of damages measured?
Q: Under a written contract dated December 1, 1989, A that he would occupy the building being constructed
Victor leased his land to Joel for a period of five (5) years upon completion, for the unexpired portion of the lease
at a monthly rental of P1,000.00, to be increased to term, explaining that he had spent partly for the
P1,200.00 and P1,500.00 on the third and fifth year, construction of the building that was burned. A rejected
respectively. On January 1, 1991, Joel subleased the land B’s demand. Did A do right in rejecting B’s demand? (1993
to Conrad for a period of 2 years at a monthly rental of Bar Question)
P1,500.00. On December 31, 1992, Joel assigned the lease
to his compadre, Ernie, who acted on the belief that Joel A: Yes, A was correct in rejecting the demand of B. As a
was the rightful owner and possessor of the said lot. Joel result of the total destruction of the building by fortuitous
has been faithfully paying the stipulated rentals to Victor. event, the lease was extinguished. (Art. 1655, NCC)
When Victor learned on May 15, 1992 about the sublease
and assignment, he sued Joel, Conrad and Ernie for
rescission of the contract of lease and for damages.
1. Will the action prosper? If so, against
whom? Explain.
2. In case of rescission, discuss the rights and
obligations of the parties. (2005 Bar
Question)
A:
1. Yes, the action for rescission of the lease will prosper
because Joel cannot assign the lease to Ernie without
the consent of Victor (Art. 1649, NCC). But Joel may
sublet to Conrad because there is no express
prohibition (Art. 1650, NCC; Alipio v. CA, G.R. No.
134100, Sept. 29, 2000).
Note: The Government has adopted the Torrens system due to its 2. Transfer Certificate of Title (TCT) – the title issued by
being the most effective measure to guarantee the integrity of land the Register of Deeds in favor of a transferee to whom
titles and to protect their indefeasibility once the claim of the ownership of a registered land has been
ownership is established and recognized (Casimiro Development
transferred by any legal mode of conveyance (e.g. sale,
Corporation v. Nato Mateo, G.R. No. 175485, July 27, 2011).
donation).
Q: What is the nature of the proceeding for land
It also consists of an original and an owner’s duplicate
registration under the Torrens System?
certificate.
A: The Torrens system is judicial in character and not
Q: Differentiate title over land, land title, certificate of
merely administrative. Under the Torrens system, the
title, and deed.
proceeding is in rem, which means that it is binding upon
the whole world.
A: Title is a juridical act or a deed which is not sufficient by
itself to transfer ownership but provides only for a juridical
Accordingly, all occupants, adjoining owners, adverse
justification for the effectuation of a mode to acquire or
claimants, and other interested person are notified of the
transfer ownership.
proceedings, by publication of the notice of initial hearing,
and have a right to appear in opposition to such
Land title is the evidence of the owner’s right or extent of
application.
interest, by which he can maintain control, and as a rule,
Note: In a registration proceeding instituted for the registration of assert right to exclusive possession and enjoyment of
a private land, with or without opposition, the judgment of the property.
court confirming the title of the applicant or oppositor, as the case
may be, and ordering its registration in his name, constitutes, when Certificate of title is the transcript of the decree of
final, res judicata against the whole world. registration made by the Register of Deeds in the registry. It
accumulates in one document a precise and correct
A decree of registration that has become final shall be deemed statement of the exact status of the fee simple title which
conclusive not only on the questions actually contested and
an owner possesses.
determined but also upon all matters that might be litigated or
decided in the land registration proceedings.
A deed is the instrument in writing, by which any real estate
Q: What bodies implement land registration under the or interest therein is created, alienated, mortgaged or
Torrens system? assigned, or by which title to any real estate may be
affected in law or equity.
A:
1. Courts Q: Is title over land synonymous with ownership?
2. Department of Environment and Natural Resources
(DENR) A: No. Title is a juridical act or a deed which is not sufficient
3. Department of Justice (DOJ) through the Land by itself to transfer ownership but provides only for a
Registration Authority (LRA) and its Register of Deeds juridical justification for the effectuation of a mode to
4. Department of Land Reform (DLR) acquire or transfer ownership. It provides the cause for the
5. Department of Agriculture (DAR) acquisition of ownership (i.e. sale = title; delivery = mode of
acquisition of ownership).
over a Torrens title, the validity of which is presumed and certificate of title which is an incontrovertible proof of
immune to any collateral attack. ownership. An original certificate of title issued by the
Register of Deeds under an administrative proceeding is as
“The validity of respondent’s certificate of title cannot be indefeasible as a certificate of title issued under judicial
attacked by petitioner in this case for ejectment. Under proceedings. However, indefeasibility of title does not
Section 48 of Presidential Decree No. 1529, a certificate of attach to titles secured by fraud and misrepresentation.
title shall not be subject to collateral attack. It cannot be Nonetheless, fraud and misrepresentation, as grounds for
altered, modified or cancelled, except in a direct cancellation of patent and annulment of title, should never
proceeding for that purpose in accordance with law. The be presumed, but must be proved by clear and convincing
issue of the validity of the title of the respondents can only evidence, mere preponderance of evidence not being
be assailed in an action expressly instituted for that adequate. Fraud is a question of fact which must be
purpose. Whether or not petitioner has the right to claim proved. Thus, respondent’s Torrens title is a valid evidence
ownership over the property is beyond the power of the of his ownership of the land in dispute (Datu Kiram
trial court to determine in an action for unlawful detainer.” Sampaco v. Hadji Serad Mingca Lantud, G.R. No. 163551,
July 18, 2011).
Given the foregoing, the petitioners’ attempt to remain in
possession by casting a cloud on the respondents’ title Q: Ruben C. Corpuz filed a complaint against Spouses
cannot prosper. Hilarion and Justa Agustin on the allegation that he is the
registered owner of 2 parcels of land in Laoag City.
Neither will the sheer lapse of time legitimize the Accordingly, his father bought it from Elias Duldulao and
petitioners’ refusal to vacate the subject area or bar the then allowed spouses Agustin to occupy the subject
respondents from gaining possession thereof. As ruled in properties. Despite demand to vacate, the Agustins
Spouses Ragudo v. Fabella Estate Tenants Association, Inc., refused to leave the premises.
laches does not operate to deprive the registered owner of
a parcel of land of his right to recover possession thereof Ruben alleged that he has better right to possess the
(Heirs of Jose Maligaso, Sr., etc. vs. Sps. Simon D. Encinas property having acquired the same from his father
and Esperanza E. Encinas; G.R. No. 182716, June 20, 2012). through a Deed of Quitclaim in 1971. Spouses Agustin
however contends that they are the rightful owners as
Q: What is the probative value of a Torrens title? evidenced by a Deed of Absolute Saale in their favor.
Decide who between the parties has the right to
A: Torrens title may be received in evidence in all courts of possession of the disputed properties.
the Philippines and shall be conclusive as to all matters
contained therein, principally as to the identity of the land A: Indeed, a title issued under the Torrens system is
owner except so far as provided in the Land Registration entitled to all the attributes of property ownership, which
Act (LRA) necessarily includes possession. Petitioner is correct that as
a Torrens title holder over the subject properties, he is the
A Torrens certificate is an evidence of indefeasible title of rightful owner and is entitled to possession thereof. In this
property in favor of the person in whose name appears case, the Quitclaim executed by the elder Corpuz in favor of
therein – such holder is entitled to the possession of the petitioner was executed ahead of the Deed of Sale of
property until his title is nullified. respondents. Thus, the sale of the subject properties by
petitioner’s father to respondents cannot be considered as
Q: Hadji Serad Lantud filed an action to quiet title with a prior interest at the time that petitioner came to know of
damages with the RTC of Lanao del Sur. Accordingly, Datu the transaction. (Ruben C. Corpuz v. Spouses Hilarion
Kiram Sampaco with several armed men, forcibly and Agustin and Justa Agustin, G.R. No. 183822, Jan. 18, 2012)
unlawfully entered his property and destroyed the nursery
buildings, cabbage seedlings and other improvements. Q: What is meant by indefeasibility and incontrovertibility
Datu Kiram however denied the material allegationos of of certificates of title?
Hadji Lantud asserting that he and his predecessors-in-
interest are the ones who had been in open, public, A: The certificate, once issued, becomes a conclusive
continuous, and exclusive possession of the property in evidence of the title/ownership of the land referred to
dispute. He also alleged that he inherited the land in 1952 therein. What appears on the face of the title is controlling
from his father and had been in adverse possession and on questions of ownership of the property in favor of the
ownership of the subject lost, cultivating and planting person whose name appears therein and such cannot be
trees and plants. He also declared the land for taxation defeated by adverse, open, and notorious possession;
purposes and paid real estate taxes. Who is the rightful neither can it be defeated by prescription.
owner of the subject property?
3. Decree of registration and the certificate of title issued Note: Stated differently, an innocent purchaser for value relying on
pursuant thereto may be attacked on the ground of the Torrens title issued is protected.
actual fraud within one (1) year from the date of its
entry and such an attack must be direct and not by a Q: When does the mirror doctrine apply?
collateral proceeding. The validity of the certificate of
title in this regard can be threshed out only in an A: When a title over a land is registered under the Torrens
action expressly filed for the purpose. system
Note: The defense of indefeasibility of a Torrens title does not Q: Is the right of the public to rely on the face of a
extend to a transferee who takes it with notice of a flaw in the title certificate of title absolute?
of his transferor. To be effective, the inscription in the registry
must have been made in good faith. A holder in bad faith of a A: No. This is unavailing when the party concerned has
certificate of title is not entitled to the protection of the law, for actual knowledge of facts and circumstances that should
the law cannot be used as a shield for fraud (Adoracion Rosales
imply a reasonably cautious man to make such further
Rufloe, et al., v. Leonarda Burgos et al., G.R. No. 143573, Jan. 30,
2009). inquiry.
Q: There is no specific provision in the Public Land Law (CA Q: What are the exceptions to the application of the
No. 141, as amended) or the Land Registration Act (Act mirror doctrine?
496), now P.D. 1529, fixing the one (1) year period within
which the public land patent is open to review on the A: BOB LIKA
ground of actual fraud as in Section 38 of the Land 1. Where the purchaser or mortgagee is a
Registration Act, now Section 32 of PD 1529, and clothing Bank/financing institution;
a public land patent certificate of title with indefeasibility. 2. Where the Owner still holds a valid and existing
What is the effect of such absence? certificate of title covering the same property
because the law protects the lawful holder of a
A: None. The rule on indefeasibility of certificates of title registered title over the transfer of a vendor
was applied by the Court in Public Land Patents because, bereft of any transmissible right;
according to the Court, such application is in consonance 3. Purchaser in Bad faith;
with the spirit and intent of homestead laws. 4. Purchases land with a certificate of title
containing a notice of Lis pendens;
The Court held that the pertinent pronouncements in cases 5. Sufficiently strong indications to impel closer
clearly reveal that Sec. 38 of the Land Registration Act, now Inquiry into the location, boundaries and
Sec. 32 of PD 1529 was applied by implication by this Court condition of the lot;
to the patent issued by the Director of Lands duly approved 6. Purchaser had full Knowledge of flaws and
by the Secretary of Natural Resources, under the signature defects in the title; or
of the President of the Philippines in accordance with law. 7. Where a person buys land not from the registered
owner but from whose rights to the land has been
The date of issuance of the patent, therefore, corresponds merely Annotated on the certificate of title.
to the date of the issuance of the decree in ordinary
registration cases because the decree finally awards the Q: Cipriana Delgado was the registered owner of a lot
land applied for registration to the party entitled to it, and situated in Cebu. Meanwhile, she and her husband
the patent issued by the Director of Lands equally and entered into an agreement with Cecilia Tan (buyer) for the
finally grants, awards, and conveys the land applied for to sale of the said property for a consideration of
the applicant. P10.00/sq.m. It was agreed that the buyer shall make
partial payments from time to time and pay the balance
Note: A certificate of title issued under an administrative when the Spouses are ready to execute the deed of sale
proceeding pursuant to a homestead patent is as indefeasible as a and transfer title to her. Cecilia was already occupying a
certificate of title issued under a judicial registration proceeding, portion of the property where she operates a bihon
provided the land covered by said certificate is a disposable public factory while the rest was occupied by tenants which the
land within the contemplation of the Public Land Law. Spouses undertook to clear prior to full payment. After
paying the total amount and being ready to pay the
balance, Cecilia demanded the execution of the deed Q: If the land subject of the dispute was not brought
which was refused. Cecilia, at this point, learned of the under the operation of the Torrens system, will the
sale of the property to the Dys and its subsequent concept of an innocent purchaser for value apply?
mortgage to petitioner Philippine Banking Corporation
(Philbank). Thus, a complaint for annulment of the A: If the land in question was not brought under the
Certificate of title and for specific performance and/or operation of Torrens system because the original certificate
reconveyance with damages was filed against Spouses of title is null and void ab initio, the concept of an innocent
Delgado, the Dys and Philbank. However, Philbank purchaser for value does not apply.
contends that it is a mortgagee in good faith. Is the bank’s
contention correct? Note: Good faith and bad faith is immaterial in case of unregistered
land. One who purchases an unregistered land does so at his peril.
A: Primarily, it bears noting that the doctrine of “mortgagee
in good faith” is based on the rule that all persons dealing Q: In 1979, Nestor applied for and was granted a Free
with property covered by a Torrens Certificate of Title are Patent over a parcel of agricultural land with an area of 30
not required to go beyond what appears on the face of the hectares, located in General Santos City. He presented the
title. This is in deference to the public interest in upholding Free Patent to the Register of Deeds, and he was issued a
the indefeasibility of a certificate of title as evidence of corresponding Original Certificate of Title (OCT) No. 375.
lawful ownership of the land or of any encumbrance Subsequently, Nestor sold the land to Eddie. The deed of
thereon. In the case of banks and other financial sale was submitted to the Register of Deeds and on the
institutions, however, greater care and due diligence are basis thereof, OCT No. 375 was cancelled and Transfer
required since they are imbued with public interest, failing Certificate of Title (TCT) No. 4576 was issued in the name
which renders the mortgagees in bad faith. Thus, before of Eddie. In 1986, the Director of Lands filed a complaint
approving a loan application, it is a standard operating for annulment of OCT No. 375 and TCT No. 4576 on the
practice for these institutions to conduct an ocular ground that Nestor obtained the Free Patent through
inspection of the property offered for mortgage and to fraud. Eddie filed a motion to dismiss on the ground that
verify the genuineness of the title to determine the real he was an innocent purchaser for value and in good faith
owner(s) thereof. The apparent purpose of an ocular and as such, he has acquired a title to the property which
inspection is to protect the “true owner” of the property as is valid, unassailable and indefeasible. Decide the motion.
well as innocent third parties with a right, interest or claim (2000 Bar Question)
thereon from a usurper who may have acquired a
fraudulent certificate of title thereto (Philippine Banking A: Nestor’s motion to dismiss the complaint for annulment
Corporation v. Arturo Dy, et al., G.R. No. 183774. November of OCT No. 375 and TCT No. 4576 should be denied for the
14, 2012). following reasons:
Q: Who is a purchaser in good faith and for value? 1. Eddie cannot claim protection as an innocent
purchaser for value nor can he interpose the
A: A purchaser in good faith and for value is one who buys defense of indefeasibility of his title, because his
property of another, without notice that some other person TCT is rooted on a void title. Under Sec. 91, CA
has a right to, or interest in, such property, and pays a full No. 141, as amended, otherwise known as the
and fair price for the same, at the time of such purchase, or Public Land Act, statements of material facts in
before he has notice of the claim or interest of some other the applications for public land must be under
person in the property. Good faith is the opposite of fraud oath. Sec. 91 of the same act provides that such
and of bad faith, and its non-existence must be established statements shall be considered as essential
by competent proof. Sans such proof, a buyer is deemed to conditions and parts of the concession, title, or
be in good faith and his interest in the subject property will permit issued, any false statement therein, or
not be disturbed. A purchaser of a registered property can omission of facts shall ipso facto produce the
rely on the guarantee afforded by pertinent laws on cancellation of the concession. The patent issued
registration that he can take and hold it free from any and to Nestor in this case is void ab initio not only
all prior liens and claims except those set forth in or because it was obtained by fraud but also
preserved against the certificate of title (Philippine Charity because it covers 30 hectares which is far beyond
Sweepstakes Office (PCSO) vs. New Dagupan Metro Gas the maximum of 24 hectares provided by the free
Corporation, et al.; G.R. No. 173171, July 11, 2012). patent law.
Note: An innocent purchaser for value includes a lessee, 2. The government can seek annulment of the
mortgagee, or other encumbrances for value. original and transfer certificates of title and the
reversion of the land to the State. Eddie's defense
Purchaser in good faith and for value is the same as an innocent is untenable. The protection afforded by the
purchaser for value. Torrens System to an innocent purchaser for
value can be availed of only if the land has been
Good faith consists in an honest intention to abstain from taking
any unconscious advantage of another. titled thru judicial proceedings where the issue of
fraud becomes academic after the lapse of one
(1) year from the issuance of the decree of
Q: Spouses X and Y mortgaged a piece of registered land released the land of the public domain as alienable and
to A, delivering as well the OCT to the latter, but they disposable, and that the land subject of the application for
continued to possess and cultivate the land, giving 1/2 of registration falls within the approved area per verification
each harvest to A in partial payment of their loan to the through survey by the PENRO or CENRO. In addition, the
latter. A however, without the knowledge of X and Y, applicant for land registration must present a copy of the
forged a deed of sale of the aforesaid land in favor of original classification approved by the DENR Secretary and
himself, got a TCT in his name, and then sold the land to B. certified as a true copy by the legal custodian of the official
records.
B bought the land relying on A's title, and thereafter got a
TCT in his name. It was only then that the spouses X and Y Although the survey and certification were done declaring
learned that their land had been titled in B's name. May certain portions of the public domain situated in Cebu City
said spouses file an action for reconveyance of the land in as alienable and disposable, an actual copy of such
question against B? Reason. (1999 Bar Question) classification, certified as true by the legal custodian of the
official records, was not presented in evidence.
A: The action of X and Y against B for reconveyance of the Unfortunately, respondents were not able to discharge the
land will not prosper because B has acquired a clean title to burden of overcoming the presumption that the land they
the property being an innocent purchaser for value. sought to be registered forms part of the public domain
(Republic of the Philippines vs. Gloria Jaralve (deceased),
A forged deed is an absolute nullity and conveys no title. substituted by Alan Jess Jaralve-Document, Jr., et al. G.R.
The fact that the forged deed was registered and a No. 175177. October 24, 2012).
certificate of title was issued in his name, did not operate to
vest upon A ownership over the property of X and Y. The Q: Discuss the application of the Regalian doctrine.
registration of the forged deed will not cure the infirmity.
However, once the title to the land is registered in the A: All lands not otherwise appearing to be clearly within
name of the forger and title to the land thereafter falls private ownership are presumed to belong to the State.
into the hands of an innocent purchaser for value, the Incontrovertible evidence must be shown that the land is
latter acquires a clean title thereto. A buyer of a registered alienable or disposable in order to overcome such
land is not required to explore beyond what the record in presumption.
the registry indicates on its face in quest for any hidden
defect or inchoate right which may subsequently defeat his Note: It does not negate native title to lands held in private
right thereto. This is the "mirror principle" of the Torrens ownership since time immemorial (Cruz v. Secretary of
system which makes it possible for a forged deed to be the Environment and Natural Resources, G.R. No. 135385, Dec. 6,
2000).
root of a good title.
Q: What is a native title?
Besides, it appears that spouses X and Y are guilty of
contributory negligence when they delivered the OCT to
A: it refers to a pre- conquest rights to lands and domains
the mortgagee without annotating the mortgage thereon.
which, as far back as memory reaches, have been held
Between them and the innocent purchaser for value, they
under a claim of private ownership by Indigenous Cultural
should bear the loss.
Communities of Indigenous Peoples, have never been
public lands and are thus indisputably presumed to have
REGALIAN DOCTRINE
been held that way before Spanish conquest.
Q: What is Regalian doctrine (jura regalia)?
Q: What is time immemorial possession?
A: A time-honored constitutional precept that all lands of
A: It refers to a period of time as far back as memory can
the public domain belong to the State, and that the State is
go, certain Indigenous Cultural Communities of Indigenous
the source of any asserted right to ownership in land, and
Peoples are known to have occupied, possessed in the
charged with the conservation of such patrimony.
concept of owner, and utilized a defined territory devolved
to them, by operation of customary law or inherited from
Under the Regalian doctrine, land that has not been
their ancestors, in accordance with their customs and
acquired from the government, either by purchase, grant,
tradition.
or any other mode recognized by law, belongs to the State
as part of the public domain. Thus, it is indispensable for a
Q: Socorro Orcullo was a grantee of a Free Patent for a
person claiming title to a public land to show that his title
parcel of land in Cebu. Subsequently, the subject lot was
was acquired through such means. To prove that the
sold to SAAD Agro-Industries, Inc. by one of Orculoo’s
subject property is alienable and disposable land of the
heirs. Yet, in 199, the Solicitor General filed a complaint
public domain, respondents presented the Community
for the annulment of the title and reversion of the said lot
Environment and Natural Resourtces Office Certificate
on the ground that the issuance of the free patent and
(CENRO). However, a CENRO or PENRO Certification is not
title was irregular and erroneous, following the discovery
enough to certify that a land is alienable and disposable.
that the lot is allegedly part of the timberland and forest
The applicant for land registration must prove that the
reserve. Decide on the case.
DENR Secretary had approved the land classification and
A: The legislature has the authority to implement the Q: Joe, an alien, invalidly acquired a parcel of land in the
constitutional provision classifying the lands of the public Philippines. He subsequently transferred it to Jose, a
domain; the executive, administers our public lands Filipino citizen. What is the status of the transfer?
pursuant to their duty “to ensure that laws be faithfully
executed” and in accordance with the policy prescribed; A: If a land is invalidly transferred to an alien who
lastly, the judiciary steps into the picture if the rules laid subsequently becomes a Filipino citizen or transfers it to a
down by the legislature are challenged or if it is claimed Filipino, the flaw in the original transaction is considered
that they are not being correctly observed by the executive cured and the title of the transferee is rendered valid. Since
branch. the ban on aliens is intended to preserve the nation’s land
for future generations of Filipinos, that aim is achieved by
CITIZENSHIP REQUIREMENT making lawful the acquisition of real estate by aliens who
became Filipino citizens by naturalization or those transfers
Q: Who may acquire private lands? made by aliens to Filipino citizens. As the property in
dispute is already in the hands of a qualified person, a
A: Filipino citizen, there would be no more public policy to be
1. Filipino citizens; protected. The objective of the constitutional provision to
2. Filipino corporations and associations as defined keep our lands in Filipino hands has been achieved
in Sec. 2, Article XII of the Constitution and by (Borromeo v. Descallar, G.R. No. 159310, Feb. 24, 2009)
exceptionl;
3. Aliens, but only by hereditary succession; Q: If Joe had not transferred it to Jose but he, himself, was
4. A natural-born citizen of the Philippines who has later naturalized as a Filipino citizen, will his acquisition
lost citizenship under the terms and Section 8. thereof remain invalid?
Note: Filipino citizens can both acquire or otherwise hold lands of A: No. If a land is invalidly transferred to an alien who
public domain. subsequently becomes a Filipino citizen, the flaw in the
original transaction is also considered cured and the title of
Q: Can an alien acquire a private land in the Philippines? the transferee is rendered valid (Borromeo v. Descallar, G.R.
No. 159310, Feb. 24, 2009).
