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CIVIL LAW
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CIVIL LAW
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U.P. LAW BOC GENERAL PRINCIPLES CIVIL LAW
GENERAL PRINCIPLES
Civil Law
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be couched in clear and unequivocal terms which subject and not have enacted conflicting statutes.
leave no doubt as to the intention of a party to give up Hence, all doubts must be resolved against any
a right or benefit which legally pertains to him. [RB implied repeal, and all efforts should be exerted in
Michael Press v Galit, G.R. No. 153510 (2008)] order to harmonize and give effect to all laws on the
subject. [Republic v. Marcopper Mining, G.R. No.
The waiver should be made in a positive manner [Dona 137174 (2000)]
Adela v. Tidcorp, G.R. No. 201931 (2015)]
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Territoriality Principle
Art. 11, CC. Customs which are contrary to law, Penal laws and those of public security and safety
public order or public policy shall not be shall be obligatory upon all who live or sojourn in the
countenanced. Philippine territory, subject to the principles of public
international law and to treaty stipulations. [Art. 14,
Art. 12, CC. A custom must be proved as a fact, CC.]
according to the rules of evidence.
Exemptions to the Territoriality Principled under
International Law (Theory of Extraterritoriality):
Ignorance is positive proof that said custom does not
1. When the offense is committed by a foreign
exist.
sovereign while in Philippine territory
2. When the offense is committed by diplomatic
10. Legal Periods representatives
3. When the offense is committed in a public or
Art. 13, CC. When the laws speak of years, months, armed vessel of a foreign country.
days or nights, it shall be understood that years are
of three hundred sixty-five days each; months, of 12. Binding Effect
thirty days; days, of twenty-four hours; and nights
from sunset to sunrise. Nationality Principle
Art. 15, CC. Laws relating to family rights and
If months are designated by their name, they shall
duties, or to the status, condition and legal capacity
be computed by the number of days which they
of persons are biding upon citizens of the
respectively have.
Philippines, even though living abroad.
In computing a period, the first day shall be
excluded, and the last day included. It is true that owing to the nationality principle
embodied in Article 15 of the CC, only Philippine
nationals are covered by the policy against absolute
Note:
divorces, the same being considered contrary to our
Sec. 31, Revised Administrative Code. "Year" shall concept of public policy and morality. However, aliens
be understood to be twelve calendar months; may obtain divorces abroad, which may be recognized
"month" of thirty days, unless it refers to a specific in the Philippines, provided they are valid according to
calendar month in which case it shall be computed their national law. [Dacasin v. Dacasin, G.R. No.
according to the number of days the specific month 168785 (2010)]
contains; "day," to a day of twenty-four hours; and
"night," from sunset to sunrise. Lex Rei Sitae
Art. 16, CC. Real property as well as personal
Policy on Last Day being a Legal Holiday/Sunday property is subject to the law of the country where
If the period arises by statute or orders by the it is stipulated.
government, the last day will automatically be
considered the next working day However, intestate and testamentary successions,
both with respect to the order of succession and to
If the period arises from a contractual relationship, the the amount of successional rights and to the
act will still be due on that Legal Holiday/Sunday intrinsic validity of testamentary provisions, shall
be regulated by the national law of the person
There obviously exists a manifest incompatibility in the whose succession is under consideration, whatever
manner of computing legal periods between the CC may be the nature of the property and regardless of
and the Revised Administrative Code of 1987. Since the country wherein said property may be found.
the Administrative Code is the more recent law, it
governs the computation of legal period [CIR v.
Personal and real property are governed where the
Primetown, G.R. No. 162155 (2007)]
land (situs) is.
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INTERNATIONAL As to
Public
International
Private
International
LAW Law
States and
Law
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previously ruled upon it in other cases. [Coquia and • When the foreign law is PENAL in nature;
Aguiling-Pangalangan] • When the foreign law is PROCEDURAL in
nature;
Burden of Proof • When the foreign law is purely FISCAL OR
The party whose cause of action or defense depended ADMINISTRATIVE in nature;
upon the foreign law has the burden of proving the • When the application of foreign law will work
foreign law. UNDENIABLE INJUSTICE TO CITIZENS of the
forum;
Such foreign law is treated as a question of fact to be
• When the case involves REAL OR PERSONAL
properly pleaded and proved in conformity with the
PROPERTY situated in the forum;
law of evidence of the state where it is presented.
• When the application of the Foreign law
might ENDANGER THE VITAL INTEREST of
b. Proof of Foreign Law the state;
• When the foreign law is CONTRARY TO
Methods to prove foreign law GOOD MORALS
1. Official publication of the law (and consularized)
[Rule 132, Section 24, Rules of Court]
2. Copy of the law attested by the officer having the
legal custody of the record or by his deputy. (and
consularized) [Rule 132, Section 24, Rules of
Court]
3. Learned treatises and expert witness for
unwritten foreign law [Rule 130, Section 46, Rules
of Court]
c. Exceptions to the
Application of Foreign Law
1. A specific law of the forum decrees that internal
law should apply
Examples:
• Real and personal property are subject to the
law of the country where they are situated.
[Art. 16, New CC]
• Revocation of a will done outside the
Philippines may be valid if done according to
the law of the place where the will was made
or lex domicile. [Art. 829, New CC]
• Filipinos are prohibited from making joint
wills even when done abroad. [Art. 819, CC]
2. The proper foreign law was not properly
pleaded and proved
3. The case falls under any of the exceptions
to the application of foreign law.
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In the absence of concurrence of all these, the domicile A declaration of death issued by a competent court is
of origin is deemed to continue. [Pundaodaya v. considered valid for all purposes. Upon the death of a
COMELEC, G.R. No. 179313 (2009)] person, some of his rights and obligations are totally
extinguished while others are passed on to his
successors.
3. Principles on Personal
Status and Capacity d. Absence
a. Definition Three ways of addressing conflict of laws problem
regarding absence:
Personal status 1. There is a rebuttable presumption that a person is
Includes both condition and capacity. dead when he has been absent for a number of
years
Embraces such matters as: 2. A person’s unexplained absence is judicially
1. The beginning and end of human investigated and established which results in
personality legal effects similar to those of death
2. Capacity to have rights in general 3. A judicial decree shall have to be issued declaring
3. Capacity to engage in legal transactions the person dead before the legal effects of death
4. Protection of personal interests take place.
5. Family relations, particularly the relations
between: The Philippines follows the first.
a. Husband and wife
b. Parent and child e. Name
c. Guardian and ward
6. Transactions of family law, especially General Rule: No person can change his name or
a. Marriage surname without judicial authority.
b. Divorce
c. Separation Exceptions (according to Jurisprudence):
d. Adoption 1. That the name is ridiculous or tainted with
e. Legitimation dishonor or extremely difficult to pronounce.
f. Emancipation 2. When the change is necessary to avoid confusion
7. Succession (both testate and intestate) 3. When the right to a new name is a consequence of
a change in status
Capacity 4. A sincere desire to adopt a Filipino name to erase
The union of juridical capacity and capacity to act signs of a former alien nationality which unduly
PRODUCES complete civil capacity hamper social and business life.
Juridical Capacity Capacity to Act
the fitness of a man to Whether an alien’s change of name is valid DEPENDS
the power to do acts
be the subject of legal SOLELY ON HIS PERSONAL LAW.
with juridical effects
relations
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a. Marriage
Philippine Policy on Marriage and the Family
In case of doubt, courts will apply FORUM law because
marriage is greatly influenced by the values of society.
[Prof. Aguiling-Pangalangan]
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2. A valid marriage license except in cases provided Under Philippine law, marriage between spouses with
in Chapter 2 of this Title; and at least 1 Filipino officiated by the Philippine consul
3. A marriage ceremony which takes place with the general, consul or vice consul must comply with the
appearance of the contracting parties before the FORMAL AND INTRINSIC REQUIREMENTS under
solemnizing officer and their personal declaration Philippine law.
that they take each other as husband and wife in 1. Valid marriage license and due publication and
the presence of not less than two witnesses of registration
legal age.
2. Alien must comply with marriage requisites under
Exceptions to the rule of lex loci celebrationis: Lex his or her national law and submit a certificate of
nationalii legal capacity to contract marriage issued by his
1. Either/both parties are below 18 years old diplomatic or consular office
2. Bigamous or polygamous marriages
3. Subsequent marriage without recording: 3. Stateless persons or refugees shall submit an
a. The judgment of nullity of the first marriage affidavit in lieu of the certificate of legal capacity.
b. Partition and distribution of the properties of
the spouses Effects of Marriage
c. Delivery of the children’s presumptive Refers to personal relations between spouses and
legitimes property relations of the spouses
4. Mistake as to identity of the contracting party
5. One of the parties was psychologically Governing Law on Personal Relations Between the
incapacitated to comply with the essential marital Spouses: Lex Nationalii
obligations
6. Incestuous Includes mutual fidelity, respect, cohabitation,
7. Void by reason of public policy support and the right of the wife to use the husband’s
family name.
The abovementioned involve the question capacity to
marry, which is a substantive requirement for If the spouses are of different nationalities, generally,
marriage. Since personal law governs questions of the national law of the husband may prevail if not
intrinsic validity, the above are exceptions to lex loci contrary to law, customs and good morals of the form.
celebrationis because they are controlled by lex
nationalii. Under Philippine law, both husband and wife have the
right to fix the family domicile. [Art. 69,FC]
Intrinsic Validity of Marriage: Personal Law of the
Parties – Lex Nationalii or Lex Domicilii Property Relations of Spouses
Refers to the capacity or general ability of a person to According to The Hague Convention on the Law
marry (e.g. age requirement and parental consent). applicable to Matrimonial Property Regimes the
governing law:
Governing Law: Personal Law, either Lex Nationalii or 1. Internal law designated by the spouses
Lex Domicilii before the marriage; or
Note: In the Philippines: Lex nationalii 2. In the absence thereof, the internal law of
the state in which both spouses fix their
Intrinsic requirements of marriage habitual residence.
No marriage shall be valid, unless these essential .
requisites are present: PRINCIPLE OF IMMUTABILITY
1. Legal capacity of the contracting parties who The applicable law continues notwithstanding any
must be a male and female; and change of their nationality or habitual residence. [Art.
2. Consent freely given in the presence of the 7, The Hague Convention on Matrimonial Property
solemnizing officer [Art. 2, FC] Regime]
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2. With respect to extrinsic validity of Note: In both choice of law approaches, since the
contracts affecting property not situated in action turns on the validity of the marriage, lex fori,
the Philippines and executed in the country which is crucial in divorce, plays no substantial role in
where property is located annulment and declaration of nullity.
3. With respect to extrinsic validity of
contracts entered into in the Philippines Bases of Jurisdiction
but affecting property situated in a foreign 1. Lex loci celebrationis,
country requiring different formalities 2. Law of marital domicile,
3. Any court which acquires personal jurisdiction
b. Divorce and Separation over the parties.
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f. Special Contracts Art. 17, CC. The forms and solemnities of contracts,
wills, and other public instruments shall be
1. Carriage of Goods by Sea governed by the laws of the country in which they
2. Contracts for International Air Transportation are executed.
a. The Warsaw Convention was concluded in
order to establish uniform rules and Art. 815, CC. When a Filipino is in a foreign country,
regulations on the liability of international he is authorized to make a will in any of the forms
airline carriers in cases of death, injuries of established by the law of the country in which he
passengers or loss or damage of cargo. may be. Such will may be probated in the
b. Any action for damages may be brought Philippines.
either:
i. In the court of the domicile of the Art. 816, CC. The will of an alien who is abroad
carrier; produces effect in the Philippines if made with the
ii. In his principal place of business formalities prescribed by the law of the place in
through which the contract has been which he resides, or according to the formalities
made; OR observed in his country, or in conformity with those
iii. Before the court at the place of which this Code prescribes.
destination.
c. The procedural rules of the forum shall
Art. 817, CC. A will made in the Philippines by a
apply.
citizen or subject of another country, which is
d.
executed in accordance with the law of the country
g. Limitations to Choice of of which he is a citizen or subject, and which might
Law be proved and allowed by the law of his own
country, shall have the same effect as if executed
1. Parties may not select a law that has no according to the laws of the Philippines.
connection at all with the transaction or the
parties Filipino nationals
2. If the law selected should change, the law as 1. LEX LOCI CELEBRATIONIS – formalities
changed will govern. established by the law of the country where the
will is executed [Art. 17 and 815, CC]
Exception: If the change is so revolutionary that it 2. LEX NATIONALII – formalities prescribed under
was never contemplated by the parties Philippine law
3. Should not be interpreted to oust the jurisdiction Note: There is no express provision, only by analogy
court already acquired over the parties and the with rules applicable to aliens. The ratio is that it
subject matter cannot be assumed that the Code places the Filipino
4. Public policy deemed written into contracts citizen in a worse position that the alien in relation to
impressed with public interest our law
5. Cognovit Clauses / Confession of Judgment
Clauses – debtor may agree to be subject to the For Aliens
jurisdiction of a specific court in case of breach or 1. LEX NATIONALII [Art. 816 and 817, CC]
default in payment. 2. LEX DOMICILII
3. LEX LOCI CELEBRATIONIS
4. C hoice of Law in Wills, With Regard to Joint Wills
Succession and 1. By Filipinos: VOID under Philippine law on the
ground of public policy. [Art. 818, CC]
Administration of Estates 2. By Foreigners: VALID UNLESS it affects heirs in
the Philippines.
a. Extrinsic Validity Of Wills
b. Intrinsic Validity Of Wills
Includes age, testamentary capacity of the testator
and the form of the will. Governed by the national law of the decedent [Art. 16,
CC]
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Includes issues of substance such as order of 2. If none, the law that will sustain the validity
succession, amount of successional rights and of the trust.
intrinsic validity of testamentary provisions [Art. 16,
CC] Will creating a trust
Testamentary trusts depend for their extrinsic
c. Interpretation of Wills validity on the will which created them. The rules
governing wills as to capacity and extrinsic
Governed by the rules of interpretation of the national requirements apply (lex loci celebrationis).
law of the decedent [Art. 16, CC]
As to intrinsic validity, since a trust involves
property, the rule of lex situs determines the
d. Revocation validity of a trust created by a last will and
testament. [Coquia and Aguiling-Pangalangan]
When done in the Philippines
Philippine Law applies
5. C hoice of Law in Torts and
Done outside the Philippines, by a person Crimes
domiciled in the Philippines
1. LEX DOMICILII – Philippine Law
2. LEX LOCI ACTUS – Law of the place of a. Policies Underlying
revocation Substantive Tort Law
3. LEX LOCI CELEBRATIONIS – Law of the [Coquia And Aguiling-Pangalangan]
place where the will was made [Balane]
1. To deter undesirable or wrongful conduct;
Done outside the Philippines, by a non- and
domiciliary 2. To rectify the consequences of the tortious
1. LEX LOCI CELEBRATIONIS – Law of the act by distributing the losses that result from
place where the will was made accident and product liability.
2. LEX DOMICILII – Law of the place where
testator was domiciled at the time of
revocation
b. Lex Loci Delicti Commissi
for Torts
e. Probate
Law of the place where the alleged tort was
FORUM LAW governs because disallowance is committed.
essentially procedural in character 1. Under COMMON law jurisdiction, the place
where the tort was committed is the place
However, the court will look into the law of the foreign where the last event necessary to make an actor
state where the will was made as to whether the liable occurred (adheres to vested rights
extrinsic requirements in the execution of the will have theory)
been complied with. 2. CIVIL law states on the other hand view the
place where the alleged tort was committed
as the place where tortious conduct was
f. Administration of Estates committed
Nationality and domicile does not affect Traditional View on Jurisdiction – an actor liable by
administration LEX LOCI DELICTI COMMISSI is liable everywhere
Authority of the administrator or executor is limited to Modern Theories on Foreign Tort Liability
the authority of the court that appointed such. 1. The Most Significant Relationship
Considers the state’s contacts with the occurrence
TRUSTS and the parties.
Refers to a right of property held by one person for the
benefit of another. With the widespread criticism of the traditional
rule of lex loci delicti commissi, modern theories
Governing Law have been advanced to arrive at just results.
1. Choice of law provision; Considering that the complaint is one of torts, the
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Philippine law should apply since it the situs of the e. Lex Loci Delicti For Crimes
alleged tortious conduct, it has the most
significant relationship with the case, and it is the General rule: law of the place where the crime was
state intimately concerned with the ultimate committed based on the territoriality principle
outcome of the case. [Saudi Arabian Airlines v. CA,
G.R. No. 122191, (1998)] NULLUM CRIMEN SINE LEGE. An act is punishable if
it has been made punishable as a crime by law.
2. Interest Analysis
Considers the relevant concerns the state may Developments in public international law now
have in the case and its interest in having its law includes acts considered as a crime under
applied on that issue. international law.
3. Cavers’ Principle of Preference Exceptions to Lex Loci Delicti:
Considers justice and social expediency 1. Crimes committed by state officials, diplomatic
representatives and officials of recognized
c. Foreign Tort Claims international organizations
2. Crimes committed on board foreign vessels even
Tortious liability is transitory - the liability resulting if it is within the territorial waters of the coastal
from the conduct is “deemed personal to the state, except: (Art. 27 of UNCLOS)
perpetrator of the wrong, following him a. When the consequences of said crime
whithersoever he may go, so that compensations may extend to the coastal state;
be exacted from him in any proper tribunal which may b. When it will disturb the peace or good order
obtain jurisdiction of the defendant’s person, the right of the country;
to sue not being confined to the place where the cause c. When the assistance of local authorities has
of action arises.” been requested by the master of the ship or
diplomatic agent or consular officer of the
Philippine Rule on Foreign Torts flag state; or
There is no specific statutory law governing the d. When such measures are necessary for the
damages arising from foreign torts. It is suggested suppression of illicit traffic in narcotic drugs
that the English Rule may be followed such that the or psychotropic substances.
tort committed abroad is actionable in the country 3. Crimes committed by Philippine nationals
where it was committed and also under Philippine abroad under Article 2 of the Revised Penal
law. [Coquia and Aguiling-Pangalangan] Code:
a. On a Philippine ship or airship
d. Distinguishing between b. Forgery or counterfeit any coin or currency
note of the Philippine Islands or obligations
Torts and Crimes and securities issued by the Government of
the Philippine Islands
TORTS CRIMES c. Introduction of those mentioned above into
Transitory Local the Philippines
Personal to the Injury to the state where d. Public officers or employees committing an
tortfeasor committed offense in the exercise of their functions
Affront against e. Crimes against national security and the law
Injury to an individual
sovereignty and good of nations, defined in Title One of Book Two
who may be situated
order of the State where of the RPC.
in any place
it occurs
Amenable to suit in
whatever jurisdiction
Can be sued only where 6. C hoice of Law Affecting
crime was committed
he is found Corporations and Other
Penal laws are
Torts law assigns the
promulgated to punish Juridical Entities
liability to perpetrators
and reform the
in order to indemnify
the victim for injuries
perpetrators and deter a. Corporations
them and others from
sustained
violating the law
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III. PERSONS AND Art. 41, CC. For civil purposes, the fetus is
FAMILY RELATIONS considered born if it is alive at the time it is
completely delivered from the mother’s womb.
However, if the fetus had an intra-uterine life of less
Persons and Personality than seven months, it is not deemed born if it dies
within twenty-four hours after its complete delivery
from the maternal womb.
1. Concept of Person and
Birth: complete removal of the fetus from the mother’s
Personality womb.
Persons: Any being, physical, moral, real, juridical and Before birth, a fetus is merely part of the mother’s
legal susceptible of rights and obligations or being the internal organs. It is enough that the child lives even
subject of legal relations. for an instant. [Tolentino]
Juridical Capacity Capacity to Act Proof that the fetus was alive upon separation is
Fitness of a person to complete respiration as a test or sign of independent
Power to do acts with
be the subject of legal life.
legal effect
relations
Passive Active It is presumed that the child was alive and it is the
Aptitude for the holding Aptitude for the opposing party who has the burden of proof.
and enjoyment of rights exercise of rights
Inherent in natural Intra-Uterine Life When Considered Born
Must be acquired
persons If alive (e.g. can breathe
Lost through death and 7 months or more independently, etc.)
Lost upon death
other causes upon delivery
Cam exist without Must exist with juridical If alive after completion
capacity to act capacity Less than 7 months of 24 hours from
Cannot be limited or May be restricted or delivery
restricted limited
Personality of Conceived Child
Art. 37, CC. Juridical capacity, which is the fitness a. Limited: only for purposes favorable to it.
to be the subject of legal relations, is inherent in b. Conditional: it depends upon the child being born
every natural person and is lost only through death. alive later
Capacity to act, which is the power to do acts with
legal effect, is acquired and may be lost. A conceived child can acquire rights while still in the
mother’s womb. It can inherit by will or by intestacy.
N.B. Juridical capacity can exist even without capacity
to act; the existence of the latter implies that of the Period of Conception: the first 120 days of the 300
former. Full civil capacity is the existence of both days preceding the birth of the child. [Tolentino]
capacity to act and juridical capacity.
An aborted fetus never acquired legal rights/civil
Capacity and incapacity depends on the law, therefore personality because it was not alive at the time of
it cannot be modified by agreements. It is a matter of delivery from the mother’s womb. No damages can be
public interest. [Tolentino] claimed in behalf of the unborn child since an action
for pecuniary damages on account of personal injury
or death pertains primarily to the one injured. [Geluz v.
2. C ommencement and CA, G.R. No. L-16439 (1961)]
Termination of Personality “This is not to say that the parents [of an aborted fetus]
are not entitled to collect any damages at all. But such
Art. 40, CC. Birth determines personality; but the
damages must be those inflicted directly upon them
conceived child shall be considered born for all
as distinguished from the injury or violation of the
purposes favorable to it, provided that it be born
rights of the [aborted fetus]” e.g. moral damages for
later with the conditions specified in the following
their loss and the disappointment of their parental
article.
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expectations (Art. 2217, CC). [Geluz v. CA, G.R. No. L- Both over 15 and under
Male
16439 (1961)] 60; different sexes
Both over 15 and under
Older
3. Death 60; same sex
One under 15 or over
60, the other between One between 15 and 60
Art. 42, CC. Civil personality is extinguished by those ages
death. The effect of death upon the rights and
obligations of the deceased is determined by law,
by contract and by will. 4. J uridical Persons
Art. 43, CC. If there is a doubt, as between two or The following are juridical persons [Art. 44, CC.]:
more persons who are called to succeed each other, a. The State and its political subdivisions;
as to which of them died first, whoever alleges the b. Other corporations, institutions and entities for
death of one prior to the other, shall prove the public interest or purpose, created by law; their
same; in the absence of proof, it is presumed that personality begins as soon as they have been
they died at the same time and there shall be no constituted according to law:
transmission of rights from one to the other. 1. Juridical persons mentioned in Nos. 1 and 2
of the preceding article are governed by the
Criminal liability ends with death but civil liability may laws creating or recognizing them. [par. 1,
be charged against the estate [People v. Tirol, G.R. No. Art. 45, CC]
L-30538 (1981)]. 2. Upon the dissolution of corporations,
institutions and other entities for public
Note: Article 43 [CC] provides a statutory presumption interest or purpose mentioned in No. 2 of
when there is doubt on the order of death between article 44, their property and other assets
persons who are called to succeed each other (only). shall be disposed of in pursuance of law or the
charter creating them. If nothing has been
The statutory presumption of Article 43 was not specified on this point, the property and other
applied due to the presence of a credible eyewitness assets shall be applied to similar purposes for
as to who died first [Joaquin v. Navarro, G.R. No. 5426 the benefit of the region, province, city or
(1953)]. municipality which during the existence of the
institution derived the principal benefits from
Even mere inference, when drawn from established the same. [Art. 47, CC.]
facts and weighed by common experience, may prevail c. Corporations, partnerships and associations for
over the presumption of Art. 43 [Joaquin v. Navarro, private interest or purpose to which the law grants
G.R. No. 5426 (1953)]. a juridical personality, separate and distinct from
that of each shareholder, partner or member.
Art. 43, CC v. Sec. 3(jj), Rule 131, Rules of Court 1. Private corporations are regulated by laws of
(hereinafter, ROC) general application on the subject.
Art. 43 Sec. 3(jj), Rule 131 2. Partnerships and associations for private
interest or purpose are governed by the
Only use the presumptions when there are no facts
provisions of this Code concerning
to get inferences from
partnerships [pars. 2 and 3, Art. 45, CC].
Only used for Cannot be used for
succession purposes succession purposes
Only during death in Art. 46, CC. Juridical persons may acquire and
In any circumstance calamities, wreck, possess property of all kinds, as well as incur
battle or conflagration obligations and bring civil or criminal actions, in
conformity with the laws and regulations of their
Sec. 3(jj), Rule 131, ROC: Presumption of organization.
Survivorship
Age Presumed Survivor Concept of Juridical Persons is that an abstract being
Both under 15 Older is formed for the realization of a collective purpose
that the law granted with capacity for rights and
Both above 60 Younger
obligations. It requires recognition of the State and is
One under 15, the other
One under 15 independent of the members. [Tolentino]
above 60
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Capacity to act is not limited on account of religious Effect on Crimes [R.A. 9344]
belief or political opinion. General Rule: EXEMPTED from criminal liability
Exception: Acted with discernment, and the minor is
General Rule: Incapacitated persons are not exempt between 15 and 18 years of age.
from certain obligations arising from his acts or
property relations. INSANITY
RA 6809 (1989): An act lowering the age of majority Prevailing Presumption: Every person is of sound
from twenty-one to eighteen years. mind, in the absence of proof to the contrary. [par. 1,
Art. 800, CC]
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without prejudice to the effect of reappearance of 5. Justices, judges, prosecuting attorneys, clerks of
the absent spouse. superior and inferior courts, and other officers and
employees connected with the administration of
Art. 42, CC. The subsequent marriage referred to in justice, the property and rights in litigation or
the preceding Article shall be automatically levied upon an execution before the court within
terminated by the recording of the affidavit of whose jurisdiction or territory they exercise their
reappearance of the absent spouse, unless there is respective functions; this prohibition includes the
a judgment annulling the previous marriage or act of acquiring by assignment and shall apply to
declaring it void ab initio. lawyers, with respect to the property and rights
which may be the object of any litigation in which
A sworn statement of the fact and circumstances of they may take part by virtue of their profession.
reappearance shall be recorded in the civil registry 6. Any others specially disqualified by law
of the residence of the parties to the subsequent
marriage at the instance of any interested person, PHYSICAL INCAPACITY/DISEASE
with due notice to the spouses of the subsequent
marriage and without prejudice to the fact of Art. 46, FC. Any of the following circumstances
reappearance being judicially determined in case shall constitute fraud referred to in Number 3 of the
such fact is disputed. preceding Article:
xxx
INSOLVENCY AND TRUSTEESHIP
(3) Concealment of sexually transmissible disease,
Rescissible Contracts [Art. 1381, CC] regardless of its nature, existing at the time of
1. Those which are entered into by guardians marriage.
whenever the wards whom they represent suffer
lesion by more than one-fourth of the value of the Art. 820, CC. Any person of sound mind and of the
things which are the object thereof; age of eighteen years or more, and not blind, deaf
2. Those agreed upon in representation of or dumb, and able to read and write, may be a
absentees, if the latter suffer the lesion stated in witness to the execution of a will mentioned in
the preceding number; Article 805 of this Code.
3. Those undertaken in fraud of creditors when the
latter cannot in any other manner collect the
claims due them;
6. D omicile and Residence of
4. Those which refer to things under litigation if they Persons
have been entered into by the defendant without
the knowledge and approval of the litigants or of For Natural Persons:
competent judicial authority; The place of their habitual residence [Art. 50, CC]
5. All other contracts specially declared by law to be
subject to rescission. For Juridical Persons:
The place where their legal representation is
The following persons cannot acquire by purchase, established, or where they exercise their primary
even at a public or judicial auction, either in person functions, unless there is a law or other provision that
or through the mediation of another [Art. 1491, CC.]: fixes the domicile [Art. 51, CC]
1. The guardian, the property of the person or
persons who may be under his guardianship; Domicile v. Residence
2. Agents, the property whose administration or sale While domicile is permanent (there is intent to
may have been entrusted to them, unless the remain), residence is temporary and may be changed
consent of the principal has been given; anytime (there is no necessary intent to remain).
3. Executors and administrators, the property of the
estate under administration; Requisites of Domicile:
4. Public officers and employees, the property of the a. Residence or bodily appearance in a new locality
State or of any subdivision thereof, or of any b. Intention to permanently remain there (animus
government-owned or controlled corporation, or manendi); and
institution, the administration of which has been c. An intention to abandon the old domicile (animus
intrusted to them; this provision shall apply to non revertendi)
judges and government experts who, in any
manner whatsoever, take part in the sale;
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Mere breach of promise to marry is not an actionable Effect of Absence of Essential Requisites
wrong. But to formally set a wedding and go through Absence Defect or Irregularity
all the above-described preparation and publicity, Void Voidable
only to walk out of it when the matrimony is about to
be solemnized, is quite different. This is palpably and Note: An irregularity in a formal requisite will not
unjustifiably contrary to good customs for which affect the validity of the marriage and instead makes
defendant must be held answerable in damages in
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Changing of sex in one’s birth certificate on the basis The consent must refer to the contracting parties’
of sex reassignment shall be denied; otherwise, it bona fide intention to be married to the other. i.e. to
would result in confusion and would allow marriage make the woman his wife. [People v. Santiago, G.R. No.
between persons of the same sex which is in defiance 27972 (1927)]
of the law, as marriage is a union between a man and
a woman. [Silverio v. Republic, G.R. No. 174689 (2007)] In People v. Santiago, it was held that the marriage
entered into by a person whose real intent is to avoid
But when the change in sex happens naturally, as prosecution for rape is void for total lack of consent.
when the person has Congenital Adrenal Hyperplasia Here, it was the intent of the accused, not the victim of
(CAH) or is “biologically or naturally intersex,” the rape, whom he married under duress, that was
determining factor in their gender classification would considered. The accused did not intend to make the
be what they, having reached the age of majority, with victim his wife. He merely used such marriage to
good reason thinks is their sex. Change in name and escape criminal liability. [G.R. No. 27972 (1927)]
sex as registered is here allowed. [Republic v.
Cagandahan, G.R. No. 166676 (2008)] Defect
Art. 45, FC states that a marriage may be annulled for
2. AGE any of the following causes existing at the time of the
marriage: xxx (3) that the consent of either party was
Legal Capacity obtained by fraud, unless such party afterwards, with
full knowledge of the facts constituting the fraud,
Art. 5, FC. Any male or female of the age of
freely cohabited with the other as husband and wife.
eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38, may
Fraud here refers to matters which relate to the
contract marriage.
marital relation:
a. Non-disclosure of previous conviction by final
Male or female 18 years old and above, not under any judgment of a crime involving moral turpitude;
of the impediments mentioned in Arts. 37 (incestuous b. Concealment of pregnancy by another man;
marriages) and 38, FC (marriages against public c. Concealment of a sexually transmitted disease;
policy) may contract marriage. d. Concealment of drug addiction, alcoholism,
lesbianism, or homosexuality [Art. 46, FC]
Limited Emancipation:
a. Parental Consent: Needed for parties between
18 to 20 years old. c. Formal Requisites
If no parental consent is obtained, it makes the 1. MARRIAGE CEREMONY
marriage voidable [Art. 45, FC].
No prescribed form or religious rite for the
The party who may file for annulment is the party solemnization of marriage is required. [Art. 6, FC]
who contracted marriage without parental
consent or the parent/guardian of the party aged The couple's written agreement where they declare
18-20 [Art. 47, FC]. themselves as husband and wife, signed by them
before a judge and two capable witnesses, even
b. Parental Advice: Needed for parties between 21 though it was independently made by them, still
to 25 years old. counts as a valid ceremony. [Martinez v. Tan, G.R. No.
L-4904 (1909)]
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N.B. In a marriage in articulo mortis, when one or both General rule: Those solemnized by any person not
parties are unable to sign the marriage certificate, it legally authorized to perform marriages are void.
shall be sufficient for one of the witnesses to write the
name of said party, which shall be attested by the Exception: Unless such marriages were contracted
solemnizing officer. [par. 2, Art. 6. FC] with either or both parties believing in good faith that
the solemnizing officer had the legal authority to do
Places where marriage shall be publicly solemnized: so. [Art. 35(2), FC]
Chambers of the judge or in open court
a. Church, chapel, or temple A marriage can be held outside the judge’s chambers
b. Office of the consul-general, consul, or vice- or courtroom only in the following instances:
consul [Art. 8, FC] a. at the point of death
b. remote places in accordance with Art. 29, FC
Exceptions: c. upon request of both parties in writing in a sworn
a. Marriages performed in articulo mortis or in statement to this effect. [Navarro v. Domagtoy,
remote places. [Art. 29, FC] A.M. No. MTJ-96-1088 (1996)]
b. Where both parties request in writing that
marriage be solemnized at a place designated by But where a judge solemnizes a marriage outside his
them. jurisdiction, there is a resultant irregularity in the
formal requisite laid down in Article 3, which while it
N.B. Non-compliance with this requirement does not may not affect the validity of the marriage, may
invalidate the marriage (premise: more witnesses = subject the officiating official to administrative
more people can notify officer of impediments to liability. [Navarro v. Domagtoy, A.M. MTJ-96-1088
marriage). (1996); Aranes v. Occiano, MTJ-02-1390 (2002)]
2. AUTHORITY OF THE SOLEMNIZING OFFICER A marriage which preceded the issuance of the
marriage license is void and the subsequent issuance
Who May Solemnize Marriage: of such license cannot render valid the marriage.
Normal Circumstances Except in cases provided by law, it is the marriage
Incumbent member of the Judiciary, within his license that gives the solemnizing officer the authority
jurisdiction. [Art. 7, FC] to solemnize a marriage. [Aranes v. Occiano, MTJ-02-
Priest, Rabbi, Imam or Minister of any Church or 1390 (2002)].
Religious Sect who must be:
a. Duly authorized by his church or religious 3. MARRIAGE LICENSE
sect;
b. Registered with the civil registrar general; General Rule: License required, which is issued by local
c. Acting within the limits of the written registrar of city or municipality where either
authority granted to him by his church or contracting party habitually resides [Art. 9, FC]. Each
religious sect; contracting party should file separately. [Art. 11, FC]
d. At least one of the contracting parties
belongs to the solemnizing officer’s church or Sec. 15, R.A. No. 10354. Certificate of Compliance.
religious sect. [Art. 7, FC] – No marriage license shall be issued by the Local
Municipal and City Mayors [Secs. 444-445, Local Civil Registrar unless the applicants present a
Government Code] Certificate of Compliance issued for free by the
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local Family Planning Office certifying that they e. Marriages by Muslims and Ethnic cultural
had duly received adequate instructions and minorities provided they are solemnized in
information on responsible parenthood, family accordance with their customs, rites or practices.
planning, breastfeeding, and infant nutrition. [Art. 33, FC]
f. Marriage by parties who have cohabited for at
Where Valid: License valid in any part of the least 5 years without any legal impediment to
Philippines marry each other. [Art. 34, FC; Ninal v. Badayog,
G.R. No. 133778 (2000)]
Period of Validity: It will be valid for 120 days from
date of issue, automatically cancelled at the expiration Note: A false affidavit of having lived together for
of such period. 5 years as husband and wife cannot be considered
as a mere irregularity in the formal requisites of
Marriages celebrated without a marriage license marriage but a complete absence, rendering their
before the effectivity of the Family Code are void ab marriage void ab initio. [De Castro v. Assidao-De
initio as marriage license was an essential requisite in Castro, G.R. No. 160172 (2008)]
the CC. [Kho v. Republic, G.R. No. 147862 (2016)]
Requisites for the 5-year cohabitation to be valid for
License obtained by false affidavit [of having lived the exemption from acquiring a marriage license
together as husband and wife for 5 years] will not be a. The man and woman must have been living
considered a defect but total absence of license, together as husband and wife for at least five
rendering their marriage void ab initio. [De Castro v. years before the marriage;
Assidao-De Castro, G.R. No. 160172 (2008)] b. The parties must have no legal impediment to
marry each other;
Special Situations c. The fact of absence of legal impediment between
Anyone between 18-21 years old who has not yet been the parties must be present at the time of
emancipated by reason of marriage must present the marriage;
written consent that was given by his or her parent or d. The parties must execute an affidavit stating that
guardian. [Art. 14, FC] they have lived together for at least five years [and
are without legal impediment to marry each
Anyone between 21-25, on the other hand, must ask other]; and
for advice from his or her parents or guardians. If the e. The solemnizing officer must execute a sworn
advice wasn’t obtained, the marriage license will only statement that he had ascertained the
be released 3 months after the publication of the qualifications of the parties and that he had found
application. [Art. 15, FC] no legal impediment to their marriage [Borja-
Manzano vs. Judge Sanchez, A.M. MTJ-00-1329
Foreign National (2001)].
a. When either or both parties are foreign nationals:
certificate of legal capacity to contract marriage 4. MARRIAGE CERTIFICATE
issued by a diplomatic or consular official, shall be Where parties declare that they take each other as
submitted before a marriage license can be husband and wife; contains the following:
obtained [Art. 21, FC] a. Full name, sex, age of party;
b. Stateless persons or refugees from other b. Citizenship, religion, habitual residence;
countries: Affidavit stating circumstances c. Date and precise time of celebration of marriage;
showing capacity to contract marriage, instead d. That marriage license was properly issued (except
of certificate of legal capacity [Art. 21, FC] in marriages of exceptional character);
e. That parental consent was secured, when
Exceptions to the Marriage License Requirement required;
a. Marriage in articulo mortis [Art. 27, FC] f. That requirement as to parental advice was
The marriage may be solemnized without the complied with, when required;
necessity of a marriage license. It remains valid g. That parties have entered into marriage
even if ailing party survives. settlements, if any [Art. 22, FC]
b. Between passengers or crew members in a ship or
airplane [Art. 31, FC] N.B. Not an essential or formal requisite without which
c. Persons within a military zone [Art. 32, FC] the marriage will be void [Madridejo v. de Leon, G.R.
d. Marriage in remote and inaccessible places [Art. No. L-32473 (1930)]. It is the best evidence that a
28, FC] marriage does exist. [Tenebro v. CA, G.R. No. 150758
(2004)]
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Essential Requisites Formal Requisites A divorce obtained abroad by a couple, who are both
aliens, may be recognized in the Philippines, provided
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it is consistent with their respective national laws. Neither party can encumber or dispose by acts inter
[Garcia v. Recio, G.R. No. 138322 (2001)] vivos of his or her share in the property acquired
during cohabitation and owned in common,
Note: Divorces obtained abroad by Filipino citizens without the consent of the other, until after the
may now be validly recognized in the Philippines but termination of their cohabitation.
only in cases of mixed marriages involving a Filipino
and a foreigner. [Republic of the Philippines v. Manalo, When only one of the parties to a void marriage is
G.R. No. 221029 (2018)] in good faith, the share of the party in bad faith in
the co-ownership shall be forfeited in favor of their
In mixed marriages involving a Filipino and a common children. In case of default of or waiver by
foreigner, Article 26 of the Family Code allows the any or all of the common children or their
former to contract a subsequent marriage in case the descendants, each vacant share shall belong to the
divorce is (1) “validly obtained abroad by the alien respective surviving descendants. In the absence of
spouse and (2) is of the type that legally dissolves the descendants, such share shall belong to the
marriage and capacitating him or her to remarry.” innocent party. In all cases, the forfeiture shall take
[Garcia v. Recio, G.R. No. 138322 (2001)] place upon termination of the cohabitation.
Note: Following the ruling of Republic of the Art. 148, FC. In cases of cohabitation not falling
Philippines v. Manalo, the divorce may now be one that under the preceding Article, only the properties
was validly obtained by the Filipino spouse against the acquired by both of the parties through their actual
foreigner spouse [G.R. No. 221029 (2018)]. joint contribution of money, property, or industry
shall be owned by them in common in proportion to
Courts will only determine (1) whether the foreign their respective contributions. In the absence of
judgment is inconsistent with an overriding public proof to the contrary, their contributions and
policy in the Philippines; and (2) whether any alleging corresponding shares are presumed to be equal.
party is able to prove an extrinsic ground to repel the The same rule and presumption shall apply to joint
foreign judgment, i.e. want of jurisdiction, want of deposits of money and evidences of credit.
notice to the party, collusion, fraud, or clear mistake of
law or fact. If there is neither inconsistency with public If one of the parties is validly married to another, his
policy nor adequate proof to repel the judgment, or her share in the co-ownership shall accrue to the
Philippine courts should, by default, recognize the absolute community or conjugal partnership
foreign judgment as part of the comity of nations. existing in such valid marriage. If the party who
[Fujiki vs Marinay, G.R. No. 1196049 (2013)] acted in bad faith is not validly married to another,
his or her shall be forfeited in the manner provided
5. C ommon-Law Marriages in the last paragraph of the preceding Article.
Art. 147, FC. When a man and a woman who are The foregoing rules on forfeiture shall likewise
capacitated to marry each other, live exclusively apply even if both parties are in both bad faith.
with each other as husband and wife without the
benefit of marriage or under a void marriage, their Though there is no technical marital partnership
wages and salaries shall be owned by them in equal between person living as husband and wife, without
shares and the property acquired by both of them being lawfully married, nevertheless there is between
through their work or industry shall be governed by them an informal civil partnership which would entitle
the rules on co-ownership. the parties to an equal interest in property acquired by
their joint efforts [Lesaca v. Lesaca, G.R. No. L-3605
In the absence of proof to the contrary, properties (1952)]
acquired while they lived together shall be
presumed to have been obtained by their joint 6. V oid and Voidable
efforts, work or industry, and shall be owned by
them in equal shares. For purposes of this Article, a Marriages
party who did not participate in the acquisition by
the other party of any property shall be deemed to Presumption of Marriage
have contributed jointly in the acquisition thereof if Art. 220, CC. In case of doubt, all presumptions
the former's efforts consisted in the care and favor the solidarity of the family. Thus, every
maintenance of the family and of the household. intendment of law or facts leans toward the validity
of the marriage, the indissolubility of the marriage
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bonds, the legitimacy of children, the community of such action or defense shall prescribe in ten years
property during marriage, the authority of parents after this Code shall taken effect.
over their children, and the validity of defense of
any member of the family in case of unlawful 1. ABSENCE OF REQUISITES
aggression.
Art. 4(1), FC. The absence of any essential or formal
a. Semper Praesumitur Pro Matrimonio: requisites shall render the marriage void ab initio,
Presumption in favor of a valid marriage [Art. 220, except as stated in Article 35.
CC]
b. The presumption that a man and a woman Art. 5, FC. Any male or female of the age of
deporting themselves as husband and wife have eighteen years or upwards not under any of the
entered into a lawful contract of marriage is impediments mentioned in Articles 37 and 38, may
satisfactory if uncontradicted. [Sec. 3 (aa), Rule contract marriage.
131, ROC]
c. In marriages of exceptional character, the
Void from the Beginning [Art. 35, FC]
existence of the marriage is presumed, even in the
a. Marriage where any party is below eighteen years
total absence of a marriage license. [Vda. De
of age even with the consent of parents or
Jacob v. CA, G.R. No. 135216 (1999)]
guardians
d. If a marriage certificate is missing, and all means
b. Marriage solemnized by any person not legally
have not yet been exhausted to find it, then the
authorized to perform marriages unless such
marriage is presumed to exist [Sevilla v. Cardenas,
marriages were contracted with either or both
G.R. No. 167864 (2006)]
parties believing in good faith that the
solemnizing officer had legal authority to do so.
Absence of a marriage certificate is not proof of
Note: One’s belief in good faith that the
absence of marriage. To prove the fact of marriage,
solemnizing officer has the required authority is a
the following would constitute competent evidence: 1.
mistake of fact, and not of law.
the testimony of witnesses to matrimony; 2.
c. Marriage solemnized without a valid marriage
documentary photos or videos of the wedding; 3. the
license, except in marriages under exceptional
couple’s public cohabitation; and 4. birth and
circumstances
baptismal certificates of children born during the
d. Bigamous or polygamous marriages not falling
union. [Trinidad v. CA, G.R. No. 118904 (1998)]
under Article 41 (Art. 41: subsequent marriage by
present spouse who obtained a declaration of
a. Void Marriages presumptive death for absent spouse prior to the
subsequent marriage)
e. There is a mistake as to the identity of the other
TYPES OF VOID MARRIAGES
contracting party
1. Absence of any formal/essential requisites [Art.
f. Subsequent marriages that are void under Article
35, FC]
53 (Non-compliance with Art. 52)
2. Bigamous and polygamous marriages
3. Subsequent marriage, upon reappearance of
To be considered void on the ground of absence of a
spouse [Art. 42, FC]
marriage license, the law requires that the absence of
4. Bad faith of both spouses
such marriage license must be apparent on the
5. Psychologically Incapacitated spouse [Art. 36, FC]
marriage contract, or at the very least, supported by a
6. Void subsequent marriages
certification from the local civil registrar that no such
7. Incestuous Marriages [Art. 37, FC]
marriage license was issued to the parties. [Alcantara
8. Void by reasons of public policy [Art. 38, FC]
v. Alcantara, G.R. No. 167746 (2007)]
9. Non-compliance with recording requirement after
declaration of nullity [Art. 53, FC]
2. BIGAMOUS AND POLYGAMOUS MARRIAGES
PERIOD TO FILE FOR ACTION OR DEFENSE FOR
No Judicial Declaration Of Nullity
ABSOLUTE NULLITY
A person entered into a subsequent marriage
WITHOUT first getting a judicial declaration of nullity
Art. 39, FC. The action or defense for the of the first void marriage. [Art. 40, FC]
declaration of absolute nullity shall not prescribe.
However, in case of marriage celebrated before the Presumptive Death
effectivity of this Code and falling under Article 36,
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2 years under
Absent for at
extraordinary N.B. Although 7 years is required for the presumption
least 4 years
circumstances of death of an absentee in the CC, the FC makes an
In order to Declaration of exception for the purpose of remarriage by limiting
remarry, presumptive such requirement to 4 years.
As to
summary death is not
remarriage 4. BAD FAITH OF BOTH SPOUSES
proceeding is necessary
necessary Art. 44, FC. If both spouses of the subsequent
Can be marriage acted in bad faith, said marriage shall be
instituted by void ab initio and all donations by reason of
the spouse marriage and testamentary dispositions made by
As to who can
present, any The spouses one in favor of the other are revoked by operation of
institute the
interested themselves law.
action
party, and the
subsequent 5. PSYCHOLOGICAL INCAPACITY
spouse Art. 36, FC. A marriage contracted by any party
Subsequent who, at the time of the celebration, was
marriage is Upon psychologically incapacitated to comply with the
automatically reappearance, essential marital obligations of marriage, shall
terminated by judicial likewise be void even if such incapacity becomes
As to effect on
the recording proceeding is manifest only after its solemnization.
subsequent
of an affidavit necessary to
marriage
of declare The application of Art. 36 is confined to the most
reappearance marriage null serious cases of personality disorders clearly
of the absent and void demonstrative of an utter insensitivity or inability to
spouse give meaning and significance to the marriage.
Well-founded
Generally
belief that the The psychological illness that must have afflicted a
As to ground believed to be
absent spouse party at the inception of the marriage should be a
dead
is dead malady so grave and permanent as to deprive one of
awareness of the duties and responsibilities of the
Related Provisions matrimonial bond he or she is about to assume.
Art. 390, CC. After an absence of 7 years, it being [Marcos v. Marcos, G.R. No. 136490 (2000)]
unknown whether or not the absentee still lives, he
shall be presumed dead for all purposes, except for There are 3 characteristics for determining
those of succession. psychological incapacity:
a. Gravity;
The absentee shall not be presumed dead for the b. Antecedent; and
purpose of opening his succession till after an c. Incurability [Santos v. Bedia-Santos, G.R. No.
absence of 10 years. If he disappeared after the age 112019 (1995)]
of 75 years, an absence of 5 years shall be sufficient
in order that his succession may be opened. Molina Doctrine in Psychological Incapacity
a. The burden of proof to show the nullity of the
The following shall be presumed dead for all marriage belongs to the plaintiff. This is to be
purposes, including the division of the estate among investigated by the OSG for collusion.
the heirs: b. The root cause of the psychological incapacity
a. A person on board a vessel lost during a sea must be:
voyage, or an aeroplane which is missing, who has 1. Medically or clinically identified;
not been heard of for four years since the loss of 2. Alleged in the complaint;
the vessel or aeroplane; 3. Sufficiently proven by the experts; and
b. A person in the armed forces who has taken part 4. Clearly explained in the decision.
in war, and has been missing for four years; c. The incapacity must be proven to be existing at
“the time of the celebration” of the marriage.
A person who has been in danger of death under d. Such incapacity must also be shown to be
other circumstances and his existence has not medically or clinically permanent or incurable.
been known for four years. [Art. 391, CC.]
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e. Such illness must be grave enough to bring about In the task of ascertaining the presence of
the disability of the party to assume the essential psychological incapacity as a ground for the nullity of
obligations of marriage. marriage, the courts, which are concededly not
f. The essential marital obligations must be those endowed with expertise in the field of psychology,
embraced by Articles 68 up to 71 of the Family must of necessity rely on the opinions of experts in
Code as regards the husband and wife as well as order to inform themselves on the matter, and thus
Articles 220, 221, and 225 of the same Code in enable themselves to arrive at an intelligent and
regard to parents and their children. judicious judgment. [Kalaw v. Fernandez, G.R. No.
g. Interpretations given by the National Appellate 166357 (2015)]
Matrimonial Tribunal of the Catholic Church in the
Philippines, while not controlling/decisive, should The stringent requirements set forth by Molina should
be given great respect by our courts. be relaxed and applied case-to-case. To require the
h. The trial court must order the prosecuting allegation of the root cause of psychological
attorney or fiscal and the Solicitor General to incapacity by an accredited psychologist may prove
appear as counsel for the state. No decision shall too expensive for the parties. But where the parties
be handed down unless the Solicitor General had full opportunity to present expert opinions, such
issues a certification. [Republic v. Molina, G.R. will be weighed by the Court in its decision. [Ting v.
108763 (1997)] Velez-Ting, G.R. No. 166562, (2009)]
Art. 36, FC must not be confused with a divorce law 6. INCESTUOUS MARRIAGES
that cuts the marital bond at the time the grounds for
Marriages between the following are considered
divorce manifest themselves; rather, it must be limited
incestuous, and are therefore void ab initio
to cases where there is a downright incapacity or
a. Between ascendants and descendants of any
inability to assume and fulfill the basic marital
degree, legitimate or illegitimate
obligations, not a mere refusal, neglect or difficulty,
b. Between brothers and sisters, whether full or
much less, ill will, on the part of the errant spouse.
half blood, legitimate or illegitimate [Art. 37, FC]
[Republic v. Romero, G.R. No. 209180 (2016)]
7. AGAINST PUBLIC POLICY
The senseless and protracted refusal of one of the
parties to fulfill the marital obligation "To procreate Marriages between the following are considered
children based on the universal principle that against public policy, and are therefore void ab initio:
procreation of children through sexual cooperation is a. Between collateral blood relatives, legitimate or
the basic end of marriage." is equivalent to illegitimate, up to the fourth civil degree;
psychological incapacity. “A man who can but won’t is b. Between step-parents and step-children;
psychologically incapacitated” [Tsoi v. CA, G.R. 119190 N.B. Stepbrothers and stepsisters can marry
(1997)] because marriages between them are not among
those enumerated in Article 38.
Psychological incapacity maybe established by the c. Between parents-in-law and children-in-law;
totality of the evidence presented. Personal medical d. Between adopting parent and adopted child;
examination could be dispensed with. [Marcos v. e. Between the surviving spouse of the adopting
Marcos, G.R. No. 136490 (2000)] parent and the adopted child;
f. Between the surviving spouse of the adopted child
There is no requirement that the respondent be and the adopter;
medically examined first. [Republic v. San Jose, G.R. g. Between an adopted child and a legitimate child
No. 168328 (2007)] of the adopter;
h. Between adopted children of the same adopter;
“Pathological liar” considered as psychological an:
incapacity, Molina guidelines met. [Antonio v. Reyes, i. Between parties where one, with the intention to
G.R. No. 155800 (2006)] marry the other, killed that other person's spouse,
or his or her own spouse [Art. 38, FC]
Note: This case also gave weight to the fact that the
Church annulled the marriage. Note: The following relationships are outside of
Articles 37 and 38, and are therefore not impediments
Marriages where both parties are afflicted with grave, to marriage:
severe and incurable psychological incapacity shall a. Brother-in-law with sister-in-law;
likewise be void [Te v. Te, G.R. No 161793 (2009)]. b. Stepbrother with stepsister;
c. Guardian with ward;
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U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW
d. Adopted with illegitimate child of the adopter; custody and support decided by court in a proper
e. Adopted son of the husband with adopted proceeding.
daughter of the wife. b. Property Regime: dissolved and liquidated (party
in bad faith shall forfeit his/her share in favor of
8. NON-COMPLIANCE WITH RECORDING the common children or if there are none, children
REQUIREMENT AFTER DECLARATION OF of the guilty spouse by a previous marriage, and in
NULLITY case there are none, to the innocent spouse).
c. Donation propter nuptias: remains valid, (but if
Subsequent marriage of spouses, where the the donee contracted marriage in bad faith,
requirements of recording under Art. 52 have not have donations are revoked by operation of law)
been complied with, shall be null and void. [Art. 53, d. Insurance benefits: innocent spouse may revoke
FC] designation of guilty party as beneficiary, even if
such designation is stipulated as irrevocable.
The judgment of annulment or of absolute nullity of e. Succession Rights: party in bad faith shall be
the marriage, the partition and distribution of the disqualified to inherit from the innocent spouse,
properties of the spouses and the delivery of the whether testate or intestate.
children's presumptive legitimes shall be recorded in
the appropriate civil registry and registries of property; Both spouses guilty of bad faith
otherwise, the same shall not affect third persons. If both spouses of the subsequent marriage acted in
[Art. 52, FC.] bad faith, all donations by reason of marriage and
testamentary dispositions made by one party in favor
Previous marriage declared Void ab Initio or of the other are revoked by operation of law. [Art. 44,
Annulled FC]
The word “solely” in Art. 40 referred to validating
subsequent marriages but NOT to limiting the Who may file the petition for nullity of void
purposes for which a judicial declaration of nullity can marriages?
be invoked. [Domingo v. CA, G.R. No. 104818 (1993)] General Rule: Only the husband or wife may file the
petition. [AM No. 02-11-10 SC, Sec. 2]
N.B. Separation of property is also a valid purpose for
filing for a judicial declaration of nullity. Specifically, A.M. No. 02-11-10-SC extends only to
marriages covered by the Family Code, which took
Under the CC, no judicial declaration for nullity of effect on August 3, 1988, but, being a procedural rule
previous marriage was required to contract a that is prospective in application, is confined only to
subsequent marriage. [People v. Mendoza, G.R. No. L- proceedings commenced after March 15, 2003.
5877 (1954)] [Ablaza v. Republic, G.R. No 158298 (2010)]
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Requisites for Valid Remarriage a. The court shall provide for the support of the
a. The previous marriage should be judicially spouses,
declared void or annulled (final judgment) [Terre b. The custody and support of the common children,
v. Terre, A.M. No. 2349 (1992), Atienza v. Brillantes, giving paramount consideration to their moral
A.M. No. MTJ-92-706 (1995)]; Wiegel v. Sempio- and material welfare, their choice of parent with
Dy, G.R. No. L-53703 (1986)]. whom they wish to remain.
b. Must comply with the requirements of Art. 52, FC: c. The court shall also provide for visitation rights of
Art. 52, FC. The judgment of annulment or of other parent. [Art. 49, FC]
absolute nullity of the marriage the partition and
distribution of the properties of the spouses and the Effect of Res Judicata
delivery of the children's presumptive legitimes Suffice it to state that parties are bound not only as
shall be recorded in the appropriate civil registry regards every matter offered and received to sustain or
and registries of property; otherwise the same shall defeat their claims or demand but as to any other
not affect third persons. admissible matter which might have been offered for
that purpose and of all other matters that could have
Safeguard against collusion and No confession of been adjudged in that case. [Mallion vs Alcantara, G.R.
judgment No. 141528 (2006)]
In the cases referred to in the preceding paragraph, no
judgment shall be based upon a stipulation of facts or Effect of Final Judgment Declaring Nullity
confession of judgment. [Art. 48 (2), FC] The effects provided for by paragraphs (2), (3), (4) and
(5) of Article 43 and by Article 44 shall also apply in
Stipulation of Facts the proper cases to marriages which are declared void
An admission by both parties after agreeing to the ab initio or annulled by final judgment under Articles
existence of any of the grounds or facts that would 40 and 45 [Art. 50(1), FC].
constitute a void/voidable marriage
Final judgment in such cases shall provide for:
Confession of Judgment a. Liquidation, partition, and distribution of the
The admission by one party admitting his/her fault to properties of the spouses
cause the invalidity of the marriage. b. Custody and support of the common children
c. Delivery of their presumptive legitimes
Although the admission of guilt of the wife constitutes
a confession of judgment, the husband was also able UNLESS: such matters had been adjudicated in
to present other evidence to support the allegation. previous judicial proceedings. [Art. 50(2), FC]
Hence, there was no collusion. [Ocampo v.
Florenciano, G.R. No. L-13553 (1960)] All creditors of the spouses/property regime shall be
notified of the proceedings for liquidation [Art. 50(2
Participation of the OSG and 3), FC]
The obvious intent of the AM 02-11-10-SC was to
require the OSG to appear as counsel for the State in In the partition, the conjugal dwelling and lot shall be
the capacity of a defensor vinculi (i.e., defender of the adjudicated to the spouse with whom majority of the
marital bond) to oppose petitions for, and to appeal common children remain [Art. 102 and 129, Art. 50(4),
judgments in favor of declarations of nullity of FC]
marriage under Article 36 of the Family Code, thereby
ensuring that only the meritorious cases for the Tender Years Presumption
declaration of nullity of marriages based on Children below 7 years age will be in the custody of the
psychological incapacity-those sufficiently evidenced mother.
by gravity, incurability and juridical antecedence-
would succeed. [Mendoza v. Republic, G.R. No. 157649 Presumptive legitimes, computed as of the date of
(2012)] the final judgment, shall be delivered in cash, property
or sound securities:
No Motion to Dismiss a. Unless the parties, by mutual agreement
AM 02-11-10-SC Sec. 7 prohibits the filing of a motion judicially approved, had already provided for such
to dismiss in actions for annulment of marriage. [Art. 51(1), FC]
[Aurelio v. Aurelio, G.R. No. 175367 (2011)] b. The children/guardian/trustee of property may
ask for the enforcement of the judgment [Art.
Effect of pendency of action for declaration of 51(2), FC]
nullity:
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c. The delivery of the presumptive legitimes shall Nature of an Action for Annulment
not prejudice the ultimate successional rights, but Action in rem, concerns status of parties; res is relation
the value of the properties already received shall between parties or marriage tie; jurisdiction depends
be considered as advances on their legitime [Art. on nationality or domicile not the place of celebration.
51(3), FC]
1. LACK OF PARENTAL CONSENT
Generally, children born or conceived within void
marriages are illegitimate. 18 ≤ x < 21 without parental consent
Exceptions:
a. Children conceived or born before the judgment Note: Art. 14, FC states that in case either or both of
under Article 36 has become final and executory the contracting parties, not having been emancipated
[Art. 54, FC] by a previous marriage, are between the ages of
b. Children conceived or born of subsequent eighteen and twenty-one, THEY SHALL, in addition to
marriages under Article 53 [Art. 54, FC] the requirements of the preceding articles:
a. Exhibit to the local civil registrar the consent to
b. Voidable or Annullable their marriage of their father, mother, surviving
parent or guardian, or persons having legal
Marriages charge of them, in the order mentioned
i. Manifested in writing by the interested
Art. 4, FC states that “xxx A defect in any of the party, who personally appears before the
essential requisites shall render the marriage voidable proper local civil registrar, or
as provided in Article 45.” ii. In the form of an affidavit made in the
presence of two witnesses and attested
Grounds for Annulment [Art. 45, FC] before any official authorized by law to
1. The party in whose behalf it is sought to have the administer oaths
marriage annulled was eighteen years of age or b. Record such personal manifestation in both
over but below twenty-one, and the marriage was applications for marriage license, and the
solemnized without the consent of the parents, affidavit, if one is executed instead, shall be
guardian or person having substitute parental attached to said applications.
authority over the party, in that order, unless after
attaining the age of twenty-one, such party freely In defending the requirement of parental consent,
cohabited with the other and both lived together the Court held that the State has power to make
as husband and wife; adjustments in the constitutional rights of minors
2. Either party was of unsound mind, unless such based on the following grounds: 1) the peculiar
party after coming to reason, freely cohabited vulnerability of children, 2) to protect minors from
with the other as husband and wife; immature decision making and prevent unstable
3. The consent of either party was obtained by marriages, 3) on the presumption that parents act
fraud, unless such party afterwards, with full in the best interests of their children in child
knowledge of the facts constituting the fraud, rearing. (Moe v. Dinkins, (US Case, 1981))
freely cohabited with the other as husband and
wife; May be Ratified by the party 18 or above but
4. The consent of either party was obtained by below 21 upon free cohabitation upon reaching 21
force, intimidation or undue influence, unless
the same having disappeared or ceased, such 2. INSANITY
party thereafter freely cohabited with the other as
husband and wife; Presumption: A person is presumed to be of sound
5. Either party was physically incapable of mind. The burden of proof is on the person alleging
consummating the marriage with the other, and insanity.
such incapacity continues and appears to be Mental incapacity or insanity is a vice of consent. It can
incurable; or be ratified by cohabitation after insanity is cured or
6. Either party was afflicted with a sexually- during a lucid interval.
transmissible disease found to be serious and
appears to be incurable. Mere mental weakness is not a ground for annulment,
but if found grave enough, it may amount to
psychological incapacity.
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Intoxication, somnambulism where one had no If husband knew of pregnancy, the marriage cannot be
mental capacity to give consent is equivalent to annulled on the ground of concealment.
insanity
The woman was 7 months pregnant at the time she
Must exist at the time of the celebration of the met petitioner. He cannot claim that the pregnancy
marriage. Insanity that occurs after the celebration of was concealed from him and that he was defrauded
marriage does not constitute a cause for nullity into marrying her. [Buccat v. Buccat, G.R. No 47101
[Katipunan v. Tenorio, G.R. No. 43442 (1937)] (1941)]
Test of Insanity: Whether the party at the time of But where the wife concealed the fact that she was 4
marriage was capable of understanding the nature months pregnant during the time of the marriage and
and consequences of marriage itself (Sempio-Diy) was “naturally plump,” Delizo could hardly be
expected to know, by mere looking, whether or not she
3. FRAUD was pregnant at the time of the marriage. [Aquino v.
Delizo, G.R. No. L-15853 (1960)]
Art. 46, FC. Any of the following circumstances
shall constituted fraud referred to in Number 3 of Note: May be ratified upon free cohabitation after
the preceding Article: knowledge of fraud.
(1) Non-disclosure of a previous conviction by
final judgment of the other party of a crime Concealment of Sexually Transmissible Disease
involving moral turpitude; Art. 45 (6) STD Art. 46 (3) STD
(2) Concealment by the wife of the fact that at the The concealing of the
time of marriage, she was pregnant by a man STD is a type of fraud
Ground for annulment
other than her husband; which is a ground for
(3) Concealment of sexually transmissible annulment
disease, regardless of its nature, existing at Does not have to be
Must be concealed
the time of marriage; or concealed
(4) Concealment of drug addiction, habitual Must be serious and Need not be serious nor
alcoholism or homosexuality or lesbianism incurable incurable
existing at the time of marriage. It is the concealment
The STD itself is the
that gives rise to the
No other misrepresentation or deceit as to ground for annulment
annulment
character, health, rank, fortune or chastity shall
constitute such fraud as will give grounds for the Concealment of Drug Addiction, Habitualism,
action of annulment of marriage. Homosexuality or Lesbianism
Recovery or rehabilitation from STD, drug addiction,
Note: The enumeration of the grounds for annulment and habitual alcoholism will NOT bar action for
under Art. 46 for reasons of fraud or vice of consent is annulment; the defect is not the disease, but the fraud
exclusive. No other misrepresentation or deceit of which vitiated consent.
character, health, rank, fortune or chastity shall
constitute fraud. It is the concealment of homosexuality, and not
homosexuality per se, that vitiates the consent of the
Non-Disclosure of Conviction of Crime: innocent party. [Almelor v. RTC, G.R. No. 179620
a. The crime must involve moral turpitude (2008)]
b. Must be convicted by final judgment
c. Conviction must be prior to marriage Effect of Cure to Fraud in Art. 46
Recovery or rehabilitation from STD, drug addiction,
Concealment of Pregnancy and habitual alcoholism will NOT bar action for
Wife must have: annulment; the defect is not the disease, but the fraud
a. Concealed her pregnancy AND which vitiated consent.
b. Pregnancy is by another man other than her
husband Wife gave birth 3 months after marriage, and husband
then filed for annulment on the ground of
Fraud against very essence of marriage: importance concealment of non-virginity. Denied. Court held that
of procreation of children; an assault to the integrity of it was unbelievable that husband could not have
the union by introducing ALIEN BLOOD. noticed when wife had been at least 6 months
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U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW
pregnant prior to marriage. [Buccat v. Buccat, G.R. No If the potent spouse was aware, it is implied that
47101 (1941)] he/she renounced copulation by consenting to the
marriage. [Tolentino]
The Supreme Court granted annulment because the
wife concealed the fact that she was 4 months When both spouses are impotent, marriage cannot be
pregnant during the time of the marriage. Since Delizo annulled because neither spouse is aggrieved.
was “naturally plump,” Aquino could hardly be [Sempio-Dy]
expected to know, by mere looking, whether or not she
was pregnant at the time of the marriage. [Aquino v. An impotent plaintiff could not have expected
Delizo, G.R. No. L-15853 (1960)] copulation with the other spouse. [Tolentino]
It is the concealment of homosexuality, and not REFUSAL of wife to be examined DOES NOT
homosexuality per se, that vitiates the consent of the PRESUME impotency [Jimenez v Canizares, G.R. No. L-
innocent party. Such concealment presupposes bad 12790 (1960)]
faith and intent to defraud the other party in giving
consent to the marriage. [Almelor v. RTC, G.R. No. N.B. If she continues to refuse the physical exam, she
179620 (2008)] can be held in contempt & ordered confined in jail until
she does so.