A: GR: An alien cannot acquire private lands.
4. Those who have acquired ownership of land by any except through lease does not apply for land was no longer
other manner provided for by law. public land but private property.
Where the land is owned in common, all the co-owners Q: Noynoy, Erap, Manny and Gibo are co-owners of a
shall file the application jointly. (Sec. 14, PD 1529) parcel of land. May Manny seek registration in his name of
the land in its entirety?
Q: Who may apply for registration of a land subject to a:
A: Since a co-owner cannot be considered a true owner of a
1. Pacto de retro sale? specific portion until division or partition is effected, he
cannot file an application for registration of the whole area
GR: Vendor a retro may apply for registration. without joining the co-owners as applicants.
XPN: Vendee a retro should the period for Q: What are the requisites for the filing of an application
redemption expire during pendency of registration under Sec. 14(1) of PD. No. 1529?
proceedings and ownership to property is
consolidated in vendee a retro. A:
1. That the property is an agricultural land of public
2. Trust? domain;
2. That it has been classified by a positive act of
GR: Trustee may apply for registration. government as alienable and disposable (A and D);
3. That the applicant, by himself or through his
XPN: Unless prohibited by the instrument creating predecessors-in-interest has been in open, continuous,
the trust. exclusive and notorious possession and occupation of
the land in the concept of owner (OCENCO); and
Note: Trusteeship or trust is a fiduciary relationship with 4. That such possession and occupation is under a bona
respect to property which involves the existence of fide claim of ownership since June 12, 1945 or earlier.
equitable duties imposed upon the holder of the title to
the property to deal with it for the benefit of another Note: There must be an express declaration by the State that the
public dominion property is no longer intended for public service
3. Reserva troncal? or the development of the national wealth or that the property has
been converted into patrimonial. Without such express
declaration, the property, even if classified as alienable or
Reservista has the right to apply for registration but disposable, remains property of the public dominion, pursuant to
the reservable character of the property will be Article 420(2), and thus incapable of acquisition by prescription. It
annotated in the title. is only when such alienable and disposable lands are expressly
declared by the State to be no longer intended for public service or
Note: In reserva troncal the ascendant who inherits from his for the development of the national wealth that the period of
descendant any property which the latter may have acquired by acquisitive prescription can begin to run. Such declaration shall be
gratuitous title from another ascendant, or a brother or sister, is in the form of a law duly enacted by Congress or a Presidential
obliged to reserve such property as he may have acquired by Proclamation in cases where the President is duly authorized
operation of law for the benefit of relatives who are within the by law.
third degree and who belong to the line from which said
property came.
Q: In 1998, Iglesia ni Cristo filed its application for
Registration of Title before the MCTC in Paoay-Currimao.
Q: May private corporations hold alienable lands of public
Yet, the Republic filed an opposition to INC’s application.
domain?
The cadastral court held that the essential elements for
judicial confirmation of an imperfect title over the subject
A: No. The word “persons” refers to natural persons who
lot have been complied with. The CA also held that the
are citizens of the Philippines. Juridical or artificial persons
INC has been in continuous, open, and peaceful
are excluded. Sec. 3, Art. XII of the 1987 Constitution
possession and occupation of the lot for more than 40
prohibits private corporations or associations from holding
years. May a judicial confirmation of imperfect title
alienable lands of the public domain except by lease.
prosper when the subject property has been declared as
alienable only after June 12, 1945?
Private corporations or associations may not hold such
alienbale lands of public domain except by lease, for a
A: In Naguit, the Court held a less stringent requirement in
period not exceeding twenty-five years, renewable for not
the application of Sec. 14(1) of PD 1529 in that the
more than twenty-five years, and not to exceed one
reckoning for the period of possession is the actual
thousand hectares in area. But where at the time the
possession of the property and it is sufficient for the
corporation acquired land, its predecessor-in-interest had
property sought to be registered to be already alienable
been in possession and occupation thereof in the manner
and disposable at the time of the application for
and for the period prescribed by law as to entitle him to
registration of title is filed.
registration in his name, then the proscription against
corporation acquiring alienable lands of the public domain
b. By devise – person acquires land from one who 2. No alienation, transfer or conveyance of any
may or may not be a relative, if he is named in the homestead after five (5) years and before twenty-five
deceased’s will as devisee for such property. (25) years after the issuance of title shall be valid
2. Prescription – Possession of land for required number without the approval of the Secretary of DENR. (C.A.
of years and assertion of ownership through an No. 141 as amended by C.A. No. 458)
uninterrupted actual possession of property within the 3. It cannot be alienated within five (5) years after
period of time prescribed by law (Arts. 712, 1134, approval of such patent application.
1137, NCC). 4. It cannot be liable for the satisfaction of debt within
five (5) years after the approval of such patent
LAND PATENTS application.
5. It is subject to repurchase of the heirs within five (5)
Q: How are public lands suitable for agricultural purposes years after alienation when such is already allowed.
disposed of? 6. No private corporation, partnership or association may
lease such land unless it is solely for commercial,
A: Public Lands suitable for agricultural purposes are industrial, educational, religious or charitable
disposed as follows: purposes, or right of way (subject to the consent of the
1. homestead settlement; grantee and the approval of the Secretary of the
2. sale; DENR). [The Public Land Act (C.A. No. 141)].
3. lease;
4. confirmation of imperfect title or incomplete Q: What are the exceptions to the rule on restrictions on
titles either by judicial or administrative alienation or encumbrance of lands titled pursuant to
legalization; or patents?
5. free title.
A:
When a homesteader has complied with all the terms and 1. Actions for partition because it is not a conveyance,
conditions which entitle him to a patent for a particular 2. Alienations or encumbrances made in favor of the
tract of public land, he acquires a vested interest therein, government.
enough to be regarded as the equitable owner thereof.
Where the right to a patent to land has once become Q: What is the proper action in cases of improper or illegal
vested in a purchaser of public lands, it is equivalent to a issuance of patents?
patent actually issued. The execution and delivery of
patent, after the right to a particular parcel of land has A: Reversion suits, the objective of which is the cancellation
become complete, are the mere ministerial acts of the of the certificate of title and the consequent reversions of
officer charged with that duty. Even without a patent, a the land covered thereby to the State.
perfected homestead is a property right in the fullest sense,
unaffected by the fact that the paramount title to the land Q: Gerardo acquired title over 2 parcels of land located in
is still in the government. Such land may be conveyed or Cagayan covered by OCT No. P-311 through the grant of
inherited. Homestead Patent No. V-6269 in his favour on January 12,
1951. Upon Gherardo’s death however, respondents
As evidence of ownership of land, a homestead patent discovered that OCT No. P-311 had been cancelled as the
prevails over a land tax declaration. (Jose Medina v. Court same has been sold to Juan Binayug. Thus, respondents
of Appeals & The Heirs of the Late Abundio Castaňares, G.R. filed a complaint “for declaration of nullity of title,
No. 137582, August 29, 2012.) annulment of instrument, and declaration of ownership
with damages against the petitioners. According to them,
Note: When a free patent title is issued to an applicant and the sea the purported sale between Gerardo and Juan was
water moves toward the estate of the title holder, the invaded prohibited under CA No. 141 and that the sale violated the
property becomes part of the foreshore land. The land under the 5-year prohibitory period under Sec. 118 of the Public
Torrens system reverts to the public domain and the title is
Land Act. Is the contention of the respondents correct?
annulled.
After a free patent application is granted and the corresponding A: Yes. To reiterate, Section 118 of the Public Land Act, as
certificate of title is issued, the land ceased to be part of the public amended, reads that “[e]xcept in favor of the Government
domain and becomes private property over which the Director of or any of its branches, units, or institutions, or legally
Lands had neither control nor jurisdiction. constituted banking corporations, lands acquired under
free patent or homestead provisions shall not be subject to
Q: What are the restrictions on alienation or encumbrance encumbrance or alienation from the date of the approval of
of lands titled pursuant to patents? the application and for a term of five years from and after
the date of issuance of the patent or grant x x x.” The
A: provisions of law are clear and explicit. A contract which
1. Lands acquired under free patent or homestead patent purports to alienate, transfer, convey, or encumber any
is prohibited from being alienated, except if in favor of homestead within the prohibitory period of five years from
the government, 5 years from and after the issuance the date of the issuance of the patent is void from its
of the patent or grant. execution. In a number of cases, this Court has held that
A: A Free Patent may be issued where the applicant is: Note: In Republic v. CA and Tancinco, the court found that the
alleged alluvial deposits were artificial and manmade and not the
a. a natural-born citizen of the Philippines; exclusive result fo the current of the Merycauayan and Bocaue
rivers. The deposits came into being not because of the sole effect
b. is not the owner of more than twelve (12)
of the current of the rivers but as a result of the transfer of the dike
hectares of land; towards the river and encroaching upon it (G.R. No. L-61647, Oct.
c. has continuously occupied and cultivated, either 12, 1984).
by himself or through his predecessors-in-
interest, a tract or tracts of agricultural public Q: What is the rule on ownership of abandoned river beds
land subject to disposition, for at least 30 years by right of accession?
prior to the effectivity of Republic Act No. 6940;
and A: Under Article 461 of the Civil Code, river beds which are
d. has paid the real taxes thereon while the same abandoned through the natural change in the course of the
has not been occupied by any person. waters ipso facto belong to the owners whose lands are
occupied by the new course in proportion to the area lost.
However, the owners of the lands adjoining the old bed recedes, soils, rocks and other materials are deposited on
shall have the right to acquire the same by paying the value Jessica’s and Jenny’s properties. This pattern of the river
thereof, which value shall not exceed the value of the area swelling, receding and depositing soil and other materials
occupied by the new bed. being deposited on the neighbors’ properties have gone
on for many years. Knowing this pattern, Jessica
Q: What is the rule on ownership by right of accretion constructed a concrete barrier about 2 meters from her
along river banks? property line and extending towards the river, so that
when the water recedes, soil and other materials are
A: Article 457 of the Civil Code provides that to the owners trapped within this barrier. After several years, the area
of lands adjoining the banks of rivers belong the accretion between Jessica’s property line to the concrete barrier
which they gradually receive from the effects of the current was completely filled with soil, effectively increasing
of the waters. Jessica’s property by 2 meters. Jenny’s property, where no
barrier was constructed, also increased by one meter
Q: What is the rule on accretion along the banks of creeks, along the side of the river.
streams and lakes?
Can Jessica and Jenny legally claim ownership over the
A: Alluvial deposits along the banks of creeks, streams and additional 2 meters and one meter, respectively, of land
lakes do not form part of the public domain as the alluvial deposited along their properties?
property automatically belongs to the owner of the estate
to which it may have been added. That the owner of the A: Jenny can legally claim ownership of the lands by right of
adjoining property must register the same under the accession (accretion) under Article 457 of the Civil Code.
Torrens system otherwise, the alluvial property may be The lands came into being over the years through the
subject to acquisition through prescription by third persons. gradual deposition of soil and silt by the natural action of
the waters of the river.
Q: What is the rule on accretion on the sea bank?
Jessica cannot claim the two meter-wide strip of land added
A: Still of public domain, and is not available for private to her land. Jessica constructed the cement barrier two
ownership until formally declared by the government to be meters in front of her property towards the river not to
no longer needed for public use (Republic v. Amanda Vda. protect her land from the destructive forces of the water
De Castillo, G.R. No. L-69002 June 30, 1988). but to trap the alluvium. In order that the riparian owner
may be entitled to the alluvium the deposition must occur
Q: If the area of a non-registrable land is increased due to naturally without the intervention of the riparian owner
accretion, may the alluvial deposits be subjected to (Republic v. CA 132 SCRA 514 [1984]).
private ownership?
Q: If Jessica’s and Jenny’s properties are registered, will
A: No. Non-registrable lands (property of public dominion) the benefit of such registration extend to the increased
are outside the commerce of man, they are not subject to area of their properties?
private appropriation.
A: No, the registration of Jessica’s and Jenny’s adjoining
Q: If the land, the area of which is increased by accretion, property does not automatically extend to the accretions.
has already been registered, is there still a need to register They have to bring their lands under the operation of the
the alluvion? Torrens system of land registration following the procedure
prescribed in P.D. No. 1529.
A: Yes. Accretion does not automatically become
registered. It needs a new registration. Q: Assume the two properties are on a cliff adjoining the
shore of Laguna Lake. Jessica and Jenny had a hotel built
Q: If the land area has been diminished due to accretion, on the properties. They had the earth and rocks excavated
may the riparian owner claim protection against such from the properties dumped on the adjoining shore, giving
diminution based on the fact of registration of his land? rise to a new patch of dry land. Can they validly lay claim
to the patch of land? (2008 Bar Question)
A: Registration does not protect the riparian owner against
diminution of land through accretion. Accretions become A: Jessica and Jenny cannot validly lay claim to the price of
the property of the owners of the banks and are natural dry land that resulted from the dumping of rocks and earth
incidents to land bordering on running streams and the materials excavated from their properties because it is a
provisions of the Civil Code thereon are not affected by the reclamation without authority. The land is part of the
Land Registration Act (now Property Registration Decree) lakeshore, if not the lakebed, which is inalienable land of
(Republic v. CA and Tancinco, G.R. No. L-61647, Oct. 12, the public domain.
1984).
Q: Alleging continuous and adverse possession of more
Q: The properties of Jessica and Jenny, who are neighbors, than 10 years, respondent Arcadio Santos III applied for
lie along the banks of the Marikina River. At certain times registration of Lot 4998-B located in Parañaque City. It was
of the year, the river would swell and as the water bounded in the Northeast by Lot 4079 in the southeast by
A: An action for reversion is slightly different from escheat A: When the conditions set by law are complied with, the
proceeding, but in its effects they are the same. They only possessor of the land, by operation of law, acquires a right
differ in procedure. Escheat proceedings may be instituted to government grant, without the necessity of a certificate
as a consequence of a violation of the Constitution which of the title being issued.
prohibits transfers of private agricultural lands to aliens,
whereas an action for reversion is expressly authorized by Q: RP opposed the application for registration filed by
the Public Land Act (Rellosa v. Gaw Chee Hun, G.R. No. L- Manna Properties under Sec. 48(b), CA No. 141 arguing
1411, Sept. 29, 1953). that, as a private corporation, it is disqualified from
holding alienable lands of the public domain, except by Note: Extended period for filing of application – Sec. 1, R.A. 9176
lease, citing Sec. 3, Art. XII, 1987 Constitution. On the provides in part that, “The time to be fixed in the entire
other hand, Manna Properties claims that the land in archipelago for the filing of applications shall not extend beyond
December 31, 2020. Provided that the area applied for does not
question has been in the open and exclusive possession of
exceed 12 hectares.”
its predecessors-in-interest since the 1940s, thus, the land
was already private land when Manna Properties acquired
Q: In 1913, Gov. Gen. Forbes reserved for provincial park
it from its predecessors-in-interest. Decide.
purposes a parcel of land which, sometime thereafter, the
court ordered registered in Palomo’s name. In 1954, then
A: Lands that fall under Sec. 48, CA No. 141 are effectively
Pres. Magsaysay converted the land into the Tiwi Hot
segregated from the public domain by virtue of acquisitive
Spring National Park, under the management of the
prescription. Open, exclusive and undisputed possession of
Bureau of Forest Development. The area was never
alienable public land for the period prescribed by CA No.
released as alienable or disposable. The Palomos,
141 ipso jure converts such land into private land. Judicial
however, continued to possess the said property, had
confirmation in such cases is only a formality that merely
introduced improvements therein as well as paid real
confirms the earlier conversion of the land into private
estate taxes. The Republic now seeks the cancellation of
land, the conversion having occurred in law from the
the titles over the subject land. Should the cancellation be
moment the required period of possession became
granted?
complete.
A: Yes. The adverse possession which may be the basis of a
Under CA No. 141, the reckoning point is June 12, 1945. If
grant of title in confirmation of imperfect title cases applies
the predecessors-in-interest of Manna Properties have
only to alienable lands of the public domain. There is no
been in possession of the land in question since this date,
question that the lands in the case at bar were not
or earlier, Manna Properties may rightfully apply for
alienable lands of the public domain. The records show that
confirmation of title to the land. Manna Properties, a
such were never declared as alienable and disposable and
private corporation, may apply for judicial confirmation of
subject to private alienation prior to 1913 up to the present
the land without need of a separate confirmation
(Sps. Palomo, et. al., v. CA, et. al., G.R. No. 95608, Jan. 21,
proceeding for its predecessors-in-interest first (Republic v.
1997).
Manna Properties Inc., G.R. No. 146527, Jan. 31, 2005).
Q: Bracewell asserts that he has a right of title to a parcel
Q: Who may apply for judicial confirmation?
of land having been, by himself and through his
predecessors-in-interest, in xxx occupation xxx under a
A:
bona fide claim of ownership since 1908. Thus, he filed an
1. Filipino citizens who by themselves or through their
application for registration in 1963 but the he land has
predecessors-in-interest have been in open,
been classified as alienable or disposable only on May 27,
continuous, exclusive and notorious possession and
1972. May his application for confirmation of imperfect
occupation of alienable and disposable lands of public
title be granted?
domain under a bona fide claim of acquisition since
June 12, 1945 or prior thereto or since time
A: No. The land was only classified as alienable or
immemorial;
disposable on May 27, 1972. Prior to said date, when the
subject parcels of land were classified as inalienable or not
2. Filipino citizens who by themselves or their
disposable, the same could not be the subject of
predecessors-in-interest have been, prior to the
confirmation of imperfect title. There can be no imperfect
effectivity of PD 1073 on January 25, 1977, in open,
title to be confirmed over lands not yet classified as
continuous, exclusive and notorious possession and
disposable or alienable. In the absence of such
occupation of agricultural lands of the public domain
classification, the land remains unclassified public land until
under a bona fide claim of acquisition or ownership for
released and opened to disposition. Indeed, it has been
at least 30 years, or at least since January 24, 1947;
held that the rules on the confirmation of imperfect title do
not apply unless and until the land classified as forest land
3. Private domestic corporations or associations which
is released in an official proclamation to that effect so that
had acquired lands from Filipino citizens who had
it may form part of the disposable agricultural lands of the
possessed the same in the manner and for the length
public domain (Bracewell v. CA, G.R. No. 107427, Jan. 25,
of time indicated in paragraphs 1 & 2 above; or
2000)
4. Natural-born citizens of the Philippines who have lost
Q: In an application for judicial confirmation of imperfect
their citizenship and who has the legal capacity to
title filed by Naguit, the OSG argues that the property xxx
enter into a contract under Philippine laws may be a
must first be alienable. Since the subject land was
transferee of private land up to a maximum are of
declared alienable only on 1980, Naguit could not have
5,000 sq.m., in case of urban land, or 3 hectares in
maintained a bona fide claim of ownership since June 12,
case of rural land to be used by him for business or
1945, as required by Section 14 of the Property
other purposes.
Registration Decree, since prior to 1980, the land was not
alienable or disposable. Is it necessary under Section 14(1)
UNDER R.A. 8371 Q: Are the Rules of Court applicable in land registration
proceedings
Q: What law governs the ownership and disposition of
ancestral lands and ancestral domains? A: The Rules of Court could be applied in land registration
proceedings in a suppletory character or whenever
A: RA 8371 of the Indigenous Peoples Rights Act of 1997 practicable or convenient.
(IPRA) which was enacted October 29, 1997. The IPRA is a
law dealing with a specific group of peoples, i.e., the Note: Motion to intervene in a land registration case is not
allowed.
Indigenous cultural communities or the indigenous peoples.
The law allows indigenous peoples to obtain recognition of
APPLICATION
their right of ownership over ancestral lands and ancestral
domains by virtue of native title.
Q: What is the form of the application for registration or
judicial confirmation?
REGISTRATION PROCESS AND REQUIREMENTS
A: In writing;
Q: What are the modes of registering land titles?
1. Signed by the applicant or person duly authorized
in his behalf;
A: There are two modes:
1. Original registration proceedings under the
2. Sworn to before an officer authorized to
Property Registration Decree (PD 1529), and
administer oaths for the province or city where
2. Confirmation of imperfect or incomplete title
the application was actually signed; and
under Section 48(b) of the Public Land Act, as
amended.
3. If there is more than 1 applicant, they shall be
signed and sworn to by and in behalf of each.
Q: What are the contents of the application? Q: What is the rule regarding application covering two or
more parcels?
A: D CAME FAR N
1. Description of the land applied for together with A: An application may include two or more parcels of land
the buildings and improvements; the plan belonging to the applicant/s provided they are situated
approved by Director of Lands and the technical within the same province or city (Sec 18, P.D. 1529).
descriptions must be attached
Q: Where shall the application be filed?
2. Citizenship and civil status of the applicant
a. If married, name of spouse A: If the application covers a single parcel of land situated
b. If the marriage has been legally dissolved, within:
when and how the marriage relation was 1. only one city or province:
terminated RTC or MTC, as the case may be, of the province
or city where the land is situated.
3. Assessed value of the land and the buildings and 2. two or more provinces or cities:
other improvements based on the last a. When boundaries are not defined – in the
assessment for taxation purposes RTC or MTC of the place where it is declared
for taxation purposes.
4. Manner of acquisition of land b. When boundaries are defined – separate
plan for each portion must be made by a
5. Mortgage or Encumbrance affecting the land or surveyor and a separate application for each
names of other persons who may have an interest lot must be filed with the appropriate RTC or
therein, legal or equitable MTC.
6. The court may require Facts to be stated in the Note: MeTC, MCTC, and MTC has jurisdiction to decide cadastral
application in addition to those prescribed by the and land registration cases, provided:
Decree not inconsistent therewith and may 1. There is no controversy or opposition (uncontested
lots); or
require the filing of additional papers
2. Value of contested lots does not exceed P100,000 (Sec.
4, R.A. 7691)
7. Full names and addresses of All occupants of the
land and those of the adjoining owners, if known, In other cases, the RTC has jurisdiction.
and if not known, the applicant shall state the
extent of the search made to find them Q: Does the RTC acting as a land registration court have
general or limited jurisdiction?
8. If the application describes the land as bounded
by a public or private way or Road, it shall state A: Sec. 2 of P.D. No. 1529 has eliminated the distinction
whether or not the applicant claims any portion between the general and the limited jurisdiction of the
of the land within the limits of the way or road, registration court. All conflicting claims of ownership and
and whether the applicant desires to have the interest in the land, and related issues submitted to the
line of way or road determined court with or without the unanimity of the parties, may
now be heard and resolved by the court. The court is now
9. If the applicant is a Non-resident of the authorized to hear and decide not only non-controversial
Philippines, he shall file an instrument in due cases but even contentious issues which used to be beyond
form appointing an agent residing in the its competence.
Philippines and shall agree that service of any
legal process shall be of the same legal effect as if Q: What are the purposes of the publication requirement
made upon the applicant within the Philippines for notice of the filing of the application and the date and
(Sec.16, PD 1529) place of hearing?
A: It deprives the court of jurisdiction. Q: When is publication not necessary in case the
application is amended?
GR: If it is later shown that the decree of registration
had included land or lands not included in the A:
publication, then the registration proceedings and the 1. If the amendment consists in the exclusion of a portion
decree of registration must be declared null and void – of the area covered by the original application and the
original plan as previously published, a new independent of, and not subordinate to, the rights of the
publication is not necessary (Exclusion). government.
Note: In this case, the jurisdiction of the court is not affected Q: Who may be proper oppositors in specific cases?
by the failure of filing a new application.
A: The following may be proper oppositors:
2. Amendments to the application including joinder, 1. A homesteader who has not yet been issued his
substitution or discontinuance as to the parties. title but who had fulfilled all the conditions
a. Joinder means joining of two or more defendants required by law to entitle him to a patent.
or plaintiffs involved in a single claim, or where 2. A purchaser of friar land before the issuance of
two or more claims or remedies can be disposed the patent to him.
of in the same legal proceedings. 3. Persons who claim to be in possession of a tract
of public land and have applied with the Bureau
b. Substitution means the replacement of one of the of Lands for its purchase.
parties in a lawsuit because of events that 4. The Government relative to the right of foreshore
prevent the party from continuing with the trial. lessees of public land as the latter’s rights is not
based on dominion or real right independent of
c. Discontinuance means the voluntary termination the right of the government.
of litigation by a plaintiff who has elected not to
pursue it or by both parties pursuant to a Q: May a private person oppose registration on the
settlement. ground that the land sought to be registered is owned by
the government?
Note: This may be allowed by the court at any stage of
the proceedings upon just and equitable terms.
A: No. A private person may not oppose an application for
registration on the ground that the land applied for is a
3. An amendment due to change of name of the
property of the government.
applicant.
Q: Should an oppositor have title over the disputed land?
OPPOSITION
A: No. The oppositor need not show title in himself; he
Q: Who may properly oppose an application for
should however appear to have interest in the property.
registration?
Q: Should an oppositor’s interest over the land be legal or
A: Any person claiming an interest, whether named in the
may it be merely equitable?
notice or not, may appear and file an opposition on or
before the date of initial hearing, or within such further
A: It is immaterial whether his interest is in the character of
time as may be allowed by the court. The opposition shall
legal owner or is of a purely equitable nature as where he is
state all the objections to the application and shall set forth
a beneficiary of a trust.
the interest claimed by the party filing the same and apply
for the remedy desired, and shall be signed and sworn to by
Q: When may a person be declared in default in land
him or by some other duly authorized person (Sec. 25, PD
registration proceedings?
No. 1529).
A: A person may be declared in default if he fails to file an
Q: What are the requisites for a valid opposition?
opposition.
A:
Q: What is the effect of failure to oppose?
1. Set forth objections to the application;
2. State interest claimed by oppositor;
A: Order of default – The court shall, upon motion of the
3. Apply for the remedy desired; and
applicant, no reason to the contrary appearing, order a
4. Signed and sworn to by him or by some other duly
default to be recorded and require applicant to present
authorized person.
evidence.
Note: The opposition partakes of the nature of an answer with a
counterclaim. Q: A judge declared in default an oppositor who had
already filed with the court an opposition based on
Q: Who may be an oppositor to the application for substantial grounds for his failure to appear at the initial
registration or judicial confirmation? hearing of the application for registration. Is the default
order proper? If not, what is his remedy?
A: Any person whether named in the notice or not,
provided, his claim of interest in the property applied for is A: No, it is not. Failure of the oppositor to appear at the
based on a right of dominion or some other real right initial hearing is not a ground for default. In which case, his
proper remedy is to file a petition for certiorari to contest
the illegal declaration of order of default, not an appeal.
Q: What is the effect of the absence of an opposition as A: Yes. As held in the case of Martinez v. Republic: “If it
regards allegations in the application? cannot be made any clearer, we hold that a defendant
party declared in default retains the right to appeal from
A: When there is no opposition, all allegations in the the judgment by default on the ground that the plaintiff
application are deemed confessed on the part of the failed to prove the material allegations of the complaint, or
opponent. that the decision is contrary to law, even without need of
the prior filing of a motion to set aside the order of default.
Q: What if a certificate of title was issued covering non- We reaffirm that the Lim Toco doctrine, denying such right
registrable lands without the government opposing, is the to appeal unless the order of default has been set aside,
government estopped from questioning the same? was no longer controlling in this jurisdiction upon the
effectivity of the 1964 Rules of Court, and up to this day.”
A: The government cannot be estopped from questioning (G.R. No. 160895, Oct. 30, 2005.)
the validity of the certificates of title, which were granted
without opposition from the government. The principle of EVIDENCE REQUIRED
estoppel does not operate against the government for the
acts of its agents. Q: What must the applicant for land registration prove?
Q: If an order of general default is issued, may the court A: The applicant must prove: DIP
automatically grant the application? 1. Declassification – The land applied for has been
declassified from the forest or timber zone and is
A: No. Even in the absence of an adverse claim, the a public agricultural land, is alienable and
applicant still has to prove that he possesses all the disposable, or otherwise capable of registration.
qualifications and none of the disqualifications to obtain 2. Identity of the land; and
the title. If he fails to do so, his application will not be 3. Possession and occupation of the land for the
granted. length of time and in the manner required by law.
Q: What is the remedy of a person who was declared in Q: What may constitute sufficient proof to establish
default by the court? declassification of land from forest to alienable or
disposable, or agricultural?
A:
1. Motion to set aside default order – A defaulted A: POEM-CIL
interested person may gain standing in court by filing 1. Presidential proclamation
such motion at any time after notice thereof and 2. Administrative Order issued by the Secretary of
before judgment, upon proper showing that: Environment and Natural Resources
a. his failure to answer (or file an opposition as in 3. Executive order
ordinary land registration case) was due to: 4. Bureau of Forest Development (BFD) Land
FAME: Classification Map
i. Fraud 5. Certification by the Director of Forestry, and
ii. Accident reports of District Forester
iii. Mistake 6. Investigation reports of Bureau of Lands
iv. Excusable Neglect investigator
b. and that he has a meritorious defense. (Sec. 3, 7. Legislative act, or by statute
Rule 9, Rules of Court)
Q: The Cenizas applied for registration of their title over a
2. Petition for Certiorari – Failure of the oppositor to parcel of public land which they inherited. Without
appear at the initial hearing is not a ground for default. presenting proof that the land in question is classified as
In which case, his proper remedy is to file a petition for alienable or disposable, the court granted the application,
certiorari not later than sixty (60) days from notice of holding that mere possession for a period as provided for
judgment, order or resolution to contest the illegal by law would automatically entitle the possessor the right
declaration or order of default, not an appeal. (Sec. 4, to register public land in his name. Was the court ruling
Rule 65, Rules of Court) correct?
Note: The petition shall be filed not later than 60 days from A: No. Mere possession for a period required by law is not
notice of the order. In case a motion for reconsideration or enough. The applicant has to establish first the disposable
new trial is timely filed, whether such motion is required or and alienable character of the public land, otherwise, public
lands, regardless of their classification, can be subject of Q: In case of conflict between areas and boundaries,
registration of private titles, as long as the applicant shows which prevails?
that he meets the required years of possession. The
applicant must establish the existence of a positive act of A: GR: Boundaries prevail over area.
the government, such as a presidential proclamation or an
executive order; administrative action; reports of Bureau of XPNs:
Lands investigators and a legislative act or a statute. 1. Boundaries relied upon do not identify land
(Republic v. Ceniza, G.R. No. 127060, Nov. 19, 2002) beyond doubt.
2. Boundaries given in the registration plan do not
Q: What may be presented as proof of the identity of the coincide with outer boundaries of the land
land sought to be registered? covered and described in the muniments of title.
2
A: ST D Q: What may constitute proof of possession?
1. Survey plan in general
2. Tracing cloth plan and blue print copies of plan A: To prove possession, it is not enough to simply declare
3. Technical description of the land applied for, duly one’s possession and that of the applicant’s predecessors-
signed by a Geodetic Engineer in-interest to have been “adverse, continuous, open, public,
4. Tax Declarations peaceful and in concept of owner” for the required number
of years. The applicant should present specific facts to show
Q: What is the effect of the failure to present the original such nature of possession because bare allegations,
tracing cloth plan? without more, do not amount to preponderant evidence
that would shift the burden to the oppositor (Diaz v.
A: While the submission in evidence of the original tracing Republic, G.R. No. 141031, Aug. 31, 2004).
cloth plan is a mandatory and even a jurisdictional
requirement, the Court has recognized instances of Q: What are some specific overt acts of possession which
substantial compliance with this rule. It is true that the best may substantiate a claim of ownership?
evidence to identify a piece of land for registration
purposes is the original tracing cloth plan from the Bureau A:
of Lands, but blueprint copies and other evidence could 1. Introducing valuable improvements on the property
also provide sufficient identification. In the case of Republic like fruit-bearing trees;
v. Ludolfo y Muñoz, respondent submitted, among other 2. Fencing the area;
things, the following supporting documents: (1) a blueprint 3. Constructing a residential house thereon; or
copy of the survey plan approved by the Bureau of Lands; 4. Declaring the same for taxation purposes.
and (2) the technical descriptions duly verified and
approved by the Director of Lands (G.R. No. 151910, Note: Evidence to be admissible must, however, be credible,
October 15, 2007). substantial and satisfactory
Q: Under what instance may its presentation be dispensed Q: What are insufficient proofs of possession?
with?
A: COF-3T
A: If the survey plan is approved by the Director of Lands 1. Mere Casual cultivation of portions of the land by
and its correctness has not been overcome by clear, strong claimant.
and convincing evidence, the presentation of the tracing
cloth plan may be dispensed with. Thus, original tracing Reason: Possession is not exclusive and notorious
cloth plan need not be presented in evidence. (Republic v. so as to give rise to a presumptive grant from the
Ludolfo y Muñoz, G.R. No. 151910, Oct. 15, 2007). State.
Note: Under LRA Circular 05-2000, only a certified copy of the 2. Possession of Other persons in the land applied
original tracing cloth plan need be forwarded to the LRA. for impugns the exclusive quality of the
applicant’s possession.
Although mere blue print copies were presented in court as
evidence, the original tracing cloth plan was attached to the 3. Mere failure of Fiscal representing the State to
application for registration and was available to the court for
cross-examine the applicant on the claimed
comparison. Hence, the approval of registration was proper
(Republic v. IAC, G.R. No. L-70594, Oct. 10, 1986) possession.
5. Where applicants Tacked their possession to that The law speaks of possession and occupation. Possession is
of their predecessor-in-interest but they did not broader than occupation because it includes constructive
present him as witness or when no proofs of what possession. When, therefore, the law adds the word
acts of ownership and cultivation were performed occupation, it seeks to delimit the all encompassing effect
by the predecessor. of constructive possession. Taken together with the words
open, continuous, exclusive and notorious, the word
Q: Exequiel Ampil, as representative of heirs of the late occupation serves to highlight the fact that for an applicant
Albina Ampil, filed a complaint for ejectment against to qualify, his possession must not be a mere fiction.
Perfecto Manahan, et al. Allegedly, Albina was the owner
of 2 adjoining residential lots located in Bulacan as Actual possession of a land consists in the manifestation of
evidenced by tax declarations. They asserted that Albina acts of dominion over it of such a nature as a party would
allowed Perfecto and his family to occupy a portion of said naturally exercise over his own property (Republic v.
properties on the condition that they would vacate the Alconaba, G.R. No. 155012, Apr. 14, 2004).
same should the need to use it arise. Despite requests
however, Perfecto and his family refuse to vacate the Note: “Well-nigh incontrovertible evidence” refers to the
property. Respondents aver that they had been in degree of proof of registrable rights required by law in
peaceful and continuous possession of the property in the registration proceedings.
concept of an owner sine time immemorial and that
Albina was never the owner of the property. Who Q: Are tax declarations presented by them sufficient proof
between the petitioners and the respondents have the of possession and occupation for the requisite number of
better right to the physical possession of the disputed years?
property?
A: No. The records reveal that the subject property was
A: The petitioners have the better right to the property in declared for taxation purposes by the respondents only for
question. The bare allegation of respondents that they had the year 1994. While belated declaration of a property for
been in peaceful and continuous possession of the lot in taxation purposes does not necessarily negate the fact of
question because their predecessor-in-interest had been in possession, tax declarations or realty tax payments of
possession thereof in the concept of an owner from time property are, nevertheless, good indicia of possession in the
immemorial, cannot prevail over the tax declarations and concept of an owner, for no one in his right mind would be
other documentary evidence presented by petitioners. In paying taxes for a property that is not in his actual or, at
the absence of any supporting evidence, that of the least, constructive possession. (Republic v. Alconaba, G.R.
petitioners deserves more probative value. A perusal of the No. 155012, Apr. 14, 2004)
records shows that respondents’ occupation of the lot in
question was by mere tolerance. From the minutes of the Q: What are the proofs of private ownership of land?
meeting in the Barangay Lupon, Perfecto admitted that
Albina permitted them to use the lots on the condition that A: STOP
they would vacate the same should Albina need it (Heirs of 1. Spanish title, impending cases.
Albina G. Ampil, namely Precious A. Zavalla, Eduardo Ampil,
et al. vs. Teresa Manahan and Mario Manahan G.R. No. Note: However, Spanish titles are now
175990. October 11, 2012). inadmissible and ineffective as proof of
ownership in land registration proceedings filed
Q: Mauricio and Carmencita testified to establish their after Aug. 16, 1976. It is mere indicia of a claim of
claim over the subject lots. When the application was ownership that the holder has a claim of title over
granted, the OSG appealed, arguing that weight should the property.
not be given to the self-serving testimonies of the two;
that their tax declaration is not sufficient proof that they 2. Tax declaration and tax payments.
and their parents have been in possession of the property
for at least thirty years, said tax declaration being only for Note: While tax declarations are not conclusive proof of
the year 1994 and the property tax receipts presented by ownership, they constitute good indicia of possession in
them were all of recent dates. Are the said pieces of the concept of owner and a claim of title over the
subject property for no one in his right mind would be
evidence sufficient to establish actual possession of land
paying taxes for a property that is not in his actual or
for the period required by law thus warranting the grant constructive possession.(Charles L. Ong v. Republic of
of the application? the Philippines, G.R. No. 175746, March 12, 2008 and
Republic of the Philippines v. Teodoro P. Rizalvo, Jr. G.R.
No. 172011, March 7, 2011)
A: The spouses Ducat and Kiong. The Affidavit of Transfer of Q: What is decree of registration?
Real Property proved Ducat’s ownership of the property. It
stated that Ducat bought the subject property from Cecilio A: It is a document prepared in the prescribed form by the
and Bernardo. The heirs did not question the authenticity LRA Administrator, signed by him in the name of the court,
and due execution of said document. It constitutes an embodying the final disposition of the land by the court and
admission against interest made by Bernardo, petitioners' such other data found in the record, including the name
predecessor-in-interest. and other personal circumstances of the applicant, the
technical description of the property, liens and
Bernardo's admission against his own interest is binding on encumbrances affecting it, and such other matters as
his heirs. The heirs' predecessor-in-interest recognized determined by the court in its judgment.
Ducat and Kiong as the legal owner of the lot in dispute.
Q: In a registration case, the court rendered a decision
Thus, there is no proof that the titling of the subject granting Reyes’ application, hence the Director of Lands
property was fraudulently obtained by Ducat and Kiong in appealed. Reyes moved for the issuance of a decree of
their names (Heirs of Bernardo Ulep v. Sps. Cristobal Ducat registration pending appeal. May his motion be granted?
and Flora Kiong, G.R. No. 159284, Jan. 27, 2009).
A: No. Innocent purchasers may be misled into purchasing
Q: What proofs are insufficient to establish private real properties upon reliance on a judgment which may be
ownership or right over land? reversed on appeal. A Torrens title issued on the basis of a
judgment that is not final is a nullity as it violates the
A: explicit provisions of the LRA, which requires that a decree
1. Compromise agreement among parties to a land shall be issued only after the decision adjudicating the title
registration case where they have rights and interest becomes final and executor (Dir. of Lands v. Reyes, G.R. No.
over the land and allocated portions thereof to each of L-27594, Nov. 28, 1975).
them.
Q: After final adjudication in a land registration
Note: Assent of Director of Lands and Director of Forest proceeding, Pepito and his family took possession of the
Management to compromise agreement did not and could land subject of the registration proceedings. Don Ramon
Q: What does a decree of registration cover? A: The appeal is not meritorious. The trial court ruled
correctly in granting defendant's motion to dismiss for the
A: Only claimed property or a portion thereof can be following reasons:
adjudicated. A land registration court has no jurisdiction to 1. While there is the possibility that F, a former
adjudge a land to a person who has never asserted any lessee of the land was aware of the fact that C was
right of ownership thereof. the bona fide occupant thereof and for this reason
his transfer certificate of title may be vulnerable,
Q: May the court render a partial judgment in land the transfer of the same land and the issuance of
registration proceedings? new TCTs to X and Y who are innocent purchasers
for value render the latter's titles indefeasible. A
A: Yes. Where only a portion of the land, subject of person dealing with registered land may safely rely
registration is contested, the court may render partial on the correctness of the certificate of title and
judgment provided that a subdivision plan showing the the law will not in any way oblige him to go behind
contested land and uncontested portions approved by the the certificate to determine the condition of the
Director of Lands is previously submitted to the court. property in search for any hidden defect or
inchoate right which may later invalidate or
Q: What is the effect of a decree of registration? diminish the right to the land. This is the mirror
principle of the Torrens System of land
A: The decree of registration binds the land, quiets title, registration.
subject only to such exceptions or liens as may be provided
by law. 2. The action to annul the sale was instituted in 1977
or more than (10) years from the date of
It is conclusive upon all persons including the national execution thereof in 1957, hence, it has long
government and all branches thereof. Such conclusiveness prescribed.
does not cease to exist when the title is transferred to a
successor. Under Sec. 45, Act 496, “the entry of a certificate of title
shall be regarded as an agreement running with the land,
Note: Title once registered cannot be impugned, altered, changed, and binding upon the applicant and all his successors in title
modified, enlarged or diminished, except in a direct proceeding that the land shall be and always remain registered land. A
permitted by law. title under Act 496 is indefeasible and to preserve that
character, the title is cleansed anew with every transfer for
Q: Does the principle of res judicata apply to land value (De Jesus v. City of Manila, G.R. No. L-26816, Feb. 28,
registration proceedings? 1967; Laperal v. City of Manila, G.R. No. L-16991, Mar. 31,
1964; Penullar v. PNB, G.R. No. L-32762 Jan. 27, 1983).
A: The principle of res judicata applies to all cases and
proceedings, including land registration and cadastral Q: Suppose the government agency concerned joined C in
proceedings. filing the said action against the defendants, would that
change the result of the litigation? Explain. (1990 Bar
Q: In 1950’s, the Government acquired a big landed estate Question)
in Central Luzon from the registered owner for subdivision
into small farms and redistribution of bonafide occupants. A: Even if the government joins C, this will not alter the
F was a former lessee of a parcel of land, five hectares in outcome of the case so much because of estoppel as an
area. After completion of the resurvey and subdivision, F express provision in Sec. 45, Act 496 and Sec. 31, PD 1529
applied to buy the said land in accordance with the that a decree of registration and the certificate of title
guidelines of the implementing agency. Upon full payment issued in pursuance thereof “shall be conclusive upon and
of the price in 1957, the corresponding deed of absolute against all persons, including the national government and
sale was executed in his favor and was registered, and in all branches thereof, whether mentioned by name in the
1961, a new title was issued in his name. In 1963, F sold the application or not.”
said land to X; and in 1965 X sold it to Y, new titles were
successively issued in the names of the said purchasers.
Q: May the court reopen the judgment or decree of As the purchaser of the properties in the extra-judicial
registration? foreclosure sale, the PNCB is entitled to a writ of possession
therefore. The basis of this right to possession is the
A: No.The court has no jurisdiction or authority to reopen purchaser’s ownership of the property. Mere filing of an ex
the judgment or decree of registration, nor impair the title parte motion for the issuance of the writ of possession
or other interest of a purchaser holding a certificate for would suffice, and no bond is required. (Sulit v. CA, G.R. No.
value and in good faith, or his heirs and assigns, without his 119247, Feb. 17, 1997; Agcaoili, Registration Decree and
or their written consent. Related Laws, p. 508-509)
Q: What are the effects of the entry of the decree of Q: Against whom may a writ of possession be issued?
registration in the National Land Titles and Deeds
Registration Authority (NALDTRA)? A: In a registration case, a writ of possession may be issued
against:
A: 1. The person who has been defeated in a
1. This serves as the reckoning date to determine the 1- registration case; and
year period from which one can impugn the validity of 2. Any person adversely occupying the land or any
the registration. portion thereof during the land registration
2. 1 year after the date of entry, it becomes proceedings up to the issuance of the final
incontrovertible, and amendments will not be allowed decree.
except clerical errors. It is deemed conclusive as to the
whole world. Q: Yano filed an application for registration which was
3. Puts an end to litigation. granted. Consequently, a writ of possession was issued.
Vencelao, who occupies the land, contends that he was
WRIT OF POSSESSION not the defeated oppositor in the case, hence a writ of
possession may not be issued against him. May a writ of
Q: In what instances may a writ of possession issue? possession be issued against Vencelao?
A: It is issued by LRA after finality of judgment, and contains In his appeal, may Arcidio seek the nullity of Valentin’s
technical description of land. It is subject only to an appeal. title, invoking as defense the ruling of the Director of
Lands in an administrative case that Valentin has never
It is conclusive evidence of the ownership of the land resided in said land and declared that the homestead
referred to therein and becomes indefeasible and patent was improperly issued to him?
incontrovertible after one year from the issuance of the
decree. A: No, a collateral attack is not allowed. It was erroneous
for Arcidio to question the Torrens OCT issued to Valentin
Q: Differentiate decree of confirmation and registration in an ordinary civil action for recovery of possession filed by
from decree of registration. the registered owner – Valentin – of the said lot, by
invoking as affirmative defense in his answer the Order of
A: Decree of confirmation and registration of title is issued the Bureau of Lands issued pursuant to the investigatory
pursuant to the Public Land Act, where the presumption is power of the Director of Lands under Section 91 of Public
that the land applied for pertains to the State, and that the Land Law (CA No. 141 as amended). Such a defense
occupants and possessors only claim an interest in the partakes of the nature of a collateral attack against a
same by virtue of their imperfect title or continuous, open, certificate of title brought under the operation of the
and notorious possession Torrens system of registration pursuant to Sec. 122, Land
Registration Act, now Sec. 103, P.D. 1259 (Ybanez v. IAC,
Decree of registration is issued pursuant to the Property G.R. No. 68291, Mar. 6, 1991).
Registration Decree, where there already exists a title
which is confirmed by the court (Limcoma Multi-Purpose Q: In a case for recovery of possession based on
Cooperative v. Republic, G.R. No. 167652, July 10, 2007). ownership, is a third-party complaint to nullify the title of
the third-party defendant considered a direct attack on
Q: What is the doctrine of non-collateral attack of a the title?
decree or title?
A: If the object of the third-party complaint is to nullify the
A: A decree of registration and registered title cannot be title of the third-party defendant, the third-party complaint
impugned, enlarged, altered, modified, or diminished either constitutes a direct-attack on the title because the same is
in collateral or direct proceeding, after the lapse of one in the nature of an original complaint for cancellation of
year from the date of its entry. title.
Q: Under what instance, will such doctrine not apply? Q: If an attack is made thru a counterclaim, should it be
disregarded for being a collateral attack?
A: Prohibition against collateral attack does not apply to
spurious or non-existent titles, since such titles do not A: No. A counterclaim is also considered an original
enjoy indefeasibility. “Well-settled is the rule that the complaint, and as such, the attack on the title is direct and
indefeasibility of a title does not attach to titles secured by not collateral.
fraud and misrepresentation. In view of these
A: Yes, Rachelle’s suit will prosper because all the elements Q: When will an action for damages in land registration
of an action for reconveyance are present, namely: cases prescribe?