4. FORCE, INTIMIDATION, UNDUE INFLUENCE
6. SEXUALLY-TRANSMISSIBLE DISEASE
Force must be one as to prevent party from acting as a SERIOUS AND INCURABLE
free agent; will destroyed by fear/compulsion
Affliction of STD is unknown to the other spouse. The
Intimidation must be one as to compel the party by a other spouse must also be free from a similar STD.
reasonable/well-grounded fear of an imminent and [Balane]
grave evil upon his person/properties
a. Degree of intimidation: age, sex, condition of Requisites
person borne in mind a. Should exist at the time of the marriage
b. Threat or intimidation as not to act as free agent; b. Should be found serious
c. Should appear to be incurable
May be ratified upon voluntary cohabitation after
force, intimidation, or undue influence has ceased or Rationale: danger to the health of spouse &
disappeared. offspring/s
Page 51 of 497
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Page 52 of 497
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May be attacked solidarily liable for the support of the family. The
directly or spouse present shall, upon proper petition in a
collaterally, but summary proceeding, be given judicial authority
Cannot be
for the purpose of to administer or encumber any specific separate
attacked
remarriage, a property of the other spouse and use the fruits or
collaterally
judicial proceeds thereof to satisfy the latter’s share.
How
declaration of
Impugned Cannot be
nullity is required Neither does separation in fact affect CPG (Art. 127,
impugned after
[Art. 40, FC] FC), subject to the same exceptions.
death of one of
the parties
Can be impugned De Facto Separation is the separation of spouses in
even after death fact, without obtaining a judicial decree of legal
of the parties separation.
A proper
interested person Agreement to Separate
Who May (depending on A notary public should not facilitate the disintegration
A party to the of a marriage and the family by encouraging the
Challenge the dates of
marriage separation of the spouses
Validity marriage and of
filing of and extrajudicially dissolving the conjugal
proceeding) partnership. [Espinosa v. Omana, A.C. No. 9081 (2011)]
Susceptible
Does not Absolute Divorce
to Prescribes
prescribe Where a marriage between a Filipino citizen and a
Prescription
foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse
7. The Law on Separation of capacitating him or her to remarry, the Filipino spouse
the Spouses shall have capacity to remarry under Philippine law.
[par. 2, Art. 26, FC, as amended by Executive Order
SEPARATION IN FACT (De Facto Separation) 227)]
When a husband and wife are separated in fact, or one
has abandoned the other and one of them seeks Note: A foreign divorce obtained by the Filipino spouse
judicial authorization for a transaction where the against his foreigner spouse is now considered valid.
consent of the other spouse is required by law but such [Republic v. Manalo, G.R. 221029 (2018)]
consent is withheld or cannot be obtained, a verified
petition may be filed in court alleging the foregoing If both parties are Muslims, there is a presumption
facts. that the Muslim Code or Muslim law is complied with.
If together with it or in addition to it, the marriage is
The petition shall attach the proposed deed, if any, likewise solemnized in accordance with the CC of the
embodying the transaction, and, if none, shall Philippines, whichever comes first is the validating rite
describe in detail the said transaction and state the and the second rite is the merely ceremonial one. But,
reason why the required consent thereto cannot be in this case, as long as both parties are Muslims, this
secured. In any case, the final deed duly executed by Muslim Code will apply. [Zamoranos v. People, G.R.
the parties shall be submitted to and approved by the No. 193902 (2011)]
court. [Art. 239, FC.]
One of the effects of irrevocable talaq, as well as other
Rule: The separation in fact between husband and kinds of divorce, refers to severance of matrimonial
wife shall not affect the regime of absolute bond, entitling one to remarry. [Zamoranos v. People,
community EXCEPT that [Art. 100, FC.]: G.R. No. 193902 (2011)]
a. The spouse who leaves the conjugal home or
refuses to live therein, without just cause, shall 8. L egal Separation
not have the right to be supported;
b. When the consent of one spouse to any An action for legal separation involves nothing more
transaction of the other is required by law, judicial than the bed-and-board separation of the spouses. It
authorization shall be obtained in a summary is purely personal in nature. [Lapuz Sy v. Eufemio, G.R.
proceeding; No. L-30977 (1972)]
c. In the absence of sufficient community property,
the separate property of both spouses shall be
Page 53 of 497
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW
Grounds for Legal Separation [Art. 55, FC]: The grounds for legal separation are exclusive. [Art.
a. Repeated physical violence or grossly abusive 55, FC]
conduct directed against the petitioner, a
common child, or a child of the petitioner; These must be filed within 5 years after occurrence of
b. Physical violence or moral pressure to compel the cause [Art. 57, FC]
petitioner to change religious or political
affiliation; Acts of Violence according to R.A. No. 9262 (as
c. Attempt of respondent to corrupt or induce the grounds for legal separation under Art. 55(1), FC)
petitioner, a common child, or a child of the a. Causing physical harm to the woman or her child;
petitioner, to engage in prostitution, or b. Threatening to cause the woman or her child
connivance in such corruption or inducement; physical harm;
d. Final judgment sentencing the respondent to c. Attempting to cause the woman or her child
imprisonment of more than six years, even if physical harm;
pardoned; d. Placing the woman or her child in fear of
e. Drug addiction or habitual alcoholism of the imminent physical harm;
respondent; e. Attempting to compel or compelling the woman
f. Lesbianism or homosexuality of the respondent; or her child to engage in conduct which the
woman or her child has the right to desist from or
It is the concealment of homosexuality, and not desist from conduct which the woman or her child
homosexuality per se, that vitiates the consent of has the right to engage in, or attempting to
the innocent party. Such concealment restrict or restricting the woman's or her child's
presupposes bad faith and intent to defraud the freedom of movement or conduct by force or
other party in giving consent to the marriage. threat of force, physical or other harm or threat of
[Almelor v. RTC, G.R. No. 179620 (2008)] physical or other harm, or intimidation directed
g. Contracting by the respondent of a subsequent against the woman or child. This shall include, but
bigamous marriage, whether in the Philippines not limited to, the following acts committed with
or abroad; the purpose or effect of controlling or restricting
h. Sexual infidelity or perversion; the woman's or her child's movement or conduct:
Adultery is not a continuing crime; it is 1. Threatening to deprive or actually depriving
consummated at every moment of carnal the woman or her child of custody to her/his
knowledge. Thus, every sexual act is a ground for family;
legal separation. [People v. Zapata and Bondoc, 2. Depriving or threatening to deprive the
G.R. No. L-3047 (1951)] woman or her children of financial support
legally due her or her family, or deliberately
A civil action for legal separation based on providing the woman's children insufficient
concubinage may proceed ahead of, or financial support;
simultaneously with, a criminal action for 3. Depriving or threatening to deprive the
concubinage; conviction is not a perquisite woman or her child of a legal right;
[Gandionco v. Penaranda, G.R. No. 79284 (1987)] 4. Preventing the woman in engaging in any
i. Attempt by the respondent against the life of the legitimate profession, occupation, business
petitioner; or or activity or controlling the victim's own
j. Abandonment of petitioner by respondent money or properties, or solely controlling the
without justifiable cause for more than one year. conjugal or common money, or properties;
Abandonment is not mere physical estrangement f. Inflicting or threatening to inflict physical harm on
but also financial and moral desertion. There oneself for the purpose of controlling her actions
must be an absolute cessation of marital or decisions;
relations, duties, and rights with the intention of g. Causing or attempting to cause the woman or her
perpetual separation. [Dela Cruz. v. Dela Cruz, child to engage in any sexual activity which does
G.R. No. L-19565 (1968)] not constitute rape, by force or threat of force,
physical harm, or through intimidation directed
Note: The death of one party in a legal separation case against the woman or her child or her/his
abates the action. This is because the death of either immediate family;
spouse automatically dissolves the marriage. An h. Engaging in purposeful, knowing, or reckless
action for legal separation is also purely personal conduct, personally or through another, that
between the spouses. [Lapuz Sy v. Eufemio, G.R. No. L- alarms or causes substantial emotional or
30977 (1972)] psychological distress to the woman or her child.
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This shall include, but not be limited to, the When to File Action
following acts: An action for legal separation shall be filed within five
1. Stalking or following the woman or her child years from the time of the occurrence of the cause.
in public or private places; [Art. 57, FC]
2. Peering in the window or lingering outside
the residence of the woman or her child; Cooling-off and Reconciliation Effects
3. Entering or remaining in the dwelling or on An action for legal separation shall in no case be tried
the property of the woman or her child before six months shall have elapsed since the filing
against her/his will; of the petition. [Art. 58, FC]
4. Destroying the property and personal
belongings or inflicting harm to animals or Actions cannot be tried unless the court has
pets of the woman or her child; and attempted to reconcile the spouses, and determined
5. Engaging in any form of harassment or that despite such efforts, reconciliation is highly
violence; improbable [Art. 59]
i. Causing mental or emotional anguish, public
ridicule or humiliation to the woman or her child, N.B. This is without prejudice to judicial determination
including, but not limited to, repeated verbal and of custody of children, alimony, and support pendente
emotional abuse, and denial of financial support lite.
or custody of minor children of access to the
woman's child/children. Courts can still resolve other issues, pending the
waiting period or cooling off period. In resolving other
DEFENSES FOR LEGAL SEPARATION issues, courts should try not to touch, as much as
possible, on the main issue (i.e. adultery if that is the
Grounds for denying legal separation [Art. 56, FC]: ground used). However, Court must still receive
a. Condonation by aggrieved party – after the evidence if just to settle incidental issues of support
commission of the offense; may be express or and custody. [Araneta v. Concepcion, G.R. No. L-9667
implied. (1956)]
That plaintiff-husband and his wife agreed to go N.B. This provision of the Family Code dictating a
to the house of his cousin and there slept together mandatory 6-month cooling-off period does not apply
as husband and wife for two nights – all these in cases where violence, as used in R.A. No. 9262
facts have no other meaning than that (Anti-Violence Against Women and their Children), is
reconciliation between them was effected and alleged. The case should be heard as soon as possible
there was condonation of the wife by the husband. by the court.
This reconciliation occurred almost 10 months
after he came to know of her infidelity. [Bugayong Confession of Judgment
v. Ginez, G.R. No. 10033 (1957)] No decree of legal separation shall be based upon a
b. Consent by aggrieved party to the commission of stipulation of facts or a confession of judgment. [par.
the offense – before the commission of the 1, Art. 60, FC]
offense; may be express (e.g. written agreement,
[Matubis v. Praxedes, G.R. No. L-11766 (1960)] or N.B. Art. 60 par. 1 applies only if the judgment was
implied based solely on the stipulation of facts or solely on the
c. Connivance between parties in the commission of confession of judgment. Thus, if other grounds were
the offense used, Art. 60 par. 1 is not applicable. [Balane]
d. Mutual guilt or Recrimination between spouses
in the commission of any ground for legal The prohibition on confession of judgment does not
separation mean that the Court will not grant petition if one party
e. Collusion between parties to obtain decree of admits to being guilty of the charges of adultery. The
legal separation point of this provision is that the Court should still
f. Prescription of action for legal separation [Art. admit evidence, not decide just based on an admission
57: 5 years from occurrence of the cause of action] of guilt. Because what is prohibited is handing down a
g. Reconciliation of parties during pendency of decree of legal separation based solely on a
action [Art. 66 (1)] confession of judgment. [Ocampo v Florenciano, G.R.
h. Death of either party during pendency of action No. 13553 (1960)]
[Lapuz Sy v. Eufemio, G.R. No. L-30977 (1972)]
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In order to fall under the prohibition, it must be proved Art. 81, FC. Everything stipulated in the settlements
that they were living in a common-law relationship at or contracts referred to in the preceding articles in
the time of the donation. [Sumbad v. CA, G.R. No. consideration of a future marriage, including
106060 (1999)] donations between the prospective spouses made
therein, shall be rendered void if the marriage does
Distinguished from Ordinary Donations not take place. However, stipulations that do not
Donations propter depend upon the celebration of marriage shall be
Ordinary Donations valid.
nuptias
Does not require Express acceptance
express acceptance required e.g. recognition of paternity of illegitimate child
May include future Cannot include future
property property Waiver Not Allowed
If present property is General Rule: No waiver of rights, shares and effects of
No limit to donation of the absolute community of property during the
donated and property
present property marriage can be made
regime is not absolute
provided legitimes are Exception: In case of judicial separation of property.
community, limited to
not impaired When the waiver takes place upon a judicial
1/5 [Art. 84, FC]
Grounds for revocation separation of property, or after the marriage has been
Grounds for revocation dissolved or annulled, the same shall appear in a
found in donation laws
found in Art. 86, FC public instrument and shall be recorded as provided in
CC provisions
Article 77. The creditors of the spouse who made such
waiver may petition the court to rescind the waiver to
the extent of the amount sufficient to cover the
amount of their credits. [Art. 89, FC.]
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N.B. The creditors of the spouse who made such The presumption applies that all properties acquired
waiver may petition the court to rescind the waiver to during the marriage belong to the CPG. There are 3
the extent of the amount sufficient to cover the distinct patrimonies in this system, the husband’s
amount of their credits. capital property, the wife’s paraphernal property and
the conjugal property.
a. Absolute Community of
Property c. Separation of Property
The community property consists of all the property Each spouse has complete control and ownership of
owned by the spouses at the time of the celebration of his or her own properties which will include “all
the marriage and those either one or both of them earnings from his or her profession, business or
acquired during the marriage. There is a presumption industry and all fruits, natural, industrial or civil, due
in law that properties acquired during the marriage or received during the marriage form his or her
belong to the community, unless it is proved that it is separate property.” Expenses of the family shall be
one of those excluded therefrom. shouldered by the spouses in proportion to their
income, or, in case of insufficiency or default thereof,
to the current market value of their separate
b. Conjugal Partnership of properties.
Gains
This property regime was formerly the default regime
under the CC. In this regime, the spouses retain
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work or industry. [Ocampo v. Ocampo, G.R. No. d. Share of either spouse in hidden treasure,
198908 (2015)] whether as finder or owner of property
where treasure was found
e. Acquired through occupation such as
fishing or hunting
f. Livestock existing at dissolution of
partnership in excess of what is brought by
either spouse to the marriage
g. Acquired by chance, such as winnings
from gambling or betting
Moral damages arising from a contract paid
from the CPG [Zulueta v. Pan American World
Airways, G.R. No. L-28589 (1973)]
Loans contracted during the marriage are
conjugal, and so is any property acquired
therefrom [Mendoza v. Reyes, G.R. No. L-31625
(1983)]
Property purchased by installment, paid partly
with conjugal funds and partly with exclusive
funds, if full ownership was vested during the
marriage; the CPG shall reimburse the owner-
spouse [Art. 118, FC]
If a winning ticket is bought by conjugal funds,
the prize is conjugal (otherwise, the prize is
exclusive property of the spouse who owns the
ticket)
Improvement on exclusive property: if original
value < new value (where new value = value of
land + value of improvements + net change in
value), then land becomes conjugal property,
subject to the reimbursement of the value of
the property of the owner-spouse at the
dissolution of the CPG
Property belonging to one spouse converted
into another kind totally different in nature
from its original form during marriage
becomes conjugal in the absence of proof that
the expenses of the conversion were
exclusively for the account of the original
owner-spouse, subject to reimbursement of
the value of the original property from the
conjugal partnership
Properties acquired before the marriage, for
those with legitimate descendants with a Property brought into the marriage by each
former marriage (to protect rights of children spouse as his/her own
by a former marriage)
Properties acquired during the marriage by a Properties acquired during the marriage by a
gratuitous title, i.e. donation, inheritance by gratuitous title, i.e. donation, inheritance by
What remains
testate and intestate succession, including the testate and intestate succession, including the
exclusive
fruits of such properties fruits of such properties
property
Except: When expressly provided by the donor Except: When expressly provided by the donor
or testator that the property shall form part of or testator that the property shall form part of
the ACP the ACP
Property acquired by right of redemption, by
Properties for personal use
barter, or by exchange with property belonging
to either spouse
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Except: Jewelry (partakes of the nature of an Plata v. Yatco, G.R. No. L-20825 (1964): Plata
investment) purchased property when she was single.
When married, she and her husband Bergosa
co-signed a mortgage on the property. Upon
foreclosure, Bergosa was sued for illegal
detainer. A writ of execution on the property
was carried out but Plata refused to leave the
premises. SC ruled that Plata cannot be held
in contempt. Property is not conjugal. Her
husband signing as co-mortgagor does not
convert it to CPG. She could ignore execution
because the decision was for her husband
alone.
Property purchased with exclusive money of
either spouse
Property purchased by installment, paid partly
with conjugal funds and partly with exclusive
funds, if full ownership was vested before the
marriage (Art. 118, FC)
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balance from their separate properties except balance from their separate properties except
for: for:
a. Debts contracted by either spouse before a. Debts contracted by either spouse before
marriage which have not redounded to marriage which have not redounded to the
the benefit of the family; benefit of the family;
b. Support of illegitimate children; and b. Support of illegitimate children; and
c. Liabilities incurred by either spouse c. Liabilities incurred by either spouse
arising from crime or quasi-delict. arising from crime or quasi-delict.
Gambling losses of any kind (i.e. legal or Gambling losses of any kind (i.e. legal or
illegal) shall be borne by the losing spouse’s illegal) shall be borne by the losing spouse’s
separate property (Art. 95, FC) separate property (Art. 123, FC)
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Exceptions:
Moderate donations to charity due to family
Consent or approval by both spouses, or
rejoicing or distress
authority given by the court in lieu of the
consent of the other spouse.
ACP allows donations in excess of one-fifth of
present property of future spouses because the
donation would form part of the community
property once the marriage is celebrated. (Art.
84, FC)
Jader-Manalo v. Camaisa, G.R. No. 147978 (2002): Mere awareness of a transaction is NOT
consent.
Homeowner’s Savings & Loan Bank v. Dailo, G.R. No. 153802 (2005):
In the absence of (court) authority or written consent of the other spouse, any disposition or
encumbrance of the conjugal property shall be void.
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Present/aggrieved spouse may petition the Present/aggrieved spouse may petition the
court for: court for:
a. Receivership a. Receivership
b. Judicial separation of property b. Judicial separation of property
c. Authority to be the sole administrator of c. Authority to be the sole administrator of
the absolute community, subject to the partnership property, subject to
precautionary conditions that the court precautionary conditions that the court
may impose may impose
A spouse is deemed to have abandoned the A spouse is deemed to have abandoned the
other when he or she has left the conjugal other when he or she has left the conjugal
dwelling without any intention of returning. dwelling without any intention of returning.
Rules on
Abandonment
Spouse is prima facie considered to have Spouse is prima facie considered to have
abandoned the other spouse and the family if abandoned the other spouse and the family if
he or she has: he or she has:
a. Left for a period of 3 months a. Left for a period of 3 months
b. Failed to inform the other spouse of his or b. Failed to inform the other spouse of his or
her whereabouts for a period of 3 months her whereabouts for a period of 3 months
Partosa-Jo v. CA, G.R. No. 82606 (1992):
Physical separation of the spouses, coupled
with the husband’s refusal to give support to
the wife, sufficed to constitute abandonment
as a ground for an action for the judicial
separation of their conjugal property.
Procedure [Art. 129, FC]
Procedure [Art. 102, FC]
a. Prepare an inventory of all properties
a. Inventory of assets of ACP and of spouses,
b. Amounts advanced by CPG in payment of
with market values
personal debts and obligations shall be
b. Obligations are paid with community
credited to the CPG
property, and separate obligations not
c. Reimburse each spouse for the use of
charged to ACP paid by respective assets
his/her exclusive funds in the acquisition
of spouses
of property or for the value of his or her
exclusive property, the ownership of which
If obligations exceed the assets of the ACP,
has been vested by law in the conjugal
nothing is divided. Creditors can go after the
partnership
separate properties of the spouses, which are
d. Debts and obligations of CPG shall be
solidarily liable for the deficiency
paid out of the conjugal assets, otherwise
a. Delivery of whatever remains in their
both spouses are solidarily liable with
exclusive property
their exclusive property
Liquidation of b. Balance, or net remainder is divided
e. Remains of the exclusive properties shall
assets and equally between the spouses, irrespective
be delivered to respective owner-spouses.
liabilities of how much each brought into the
f. Indemnify loss/deterioration of movables
community
belonging to either spouse, even due to
c. If personal obligations of a spouse exceed
fortuitous event, used for the benefit of
his/her separate property, creditor can go
the family
after the share of the spouse on the net
g. Net remainder of CPG shall constitute the
remainder of the ACP, without prejudice
profits which shall be divided equally
to the provisions of law on forfeitures and
between husband and wife except when:
delivery of presumptive legitimes
1. A different proportion or division was
d. After covering all community obligations
agreed upon in the marriage
and obligations of spouses, balance of
settlements
separate properties shall be delivered to
2. There has been a voluntary waiver or
respective spouses or their heirs, and they
forfeiture of such share as provided in
will also divide into two equal shares
the FC
whatever is left of the community assets,
h. Presumptive legitimes are delivered to
without prejudice to the provisions of law
common children
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Separation of Property of the Spouses and Administration of Common Property by One Spouse During the
Marriage
Art. 134, FC. In the absence of an express declaration in the marriage settlements. The separation of property
between spouses during the marriage shall not take place except by judicial order. Such judicial separation of
property may either be voluntary or for sufficient cause.
Loss of parental authority of the spouse of petitioner Restoration of parental authority to the spouse previously
has been decreed by the court deprived of it
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Separation of Property
Agreed upon in the marriage settlements by the spouses
Mandatory under Arts. 103 & 130, FC (subsequent marriages contracted by a surviving spouse
without judicial settlement of previous property regime)
When it applies
Judicial separation of property (Voluntary or just cause)
Default property regime when there is reconciliation between spouses after judicial separation
of property
Each spouse’s earnings from his or her own profession, business, or industry
What it consists
of Natural, industrial or civil fruits of spouse’s separate properties
Family expenses: Both spouses are liable in proportion to their income; if insufficient, based on
Liabilities the current value of their separate properties
Spouses may own, dispose, possess, and administer separate estates without the consent of
the other
In Re: voluntary dissolution of CPG of Sps. Bermas, G.R. No. L-20379 (1965): A voluntary separation of properties is
not perfected by mere consent but upon the decree of the court approving the same. The petition for voluntary
separation of property was denied because the children of the 1st and 2nd marriages were not informed; the separation
of property may prejudice the rights and shares of the children.
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Properties acquired
through exclusive Remains exclusive, provided there is proof Remains exclusive
funds
Properties acquired
Owned in common in proportion to respective
by both through Governed by rules on co-ownership
contribution
work and industry
Where only one party to a void marriage is If one party is validly married to another his/her
in good faith, share of party in bad faith is share in the co-owned properties will accrue to
forfeited: the ACP/CPG of his/her existing valid
• In favor of their common children marriage.
• In case of default of or waiver by any
or all of the common children or their If the party who acted in bad faith is not validly
Forfeiture
descendants, each vacant share shall married to another, his/her share shall be
belong to the respective surviving forfeited in the same manner as that provided
descendants in Art 147.
• In the absence of such descendants,
such share belongs to the innocent The same rules on forfeiture shall apply if both
party parties are in bad faith.
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3. Among other ascendants and descendants Suits between brothers-in-law can prosper even
4. Among brothers and sisters, full or half blood without a verified complaint or petition. [Guerrero v.
RTC, G.R. No 109068 (1994)]
The family is an institution that is governed by law. The
The enumeration of brothers and sisters as members
internal aspect of the family is sacred and inaccessible
of the same family under does not comprehend
to law because law must respect the freedom of action
sisters-in-law and brothers-in-law. [Gayon v. Gayon,
of man.
G.R. No. L-28394 (1970)].
Exception to the Exception: Note: A person may constitute and be the beneficiary
A verified complaint or petition is not needed for of only one family home [Art. 161]
matters not subject to compromise.
When Deemed Instituted
Under Art 2035, CC the following cannot be subject The family home is deemed constituted on a house
of compromise: and lot form the time it is occupied as a family
a. Civil status of persons, residence. [Art. 153, FC]
b. Validity of marriage or a legal separation
c. Any ground for legal separation, Exemption from Forced Sale, Execution,
d. Future support (as it is presumed to be needed for Attachment
the survival of the one receiving support), General Rule: The family home is exempt from the
e. Jurisdiction of courts, following from the time of its constitution and so long
f. Future legitime. as any of its beneficiaries actually resides therein:
a. Execution;
Art. 151, FC only applies when the case is exclusively b. Forced sale;
among family members. Whenever a stranger is c. Attachment [Art. 153]
included as a party to the case, Art. 151 does not apply.
[Hontiveros v. RTC, G.R. No. 125465 (1999)] Exceptions in the exemption of the family home from
execution:
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constituting the family home, by the owner or owners Note: The provisions of this Chapter shall also govern
of the property, or by any of the beneficiaries, the same existing family residences insofar as said provisions
rule and procedure shall apply. [Art. 160, par. 1, FC.] are applicable. [Art. 162, FC.]
General Rule
The proof that the house is the family home must be
alleged against creditors; Applied the rule in Art. 160,
FC. [Versola v. Mandolaria, G.R. No. 164740 (2006)]
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after the termination of the former marriage, the Exception: That the heirs of the husband may file the
following rules shall govern in the absence of action or continue the same within the periods
proof to the contrary [Art 168]: prescribed in Art. 170 [Art. 171]:
1. If born before 180 days after the solemnization 1. If the husband died before the expiration of the
of the subsequent marriage – child is period fixed for bringing his action
considered conceived during the former 2. If he should die after the filing of the complaint
marriage, provided it be born within 300 days without having desisted therefrom
after termination of the former marriage 3. If the child was born after the death of the
2. If born after 180 days following the husband.
celebration of the subsequent marriage –
child is considered conceived during such Sayson v. CA, G.R. No. 89224-25 (1992): Legitimacy
marriage, even if it be born within 300 days can only be attacked directly.
after the termination of the former marriage
If the birth of the child has been concealed or was Note: Only in the absence of primary evidence can
unknown to the husband, the above periods shall be secondary evidence be admitted
counted:
a. From the discovery or knowledge of the birth of Action for Claiming Filiation (Legitimate Children)
the child, or [Art. 173, FC]:
b. From the discovery or knowledge of its a. The child can bring the action during his or her
registration, whichever is earlier. lifetime
General Rule: Only the husband can impugn the b. If the child dies during minority or in a state of
legitimacy of a child. If he does not bring an action insanity, such action shall be transmitted to his
within the prescribed periods, he cannot file such heirs, who shall have a period of five years within
action anymore thereafter, and this is also true with his which to institute the action.
heirs.
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c. The action commenced by the child shall survive signed by the parents and sworn for it to be admitted
notwithstanding the death of either or both of the as evidence. [Mendoza v. Mella, G.R. No. L-18752
parties (1966)]
Rights of Legitimate Children [Art. 174, FC] Signature of the father on the birth certificate is
a. To bear the Surnames of the father and the considered as an acknowledgement of paternity and
mother, in conformity with the provisions of the mere presentation of a duly authenticated copy of
CC on surnames such certificate will successfully establish filiation.
b. To receive support from their parents, their [Eceta v. Eceta, G.R. 157037 (2004)]
ascendants, and in proper cases, their brothers
and sisters, in conformity with the provisions of Unsigned birth certificates are not evidence of
the Code on Support recognized filiation. [Baluyut v. Baluyut, G.R. No. L-
c. To be entitled to the legitimate and other 33659 (1990)]
Successional rights granted to them by the CC
The due recognition of an illegitimate child in a record
of birth, a will, a statement before a court of record, or
3. Illegitimate Children in any authentic writing, is in itself a consummated act
of acknowledgement of the child, and no further court
Children conceived and born outside a valid marriage action is required. [De Jesus v. Estate of Decedent Juan
are illegitimate, unless otherwise provided in this Gamboa Dizon, G.R. No. 142877 (2001)]
Code. [Art. 165.]
Secondary Evidence
Who are illegitimate children Rule 130, Sec. 40 is limited to objects commonly
General Rule: Those conceived and born outside of a known as family possessions reflective of a family's
valid marriage. [Art. 165] reputation or tradition regarding pedigree like
inscriptions on tombstones, monuments, or coffin
Exceptions: plates. [Jison v. CA, G.R. No. 124853 (1998)]
a. Children of marriages void under Art. 36
(psychological incapacity); and "Su padre [Your father]" ending in a letter is only proof
b. Under Art. 53 (subsequent marriages which did of paternal solicitude and not of actual paternity.
not comply with Art. 52). [SEMPIO-DY] Signature on a report card under the entry of
"Parent/Guardian" is likewise inconclusive of open
Illegitimate children may establish their illegitimate admission. [Heirs of Rodolfo Bañas v. Heirs of Bibiano
filiation in the same way and on the same evidence as Bañas, G.R. No. L-25715 (1985)]
legitimate children.
Mere possession of status as an illegitimate child does
The action must be brought within the same period not make an illegitimate child recognized but is only a
specified in Article 173, except when the action is ground for bringing an action to compel judicial
based on the second paragraph of Article 172, in which recognition by the assumed parent. [Gono-Javier vs.
case the action may be brought during the lifetime of CA, G.R. No. 111994 (1994)]
the alleged parent. [Art. 175, FC.]
To prove open and continuous possession of the status
General Rule: Illegitimate children may establish their of an illegitimate child, there must be evidence of the
illegitimate filiation in the same way and on the same manifestation of the permanent intention of the
evidence (primary or secondary) as legitimate supposed father to consider the child as his, by
children. continuous and clear manifestations of parental
affection and care, which cannot be attributed to pure
Action for Claiming Filiation [Art. 145, FC] charity. [Perla v. Baring, G.R. No. 172471 (2012)]
a. For actions based on primary evidence, the same
periods stated in Art. 173 apply. Meanwhile, the lack of participation of the supposed
b. For actions based on secondary evidence, the father in the preparation of a baptismal certificate
action may only be brought during the lifetime of renders this document incompetent to prove
the alleged parent. paternity. Baptismal certificates are per
se inadmissible in evidence as proof of filiation and
Primary Evidence they cannot be admitted indirectly as circumstantial
Baptismal certificates are given probative value only evidence to prove the same [Perla v. Baring and Perla
for births before 1930. Birth certificates must be (2012)]
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Impugning legitimation [Art. 182, FC] It requires a proceeding in rem, and may only be
a. May be made only by those who are prejudiced in proven by a judicial decree issued by a court of
their rights competent jurisdiction, not by open and continuous
b. Within five years from the time their cause of cohabitation
action accrues
Legitimation Adoption
The law merely makes legal what The law creates by fiction a relation
Legal effect
exists by nature which did not in fact exist
Persons affected Natural children Strangers (generally)
Procedure Extrajudicial acts of parents Always by judicial decree
Both parents
Except:
1. One spouse seeks to adopt the
legitimate child of the other
Who should apply Both parents 2. One spouse seeks to adopt his
own illegitimate child, provided
that the other spouse has
signified their consent thereto
3. Spouses are legally separated
from each other
Same status and rights with that of Creates a relationship only between
a legitimate child not only in the child and the adopting parents
Effect on parent-child relationship
relation to the legitimizing parents [Sayson v. CA, G.R. No. 89224-25
but also to other relatives (1992)]
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government agency that he/she has the legal Persons whose written consent is necessary for
capacity to adopt in his/her country adoption (Sec. 9)
d. His/her government allows the adoptee to 1. The prospective adoptee if 10 years or older
enter his/her country as his/her adoptee and 2. The prospective adoptee’s biological parents,
reside there permanently as an adopted child legal guardian or the government instrumentality
e. Has submitted all the necessary clearances or institution that has custody of the child
and such certifications as may be required 3. The prospective adopters’ legitimate and adopted
children who are 10 years or older
Requirements in c, d, and e may be waived 4. The prospective adopters’ illegitimate children, if
under the following circumstances: any, who are 10 years or older and living with them
i. Adopter is a former Filipino Citizen who 5. The spouse, if any, of the person adopting or to be
th
seeks to adopt a relative within the 4 adopted.
degree of consanguinity or affinity
ii. Adopter seeks to adopt the legitimate or Note: A decree of adoption shall be effective as of the
illegitimate child of his/her Filipino date the original petition was filed. It also applies in
spouse case the petitioner dies before the issuance of the
iii. Adopter is married to a Filipino Citizen decree of adoption to protect the interest of the
and seeks to adopt jointly with his/her adoptee.
th
spouse a relative within the 4 degree of
consanguinity or affinity of the Filipino c. Foundlings
spouse
Foundling shall refer to a deserted or abandoned
3. Guardians infant or a child found, with parents, guardian, or
With respect to their wards, after the termination of relatives being unknown, or a child committed in an
the guardianship and clearance of his/her orphanage or charitable or similar institution with
accountabilities. unknown facts of birth and parentage and registered
in the Civil Register as a foundling. [Sec. 3 (h), Rules
b. Who Can Be Adopted (Sec. And Regulations To Implement The Domestic Adoption
8) Act Of 1998]
1. Minor who has been administratively or judicially When is a child considered a foundling
declared available for adoption It shall be the duty of the Department or the child-
2. Legitimate son/daughter of one spouse by placing or child-caring agency which has custody of
another the child to exert all efforts to locate his/her unknown
3. Illegitimate son/daughter by a qualified adopter biological parent(s). If such efforts fail, the child shall
to improve the child’s status to that of legitimacy be registered as a foundling and subsequently be the
4. A person of legal age if, prior to the adoption, said subject of legal proceedings where he/she shall be
person has been consistently considered and declared abandoned. [Sec. 5, RA 8552]
treated by the adopter(s) as his/her child since
minority If efforts to locate the child's parent/s fail, the child
5. A child whose previous adoption has been shall be registered as a foundling and within three (3)
rescinded months from the time he/she is found, be the subject
6. A child whose biological or adoptive parent(s) has of legal proceedings where he/she shall be declared
died, provided that no proceedings shall be abandoned. [Sec. 5, Rules And Regulations To
initiated within 6 months from the time of death Implement The Domestic Adoption Act Of 1998]
of said parent(s) [Sec. 8]
Domestic laws on adoption also support the principle
Exceptions to the Requirement of a Certification that that foundlings are Filipinos. These laws do not
the Child is Available for Adoption (Sec. 4): provide that adoption confers citizenship upon the
1. Adoption of an illegitimate child by his/her adoptee. Rather, the adoptee must be a Filipino in the
biological parent; first place to be adopted. The most basic of such laws
2. Adoption of a child by his/her stepparent; is Article 15 of the CC which provides that "laws
th
3. Adoption by a relative within the 4 civil degree by relating to family rights, duties, status, conditions,
consanguinity or affinity legal capacity of persons are binding on citizens of the
Philippines even though living abroad." Adoption
deals with status, and a Philippine adoption court will
have jurisdiction only if the adoptee is a Filipino.