1. Rachelle is claiming dominical rights over the
property; A: An ordinary action for damages prescribes in ten (10)
2. Rommel procured his title to the land by fraud; years after the issuance of the Torrens title over the
3. The action was brought within the statutory property.
period of four years from discovery of the fraud
and not later than 10 years from the date of CANCELLATION SUIT
registration of Rommel’s title; and
4. Title to the land has not yet passed into the hands Q: What is cancellation suit?
of an innocent purchaser for value.
A: It is an action for cancellation of title brought by a
Rommel can invoke the indefeasibility of his title if Rachelle private individual, alleging ownership as well as the
had filed a petition to re-open or review the decree of defendant’s fraud or mistake, as the case may be, in
registration. But Rachelle instead filed an ordinary action in successfully obtaining title over a disputed land claimed by
personam for reconveyance. In the latter action, the plaintiff.
indefeasibility is not a valid defense, because in filing such
action, Rachelle is not seeking to nullify or to impugn the Q: When is resort to a cancellation suit proper?
indefeasibility of Rommel’s title. She is only asking the court
to compel Rommel to reconvey the title to her as the A:
legitimate owner of the land. 1. When two certificates of title are issued to different
persons covering the same parcel of land in whole or
Q: May the court cancel the notice of lis pendens even in part
before final judgment is rendered? Explain. (1995 Bar 2. When certificate of title is issued covering a non-
Question) registrable property
3. Other causes such as when the certificate of title is
A: A notice of lis pendens may be cancelled even before issued pursuant to a judgment that is not final or when
final judgment upon proper showing that the notice is for it is issued to a person who did not claim and applied
the purpose of molesting or harassing the adverse party or for the registration of the land covered.
that the notice of lis pendens is not necessary to protect
the right of the party who cause it to be registered. (Sec. Q: What are the rules as regards cancellation of
77, PD 1529) certificates of title belonging to different persons over the
same land?
In this case, it is given that Rachelle is the legitimate owner
of the land in question. It can be said, therefore, that when A: Where two certificates are issued to different persons
she filed her notice of lis pendens her purpose was to covering the same land, the title earlier in date must
protect her interest in the land and not just to molest prevail. The latter title should be declared null and void and
Rommel. It is necessary to record the lis pendens to protect ordered cancelled.
her interest because if she did not do it, there is a
possibility that the land will fall into the hands of an Q: What is meant by prior est temporae, prior est in jura?
innocent purchaser for value and in that event, the court
loses control over the land making any favorable judgment A: It is a principle which means he who is first in time is
thereon moot and academic. For these reasons, the notice preferred in right.
of lis pendens may not be cancelled.
Q: Pablo occupied a parcel of land since 1800. In 1820, he
DAMAGES was issued a certificate of title over said land. In 1830,
however, the land was reclassified as alienable and
Q: When may an action for damages be resorted to in land disposable, as it was originally a forest land. In 1850,
registration cases? Pedro was able to obtain a certificate of title over the
same land. Upon learning of such, Pablo sought to have
A: After one year from date of the decree and if Pedro’s title declared null and void. Decide.
reconveyance is not possible because the property has
passed to an innocent purchaser for value and in good A: As a general rule, the earlier in date must prevail.
faith, the aggrieved party aggrieved party may bring an However, this principle cannot apply if it is established that
ordinary action for damages only against the applicant or the earlier title was procured through fraud or is otherwise
persons responsible for the fraud or were instrumental in jurisdictionally flawed (Republic v. CA and Guido, et. al.,
depriving him of the property. G.R. No. 84966, Nov. 21, 1991). The rule is valid only absent
any anomaly or irregularity tainting the process of
registration. Where the inclusion of land in the certificate of
title of prior date is a mistake, the mistake may be rectified
by holding the latter of the two certificates to be conclusive
(Legarda v. Saleeby, G.R. No. 8936, Oct. 2, 1915). Since the
Quieting of title is a common law remedy for the removal of A: Yes. The State may criminally prosecute for perjury the
any cloud upon, doubt, or uncertainty affecting title to real party who obtains registration through fraud, such as by
property. Whenever there is a cloud on title to real stating false assertions in the application for registration,
property or any interest in real property by reason of any sworn answer required of applicants in cadastral
instrument, record, claim, encumbrance, or proceeding that proceedings, or application for public land and patent.
is apparently valid or effective, but is, in truth and in fact,
invalid, ineffective, voidable, or unenforceable, and may be
prejudicial to said title, an action may be brought to remove
such cloud or to quiet the title. In such action, the
competent court is tasked to determine the respective
rights of the complainant and the other claimants, not only
to place things in their proper places, and make the
REMEDY IN CASE OF LOSS OR (b) that the documents presented by petitioner are
DESRUCTION OF CERTIFICATE OF TITLE sufficient and proper to warrant reconstitution of the
lost or destroyed certificate of title;
Q: What is the remedy in case a person lost his certificate (c) that the petitioner is the registered owner of the
of title? property or had an interest therein;
(d) that the certificate of title was in force at the time it
A: It depends. was lost or destroyed; and
1. If what is lost is the OCT or TCT – Reconstitution (e) that the description, area and boundaries of the
of certificate of title; property are substantially the same as those contained
2. If, however, it is the duplicate of the OCT or TCT – in the lost or destroyed certificate of title (Republic of
Replacement of lost duplicate certificate of title. the Philippines v. Apolinaria Catarroja, et al., G.R. No.
171774, Feb. 12, 2010).
Q: What is reconstitution of certificate of title?
Q: What are the jurisdictional requirements in petitions
A: The restoration of the instrument which is supposed to for reconstitution of title?
have been lost or destroyed in its original form and
condition, under the custody of Register of Deeds. A: Notice thereof shall be:
1. Published twice in successive issues of the Official
Q: What is the purpose of reconstitution of title? Gazette;
2. Posted on the main entrance of the provincial
A: To have the same reproduced, after proper proceedings, building and of the municipal building of the
in the same form they were when the loss or destruction municipality or city, where the land is situated;
occurred. and
3. Sent by registered mail to every person named in
The reconstitution or reconstruction of a certificate of title said notice
literally denoted restoration of the instrument which is
supposed to have been lost or destroyed in its original form Note: The above requirements are mandatory and jurisdictional.
and condition
Q: What are the kinds of reconstitution of title?
Q: Does reconstitution determine ownership of land
covered by a lost or destroyed certificate of title? A:
1. Judicial – partakes the nature of a land registration
A: A reconstituted title, by itself, does not determine or proceeding in rem. The registered owners, assigns, or
resolve the ownership of the land covered by the lost or any person having an interest in the property may file
destroyed title. The reconstitution of a title is simply the re- a petition for that purpose with RTC where property is
issuance of a lost duplicate certificate of title in its original located. RD is not the proper party to file the petition.
form and condition. It does not determine or resolve the 2. Administrative – may be availed of only in case of:
ownership of the land covered by the lost or destroyed a. Substantial loss or destruction of the original land
title. A reconstituted title, like the original certificate of titles due to fire, flood, or other force majeure as
title, by itself does not vest ownership of the land or estate determined by the Administrator of the Land
covered thereby (Alonso, et. al. v. Cebu Country Club Inc., Registration Authority
G.R. No. 130876, Dec. 5, 2003). b. The number of certificates of title lost or
damaged should be at least 10% of the total
Q: Where the title to the land was lost, does it mean that number in the possession of the Office of the
the land ceased to be registered land? Register of Deeds
c. In no case shall the number of certificates of title
A: No. The fact that the title to the land was lost does not lost or damaged be less than 500
mean that the land ceased to be a registered land before d. Petitioner must have the duplicate copy of the
the reconstitution of its title. certificate of title (R.A. 6732)
Q: May a writ of possession be issued in a petition for Note: The law provides for retroactive application thereof to cases
reconstitution? 15 years immediately preceding 1989.
A: No, because, reconstitution does not adjudicate Q: From what sources may a certificate of title be
ownership over the property. A writ of possession is issued reconstituted?
to place the applicant-owner in possession.
A:
Q: What must be shown before the issuance of an order Judicial reconstitution
for reconstitution? For OCT (in the following order):
1. Owner’s duplicate of the certificate of title
A: 2. Co-owner’s, mortgagee’s or lessee’s duplicate of
(a) that the certificate of title had been lost or destroyed; said certificate
3. any error, omission or mistake was made in entering instrumentalities, and its officials and agents in any
a certificate or any memorandum thereon or on any litigation, proceeding, investigation or matter requiring the
duplicate certificate; services of a lawyer. It shall represent the government in all
4. the name of any person on the certificate has been registration and related proceedings and institute actions
changed; for the reversion to the State of Lands of the public domain
5. the registered owner has been married, or and improvements thereon and all lands held in violation of
registered as married, the marriage has terminated the Constitution.
and no right or interest of heirs or creditors will
thereby be affected; Q: When does reversion apply?
6. a corporation, which owned registered land and has
been dissolved, has not conveyed the same within 3 A: Generally, reversion applies in all cases where lands of
years after its dissolution; or public domain and the improvements thereon and all lands
7. there is a reasonable ground for the amendment or are held in violation of the Constitution.
alteration of title.
Q: What are the grounds for reversion of lands covered by
Q: What are the requisites for the amendment or a patent?
correction of title?
A:
A: FREON-U 1. Violation of Sec.s 118, 120, 121 and 122, Public Land
1. It must be Filed in the original case; Act (e.g. alienation or sale of homestead executed
2. By the Registered owner or a person in interest; within the 5 year prohibitory period)
3. On grounds Enumerated; 2. When land patented and titled is not capable of
4. All parties must be Notified; registration
5. There is Unanimity among them; and 3. Failure of the grantee to comply with the conditions
6. Original decree must not be Opened. imposed by law to entitle him to a patent grant
4. When the area is an expanded area
REVERSION 5. When the land is acquired in violation of the
Constitution (e.g. land acquired by an alien may be
Q: What is meant by reversion? reverted to the State)
A: It is an action instituted by the government, through the Q: Luis filed a complaint for annulment of title involving a
Solicitor General, for cancellation of certificate of title and foreshore land which was granted in Flores’ favor, alleging
the consequential reversion of the land covered thereby to that his application therefor was granted by the
the State. government. Is Luis the real party in interest with
authority to file a complaint for annulment of title of
Reversion connotes restoration of public land fraudulently foreshore land?
awarded or disposed of to the mass of the public domain
and may again be the subject of disposition in the manner A: No. In all actions for the reversion to the Government of
prescribed by law to qualified applicants. lands of the public domain or improvements thereon, the
Republic of the Philippines is the real party in interest. The
Q: Differentiate an action for reversion from an action for action shall be instituted by the Solicitor General or the
cancellation of title? officer acting in his stead, in behalf of the Republic of the
Philippines. Petitioners must first lodge their complaint
A: with the Bureau of Lands in order that an administrative
ACTION FOR REVERSION ACTION FOR CANCELLATION investigation may be conducted under Sec. 91, Public Land
Filed by the government Initiated by a private party Act (Manese v. Sps. Velasco, G.R. No. 164024, Jan. 29,
through the Solicitor usually in a case where there 2009).
General are 2 titles issued to different
persons for the same lot Private persons have no right or interest over land
considered public at the time the sales application was
Q: In the remedy of action for cancellation of title, does filed. They have no personality to question the validity of
the land revert back to the mass of public domain? the title (Vicente Cawis v. Hon. Antonio Cerilles, G.R. No.
170207, April 19, 2010).
A: No. In this action, the land does not revert to the mass of
the public domain, but is declared as lawfully belonging to Note: Indefeasibility of title, prescription, laches and estoppel do
not bar reversion suits.
the party whose certificate of title is held superior over the
other.
Q: What is the effect of registration of such voluntary reference by number to the certificate of title to which it
dealings? relates and to the volume and page in the registration book
in which it is registered (Sec. 65, P.D. 1529).
A: It:
1. creates a lien that attaches to the property in 2. If the instrument creating or declaring a trust or other
favor of the mortgagee; and equitable interest contains an express power to sell,
2. constitutes constructive notice of his interest in mortgage or deal with the land in any manner, such power
the property to the whole world. shall be stated in the certificate of title by the words "with
power to sell", or "power to mortgage", or by apt words of
Q: What is the rule on carry over of encumbrances? description in case of other powers (Sec. 66, P.D. 1529).
A: If, at the time of any transfer, subsisting encumbrances 3. If a new trustee of registered land is appointed by a court
or annotations appear in the registration book, they shall of competent jurisdiction, a new certificate may be issued
be carried over and stated in the new certificate or to him upon presentation to the Register of Deeds of a
certificates; except so far as they may be simultaneously certified copy of the order or judicial appointment and the
released or discharged (Sec. 59, P.D. 1529). surrender for cancellation of the duplicate certificate (Sec.
67, P.D. 1529).
Q: If the property that was the subject of mortgage was
subsequently foreclosed, must a new certificate of title be 4. Whoever claims an interest in registered land by reason
automatically issued in favour of the purchaser? of any implied or constructive trust shall file for
registration with the Register of Deeds a sworn statement
A: The answer must be qualified. thereof containing a description of the land, the name of
the registered owner and a reference to the number of the
1. No right of redemption - the certificate of title of the certificate of title. Such claim shall not affect the title of a
mortgagor shall be canceled, and a new certificate issued in purchaser for value and in good faith before its registration
the name of the purchaser. (Sec. 68, P.D. 1529).
A: The purpose of annotating the adverse claim on the title A: The effect of non-registration or invalid registration of an
of the disputed land is to apprise third persons that there is adverse claim renders it ineffective for the purpose of
a controversy over the ownership of the land and to protecting the claimant’s right or interest on the disputed
preserve and protect the right of the adverse claimant land, and could not thus prejudice any right that may have
during the pendency of the controversy. arisen thereafter in favor of third parties.
Q: When is a claim of interest adverse? Q: What are the limitations to the registration of an
adverse claim?
A:
1. Claimant’s right or interest in registered land is A:
adverse to the registered owner; 1. No second adverse claim based on the same
2. Such right or interest arose subsequent to the date of ground may be registered by the same claimant.
original registration; or 2. A mere money claim cannot be registered as an
3. No other provision is made in the decree for the adverse claim.
registration of such right or claim.
Q: May an adverse claim exist concurrently with a
Q: What are the formal requisites of an adverse claim for subsequent annotation of a notice of lis pendens?
purposes of registration?
A: Yes, an adverse claim may exist concurrently with a
A: WNR subsequent annotation of a notice of lis pendens. When an
1. Adverse claimant must state the following in adverse claim exists concurrently with a notice of lis
Writing: pendens, the notice of adverse claim may be validly
a. his alleged right or interest; cancelled after the registration of such notice, since the
b. how and under whom such alleged right of notice of lis pendens also serves the purpose of the adverse
interest is acquired; claim.
c. description of the land in which the right or
interest is claimed; and Q: What is the lifespan of a registered adverse claim?
d. certificate of title number
A: The adverse claim shall be effective for a period of thirty
2. Such statement must be signed and sworn to (30) days from the date of registration and it may be
before a Notary public; and cancelled.
3. Claimant shall state his Residence or place to
which all notices may be served upon him. Q: What is the effect of the expiration of the period of
effectivity of an adverse claim?
Q: How are adverse claims registered?
A: The expiration does not ipso facto terminate the claim.
A: By filing a sworn statement with the Register of Deeds of The cancellation of the adverse claim is still necessary to
the province where the property is located, setting forth render it ineffective; otherwise, the inscription will remain
the basis of the claimed right together with other data annotated and shall continue as a lien to the property.
pertinent thereto.
Q: May the RD cancel an adverse claim?
Note: Entry of the adverse claim filed on the day book is sufficient
without the same being annotated at the back of the A: The RD cannot, on its own, automatically cancel the
corresponding certificate of title (Director of Lands v. Reyes, G.R. adverse claim.
No. L-27594, Feb. 27, 1976)
Note: Before the lapse of 30-day period, the claimant may file a
Q: What claims may be registered as adverse claims? sworn petition withdrawing his adverse claim, or a petition for
cancellation of adverse claim may be filed in the proper Regional
A: Any claim of part or interest in registered land that are Trial Court
adverse to the registered owner, arising subsequent to the
date of the original registration (Sec. 70, PD 1529)
Q: What must an interested party do if he seeks the Q: When may a notice of lis pendens be made and when
cancellation of a registered adverse claim? may it not be resorted to?
Note: It is not a lien or encumbrance under our civil law. It is mere Q: What are the effects of the annotation of notice of lis
cautionary notice to prospective buyers of certain property that pendens?
said property is under litigation. The annotation of a notice of lis
pendens at the back of the original copy of the certificate of title on A: The filing of notice of lis pendens has 2 effects:
file with the Register of Deeds is sufficient to constitute 1. It keeps the subject matter of litigation within the
constructive notice to purchasers or other persons subsequently power of the court until the entry of the final
dealing with the same property. One who deals with property judgment to prevent the defeat of the final
subject of a notice of lis pendens cannot invoke the right of a
judgment by successive alienation; and
purchaser in good faith neither can he acquire better rights that
those of his predecessors-in-interest.
2. It binds a purchaser, bona fide or not, of the land
Q: What is the basis for such notice? subject of the litigation to the judgment or decree
that the court will promulgate subsequently.
A: Such announcement is founded upon public policy and
necessity, the purpose of which is to keep the properties in Q: What statutory liens affecting title are not barred even
litigation within the power of the court until the litigation is though not noted in the title?
terminated and to prevent the defeat of the judgment or
decree by subsequent alienation (Isabelita Cunanan et al., A: LUPD
v. Jumping Jap Trading Corporation et al., G.R. No. 173834, 1. Liens, claims or rights arising or existing under the
April 24, 2009). laws and the Constitution, not required by law to
appear of record in the RD;
Q: What are the purposes of a notice of lis pendens?
2. Unpaid real estate taxes levied and assessed
A: To: within two (2) years immediately preceding the
1. protect the rights of the party causing the acquisition of any right over the land by an
registration of the lis pendens; and innocent purchaser for value without prejudice to
2. advise third persons who purchase or contract on right of the government to collect taxes payable
the subject property that they do so at their peril before that period from the delinquent taxpayer
and subject to the result of the pending litigation. alone;
Note: It is an announcement to the whole world that a particular 3. Public highway or private way established or
real property is in litigation, serving as a warning that one who recognized by law or any government irrigation
acquires an interest over said property does so at his own risk, or canal or lateral thereof; and
that he gambles on the result of the litigation over the said
property. The filing of a notice of lis pendens charges all strangers 4. Any Disposition of the property or limitation on
with a notice of the particular litigation referred to therein and, the use thereof by virtue of laws or regulations on
therefore, any right they may thereafter acquire on the property is
agrarian reform (Sec. 44, PD 1529).
subject to the eventuality of the suit (Isabelita Cunanan et al., v.
Jumping Jap Trading Corporation et al., G.R. No. 173834, April 24,
2009). Q: When may a notice of lis pendens be cancelled?
Q: What is foreshore land? with prayer for TRO. The RTC dismiss PRA’s petition and
ruled that PRA was not exempt from payment of real
A: A strip of land that lies between the high and low water property taxes as it was organized as a stock corporation.
marks and is alternatively wet and dry according to the flow Is the ruling correct?
of tide. It is that part of the land adjacent to the sea, which
is alternately covered and left dry by the ordinary flow of A: The subject lands are reclaimed lands, specifically
tides. portions of the foreshore and offshore areas of Manila Bay.
As such, these lands remain public lands and form part of
Note: Seashore, foreshoreland, and/or portions of the territorial the public domain. In the case of Chavez v. Public Estates
waters and beaches, cannot be registered. Even alluvial formation Authority and AMARI Coastal Development Corporation, the
along the seashore is part of the public domain and, therefore, not Court held that foreshore and submerged areas irrefutably
open to acquisition by adverse possession by private persons.
belonged to the public domain and were inalienable unless
reclaimed, classified as alienable lands open to disposition
Q: What are mangrove swamps?
and further declared no longer needed for public service.
The fact that alienable lands of the public domain were
A: These are mud flats, alternately washed and exposed by
transferred to the PEA (now PRA) and issued land patents
the tide, in which grows various kindred plants which will
or certificates of title in PEA’s name did not automatically
not live except when watered by the sea, extending their
make such lands private. This Court also held therein that
roots deep into the mud and casting their seeds, which also
reclaimed lands retained their inherent potential as areas
germinate there. These constitute the mangrove flats of the
for public use or public service (Republic of the Philippines,
tropics, which exist naturally, but which are also, to some
represented by the Philippine Reclamation Authority (PRA)
extent cultivated by man for the sake of the combustible
vs. City of Parañaque; G.R. No. 191109, July 18, 2012.)
wood of the mangrove and like trees as well as for the
useful nipa palm propagated thereon (Montano v. Insular
DEALINGS WITH UNREGISTERED LANDS
Government, G.R. No. 3714, Jan. 26, 1909).
Q: Is the transfer of an unregistered land valid?
Q: Are mangrove swamps disposable?
A: Yes. It is valid only between the parties and does not
A: No. Mangrove swamps or manglares are forestall and
bind third persons. Sec. 113 of P.D. 1529 states that no
not alienable agricultural land.
deed, conveyance, mortgage, lease, or other voluntary
instrument affecting land not registered under the Torrens
Q: What are mineral lands?
system shall be valid, except as between the parties
thereto, unless such instrument shall have been recorded in
A: Mineral land means any land where mineral resources
the manner herein prescribed in the office of the Register
are found. Mineral resources, on the other hand, mean any
of Deeds for the province or city where the land lies.
concentration of mineral/rocks with potential economic
value.
A: The rights over the land are indivisible and that the land
itself cannot be half agricultural and half mineral. The
classification of land must be categorical; the land must be
either completely mineral or completely agricultural.
Q: What is watershed?
A:
RD LRA COURTS
1. Registration of an instrument 1. Assistance to the Jurisdiction over:
presented for registration dealing Department of Agrarian
with real or personal property which Reform, the Land Bank, 1. Applications for original
complies with the requisites for and other agencies in the registration of title to lands,
registration implementation of the land including improvements and
2. See to it that said instrument bears reform program of the interests therein
the proper documentary and stamps government
and that the same are properly 2. Assistance to courts in 2. Petitions filed after original
cancelled ordinary and cadastral land registration, with power to hear
3. If the instrument is not registerable: registration proceedings and determine all questions
4. deny the registration thereof and 3. Central repository of arising upon such application or
inform the presentor of such denial in records relative to the petitions.
writing, stating the ground or reason original registration of
therefore, and lands titled under the
5. advising him of his right to appeal by Torrens system, including
consulta in accordance with Sec. 117 the subdivision and
of PD 1529 consolidation plans of
6. Prepare and keep an index system titled lands.
which contains the names of all 4. Adjudicate appeal – en
registered owners and lands consulta cases
registered
TORTS AND DAMAGES Note: Either of these liabilities may be enforced against the
offender subject to the caveat under Article 2177 of the Civil Code
PRINCIPLES that the plaintiff cannot recover damages twice for the same act or
omission of the defendant (Santos v. Pizardo, G.R. No. 151452, July
29, 2005).
Q: What is a tort?
Q: What is the principle of abuse of rights?
A: It is a civil wrong wherein one person’s conduct causes a
compensable injury the person, property or recognized
A: Every person must, in the exercise of his rights and in the
interest of another, in violation of a duty imposed by law
performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith. (Art. 19, NCC)
Note: The term tort was not used by the Code Commission and
instead used the term quasi-delict because it is broader in coverage
as it covers in common law countries, acts which are intentional or Note: This principle is based upon the famous maxim suum jus
malicious, which latter acts in teh general plan of the Philippine summa injuria (the abuse of a right is the greatest possible wrong).
legal system are governed by the Penal Code. However, the case of (Arlegui v. CA, G.R. No. 126437, Mar. 6, 2002)
Barredo v. Garcia made no distinction between intentional and
negligent injuries as it declared that quasi delict include punishable Q: What is the rationale behind the principle?
and non punishable acts or omission (Pineda, Torts and Damages
Annotated, 2004 ed). A: The exercise of a right ends when the right disappears,
and it disappears when it is abused, especially to the
Q: What are the main functions of punishing tort? prejudice of others. The mask of a right without the spirit of
justice which gives it life is repugnant to the modern
A: concept of social law. It cannot be said that a person
1.Compensation and Restitution – to compensate persons exercises a right when he unnecessarily prejudices another
sustaining a loss or harm as a result of another’s act or or offends morals or good customs (Pineda, Torts and
omission, placing the cost of that compensation on those Damages, 2009, p. 325, citing BorrelMacia).
who, in justice ought to bear it.
2. Prevention – to prevent future losses and harm Note: The abuse of rights rule established in Article 19 of the Civil
Code requires every person to act with justice, to give everyone his
Q: What are the major purposes of imposing liability due and to observe honesty and good faith. (RellosavsPellosis, 362
arising from tort? SCRA 486)
2. Independent civil liabilities, such as those A: Yes. Liability without Fault includes:
(a) not arising from an act or omission complained of a. Strict Liability – there is strict liability if one is
as a felony, e.g., culpa contractual or obligations made independent of fault, negligence or intent
arising from law under Article 31 of the Civil Code after establishing certain facts specified by law. It
(such as breach of contract or tort), intentional torts includes liability for conversion and for injuries
under Articles 32 and 34, and culpa aquiliana under caused by animals, ultra-hazardous activities and
Article 2176 of the Civil Code nuisance.
b. Product Liability – is the law which governs the
(b) where the injured party is granted a right to file an liability of manufacturers and sellers for damages
action independent and distinct from the criminal resulting from defective products. (Aquino, T.,
action under Article 33 of the Civil Code (in cases of Torts and Damages, 2005, Second Ed.)
defamation, fraud and physical injuries).
A: No one shall unjustly enrich himself at the expense of 4. State of Necessity (Art. 432) – A situation of
another (Pacific Merchandising Corp. v. Consolacion present danger to legally protected interests,
Insurance and Surety Co., Inc., 73 SCRA 564) in which there is no other remedy than the
injuring of another’s also legally protected
Coverage: the article applies only if: interest.
i. Someone acquires or comes into possession of
“something” which means delivery or acquisition CLASSIFICATION OF TORTS
of “things”; and
ii. Acquisition is undue and at the expense of Q: What are the classes of torts according to manner of
another, which means without any just or legal commission?
ground.
A:
Q: What is the remedy for unjust enrichment? 1. Negligent torts – It involves voluntary acts or
omissions which results in injury to others, without
A: Accion In Rem Verso. It is an action for recovery of what intending to cause the same.
has been paid without just cause.
2. Intentional torts – The actor desires to cause the
Note: Mistake is not an essential element, as opposed to solution consequences of his act or believes the consequences
indebiti where mistake is an essential element. are substantially certain to result therefrom.
Q: What are the requisites for accion in rem verso? This refers to a tort or wrong perpetuated by one
who intends to do that which the law has declared
A: wrong as contrasted with negligence in which the
1. That the defendant has been enriched; tortfeasor fails to exercise that degree of care in
2. That the plaintiff has suffered a loss; doing what is otherwise permissible (Black’s Law
3. That the enrichment of the defendant is without just th
Dictionary, 6 Edition, p. 1489).
or legal ground;
4. That the plaintiff has no other action based on 3. Strict liability – The person is made liable independent
contract, quasi-contract, crime or quasi-delict. of fault or negligence upon submission of proof of
certain facts.
Q: When may accion in rem verso be availed of?
ACCORDING TO SCOPE: GENERAL OR SPECIFIC
A: It can only be availed of if there is no other remedy to
enforce it based on contract, quasi-contract, crime or 1. General – the catch-all provisions on torts provided for
quasi-delict. in the Civil Code i.e. Articles 19, 20 and 21. The effect is
that “there is a general duty owed to every person not
Q: Is rendition of services included under Art. 22? to cause harm either willfully or negligently. Articles
19, 20, and 21 are provisions on human relations that
A: No. If services were rendered by someone benefiting “were intended to expand the concept of torts in this
another, it does not mean that the latter is exempted from jurisdiction by granting adequate legal remedy for the
indemnifying the former. The liability will lie on quasi- untold number of moral wrongs which is impossible
contract under Article 2146. for human foresight to specifically provide for in the
statutes.” (Aquino, 2005, citing PNB v. CA, et al. 83
Q: Is the owner of a property obliged to take reasonable SCRA 237)
care towards a trespasser for his protection or from
concealed danger? 2. Specific torts - It includes trespass, assault and battery,
negligence, products liability, and intentional infliction
A: GR: No. of emotional distress. As defined, torts fall into three
different categories: intentional, negligent and liability
XPN: (manufacturing and selling defective products),
1. Visitors – Owners of buildings or premises product liability tort.
owe a duty of care to visitors.
a. Art. 19, 20, 21 (catch-all provisions)
2. Tolerated Possession – The owner is still b. unjust enrichment (arts. 22, 23, 2142 &
liable if the plaintiff is inside his property by 2143)
tolerance or by implied permission. c. violation of right of privacy and family
relations
Common carriers may be held liable for d. dereliction of official duty of public officers
negligence to persons who stay in their premises e. unfair competition
even if they are not passengers. f. malicious prosecution
g. violation of rights and liberties of another Q: What are the rules on liability for collapse of a
person building?
h. nuisance
A:
THE TORTFEASOR 1. The collapse of the building must be within 15 years
from the completion of the structure.
Q: Who are the persons liable for a quasi-delict? 2. The prescriptive period is 10 years following the
collapse.
A: Defendants in tort cases can either be natural or artificial 3. If the engineer or architect supervises the
beings. construction, he shall be solidarily liable with the
contractor.
Q: Can a corporation be held liable for torts? 4. The liability does applies to collapse or ruin, not to
minor defects.
A: Yes. A corporation may be held civilly liable in the same 5. Even if payment has been made, an action is still
manner as natural persons. (PNB v. CA, 83 SCRA 237) possible. (Art. 1723, NCC)
Note: With respect to close corporations, the stockholders who are Q: Who is liable when a building collapses during an
personally involved in the operation of the corporation may be earthquake?
personally liable for corporate torts under Section 100 of the
Corporation Code.
A: It depends.
1. If the proximate cause of the collapse of the
Q: What is the liability of the owner of a vehicle in case of
building is an earthquake, no one can be held
an accident?
liable in view of the fortuitous event.
2. If the proximate cause is, however, defective
A: In motor vehicle mishaps, the owner is solidarily liable
designing or construction, or directly attributable
with his driver, if the former, who was in the vehicle, could
to the use of inferior or unsafe material, it is clear
have, by the use of the due diligence, prevented the
that liability exists.
misfortune. It is disputably presumed that a driver was
negligent, if he had been found guilty or reckless driving or
Q: What is the liability of the the architect and builder to
violating traffic regulations at least twice within the next
the employer when the construction is defective?
preceding two months. (Art. 2184, NCC)
A: Solidary liability for damages if within 15 years from the
Q: What is the rule regarding the liability of proprietors of
completion of the structure the same should collapse.
buildings:
Q: What instance would make cities and municipalities
A:
liable for damages?
a. The proprietor of a building or structure is responsible
for the damages resulting from its total or partial
A: Cities and municipalities shall be subsidiarily liable for
collapse, if it should be due to the lack of necessary
the neglect of duty of a member of a city or municipal
repairs. (Art. 2190, NCC)
police force. (Art. 34, NCC)
b. Proprietors shall also be responsible for damages
caused: Note: The defense of having observed the diligence of a good
1) By the explosion of machinery which has not father of a family to prevent the damage is not available to the city
been taken care of with due diligence, and or municipality.
the inflammation of explosive substances
which have not been kept in a safe and Q: Who are joint tortfeasors?
adequate place;
2) By excessive smoke, which may be harmful A: All the persons who command, instigate, promote,
to persons or property; encourage, advice, countenance, cooperate in, aid, or abet
3) By the falling of trees situated at or near the commission of a tort, or who approve it after it is done,
highways or lanes, if not caused by force if done for their benefit; they are each liable as a principal,
majeure; to the same extent and in same manner as if they have
4) By emanations from tubes, canals, sewers or performed the wrongful act themselves. (Worcester
deposits of infectious matter, constructed v.Ocampo, 22 Phil 42)
without precautions suitable to the place.
(Art. 2191, NCC) Q: What is the nature of liability of joint tortfeasors?
ACT OR OMISSION AND ITS MODALITIES A: No. Generally, laws provide for their own sanctions and
methods of enforcement thereof. Article 20 applies only in
Q: When does liability for damages under quasi delict cases where the law does not provide for its own sanctions.
arises? Said article provides for a general sanction –indemnification
for damages (Pineda, Torts and Damages, 2009, p.329-330)
A: Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the Q: In view of the general sanction provided for under Art.
damage done (Art. 2176, NCC). 20, may a person have an absolute right to be
indemnified?
Q: What is an act?
A: No. It is essential that some right of his be impaired.
A: Any bodily movement tending to produce some effect in Without such, he is not entitled to indemnification. (Pineda,
the external world, it being unnecessary that the same be Torts and Damages, 2009, p.330)
actually produced, as the possibility of its production is
sufficient. (People v. Gonzales, 183 SCRA 309, 324) Note: Article 20 does not distinguish; the act may be done willfully
or negligently.
Q: When is there fault or negligence?
Q: Differentiate Article 20 from Article 21 of the NCC.
A: It consists in the omission of that diligence which is
required by the nature of the obligation and corresponds A: Article 20 speaks of the general sanction for all other
with the circumstances of the persons, of the time and of provisions of law which do not especially provide for their
the place (Art. 1173). own sanction. Article 21 on the other hand, speaks of act
which is legal but is contrary to morals, good custom, public
Note: Responsibility arising from negligence in the performance of order or public policy and is done with intent to injure.
every kind of obligation is demandable, but such liability may be
regulated by the courts, according to the circumstances (Art. 1172). Note: Any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy
Q: What is the rule when negligence shows bad faith? shall compensate the latter for the damage. (Art. 21, NCC)
A: Responsibility arising from fraud is demandable in all Q: What are the elements of acts contra bonus mores
obligations (Art. 1171). Furthermore, in case of fraud, bad under Art. 21, NCC?
faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably A:
attributed to the non-performance of the obligation (Art. 1. There is an act which is legal;
2201). 2. But which is contrary to morals, good custom, public
order, or public policy; and
Q: If the law or contract does not state the degree of 3. It is done with intent to injure.
diligence required in the performance of the obligation,
what should be followed? Q: What is the rule on breach of promise to marry?
A: That which is expected of a good father of a family must A: GR: If a person promised to marry another and the
be observed (Art. 1173). promise was broken, no court can compel the promissee.
The right to marry is a personal one and is not subject to
Q: When is negligence excused? judicial compulsion.
A: When the events that transpired were unforeseen or, XPN: A breach of promise to marry may give rise to
which though unforeseen, were inevitable damages under certain circumstances:
XPN: a) if there is criminal or moral seduction (Art. 2219,
1. In cases specified by law par. 3 and 10)
2. When declared by stipulation b) actual damages suffered by reason of breach of
3. When the nature of the obligation requires the promise to marry. (Pineda, Torts and Damages,
assumption of risk 2009, p.333-339)
c) The aggrieved party may ask the other to
Q: Aside from quasi delict and abuse of rights, when may recognize the child, if there is any, and to give
liability for damages arise? support to said child in addition to
compensatory damages. (Suarez, 2011, 195)
A: Every person who, contrary to law, willfully or
negligently causes damage to another, shall indemnify the Q: Rosa was leasing an apartment in the city. Because of
latter for the same (Art. 20, NCC). the RentControl Law, her landlord could not increase the
rental as much as he wanted to, nor terminate her lease Q: Who are the persons vicariously liable?
as long as she was paying her rent. In order to force her to
leave the premises, the landlord stopped making repairs A: F-GOES-T
on the apartment, and caused the water and electricity 1. Father, or in case of death or incapacity, mother:
services to be disconnected. The difficulty of living a. damage caused by minor children
without electricity and running water resulted in Rosa's b. living in their company
suffering a nervous breakdown. She sued the landlord for 2. Guardians:
actual and moral damages. Will the action prosper? (1996 a. for minors or incapacitated persons
Bar Question) b. under their authority
c. living in their company
A: Yes, based on quasi-delict under the human relations 3. Owners and managers of establishments:
provisions of the NCC (Articles 19, 20 and 21) because the a. for their employees
act committed by the lessor is contrary to morals. b. in the service of the branches in which they
are employed, or;
Moral damages are recoverable under Article 2219(10) in c. on the occasion of their functions
relation to Article 21. Although the action is based onquasi- 4. Employers:
delict and not on contract, actual damages may be a. damages caused by employees and
recovered if the lessee is able to prove the losses household helpers
andexpenses she suffered. b. acting within the scope of their assigned
tasks
Q: What is the principle of vicarious liability or law on c. even if the employer is not engaged in any
imputed negligence? business or industry
5. State – acting through a special agent and not
A: Under Art. 2180, a person is not only liable for torts when the damage has been caused by the official
committed by him, but also for torts committed by others to whom the task done properly pertains.
with whom he has a certain relation or for whom he is 6. Teachers or heads of establishments:
responsible. a. of arts and trades
b. for damages caused by their pupils and
Q: How is quasi-delict under Art. 2180 interpreted? students or apprentices
c. so long as they remain in their custody (Art.
A: A person or juridical entity is made liable solidarily with a 2180, NCC)
tortfeasor simply by reason of his relationship with the
latter. The relationship may either be a parent and child; Q: When is the actual tortfeasor not exempted from
guardian and ward; employer and employee; school and liability?
student.
A: The minor, ward, employee, special agent, pupil,
Q: What is the presumption of negligence on persons students and apprentices who actually committed the
indirectly responsible? delictual acts are not exempted by the law from personal
responsibility. They may be sued and made liable alone as
A: The presumption of law is that there was negligence on when the person responsible for them or vicarious obligor
the part of the master or employer either in the selection of proves that he exercised the diligence of a good father of
the servant or employee (culpa in eligiendo) or in the a family or when the minor or insane person has no parents
supervision over him after the selection (culpa vigilando), or guardians. In the latter instance, they are answerable
or both. with their own property. (Pineda, Torts and Damages,
2009, p.83)
Note: The presumption is juris tantum and not juris et de jure;
subsequently, it may be rebutted. Accordingly, if the employer PARENTS
shows to the satisfaction of the court that in the selection and
supervision of his employee he has exercised the care and diligence
Q: What are the requisites of vicarious liability of parents?
of a good father of a family, the presumption is overcome and he is
relieved of the liability.
A:
Q: What is the nature of the responsibility of a vicarious 1. The child is below 21 years of age
obligor? 2. The child committed a tortuous act to the
damage and prejudice of another person
A: His liability is primary and direct, not subsidiary. He is 3. The child lives in the company of the parent
solidarily liable with the tortfeasor. His responsibility is not concerned whether single or married (Pineda,
conditioned upon the insolvency of or prior recourse Torts and Damages, 2009, p.85).
against the negligent tortfeasor (De Leon Brokerage v. CA,
G.R. 15247, Feb. 28, 1962)
Q: What is required before an employer may be held liable A: Yes. The vicarious liability of employers attaches only
for the act of its employees? when the tortuous conduct of the employee relates to, or is
in the course of his employment. (Valenzuela v. CA)
A:
1. The employee was chosen by the employer However, it is not necessary that the task performed by the
personally or through another; employee is his regular job or that which was expressly
2. The service is to be rendered in accordance with given to him by the employer. It is enough that the task is
orders which the employer has the authority to indispensable to the business or beneficial to the
give all times; employer. (Filamer Christian Institute v. IAC, 212 SCRA 637)
3. That the elicit act of the employee was on the
occasion or by reason of the functions entrusted Q: After working overtime up to midnight, Alberto, an
to him. executive of an insurance company drove a company
vehicle to a favorite Videoke bar where he had some
Note: Before the employer’s subsidiary liability is exacted, there drinks and sang some songs with friends to "unwind". At
must be proof that: 2:00 a.m., he drove home, but in doing so, he bumped a
1. they are indeed the employer of the convicted tricycle, resulting in the death of its driver. May the
employee
insurance company be held liable for the negligent act of
2. the former are engaged in some kind of industry
3. the crime was committed by the employees in the Alberto? Why? (2001 Bar Question)
discharge of their duties
4. that the execution against the latter has not been A: No. The insurance company is not liable because when
satisfied due to insolvency. the accident occurred, Alberto was not acting within the
assigned tasks of his employment.
Q: OJ was employed as professional driver of MM Transit
bus owned by Mr. BT. In the course of his work, OJ hit a It is true that under Art. 2180 (par. 5), employers are liable
pedestrian who was seriously injured and later died in the for damages caused by their employees who were acting
hospital as a result of the accident. The victim’s heirs sued within the scope of their assigned tasks. However, the mere
the driver and the owner of the bus for damages. Is there fact that Alberto was using a service vehicle of the
a presumption in this case that Mr. BT, the owner, had employer at the time of the injurious accident does not
been negligent? If so, is the presumption absolute or not? necessarily mean that he was operating the vehicle within
(2004 Bar Question) the scope of his employment. In Castilex Industrial Corp. v.
Vasquez Jr (321 SCRA393 [1999]), the Supreme Court held
A: Yes, there is a presumption of negligence on the part of that notwithstanding the fact that the employee did some
the employer. However, such presumption is rebuttable. overtime work for the company, the former was,
The liability of the employer shall cease when they prove nevertheless, engaged in his own affairs or carrying out a
that they observed the diligence of a good father of a family personal purpose when he went to a restaurant at 2:00
to prevent damage (Article 2180, Civil Code). When the a.m. after coming out from work. The time of the accident
employee causes damage due to his own negligence while (also 2:00 a.m.) was outside normal working hours.
performing his own duties, there arises the juris tantum
presumption that the employer is negligent, rebuttable
only by proof of observance of the diligence of a good
father of a family (Metro Manila Transit v. CA, 223 SCRA
devoted the duty of doing the act performed, it is the official, not Q: Is the application of Article 2180 limited to school of
the State, who is liable for damages by the act he performed arts and trades?
(Pineda, Torts and Damages, Annotated, 2004 ed.).
A: No. It applies to all, including academic institutions
Q: Who is a special agent? where the teacher-in-charge is liable for the acts of his
students. In the case of establishments of arts and trades, it
A: A special agent is one who receives a definite and fixed is the head thereof, and only he, who shall be liable.
order or commission, foreign to the exercise of the duties (Amadora v CA, 160 SCRA 315)
of his office.
Note: There is really no substantial difference distinction between
An employee who on his own responsibility performs the academic and non-academic schools in so far as torts
functions inherent in his office and naturally pertaining committed by their students are concerned. The same vigilance is
thereto is not a special agent. (Meritt v. Government of the expected from the teacher over the student under their control
Philippine Islands, 34 Phil 311) and supervision, whatever the nature of the school where he is
teaching.
Q: What are the aspects of liability of the State?
Q: When is a student considered in the custody of the
A: school authorities?
1. Public/Governmental – where the State is liable only
for the tortuous acts of its special agents. A: The student is in the custody of the school authorities as
2. Private/Non-governmental – when the State is long as he is under the control and influence of the school
engaged in private business or enterprise, it becomes and within its premises, whether the semester has not
liable as an ordinary employer. (Fontanilla v. ended, or has ended or has not yet begun. The term
Maliaman; NIA v. Fontanilla, 179 SCRA 685) “custody” signifies that the student is within the control
and influence of the school authorities. The teacher in
Note: If the special agent is not a public official and is charge is the one designated by the dean, principal, or
commissioned to perform non-governmental functions, then the other administrative superior to exercise supervision over
State assumes the role of an ordinary employer and will be held the pupils or students in the specific classes or sections to
liable as such for the tortuous acts of said agent. If the State which they are assigned. It is not necessary that at the time
commissioned a private individual to perform a special
of the injury, the teacher is physically present and in a
governmental task, it is acting through a special agent within the
meaning of the provision (NIA v. Fonatanilla, supra)
position to prevent it.
TEACHERS AND HEADS OF ESTABLISHMENTS OF ARTS AND Q: Can the liability be imputed to the teacher-in-charge
TRADES even if the student has already reached the age of
majority?
Q: What is the basis of the teacher’s vicarious liability?
A: Yes. Under Article 2180, age does not matter. Unlike the
A: The basis of the teacher’s vicarious liability is, as such, parent who will be liable only if the child is still a minor, the
they acting in Loco Parentis (in place of parents). However teacher is held answerable by the law for the act of the
teachers are not expected to have the same measure of student regardless of the age of the student (Pineda, Torts
responsibility as that imposed on parent for their influence and Damages, 2009, p.113, citing Amadora v. Court of
over the child is not equal in degree. The parent can instill Appeals, 160 SCRA 315).
more lasting discipline more lasting disciple on the child
than the teacher and so should be held to a greater Q: Who is a minor under Art.221 of the Family Code?
accountability than the teacher or the head for the tort
committed by the child. A: The term “unemancipated minor” found in Art. 221
means children below 18 years of age. This is in contrast
Q: What is the rationale of the liability of school heads with the “minor children” found in Art. 2180(2) of NCC
and teachers for tortuous acts of their pupil and students? which refers to children below 21 years. To avoid the
overlapping in ages, the better option to settle the conflict
A: The rationale of school heads and teachers liability for is to consider Art 221 as totally superseded by Art 236(FC)
tortuous acts of their pupil and students, so long as they as amended by R.A. 6809. Thus:
remain in custody, is that they stand, to a certain extent, as
to their pupils and students, in loco parentis and are called GR: 18 years of age – parental authority ceases
upon to “exercise reasonable supervision over the conduct (emancipation)
of the child.” This is expressly provided for in Articles 349,
350 and 352 of the Civil Code. (Pineda, Torts and Damages, XPNS: 21 years of age in the following cases
2009, p.114) 1. marriage
2. Art. 2180(2) NCC
Note: Art. 221 of the Family Code provides that parents and other
persons exercising parental authority shall be civilly liable for the
injuries and damages caused by the act or omission or their
c. Natural and Ordinary or Direct Consequences Test; fraught with risk and he should therefore foresee the impending
d. Hindsight Test; harm that will result if he continues. (Suarez, 2011, 117)
e. Orbit of Risk Test;
f. Substantial Factor Test. (Aquino, Torts and Damages, EFFICIENT INTERVENING CAUSE
2005, p.273)
Q: What is an efficient intervening cause?
Q: What is the “but for” test?
A: It is one which destroys the causal connection between
A: This is also known as the sine qua non test. It considers the negligent act and the injury and thereby negatives
whether the injury would not have occurred but for the liability (Morril v.Morril, 60 ALR 102, 104 NJL 557). It is
defendant's negligent act. Defendant’s conduct is the cause sometimes called, novusactusinterviens.
in fact of the injury if the damage would not have resulted
had there been no negligence on the part of the defendant. Q: When is there no efficient intervening cause?
Note: The conduct of the defendant is not the cause of the event if
A: If the force created by the negligent act or omission have
the event would have occurred without it. (Suarez, 2011, 117)
either:
1. remained active itself; or
Q: What is the substantial factor test?