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Recent legislation is more direct. R.A. No. 8043 • Written certification that a local/national
entitled "An Act Establishing the Rules to Govern the radio/TV case was aired on 3 different
Inter-Country Adoption of Filipino Children and For occasions
Other Purposes" (otherwise known as the "Inter- • Publication in 1 newspaper of general
Country Adoption Act of 1995"), R.A. No. 8552, circulation
entitled "An Act Establishing the Rules and Policies on • Police report / barangay certification of
the Adoption of Filipino Children and For Other due diligence
Purposes" (otherwise known as the Domestic • Returned registered mail to last known
Adoption Act of 1998) and this Court's A.M. No. 02-6- address of parents
02-SC or the "Rule on Adoption," all expressly refer to c. Birth certificate, if available
"Filipino children" and include foundlings as among d. Recent photo and photo upon abandonment
Filipino children who may be adopted. [Poe- of child
Llamanzares v. COMELEC, G.R. No. 221697 (2016)]
d. Pre-Adoption Procedures
1. Voluntary Commitment of biological parent(s)
wanting to put their child up for adoption
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e. Adoption Procedures
[Aguiling-Pangalangan]
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Art. 184, FC (as amended by RA 8552) The law is silent as to what middle name the
The following may not adopt: adoptee may use but the SC has held that an
1. The guardian, with respect to the ward, prior to adoptee is entitled to all the rights provided by law
the approval of the final accounts rendered upon to a legitimate child, including the right to bear the
the termination of the guardianship surname of her father and mother. [In re: Adoption
2. Any person convicted of a crime of moral of Stephanie Nathy Astorga Garcia, G.R. No. 148311
turpitude (2005)]
5. Nationality
Adoption does not confer citizenship: Sec. 3, Art. 4
g. Rights of an Adopted Child of the Constitution: Philippine citizenship may be
lost/acquired [only] in the manner provided by law.
1. Parental Authority [Sec. 16, RA 8552] The right to confer citizenship belongs to the State
Except in cases where the biological parent is the (political) and cannot be granted by a citizen
adopter’s spouse, all legal ties between biological through adoption. Adoption creates a relationship
parent and adoptee shall be severed, and the between the adopter and adoptee, not between
same shall then be vested on the adopters. the State and the adoptee.
2. Legitimacy [Sec. 17, RA 8552]
The adoptee shall be considered the legitimate
son/daughter of the adopters for all intents and
h. Rescission of Adoption
purposes, and as such is entitled to all rights and
obligations provided by law to legitimate children Adoptee may file action for rescission, with the
born to them without discrimination of any kind. assistance of DSWD if he/she is a minor or over 18 but
3. Succession [Sec. 18, RA 8552] incapacitated, based on the ff grounds [Sec. 19, FC]:
In legal and intestate succession, the adopter and 1. Repeated physical and verbal maltreatment by
the adoptee shall have reciprocal rights of adopters despite having undergone counseling
succession without distinction from legitimate 2. Attempt on life of adoptee
filiation. However, if the adoptee and his/her 3. Sexual assault or violence
biological parents had left a will, the law on 4. Abandonment or failure to comply with parental
testamentary succession shall govern. obligations
Legal or intestate succession to the estate of the Note: Adoption, being in the best interest of the child,
adopted shall be governed by the following rules: shall not be subject to rescission by the adopter.
a. Legitimate and illegitimate children, However, the adopter may disinherit the child based
descendants and the surviving spouse of the on causes enumerated in Art. 919 [CC]:
adoptee shall inherit in accordance with the 1. Conviction of an attempt on the life of the adopter
ordinary rules of legal/intestate succession 2. Having accused, without grounds, the adopter of
b. When the surviving spouse OR illegitimate a crime punishable by imprisonment for more
children AND adopters concur, they shall than 6 years
inherit on a 50-50 basis 3. Conviction of adultery/concubinage with the
c. When the surviving spouse AND illegitimate adopter’s spouse
children AND adopters concur, they shall 4. Having caused the adopter to make or change a
inherit on a 1/3-/1/3-1/3 basis will by force, intimidation or undue influence
5. Refusal without just cause to support the adopter
6. Maltreatment of the adopter by word/deed
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2. A legally-free child is one who has been Adopted children do not have a right to represent their
voluntarily or involuntarily committed to the adopters in successional interests. Although an
DSWD of the Philippines, in accordance with the adopted child is deemed to be a legitimate child and
Child and Youth Welfare Code. have the same rights as the latter, these rights do not
3. No child shall be matched to a foreign adoptive include the right of representation (because the
family unless it is satisfactorily shown that the adopted child has no right to inherit from the
child cannot be adopted locally (last resort). grandparent). The relationship created by the
4. In order that such child may be considered for adoption is between only the adopting parents and the
placement, the following documents must be adopted child. It does not extend to the blood
submitted to the Board: relatives of either party. [Sayson v. CA, G.R. No.
a. Child study 89224-25 (1992)]
b. Birth Certificate / Foundling Certificate
c. Deed of Voluntary Commitment/ Decree of
Abandonment/ Death Certificate of parents
d. Medical Evaluation / History
e. Psychological Evaluation, as necessary
f. Recent photo of the child
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The order of liability among ascendants and When Stranger Gives Support
descendants would be: 1. legitimate children and When, without the knowledge of the person obliged
descendants, 2. legitimate parents and ascendants, 3. to give support, it is given by a stranger, the stranger
illegitimate children and their descendants. has the right to claim the same from the person
[Tolentino] obliged, unless it appears that he gave it without
intention of being reimbursed. [Art. 206, FC]
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Person Obliged Refuses or Fails To Give Support except from the date of judicial or extra-judicial
When the person obliged to give support unjustly demand.
refuses or fails to give support when urgently needed,
any third person may furnish support to the needy Support pendente lite may be claimed in accordance
individual, with right of reimbursement from the with the Rules of Court.
person obliged to give support. This particularly
applies when the father or mother of a minor child Payment shall be made within the first 5 days of each
unjustly refuses to support or fails to give support to corresponding month. When the recipient dies, his
the child when urgently needed. [Art. 207, FC] heirs shall not be obliged to return what he has
received in advance.
Contractual Support or That Given By Will [Art. 203, FC]
The excess in amount beyond that required for legal
support shall be subject to levy on attachment or
execution. [Art. 208, FC]
6. O ptions
Reason: The amount of support agreed upon in the a. Payment of the amount; or
contract or given in the will can be more than what the b. Receiving and maintaining the recipient in the
recipient needs. [Sempio-Diy] home of the provider, unless there is a legal or
moral obstacle for doing so.
Furthermore, contractual support shall be subject to
adjustment whenever modification is necessary due to 7. Attachment
changes in circumstances manifestly beyond the
contemplation of the parties. [Art. 208, FC] The right to receive support as well as any money or
property obtained as such support shall not be levied
3. Support Pending upon on attachment or execution. [Art. 205, FC]
Litigation on the Status of This is to protect that which the law gives to the
recipient against want and misery. [Tolentino]
Marriage
Pending legal separation or annulment, and for
declaration of nullity, support pendente lite for spouses
and children will come from the ACP/CPG. After final
judgment granting the petition, mutual support
obligation between spouses ceases. (But in legal
separation, court may order guilty spouse to give
support to innocent spouse.) [Art. 198, FC]
4. A mount
The amount of support is in proportion to the means
of the provider and the needs of the receiver, and can
be reduced or increased if such circumstances change.
[Arts. 201, 202, FC]
5. W hen Demandable
The obligation to give support shall be demandable
from the time the person who has a right to receive the
same needs it for maintenance, but it shall not be paid
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Procedure:
Procedural rules provided for in this Title shall apply a. A preliminary conference shall be conducted by
to: the judge personally without the parties being
1. Separation in fact between husband and wife assisted by counsel.
2. Abandonment by one of the other b. After the initial conference, if the court deems it
3. Incidents involving parental authority useful, the parties may be assisted by counsel at
the succeeding conferences and hearings. [Art.
Note: Until modified by the Supreme Court, the 243, FC]
procedural rules herein shall apply in all cases falling c. If the petition is not resolved at the initial
under the aforementioned matters. Such cases shall conference, said petition shall be decided in a
be decided in an expeditious manner, without regard summary hearing. Basis of summary hearing (at
to technical rules. [Art. 238, FC] the sound discretion of the court):
1. Affidavits
1. Separation in Fact 2. Documentary evidence
3. Oral testimonies at the court’s sound
A verified petition alleging the following facts is discretion. If testimony is needed, the court
required when [Art. 239, FC]: shall specify the witnesses to be heard and
a. A husband and wife are separated in fact; or, the subject-matter of their testimonies,
b. One has abandoned the other directing the parties to present said
witnesses. [Art. 246(a), FC]
Situation: Where one of them seeks judicial
authorization for a transaction where the consent of When appearance of spouses required:
the other spouse is required by law but such consent is a. In case of non-appearance of the spouse whose
withheld or cannot be obtained consent is sought, the court shall inquire into the
reasons for his failure to appear, and shall require
The petition shall: such appearance, if possible. [Art. 244, FC]
a. Attach the proposed deed, if any, embodying the b. If, despite all efforts, the attendance of the non-
transaction, if none, shall describe in detail the consenting spouse is not secured, the court may
said transaction and state the reason why the proceed ex parte and render judgment as the facts
required consent thereto cannot be secured. and circumstances may warrant. In any case, the
b. The final deed duly executed by the parties shall judge shall endeavor to protect the interests of the
be submitted to and approved by the court. [Art. non-appearing spouse. [Art. 245, FC]
239, FC]
Nature of judgment
Separate Claim for Damages: Claims for damages by The judgment of the court shall be immediately final
either spouse, except costs of the proceedings, may be and executory. [Art. 247, FC]
litigated only in a separate action. [Art. 240, FC]
Rules applicable for administering or encumbering
Jurisdiction: Jurisdiction over the petition shall, upon separate property of spouse
proof of notice to the other spouse, be exercised by the The petition for judicial authority to administer or
proper court authorized to hear family cases, if one encumber specific separate property of the
exists, or in the regional trial court or its equivalent abandoning spouse and to use the fruits or proceeds
sitting in the place where either of the spouses resides. thereof for the support of the family shall also be
[Art. 241, FC] governed by these rules. [Art. 248, FC]
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Illegitimate Children shall use the surname and shall Both above 60 Younger
be under the parental authority of their mother.
However, they may use the surname of their father if
their filiation has been expressly recognized by their
father through: One under 15, the
One under 15
a. record of birth in civil register other above 60
b. admission in public document
c. admission in private handwritten document Both over 15 and under
Male
60; different sexes
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void, unless before the celebration of the subsequent Art. 383, CC. In the appointment of a
marriage, the prior spouse had been absent for four representative, the spouse present shall be
consecutive years and the spouse present has a well- preferred when there is no legal separation.
founded belief that the absent spouse was already If the absentee left no spouse, or if the spouse
dead. In case of disappearance where there is danger present is a minor, any competent person may be
of death under the circumstances set forth in the appointed by the court.
provisions of Article 391 of the CC, an absence of only
two years shall be sufficient. [Article 41., FC] Requisites: The judge may appoint a person to
represent absentee when:
General Rule: Marriage contracted by any person a. Person disappears from his domicile
during the subsistence of a previous marriage is void. b. His whereabouts are unknown
c. No agent to administer his property
Exceptions: The following subsequent marriage of the d. An interested party, a relative, or a friend files the
present spouse is valid: action
a. Subsequent marriage due to ordinary absence
where: Who may be appointed as representative?
1. The prior spouse had been absent for 4 a. Spouse present shall be preferred when there is
consecutive years; no legal separation
2. The spouse present had a well-founded belief b. If no spouse or spouse is incapacitated, any
that absent spouse is dead; and competent person
3. Judicial declaration of presumptive death
was secured (no prejudice to the effect of the
reappearance of the absent spouse). 2. D eclaration of Absence
b. Subsequent marriage due to extraordinary
absence where:
[Arts. 384-389, CC]
1. The prior spouse had been missing for 2
consecutive years; Art. 384, CC. Two years having elapsed without any
2. There is danger of death attendant to the news about the absentee or since the receipt of the
disappearance [Art. 391, CC]; last news, and five years in case the absentee has
3. The spouse present had a well-founded belief left a person in charge of the administration of his
that the missing person is dead; and property, his absence may be declared.
Judicial declaration of presumptive death was secured The following may ask for the declaration of absence]:
(no prejudice to the effect of the reappearance of the a. The spouse present;
absent spouse). b. The heirs instituted in a will, who may present an
authentic copy of the same;
Exception to the Exception: c. The relatives who may succeed by the law of
Art. 381, CC. When a person disappears from his intestacy;
domicile, his whereabouts being unknown, and d. Those who may have over the property of the
without leaving an agent to administer his absentee some right subordinated to the
property, the judge, at the instance of an interested condition of his death [Art. 385, CC].
party, a relative, or a friend, may appoint a person
to represent him in all that may be necessary. Art. 386, CC. The judicial declaration of absence
shall not take effect until six months after its
This same rule shall be observed when under publication in a newspaper of general circulation.
similar circumstances the power conferred by the
absentee has expired. When may absence be declared?
Two years without any news about the absentee.
Art. 382, CC. The appointment referred to in the Five years if the absentee left a person in charge of
preceding article having been made, the judge administration of his property.
shall take the necessary measures to safeguard the
rights and interests of the absentee and shall Declaration takes effect only after six months after
specify the powers, obligations and remuneration publication in a newspaper of general circulation.
of his representative, regulating them, according to
the circumstances, by the rules concerning Who may ask for a declaration of absence?
guardians. a. Spouse present
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General Rule: No entry in a civil register shall be Who may file the petition and where? [Sec. 3, RA
changed or corrected without a judicial order 9048]
a. Any person having direct personal interest in the
Exceptions: correction of a clerical or typographical error in an
a. Clerical or typographical errors or entry and/or change of first name or nickname in
b. Intersex persons the civil register
b. Verified petition with the local civil registry office
Clerical or Typographical Errors of the city or municipality
Change of: first name or nickname, day and month in 1. where the record being sought to be
the date of birth, or sex of a person corrected or changed is kept
2. where the interested party is presently
This exception applies where it is patently clear that residing or domiciled, if it will be impractical
there was a clerical or typographical error or mistake to submit in the place where record is kept
in the entry, which can be corrected or changed by the (i.e. when party has migrated to another
concerned city or municipal civil registrar or consul place in the country)
general in accordance with the provisions of this Act 3. nearest Philippine Consulates, if the
and its implementing rules and regulations petitioner is presently residing or domiciled in
foreign countries
Intersex persons
Sexual development of intersex persons—those whose Note: All petitions for the clerical or typographical
sex chromosomes, genitalia, and/or secondary sex errors and/or change of first names or nicknames may
characteristics are determined to be neither be availed of only once.
exclusively male nor female, makes gender
classification at birth inconclusive. It is only at maturity Grounds for Change of First Name or Nickname.
that the gender of such persons become fixed. [Sec. 4, RA 9048]
The petition for change of first name or nickname may
In the case of Jennifer Cagandahan, who suffered from be allowed in any of the following cases:
Congenital Adrenal Hyperplasia and had two sex a. The petitioner finds the first name or nickname to
organs and whose female sex organs did not develop be ridiculous, tainted with dishonor or extremely
normally, the Court granted her petition to change her difficult to write or pronounce.
registered sex from female. [Republic v Cagandahan, b. The new first name or nickname has been
G.R. No. 166676 (2008)]. habitually and continuously used by the petitioner
and he has been publicly known by that first name
Note: or nickname in the community: or
Clerical or typographical error refers to a mistake c. The change will avoid confusion.
committed in the performance of clerical work in
writing, copying, transcribing or typing an entry in the Form and Contents of the Petition: The petition for
civil register that is harmless and innocuous (i.e. correction of a clerical or typographical error, or for
misspelled name, misspelled place of birth, mistake in change of first name or nickname, as the case may be,
the entry of day and month in the date of birth or the shall be in the form of an affidavit, subscribed and
sex of the person or the like, which is visible to the eyes sworn to before any person authorized by the law to
or obvious to the understanding, and can be corrected administer oaths. The affidavit shall set forth facts
or changed only by reference to other existing record necessary to establish the merits of the petition and
or records) shall show affirmatively that the petitioner is
competent to testify to the matters stated. The
petitioner shall state the particular erroneous entry or
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entries, which are sought to be corrected and/or the where the corresponding civil registry is located. [Rule
change sought to be made. [Sec. 5, RA 9048] 108, Sec. 1, ROC]
The petition shall be supported with the following Entries subject to cancellation or correction [Rule
documents: 108, Sec. 2, ROC]
a. A certified true machine copy of the certificate or Upon good and valid grounds, the following entries in
of the page of the registry book containing the the civil register may be cancelled or corrected:
entry or entries sought to be corrected or a. births;
changed. b. marriages;
b. At least two (2) public or private documents c. deaths;
showing the correct entry or entries upon which d. legal separations;
the correction or change shall be based; and e. judgments of annulments of marriage;
c. Other documents which the petitioner or the city f. judgments declaring marriages void from the
or municipal civil registrar or the consul general beginning;
may consider relevant and necessary for the g. legitimations;
approval of the petition. h. adoptions;
i. acknowledgments of natural children;
No petition for correction of erroneous entry j. naturalization;
concerning the date of birth or the sex of a person shall k. election, loss or recovery of citizenship
be entertained except if the petition is accompanied by l. civil interdiction;
earliest school record or earliest school documents m. judicial determination of filiation;
such as, but not limited to, medical records, baptismal n. voluntary emancipation of a minor; and
certificate and other documents issued by religious o. changes of name.
authorities; nor shall any entry involving change of
gender corrected except if the petition is accompanied Parties
by a certification issued by an accredited government When cancellation or correction of an entry in the civil
physician attesting to the fact that the petitioner has register is sought, the civil registrar and all persons
not undergone sex change or sex transplant. The who have or claim any interest which would be
petition for change of first name or nickname, or for affected thereby shall be made parties to the
correction of erroneous entry concerning the day and proceeding. [Rule 108, Sec. 3, ROC]
month in the date of birth or the sex of a person, as the
case may be, shall be published at least once a week Notice and Publication
for two (2) consecutive weeks in a newspaper of Upon the filing of the petition, the court shall, by an
general circulation. order, fix the time and place for the hearing of the
same, and cause reasonable notice thereof to be given
Furthermore, the petitioner shall submit a certification to the persons named in the petition. The court shall
from the appropriate law enforcement agencies that also cause the order to be published once a week for
he has no pending case or no criminal record. three (3) consecutive weeks in a newspaper of general
circulation in the province. [Rule 108, Sec. 4, ROC]
The petition and its supporting papers shall be filed in
three (3) copies to be distributed as follows: first copy Opposition
to the concerned city or municipal civil registrar, or the The civil registrar and any person having or claiming
consul general; second copy to the Office of the Civil any interest under the entry whose cancellation or
Registrar General; and third copy to the petitioner correction is sought may, within fifteen (15) days from
notice of the petition, or from the last date of
publication of such notice, file his opposition thereto.
3. Rule 108, Rules of Court [Rule 108, Sec. 5, ROC]
Cancellation or correction of entries in the civil registry Expediting Proceedings.
The court in which the proceeding is brought may
Who may file petition and Where it may be filed. make orders expediting the proceedings, and may also
Any person interested in any act, event, order or decree grant preliminary injunction for the preservation of the
concerning the civil status of persons which has been rights of the parties pending such proceedings. [Rule
recorded in the civil register, may file a verified petition 108, Sec. 6, ROC]
for the cancellation or correction of any entry relating
thereto, with the Court of First Instance of the province
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Order
After hearing, the court may either dismiss the petition
or issue an order granting the cancellation or
correction prayed for. In either case, a certified copy of
the judgment shall be served upon the civil registrar
concerned who shall annotate the same in his record.
[Rule 108, Sec. 7, ROC]
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PROPERTY
Civil Law
Note: Whether attached by the owner himself or parties would be prejudiced. That characterization is
some other person effective between the parties. [Makati Leasing v.
3. Fertilizer actually used on a piece of land Wearever, G.R. No. L-58469 (1983)]
b. The province or municipality, as a juridical sea so as to become part of the shore. The land having
entity, also possesses private property to disappeared on account of the gradual erosion in case
answer for its economic necessities. of natural expropriation, and having remained
c. General Presumption: that land comes from submerged until they were reclaimed by the
the State upon the creation of the government, they are public land. [Government v.
municipality. All lands in the possession of the Cabangis, G.R. No. L-28379 (1929)]
municipality are properties of public dominion
held in trust for the State’s inhabitants are
subject to the control and supervision of the
3. Based on Consumability
State.
Only applies to movable property, determined by
Exception: Properties acquired with their own funds in nature [Art. 418, CC]
their private or corporate capacity over which the a. Consumable goods: movables which cannot be
political subdivision has ownership and control. A used in a manner appropriate to their nature
municipal corporation must prove that they acquired without their being consumed.
the land with their own corporate funds. [Salas v. b. Non-consumable goods: all those excluded in the
Jarencio,G.R. No. L-29788 (1972)] first category
2. T ypes of Ownership
a. Full Ownership - With complete rights over the
property.
b. Naked Ownership - Absence of jus fruendi and
jus utendi.
c. Sole Ownership - Ownership vested only in one
person
d. Co-Ownership - Ownership vested in 2 or more
persons in ideal shares or undivided interest.
e. Beneficial ownership - Right to enjoy the use
and fruits of a property
3. Rights of an Owner
1. Right to enjoy and dispose of a thing, without
other limitations than those established by law.
2. Right of action against the holder and possessor
of the thing in order to recover it.
3. Jus Utendi: right to use and enjoy
4. Jus Fruendi: right to receive the fruits
5. Jus Abutendi: right to consume a thing by use
6. Jus Disponendi: right to alienate, encumber,
transform or even destroy the thing owned
7. Jus Vindicandi: right to recover possession of
property based on a claim of ownership
8. Jus Possidendi: right to possess the property
(Implied from all the other rights)
9. Jus Accessionis: right to whatever is attached to
the thing in such a way that they cannot be
separated without injury
10. Jus Tresauris: right to hidden treasure
11. Right to Exclude; Doctrine of Self-Help [Art. 429,
CC]
12. Right to enclose or fence [Art. 430, CC]
13. Right to receive just compensation in case of
expropriation [Art. 435, CC] but not if the
property seized by competent authority in the
exercise of police power, unless seizure is DOCTRINE OF SELF-HELP [Arts. 429-430, CC]
unjustified 1. The owner or a third person may use this right for
14. Right of owner of land to its surface and the benefit of the owner, acting as negotiorum
everything under it, except natural resources - gestor may use such force as may be reasonably
the owner may make any works, plantations, and necessary to repel or prevent an actual or
excavations subject to servitudes and special threatened unlawful physical invasion or
laws and ordinances and reasonable needs of usurpation of his property.
aerial navigation [Art. 437, CC]
Requisites:
a. Protecting Property a. Person exerting force is owner or lawful
possessor
REAL RIGHTS v. PERSONAL RIGHTS b. There is actual or threatened unlawful
physical invasion or usurpation of property
Real Rights c. Force used against aggressor is reasonably
Rights that confer upon its holder an autonomous necessary to repel/prevent such aggression
power to derive directly from a thing certain economic
advantages independently of whoever the possessor Exception: Cannot be used against agents of the
of the thing. state acting in their official functions or from other
lawful form of action against the possessor
The number of real rights is an open classification:
1. Ownership 2. Every owner may enclose or fence his land or
2. Real right of Possession tenements by any other means without detriment
3. Usufruct to servitudes constituted thereon.
4. Easement
5. Recorded lease 4. A ctions to Recover
6. Real Estate Mortgage
7. Chattel Mortgage Ownership and Possession
8. Pledge of Property
9. Antichresis
10. Retention
11. Pre-emption a. Immovable Property
12. Redemption
13. Stewardhip Accion Reivindicatoria
14. Certificate of Ancestral Domain Title; Certificate An action to recover ownership of real property. It
of Ancestral Domain Claims in the IPRA Law includes, but is not limited to possession.
SUMMARY OF ACTIONS
Action Venue Summon Prayer Basis Prescription Jurisdiction
Prior physical
possession for
Forcible Entry/
Real In forcible entry;
Unlawful Possession 1 year MTC
Action personam Notice to vacate
Detainer
for unlawful
detainer
GF: 10 years
BF: 30 years
[Art. 1137, CC]
Exception (i.e. no
Accion Real In
Possession Ownership acquisitive prescription): RTC
Reivindicatoria Action personam
Torrens Title and
property of public
dominion;
Exception to exception:
laches
RTC or MTC
Real In Constructive 10 years
Reconveyance Title (depending on
Action personam trust [Art. 1456, CC]
value)
If plaintiff in possession,
imprescriptible
RTC or MTC
Quieting of Real Quasi-in Quieting of Otherwise, 10 years
Ownership (depending on
Title Action rem Title (based on constructive
value)
trust) [Heirs of Jose
Olviga vs. CA, G.R, No.
104813 (1993)]
RTC or MTC
Personal In Possession or GF: 4 years
Replevin Possession (depending on
Action personam Ownership BF: 8 years
value)
ACCESSION CONTINUA Situation #1: Both the landowner (LO) and the
Right pertaining to the owner of a thing over owner of materials (OM) are in GF
everything that is incorporated or attached thereto Rights: Shall own what is built,
either naturally or artificially (by external forces). planted, sown
(materials/improvements)
ACCESSION CONTINUA ARTIFICIAL OR [Accessio cedit principali]
INDUSTRIAL LO in GF
Building, planting or sowing on land owned by Liabilities: shall pay for the value
another (over immovables). of the materials (no one shall be
unjustly enriched at the expense
General rule: Whatever is built, planted or sown on the of another)
land of another + improvements or repairs made Rights:
thereon, belong to the owner of the land subject to the 1. Limited right of removal
rules on BPS. [Art. 445, CC] (can only be resorted to if
OM in GF no injury can be inflicted on
Presumptions: the work constructed); or
1. All works, sowing and planting are presumed 2. Right to reimbursement for
made by the owner and at his expense, unless the the value of materials.
contrary is proved.
2. The owner of the principal thing owns the natural, Situation #2: Both the LO and OM are in BF
industrial and civil fruits, except when the Both LO and
following persons exist: Parties will be treated as though
OM in BF
a. Possessor in Good Faith both acted in GF [Art. 453, CC]
b. Usufructuary
c. Lessee Situation #3: LO in BF, while OM in GF
d. Antichretic creditor Rights: To own what is built,
planted, sown
Meaning of bad faith (materials/improvements)
On the part of the landowner
Whenever the building, planting or sowing was done Liabilities: shall pay for the value
with his knowledge and without opposition on his part. LO in BF
of the materials, as well as pay
[par. 2, Art. 453, CC] OM indemnity for damages
On the part of the owner of materials Note: Subject to OM’s absolute
Allows the use of his materials without protest. right of removal
Rights:
On the part of the builder, planter and sower 1. Absolute right of removal +
He is a possessor in bad faith at the time of BPS if he Right to indemnification for
knows that damages; OR
1. He does not have title to the land, and thus, has no OM in GF
2. Right to reimbursement for
right to build thereon; or the value of materials +
2. He has no permission to build, plant, or sow on the Right to indemnification for
land which he possesses but does not own. damages
Note: Situation #4: LO in GF, while OM in BF
Bad faith leads to liability for damages and the loss of
Rights:
the works or the improvement without
1. Right to acquire the
reimbursement.
improvements without
paying indemnity
Bad faith of one party neutralizes the bad faith of the LO in GF
2. Right to acquire indemnity
other.
for damages if there are
hidden defects known to
Rules [Arts. 446-455, CC]
OM
a. Case where the landowner differs from the
Lose materials without right to
owner of materials [Art. 447, CC] OM in BF
indemnity (no right of removal)
Situation #2: Both the LO and BPS are in BF Note: If there are 3 parties in BPS, solve the problem
Both LO and by considering the options open to the landowner
Parties will be treated as though
BPS in BF vis-à-vis BPS depending on their good faith or bad
both acted in GF [Art. 453, CC]
faith; apply Art. 455, CC re: one who acted in good
faith. Art. 455, CC shall not apply if the owner
Situation #3: LO in BF, while BPS in GF makes use of the right granted by Article 450.
1. Must indemnify BPS for the
improvements AND pay General Rules [de Leon]:
damages as if he himself 1. OM in GF entitled to reimbursement for the
did the BPS value of the materials used (regardless of the
LO in BF GF or BF of the LO and/or the BPS),
2. Has no option to sell the
land and cannot compel
BPS to buy the land without PRIMARILY, from the BPS. If the BPS be
the latter’s consent insolvent, then the LO shall be subsidiarily
Rights: liable to the OM [par. 1, Art. 455, CC]
1. Absolute right of removal +
BPS in GF Requisites for the LO’s subsidiary liability
Right to indemnification for
damages; OR • The OM acted in GF;
• BPS is insolvent; and
• The LO appropriates the accession to 4. If only the BPS acted in BF, he becomes liale
himself. to the OM for the value of the materials +
2. The BPS who has paid the OM may seek damages. Should he become insolvent, the
reimbursement from the LO (value of LO shall pay for the value of the materials, but
materials + labor) [par. 2, Art. 455, CC] will not be liable for damages. Additionally,
he shall still be liable to the LO [Arts. 450-
Requisites: 451, CC]
• The BPS acted in GF; and 5. If only the LO acted in GF, he can exercise any
• The LO appropriates the improvement to of his options under Arts. 449 and 450, both
himself. having an additional right to ask for damages
3. if only the OM is in BF, he loses his materials, [Art. 451, CC].He shall also not be subsidiarily
as well as his right to indemnity. He also liable to the OM.
becomes liable for damages. [Arts. 449, 451, 6. If ALL acted in BF, they shall be treated as
CC] though all of them acted in GF [Art. 453, CC]
7.
ACCESSION CONTINUA NATURAL LAND Requisites: [ACFI – Abrupt, caused by Current or other
DEPOSITS, ETC. Forces of nature, Identifiable]
1. Segregation and transfer of land is sudden and
Alluvium abrupt;
Soil is gradually deposited on banks adjoining the 2. Caused by the current of the water; and
river. 3. The portion of land transported must be known
and identifiable; or
Requisites: [GAC – Gradual, Adjacent, Currents] 4. Can also apply to sudden transfer by other forces
1. Deposit of soil or sediment is gradual and of nature such as land transferred from a
imperceptible; mountain slope because of an earthquake.
2. As a result of the action of the currents of the
waters of the river and should have no human Effect: The ownership of the detached property is
intervention; retained by the owner subject to removal within 2
3. Land where the accretion takes place is adjacent to years from the detachment.
the banks of the rivers; and
4. Deemed to Exist: When the deposit of the sediment In case of uprooted trees, the owner retains ownership
has reached a level higher than the highest level if he makes a claim within 6 months. This refers only
of the water during the year, i.e. higher than the to uprooted trees and does not include trees which
river bank. remain planted on a known portion of land carried by
the force of the waters. In this latter case, the trees are
Effect: The riparian owner automatically owns the regarded as accessions of the land through gradual
Alluvion but it does not automatically become changes in the course of adjoining stream. [Payatas v.
registered property in his name. Tuazon, G.R. No. L-30067 (1929)]
3. Characteristics
1. There are 2 or more co-owners.
2. There is a single object which is not materially or
physically divided and his ideal share of the
whole.
3. There is no mutual representation by the co-
owners.
4. It exists for the common enjoyment of the co-
owners.
5. It has no distinct legal personality.
6. It is governed first of all by the contract of the
parties; otherwise, by special legal provisions, and
in default of such provisions, by the provisions of
Title III on Co-Ownership.
Only limitation
Each co-owner of realty held pro indiviso exercises his
rights over the whole property and may use and enjoy
the same with no other limitation than that he shall
not injure the interests of his co-owners. [Pardell v.
Bartolome, G.R. No. L-4656 (1912)]
a. Law f. By Occupancy
Harvesting and Fishing: Co-ownership by two or more
1. Cohabitation: co-ownership between common
persons who have seized a res nullius thing
law spouses [See Arts. 147, 148, 90, FC]
2. Purchase creating implied trust [Art. 1452, CC]
3. Easement of party wall: co-ownership of part- 5. R ights of Co-Ownership
owners of a party wall [Art. 658, CC]
4. Condominium Law: co-ownership of the common a. Right to Share in the
areas by holders of units [Sec. 6, RA 4726]
Benefits as Well as the
b. Contract Charges [Art. 485, CC]
1. By Agreement of Two or More Persons [Art. 494, 1. Proportionality – The share of the co-owners
CC] shall be proportional to their respective interests.