2. created another force which remained active until
it directly caused the result; or
A: It makes the negligent conduct the cause-in-fact of the
3. created a new active risk of being acted upon by
damage if it was a substantial factor in producing the
the active force that caused the result. (57 Am.
injuries. It is important in cases where there are concurrent
Jur. 2d 507)
causes (Aquino, Torts and Damages, 2005, p.268-269)
CAUSE vs. CONDITION
Q: What is the principle of concurrent causes?
Q: Distinguish cause and condition
A: Where the concurrent or successive negligent acts or
omissions of two or more persons, although acting
A: Cause is the active force while condition is the passive
independently, are in combination with the direct and
rd situation. The former is the active “cause” of the harm and
proximate cause of a single injury to a 3 person, and it is
the latter is the existing “conditions” upon which the cause
impossible to determine what proportion each contributed
operated.
to the injury, either of them is responsible for the whole
injury, even though his act alone might not have caused the
Note: If the defendant has created only a passive static condition
entire injury. which made the damage possible, the defendant is said not to be
liable.
Q: What is the necessary and sufficient test?
LEGAL INJURY
A: The act or omission is a cause-in-fact if it is a necessary
element of a sufficient set. Q: What is injury as distinguished from damage and
damages?
Q: Explain natural and probable test.
A: Injury is the illegal invasion of a legal right; damage is
A: Where the defendant’s liability is recognized only if the the loss, hurt, or harm which results from the injury; and
harm or injury suffered is the natural and probable damages are the recompense or compensation awarded
consequence of his act or omission complained of. (Banzon for the damage suffered.
v. CA, 175 SCRA 297)
Q: What is a right?
Q: Explain the foreseeability test
A: It is a legally enforceable claim of one person against
A: Where the particular harm was reasonably foreseeable another, that the other shall do a given act, or shall not do a
at the time of the defendant’s misconduct, his act or given act (Pineda, Persons, p. 23)
omission is the legal cause thereof. To be negligent, the
defendant must have acted or failed to act in such a way Q: What are the kinds of rights? Distinguish.
that an ordinary reasonable man would have realized that
certain interests of certain persons were unreasonably A:
subjected to a general but definite class of risk which made 1. Natural Rights – Those which grow out of the nature
the actor’s conduct negligent, it is obviously the of man and depend upon personality.
consequence for the actor must be held legally responsible
(Pineda, Torts and Damages, 2009, p.53). E.g. right to life, liberty, privacy, and good reputation.
3. Civil Rights – Those that pertain to a person by virtue Q: What are the torts that cause injury to relations?
of his citizenship in a state or community.
A:
E.g. 1. Family relations
1. property rights, a. Alienation of affection
2. marriage, b. Loss of consortium
3. equal protection of laws, c. Criminal conversation (adultery)
4. freedom of contract, trial by jury. (Pineda, 2. Social relations
Persons, p. 24) a. Meddling with or disturbing family relations
5. Rights of personalty or human rights; b. Intriguing to cause another to be alienated
6. Family rights; and from his friends
7. Patrimonial rights: 3. Economic relations
i. Real rights a. Interference with contractual relations
ii. Personal rights. (Rabuya Persons, p. 19) b. Unfair competition
4. Political relations
Q: What is meant by damnum absque injuria? a. Violation of right to suffrage
b. Violation of other political rights (freedom of
A: There is no liability even if there is damage because speech, press, assembly and petition, etc.)
there was no injury.
INTENTIONAL TORTS
The literal meaning is “damage without injury.” This means
that although the victim suffered physical damages or Q: What is intentional tort?
injury, the same is not considered a “legal injury” which
entitles him to recover damages. (Suarez, 2011, 25) A: It is a tort or wrong perpetrated by one who intends to
do that which the law has declared wrong as contrasted
Note: There can be damage without injury in those instances in with negligence in which the tortfeasor fails to exercise that
which the loss or harm was not the result of a violation of a legal degree of care in doing what is otherwise permissible
duty. In such cases, the consequences must be borne by the th
(Black’s Law Dictionary, 6 edition, p. 1489).
injured person alone.
Note: Intentional torts are those which involve malice or bad faith.
Q: What are the available remedies for a person whose
rights have been violated? Q: What is intent from the point of view of torts
A: Legal remedies are either preventive or compensatory. A: It refers either to a person’s desire that certain
Every remedy in a certain sense is preventive because it consequences result from his actions or even his knowledge
threatens certain undesirable consequences to those who that those results are substantially certain to occur as a
violate the rights of others. result of his actions (Garratt v. Dailey, 46 Wash 2d 197,
1955)
The primary purpose of a tort action is to provide
compensation to a person who was injured by the tortuous Q: What is the doctrine of transferred intent?
conduct of the defendant. The remedy of the injured
person is therefore primarily an action for damages against A: It arises when a person intends to commit a tort against
the defendant. (Aquino, Torts and Damages, 2005, p.20) one person and injury to another results instead. For
intentional tort purposes, the intent will be deemed to be
CLASSES OF INJURY transferred from the intended victim to the actual one (U.S.
v. Maisa, 8 Phil 597)
Q: What are the torts committed against persons?
Q: What are the seven major intentional torts?
A:
1. assault, A: FITTED CAB
2. battery, 1. False Imprisonment (Dignitary Tort)
3. false imprisonment, 2. Trespass to land
4. intentional infliction of emotional distress, and 3. Trespass to chattels (Trover)
5. fraud 4. Intentional Infliction of Emotional Distress
5. Conversion
6. Assault
Q: When is an actor liable for tort based on assault? FALSE IMPRISONMENT (DIGNITARY TORT/ILLEGAL
DETENTION)
A: An actor is liable for assault if:
1. He acts intending to cause a harmful or offensive contact Q: What are the elements of false imprisonment as a basis
with the person of the other, or an imminent apprehension for tort liability?
of such a contact, and
2. The other is thereby put in such imminent apprehension. A:
1. An act or omission on the part of defendant that confines
Note: Assault requires intent. Actual ability to carry out the or restrains plaintiff
apprehended contact is not necessary. 2. That plaintiff is confined or restrained to a bounded area;
3. Intent
Q: When is an act not considered an assault? 4. Causation
5. Awareness of the defendant of the confinement that the
A: An act intended as a step toward the infliction of a future defendant was actually harmed by it
contact, which is so recognized by the other, does not make
the actor liable for an assault under the rule. Note: In the case of People v. Bisda, 406 SCRA 454, moral damages
may be awarded to a victim of illegal arrest and detention,
especially if the victim is a minor, the accused poked a knife at her,
Q: When is contact said to be “harmful”?
forcibly took her from school, tied her hands and placed scotch
tape on her mouth.
A: While the law varies by jurisdiction, contact is often
defined as "harmful" if it objectively intends to injure, Q: Must the restraint be physical in order to be liable for
disfigure, impair, or cause pain. false imprisonment?
Q: When is an act deemed to be “offensive”? A: No.While it is true that physical restraint is the classic
form of false imprisonment, it can take the form of threats
A: The act is deemed "offensive" if it would offend a or duress such as threats to harm the person or his family if
reasonable person’s sense of personal dignity. he leaves the premises.
a possessor in bad faith or by a person who does not have any right CONVERSION
whatsoever over the property.
Q: What is “conversion?”
Anybody who builds, plants or sows on the land of another
knowing full well that there is a defect in his title is liable for
damages. The liability is in addition to the right of the landowner in A: It is an intentional interference with the plaintiff’s
good faith to appropriate what was built, planted or sown or to personal property that is so substantial that it is fair to
remove the same. require the defendant to pay the property’s full value.
Liability for damages under the above-cited provisions of the RPC Q: What are the elements of conversion?
and the NCC requires intent or bad faith (Aquino, Torts and
Damages, 2005, p.367) A:
1. An act by the defendant that substantially interferes
Q: What are elements of trespass to land? with plaintiff's right of possession in a chattel in a
sufficiently serious fashion as justify the payment the
A: chattel's full value.
1. The defendant committed a coluntary act against 2. Intent on the part of the defendant
the plaintiff 3. Plaintiff was either in possession of the chattel or had
2. The defendant physically invaded the real the immediate right to possess it
property owned by the plaintiff
3. Intent
4. The plaintiff had the immediate right to the Note: Conversion may include:
possession of the land (as an owner living there or 1. Cases where the defendant deprived the plaintiff of
as a tenant renting it) personal property for the purpose of obtaining
possession of a real property, as when a landlord
Note: Thepossession of real property is not affected by acts of a deprived his tenants of water in order for them to
possessory character which are merely tolerated. vacate the lot they were cultivating.
2. Unjustified deprivation of access to property such as
unjustified disconnection of electricity service
TRESPASS TO CHATTELS (TROVER)
Q: What is the difference between “conversion” and
Q: What is trespass to chattels?
trespass to chattels?
A: It is where a person intentionally interferes with
A: It is the seriousness of the damage. In “conversion”
personal property in someone else’s possession.
claim, damage to the personal property is so egregious as
Note: It may also cover cases where the defendant deprived the to merit the defendant’s paying its full value in damages.
plaintiff of personal property for the purpose of obtaining Thus, not all trespasses to chattels are conversions, but all
possession of a real property. (Aquino, Torts and Damages, 2005, conversions are trespass to chattels. (Cf. U.S. v. Calimag, 12
p.369, citing Magbanaua vs. IAC, 137 SCRA 329) Phil 687)
A: In the field of tort, trespass extends to all cases where a VIOLATION OF PERSONAL DIGNITY
person is deprived of his personal property even in the
absence of criminal liability. (Aquino, T., Torts and Q: What is the rule with regard to the right of a person to
Damages, 2005, Second Ed. p.368) his dignity, personality, privacy and peace of mind?
Q: What are the elements of trespass to chattels? A: Every person shall respect the dignity, personality,
privacy and peace of mind of his neighbors and other
A: persons. The following and similar acts, though they may
1. The defendant took a voluntary act which interfered not constitute a criminal offense, shall produce a cause of
with the plaintiff’s right of possession in the chattel. It action for damages, prevention and other relief:
could either be dispossession (taking possession to the
exclusion of the owner) or intermeddling (touching or 1. Prying into the privacy of another's residence;
harming it without removing it from the owner’s 2. Meddling with or disturbing the private life or
possession) family relations of another;
2. The defendant intended the interference 3. Intriguing to cause another to be alienated from
3. The plaintiff either possessed or had the immediate his friends;
right to possess the same 4. Vexing or humiliating another on account of his
4. Damages must be proven if the act is intermeddling, religious beliefs, lowly station in life, place of
but if the act is dispossession, actual damages need birth, physical defect, or other personal condition.
not be proven. (Art. 26, NCC)
Note: “Severe emotional distress” in some jurisdictions, refer to 4. Invasion of privacy is likewise an offense in special laws
any type of severe and disabling emotional or mental condition such as the:
which may be generally recognized and diagnosed by professionals i. anti-wiretapping law; and
trained to do so, including posttraumatic stress disorder, neurosis, ii. secrecy of bank deposits act; and
psychosis, chronic depression, or phobia.
5. The Rules of Court provisions on privileged
The plaintiff is required to show, among other things, that he or
she suffered emotional distress so severe that no reasonable communication.
person could be expected to endure it; severity of the distress is an
element of the cause of action, not simply a matter of damages. Q: What is the standard to be applied in determining the
existence of a violation of the right to privacy?
The plaintiff cannot recover merely because of hurt feelings.
Liability cannot be extended to every trivial indignity. The plaintiff A: The right to privacy is not a guaranty to hermitic
must necessarily be expected and required to be hardened to a seclusion. The standard to be applied is that of a person of
certain amount of rough language, and to acts that are definitely
ordinary sensibilities. It is relative to the customs of the
inconsiderate and unkind.
time and place, and is determined by the norm of an
ordinary person.
Q: Distinguish emotional distress from defamation
Note: The essence of privacy is the right to be let alone. (Pineda,
A: An emotional distress tort action is personal in nature. It Torts and Damages, 2009, p.348)
is a civil action filed by an individual to assuage the injuries
to his emotional tranquility due to personal attacks on his Q: What is the two-part test in determining the
character. reasonableness of a person’s expectation of privacy?
Q: What are the four general classes of tort actions for There is no intrusion when an employer investigates its
invasion of privacy? employee or when a school investigates its student. In the
latter case, the investigation may cover an alleged offense
A: committed outside the school premises. (Aquino, Torts and
1. Appropriation; Damages, 2005, p.430)
2. Intrusion;
3. Public disclosure of private facts; and Intrusion and public records:
4. False light in the public eye (Pineda, Torts and
Damages, 2009, p.349) Generally, there is no intrusion into the right of privacy of
another if the information sought is a matter of public
Q: What is appropriation? record. This is especially true in case the persons who are
invoking the right to privacy are public officers and the
A: It consists of appropriation, for the defendant’s benefit matter involved is of public concern.
or advantage, of the plaintiff’s name or likeness. (Carlisle v.
Fawcett Publications, 201 Cal. App.2d 733, 20 Cal,Rptr. 405) However, if the matter sought to be revealed does not
involve anything of public concern, there can be a violation
Q: What does this tort protect? or the right to privacy. (Aquino, Torts and Damages, 2005,
p.438)
A: The tort of commercial appropriation of likeness has
been held to protect various aspects of an individual’s Q: What is public disclosure of private facts?
identity from commercial exploitation:
1. name A: Consists of a cause of action in publicity, of a highly
2. likeness objectionable kind, given to private information about the
3. Achievements plaintiff, even though it is true and no action would lie for
4. Identifying characteristics defamation. (Melvin v. Reid, 112 Cal.App. 285, 297 P. 91)
5. Actual performances
6. Fictitious characters created by a performer Q: What is violated in public disclosure of private facts?
7. Phrases and other things associated with an
individual. A: The interest sought to be protected is the right to be free
from unwarranted publicity, from the wrongful publicizing
Q: What is intrusion? of the private affairs and activities of an individual which
are outside the realm of legitimate concern. (Aquino, Torts
A: Consists in the intrusion upon the plaintiff’s solitude or and Damages, 2005, p.450, citing Ayer Productions, Ltd.
seclusion. Pty., et.al vs Hon. Ignacio Capulong, et. al. GR No. L-82380)
It includes:
Q: What are the elements of public disclosure of private
1. Prying into the privacy of one’s home; facts?
2. Invading his home; (Ford Motor Co. v. Williams, 108
Ga.App. 21, 132, S.E.2d 206) A:
3. Invading one’s privacy by looking from outside; 1. There must be a public disclosure;
4. Eavesdropping; (LaCrone v. Ohio Bell Tel. Co., 114 Ohio 2. The facts disclosed must be a private fact;
App. 299, 182 N.E.2d 340, 59 O.O2d 236) or 3. The matter be one which would be offensive and
5. Persistent and unwanted telephone calls. objectionable to a reasonable person of ordinary
sensibilities.
Note: The tort of intrusion upon a person’s solitude protects a
person’s sense of locational and psychological privacy. Q: Who is a “public figure”?
RE: Malice: The presence of probable cause signifies, as a legal A: None. The mere filing of a suit does not render the
consequence, the absence of malice.The absence of malice,
plaintiff liable for malicious prosecution should he be
therefore, involves good faith on the part of the defendant. This
good faith may even be based on mistake of law. unsuccessful. Persons should have free resort to the courts.
Note: However, the repeated filing of a complaint all of which were A: No, because intent to commit a crime is not a violation
dismissed shows malicious prosecution entitling the injured party of law.
to an award of moral damages (Pineda, Torts and Damages, 2009,
p.256, citing Hawpia v. CA, 20 SCRA 536).
Q: Is the allegation that the offender merely expresses his
opinion or belief a defense in defamation cases?
DEFAMATION
A: In order to escape criminal responsibility, it is not
Q: What is defamation and what does it cover?
enough for the offender to say that he expresses therein no
more than his opinion or belief. The communication must
A: Defamation is tarnishing the reputation of someone; It is
be made in the performance of a “legal, moral, or social
a public and malicious imputation of a crime, or of a vice or
duty.”
defect, real or imaginary, or any act, omission, condition,
status, or circumstance tending to cause the dishonor,
Q: What is retraction and what is its effect as regards
discredit, or contempt of a natural or juridical person, or to
liability for defamation?
blacken the memory of one who is dead. (Art. 353, RPC). It
has two varieties, slander and libel.
A: When a periodical gives currency, whether innocently or
otherwise, to a false and defamatory statement concerning
Note: Actual damages need not be proved, at least where the
publication is libelous per se, or where the amount of damages is any person, it is under both a legal and moral duty to check
more or less nominal. the propagation of such statement as soon as practicable
by publishing a retraction.
Q: What is the reason for liability for defamation?
Retraction may mitigate the damages provided that it
A: The liability imposed for defamation is brought about by contains an admission of the falsity of the libelous
the desire to protect the reputation of every individual. The publication and evince a desire to repair the wrong
enjoyment of reputation is one of those rights necessary to occasioned thereby.
human society that underlie the whole scheme of
civilization. It is as much a constitutional right as the Q: What is the effect if the publication was by reason of an
possession of life, liberty or property (Worcester v.Ocampo, honest mistake?
22 Phil 42)
A: It only serves to mitigate liability where the article is
Q: What are the requisites before one can be held liable libelous per se.
for defamatory imputations?
Q: If the defamatory imputations were made in a
A: privileged communication, is there liability therefor?
1. It must be defamatory;
2. It must be malicious; A: None. An absolutely privileged communication is one for
3. It must be given in publicity; and which, by reason of the occasion on which it is made, no
4. The victim must be identifiable. (Alonzo v. Court of remedy is provided for the damages in a civil action for
Appeals, 241 SCRA 51) slander or libel.
Note: “Publication” is the communication of the defamatory FRAUD OR MISREPRESENTATION (FORMERLY DECEIT)
matter to some third person or persons.
Q: What are the elements of misrepresentation in torts
Q: What is libel? cases?
Q: What is slander by deed? Note: There is sexual fraud when the accused represented that he
was single and the complainant agreed to marry him based on this
A: It is a crime committed by any person who performs an representation. Thereafter, the accused heartlessly abandoned her
(Manuel v. People, 476 SCRA 461)
act that costs dishonor, discredit or contempt upon the
offended party in the presence of other person or persons.
A: Seduction, by itself, is an act which is contrary to morals, Q: In what instances can a public officer be liable for
good customs and public policy. The defendant is liable if damages?
he employed deceit, enticement, superior power or abuse
of confidence in successfully having sexual intercourse with A: When a member of a city or municipal police force
another (Aquino, Torts and Damages, 2005, p.364) refuses or fails to render aid or protection to any person in
case of danger to life or property, such peace officer shall
Note: There is liability even if there is no breach of promise to be primarily liable for damages. (Art. 34, NCC)
marry.
An action may be brought by any person suffering from
Q: What is included in “sexual assault”? material or moral loss because a public servant refuses or
neglects, without just cause to perform his official duty.
A: The defendant would be liable for all forms of sexual (Art.27, NCC)
assault. These include rape, acts of lasciviousness and
seduction. Requisites:
i. defendant is a public officer charged with the
Note: Gender is immaterial in seduction and sexual assault. performance of a duty in favor of the plaintiff
ii. he refused or neglected without just cause to
Q: When can it be said that there is no seduction? perform such duty (ministerial)
iii. plaintiff sustained material or moral loss as
A: Where the plaintiff, of adult age, maintained intimate consequence of such non-performance
sexual relations with the defendant, with repeated acts of iv. the amount of such damages, if material
intercourse, such conduct is incompatible with the idea of
sdecution. Voluntariness and mutual passion, though there Q: What is the intention of making public officers liable
was artful persuasions and wiles without fulfilling the under Art 34, NCC?
promise of marriage is not actionable.
A: Art. 34 is intended to afford a remedy against police
UNJUST DISMISSAL officers who connive with bad elements, are afraid of them
or simply indifferent to duty.
Q: What is the rule on dismissal of employees?
Note: Public officials ought to act with the highest degree of
A: It is a basic rule that an employer has a right to dismiss excellence, professionalism, intelligence and skill and for failure to
an employee in the manner and on the grounds provided act with such, he may be held liable for exemplary damages in his
for under the NCC. If the dismissal is for a valid cause, his personal capacity (Lim v, Ponce de Leon, 492 SCRA 497)
dismissal is consistent with the employer’s right to protect
his interest in seeing to it that his employees are INTERFERENCE WITH RELATIONS
performing their jobs with honesty, integrity and good
faith. (Aquino Torts and Damages, 2005, p.375, citing Q: What are the four kinds of interference?
Marilyn Bernardo v. NLRC, Mar. 15, 1996)
A: Interference with:
However, such exercise of the right to terminate must be 1. Family relations;
consistent with the general principles provided for under 2. Social relations;
Articles 19 and 21 of the New Civil Code. If there is non- 3. Economic relations; and
compliance with said provisions, the employer may be held 4. Political relations.
liable for damages. The right to dismiss an employee should
not be confused with the manner in which the right is FAMILY RELATIONS
exercised and the effects flowing therefrom. If the dismissal
is done anti-socially or oppressively then the employer ALIENATION OF AFFECTION
should be deemed to have violated Art. 1701, NCC which
prohibits acts of oppression by either capital or labor Q: What is alienation of affection?
against the other, and Art. 21. (Quisaba v. Sta. Ines-Melale
Veneer and Plywood, Inc. ,Aug. 30, 1974) A: This consists of depriving one spouse of the affection,
society, companionship and comfort of the other. (Aquino,
An employer may be held liable for damages if the manner Torts and Damages, 2005, p.480)
of dismissing the employee is contrary to morals, good
customs and public policy. This may be done by false Note: The Family Code imposes on the spouses the obligation to
live together, observe mutual love, respect and fidelity, and render
imputation of misdeed to justify dismissal or any similar
mutual help and support. (Article 68) Interference with such may
manner of dismissal which is done abusively. (Globe result in the tort liability of alienation of affection.
The gist of the tort is an interference with one spouse’s mental because the same is contrary to law, morals and good
attitude toward the other and the conjugal kindness of marital customs.
relations resulting in some actual conduct which materially affects
it.
Moral damages were awarded because of the wife’s refusal
to perform her wifely duties, her denial of consortium and
Q: In general, what is the scope of the tort ‘alienation of
desertion of her husband. Her acts constitute a willful
affections’?
infliction of injury upon her husband’s feelings in a manner
contrary to morals, good customs or public policy.
A: It extends to all cases of wrongful interference in the
(Tenchaves v. Escaño, G.R. No. L-19671, July 26, 1966)
family affairs of others whereby one spouse is induced to
leave the other spouse or to conduct himself or herself in a
CRIMINAL CONVERSATION (ADULTERY)
manner that the comfort of married life is destroyed.
(Thomas M. Cooley and D. Avery Haggard, Treatise on the
Q: When is adultery committed?
Law of Torts, Vol. 2, 1932 Ed., p.6)
A: Adultery is committed by any married woman who shall
Q: Who may be liable for alienation of affections?
have sexual intercourse with a man not her husband and by
the man who has carnal knowledge of her knowing her to
A: The defendant who purposely entices the spouse of
be married, even if the marriage was subsequently declared
another, to alienate his or her affections with his or her
void (Art. 333, RPC).
spouse, even if there are no sexual intimacies is liable for
damages under this article. Likewise, a person who Note: Concubinage is committed by a husband who shall:
prevented the reconciliation of spouses after their
separation is liable for alienation of affections. 1. Keep a mistress in the conjugal dwelling;
2. Have sexual intercourse with her, under scandalous
Note: It is not necessary that there is adultery or the spouse is circumstances, with a woman not his wife; or
deprived of household services. 3. Cohabit with her in any other place. (Art. 334, RPC)
Q: What are some cases where there is no tort liability for Liability for adultery or concubinage based on the law on torts:
alienation of affections? not only moral damages but also for other appropriate damages.