2. By the creation of a Universal Partnership of all Any stipulation to the contrary is void. [Art. 48,
present property [Arts. 1778-1779, CC] par. 1, CC]
3. By Association and Societies with Secret Articles 2. Presumption of Equality – The portions
[Art. 1775, CC] belonging to the co-owners in the co-ownership
shall be presumed equal, unless the contrary is
proved. [Art. 48, par. 2, CC]
c. Intestate Succession
Co-ownership between the heirs before partition of b. Right to Use the Thing
the estate [Art. 1078, CC] Owned In Common [Art.
486, CC]
Note: No prescription shall run in favor of a co-owner Judicial intervention: The court, at the instance of an
or co-heir against his co-owners or co-heirs so long as interested party, shall order such measures as it may
he expressly or impliedly recognizes the co-ownership. deem proper, including the appointment of an
[Art. 494, CC] administrator, in the following cases:
1. If there be no majority, or
For prescription to run in favor of a co-owner, the 2. If the resolution of the majority is seriously
following elements must concur to show adverse prejudicial to those interested in the property
possession of a co-owner: owned in common.
1. He has performed unequivocal acts of repudiation
amounting to an ouster of the other co-owners; Examples of acts seriously prejudicial:
2. Such positive acts of repudiation have been made 1. Call for a substantial change of the thing
known to the other co-owners; and 2. Authorizing leases, loans, and other contracts
3. The evidence thereon must be clear and without the necessary security, thereby exposing
convincing. [Salvador v. CA, supra] the property to serious danger
4. His possession is open, continuous, exclusive, and 3. Continued employment of an administrator who
notorious. is guilty of fraud or negligence in his management
(Manresa)
i. Right to Redemption [Art.
1619, CC]
6. R ules
Legal redemption – the right to be subrogated, upon a. On Renunciation of Share
the same terms and conditions stipulated in the
contract, in the place of one who acquires a thing by Note: this is different from renunciation of co-
purchase or dation in payment, or by any other ownership
transaction whereby ownership is transmitted by
onerous title. A co-owner may exempt himself from the payment of
expenses of preservation by renouncing his undivided
A co-owner of a thing may exercise the right of interest in the co-ownership as may be equivalent to
redemption in case the shares of all the other co- his share in of the necessary expenses and taxes. [Art.
owners or of any of them are sold to third person. [Art. 488, CC]
1620, CC]
A co-owner who has not waived his share in the co-
As legal redemption is intended to minimize co- ownership may be compelled to pay his share in the
ownership, once a property is subdivided and cost of its maintenance but he may not be compelled
distributed among the co-owners, the community to renounce.
ceases to exist and there is no more reason to sustain
any right of legal redemption. Every act intended to Waiver of renunciation is not allowed if it is prejudicial
put an end to indivision among co-heirs is deemed to to the co-ownership.
be a partition. [Avila vs. Sps. Barabat, supra]
b. Repairs for Preservation
May be judicial or extrajudicial: Exception: If the partition was already executed, they
1. Extrajudicial partition – The agreement may be cannot impugn partition
oral or written.
2. Judicial partition – governed by the Rules of Court Exception to the exception: If there was fraud, or a
insofar as they are consistent with the CC. [Art. previous formal opposition to prevent the partition,
496, CC] without prejudice to right of debtor/assignor to
maintain its validity.
Action for partition will determine:
1. Whether or not the plaintiff is indeed a co-owner Rules on notice to creditors and assignees:
of the property 1. The law does not expressly require previous notice
2. How the property will be divided between the to the creditors and assignees before a partition,
plaintiff and defendant. but the latter have the right of creditors and
assignees to take part in the division.
Incidents of Partition
1. Mutual accounting for benefits received and If notice is not given, the partition may be
reimbursement for expenses made [Art. 500, CC] impugned by creditor/assignee if made in fraud of
2. Payment of damages by each co-owner by reason creditors.
of his negligence or fraud. [Art. 500, CC]
3. Liability of each co-owner for defects of title and Once notice has been given, it is the duty of
quality of the portion assigned to each of the co- creditors and assignees to intervene and make
owners. [Art. 501, CC] known their stand.
2. If they fail, they cannot question the division
Effects of Partition made, except in cases of fraud.
1. Confers exclusive ownership of the property 3. If they formulate a formal question, they can
adjudicated to a co-heir. contest such partition
2. Co-heirs shall be reciprocally bound to warrant
the title to and the quality of each property Partition of an indivisible thing [Art. 498, CC]
st
adjudicated. 1 option: The co-owners can agree that one of them
3. Reciprocal obligation of warranty shall be shall be the sole owner by paying the value of other co-
proportionate to the respective hereditary shares owners’ shares
nd
of co-heirs. 2 option: If they cannot agree who among them shall
rd
4. An action to enforce warranty must be brought be sole owner, the property will be sold to a 3 person
within 10 years from the date the right accrues. and the proceeds distributed among them
5. The co-heirs shall not be liable for the subsequent
insolvency of the debtor of the estate.
Right of third parties e. Sale of Property Co-Owned
The partition of a thing owned in common shall not
prejudice third persons, who shall retain the rights of The sale shall be resorted only if:
1.
2.
The property is essentially indivisible
The co-owners cannot agree that the entire Possession
property be allotted or assigned to one of them,
who shall reimburse the other co-owners of their The holding of a thing or the enjoyment of a right. [Art.
shares. 523, CC]
1. Concept of Possession
Possession includes the idea of occupation. It cannot
exist without it.
Extent of possession
a. Actual – consists in manifestation of acts of
dominion over the thing of such a nature as a
party would naturally exercise over his own
property.
b. Constructive – possession of a portion of the
thing under claim of ownership is a constructive
possession of the whole of such thing, if the
remainder is not in the adverse possession of
another.
a. Must be susceptible of being appropriated One who possesses as a mere holder, not in the
b. Need not be susceptible of prescription – things concept of owner, acknowledges in another a superior
must be within the commerce of men right which he believes to be ownership, whether his
belief is right or wrong: e.g. tenant, usufructuary,
What May Not Be Possessed borrower in commodatum.
a. Res communes
b. Property of public dominion c. Possession in the Concept
c. Right under discontinuous and/or non-apparent
easement of an Owner.
• May be exercised by the owner himself or one who
2. E ssential Requisites of claims to be so.
Possession • DOES NOT refer to the possessor‘s inner belief or
disposition regarding the property in his
a. Occupancy – There must be holding or control of possession.
a thing or right. Also known as possession in fact. • Possession in the concept of an owner refers to his
b. Intent to possess (animus possidendi) – The overt acts which tend to induce the belief on the
holding must be with intention to possess. part of others that he is the owner.
c. Must be in one’s own right – May be held by a • Possession in the concept of an owner is ius
person in his own name or in that of another possidendi.
10. He can do on the thing possessed everything that EXCEPT: when he holds the same adversely
the law authorizes an owner to do: he can against all of them with notice to them the
exercise the right of pre-emption and is entitled exclusive claim of ownership.
to the indemnity in case of appropriation. Refers to all kinds of possession, whether in
11. Has presumption of continuity of good faith [Arts. concept of owner or not, in good faith or in bad
528 and 529, CC) faith, and in one’s own name or another’s – in
12. Non-interruption of possession [Arts. 554 and reference to things only, NOT rights.
561, CC]
13. Right to be protected in his possession 2. Entitlement to fruits/expenses : Possessor in
Good Faith – Arts. 544, 526-527, CC
In general, every possessor has a right to be a. As to the fruits
respected in his possession. If disturbed therein, i. Fruits already received [Art. 544(1), CC]
possessor has a right to be protected in or • Entitled to all the fruits until
restored to possession [Art. 539, CC] possession is legally interrupted (i.e.
before summons)
“Every possessor” – includes all kids of ii. Fruits still pending [Art. 545, CC]
possession, from that of an owner to that of a • Entitled to pro-rate the fruits already
mere holder, except that which constitutes a growing when his possession is legally
crime. interrupted.
14. Lawful possessor can employ self-help [Art. 429, b. As to necessary expenses [Art. 546, (1), CC]
CC] and [Art. 540, CC] i. Imposed by the thing itself and have no
relation to the desire or purpose of the
Reason for the rule: To prevent anyone from possessor; hence they are reimbursed,
taking the administration of justice into his own whatever may be the juridical character of
hands. Even the owner cannot forcibly eject the the person who advanced them.
possessor, but must resort to the courts. ii. The possessor in good faith may retain the
15. Extension to the movables within or inside [Arts. thing until he is reimbursed for necessary
542 and 426, CC] expenses.
c. As to useful expenses [Arts. 546 (2) and 547,
Other Consequences CC]
1. Possession is converted into ownership after the • Incurred to give greater utility or
required lapse of time necessary of prescription productivity to the thing
[Art. 540, CC] • They are reimbursed only to the possessor
in GF as a compensation or reward for
To consolidate title by prescription, the him. Possessor in BF cannot recover such
possession must be under claim of ownership, expenses
and it must be peaceful, public and uninterrupted.
• The possessor in good faith may retain the
thing until he is reimbursed for useful
It is only the conviction of ownership externally
expenses.
manifested, which generates ownership.
• The other party has the option to:
i. Refund the amount of expenses; or
Acts of possessory character done by virtue of a
license or mere tolerance on the part of the real ii. Pay the increase in value which the
owner are not sufficient and will not confer title by thing may have acquired
prescription or adverse possession. d. As to ornamental expenses or expenses for
pure luxury [Art. 548, CC]
The possessor in good faith is not entitled to
The following cannot acquire title by prescription:
a refund for ornamental expenses. But he
• Lessees, trustees, pledges, tenants on shares
may remove the ornamental improvements if
or planters and all those who hold in the
they do not cause damage to the principal
name or in representation of another.
thing.
• Mere holders placed in possession of the
property by the owner, such as agents, POSSESSOR IN BAD FAITH
employees. One who is aware that there exists in his title or mode
• Those holding in a fiduciary character like of acquisition a flaw which invalidates it.
receivers, attorneys, depositaries and
antichretic creditors. Requisites:
• Co-owner, with regard to common property:
1. Possessor has a title or mode of acquisition; concept of an owner (e.g., owner sells the
2. There is a flaw or defect in said title or mode; property and becomes lessee)
b. Constructive possession (See discussion in
Examples of vice or defect in title : Concept of Possession)
a. Grantor was not the owner
b. Requirements for transmission were not 2. By the fact that the thing is subject to the action
complied with of our will
c. Mistake in the identity of the person
d. Property was not really res nullius Possession is acquired through the following
modes of constructive delivery:
3. The possessor is aware of the flaw or defect in the a. Traditio simbolica – delivering an object or
title symbol placing the thing under the control of
the transferee
Rights of a possessor in bad faith b. Traditio longa manu – the transferor points
1. Right to be respected in possession; [Art. 539, CC] out to the transferee the things which are
2. Right to necessary expenses and the expenses for being transferred, or they merely agree or
production, gathering, and preservation of fruits; consent that delivery has been effected
[Arts. 545 and 546, CC]
3. Does not have right to reimbursement of 3. By the proper acts and legal formalities
expenses for luxury but may remove them as long established for acquiring such right
as the principal thing suffers no injury, or may sell
them to the owner who opts to buy the removable Acquisition by virtue of a just title such as when
ornaments. property is transmitted by succession, donation,
4. No right to reimbursement for useful contract, or execution of a public instrument, etc.
improvements and no limited right of removal.
b. By Whom May Possession
Obligations of a possessor in bad faith be Acquired [Art. 532, CC]
1. Reimburse the value of fruits received and which
the legitimate possessor could receive; [Art. 549,
1. The same person who is to enjoy it
CC]
2. His legal representative
2. Pay in proportion to the charges, expenses of
3. His agent
cultivation and the net proceeds upon cessation of
4. Any person without any power whatever
good faith; [Art. 545, CC]
3. Costs of litigation; [Art. 550, CC]
this case, the possession shall not be considered as
4. Liability to the deterioration/loss of a thing
acquired until the person in whose name the act of
possessed in every case, including fortuitous
possession was executed has ratified the same,
events. [Art. 552, CC]
without prejudice to the juridical consequences of
negotiorum gestio in a proper case.
4. A cquisition of Possession
c. Preference of Possession
a. Ways of Acquiring [Art. 538, CC]
Possession [Art. 531, CC]
Possession as a fact cannot be recognized at the same
1. By the material occupation of a thing or the time in two different personalities except in the cases
exercise of a right of co-possession
a. Possession is acquired through the following
modes of constructive delivery: In case a dispute arises, the order of preference is as
i. Traditio brevi manu – If the follows:
transferee/buyer already had possession 1. The present possessor shall be preferred
of the object under a different title even 2. If there are two possessors, the one longer in
before the sale (e.g., lessee subsequently possession is preferred
buys the property) 3. If the dates of the possession are the same, the
ii. Traditio constitutum possessorium – the one who presents a title is preferred
transferor/seller continues in the 4. If all the foregoing conditions are equal, the thing
possession of the object, but not in the shall be placed in judicial deposit pending
2. If the previous possessor is unknown, the finder which has not been annulled at the time of the
shall immediately deposit it with the mayor of the sale. [Art. 1506, CC]
city or municipality where the finding has taken d. If the present possessor has already become
place. owner of the thing through acquisitive
3. The finding shall be publicly announced by the prescription.
mayor for two consecutive weeks in the way he
deems best.
4. If the movable cannot be kept without
deterioration, or without expenses which
considerably diminish its value, it shall be sold at
public auction 8 days after the publication.
5. Six (6) months from the publication having
elapsed without the owner having appeared, the
thing found, or its value, shall be awarded to the
finder. The finder and the owner shall be obliged,
as the case may be, to reimburse the expenses.
6. If the owner should appear in time, he shall be
obliged to pay, as a reward to the finder, 1/10 of
the sum or of the price of the thing found.
9. L oss/Termination of
Possession [Art. 555, CC]
A possessor may lose his possession:
a. By the abandonment of the thing;
b. By an assignment made to another either by
onerous or gratuitous title;
c. By the destruction or total loss of the thing, or
because it goes out of commerce;
d. By the possession of another, subject to the
provisions of Art. 537, CC if the new possession
has lasted longer than 1 year. But the real right of
possession is not lost till after the lapse of 10
years.
Exceptions:
a. If present possessor acquired it in good faith at a
public sale, unless the original owner reimburses
the price paid for the movable. [Art. 559, CC]
b. If the present possessor purchased it in a
merchant’s store, fair or markets [Art. 1505,
CC]. This is to protect the innocent buyer to
facilitate commercial sales and give stability to
business transactions. A buyer cannot be
reasonably expected to look behind the title of
every article when he buys at a store [Sun
Brothers vs. Velasco, 54 O.G. 5143, (1958)]
c. If the present possessor purchased it in good
faith from one who has a voidable title thereto,
• Includes only jus utendi, jus fruendi) and jus Reasons for preserving form and substance
possidendi 1. To prevent extraordinary exploitation;
2. To prevent abuse, which is frequent;
• Usufructuary must preserve the form or substance
3. To prevent impairment.
of the thing.
• Preservation is a natural requisite, not essential Exception: In an abnormal usufruct, alteration is
because the title constituting it or the law may allowed.
provide otherwise.
• Usufruct is extinguished by the death of the
usufructuary.
3. Classification
Voluntary: created by the will of private persons
• By act inter vivos– such as contracts and donations:
• By donation of the usufruct;
• By retention of the usufruct by donor;
• Where a usufruct is constituted inter vivos and for valuable consideration, the contract
is unenforceable unless in writing;
AS TO • By act mortis causa – such as testament
MANNER OF Legal: as provided by law.
CREATION Usufruct of parents over the property of unemancipated children. (now limited to the
collective daily needs of the family) [Art. 226, CC]
Mixed: created both by law and the acts of persons, i.e. by acquisitive prescription.
The rights and duties of the usufructuary provided by law may be modified or eliminated by
the parties.
If the usufructuary is authorized to alienate the thing in case of necessity, it is the
usufructuary who determines the question of necessity
Simple: only one usufructuary enjoys the property.
Multiple: several usufructuaries enjoy the property as co-usufructuaries.
Simultaneous: at the same time.
Successive: one after the other.
AS TO
NUMBER OF Limitations
BENEFICIARIES • If by donation, ALL donees must be alive. [Art. 756, CC]
• Fiduciary and the second heir must be alive at the time of the death of the testator. [Art.
863, CC]
• If by testamentary succession, there must be only 2 successive usufructuaries, and both
must be alive or at least already conceived at the time of the testator’s death and later
born alive. [Art. 869, CC]
Rights: Must not be strictly personal or intransmissible.
Things
Normal: involves non-consummable things where the form and substance are preserved.
AS TO OBJECT Abnormal or irregular: when the usufruct includes things which cannot be used in a
OF USUFRUCT manner appropriate to its nature without being consumed.
Quasi-usufruct [Art. 574, CC
Includes things which cannot be used without being consumed.
Money may be the object of usufruct. [Alunan v. Veloso, G.R. No. 29158 (1928)]
Pure – without term or condition
With a term – with a period, which may either be suspensive (from a certain day) or
AS TO
resolutory (to a certain day)
EFFECTIVITY
Conditional – subject to a condition which may either be suspensive (from a certain event)
or resolutory (until a certain event)
Effect of the transfer of right: d. When the things, whatever their nature, are
The transfer or lease of the usufruct does not delivered under appraisal as equivalent to
terminate the relation of the usufructuary with the their sale.
owner.
Notes:
Death of the transferee does not terminate the Future crops may be sold but such sale would be
usufruct but it terminates upon the death of the void if usufruct terminates prior to harvest of
usufructuary who made the transfer. future fruits. The buyer’s remedy is to recover from
the usufructuary.
Rules as to Lease:
• The property in usufruct may be leased even The usufructuary-lessor is liable for the act of the
without the consent of the owner. substitute.
• The lease should be for the same period as
the usufruct. A usufructuary who alienates or leases his right of
Exception: leases of rural lands continues for usufruct shall answer for any damage which the
the remainder of the agricultural year. things in usufruct may suffer through the fault or
• A lease executed by the usufructuary before negligence of the person who substitutes him.
the termination of the usufruct and subsisting [Art. 590, CC]
after the termination of the usufruct must be
respected, but the rents for the remaining A usufructuary can sell or alienate his right of
period will belong to the owner. usufruct, apart from the thing held in usufruct, but
• If the usufructuary has leased the lands or the right of usufruct remains a temporary real
tenements given in usufruct, and the usufruct right.
should expire before the termination of the
lease, he or his heirs and successors shall 4. To enjoy any increase which the thing may
receive only the proportionate share of the acquire through accession
rent that must be paid by the lessee. [Art.
568, CC] 5. To make improvements on the property as he
may deem proper [Art. 579, CC]
• It is the usufructuary and not the naked owner
who has the right to choose the tenant.
He may improve the thing without altering its
• As corollary to the right of the usufructuary to form and substance. He may also remove
all the rent, to choose the tenant, and to fix
improvements made by him if it is possible to do
the amount of the rent, she necessarily has
so without damage to property.
the right to choose herself as the tenant
thereof; and, as long as the obligations she Registration of improvements – to protect
had assumed towards the owner are fulfilled. rd
usufructuary against 3 persons
[Fabie v. Gutierrez David, G.R. L-123 (1945)]
• A lease executed by the owner before the 6. To remove improvements he made as long as no
creation of the usufruct is not extinguished by damage is caused to the property
such usufruct.
Limitations on the Right to Lease the Property Whenever the usufructuary can remove the
General rule: Usufructuary cannot do the improvements without injury to the property in
following: usufruct, he has the right to do so, and the owner
a. Cannot alienate or dispose of the objects cannot prevent him from doing so even upon
included in the usufruct; payment of their value.
b. Cannot renounce a servitude;
c. Cannot mortgage or pledge a thing. This right does not involve an obligation – if the
usufructuary does not wish to exercise it, he
Exceptions: cannot be compelled by the owner to remove the
a. When the right of usufruct is converted into improvements.
the right of ownership;
b. When the things are consumable [Art. 574, This right to remove improvements can be
CC]; enforced only against the owner, not against a
c. When the things by their nature are intended purchaser in good faith to whom a clean title has
for sale, such as the merchandise in a been issued.
commercial establishment; and
7. To set-off the improvements he made against The surviving spouse of the usufructuary may
any damage to the property [Art. 580, CC] dispose his/her usufructuary right like any
other hereditary property, and may be the
The improvements should have increased the subject of attachment or execution [Bogacki
value of the property, and that the damages are v. Inserto, G.R. No. L-39187 (1982)]
imputable to the usufructuary.Increase in value
and the amount of damages are set off against 2. To bring action and oblige the owner to give him
each other. proper authority and necessary proof in cases of
usufruct to recover property or real right [Art.
Rules: 578, CC]
• If the damages exceed the increase in value,
the difference should be paid by the The provision applies if the purpose of the action
usufructuary as indemnity. is to recover real or personal property, or real right
• If the increase in value exceeds the damages, over real or personal property.
and the improvements are of such nature that
they can be removed without injury to the The action may be brought in the name of the
thing in usufruct, the settlement of the usufructuary.
difference must be agreed upon by the
parties. If a favorable judgement is obtained, the usufruct
• If the improvements cannot be removed shall be limited to the fruits, and the naked
without injury, the excess in value accrues to ownership shall belong to the owner.
the owner.
Upon termination of the case, the usufruct of the
8. To retain the thing/property until he is action also terminates.
reimbursed for taxes on the capital and
advances for extraordinary expenses [Art. 612, 3. To exercise all rights of a co-owner with respect
CC] to the administration and collection of
fruits/interests from the property in cases of
The usufructuary has the right of retention until he usufruct of a part of a property owned in
is reimbursed of the amount he paid for taxes and common [Art. 582, CC]
the increase in value cause by extraordinary
repairs he made. Usufructuary is bound by the partition made by
the owners of the undivided property even if he did
He has no right to reimbursement for useful not take part in the partition. His usufruct is
improvements. transferred over the part allotted to the co-owner.
On sterile stock: same rules on fungible property He cannot fell or cut trees in a manner that will
govern. (i.e. it is an abnormal usufruct – may dispose prejudice the land.
of or consume the animal [Art. 574, CC]
The usufructuary may make necessary thinnings to
On fruitful stock: ensure that the remaining trees may properly grow.
• Must replace ordinary losses of the stock with
the young if: e. Usufruct on a Right of
1. Some animals die from natural causes; or
2. Some animals are lost due to rapacity of Action to Recover Property
beasts of prey. or Real Rights Over
Note: If the number of the young produced is less
than the animals that died from natural causes or
Property [Art. 578, CC]
due to beasts of prey, then the usufructuary does
The action may be brought in the name of the
not have to replace those which are in excess of
usufructuary.
the young that he currently has.
• No obligation to replace if: If the purpose is the recovery of the property or right,
1. There is a total loss of animals because of he has the also the right to oblige the owner to give the
some unexpected or unnatural loss (like
authority for such purpose, as well as to furnish him
contagious disease or any other uncommon
whatever pieces of evidence he may have.
event, provided the usufructuary has no
fault); or
2. All perish, the usufructuary should deliver the f. Usufruct on Mortgaged
remains to the owner. Property [Art. 600, Cc]
• If there is partial loss, the usufruct subsists on the
remainder. If the usufruct is over the entire patrimony of the
owner, Art. 598, CC should apply.
Note:
1. If all the animals should perish, without his fault, If the usufructuary mortgaged the usufruct himself, he
the usufructuary shall still deliver the remains is liable to pay his own debt.
which may have been saved to the owner.
2. If the loss, either partial or whole is without fault of
the usufructuary, he has no duty to replace them.
g. Usufruct over an Entire
3. Bad use as provided in Art. 603 gives the owner the Patrimony [Art. 598, CC]
right to bring an action, but does not warrant the
extinguishment of the usufruct. [Art. 610, CC] Applies when:
1. the usufruct is a universal one
2. the naked owner has debts or is obliged to make
periodical payments
Usufruct granted for the time that may elapse Art. 608, CC
before a third person attains a certain age [Art. If destroyed property is insured before termination of
606, CC] the usufruct
It shall subsist for the number of years specified Usufructuary can
even if the third person should die before the continue enjoying the
period expires unless such usufruct has been new building if a new one
expressly granted only in consideration of the is built.
existence of such person. When insurance premium
paid by owner and
Usufructuary shall
c. By merger of the usufruct and ownership in the usufructuary (par. 1)
receive interest on the
same person; interest on the insurance
Illustration: H was the usufructuary of land owned indemnity if owner does
by X. X dies, leaving in his will, the naked not wish to rebuild.
ownership of the land to H. the usufruct is
Owner shall receive the
extinguished because now H is both the naked
full amount of the
owner and the usufructuary.
insurance indemnity in
case of loss, and either of
d. By renunciation of the usufructuary;
the following, depending
on the case:
Limitations:
• Must be express: tacit renunciation is not When the insurance
If he does not rebuild,
sufficient; taken by the naked owner
usufruct continues over
• Does not need the consent of naked owner; only because
the remaining land and
and usufructuary refuses to
materials (plus interests)
contribute to the
• If made in fraud of creditors, they may rescind
premium (par. 2)
the waiver through an action under Art. 1381, If the owner rebuilds,
CC (accion pauliana). usufruct does not
continue on the new
e. By the total loss of the thing in usufruct; building, but owner
Situation Effect should pay interest on
the value of the land and
Art. 607, CC materials
If destroyed property is not insured
Insurance proceeds go to
Usufruct continues over When insurance taken by the usufructuary.
If the building forms part
the land and materials usufructuary only No obligation to rebuild.
of an immovable under
(plus interests), if owner depends on value of Usufruct continues on
usufruct
does not rebuild. usufructuary’s insurable the land.
Usufruct continues over interest Owner has no share in
If usufruct is on the the land and materials insurance proceeds.
building only (plus interests), if owner
does not rebuild.
If usufructuary alone was given the indemnity: When the dominant and the servient estates have
1. He must give it to the naked owner and compel the same owner, the easement is extinguished.
the latter to return either the interest or to replace Separate ownership is a prerequisite to an
the property. easement.
2. He may even deduct the interest himself, if the
naked owner fails to object. The acknowledgment of an easement is a
admission that the property belongs to another.
b. Bad Use of Thing in
c. It can only exist between neighboring estates in
Usufruct [Art. 610, CC] case of real easements.
Does not extinguish the usufruct but entitles the owner d. It is a right constituted over an immovable by
to demand delivery and administration of the thing nature (land and buildings), not over movable
with the obligation to pay the net proceeds of fruits. properties or even immovable by incorporation, by
destination or by analogy. [Art. 613, CC]
The bad use must cause considerable injury not to the
thing, but to the owner. Immovable: used in its common and not in the
legal sense, meaning only property immovable by
Usufructuary is liable for damages caused to property. nature can have easements.
They cannot be established on things beyond the It cannot be alienated separately from the
commerce of man, (i.e. property of public tenement affected or benefited.
dominion).
Any alienation of the property covered carries with
e. It limits the servient owner’s right of ownership it the servitudes affecting said property. But this
for the benefit of the dominant estate. affects only the portion of the tenement with the
easement, meaning that the portions unaffected
Right of limited use but no right to own and can be alienated without the servitude.
possess the servient estate.
i. It is indivisible. [Art. 618, CC]
There exists a limitation on ownership: the
dominant owner is allowed to enjoy or use part of If the servient estate is divided between two or
the servient estate, and owner of the servient more persons, the easement is not modified, and
estate is restricted in his enjoyment of his each of them must bear it on the part that
property. corresponds to him.
Being an abnormal limitation of ownership, it If the dominant estate is divided between two or
cannot be presumed [de Leon]. more persons, each of them may use the
easement in its entirety, without changing the
f. It creates a relation between tenements. place of its use, or making it more burdensome in
any other way.
There is no transfer of ownership, but a
relationship is created, depending on the type of j. It has permanence because once it attaches,
easement. whether used or not, it continues and may be used
anytime
General Rule: It may consist in the owner of the
dominant estate demanding that the owner of the Perpetual: exists as long as property exists, unless
servient estate refrain from doing something it is extinguished.
(servitus in non faciendo) or that the latter permit
that something be done over the servient property Easement Distinguished from Lease
(servitus in patendo), but not in the right to Easement Lease
demand that the owner of the servient do
something (servitus in faciendo) except if such act Real right only when it is
is an accessory obligation to a praedial servitude registered, or when its
Real right, whether
(obligation propter rem) subject matter is real
registered or not
property and the duration
Servient owner merely allows something to be exceeds one year
done to his estate. May be constituted only
May be constituted on
on an immovable
Exception: Praedial servitudes real or personal property
property
• Right to place beams in an adjoining wall to Limited to use of real
support a structure. Limited right to both the
property of another but
• Right to use another’s wall to support a use and possession of the
without the right to
building. property of another
possess
g. It is inherent or inseparable from estate to which
Easement Distinguished from Usufruct
they actively or passively belong. [Art. 617, CC]
Easement Usufruct
Easements are merely accessory to the May be constituted only May be constituted on
tenements, and a “quality thereof.” They cannot on an immovable either movable or
exist without tenements. property immovable property
Easements exist even if they are not expressly Not extinguished by the
Extinguished by the death
stated or annotated as an encumbrance on the death of dominant
of usufructuary
titles. owner
h. It is intransmissible.
2. Does not cause injury to the dominant estate f. By the redemption agreed upon between the
owner owners of the dominant and servient estates.
3. Does not cause injury to those who have a right
to use the easement, if any. a. Other Causes not
d. Obligations of Servient Mentioned in Art. 631, CC
Estate Owner 1. Annulment and rescission of the title constituting
the voluntary easement;
• Not to impair the use of the easement [Art. 629(1), 2. Termination of the right of grantor of the voluntary
CC] easement;
• To contribute proportionately to expenses if he 3. Abandonment of the servient estate;
uses the easement [Art. 628(2), CC] Owner of the servient estate gives up ownership of
the easement (e.g. the strip of land where the
Unless there is an agreement to the contrary right of way is constituted) in favor of the
dominant estate. The easement is extinguished
To pay for the expenses incurred for the change of because ownership is transferred to the dominant
location or form of the easement owner, who now owns both properties.
4. Eminent domain;
The government’s power to expropriate property
7. Extinguishment of for public use, subject to the payment of just
Easements compensation.
5. Special cause for extinction of legal rights of way: if
Ways by which an easement may be extinguished: right of way no longer necessary. [Art. 655, CC]
[Art. 631, CC] [MINERRO – Merger, Impossibility, Non- a. If the right of way granted to a surrounded
use, Expiration, Renunciation, Redemption, Other estate ceases to be necessary because its
causes] owner has joined it to another abutting on a
a. By merger in the same person of the ownership of public road, the owner of the servient estate
the dominant and servient estates – must be may demand that the easement be
absolute, perfect and definite, and not merely extinguished, returning what he may have
temporary. If the merger is temporary, there is at received by way of indemnity. The interest on
most a suspension of the easement, but no the indemnity shall be deemed to be in
extinguishment. payment of rent for the use of the easement.
b. By a non-user for ten years – there is inaction, and b. The same rule shall be applied in case a new
not outright renunciation. This is due to the road is opened giving access to the isolated
voluntary abstention by the dominant owner, and estate.
not due to a fortuitous event. Note: Non-user c. In both cases, the public highway must
cannot extinguish servitudes not yet exercised. substantially meet the needs of the dominant
Extinguishment by non-use only applies to estate in order that the easement may be
easements which being in use are later extinguished.
abandoned. 6. Right of way ceases to be necessary [Art. 655, CC]:
c. When either or both of the estates fall into such a. Owner of the dominant estate has joined to
condition that the easement cannot be used – another abutting on a public road.
impossibility referred to must render the entire b. A new road is opened giving access to the
easement unusable for all time. Impossibility of isolated estate.
using the easement due to the condition of the c. Requisite: the public highway must
tenements (e.g. flooding) only suspends the substantially meet the needs of the dominant
servitude until it can be used again. Exception: If estate in order that the easement may be
the suspension exceeds 10 years, the easement is extinguished
deemed extinguished by non-use. 7. Owner of the servient estate may demand that the
d. By the expiration of the term or the fulfillment of easement be extinguished.
the condition, if the easement is temporary or 8. Owner of the servient estate must return indemnity
conditional – applies only to voluntary he received (value of the land)
easements.
e. By the renunciation of the owner of the dominant
estate – must be specific, clear, express
(distinguished from non-user); or
outhouses, or on orchards or gardens already the sea if suitable to the needs of the
existing. tenement is sufficient;
4. The isolation of the immovable is NOT due to the
This easement does not prevent the owner of the dominant owner’s own acts e.g. if he constructs
servient estate from closing or fencing it, or from building to others obstructing the old way; and
building over the aqueduct in such manner as not 5. There is payment of indemnity;
to cause the latter any damage, or render a. If right of way is permanent and continuous
necessary repairs and cleanings impossible. for the needs of the dominant estate = value
of the land + amount of damage caused to
This easement is considered as continuous and the servient estate;
apparent, even though the flow of the water may b. If right of way is limited to necessary passage
not be continuous, or its use depends upon the for cultivation of the estate and for gathering
needs of the dominant estate, or upon a schedule crops, without permanent way = damage
of alternate days or hours. Therefore, it can be caused by encumbrance.
created by prescription. N.B.: In the appropriation
of water, there is a need to apply for water rights. Rules for establishing Right of Way:
1. Must be established at the point least prejudicial
6. Stop Lock or Sluice Gate [Art. 647, CC] to the servient estate. [Art. 650, CC]
The construction of a stop lock or sluice gate in the 2. Insofar as consistent with the first rule, where the
bed of the stream from which the water is to be distance from the dominant estate to a public
taken, for the purpose of improving an estate. highway is shortest.
3. The criterion of least prejudice to the servient
Such person may demand that the owners of the estate must prevail over the criterion of shortest
banks permit its construction, after payment of distance although this is a matter of judicial
damages, including those caused by the new appreciation. While shortest distance may
easement to such owners and to the other ordinarily imply least prejudice, it is not always so
irrigators. as when there are permanent structures
obstructing the shortest distance; while on the
b. Right of Way [Arts. 649- other hand, the longest distance may be free of
obstructions and the easiest or most convenient
657, CC] to pass through. [Quimen v. CA, G.R. No. 112331
(1996)]
Who may demand 4. The fact that LGV had other means of egress to
1. The owner of the dominant estate; or the public highway cannot extinguish the said
2. Any person with the real right to cultivate or use easement, being voluntary and not compulsory.
the dominant estate e.g. a usufructuary, a de jure The free ingress and egress along Mangyan Road
possessor. created by the voluntary agreement between the
parties is thus legally demandable with the
Note: a lessee cannot demand such easement, corresponding duty on the servient estate not to
because the lessor is the one bound to maintain him in obstruct the same. [La Vista Association v. CA,
the enjoyment of the property. G.R. No. 95252 (1997)]
5. The width of the easement of right of way shall be
Requisites: that which is sufficient for the needs of the
1. The dominant estate is surrounded by other dominant estate, and may accordingly be
immovables owned by other persons; changed from time to time. [Art. 651, CC]
2. There must absolutely be no access i.e. means of
entrance or exit/egress to a public highway; Obligations In Permanent And Temporary
3. Even if there is access, it is difficult or dangerous Easements Of Right Of Way
to use, or grossly insufficient;
Permanent right of way Temporary right of way
a. Mere inconvenience in the use of an outlet
does not render the easement a necessity; Indemnity
b. An adequate outlet is one that is sufficient for Consists of the damages
the purpose and needs of the dominant Consists of the damages
and the value of the
owner, and can be established at a only.
land.
reasonable expense;
c. Does not necessarily have to be by land – an Necessary repairs
outlet through a navigable river or a lake or
Dominant owner to Servient owner to spend a. Easements of the right of way for the passage
spend on such. on such. of livestock known as animal path, animal
trail or any other, and those for watering
Share in taxes places, resting places and animal folds, shall
The dominant owner be governed by the ordinances and
shall reimburse a regulations relating thereto, and, in the
Servient owner to spend absence thereof, by the usages and customs
proportionate share of
on such. of the place.
taxes to the proprietor
of the servient estate. b. Without prejudice to rights legally acquired,
the animal path shall not exceed in any case
Rules on Indemnity for Estates Enclosed Through a the width of 75 meters, and the animal trail
Sale, Exchange, Partition or Donation. that of 37 meters and 50 centimeters.
c. Whenever it is necessary to establish a
Sale, exchange or
Donation compulsory easement of the right of way or
partition
for a watering place for animals, the
Buyer, grantee or donee provisions of this Section and those of Articles
as dominant owners 640 and 641 shall be observed. In this case
The buyer or grantee the width shall not exceed 10 meters
The donee shall pay the
shall grant the right of
donor indemnity. c. Party Wall [Arts. 658-666,
way without indemnity.
Seller, grantor or donor CC]
as dominant owners
Refers to all those mass of rights and obligations
The donee shall grant
The seller or grantor emanating from the existence and common
the right of way without
shall pay indemnity. enjoyment of wall, fence, enclosures or hedges, by the
indemnity.
owners of adjacent buildings and estates separated by
such objects.
Notes on extinguishment
• Extinguishment is not automatic. The owner of Nature
the servient estate must ask for such 1. A common wall which separates two estates, built
extinguishment. by common agreement at the dividing line such
• Indemnity paid to the servient owner must be that it occupies a portion of both estates on equal
returned without interest. Interest on account of parts.
indemnity is deemed to be rent for use of 2. A party wall is a special form of co-ownership (a
easement. kind of compulsory co-ownership).
a. Each owner owns part of the wall but it
Special Rights of Way cannot be separated from the other portions
1. Right of way to carry materials for the belonging to the others. A party wall has a
construction, repair, improvement, alteration or special characteristic that makes it more of an
beautification of a building through the estate of easement as it is called by law.
another. b. An owner may use a party wall to the extent
2. Right of way to raise on another’s land scaffolding of the ½ portion on his property.
or other objects necessary for the work.
Party Wall Co-Ownership
If it be indispensable for the construction, repair, Before division of
improvement, alteration or beautification of a Shares of the co-owners
shares, a co-owner
building, to carry materials through the estate of cannot be physically
cannot point to any
another, or to raise therein scaffolding or other segregated but they
definite portion of the
objects necessary for the work, the owner of such can be physically
property as belonging
estate shall be obliged to permit the act, after identified.
to him.
receiving payment of the proper indemnity for the None of the co-owners
damage caused him. [Art. 656, CC] may use the community
3. Right of way for the passage of livestock known as There is no such
property for his
animal path, animal trail, watering places, resting limitation.
exclusive benefit
places, animal folds. [Art. 657, CC] because he would be
invading the rights of • The right to use by the other party is not
the others. interfered with;
Any owner may free • The consent by the other owner is needed if a
himself from party wants to open a window; and
contributing to the cost In a co-ownership, • The condition of the building is determined by
of repairs and partial renunciation is experts.
construction of a party allowed. 2. To increase the height of the wall.
wall by renouncing all • He does this at his expense, including the
his rights thereto. thickening of the wall on his land.
• He shall indemnify the other party for any
When Existence Of Easement Of Party Wall Is damages.
Presumed 3. To acquire a half-interest in any increase in
1. In dividing walls of adjoining buildings up to the height or thickness of the wall, paying a
point of common elevation. proportionate share in the cost of the work and
2. In dividing walls of gardens or yards situated in the value of the land covered.
cities, or towns, or in rural communities. Note that the value of the land must be appraised
3. In fences, walls and live hedges dividing rural at the time of acquisition.
lands. 4. To renounce his part ownership of a party wall if
he desires to demolish his building supported by
Note: A title or an exterior sign, or any other proof the wall.
showing that the entire wall in controversy belongs
exclusively to one of the adjoining property owners He shall bear all the expenses of repairs and work
may rebut these presumptions. necessary to prevent any damage which the
demolition may cause to the party wall.
When Existence Of An Exterior Sign Is Presumed
[Art. 660, CC] Obligations Of Owners Of A Party Wall
1. Whenever in the dividing wall of buildings there is • To contribute proportionately to the repair and
a window or opening. maintenance of the party wall unless he
2. Whenever one side is straight and plumb on all its
renounces his part-ownership.
facement, and on the other, it has similar 1. This includes the renunciation of the share in
conditions on the upper part, but the lower part the wall and the land
slants or projects outward. 2. He cannot renounce his part if his building is
3. Whenever the entire wall is built within the being supported by the party wall
boundaries of one of the estates.
• If he raises the height of the wall, he must:
4. Whenever the dividing wall bears the burden of
1. Bear the cost of maintenance of the
the binding beams, floors and roof frame of one of
additions;
the buildings, but not those of the others.
2. Bear the cost of construction, if the wall
5. Whenever the dividing wall between courtyards,
cannot support the additional height;
gardens, and tenements is constructed in such a
3. Give additional land, if necessary to thicken
way that the coping sheds the water upon only
the wall;
one of the estates.
4. Pay for damages, if necessary, even if
6. Whenever the dividing wall, being built of
temporary; and
masonry, has stepping stones, which at certain
5. Bear the increased expenses for preservation
intervals project from the surface on one side only,
but not on the other.
7. Whenever lands enclosed by fences or live hedges d. Easement of Light and
adjoin others that are not enclosed. View [Arts. 667-681, CC]
Note: The deposit of earth or debris on one side alone Easement of light (jus luminum) is the right to admit
is an exterior sign that the owner of that side is the light from the neighboring estate by virtue of the
owner of the ditch or drain. The presumption is an opening of a window or the making of certain
addition to those enumerated in Art. 660, CC. openings.
Right Of Owners Of A Party Wall Easement of view (jus prospectus) is the right to make
1. Generally, part-owners may use the wall in openings or windows, to enjoy the view through the
proportion to their respective interests, estate of another and the power to prevent all
provided that:
constructions or works which would obstruct such Notes on the Acquisition of the Easement
view or make the same difficult. • Period of acquisitive prescription depends upon
whether the easement of light and view is positive
Necessarily includes the easement of light. or negative, and only starts to run from the time
the owner asserting the servitude has forbidden
It is possible to have light only without a view. the owner of the adjoining tenement from doing
something he could lawfully do.
Note: If an owner has an easement of view, he also has • THUS, although the action to compel the closure
an easement of light, but not vice versa. might have prescribed because the easement has
been created by prescription, the owner of the
Nature adjoining estate may still build on his own land a
• Positive: Opening a window through a party wall structure that might obstruct the view for 10 years,
1. When the opening is made through the wall thus extinguishing it by non-user.
of another
2. When a part owner of a party wall opens a e. Drainage of Buildings [Art.
window therein, such act implies the exercise
of the right of ownership by the use of the 674, CC]
entire thickness of the wall.
3. The easement is created only after the lapse The owner of a building is obliged to construct its roof
of the prescriptive period. or covering in such manner that the rain water shall
• Negative: Formal prohibition upon the owner of fall on his own land or on a street or public place, and
the adjoining land or tenement. NOT on the land of his neighbor, even though the
1. Formal means that the prohibition has been adjacent land may belong to two or more persons, one
notarized [Cortes v Yu-Tibo, G.R. No. 911 of whom is the owner of the roof.
(1903)]
2. When a person opens a window on his own Even if it should fall on his own land, the owner shall
building, he is exercising his right of be obliged to collect the water in such a way as not to
ownership on his property, which does not cause damage to the adjacent land or tenement.
establish an easement.
3. Coexistent is the right of the owner of the The true easement is Article 675 where the adjacent
estate has the obligation of receiving the rain water
adjacent property to build or plant on his own
falling from a neighboring roof and giving it an outlet
land, even if such structures or planting cover
on his own lot so as not to cause damage to the
the window.
dominant estate.
4. If the adjacent owner does not build
structures to obstruct the window, such is
Easement of drainage if buildings [Art. 676, CC] – to
considered mere tolerance and NOT a waiver
give outlet to rain water collected
of the right to build.
5. An easement is created only when the owner
opens up a window and subsequently f. Intermediate Distances
prohibits or restrains the adjacent owner from [Arts. 677-681, CC]
doing anything that may tend to cut off or
interrupt the light and the 10-year Prohibiting the contraction and plantings near
prescriptive period has lapsed by a notarial fortified places or fortresses without complying with
prohibition. special laws, ordinances and regulations relative
hereto. Art. 677, CC, in effect, establishes an easement
Note: in favor of the State. The general prohibition is
• In buildings separated by a public way or alley, not dictated by the demands of national security.
less than 3 meters wide, the distances required (2
m, 60 cm) do not apply. The following must comply with the regulations or
• If an easement is acquired to have direct views, customs of the place:
balconies or belvederes, the owner of the servient • Construction of aqueduct, well, sewer, etc. [Art.
estate must not build at less than 3 meters from 678, CC]
the boundary line of the two tenements. • Constructions, which by reason of their nature or
• The distances may be stipulated by the parties, but products are dangerous or noxious.
should not be less than what is prescribed by the
law (2 meters and 60 cm).
If it be the roots of a neighboring tree, which should A municipal body has the power to declare and abate
penetrate into the land of another, the latter may cut nuisances. BUT it has no power to find as fact that a
them off himself within his property. particular thing is a nuisance. The determination of
whether or not a nuisance exists is a judicial function,
Fruits naturally falling upon adjacent land belong to because to declare something a nuisance is to deprive
the owner of said land. its use. [Iloilo Cold Storage v Mun. Council of Iloilo, G.R.
No. L-7012 (1913)].
g. Lateral and Subjacent
Support [Arts. 684-687, 1. Nuisance v. Trespass
CC] Nuisance Trespass
The proprietor is prohibited from making dangerous Use of one’s own
excavations upon his land as to deprive any adjacent property in such a
land or building of sufficient lateral or subjacent manner as to cause
support. injury to the property or
Direct infringement of
right or interest of
another’s right of
Easement of lateral and subjacent support is deemed another, and generally
property.
essential to the stability of buildings. results from the
commission of an act
Support is lateral when a vertical plane divides the beyond the limits of the
supported and supporting lands. property affected.
Injury is consequential. Injury is immediate.
Support is subjacent when the supported land is
above the supporting land.
2. N uisance v. Negligence
h. Nuisance [Arts. 682-683,
CC] Nuisance Negligence
Whether it was Whether the
See Next Section. unreasonable for the defendant’s use of his
defendant to act as he property was
did in view of the unreasonable as to
threatened danger or plaintiff, without regard
therefor in the same manner as the one who created For solidary liability, there must be some joint or
it. [Art. 696, CC] concurrent act or community of action or duty, or the
several wrongful acts done at several times must have
b. Liability of Creator of concurred in their effects as one single act to produce
the injury complained of.
Nuisance
If there exists a common design, or some joint or
He who creates a nuisance is liable for the resulting concurrent act or community of action or duty, or
damages and his liability continues as long as the several wrongful acts done at several times which
nuisance continues. have concurred in their effects as one single act to
1. There must be a breach of some duty on the part produce the injury complained of, liability is solidary
of the person sought to be held liable for damages
resulting from a nuisance before an action will lie
against him.
e. Right to Recover Damages
2. No one is to be held liable for a nuisance which he
cannot himself physically abate without legal The abatement of a nuisance does not preclude the
action against another for that purpose. right of any person injured to recover damages for its
3. Where several persons, acting independently, past existence. [Art. 697, CC]
cause damage by acts which constitute a
nuisance, each is liable for the damage which he Abatement and damages are cumulative remedies.
has caused or for his proportionate share of the
entire damage. No Prescription
The action to abate a public or private nuisance is NOT
extinguished by prescription. [Art. 1143(2), CC]
c. Liability of Transferees
Exception: Easements, under Art. 631(2), CC are
The grantee of land upon which there exists a nuisance extinguished by a non-use for 10 years
created by his predecessors in title is not responsible
therefore merely because he becomes the owner of the
premises, or merely because he permits it to remain. 6. R egulation of Nuisances
Since the injurious effect of a nuisance is continuing,
every successive owner or possessor, who fails or a. Public Nuisance
refuses to abate it, has the same liability as the
original owner. Remedies
The remedies against a public nuisance are:
To render the new owner or possessor liable, it is 1. Prosecution under the Penal Code or any local
necessary that he has actual knowledge of the ordinance;
existence of the nuisance, and that it is within his 2. A civil action; or
power to abate the same. 3. Extrajudicial abatement.
a. It must be reasonably and efficiently
If he cannot physically abate the nuisance without exercised
legal action against another person, then he shall not b. Means employed must not be unduly
be liable for such nuisance. oppressive on individuals, and
c. No more injury must be done to the property
d. Nature of Liability or rights of individuals than is necessary to
accomplish the abatement.
All persons who participate in the creation or d. No right to compensation if property taken or
maintenance of a nuisance are jointly and severally destroyed is a nuisance.
liable for the injury done.
Abatement without Judicial Proceedings,
If 2 or more persons who create or maintain the 1. Police Power of the State
nuisance act entirely independent of one another, and The police power of the State includes the right
without any community of interest, concert of action, to destroy or abate by summary proceeding
or common design, each is liable only so far as his acts whatever may be regarded as a public nuisance
contribute to the injury.
2. Right to Compensation
Property taken or destroyed for the purpose of
abating a nuisance is not take for public use;
thus, there is no obligation to make nuisance is acquired or should have been acquired
compensation for such taking. by the person entitled to abate.
3. The person who has the right to abate must give
3. Need for Abatement reasonable notice of his intention to do so, and
One of the most serious hindrances to the allow thereafter a reasonable time to enable the
enjoyment of life and property is a nuisance. other to abate the nuisance himself.
Provisions for its abatement are indispensable 4. The means employed must be reasonable and for
(Report of the Code Commission, p.51). any unnecessary damage or force, the actor will
be liable. The right to abate is not greater than the
Action for Abatement necessity of the case and is limited to the removal
1. The district health officer shall take care that one of only so much of the objectionable thing as
or all of the remedies against a public nuisance actually causes the nuisance.
are availed of.
2. If a civil action is brought by reason of the The property must not be destroyed unless it is
maintenance of a public nuisance, such action absolutely necessary to do so.
shall be commenced by the city or municipal
mayor. b. Private Nuisance
3. The district health officer shall determine whether
or not abatement, without judicial proceedings, is Private Nuisance: That which is not included in the
the best remedy against a public nuisance. definition of a public nuisance [Art. 695, CC]
4. A private person may file an action on account of
a public nuisance if it is especially injurious to him. Remedies [Art. 705, CC]
General rule: An individual has no right of action The remedies against a private nuisance are:
against a public nuisance. The abatement 1. A civil action; or
proceedings must be instituted in the name of the 2. Extrajudicial abatement.
State or its representatives. a. The procedure for extrajudicial abatement of
a public nuisance by a private person will also
Exception: An individual who has suffered some be followed.
special damage different from that sustained by the b. The person extrajudicially abating a nuisance
general public may maintain a suit in equity for an liable for damages if:
injunction to abate it, or an action for damages which i. If he causes unnecessary injury; or
he has sustained. ii. If an alleged nuisance is later declared by
the courts to be not a real nuisance.
The action becomes a tort if an individual has suffered
particular harm, in which case the nuisance is treated Remedies of the property owner
as a private nuisance with respect to such person. A person whose property is seized or destroyed as a
nuisance may resort to the courts to determine
Requisites of the right of a private individual to whether or not it was in fact a nuisance.
abate a public nuisance 1. An action for replevin;
1. That demand be first made upon the owner or 2. To enjoin the sale or destruction of the property;
possessor of the property to abate the nuisance; 3. An action for the proceeds of its sale and damages
2. That such demand has been rejected; if it has been sold; or
3. That the abatement be approved by the district 4. To enjoin private parties from proceeding to abate
health officer and executed with the assistance of a supposed nuisance.
the local police; and
4. That the value of the destruction does not exceed
P3000.
Rules
1. The right must be exercised only in cases of urgent
or extreme necessity. The thing alleged to be a
nuisance must be existing at the time that it was
alleged to be a nuisance.
2. A summary abatement must be resorted to within
a reasonable time after knowledge of the
How Occupation Is Effected: The owner of a swarm of bees shall have a right to
a. By hunting and fishing pursue them to another’s land, indemnifying the
b. By finding movables which never had any owner possessor of the latter for the damage.
c. By finding movables which have been abandoned
by the owner If the owner has not pursued the swarm, or ceases
d. By finding hidden treasures to do so within 2 consecutive days, the possessor
[See Arts 438-439, CC] of the land may occupy or retain the same, the
owner having lost his ownership by leaving, 5. Lost Movables; Procedure After Finding Lost
abandoned them (no more intention to recover) Movables [Art. 719, CC]
a. Rights and obligations of the finder of lost
2. Occupation of Domesticated Animals personal property are based on a quasi-
Wild animals are possessed only while they are contract.
under one's control; domesticated or tamed b. One who has lost his property does not
animals are considered domestic or tame if they necessarily abandon it.
retain the habit of returning to the premises of the c. Lost things cannot be acquired by
possessor. [Art. 560, CC] prescription, even if extraordinary.
d. Owner may still recover it from the person in
3. Pigeons and Fish [Art. 717, CC] possession of the same.
Pigeons or fish which change their breeding place e. If the owner is not known, finder must deliver
to another belonging to a different owner. Unless the thing to the mayor of the city or
enticed by some artifice or fraud, they shall municipality where it was found. The finding
belong to the owner of the breeding place to shall be publicly announced by the mayor for
which they have transferred. two consecutive weeks as he deems best.
f. Abandonment must be voluntary and
4. Hidden Treasure [Arts. 718, 438, CC] intentional. Under Art 719, CC implied
a. He who by chance discovers hidden treasure abandonment is presumed when six (6)
in another’s property: ½ shall be allowed to months from publication have elapsed
the finder. without the owner having appeared- in which
b. If the finder is a trespasser, he shall not be case, the thing is awarded to the finder.
entitled to any share of the treasure. g. If the owner should appear in time, he is
c. If the things found be of interest to science or obliged to give finder a 10% reward based on
the arts, the State may acquire them at their the sum or price of the thing found.
just price, which shall be divided in h. The expenses, including transportation,
conformity with the rule stated. storage, and publication, shall be reimbursed
by the finder, or by the owner in case the latter
claims the thing.
2. D onation
Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another,
who accepts it. (Simple donation)
Although under Art 725, CC, donation is an act, it is really a contract. The essential requisites of consent, subject
matter, and cause must be present.
Note: Acceptance by the done is required because donation is never obligatory. One cannot be
compelled to accept the generosity of another.
Other a. When a person gives to another a thing or right on account of the latter's merits or of the
instances services rendered by him to the donor, provided they do not constitute a demandable debt.
considered (Remuneratory donation)
as a b. When the gift imposes upon the donee a burden that is less than the value of the thing given.
donation (Onerous donation)
Requisites:
a. Must be made before the celebration of marriage;
b. Made in consideration of the marriage; and
c. Made in favor of one or both of the future spouses.
As to its
taking effect Causes for revocation of donation propter nuptias [Art. 86, CC]:
a. If the marriage is not celebrated or judicially declared void ab initio, except
donations made in the marriage settlements;
Kinds of
b. When the marriage takes place without the consent of the parents or
Donations
guardian, as required by law;
c. When the marriage is annulled, and the donee acted in bad faith;
d. Upon legal separation, the one being the guilty spouse;
e. If it is with a resolutory condition and the condition is complied with; or
f. When the donee has committed an act of ingratitude as specified by the
provisions of the CC on donations in general.
Donation Mortis Causa [Art. 728, CC]
It only becomes effective upon the death of the donor, as the donor’s death
ahead of the donee works as a suspensive condition for the existence of the
donation.
Characteristics:
a. The transferor retains ownership and control of the property while alive;
b. The transfer is revocable at will before his death; and
c. The transfer will be VOID if the transferor should survive the transferee.
a. Simple - made out of pure liberality or because of the merits of the donee.
b. Remuneratory - made for services already rendered to the donor.
As to cause c. Onerous - imposes a burden inferior in value to property donated.
or d. Improper - burden equal in value to property donated
consideration e. Sub-modo or modal - imposes a prestation upon donee as to how property
donated will be applied.
f. Mixed donations – e.g. sale for price lower than value of property.
No limit to donation of present property provided legitimes If present property is donated and property regime is
are not impaired. other than ACP, limited to 1/5.
As to grounds for revocation
Enumerated in Arts. 760 and 765, CC Enumerated in Art. 86, FC
Notes:
The nature of the act, whether it’s one of disposition or of execution, is controlling to determine whether the donation
is mortis causa or inter vivos.
What is important is the time of transfer of ownership even if transfer of property donated may be subject to a condition
or a term.
Whether the donation is inter vivos or mortis causa depends on whether the donor intended to transfer ownership over
the properties upon the execution of the deed. [Gestopa v. CA, G.R. No. 111904 (2002)]
FORMALITIES REQUIRED
FOR MOVABLES [Art. 748, CC] FOR IMMOVABLES [Art. 749, CC]
The donation of a movable may be made orally or in
General Rule: Must be in a public document
writing. Oral donation requires simultaneous delivery.
If donation and acceptance are in the same instrument:
If value of property exceeds P5,000:
a. It must in a public instrument
• Donation and acceptance must be in writing; b. Instrument must specify the property donated and
otherwise, it is void.
the charges
Exceptions:
a. Donations propter nuptias: need no express
acceptance
b. Onerous donations: governed by rules on contracts
Notes:
a. Donation of real property in a private instrument is
null and void.
b. Registration is not necessary for the donation to be
considered valid and effective. This is only comes
into play with respect to affected third persons.
c. There is nothing that prevents the donor or his heirs
to execute a public document ratifying a previous
donation that has been avoided for lack of
compliance with the legal requisites. This
ratification had the effect of a new donation
[Abragan v. Centenera, G.R. No. 22173, (1924)].
d. Action to declare the inexistence of a void donation
does not prescribe [Art. 1410, CC].
1. A donor may donate his present property provided he reserves sufficient property in ownership or in
usufruct for the support of himself and all of his relatives who are entitled to be supported by him
2. Present property: property which the donor can rightfully dispose of at the time of donation
3. Donation without reservation is not null and void in its entirety; it is only subject to reduction by the court
4. Limitation applies to simple, remunerative and modal donations but not to onerous ones nor to donations
mortis causa
b. Donations cannot comprehend future property [Art. 751, CC]
1. Future property: understood as anything which the donor cannot dispose of at the time of the donation
2. Nobody can dispose of that which does not belong to him
3. Future inheritance cannot be donated because it is future property, but upon the death of his predecessor,
the inheritance ceases to be future amd consequently, may be the object of donation. [Osorio v Osorio,
supra]
c. Amount of donation limited to what donor may give by will [Art. 752, CC]
1. A person may not donate more than he can give by will
2. Limitation applies where donor has forced or compulsory heirs
Donations made to several persons jointly
A joint donation (donation to two or more persons) could
not be accepted by a donee, independently of the other
donee/s. [Genato v. de Lorenzo, G.R. No. L-24983 (1968)] Exception: those given to husband and wife, except when
the donor otherwise provides
No accretion – one donee does not get the share of the
other donees who did not accept [Art. 753, CC]
Donor
Who are NOT allowed:
a. Guardians and trustees with respect to the property
Who are allowed: All persons who may contract (of legal entrusted to them [Art. 736, CC]
age) and dispose of their property [Art. 735, CC] b. Those disqualified by reason of public policy [Art.
739, CC]
Donor’s capacity is determined at the time of the making 1. Those made between persons guilty of adultery
of donation [Art. 737, CC] Subsequent incapacity is or concubinage at the time of the donation;
immaterial. 2. Those made between persons guilty of the same
criminal offense if the donation is made in
Note:Capacity to donate is NOT required for donations consideration thereof; or
mortis causa. 3. Those made to a public officer, his spouse,
descendants, and/or ascendants by reason of
the office.
Donee
Who are not allowed:
Who are allowed to accept donations: a. Made between person who are guilty of adultery or
a. Those who are not specifically disqualified by law concubinage [Art. 739, CC]
[Art. 738, CC] b. Made between persons found guilty of the same
b. Those who are allowed, with qualifications: criminal offense, in consideration thereof [Art. 739,
1. Minors, insane/imbecile, deaf-mute and others CC]
who are incapacitated [see NCC 38], provided c. Made to a public officer or his wife, descendant and
that their acceptance is done through their ascendants, by reason of his office [Art. 739, CC]
parents or legal representatives [Art. 741, CC] d. Those who cannot succeed by will [Art. 740, CC] –
2. Conceived and unborn children, provided that covers those stated under Arts. 1027 and 1032, CC
the donation is accepted by those who would e. Those made to incapacitated persons, although
legally represent them if they were already born simulated under the guise of another contract [Art.
743, CC]
Acceptance of the donation
Who may accept [Art. 745, CC] When to accept: during the lifetime of the donor or donee
a. Donee personally [Art. 746, CC]
Note: Any reversion stipulated by the donor in favor of a third person in violation of what is provided in the foregoing
shall be void, but shall not nullify the donation.
Double donations [Art. 744, CC]
Rule: Priority in time, priority in right.
a. If movable: one who first took possession in good faith.
b. If immovable: one who recorded in registry of property in good faith
c. If there is no inscription, the one who first took possession in good faith.
d. If there is no possession, one who can present the oldest title.
Excessive/Inofficious Donations [Art. 752, CC]
Inofficious donation: a type of donation in which a person gives or receives more than what he may give or receive by
will. If a donation is inofficious, it shall be reduced with regard to the excess.
But this reduction shall not prevent the donations from taking effect during the life of the donor, nor shall it bar the
donee from appropriating the fruits.
Note: Only those who, at the time of the donor's death, have a right to the legitime and their heirs and successors-
in-interest may ask for the reduction or inofficious donations.
If, there being two or more donations, the disposable portion is not sufficient to cover all of them, those of the more
recent date shall be suppressed or reduced with regard to the excess.
Donations cannot comprehend future property
Future property: understood as anything which the donor cannot dispose of at the time of the donation.
Note: It is immaterial that the then-future property may subsequently belong to the donor.
In fraud of creditors [NCC 759]
Donation is always presumed to be in fraud of creditors, when at the time thereof the donor did not reserve
sufficient property to pay his debts prior to the donation.
The donee shall be responsible for donor’s debts only when the donation has been made in fraud of creditors,
otherwise creditors may rescind donation by way of accion pauliana.
VOID DONATIONS
a. Donation between spouses
General Rule: Every donation or grant of gratuitous advantage, direct or indirect, between the spouses during
the marriage shall be VOID. The prohibition applies to persons living together as husband and wife without a
valid marriage.
Exception: Moderate gifts which the spouses may give each other on the occasion of any family rejoicing.
b. Those made between persons mentioned under Art. 739, CC
c. Those made to persons incapacitated to succeed by will. [Art. 740, CC]
REVOCATION/REDUCTION
Reduction
• Total withdrawal of amount, whether the legitime is impaired or not
• Benefits the donor
Revocation
• Amount is only insofar as the legitime is prejudiced
• Benefits the donors heirs (except when made on the ground of the appearance of a child)
Ingratitude
Applies to all donations EXCEPT: Mortis causa; Propter nuptias; Onerous donations
Property returned, but
Not transmitted to heirs of alienations and mortgages
Within 1 year after
donor/ donee, but if donor effected before the notation Fruits received from the
knowledge by donor of the
dies during pendency of of the complaint for filing of the complaint
fact and it was possible for
case, heirs may be revocation in the registry of returned
him to bring the action
substituted. property subsist. Later ones
shall be void.
Failure to reserve sufficient means for support
Reduced to the extent
At any time, by the donor or
Not transmissible necessary to provide Donee entitled
relatives entitled to support
support
Inofficiousness for being in excess of what the donor can give by will
Donation takes effect on
Within 5 years from the the lifetime of donor.
Transmitted to donor’s
death of the donor [NCC Reduction only upon his Donee entitled
heirs
1149] death with regard to the
excess
Fraud against creditors
Rescission within 4 years
Transmitted to creditor’s Returned for the benefit of Fruits returned/ if
from the perfection of
heirs or successors-in- the creditor who brought impossible, indemnify
donation/ knowledge of the
interest the action creditor for damages
donation
2. K inds of Prescription
a. Acquisitive Prescription
1. The acquisition of ownership and other real rights
through possession in the concept of owner of a
thing in the manner and condition provided by
law.
2. May be ordinary or extraordinary:
a. Ordinary: requires possession of things in
good faith and with just title for the time fixed
by law.
b. Extraordinary: acquisition of ownership and
other real rights without need of title or of
good faith or any other condition.
5. Possession must be in the concept of owner, not acquired by prescription or adverse possession. [PD
holder. 1529]
The following are only required in ordinary acquisitive RIGHTS NOT EXTINGUISHED BY PRESCRIPTION
prescription: [Art. 1143, CC]
1. Good faith of the possessor; and a. To demand a right of way, regulated by Art. 649,
2. Proof of just title CC;
b. To bring an action to abate a public or private
Note: nuisance.
• For extraordinary prescription, only possession in
the concept of owner is required; no need of good ACTION TO QUIET TITLE IF PLAINTIFF IS IN
faith and just title. POSSESSION
• Possession has to be in the concept of an owner, When plaintiff is in possession of the property: the
public, peaceful, and uninterrupted. action to quiet title does not prescribe.
Special characteristics
a. Essential purpose is to transmit the
use/enjoyment of a thing
b. Consensual
1
Excluded from Bar Coverage: 1) Household Service; 2) Contract of
Labor; 3) Contract for Piece of Work
c. Onerous The lease of a piece of rural land, when its duration has
d. Price is fixed in relation to the period of not been fixed, is understood to have been for all the
use/enjoyment time necessary for the gathering of the fruits which the
e. Temporary whole estate leased may yield in one year, or which it
may yield once, although two or more years have to
Subject Matter elapse for the purpose. [Art. 1682, CC]
General Rule: The subject matter must be within the
commerce of man. If the period for the lease has not been fixed, it is
Exceptions: Consumable things cannot be the subject understood to be from year to year, if the rent agreed
matter of lease, except: upon is annual; from month to month, if it is monthly;
a. Consumable only for display or advertising (lease from week to week, if the rent is weekly; and from day
ad pompam et ostentionem) to day, if the rent is to be paid daily. However, even
b. Goods are accessory to an industrial though a monthly rent is paid, and no period for the
establishment, e.g. coal in a factory [Art. 1645, lease has been set, the courts may fix a longer term for
CC] the lease after the lessee has occupied the premises for
over one year. If the rent is weekly, the courts may
b. Lease of Things as likewise determine a longer period after the lessee has
been in possession for over six months. In case of daily
Distinguished from Other rent, the courts may also fix a longer period after the
Concepts lessee has stayed in the place for over one month. [Art.