Note: An action for alienation of affection against the parents of A: A person who committed affirmative acts intended to
one consort is does not lie in the absence of proof of malice
alienate the existing friendship of one with his friends is
(Tenchavez v. Escano, 15 SCRA 355)
liable for damages. (Pineda, Torts and Damages, 2009,
p.352)
LOSS OF CONSORTIUM
A: If there is no contract yet and the defendant is only Liability not recognized
being sued for inducing another not to enter into a contract
with the plaintiff, the tort committed is appropriately called 1. A business owner cannot maintain a negligence
interference with prospective advantage. action for economic damage die to business
interruption unaccompanied by personal njury or
Q: What is the rule regarding the extent of recovery property damages against the party causing the
against defendant found guilty of interference with interruption
contractual relations? 2. A plaintiff cannot recover in negligence for purely
economic loss in the absence of physical injury
A: Such defendant cannot be held liable for more than the against a defendant who has negligently caused the
amount for which the party who induced to break the closing of a public bridge or river
contract can be held liable. It would seem that the rule is 3. Amotel owner and waitress employed thereby could
consistent with the provisions of Article 2202 of the New not maintain a claim for purely economic damages
Civil Code only if the contracting party who was induced to araising out of a contractor or fabricator of steel
break the contract was in bad faith. bars used in the construction of a bridge which was
closed when cracks were discovered
However, when there is good faith, the party who breached 4. The owners of a barge or tugboat whch collided
the contract is only liable for consequences that can be with a bridge resulting in the closing of the bridge
foreseen. (Art. 2201, NCC) for two months could not be held liable on the
theory of negligence for the loss of business by two
Q: What is the nature of the liability of the intermeddler? shores which resulted from the loss of access by
customers who were unable to cross the bridge.
A: The liability of the intermeddler is solidary because the
former has committed a tortuous act or quasi-delict where UNFAIR COMPETITION
liability is solidary. (Art. 2941, NCC)
Q: What is unfair competition?
Q: Is malice essential to make the intermeddler liable?
A: It consists in employing deception or any other means
A: GR: Yes. contrary to good faith by which any person shall pass off
the goods manufactured by him or in which he deals, or his
XPN: If the intention of the intermeddler is honest and business, or services for those of the one having established
laudable such as when the interference is intended to
goodwill, or committing any acts calculated to produce such 8. The right to the equal protection of the laws;
result. (Second par., Sec. 29, R.A. No. 166) 9. The right to be secure in one's person, house,
papers, and effects against unreasonable
Q: What is the true test of unfair competition? searches and seizures;
10. The liberty of abode and of changing the same;
A: The true test of unfair competition is whether certain 11. The privacy of communication and
goods have been intentionally clothed with an appearance correspondence;
which is likely to deceive the ordinary purchaser exercising 12. The right to become a member of associations or
ordinary care, and not whether a certain limited class of societies for purposes not contrary to law;
purchasers with special knowledge not possessed by the 13. The right to take part in a peaceable assembly to
ordinary purchaser could avoid mistake by the exercise of petition the government for redress of
this special knowledge. (U.S. v. Manuel, 7 Phil. 221) grievances;
14. The right to be free from involuntary servitude in
Q: What is included in unfair competition? any form;
15. The right of the accused against excessive bail;
A: Art. 28, NCC provides for unfair competition which 16. The right of the accused to be heard by himself
includes: and counsel, to be informed of the nature and
1. Passing off or disparagement of products cause of the accusation against him, to have a
2. Interference with contractual relations speedy and public trial, to meet the witnesses
3. Interference with prospective advantage face to face, and to have compulsory process to
4. Fraudulent misappropriation against a secure the attendance of witness in his behalf;
competition 17. Freedom from being compelled to be a witness
5. Monopolies and predatory pricing against one's self, or from being forced to confess
guilt, or from being induced by a promise of
Q: What is predatory pricing? immunity or reward to make such confession,
except when the person confessing becomes a
A: It is a practice of selling below costs in the short run in State witness;
the hope of obtaining monopoly gains later, after driving 18. Freedom from excessive fines, or cruel and
the competition from the market. unusual punishment, unless the same is imposed
or inflicted in accordance with a statute which has
Q: What could be the basis of the award of damages in not been judicially declared unconstitutional; and
case of unfair competition? 19. Freedom of access to the courts. (Art. 32, NCC)
A: It could either be Note: The violation of a person’s rights under Article III of the 1987
1. The reasonable profit which the complainant Constitution as contemplated in Art. 32 constitutes constitutional
would have made had the defendant not tort.
infringed his rights
2. The profit which the defendant actually made out Q: What is the purpose of Article 32?
of the infringement
3. Reasonable percentage based upon the amount A: Its purpose is to provide a sanction to the deeply
of gross sales of the defendant of the value of cherished rights and freedoms enshrined in the
services in connection with which the mark or Constitution. (Pineda, Torts and Damages, 2009, p. 387)
trade names was issued in the infringement of
the complainant. Q: Are judges exempted from damages?
POLITICAL RELATIONS A: GR: Yes, if by performing their duties in good faith, they
happen to violate or impair the rights and liberties
Article 32 of the New Civil Code: Any public officer or mentioned in Article 32.
employee, or any private individual, who directly or
indirectly obstructs, defeats, violates or in any manner XPN: If the judge’s act or omission constitutes a
impedes or impairs any of the following rights and liberties violation of the Revised Penal Code or other penal
of another person shall be liable to the latter for damages: statute, the judge is liable for damages aside from
1. Freedom of religion; criminal liability. (Pineda, Torts and Damages, 2009,
2. Freedom of speech; p.388)
3. Freedom to write for the press or to maintain a
periodical publication; DEFENSES
4. Freedom from arbitrary or illegal detention;
5. Freedom of suffrage; Q: What is the defense on interference?
6. The right against deprivation of property without
due process of law; A: The defendants are free from liability if they can prove
7. The right to a just compensation when private that at the time of the commission, the plaintiff knew of the
property is taken for public use; act of interference or omission.
A: Consensual privileges depend on the plaintiff agreeing to A: Consent will not shield the defendant from liability if it is
the defendant’s otherwise tortious act. On the other hand, procured by means of fraud or duress.
nonconsensual privileges shield the defendant from liability
for otherwise tortious conduct even if the plaintiff objects Note: Courts invalidate consent procured by duress when
to the defendant’s conduct. defendants threaten the plaintiff or plaintiff’s loved ones with
physical harm.
Q: When is consent a defense in torts cases and what is its
basis? Q: Why is self-defense a defense in tort cases?
A: Typically, one cannot hold another liable in tort for A: An actor is privileged to use reasonable force, not
actions to which one has consented. This is frequently intended or likely to cause death or serious bodily harm, to
summarized by the phrase "volenti non fit injuria" ("to a defend himself against unprivileged harmful contract which
willing person, no injury is done" or "no injury is done to a he reasonably believes that another is about to inflict.
person who consents"). It operates when the claimant
either expressly or implicitly consents to the risk of loss or Q: When is an actor privileged to defend himself?
damage.
A: An actor is privileged to defend himself against another
Note: Consent is willingness in fact for the conduct to occur. by force likely to cause death or serious bodily harm when
he reasonably believes that:
Q: What are some rules in determining whether consent is 1. the other is about to inflict upon him an
present as a defense? intentional contact and
2. he is thereby put in peril of death or serious
A: bodily harm which can safely be prevented only
1. It need not be communicated to the defendant by immediate use of such force.
2. In determining whether plaintiff consented, defendant
must reasonably interpret her overt act and manifestations Note: Court requires objective and subjective belief (reasonable
person could have seen the situation as dangerous and subject
of her feelings.
believed that he was in danger).
Note: The defendant’s subjective state is based on the
plaintiff’s objective actions. Q: When does the privilege of self-defense exist?
3. Plaintiff has burden of proof to show intent to commit A: The privilege exists even if the actor believes he can
the act, lack of consent, and harm. avoid defending himself by:
1. Retreating within his dwelling place, or
Q: Is consent a defense if the plaintiff or offended party is 2. Permitting the other to intrude upon
a minor? his dwelling place, or
3. Abandoning an attempt to effect a lawful arrest.
A: No.For one to surrender the right to be free from
intentional interference by others, one must have the Q: When does the privilege NOT exist?
mental capacity to consent. Defendant can be liable despite
the fact that the plaintiff was subjectively willing and A: The privilege does not exist if the actor believes that he
communicated that willingness to the defendant. can avoid defending himself by:
1. retreating in any place other than his dwelling
Note: In common law countries, most courts have applied place or
statutory rape statutes in civil cases regardless of proof that the 2. relinquishing the exercise of any right other
plaintiff was able to understand the consequences of her act and than his privilege to prevent intrusion onto his
consent. dwelling place.
Q: When is consent not necessary in order to absolve one Q: May the actor use any means in order to defend
from the injuries he caused to another? himself?
A: Conduct that injures another does not make the actor A: The actor is not privileged to use any means of self-
liable to the other, even though the other has not defense which is intended or likely to cause a bodily harm
consented to it if: in excess of that which the actor correctly or reasonably
1. An emergency makes it necessary or apparently believes to be necessary for his protection.
necessary to act before there is opportunity to
– pursuing a course of conduct which would probably A: It is conduct on the part of the injured party,
and naturally result to injury. (Marinduque Iron Mines contributing as a legal cause to the harm he has suffered,
Agents, Inc. v. The Workmen’s Compensation which falls below the standard to which he is required to
Commission, 99 Phil 480) conform for his own protection (Valenzuela v. CA, G.R. No.
115024, Feb. 7, 1996).
Q: What are the circumstances to be considered in
determining whether an act is negligent? Q: Are children below nine (9) years capable of
contributory negligence?
A:
1. Person Exposed to the Risk – A higher degree of A: No. A child under nine (9) years of age is conclusively
diligence is required if the person involved is a child. presumed incapable of contributory negligence as a matter
of law. (Jarco Marketing Corp. v. Court of Appeals, 321 SCRA
2. Emergency – The actor confronted with an emergency 377)
is not to be held up to the standard of conduct
normally applied to an individual who is in no such Q: What is the doctrine of comparative negligence?
situation.
A: The negligence of both the plaintiff and the defendant
3. Social Value or Utility of Action – Any act subjecting an are compared for the purpose of reaching an equitable
innocent person to unnecessary risk is a negligent act apportionment of their respective liabilities for the
if the risk outweighs the advantage accruing to the damages caused and suffered by the plaintiff (Pineda, Torts
actor and even to the innocent person himself. and Damages, 2009, p.51)
4. Time of the day – May affect the diligence required of Note: The relative degree of negligence of the parties is considered
the actor (Art. 1173); e.g. a driver is required to in determining whether, and to what degree, either should be
responsible for his negligence (apportionment of damages).
exercise more prudence when driving at night
Q: Can the principle of contributory negligence apply in
5. Gravity of the Harm to be Avoided – Even if the odds
criminal cases through reckless imprudence?
that an injury will result are not high, harm may still be
considered foreseeable if the gravity of harm to be
A: No. The principle of contributory negligence cannot be
avoided is great.
used as defense in criminal cases through reckless
imprudence because one cannot allege the negligence of
6. Alternative Cause of Action – If the alternative
another to evade the effects of his own negligence. (People
presented to the actor is too costly, the harm that may
result may still be considered unforeseeable to a
v. Quinones, 44 O.G. 1520; People v. Orbeto, C.A. 430 O.G. 3. Where the plaintiff, a passenger, filed an action against a
3173) carrier based on contract; (Bustamante v. CA, G.R. No.
89880, Feb. 6, 1991)
LAST CLEAR CHANCE
4. If the actor, though negligent, was not aware of the
Q: What is the doctrine of last clear chance (doctrine of danger or risk brought about by the prior fraud or negligent
discovered peril)? act;
A: This is also called as the “humanitarian negligence 5. In case of a collapse of a building or structure. (De Roy v.
doctrine.” Where both parties are negligent but the CA, G.R. No. L-41154, Jan. 29, 1988)
negligent act of one succeeds that of the other by an
appreciable interval of time, the one who has the last 6. Where both parties are negligent (Philippine National
reasonable opportunity to avoid the impending harm and Railways v. Brunty, 506 SCRA 685)
fails to do so, is chargeable with the consequences, without
reference to the prior negligence of the other party (Picart Q: Mr and Mrs R own a burned-out building, the firewall
vs Smith, 37 Phil. 809). of which collapsed and destroyed the shop occupied by
the family of Mr and Mrs S, which resulted in injuries to
Note: The doctrine of last clear chance is a theory adopted to said couple and the death of their daughter. Mr and Mrs S
mitigate the harshness of the contributory negligence of the had been warned by Mr & Mrs R to vacate the shop in
plaintiff (Phoenix Construction Inc. v. IAC, 148 SCRA 353) view of its proximity to the weakened wall but the former
failed to do so. Mr & Mrs S filed against Mr and Mrs R an
Q: What are the requisites of the doctrine of last clear action for recovery of damages the former suffered as a
chance? result of the collapse of the firewall. In defense, Mr and
Mrs R rely on the doctrine of last clear chance alleging
A: that Mr and Mrs S had the last clear chance to avoid the
1. Plaintiff is placed in danger by his own negligent acts accident if only they heeded the former’s warning to
and he is unable to get out from such situation by any vacate the shop, and therefore Mr and Mrs R’s prior
means; negligence should be disregarded. If you were the judge,
2. Defendant knows that the plaintiff is in danger and how would you decide the case? (1990 Bar Question)
knows or should have known that the plaintiff was
unable to extricate himself therefrom; and A: I would decide in favor of Mr & Mrs S. The proprietor of
3. Defendant had the last clear chance or opportunity a building or structure is responsible for the damages
to avoid the accident through the exercise of ordinary resulting from its total or partial collapse, if it should be due
care but failed to do so, and the accident occurred as a to the lack of necessary repairs (Art. 2190, NCC) As regards
proximate result of such failure. (Pineda, Torts and the defense of last clear chance, the same is not tenable
Damages, 2009, p.59-60) because according to the SC in one case (De Roy v. CAL-
80718, Jan 29, 1988, 157 S 757) the doctrine of last clear
Q: Is the doctrine of last clear chance applicable in case of chance is not applicable to instances covered by Art 2190 of
collision? the Civil Code. Further, in Phoenix Construction, Inc. v.
Intermediate Appellate Court (G.R. L-65295, March 10,
A: Yes. In case of collision, it applies in a suit between the 1987. 148 SCRA 353) the Supreme Court held that the role
owners and drivers of colliding vehicles and not where a of the common law "last clear chance" doctrine in relation
passenger demands responsibility from the carrier to to Art. 2179 of the Civil Code is merely to mitigate damages
enforce its contractual obligations (Pineda, Torts and within the context of contributory negligence.
Damages, 2009, p.60, citing Tiu v. Arriesgado, 437 SCRA
426) Q: What is the sudden peril doctrine/emergency rule?
Note: There is a different rule in case of collision of vessels.
A: One who suddenly finds himself in a place of danger, and
is required to act without time to consider the best means
Q: What are the instances when the doctrine of last clear
that may be adopted to avoid the impending danger, is not
chance is inapplicable?
guilty of negligence, if he fails to adopt what subsequently
and upon reflection may have been a better method, unless
A:
the emergency in which he finds himself is brought about
1. When the injury or accident cannot be avoided by the
by his own negligence.(Mc Kee v. IAC, 211 SCRA 519)
application of all means at hand after the peril has been
discovered; (Pantranco North Expressway v. Baesa, G.R. Note: Emergency rule exempts common carriers.
Nos. 79050-51, Nov. 14, 1989)
Q: What is the captain of the ship doctrine?
2. If the defendant’s negligence is a concurrent cause and
which was still in operation up to the time the injury was A: A surgeon is likened to a captain of the ship, in that it is
inflicted; his duty to control everything going on in the operating
A: Bonus Pater Familias or that of a good father of a family. A: The conduct that should be examined in negligence
cases is prior conduct or conduct prior to the injury that
Note: If the law or contract does not state the diligencewhich is to resulted or, in proper cases, the aggravation thereof.
be observed in the performance, that which is expected of a good
father of a family shall be required. (Art. 1173 (2))
STANDARD OF CARE
Q: What is the rule in case of fault or negligence of an
obligor? STANDARD OF CONDUCT or DEGREE OF CARE REQUIRED
In General
A: Art. 1173. The fault or negligence of the obligor consists If the law or contract does not state the diligence which is
in the omission of that diligence which is required by the to be observed in the performance, that which is expected
nature of the obligation and corresponds with the of a good father of a family shall be required (Article 1173,
nd
circumstances of the persons, of the time and of the place. 2 paragraph, NCC).
When negligence shows bad faith, the provisions of Articles
Note: Diligence of a good father of a family - bonos pater familias -
1171 and 2201, paragraph 2, shall apply.
A reasonable man is deemed to have knowledge of the facts that a
man should be expected to know based on ordinary human
Note: Art. 1171. Responsibility arising from fraud is demandable in experience. (PNR v. IAC, GR No. 7054, Jan. 22, 1993)
all obligations. Any waiver of an action for future fraud is void.
Persons who have Physical Disability
Art. 2201. In contracts and quasi-contracts, the damages for which GR: A weak or accident prone person must come up to the
the obligor who acted in good faith is liable shall be those that are standard of a reasonable man, otherwise, he will be
the natural and probable consequences of the breach of the considered as negligent.
obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted. XPN: If the defect amounts to a real disability, the standard
of conduct is that of a reasonable person under like
In case of fraud, bad faith, malice or wanton attitude, the obligor
disability.
shall be responsible for all damages which may be reasonably
attributed to the non-performance of the obligation. Experts and Professionals
GR: They should exhibit the case and skill of one who is
Q: What is the concept of a good father of the family ordinarily skilled in the particular field that he is in.
(pater familias)?
Note: This rule does not apply solely or exclusively to
A: The Supreme Court described a good father of a family professionals who have undergone formal education.
by first stating who is not. He is not and is not supposed to
be omniscient of the future; rather, he is one who takes XPN: When the activity, by its very nature, requires the
precautions against any harm when there is something exercise of a higher degree of diligence
before him to suggest or warn him of the danger or to e.g. Banks; Common carriers
foresee it (Picart v. Smith, G.R. No. L-12406, Mar. 15, 1918). Insane Persons
The same rule applies under the New Civil Code. The
Note: A good father of a family is likewise referred to as the insanity of a person does not excuse him or his guardian
reasonable man, man of ordinary intelligence and prudence, or from liability based on quasi-delict. (Arts. 2180 and 2182,
ordinary reasonable prudent man. In English law, he is sometimes NCC). This means that the act or omission of the person
referred to as the man on top of a Clapham omnibus. (Aquino, suffering from mental defect will be judged using the
2005)
standard test of a reasonable man.
Q: Does the standard of conduct applied to adults apply
The bases for holding a permanently insane person liable
equally to children?
for his torts are as follows:
Where one of two innocent person must suffer a loss it
A: GR: The action of a child will not necessarily be judged
should be borne by the one who
according to the standard of an adult.
occasioned it;
To induce those interested in the estate of the insane
XPN: If the minor is mature enough to understand and
person (if he has one) to restrain and control him;
appreciate the nature and consequences of his actions.
and
In such a case, he shall be considered to have been
The fear that an insanity defense would lead to false
negligent.
claims of insanity to avoid liability. (Bruenig v.
American Family Insurance Co., 173 N.W. 2d
Note: Failure of the employer to comply with mandatory provisions The following are circumstances to be considered:
may be considered negligence per se.
Employees 1. Time
Employees are bound to exercise due care in the 2. Place
performance of their functions for the employers. Liability 3. Emergency
may be based on negligence committed while in the 4. Gravity of harm to be avoided
5. Alternative course of action
performance of the duties of the employee (Araneta v. De
6. Social value or utility of activity
Joya, G.R. No. 83491, Aug. 27, 1990) 7. Person exposed to the risk
Owners, Proprietors and Possessors of Property (Aquino, Torts and Damages, 2005, p.46-56)
GR: The owner has no duty to take reasonable care towards
a trespasser for his protection or even to protect him from PRESUMPTION OF NEGLIGENCE
concealed danger.
XPN: Q: Discuss the provisions relative to presumptionof
1. Visitors negligence
2. Tolerated Possession
3. Doctrine of Attractive Nuisance A: Persons are generally presumed to have taken ordinary
4. State of Necessity care of his concerns.There are however exceptions when
Doctors negligence is presumed.
If a General Practitioner – Ordinary care and diligence in the 1. Article 2184. xxx. It is disputably presumed that a
application of his knowledge and skill in the practice of his driver was negligent, if he had been found guilty
profession of reckless driving or violating traffic regulations
at least twice within the next preceding two
If a Specialist – The legal duty to the patient is generally months. xxx
considered to be that of an average physician.
2. Article 2185. Unless there is proof to the contrary,
Lawyers it is presumed that a person driving a motor
An attorney is bound to exercise only a reasonable degree vehicle has been negligent if at the time of the
of care and skill, having reference to the business he mishap, he was violating any traffic regulation.
undertakes to do (Adarne v. Aldaba, Adm. Case No. 80, June
27, 1978). Note: Proof of traffic violation required.
Note: However, res ipsa loquitur is not a rule of substantive law Q: What is meant by volenti non fit injuria/assumption of
and, as such, does not create nor constitute an independent or risk?
separate ground of liability. Instead, it is considered as merely
evidentiary or in the nature of a procedural rule. (Professional
A: This maxim means that “to which a person assents is not
Services v.Agana, 513 SCRA 478)
esteemed in law as injury.” Stated otherwise, “one is not
legally injured if he has consented to the act complained of
Q: What are the requisites for the application of the
or was willing that it shall occur.” (Pineda, Torts and
doctrine of res ipsa loquitur?
Damages, 2009, p76)
A:
Q: What are the elements of the doctrine of assumption of
1. The accident was of such character as to warrant an
risk?
inference that it would not have happened except for
defendant’s negligence;
A:
2. The accident must have been caused by an agency or
1. The plaintiff must know that the risk is present;
instrumentality within the exclusive management or
2. He must further understand its nature; and
control of the person charged with the negligence
3. His choice to incur it is free and voluntary.
complained of;
3. The accident must not have been due to any voluntary
Q: What are the two kinds of assumption of risk?
action or contribution on the part of the person
injured. (Windvalley Shipping Co., Ltd. Vs Court of
A:
Appeals, 342 SCRA 214)
1. Express waiver of the right to recover;
2. Implied assumption
Q: What are some cases where the doctrine was held to
a. Dangerous Conditions
be inapplicable?
b. Contractual Relations
c. Dangerous Activities
A:
d. Defendant’s negligence
1. Where there is direct proof of absence or presence of
negligence;
Q: What is meant by:
2. Where other causes, including the conduct of the
plaintiff and third persons, are not sufficiently
1. Dangerous conditions?
eliminated by the evidence;
3. When one or more requisite is absent.
A: A person who, knowing that he is exposed to a
(Aquino, Torts and Damages, 2005, p.149)
dangerous condition, voluntarily assumes the risk of
such dangerous condition may not recover from the
Q: What are the defences available in order to disprove
defendant who maintained such dangerous condition.
negligence?