1687, CC]
Sale
In lease, only use and enjoyment is transferred, while d. Assignment of Lease
in sale, ownership is transferred; In lease, price may be
in money, fruits, some other useful things, or even The lessee cannot assign the lease without the consent
some prestation, unlike in sale where the price must be of the lessor, unless there is a stipulation to the
in money or its equivalent. contrary. [Art. 1649, CC]
Usufruct
Lease is not a real right except when lease is registered
and for a period of more than 1 year, whereas usufruct
e. Sublease
is a real right; lessor need not be owner of the thing
and the use is limited to that in the contract, whereas When in the contract of lease of things there is no
a usufruct generally includes all possible uses and express prohibition, the lessee may sublet the thing
manner of enjoyment of property. leased, in whole or in part, without prejudice to his
responsibility for the performance of the contract
Commodatum toward the lessor. [Art. 1650, CC]
Lease is essentially onerous, whereas a commodatum
is essentially gratuitous. Under the House Rental Law (R.A. No. 887), there is a
presumption that there would be no sublease unless
the lessor allows it.
c. Period of Lease
Distinguished from assignment
Cannot be perpetual – there must always be a period, In assignment, there is a transfer to a third person of
whether definite or indefinite. However, no lease for the rights and obligations arising from the lease
more than 99 years shall be valid. contract, whereas in a sublease, there is another
contract of lease where the original lessee becomes a
If at the end of the contract the lessee should continue lessor, and the original lease contract remains binding
enjoying the thing leased for fifteen days with the on the lessee.
acquiescence of the lessor, and unless a notice to the
contrary by either party has previously been given, it is Obligation of sublessee to lessor
understood that there is an implied new lease, not for Without prejudice to his obligation toward the
the period of the original contract, but for the time sublessor, the sublessee is bound to the lessor for all
established in Arts. 1682 and 1687, CC. The other terms acts which refer to the use and preservation of the
of the original contract shall be revived [Art. 1670, CC]. thing leased in the manner stipulated between the
lessor and the lessee. [Art. 1651, CC]
The sublessee is subsidiarily liable to the lessor for any 3. To pay expenses for the deed of lease.
rent due from the lessee. However, the sublessee shall 4. To suspend the payment of the rent in case the
not be responsible beyond the amount of rent due from lessor fails to make the necessary repairs or to
him, in accordance with the terms of the sublease, at maintain the lessee in peaceful and adequate
the time of the extra-judicial demand by the lessor. enjoyment of the property leased. [Art. 1658, CC]
Payments of rent in advance by the sublessee shall be 5. To tolerate the work, if during the lease it should
deemed not to have been made, so far as the lessor's become necessary to make some urgent repairs
claim is concerned, unless said payments were upon the thing leased, which cannot be deferred
effected in virtue of the custom of the place. [Art. 1652, until the termination of the lease. This lessee is
CC] obligated to tolerate although it may be very
annoying to him, and although during the same,
f. Rights and Obligations of he may be deprived of a part of the premises. [Art.
1662, CC]
Lessor
Rules in case of repairs
Rights and Obligations of Lessor [Art. 1654, CC] a. If the repairs last more than forty days the rent
a. To deliver the thing which is the object of the shall be reduced in proportion to the time -
contract in such a condition as to render it fit for including the first forty days - and the part of
the use intended; the property of which the lessee has been
b. To make on the same during the lease all the deprived.
necessary repairs in order to keep it suitable for b. When the work is of such a nature that the
the use to which it has been devoted, unless there portion which the lessee and his family need
is a stipulation to the contrary; for their dwelling becomes uninhabitable, he
c. To maintain the lessee in the peaceful and may rescind the contract if the main purpose
adequate enjoyment of the lease for the entire of the lease is to provide a dwelling place for
duration of the contract. the lessee.
d. To not alter the form of the thing leased in such a 6. To bring to the knowledge of the proprietor, within
way as to impair the use to which the thing is the shortest possible time, every usurpation or
devoted under the terms of the lease. [Art. 1661, untoward act which any third person may have
CC] committed or may be openly preparing to carry out
upon the thing leased. In case of failure, lessee
The lessor is not obliged to answer for a mere act of liable for damages which may be suffered by the
trespass which a third person may cause on the use of proprietor through the lessee’s negligence. [Art.
the thing leased but the lessee shall have a direct 1663, CC]
action against the intruder. There is a mere act of 7. To advise the owner, with the same urgency, of the
trespass when the third person claims no right need of all necessary repairs in order to keep the
whatever. [Art. 1664, CC] property suitable to the use for which it has been
devoted. In case of failure, lessee liable for
The provisions governing warranty, contained in the damages which may be suffered by the proprietor
Title on Sales, shall be applicable to the contract of through the lessee’s negligence. If the lessor fails
lease. In the cases where the return of the price is to make urgent repairs, the lessee, in order to
required, reduction shall be made in proportion to the avoid an imminent danger, may order the repairs
time during which the lessee enjoyed the thing. [Art. at the lessor’s cost. [Art. 1663, CC]
1653, CC] 8. To return the thing leased, upon the termination
of the lease, as he received it, save what has been
g. Rights and Obligations Of lost or impaired by the lapse of time, or by ordinary
wear and tear, or from an inevitable cause. [Art.
Lessee 1665, CC]
Rights and Obligations of Lessee [Art. 1657, CC] Responsibility for deterioration of loss
1. To pay the price of the lease according to the terms The lessee is responsible for the deterioration or loss of
stipulated; the thing leased, unless he proves that it took place
2. To use the thing leased as a diligent father of a without his fault. This burden of proof does not apply
family, devoting it to the use stipulated; and in the when the destruction is due to earthquake, flood,
absence of stipulation, to that which may be storm or other natural calamity. [Art. 1667, CC]
inferred from the nature of the thing leased,
according to the custom of the place;
Conditions: i. Remedies
1. Improvements are suitable to the use for which the
lease is intended 1. Ejectment
2. Improvements does not alter the form or
substance of the property leased Grounds [Art. 1673, CC]:
a. When the period agreed upon, or that which is
Effect: The lessor upon the termination of the lease fixed for the duration of leases under Arts.
shall pay the lessee one- half of the value of the 1682 and 1687, CC has expired;
improvements at that time. b. Lack of payment of the price stipulated;
c. Violation of any of the conditions agreed upon
If lessor refuses to reimburse, lessee may remove the in the contract;
improvements, even though the principal thing may d. When the lessee devotes the thing leased to
suffer damage thereby. He shall not, however, cause any use or service not stipulated which causes
any more impairment upon the property leased than is the deterioration thereof; or if he does not
necessary. observe the requirement in No. 2 of Art. 1657,
CC as regards the use thereof.
In case of ornamental expenses
1. Lessee not entitled to reimbursement Note: The ejectment of tenants of agricultural
2. Lessee may remove the ornamental objects, lands shall be governed by special laws.
provided:
a. no damage is caused to the principal thing 2. Right to Ask for Writ of Preliminary Mandatory
b. lessor does not choose to retain them by Injunction in Unlawful Detainer Cases
paying their value at the time the lease is
extinguished.
Art. 1674, CC. In ejectment cases where an appeal
is taken the remedy granted in Article 539, second
h. Rights of Purchaser of paragraph, shall also apply, if the higher court is
Leased Land to Terminate satisfied that the lessee's appeal is frivolous or
dilatory, or that the lessor's appeal is prima facie
the Lease [Art. 1676, CC] meritorious. The period of ten days referred to in
said article shall be counted from the time the
The purchaser of a piece of land which is under a lease appeal is perfected.
that is not recorded in the Registry of Property may
terminate the lease.
Art. 539. Every possessor has a right to be
Exceptions: respected in his possession; and should he be
1. when there is a stipulation to the contrary in the disturbed therein he shall be protected in or
contract of sale restored to said possession by the means
2. when the purchaser knows of the existence of the established by the laws and the Rules of Court.
lease
3. when the sale is fictitious for the purpose of A possessor deprived of his possession through
extinguishing the lease forcible entry may within ten days from the filing
• The sale is presumed to be fictitious if at the of the complaint present a motion to secure from
time the supposed vendee demands the the competent court, in the action for forcible
termination of the lease, the sale is not entry, a writ of preliminary mandatory injunction
recorded in the Registry of Property. to restore him in his possession. The court shall
4. When sale is with the right of redemption decide the motion within thirty (30) days from the
filing thereof.
• The purchaser in a sale with the right of
redemption cannot make use of the power to
3. Rescission or Specific Performance, plus
eject the lessee until the end of the period for
damages
the redemption. [Art. 1677, CC]
Limitations:
1. House helper shall not be required to work more
than 10 hours a day.
2. House helper shall be allowed 4 days vacation
each month, with pay.
b. Contract of Labor
The relation between capital and labor are not merely
contractual, but are so imbued with public interest that
labor contracts are subject to special laws.
d. Grounds of Termination of
Lease
1. Expiration of the period
2. Total loss of the thing
3. Resolution of the right of lessor (lessor-
usufructuary and usufruct expires)
4. Will of the purchaser or transferee of things
5. Rescission
OBLIGATIONS AND
CONTRACTS
Civil Law
The contractor builds additional works, but is paid the Art. 1158, CC. Obligations derived from law are not
additional cost of such works. Payor characterizes the presumed. Only those expressly determined in this
payment as a "mistake," and not a "voluntary" Code or in special laws are demandable, and shall
fulfillment under Art. 1423 of the Civil Code. Hence, it be regulated by the precepts of the law which
urges the application of the principle of solution establishes them; and as to what has not been
indebiti. However, it is not enough to prove that the foreseen, by the provisions of this Book.
payments made by payor to contractor were "not due"
because there was no prior authorization or Obligations arise when imposed by the law itself and
agreement with respect to additional works. There is a cannot be presumed; examples include obligation to
further requirement that the payment by the debtor pay taxes and obligation to support one’s family.
was made either through mistake or under a cloud of
doubt. In short, for the provisions on solutio indebiti to
apply, there has to be evidence establishing the frame b. Contracts
of mind of the payor at the time the payment was
made [Uniwide v Titan-Ikeda, G.R. No. 126619, (2006)]. Art. 1159, CC. Obligations arising from contracts
have the force of law between the contracting
parties and should be complied with in good faith.
b. As to Subject Matter
1. REAL – obligation to give This article expresses the principle of autonomy of will.
2. PERSONAL – obligation to do or not to do
Obligations arise from stipulation of the parties; it has
c. As to the Affirmativeness the force of law and should be complied with in good
faith in accordance with the stipulations and terms;
or Negativeness of the examples include obligation to pay loan by virtue of an
Obligation agreement.
intentional evasion of the normal fulfillment of and not merely on the percentage of the amount not
obligations. paid. [Cannu v Galang, G.R. No. 139523 (2005)]
b. NEGLIGENCE (culpa): Fault or negligence of the
debtor as an incident in the fulfillment of an b. Default, Delay, or Mora
existing obligation.
c. DELAY (mora): Delay in the fulfillment of the Failure to perform an obligation on time which
obligation. The delay however must be imputable constitutes breach of the obligation. [de Leon]
to the debtor/obligor.
d. AND THOSE WHO IN ANY MANNER Rules on Default, Delay, or Mora
CONTRAVENE THE TENOR THEREOF: Covers Unilateral Obligations Reciprocal Obligations
any illicit act which impairs the strict and faithful
General Rule: “No
fulfillment of the obligation
demand, No delay.”
Are liable for damages. [Art. 1170, CC]
The mere expiration of
a. Complete Failure to the period fixed by the
Perform parties is not enough in Neither party incurs in
order that the debtor delay if the other does
Slight or Casual may incur in delay. not comply or is not
Substantial Breach Those obliged to deliver ready to comply in a
Breach
1. Partial breach or to do something proper manner with
1. Total breach incur in delay from the what is incumbent upon
2. There is partial/
2. Amounts to non- time the obligee him. From the moment
substantial
performance, basis judicially or one of the parties
performance in
for rescission extrajudicially demands fulfills his obligation,
good faith
(resolution) under from them the delay by the other
3. Gives rise to
Art. 1191 and fulfillment of their begins. [Art. 1169 par. 3,
liability for
payment of obligation. [Art. 1169 CC]
damages only [Art.
damages par. 1, CC]
1234, CC]
No delay if neither
Exceptions: Demand is performs.
If the obligation has been substantially performed in
not necessary in order
good faith, the obligor may recover as though there
that delay may exist
had been a strict and complete fulfillment, less
damages suffered by the obligee. [Art. 1234, CC] under the
circumstances listed in
Art 1169 par 2, (1)-(3).
In order that there may be substantial performance of
an obligation, there must have been an attempt in
good faith to perform, without any willful or Demand may be judicial or extrajudicial.
intentional departure therefrom. The deviation from Reminder is not considered a demand for
the obligation must be slight, and the omission or performance. It must appear that the tolerance or
defect must be technical and unimportant, and must benevolence of the creditor must have ended.
not pervade the whole or be so material that the object [Tolentino]
which the parties intended to accomplish in a
particular manner is not attained. The non- When demand is not necessary in order that delay
performance of a material part of a contract will may exist [par. 2, Art. 1169, CC]
prevent the performance from amounting to a 1. When demand would be useless, as when the
substantial compliance… The compulsion of payment obligor has rendered it beyond his power to
is predicated on the substantial benefit derived by the perform; such as:
obligee from the partial performance. Although a. When the impossibility is caused by some act
compelled to pay, the obligee is nonetheless entitled or fault of the debtor (e.g. debtor absconded
to an allowance for the sum required to remedy or has destroyed the thing to be delivered);
omissions or defects and to complete the work agreed b. When the impossibility is caused by a
upon. [International Hotel Corp v Joaquin, G.R. No. fortuitous event, but the debtor has bound
158361 (2013)] himself to be liable in cases of such event.
[Tolentino]
The question of whether a breach of contract is 2. When from the nature and the circumstances of
substantial depends upon the attending circumstances the obligation it appears that the designation of
the time when the thing is to be delivered or the 2. The debtor is exempted from risk of loss of the
service is to be rendered was a controlling motive thing, which is borne by the creditor.
for the establishment of the contract (time is of 3. The expenses incurred by the debtor for the
the essence); preservation of the thing after the mora shall be
3. When the law so provides; or chargeable to the creditor.
4. When the obligation expressly so declares; 4. If the obligation bears interest, the debtor does
not have to pay from the time of delay.
Note: It is insufficient that the law or obligation 5. The creditor is liable for damages.
fixes a date for performance. It must further state 6. The debtor may relieve himself of the obligation
expressly that after the period lapses, default will by consigning the thing. [Tolentino]
commence;
Compensatio morae
KINDS OF DELAY; REQUISITES AND EFFECTS Delay of both parties in reciprocal obligations.
1. Moral Solvendi;
2. Mora Accipiendi; The parties in a bilateral contract can regulate the
3. Compensatio Morae order in which they shall comply with their reciprocal
prestations. Otherwise, the fulfillment must be
Mora solvendi simultaneous and reciprocal. Thus, one party cannot
demand performance by the other without offering to
Delay on the part of the debtor to fulfil his obligation comply with his own prestation. [Tolentino]
either to give (ex re) or to do (ex persona).
Effects:
Requisites: 1. Delay of the obligor cancels delay of obligee (and
1. Obligation must be liquidated, due and vice versa) hence it is as if there is no default.
demandable 2. The liability of the first infractor shall be equitably
2. Non-performance by the debtor within the period tempered by the courts. If it cannot be determined
agreed upon which of the parties first violated the contract, the
3. Demand, judicial or extra-judicial, by the creditor, same shall be deemed extinguished, and each
unless demand is not necessary under the shall bear his own damages. [Art. 1192, CC]
circumstances enumerated in Art 1169 par (2).
Cessation of the Effects of Mora
There is no mora solvendi in: 1. Express or implied renunciation by the creditor;
1. Negative obligations because delay is impossible 2. Prescription. [Tolentino]
[de Leon]
2. Natural obligations [Tolentino] Equitable Tempering under Art. 1192 vs.
Under Art. 2215 [Ong v Bognalbal, G.R. No.
Effects:
149140, (2006)]
1. The debtor is liable for damages. [Art. 1170, CC]
Art 1192 Art 2215
2. For determinate objects, the debtor shall bear the
risk of loss, even if the loss is due to fortuitous “In contracts, quasi-
events. [1165 par 3, CC] contracts, and quasi-
delicts, the court may
Mora accipiendi “In case both parties equitably mitigate the
Delay on the part of the creditor to accept the have committed a damages under
performance of the obligation. breach of the circumstances other
obligation, the liability than the case referred
It is necessary however, that it be lawful for the debtor of the first infractor to in the preceding
to perform, and that he can perform. [Tolentino] shall be equitably article, as in the ff.
tempered by the courts. instances:
Requisites: xxx” (1) That the plaintiff
1. Debtor offers performance. himself has
2. Offer must be in compliance with the prestation contravened the terms
as it should be performed. of the contract xxx”
3. Creditor refuses performance without just cause. Second infractor not Does not appear to
liable for damages at consider which infractor
Effects: all; only the first first committed the
1. The responsibility of the debtor is reduced to fraud infractor is liable, but breach
and gross negligence.
Fraud (dolo) is the deliberate or intentional evasion of In order that fraud may vitiate consent, it must be the
the normal fulfilment of an obligation. [de Leon] dolo causante and not merely the dolo incidente,
A waiver of future fraud is void but past fraud may be inducement to the making of the contract. The false
subject of a valid waiver by the aggrieved party. [de representation was used by plaintiff to get from
Leon] defendant a bigger share of net profits. This is just
incidental to the matter in agreement... because
The fraud referred to here is that mentioned in Art. despite plaintiff’s deceit, respondent would have still
1170, which is the malice or bad faith in the entered into the contract. [Woodhouse vs. Halili, G.R.
performance of an existing obligation, and not the No. L-4811 (1953)]
fraud or deceit used to procure a contract. [Tolentino]
Requisites for Fraud to Vitiate a Contract (Dolo
Distinguished from Causal Fraud Causante)
Causal Fraud 1. It must have been employed by one contracting
Fraud in the party upon the other;
(dolo causante and
Performance 2. It must have induced the other party to enter into
dolo incidente)
[Art. 1170, CC] the contract;
[Arts. 1338, 1344, CC]
Definition 3. It must have been serious; and
The deliberate and 4. It must have resulted in damage or injury to the
intentional evasion of Every kind of deception party seeking annulment. [Tolentino]
the normal fulfilment of for the purpose of
obligations. leading another party d. Negligence (Culpa) in the
[International Corporate into error and execute a Performance of the
Bank v Gueco,G.R. No. particular act.
141968 (2001)] Obligation
When Present
During the performance During the time of birth Art. 1172, CC. Responsibility arising from
of a pre-existing or perfection of the negligence in the performance of every kind of
obligation obligation obligation is also demandable, but such liability
Purpose may be regulated by the courts, according to the
To secure consent of circumstances.
To evade normal
another to enter the
fulfilment of obligation
contract(dolo causante)
Art. 1173, CC. The fault or negligence of the obligor which may proceed from any force majeure. The
consists in the omission of that diligence which is fact that travellers are constrained to rely on the
required by the nature of the obligation and vigilance of the keeper of the hotels or inns shall be
corresponds with the circumstances of the persons, considered in determining the degree of care
of the time and of the place. required of him.
Diligence Required [de Leon] Art. 2001, CC. The act of a thief or robber, who has
1. By stipulation of the parties entered the hotel is not deemed force majeure,
2. By law, in the absence of stipulation unless it is done with the use of arms or through an
3. Diligence of a good father of a family, if both the irresistible force.
contract and law are silent. [par. 2, Art. 1173, CC]
4. Future negligence may be waived except in cases Art. 2002, CC. The hotel-keeper is not liable for
where the nature of the obligation or the public compensation if the loss is due to the acts of the
requires another standard of care (i.e. common guest, his family, servants or visitors, or if the loss
carriers) arises from the character of the things brought into
the hotel.
Note: Only future simple negligence may be
waived. Future gross negligence may not be
Test of Negligence
waived since such negligence amounts to fraud.
“Whether or not the defendant, in doing the alleged
negligent act, used the reasonable care and caution,
Exceptions:
which an ordinary and prudent person would have
1. Common Carriers
used in the same situation” If not, then he is guilty of
Art. 1733, CC. Common carriers, from the nature of negligence. [Mandarin Villa Inc. v. CA, G.R. No. 119850
their business and for reasons of public policy, are (1996)]
bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the Question of Fact
passengers transported by them, according to all There is no fixed standard of diligence applicable to
the circumstances of each case. each and every obligation. Each case must be
determined upon its particular facts and
Such extraordinary diligence in the vigilance over circumstances, and the degree of diligence required
the foods is further expressed in articles 1734, 1735, for the purpose of an obligation must depend upon the
and 1745, Nos. 5, 6, and 7, while the extraordinary circumstances of the particular obligation. [Tolentino]
diligence for the safety of the passengers is further
set forth in articles 1755 and 1756. Kinds of Civil Negligence
Culpa Contractual Culpa Aquiliana
2. Hotel and inn-keepers Negligence is merely
Negligence is direct,
incidental in the
Art. 1998, CC. The deposit of effects made by substantive and
performance of an
travellers in hotels or inns shall also be regarded as independent.
obligation.
necessary. The keepers of hotels or inns shall be There is always a pre- There may or may not
responsible for them as depositaries, provided that existing contractual be a pre-existing
notice was given to them, or to their employees, of relation. contractual obligation.
the effects brought by the guests and that, on the The source of obligation
part of the latter, they take the precautions which of defendant to pay The source of obligation
said hotel-keepers or their substitutes advised damages is the breach is the defendant’s
relative to the care and vigilance of their effects. or non-fulfillment of the negligence itself.
contract.
Art. 1999, CC. The hotel-keeper is liable for the Proof of the existence of
vehicles, animals and articles which have been the contract and of its
introduced or placed in the annexes of the hotel. The negligence of the
breach or non-
defendant must be
fulfillment is sufficient
proved.
Art. 2000, CC. The responsibility referred to in the prima facie to warrant
two preceding articles shall include the loss of, or recovery.
injury to the personal property of the guests caused Proof of diligence in the
Proof of diligence in the
by the servants or employees of the keepers of selection and
selection and
hotels or inns as well as strangers; but not that supervision of the
Mere difficulty to foresee the happening is not The injured party may choose between the
impossibility to foresee the same. [Republic v. Luzon fulfillment and the rescission of the obligation,
Stevedoring, G.R. No. L-21749, (1967)] with the payment of damages in either case. He
may also seek rescission, even after he has chosen
5. R emedies Available in fulfilment, if the fulfillment of the obligation should
become impossible.
Case of Breach
The court shall decree the rescission claimed,
a. Action for Specific unless there be just cause authorizing the fixing of
a period.
Performance (In Obligation
to Give Specific Thing) This is understood to be without prejudice to the
rights of third persons who have acquired the thing,
The creditor has a right to compel the debtor to in accordance with articles 1385 and 1388 and the
perform the prestation. Mortgage Law.
A third person may perform another’s obligation to Rescission may take place extrajudicially, by
deliver a generic thing or an obligation to do, unless it declaration of the injured party. But if the debtor
is a purely personal act, at the expense of the debtor. impugns the declaration of rescission, it shall be
Debtor cannot avoid obligation by paying damages if subject to judicial determination. If the debtor does
the creditor insists on performance. not oppose the extrajudicial declaration of rescission,
such declaration will produce legal effect.
c. Rescission (Resolution in The party who deems the contract violated may
Reciprocal Obligations) consider it resolved or rescinded, and act accordingly,
without previous court action, but it proceeds at its
Art. 1191, CC. The power to rescind obligations is own risk. For it is only the final judgment of the
implied in reciprocal ones, in case one of the corresponding court that will conclusively and finally
obligors should not comply with what is incumbent settle whether the action taken was or was not correct
upon him. in law. But the law definitely does not require that the
contracting party who believes itself injured must first
file suit and wait for a judgment before taking
5. The right of action is not purely personal to the on WoN new debts
debtor contracted by the
debtor fall under the
Previous approval of the court is not necessary to scope of accion
exercise the accion subrogatoria. pauliana.
Fraudulent intent is
2. Accion Pauliana No need for fraudulent
required if the contract
Creditors may also impugn the acts which the debtor intent
rescinded is onerous
may have done to defraud them. [Art. 1177, CC] Prescribes in 4 years
No period for
from the discovery of
prescription
Par. 3, Art. 1381. The following contracts are the fraud
rescissible:
(3) Those undertaken in fraud of creditors when the 3. Other Specific Remedies
latter cannot in any other manner collect the claims
due them. Accion Directa
Subsidiary liability of sublessee to the lessor for rent
Rescission, which involves the right of the creditor to due from the lessee. [Art. 1652, CC]
attack or impugn by means of rescissory action any act
of the debtor which is in fraud and to the prejudice of General Rule: The sublessee is subsidiarily liable to the
his rights as creditor. lessor for any rent due from the lessee.
Requisites [Cheng v. CA, G.R. No. 144169 (2001)] Exception: The sublessee shall not be responsible
a. There is a credit in favor of the plaintiff prior to the beyond the amount of rent due from him, in
alienation by the debtor accordance with the terms of the sublease, at the time
b. The debtor has performed a subsequent contract of the extra-judicial demand by the lessor.
conveying patrimonial benefit to third person/s.
c. The debtor’s acts are fraudulent to the prejudice Re: Advance Payments
of the creditor. Payments of rent in advance by the sublessee shall be
d. The creditor has no other legal remedy to satisfy deemed not to have been made, so far as the lessor's
his claim claim is concerned, unless said payments were
e. The third person who received the property is an effected in virtue of the custom of the place.
accomplice to the fraud.
An accion pauliana thus presupposes the following: Vendor has right of action against possessor whose
1. A judgment; right is derived from the vendee
2. the issuance by the trial court of a writ of Art. 1608, CC. The vendor may bring his action
execution for the satisfaction of the judgment, against every possessor whose right is derived from
and; the vendee, even if in the second contract no
3. the failure of the sheriff to enforce and satisfy the mention should have been made of the right to
judgment of the court. repurchase, without prejudice to the provisions of
the Mortgage Law and the Land Registration Law
It requires that the creditor has exhausted the property with respect to third persons.
of the debtor. The date of the decision of the trial court
is immaterial. What is important is that the credit of Laborer/materialsman has right of action against
the plaintiff antedates that of the fraudulent owner of piece of work up to the amount owed by the
alienation by the debtor of his property. After all, the latter to the contractor. [Art. 1729, CC]
decision of the trial court against the debtor will General Rule: Those who put their labor upon or furnish
retroact to the time when the debtor became indebted materials for a piece of work undertaken by the
to the creditor. [Cheng v CA, supra] contractor have an action against the owner up to the
amount owing from the latter to the contractor at the
Accion Subrogatoria Accion Pauliana time the claim is made.
Credit must exist before
Not necessary that the fraudulent act Exception: The following shall not prejudice the
creditor’s claim is prior [Tolentino] laborers, employees and furnishers of materials:
to the acquisition of
I. the a. Payments made by the owner to the contractor
right by the debtor Note: Commentators before they are due;
have conflicting views
Doctrine of Constructive Fulfillment of Suspensive a matter of justice and condition that has been
Conditions convenience complied with
Art. 1186, CC. The condition shall be deemed [Art. 1187, par. 1] [Art. 1187, par. 2]
fulfilled when the obligor voluntarily prevents its If unilateral, the debtor
The power of the court
fulfillment. shall appropriate the
includes the
fruits and interests
determination of
Suspensive condition is deemed fulfilled when: received, unless from
whether or not there
a. Obligor intends to prevent obligee from the nature and
will be any retroactive
complying with the condition circumstance it should
effect. This rule shall
b. Obligor actually prevents obligee from complying be inferred that the
likewise apply in
with the condition intention of the persons
obligations with a
constituting the same
resolutory condition
The two requisites must concur. Mere intention of the was different. [Art. 1187
[Art. 1190 par. 3]
debtor to prevent the happening of the condition, or to par 1]
place ineffective obstacles to its compliance, without
actually preventing the fulfillment, is insufficient. 2. RESOLUTORY – The obligation is demandable at
[International Hotel Corporation v. Joaquin, G.R. No. once, without prejudice to the effects of the
158361 (2013)] happening of the event [par. 2, Art. 1179, CC]. The
rights are immediately vested to the creditor but
Doctrine does not apply to: always subject to the threat or danger of
a. Resolutory conditions extinction by the happening of the resolutory
b. External contingency that is lawfully within the condition [Tolentino].
control of the obligor [Taylor v Uy Tieng, G.R. No.
L-16109 (1922)] Before Fulfillment After Fulfillment
c. Obligor, in preventing the fulfilment of the Whatever may have
condition, acts pursuant to a right been paid or delivered
by one or both of the
Principle of Retroactivity in Suspensive Conditions parties upon the
Par. 1, Art. 1187, CC. The effects of a conditional constitution of the
obligation to give, once the condition has been Preservation of obligation shall have to
fulfilled, shall retroact to the day of the constitution creditor’s rights [par. 1, be returned upon the
of the obligation. Nevertheless, when the Art. 1188, CC] also fulfillment of the
obligation imposes reciprocal prestations upon the applies to obligations condition [par. 1, Art.
parties, the fruits and interests during the with a resolutory 1190, CC]. There is no
pendency of the condition shall be deemed to have condition. return to the status quo.
been mutually compensated. If the obligation is However, when the
unilateral, the debtor shall appropriate the fruits condition is not fulfilled,
and interests received, unless from the nature and rights are consolidated
circumstances of the obligation it should be and they become
inferred that the intention of the person absolute in character.
constituting the same was different.
AS TO CAUSE/ORIGIN
Rationale: Obligation is constituted when its essential 1. POTESTATIVE – The fulfillment of the condition
elements concur. The condition imposed is only an depends on the sole act or decision of a party.
accidental element. 2. CASUAL – The fulfilment of the condition
depends upon chance or upon the will of a third
This applies to consensual contracts only. This does person. [Art. 1182, CC]
not apply to real contracts which can only be perfected 3. MIXED – The fulfilment of the condition depends
by delivery. partly upon the will of a party to the contract and
partly upon chance and/or will of a third person.
Effects of the Happening of Suspensive Conditions
To Give To Do/Not To Do Exclusively
Condition and obligation are
If reciprocal, the fruits In obligations to do or upon the
valid.
and interests shall be not to do, the court Creditor’s Will
deemed to have been shall determine the Exclusively Condition and obligation are void
mutually compensated retroactive effect of the upon the because to allow such condition
Debtor’s Will would be equivalent to
in case of a sanctioning obligations which are Re: Obligation to Deliver a Determinate Thing
Suspensive illusory. It also constitutes a When the conditions have been imposed with the
Condition direct contravention of the intention of suspending the efficacy of an obligation
[Art. 1182, CC] principle of mutuality of to give, the following rules shall be observed in case
contracts. There is nothing to of the improvement, loss or deterioration of the thing
demand until the debtor wishes during the pendency of the condition [Art. 1189, CC]:
to. 1. If the thing is lost without the fault of the debtor,
Exclusively the obligation shall be extinguished;
Condition and obligation are
upon the 2. If the thing is lost through the fault of the debtor,
valid because in such situation,
Debtor’s Will he shall be obliged to pay damages; it is
the position of the debtor is
in case of a understood that the thing is lost when it perishes,
exactly the same as the position
Resolutory or goes out of commerce, or disappears in such a
of the creditor when the condition
Condition way that its existence is unknown or it cannot be
is suspensive. It does not render
[par. 2, Art. recovered;
the obligation illusory.
1179, CC] 3. When the thing deteriorates without the fault of
the debtor, the impairment is to be borne by the
Defendant executed an endorsement saying that creditor;
she’ll pay her debt if the house in which she lives is 4. If it deteriorates through the fault of the debtor,
sold. Such condition depended upon her exclusive will; the creditor may choose between the rescission of
thus, it is void. [Osmeña vs. Rama, G.R. No. 4437 the obligation and its fulfillment, with indemnity
(1909)] for damages in either case;
5. If the thing is improved by its nature, or by time,
The condition that payment should be made by the improvement shall inure to the benefit of the
Hermosa as soon as he receives funds from the sale of creditor;
his property in Spain is a mixed condition. The 6. If it is improved at the expense of the debtor, he
condition implies that the obligor already decided to shall have no other right than that granted to the
sell the house and all that was needed to make the usufructuary.
obligation demandable is that the sale be
consummated and the price thereof remitted to the Re: Obligations To Do and Not To Do
islands. There were still other conditions that had to
concur to effect the sale, mainly that of the presence Par. 3, Art. 1190, CC. As for the obligations to do
of a buyer, ready, able and willing to purchase the and not to do, the provisions of the second
property under the conditions set by the intestate. paragraph of article 1187 shall be observed as
[Hermosa vs. Longara, G.R. No. L-5267 (1953)] regards the effect of the extinguishment of the
obligation.
Loss, Deterioration, or Improvement of a Specific
Thing before Fulfillment of Suspensive Condition in Without Debtor’s With Debtor’s
Obligations to Give (Art. 1189) or of Resolutory Fault/Act Fault/Act
Condition in Obligations to Do or Not to Do [par. 2, Loss
Art. 1190, CC]
IV. Obligation is converted
III. Obligation is
into one of indemnity for
A thing is deemed lost: extinguished.
damages.