2. Contractual relations?
A:
1. Due diligence
A: There may be an implied assumption of risk if the
2. Accident or fortuitous event
plaintiff entered into contractual relations with the
3. Damnum absque injuria – There can be damage
defendant. By entering into a relationship freely and
without injury in those instances in which the loss
voluntarily where the negligence of the defendant is
or harm was not the result of a violation of a legal
obvious, the plaintiff may be found to accept and
duty
consent to it, and to undertake to look out for himself
4. Presumption of Regularity
and to relieve the defendant of the duty.
5. Assumption of risk
3. Dangerous activities? the manufacturer’s representatives or, in his absence, the importer
shall be deemed the manufacturer. (Art. 4, RA 7394)
A: A person who voluntarily participates in dangerous
activities assumes the risks which are usually present Q: What are the kinds of defects in products?
in such activities.
A:
4. Defendant’s negligence? 1. Manufacturing defect – defects resulting from
manufacture, construction, assembly and erection.
A: When the plaintiff is aware of the risk created by 2. Design defect – defects resulting from design and
the defendant’s negligence, yet he voluntarily proceed formulas.
to encounter it, there is implied assumption of risk on 3. Presentation defect – defects resulting from
the part of the plaintiff. handling, making up, presentation or packing of the
products.
SPECIAL LIABILITY ON PARTICULAR ACTIVITIES 4. Absence of Appropriate Warning – defect resulting
from the insufficient or inadequate information on the
PRODUCTS LIABILITY use and hazards of the products.
Q: What is product and service liability? Q: What are the defenses of a manufacturer and supplier?
A: Product Liability is the law which governs the liability of A: Art. 97 of the Consumer Act provides thatthe
manufacturers and sellers for damages resulting from manufacturer shall not be liable when it evidences:
defective products. It is meant to protect the consumers by 1. That it did not place the product on the market;
providing safeguards when they purchase or use consumer 2. That although it did place the product on the
products. (Aquino, T., Torts and Damages, 2005, p.758) market such product has no defect;
3. That the consumer or the third party is solely at
Q: What are the general principles to determine product fault.
liability?
On the other hand, Art. 99 of said Act provides that the
A: supplier shall not be liable when it is proven:
1. Regardless of the ground on which liability is asserted, 1. That there is no defect in the service
whether negligence, breach of warranty or strict rendered;
liability in tort, a manufacturer or seller of a product 2. That the consumer or the third party is solely
cannot be held liable for injury allegedly caused in the at fault.
absence of proof that the product was defective when
it left the defendant’s possession or control and that Q: What are the remedies of a consumer in the Consumer
the injury was proximately caused by the product Act?
2. Misuse of the product is a bar to recovery in a
products liability case based on strict liability in tort A: Sec. 60 of the law expressly provides that the court may
3. Privity of contract is not a requisite to recovery in a grant injunction restraining the conduct constituting the
products liability case based on breach of warranty contravention of illegal sales act and practices and/or
actual damages and such other orders as it thinks fit to
Q: What is the Consumer Act (RA 7394)? redress injury to the person affected by such conduct.
Note: A manufacturer is any person who manufactures, assembles A: The possessor or whoever makes use of the animal is
or processes consumer products, except that if the goods are liable independent of fault.
manufactured, assembled or processed for another person who
attaches his own brand name to the consumer products, the latter Note: The only exception is when the damage is caused by force
shall be deemed the manufacturer. In case of imported products, majeure or by the person who suffered the damage.
A:
1. Civil action
2. Abatement, without judicial proceedings (Art. 705,
NCC)
ATTRACTIVE NUISANCE
Note: Nature has created streams, lakes and pools which attract
children. Lurking in their waters is always the danger of drowning.
Against this danger children are early instructed so that they are
sufficiently presumed to know the danger; and if the owner of
private property creates an artificial pool on his own property,
merely duplicating the work of nature without adding any new
danger, he is not liable because of having created an "attractive
nuisance." (Hidalgo Enterprises, Inc. v.Balandan, 91 Phil 488)
GENERAL CONSIDERATIONS
A: MENTAL
1. Moral
2. Exemplary
3. Nominal
4. Temperate
5. Actual
6. Liquidated
ACTUAL/
MORAL NOMINAL
COMPENSATORY
According to purpose
Actual or compensatory damages simply Awarded only to enable the injured party Vindicating or recognizing the injured
make good or replace the loss caused by to obtain means, diversion or party’s right to a property that has been
the wrong. amusement that will alleviate the moral violated or invaded. (Tan v. Bantegui, 473
suffering he has undergone, by reason of SCRA 663)
defendants culpable action. (Robleza v.
CA, 174 SCRA 354)
According to manner of determination
Claimant must produce competent proof No proof of pecuniary loss is necessary. No proof of pecuniary loss is necessary.
or the best evidence obtainable such as The assessment is left to the discretion of Proof that a legal right has been violated
receipts to justify an award therefore. the court according to the circumstances is what is only required. Usually awarded
Actual or compensatory damages of each case. However, there must be in the absence of proof of actual
cannotbe presumed but must be proved proof that the defendant caused physical damages.
with reasonable certainty. (People v. suffering, mental anguish, moral shock,
Ereno, Feb. 22, 2000) etc. (Compania Maritima v. Allied Free
Worker’s Union, G.R. No. L-31379, Aug.
29, 1988).
Actual damages must be substantiated
by documentary evidence, such as GR: Factual basis must be alleged. Aside
receipts, in order to prove expenses from the need for the claimant to
incurred as a result of the death of the satisfactorily prove the existence of the
victim or the physical injuries sustainedfactual basis of the damages, it is also
by the victim. (Philippine Hawk necessary to prove its causal relation to
Corporation v. Vivian Tan Lee,G.R. No. the defendant’s act (Raagas v. Trava,
166869, Feb. 16, 2010) G.R. No. L-20081, Feb. 27,1968; People v.
Manero, G.R. Nos. 86883-85, Jan. 29,
XPN: Damages for loss of earning 1993).
capacity may be awarded despite the
absence of documentary evidence when: XPN: Criminal cases. Moral damages
(1) the deceased is self-employed and may be awarded to the victim in criminal
earning less than the minimum wage proceedings in such amount as the court
under current labor laws, in which case, deems just without need for pleading or
judicial notice may be taken of the fact proof of the basis thereof (People v.
that in the deceased's line of work no Paredes, July 30, 1998). The amount of
Note: Ordinary Damages are those generally Note: Special Damages are those which exist
inherent in a breach of a typical contract because of special circumstances and for
which a debtor in good faith can be held liable
if he had been previously informed of such
circumstances.
EXEMPLARY/
TEMPERATE LIQUIDATED
CORRECTIVE
According to purpose
When the court is convinced that there Liquidated damages are frequently Exemplary or corrective damages are
has been such a loss, the judge is agreed upon by the parties, either by way intended to serve as a deterrent to
empowered to calculate moderate of penalty or in order to avoid serious wrongdoings. (People v. Orilla,
damages rather than let the complainant controversy on the amount of damages. 422 SCRA 620)
suffer without redress. (GSIS v. Labung-
Deang, 365 SCRA 341)
May be recovered when the court finds If intended as a penalty in obligations 1. That the claimant is entitled to moral,
that some pecuniary loss has been with a penal cause, proof of actual temperate or compensatory damages;
suffered but its amount cannot, from the damages suffered by the creditor is not and
nature of the case, be proved with necessary in order that the penalty may
certainty. No proof of pecuniary loss is be demanded (Art. 1228, NCC). 2. That the crime was committed with 1
necessary. or more aggravating circumstances, or
No proof of pecuniary loss is necessary. the quasi-delict was committed with
gross negligence, or in contracts and
quasi-contracts the act must be
accompanied by bad faith or done in
wanton, fraudulent, oppressive or
malevolent manner.
Special/Ordinary
ACTUAL AND COMPENSATORY DAMAGES Note: Liquidated damages take the place of actual
damages except when additional damages are incurred.
Q: What are actual or compensatory damages?
2. Forfeiture of bonds in favor of the government
A: It comprehends not only the value of the loss suffered for the purpose of promoting public interest or
but also that of the profits which the obligee failed to policy (Far Eastern Surety and Insurance Co. v.
obtain. The amount should be that which would put the Court of Appeals, 104 Phil 702)
plaintiff in the same position as he would have been if he
had not sustained the wrong for which he is now getting 3. Loss is presumed (Manzanares v.Moreta, 38 Phil
compensation or reparation. To recover damages, the 821)
amount of loss must not only be capable of proof but must
actually be proven. 4. When the penalty clause is agreed upon in the
contract between the parties (Art. 1226)
Q: What is the purpose of the law in awarding actual
damages? Q: What is the distinction between civil liability ex delicto
and actual or compensatory damages?
A: Its purpose is to repair the wrong that has been done, to
compensate for the injury inflicted, and not to impose a Civil Indemnity Actual or
penalty. (Algarra v.Sandejas, 27 Phil 284) Ex Delicto Compensatory
Damages
Q: Is it necessary that loss be proved? Can be awarded To be recoverable must
without need of further additionally be
A: GR: Loss must be proved before one can be entitled to proof than the fact od established with
damages. commission of the reasonable degree of
felony. certainty (People v.
XPN: Loss need not be proved in the following cases: Dianos, 297 SCRA 191)
1. Liquidated damages previously agreed upon (Art.
2226)
Q: What is the required proof for actual damages? Thus, life expectancy is, not only relevant, but, also, an
important element in fixing the amount recoverable,
A: It is necessary that the claimant produces competent although it is not the sole element determinative of said
proof or the best evidence obtainable such as receipts to amount.
justify an award therefore. Actual or compensatory
damages cannot be presumed but must be proved with Note: The formula that has gained acceptance over time has
reasonable certainty (People v. Ereno, Feb. 22, 2000) limited recovery to net earning capacity. The premise is obviously
that net earning capacity is the person’s capacity to acquire money,
less the necessary expense for his own living (Philtranco Service
Any person who seeks to be awarded actual or
Enterprises v. Felix Paras and Inland Trailways Inc. G.R. No. 161909,
compensatory damages due to acts of another has the April 25, 2012).
burden of proving said damages as well as the amount
thereof. Actual damages cannot be allowed unless Q: Is it proper for the heirs to claim as damages the full
supported by evidence on the record. The court cannot amount of earnings of the deceased?
rely on speculations, conjectures or guesswork as to the
fact and amount of damages (Banas, Jr. v. CA, Feb. 10, A: No. Said damages consist, not of the full amount of his
2000) earnings, but of the support they received or would have
received from him had he not died in consequence of the
Q: What are the kinds of actual or compensatory negligence of the bus' agent. Stated otherwise, the amount
damages? recoverable is not loss of the entire earning, but rather the
loss of that portion of the earnings which the beneficiary
A: would have received. In other words, only net earnings, not
1. Damnun Emergens (actual damages) – the value of gross earning, are to be considered.
the actual pecuniary loss for what the claimant already
possesses before the incident which must be In fixing the amount of that support, the "necessary
supported by receipts or the best evidence available. expenses of his own living" should be deducted from his
earnings. Earning capacity, as an element of damages to
2. Lucrum cessans (compensatory damages) –the expected one's estate for his death by wrongful act, is necessarily his
profits which were not realized by reason of the act of the net earning capacity or his capacity to acquire money, less
offender or tortfeasor (Pineda, Torts and Damages, 2009, the necessary expense for his own living (Villa Rey Transit,
163-164) Inc. v. CA, et al., G.R. No. L-25499, Feb. 18, 1970).
Note: As a rule, documentary evidence should be presented to
Q: Can both actual and compensatory damages be granted
substantiate the claim for damages for loss of earning capacity. By
way of exception, damages for loss of earning capacity may be at the same time to the plaintiff?
awarded despite the absence of documentary evidence when: (1)
the deceased is self-employed and earning less than the minimum A: Yes. As provided for in Art 2200, indemnification for
wage under current labor laws, in which case, judicial notice may damages shall comprehend not only the value of the loss
be taken of the fact that in the deceased's line of work no suffered, or actual damages (damnum emergens), but also
documentary evidence is available; or (2) the deceased is that of the profits which the obligee failed to obtain or
employed as a daily wage worker earning less than the minimum compensatory damages (lucrum cessans). In other words,
wage under current labor laws.(Philippine Hawk Corporation v.
there are two components to actual damages. (RCPI vs. CA,
Vivian Tan Lee, G.R. 166869, Feb. 16, 2010)
103 SCRA 359)
Q: What must be considered in determining the amount of
ATTORNEY’S FEES AND EXPENSES OF LITIGATION
damages recoverable?
Q: What are the two concepts of attorney’s fees?
A: Much is left to the discretion of the court considering the
Distinguish one from the other.
moral and material damages involved. There can be no
exact or uniform rule for measuring the value of a human
A:
life. The amount recoverable depends on the particular
1. Ordinary
facts and circumstances of each case.
2. Extraordinary
The life expectancy of the deceased or of the beneficiary,
whichever is shorter, is an important factor. Other factors ORDINARY EXTRAORDINARY
that are usually considered are: Nature
1. Pecuniary loss to plaintiff or beneficiary; The reasonable
2. Loss of support; compensation paid to a An indemnity for damages
3. Loss of service; lawyer for the legal ordered by the court to be paid
4. Loss of society; services rendered to a by the losing to the prevailing
5. Mental suffering of beneficiaries; and client who has engaged party in litigation
6. Medical and funeral expenses. him
Basis
The fact of employment Any cases authorized by law
omission is the immediate and proximate Note: No interest shall be adjudged on unliquidated claims or
cause of the damage or injury; damages except when or until the demand can be established with
b. Defendant has done his best to lessen the reasonable certainty. (Solid Homes, Inc. v. IAC, 508 SCRA 165)
plaintiff’s injury or loss. (Pineda, Torts and
Damages, 2009, p.222-223) MORAL DAMAGES
Q: What is the amount of damages in cases where death A: It includes physical suffering, mental anguish, fright,
resulted from a crime or quasi-delict? serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury. (Art.
A: Art. 2206 provides that the amount of damages for 2217, NCC)
death caused by a crime or quasi-delict shall be at least
P75, 000, even though there may have been mitigating Q: What is the nature of moral damages?
circumstances. (People v. Tabarnero, 693 SCRA 495)
A: Although incapable of pecuniary estimation, they are in
In addition to the amount to be awarded, the defendant the category of an award designed to compensate the
shall also be liable for the following: claimant for actual injury suffered and not to impose a
penalty on the wrong does. (Pineda, Torts and Damages,
1. Loss of the earning capacity of the deceased, 2009, p. 229)
and the indemnity shall be paid to the heirs
of the latter; such indemnity shall in every Q: Why are moral damages awarded?
case be assessed and awarded by the court,
unless the deceased on account of A: They are awarded to enable the injured party to obtain
permanent physical disability not caused by means, diversions or amusement that will serve to alleviate
the defendant, had no earning capacity at the moral suffering he has undergone by reason of the
the time of his death; defendant’s culpable action. (Prudenciado v. Alliance
Transport System, Inc., 148 SCRA 440)
2. If the deceased was obliged to give support
according to the provisions of Article 291, Q: How can the plaintiff recover moral damages?
the recipient who is not an heir called to the
decedent's inheritance by the law of testate A: GR: The plaintiff must allege and prove:
or intestate succession, may demand 1. The factual basis for moral damages and
support from the person causing the death, 2. The causal relation to the defendant’s act
for a period not exceeding five years, the
exact duration to be fixed by the court; XPN: Moral damages may be awarded to the victim in
criminal proceedings without the need for pleading of
Note: The article only mentioned heir. Consequently, it proof or the basis thereof.
cannot speak of devisees and legatees who are
receiving support from the deceased. Q: When are moral damages recoverable?
3. The spouse, legitimate and illegitimate A: Moral damages may be recovered in the following and
descendants and ascendants of the deceased analogous cases:
may demand moral damages for mental 1. A criminal offense resulting in physical injuries;
anguish by reason of the death of the 2. Quasi-delicts causing physical injuries;
deceased. 3. Seduction, abduction, rape, or other lascivious
acts;
Note: The petitioner has correctly relied on the holding in Receiver 4. Adultery or concubinage;
for North Negros Sugar Company, Inc. v. Ybañez (G.R. No. L-22183, 5. Illegal or arbitrary detention or arrest;
August 30, 1968), to the effect that in case of death caused by 6. Illegal search;
quasi-delict, the brother of the deceased was not entitled to the
7. Libel, slander or any other form of defamation;
award of moral damages based on Article 2206 of the Civil Code.
(Sulpicio Lines Inc. v. Curso, et. al., G.R. No. 157009, Mar. 17, 2010) 8. Malicious prosecution;
9. Acts mentioned in Article 309; and
Q: When can interest be part of damages? 10. Actions referred to in Articles 21, 26, 27, 28, 29,
30, 32, 34, and 35. (Art. 2219, NCC)
A: In crimes and quasi-delicts, the court may appropriately
Note: To award moral damages, a court must be satisfied with
impose interest on the amount of the damages adjudicated
proof of the following:
by the court. The basis of interest is the legal rate which is 1. an injury – whether physical, mental or psychological;
6% per annum. (Art. 2209) 2. a culpable act or omission factually established;
3. a wrongful act or omission of the defendant as the
proximate cause of the injury sustained by the claimant;
A: No, civil indemnity is different from moral damages. It is A: Nominal damages are small sums fixed by the court
distinct from and should not be denominated as moral without regard to the extent of the harm done to the
damages which are based on different jural foundations injured party.They are damages in name only and are
and assessed by the court in the exercise of sound allowed simply in recognition of a technical injury based on
discretion (People v. Caldona, G.R. No. 126019, Mar. 1, a violation of a legal right.
2001).
Note: Nominal damages cannot co-exist with actual or
Q: What are those tortuous acts referred to in Articles 21, compensatory damages because nominal damages are recoverable
26, 27, 28.29, 32, 34 and 35 of the NCC, wherein the when the damages suffered cannot be proved with reasonable
certainty. The law presumes damage although actual or
plaintiff may recover moral damages?
compensatory damages are not proven. Award of actual, moral,
temperate or moderate damages preclude nominal damages. But it
A: may be awarded together with attorney’s fees. (Pineda, pp. 284-
1. Willful acts contrary to morals, good customs or public 285, 2009 )
policy
2. Disrespect to the dignity, personality, privacy and TEMPERATE OR MODERATE DAMAGES
peace of mind of neighbors and other persons
3. Refusal or neglect of a public servant to perform his Q: What are temperate damages?
official duty without just cause
4. Unfair competition in enterprise or in labor A: Those damages, which are more than nominal but less
5. Civil action for damages against accused acquitted on than compensatory, and may be recovered when the court
reasonable doubt finds that some pecuniary loss has been suffered but its
6. Violation of civil rights amount cannot be proved with certainty.
7. Civil action for damages against city or municipal
police force Note: Elements:
8. When the trial court finds no reasonable ground to 1. Some pecuniary loss;
believe that a crime has been committed after a 2. Loss is incapable of pecuniary estimation;
preliminary investigation or when the prosecutor 3. The damages awarded are reasonable.
refuses or fails to institute criminal proceedings.
Q: What is the rationale behind the temperate or
Q: May moral and exemplary damages be granted if a moderate damages?
marriage was dissolved on the ground of psychological
incapacity? A: The rationale is precisely that from the nature of the
case, definite proof of pecuniary loss cannot be offered.
A: By declaring petitioner as psychologically incapacitated, (Pineda, Torts and Damages, 2009, p.288)
the possibility of awarding moral damages was negated,
which should have been proved by specific evidence that it Note: In the absence of competent proof of the actual damage
was done deliberately. Thus, as the grant of moral damages caused on the motorcycle or the actual cost of its repair, the award
was not proper, it follows that the grant of exemplary of temperate damages by the appellate court in the amount of
P10,000.00 was reasonable under the circumstances. (Philippine
Hawk Corporation v. Vivian Tan Lee, G.R. No. 166869, Feb. 16, 3. Contracts and Quasi-contracts – when
2010) defendant acted in wanton, fraudulent, reckless,
oppressive, or malevolent manner (Art. 2232)
LIQUIDATED DAMAGES
Q: What are the requirements for an award of exemplary
Q: What are liquidated damages? damages?
A: Also known as “punitive” or “vindictive” damages. These Q: What is the rule with regard to crimes and quasi-delicts
are imposed by way of example or correction for the public causing death?
good, in addition to the moral, temperate, liquidated or
compensatory damages; A: In case of death, the plaintiff is entitled to the amount
that he spent during the wake and funeral of the deceased.
Q: What is the rationale behind exemplary damages? However, it has been ruled that expenses after the burial
are not compensable.
A: Exemplary damages are required by public policy, for
wanton acts must be suppressed. They are an antidote so Note: The amount of damages for death caused by a crime or
the poison of wickedness may not run through the body quasi-delict shall be at least three thousand pesos, even though
politic(Diaz vsAmante, 104 Phil 968).They are intended to there may have been mitigating circumstances. In addition:
1. The defendant shall be liable for the loss of the
serve as a deterrent to serious wrongdoings and as a
earning capacity of the deceased, and the
vindication of undue sufferings and wanton of invasion of indemnity shall be paid to the heirs of the latter;
the rights of an injured or a punishment for those guilty of such indemnity shall in every case be assessed
outrageous conduct. (People v. Catubig, 363 SCRA 621) and awarded by the court, unless the deceased
on account of permanent physical disability not
Q: In what cases may exemplary damages be imposed as caused by the defendant, had no earning
accessory damages? capacity at the time of his death;
2. If the deceased was obliged to give support
according to the provisions of Article 291, the
A: GR: Exemplary damages cannot be recovered as a matter
recipient who is not an heir called to the
of right (Art. 2233, NCC) decedent's inheritance by the law of testate or
intestate succession, may demand support from
XPN: They can be imposed in the following cases: the person causing the death, for a period not
1. Criminal offense – when the crime was exceeding five years, the exact duration to be
committed with one or more aggravating fixed by the court;
circumstances (Art. 2230) 3. The spouse, legitimate and illegitimate
descendants and ascendants of the deceased
may demand moral damages for mental anguish
2. Quasi-delicts – when the defendant acted with
by reason of the death of the deceased. (Art.
gross negligence (Art. 2231) 2206, NCC)
Q: What is the rule in graduation of damages in torts Q: What is the duty of the injured party?
cases?
A: The injured party is obligated to undertake measures
A: Generally, the degree of care required is graduated that will alleviate and not aggravate his condition after the
according to the danger a person or property attendant infliction of the injury or nuisance. The injured party has the
upon the activity which the actor pursues or the burden of explaining why he did not do so (Art. 2203, NCC).
instrumentality he uses. The greater the danger the greater
the degree of care required. Q: What are the damages that cannot co-exist, must co-
exist and must stand alone?
However, foreseeability is not the same as probability. Even
if there is lesser degree of probability that damage will A:
result, the damage may still be considered foreseeable. Damages that Damages that
Damages that
cannot co- must stand
Note: The test as respects foreseeability is not the balance of must co-exist
exist alone
probabilities, but the existence, in the situation in hand, of some Exemplary
real likelihood of some damage and the likelihood is of such
Nominal Damages must
appreciable weight and moment to induce, or which reasonably
should induce, action to avoid it on the part of a person or a
Damages co-exist with
reasonably prudent mind. cannot co-exist Moral, Nominal
with Temperate, Damages
Q: How are damages adjudicated in case of crimes? Exemplary Liquidated or
Damages Compensatoy
A: In crimes, the damages to be adjudicated may be Damages
respectively increased or lessened according to the
aggravating or mitigating circumstances (Art. 2204, NCC)