1. When it perishes;
Deterioration
2. When it goes out of
VI. Creditor may choose
Loss of a commerce of man; or
between bringing an
Thing 3. When it disappears in such
action for rescission of
a manner that its existence
V. Impairment to be borne the obligation OR
is unknown or it cannot be
by the creditor. bringing an action for
recovered
specific performance,
Any reduction or impairment in
Deterioration with damages in either
the substance or value of a thing
of a Thing case.
which does not amount to a loss
Improvement
Anything added to, incorporated
Improvement VII. Improvement at theVIII. Improvement by the
in, or attached to the thing that is
of a Thing debtor’s expense, the thing’s nature or by time
due.
debtor shall ONLY have shall inure to the benefit
usufructuary rights. of the creditor.
Art. 1183, CC. Impossible conditions, those contrary A day certain is understood to be that which must
to good customs or public policy and those necessarily come, although it may not be known
prohibited by law shall annul the obligation which when.
depends upon them. If the obligation is divisible,
that part thereof which is not affected by the If the uncertainty consists in whether the day will
impossible or unlawful condition shall be valid. come or not, the obligation is conditional, and it
The condition not to do an impossible thing shall be shall be regulated by the rules of the preceding
considered as not having been agreed upon. Section.
In testaments (Art. 873, CC) and donations (Art. 727, Art. 1180, CC. When the debtor binds himself to pay
CC), an unlawful or impossible condition does not when his means permit him to do so, the obligation
annul the transaction. The condition is merely deemed shall be deemed to be one with a period, subject to
not written. the provisions of Article 1197.
Period or Term
c. Positive and Negative Interval of time, which either suspends demandability
Conditions or produces extinguishment.
Positive [Art. 1184, CC] Negative [Art. 1185,CC] The period must be: future, certain, and possible.
The condition that [Tolentino]
The condition that
some event will not
some event happen at a
happen at a A fortuitous event does not interrupt the running of the
determinate time shall
determinate time shall period. It only relieves the contracting parties from the
extinguish the
render the obligation fulfillment of their respective obligations during the
obligation
effective from the period.
1. as soon as the time
moment
expires or
1. the time indicated Term/Period and Condition Distinguished
2. if it has become
has elapsed, or Term/Period Condition
indubitable that the
2. if it has become Interval of time which is Fact or event which is
event will not take
evident that the future and certain future and uncertain
place.
event cannot occur. Must necessarily come,
although it may not be May or may not happen
Where no date of fulfilment is stipulated, condition known when
must be fulfilled within a reasonable time or time No effect on existence of Gives rise to an
probably contemplated according to the nature of the the obligation, only its obligation or
obligation [par. 2, Art. 1185, CC]. demandability or extinguishes one
performance already existing
3. Obligations with a Period No retroactive effect
unless there is an
or Term agreement to the
Has retroactive effect
contrary
Under Art. 1193, CC: When it is left
When it is left
a. Obligations for whose fulfillment a day certain exclusively to the will of
exclusively to the will of
has been fixed¾ shall be demandable only when the debtor, the
the debtor, the very
that day comes. existence of the
existence of the
b. Obligations with a resolutory period¾ take effect obligation is not
obligation is affected
at once, but terminate upon arrival of the day affected
certain.
Kinds of Period [Art 1193] b. When he does not furnish to the creditor the
a. Ex die – period with a suspensive effect. guaranties or securities which he has promised;
Obligation becomes demandable after the lapse c. When by his own acts he has impaired said
of the period. guaranties or securities after their establishment,
b. In diem – period with a resolutory effect. and when through a fortuitous event they
Obligation becomes demandable at once but is disappear, unless he immediately gives new ones
extinguished after the lapse of the period. equally satisfactory;
d. When the debtor violates any undertaking, in
Effect of Advance Payment or Delivery consideration of which the creditor agreed to the
Art. 1195, CC. Anything paid or delivered before the period;
arrival of the period, the obligor being unaware of e. When the debtor attempts to abscond [Art. 1198,
the period or believing that the obligation has CC]
become due and demandable, may be recovered, f. When required by law or stipulation;
with the fruits and interests. g. If parties stipulated an acceleration clause
[Tolentino]
This is in contrast to payment by mistake of the obligor
before the occurrence of the suspensive condition, The obligation immediately becomes due and
where the law doesn’t state that fruits and interests demandable even if the period has not yet expired. The
may be recovered. However, the provisions on solution obligation becomes a pure one. [Tolentino]
indebiti can be applied. [Tolentino]
When Courts May Fix Period [Art. 1197, CC]
Loss, Deterioration, or Improvement of the Thing General Rule: The court is not authorized to fix a period
Before Period Expires for the parties [de Leon]
Art. 1194, CC. In case of loss, deterioration or
improvement of the thing before the arrival of the Exceptions: If the Court determines that one of the 3
day certain, the rules in Article 1189 shall be circumstances are present, it must decide the period
observed. “probably contemplated by the parties” [Araneta v.
Phil. Sugar Estates, G.R. No. L-22558 (1967)]
Benefit of the Period a. obligation does not fix a period, but from its
nature and circumstances, it can be inferred that
Art. 1196, CC. Whenever in an obligation a period is
a period was intended
designated, it is presumed to have been
b. the period is void, such as when it depends upon
established for the benefit of both the creditor and
the will of the debtor
the debtor, unless from the tenor of the same or
c. If the debtor binds himself when his means permit
other circumstances it should appear that the
him to do so.
period has been established in favor of one or of the
other.
Note: In every case, the courts shall determine such
period as may under the circumstances have been
Period for the benefit of either creditor or debtor probably contemplated by the parties.
Creditor Debtor
Debtor may oppose any Once fixed by the courts, the period cannot be
Creditor may demand premature demand on changed by them. [Art. 1197, CC]
the fulfillment or the part of the obligee
performance of the for the performance of Art. 1197, CC does not apply to contract of services and
obligation at any time the obligation, or if he to pure obligations.
but the obligor cannot so desires, he may
compel him to accept renounce the benefit of The court, however, to prevent unreasonable
payment before the the period by interpretations of the immediate demandability of
expiration of the period. performing his pure obligations, may fix a reasonable time in which
obligation in advance. the debtor may pay. [Tolentino]
If the period is for the benefit of the debtor alone, he The only action that can be maintained by the creditor
shall lose every right to make use of it under Art. 1197, CC is the action to ask the courts to fix
a. When after the obligation has been contracted, he the term within which the debtor must comply with his
becomes insolvent, unless he gives a guaranty or obligation. The fulfillment of the obligation itself
security for the debt; cannot be demanded until after the court has fixed the
period for compliance therewith, and such period has liability on the part of does not give rise to any
arrived. the debtor. liability on the part of
the debtor.
Art. 1197, CCapplies to a situation in which the parties
intended a period. [Where] no period was intended by a. Alternative Obligations:
the parties… Their mere failure to fix the duration of
their agreement does not necessarily justify or
Definition
authorize the courts to do so. Based on the reasons
Several prestations are due but the performance of
[herein], the agreement subsisted as long as the
one is sufficient. [de Leon]
parents and the children mutually benefited from the
arrangement. Effectively, there is a resolutory
Right of Choice [Art. 1200, CC]
condition in such agreement. When a change in the
Belongs to the debtor, UNLESS—
condition occurs, the agreement may be deemed
1. it is expressly granted to the creditor
terminated. [Macasaet v Macasaet, G.R. Nos. 154391-
2. it is expressly granted to a third person
92 (2004)]
Limitations to the right of choice [Tolentino]
4. A lternative or Facultative 1. indivisible (cannot choose part of one prestation
and part of another; See par. 2, Art. 1199, CC)
Obligations 2. impossible prestations
3. unlawful prestations
Alternative and Facultative Conditions 4. those which could not have been the object of the
Distinguished obligation
Alternative Facultative
Obligations Obligations When choice shall produce effect
Of the two or more Choice shall produce no effect except from the time it
prestations, only one is has been communicated. [Art. 1201, CC]
Of the two or more
due, while the other/s
prestations, several are
may be performed in Form of notice
due.
substitution of the one Notice of selection or choice may be in any form
due. provided it is sufficient to make the other party know
IX. May be complied with that the selection has been made. It can be:
May be complied with
by performance of 1. oral
by performance of one
another prestation in 2. in writing
of the prestations which
substitution of that 3. tacit
are alternatively due.
which is due. 4. any other equivocal means [Tolentino]
Choice of prestation
Choice of prestation
may pertain to debtor, Selection may be implied from the fact of performance
pertains only to the
creditor, or third [Tolentino]
debtor.
person.
XI. Loss/impossibility of Consent of other party
Loss/impossibility of all the prestation due to The law does not require the other party to consent to
prestations due to fortuitous event is the choice made by the party entitled to choose. The
fortuitous event shall sufficient to extinguish only possible exception is when the debtor has chosen
extinguish the the obligation. a prestation which could not have been the object of
obligation. the obligation; the creditor’s consent would bring
X. Loss/impossibility of about a novation of the obligation [Ibid.]
Loss/impossibility of the substitute/s does
one of the prestations not extinguish the Consent in obligations with various debtors and
does not extinguish the obligation, provided the creditors
obligation. obligation which is due In a joint obligation w/ various debtors and creditors,
subsists the consent of all is necessary to make the selection
XII. Culpable loss of the effective. If the obligation is solidary, and there is no
Culpable loss of any of
object which the debtor stipulation to the contrary, the choice by one will be
the objects alternatively
may deliver in binding personally upon him but not as to the others
due before the choice is
substitution before the [Tolentino].
made may give rise to
substitution is effected
Debtor cannot make a choice, or delays selection Creditor may claim the
If through the creditor's acts the debtor cannot make Debtor is released from price/value of any of
a choice according to the terms of the obligation, the the obligation. them, with indemnity
latter may rescind the contract with damages. [Art for damages.
1203, CC] Some prestations lost/impossible
Creditor may claim any
If the debtor does not select at the time when of those subsisting
performance should be effected, the choice can be Debtor to deliver that
without a right to
made for him by the creditor by applying Art. 1167 in which he shall choose
damages OR
obligations to do (debtor considered to have waived from among the
price/value of the thing
his right, subject to equity considerations) [Tolentino]. remainder.
lost, with right to
damages.
Effect of notice of choice One prestation remains
The effect of the notice is to limit the obligation to the Creditor may claim the
object or prestation selected. The obligation is remaining thing
converted into a simple obligation to perform the without a right to
prestation chosen. Once a selection has been Debtor to perform that
damages OR the
communicated, it is irrevocable [Ibid.] which remains.
price/value of the thing
lost with right to
Instances when obligation is converted into a simple damages.
obligation
1. The person with the right of choice has
communicated his choice [Arts. 1201 and par. 1, b. Facultative Obligations
1205, CC]
2. Only one prestation is practicable [Art. 1202, CC] Definition
Only one prestation is agreed upon, but the obligor
Loss of Specific Things or Impossibility of may render another in substitution. [Art. 1206, CC]
Performance of Prestations in an Alternative
Obligation Loss or deterioration of Substitute in Facultative
If Debtor’s Choice [Art. 1204, CC] Obligations [Art. 1206, CC]
Fortuitous Event Debtor’s Fault Before Substitution is After Substitution is
Made Made
All prestations lost/impossible
If due to bad faith or The loss or
Creditor shall have a
fraud of obligor: obligor deterioration of the
right to indemnity for
is liable. substitute on account
damages based on the
of the obligor’s delay,
value of the last thing
negligence, or fraud,
Debtor is released from which disappeared or
renders the obligor
the obligation. service which become
liable because once
impossible, plus
If due to the negligence the substitution is
damages other than the
of the obligor: obligor is made, the obligation is
value may also be
not liable. converted into a
awarded
simple one with the
Some prestations lost/impossible substituted thing as
Debtor to perform that the object of the
Debtor to perform that
which the debtor shall obligation.
which he shall choose
choose from among the
from among the
remainder, without
remainder.
liability for damages. 5. D ivisible and Indivisible
One prestation remains
Debtor to perform that Debtor to perform that
Obligations
which remains. which remains.
Divisible Obligations
Ones which are susceptible of partial performance,
If Creditor’s Choice [Art. 1205, CC]
that is, the debtor can legally perform the obligation
Fortuitous Event Debtor’s Fault by parts and the creditor cannot demand a single
All prestations lost/impossible performance of the entire obligation [Tolentino]
Indivisible Obligations clause does not carry with it the nullity of the principal
Ones which cannot be validly performed in parts obligation [Art.1230, CC].
[Tolentino]
Purposes of Penalty
Rules a. Funcion coercitiva de garantia - to insure the
a. Divisibility/indivisibility refers to the performance performance of the obligation.
of the prestation and not to the thing which is the b. Funcion liquidatoria - to liquidate the amount of
object thereof. The thing may be divisible, yet the damages to be awarded to the injured party in
obligation may be indivisible. case of breach of the principal obligation
b. When the obligation has for its object the (compensatory).
execution of a certain number of days of work, the c. Funcion restrictamente penal - to punish the
accomplishment of work by metrical units, or obligor in case of breach of the principal
analogous things which by their nature are obligation (punitive).
susceptible of partial performance, it shall be
divisible [Art.1225, par. 2, CC]. Rules on Penalty
c. Even though the object or service may be a. The penalty shall substitute the indemnity for
physically divisible, an obligation is indivisible if so damages and payment of interest in case of non-
provided by law or intended by the parties. compliance [Art. 1226, CC], UNLESS:
d. In obligations not to do, divisibility or indivisibility 1. There is an express provision to that effect
shall be determined by the character of the 2. The obligor refuses to pay the penalty
prestation in each particular case. 3. The obligor is guilty of fraud in non-
e. A joint indivisible obligation gives rise to fulfillment
indemnity for damages from the time any one of In this case, damages and interest aside from the
the debtors does not comply with his undertaking penalty may be awarded [Tolentino]
[Art. 1224, CC]. b. Debtor cannot exempt himself from the
performance of the principal obligation by paying
Effect the stipulated penalty UNLESS this right has been
Creditor cannot be compelled to receive partially the expressly reserved for him [Art. 1227, CC].
prestation in which the obligation consists; neither c. Creditor cannot demand the fulfillment of the
may the debtor be required to make the partial principal obligation and demanding the
payment [Art. 1248, CC], UNLESS: satisfaction of the penalty at the same time
a. The obligation expressly stipulates the contrary. UNLESS the right has been clearly granted to him
b. The different prestations constituting the objects [Art. 1227, CC]. A tacit or implied grant is
of the obligation are subject to different terms admissible.
and conditions. 1. If the creditor chooses to demand the
c. The obligation is in part liquidated and in part satisfaction of the penalty, he cannot
unliquidated. afterwards demand the fulfillment of the
obligation.
Cessation of Indivisibility 2. If there was fault on the part of the debtor,
a. By conversion of the obligation into an obligation creditor may demand not only the
to pay damages satisfaction of the penalty but also the
b. By novation of the obligation payment of damages.
c. By death of creditor or the debtor (division among 3. If the creditor has chosen to demand the
heirs of the deceased) fulfillment of the principal obligation and the
performance thereof becomes impossible
without his fault, he may still demand the
6. O bligations with a Penal satisfaction of the penalty.
Clause
Enforcement of the Penalty
Penal Clause The enforcement of the penalty can be demanded by
An accessory undertaking to assume greater liability the creditor only when the non-performance is due to
in case of breach. It is generally a sum of money, but the fault or fraud of the debtor. However, the creditor
it can be any other thing like an act or abstention. does not have to prove fault or fraud, since the non-
[Tolentino] performance gives rise to the presumption of fault.
Thus, the burden of proof to show that non-
If the principal obligation is void, the penal clause performance was due to force majeure or creditor’s
shall also be void. However, the nullity of the penal acts lies with the debtor. [Tolentino]
Proof of Actual Damage Each debtor is liable only for a proportionate part of
Proof of actual damage suffered by the creditor is NOT the debt, and each creditor is entitled only to a
NECESSARY in order that the penalty may be enforced proportionate part of the credit. [Tolentino]
[Art. 1228, CC]
Terms used for Joint Obligations
That proof of actual damages is not necessary is 1. Mancomunada
applicable only to the general rule stated in Art. 1226, 2. Mancomunada simple
where penalty shall substitute for damages and 3. Pro rata
interest, but not to the exceptions where interest or 4. “We promise to pay”, followed by signatures of
damages aside from the penalty may be awarded. two or more persons [Tolentino]
Art. 1217, CC. Payment made by one of the solidary (Reason: prescription extinguishes the mutual
debtors extinguishes the obligation. If two or more representation among solidary debtors)
solidary debtors offer to pay, the creditor may 6. Interests due by delay of one is borne by all of
choose which offer to accept. them
He who made the payment may claim from his co- Defenses Available to a Solidary Debtor [Art. 1222, CC]
debtors only the share which corresponds to each, 1. Those derived from the nature of the obligation
with the interest for the payment already made. If Defenses inherent in an obligation include non-
the payment is made before the debt is due, no existence of the obligation because of absolute
interest for the intervening period may be simulation or illicit object, nullity due to defect in
demanded. capacity or consent of all debtors,
unenforceability, non-performance of suspension
When one of the solidary debtors cannot, because condition or non-arrival of period, extinguishment
of his insolvency, reimburse his share to the debtor of the obligation, res judicata, and prescription.
paying the obligation, such share shall be borne by 2. Those personal to him
all his co-debtors, in proportion to the debt of each. Personal defenses such as minority, insanity,
fraud, violence, or intimidation will serve as a
Art. 1222, CC. A solidary debtor may, in actions filed complete exemption of the defendant debtor from
by the creditor, avail himself of all defenses which liability to the creditor
are derived from the nature of the obligation and of 3. Those pertaining to his own share
those which are personal to him, or pertain to his 4. Those personally belonging to other co-debtors
own share. With respect to those which personally but only as regards that part of the debt for which
belong to the others, he may avail himself thereof the latter are responsible.
only as regards that part of the debt for which the
latter are responsible. Comparing demand upon Solidary Debtor and
Payment by a Solidary Debtor
A relationship of mutual guaranty is created among
Demand Upon a Payment by a Solidary
co-debtors.
Solidary Debtor Debtor
The demand made
Effects of Passive Solidarity [Tolentino]
against one of them
1. Each debtor can be required to pay the entire
shall not be an obstacle Full payment made by
obligation, but after payment he can recover from
to those which may one of the solidary
the co-debtors their respective shares
subsequently be debtors extinguishes
2. Each debtor may set up his own claims against the
directed against the the obligation [Art. 1217,
creditor as payment of the obligation
3. Remission of the entire debt affects all debtors, others so long as the CC].
but when remission is limited to the share of one debt has not been fully
collected [Art. 1216, CC].
debtor, the other debtors are still liable for the
balance of the obligation The creditor may
If two or more solidary
a. The remission of the whole obligation, proceed against any
debtors offer to pay, the
obtained by one of the solidary debtors, does one of the solidary
creditor may choose
not entitle him to reimbursement from his co- debtors or all
which offer to accept
debtors. [Art. 1220, CC] simultaneously [Art.
[Art. 1217, CC].
b. The remission made by the creditor of the 1216, CC].
share which affects one of the solidary The solidary debtor who
debtors does not release the latter from his made the payment
responsibility towards the co-debtors, in case A creditor’s right to shall have the right to
the debt had been totally paid by anyone of proceed against the claim from his co-
them before the remission was effected. [Art. surety exists debtors the share which
1219] independently of his corresponds to them
4. All debtors are liable for the loss of the thing due, right to proceed against with interest, UNLESS
even if only one of them is at fault, or after the principal barred by prescription
incurring delay it is lost by fortuitous event or illegality [Art. 1218,
5. Interruption of prescription as to one debtor CC].
affects all others, but renunciation of prescription
already had does not prejudice the others. Art 2047, CC specifically calls for the application of the
provisions on solidary obligations to suretyship
contracts. In particular, Art. 1217, CC recognizes the
and complete fulfillment, less damages payment by a joint debtor [Monte de Piedad y Caja
suffered by the obligee. de Ahorros de Manila v Rodrigo, G.R. No. L-42928
(1936]) but not a solidary co-debtor.
Requisites: 4. A third person not interested in the obligation; but
a) There must be substantial the creditor is not bound to accept payment by
performance (its existence depends him, unless there is a stipulation to the contrary
upon the circumstances of each [Art 1236, CC].
particular case); and
rd
b) The obligor must be in good faith [de Note: When payment is made by a 3 person without
Leon] the consent of the debtor, such payment has NO
c) The omission or deviation must be EFFECT on the running of the prescriptive period.
slight or technical, and does not [Tolentino]
constitute material breach of the
obligation. [International Hotel Corp. v. Payment by a third person
Joaquin, G.R. No. 158361, (2013)] Art. 1236, CC. The creditor is not bound to accept
iv. When the obligee accepts the payment or performance by a third person who has
performance, knowing its no interest in the fulfillment of the obligation,
incompleteness or irregularity, and unless there is a stipulation to the contrary.
without expressing any protest or
objection, the obligation is deemed fully Whoever pays for another may demand from the
complied with. [Art. 1235, CC] debtor what he has paid, except that if he paid
without the knowledge or against the will of the
Necessity of Complete Performance debtor, he can recover only insofar as the payment
Art. 1248, CC. Unless there is an express stipulation has been beneficial to the debtor.
to that effect, the creditor cannot be compelled
partially to receive the prestations in which the Art. 1237, CC. Whoever pays on behalf of the debtor
obligation consists. Neither may the debtor be without the knowledge or against the will of the
required to make partial payments. latter, cannot compel the creditor to subrogate him
in his rights, such as those arising from a mortgage,
However, when the debt is in part liquidated and in guaranty, or penalty.
part unliquidated, the creditor may demand and
the debtor may effect the payment of the former Articles 1236 and 1237 merely lay down a presumption.
without waiting for the liquidation of the latter. However, by virtue of the parties’ freedom to contract,
the parties could stipulate otherwise. But such mutual
This provision only covers a situation where there is agreement, being an exception to presumed course of
one debtor and one creditor. It does not apply to joint events as laid down by Articles 1236 and 1237, must be
obligations, nor solidary obligations where debtors are adequately proven [Carandang v. de Guzman, G.R. No.
bound under different terms. [Tolentino] 160347 (2006)].
c. By whom Payment by a third person without the knowledge and
Payor must have free disposal of the thing due and consent of the debtor cannot be recovered from the
capacity to alienate it. [Art. 1239, CC] creditor. The right of the third person who paid in such
case is against the debtor whose obligation he has
Free disposal of the thing due means that the thing to paid. The law limits his recovery to the amount by
be delivered must not be subject to any claim or lien or which the debtor has been benefited, if the debtor had
encumbrance of a third person. no knowledge of such payment. [Tolentino]
Capacity to alienate means that the person is not Reimbursement & Subrogation Distinguished
incapacitated to enter into contracts [Arts. 1327, 1329, Reimbursement Subrogation
CC] and for that matter, to make a disposition of the Includes
thing due. [de Leon] reimbursement, but
1. The debtor or his duly authorized agent also the exercise of
2. The debtor’s heir or successor in interest Personal action to
other rights attached to
3. A third person interested in the fulfillment of the recover amount paid
the original obligation
obligation (i.e. co-debtor, guarantor) whether the (e.g. guaranties,
debtor consents to it or not, and even without securities)
debtor’s knowledge [Art 1302, CC]. This includes
Consignation: Deposit of the object of obligation in a Mere sending of letters without accompanying
competent court in accordance with the rules payment is not a valid tender of payment. When the
prescribed by law whenever the creditor unjustly tender of payment is not accompanied by the means
refuses payment or because of some circumstances of payment, interest is not suspended.
which render direct payment to the creditor
impossible or inadvisable. How consignation is made
1. Principal act which constitutes a form of payment Consignation shall be made by depositing the things
2. Judicial in character due at the disposal of judicial authority, before whom
the tender of payment shall be proved, in a proper
Requisites of consignation case, and the announcement of the consignation in
1. There is a debt due other cases.
2. Consignation is made because of some legal
cause The consignation having been made, the interested
a. There was tender of payment and creditor parties shall also be notified thereof.
refuses without just cause to accept it
b. Instances when consignation alone would Who bears the expenses
suffice as provided under Art. 1256 The expenses of consignation, when properly made,
3. Previous notice of consignation was given to those shall be charged against the creditor. [Art. 1259, CC]
persons interested in the performance of the
obligation. Previous notice is essential to the Withdrawal of Consigned Amount
validity of the consignation and its lack invalidates Before the creditor has accepted the consignation, or
the same. [Soco v Militante, G.R. No. L-58961, before a judicial declaration that the consignation has
(1983)] been properly made, the debtor may withdraw the
4. Amount or thing due was placed at the disposal of thing or the sum deposited, allowing the obligation to
the court remain in force [par. 2, Art. 1260, CC].
Consignation has a retroactive effect. (Tolentino) The article is applicable only to obligations "to do,"
and not to obligations "to give." The obligation to pay
Effects of Withdrawal by Debtor [Arts. 1260- 1261, rentals 16 or deliver the thing in a contract of lease
CC] falls within the prestation "to give"; hence, it is not
1. Before approval of the court - Obligation remains covered within the scope of Article 1266. [Philippine
in force. National Construction Corporation v. CA and
2. After approval of the court or acceptance by the Raymundo-Abarra, G.R. No. 116896 (1997)]
creditor, with the consent of the latter - Obligation
remains in force, but guarantors and co-debtors Actions Against Third Persons
are liberated. Preference of the creditor over the Art. 1269, CC. The obligation having been
thing is lost. extinguished by the loss of the thing, the creditor
3. After approval of the court or acceptance by the shall have all the rights of action which the debtor
creditor, and without creditor’s consent - may have against third persons by reason of the
Obligation subsists, without change in the liability loss.
of guarantors and co-debtors, or the creditor’s
right of preference. Other cases where loss is attributed to debtor
4. If the creditor authorizes the debtor to withdraw, a. Law provides that the debtor shall be liable even
third persons who were benefited by the if the loss is due to fortuitous events [Arts. 1942,
consignation are not prejudiced by the revival of 1979, 2147, 2159, CC].
the obligation. b. Obligor is made liable by express stipulation.
c. Nature of the obligation requires an assumption a. If debtor has performed part of the obligation
of risk. when impossibility occurred, creditor must pay
d. Fault or negligence concurs with the fortuitous the part done as long as he benefits from it.
event. b. If debtor received full payment from creditor, he
e. Loss occurs after delay. must return excess amount corresponding to part
f. Debtor has promised to deliver the same thing to which was impossible to perform.
two or more different parties.
g. Obligation arises from a criminal act. Partial loss ordinarily does not extinguish the
h. Bailee in commodatum: saves his own thing and obligation, and the thing should be delivered to the
not the thing of the creditor, etc. [Art. 1942, CC]. creditor in its impaired condition. However, if the
i. Depositary in deposit for certain instances [Art. portion lost is of such extent or nature that the
1979, CC]. obligation would not have been constituted without it,
then the obligation is extinguished. The intention of
Loss of the thing when in possession of the debtor the parties is the controlling factor in the solution of
Loss was due to the debtor’s fault. Burden of each case of partial loss. [Tolentino]
explaining the loss of the thing falls upon him,
UNLESS due to an earthquake, flood, storm, or other Doctrine of Unforeseen Events
natural calamity [Art. 1265, CC]. Art. 1267, CC. When the service has become so
difficult as to be manifestly beyond the
In Reciprocal Obligations contemplation of all the parties, the obligor may
Extinguishment of the obligation due to loss of the also be released therefrom, in whole or in part.
thing or impossibility of performance affects both the
creditor and debtor; the entire juridical relation is Requisites [Tolentino]:
extinguished. a. The event or change in circumstances could not
have been foreseen at the time of the execution of
Partial loss the contract;
Art. 1264, CC. The courts shall determine whether, b. It makes the performance of the contract
under the circumstances, the partial loss of the extremely difficult but not impossible;
object of the obligation is so important as to c. The event must not be due to the act of any of the
extinguish the obligation. parties; and
d. The contract is for a future prestation
Partial loss due to a fortuitous event does not
extinguish the obligation. The thing due shall be This only applies to absolutely exceptional changes of
delivered in its present condition, without any liability circumstances in which equity demands assistance for
on the part of the debtor, UNLESS the obligation is the debtor. [Tolentino]
extinguished when the part lost was of such extent as
to make the thing useless. Creditors’ rights
Art. 1269, CC. The obligation having been
Impossibility of Performance extinguished by the loss of the thing, the creditor
When prestation becomes legally or physically shall have all the rights of action which the debtor
impossible (by fortuitous event or force majeure), the may have against third persons by reason of the
debtor is released. [Arts. 1266, CC] loss.
Impossibility must have occurred without fault of This article refers to the rights and actions which the
debtor, and after the obligation has been constituted. debtor may have against third persons. It also refers to
any indemnity which the debtor may have already
Subjective impossibility received. [Tolentino]
Where there is no physical or legal loss, but the thing
belongs to another, the performance by the debtor
becomes impossible. The debtor must indemnify the 3. Condonation
creditor for damages.
Condonation or Remission of the Debt
Partial Impossibility An act of liberality, by virtue of which, without
Courts shall determine whether it is so important as to receiving any equivalent, the creditor renounces the
extinguish the obligation. enforcement of the obligation. The obligation is
extinguished either in whole or in such part of the
same to which remission refers.
Debtor claiming its benefits must prove Legal compensation may apply to:
compensation; once proven, effects retroact from the 1. Awards of attorney’s fees, against the litigant and
moment when the requisites concurred. not his lawyer [Gan Tion v. CA, G.R. No. L-22490
(1969)]
Compensation Distinguished from Other Modes of 2. Bank deposits, against the accounts of a depositor
Extinguishment whose checks were dishonored [BPI v CA, G.R. No.
Compensation Confusion 116792 (1996)]
There must always be Involves only one
two obligations. obligation. Note: While a bank generally has a right of set-off over
There are two persons deposits for the payment of any withdrawals on the
who are mutually There is only one part of a creditor, the question of whether the remedy
debtors and creditors of person whom the is properly exercised is a separate matter and depends
each other in two characters of the on the bank’s role as the depository bank and as
separate obligations, creditor and debtor collecting agent for the check. The depositary bank
each arising from the meet. must have acted with the highest degree of care,
same cause.
otherwise it may not exercise such right of setoff. such right at the time he gave his
[Associated Bank v Tan, G.R. No. 156940, (2004)] consent
With debtor’s Debtor may set up compensation
Voluntary Compensation – takes place when parties knowledge of debts previous to the
who are mutually creditors and debtors of each other but without assignment but not of
agree to compensate their respective obligations even consent subsequent ones
though one of the requisites of compensation may be Debtor may set up compensation
lacking. Without
of all credits prior and also later
debtor’s
to the assignment until he had
knowledge
Art. 1282, CC. The parties may agree upon the knowledge of the assignment
compensation of debts which are not yet due.
Facultative Compensation - When it can be claimed Unlike other modes of extinguishment, it is a juridical
by one of the parties who, however, has the right to act of dual function—it extinguishes an obligation, and
object to it. at the same time, it creates a new one in lieu of the old.
It operates as a relative, not an absolute, extinction.
This Compensation which can only be set up at the
option of a creditor, when legal compensation cannot Requisites
take place because some legal requisites in favor of a. A previous valid obligation
the creditor are lacking. b. Agreement of all the parties to the new obligation
c. Animus novandi or intent to novate
Obligations which cannot be compensated [Arts. d. Substantial difference between old and new
1287-1288, CC] obligations and, consequently, extinguishment of
a. Contracts of depositum the old obligation
b. Contracts of commodatum e. Validity of the new obligation
c. Future support due by gratuitous title
d. Civil liability arising from a penal offense Effect
e. Obligations due to the government If Original If New
f. Damage caused to the partnership by a partner In General Obligation is Obligation is
Void Void
Right of a Guarantor Novation is New obligation
A guarantor may set up compensation as regards void if the is void, the old
what the creditor may owe the principal debtor. [Art. original obligation
1280, CC] Old
obligation was subsists,
obligation is
void, EXCEPT UNLESS the
Effect of Assignment of Rights by the Creditor to a extinguished
when parties
Third Person [Art. 1285, CC] and replaced
annulment intended that
Debtor cannot set up against by the new
may be claimed the former
With debtor’s assignee compensation one
only by the relations shall
consent pertaining to him against stipulated.
debtor, or be extinguished
assignor UNLESS he reserved when in any event
ratification [Art. 1297, CC]
other on the occasion of any family rejoicing. The b. Pactum leonina one party bears the lion’s
prohibition shall also apply to persons living share of the risk
together as husband and wife without a valid Art. 1799, CC. A stipulation which excludes one or
marriage. more partners from any share in the profits or
Art. 1490, CC. The husband and the wife cannot losses is void.
sell property to each other, except: (1) When a c. Pactum de non alenundo – a stipulation not
separation of property was agreed upon in the to alienate
marriage settlements; or (2) When there has been Art. 2130, CC. A stipulation forbidding the owner
a judicial separation of property under Article 191. from alienating the immovable mortgaged shall be
Art. 1491, CC. The following persons cannot void.
acquire by purchase, even at a public or judicial 2. Contrary to morals
auction, either in person or through the mediation Morals deal with norms of good and right conduct
of another: evolved in a community. These norms may differ
(1) The guardian, the property of the person or at different times and places and with each group
persons who may be under his guardianship; of people. [de Leon]
(2) Agents, the property whose administration or 3. Contrary to good customs
sale may have been entrusted to them, unless Customs consist of habits and practices which
the consent of the principal has been given; through long usage have been followed and
(3) Executors and administrators, the property of enforced by society or some part of it as binding
the estate under administration; rules of conduct. It has the force of law when
(4) Public officers and employees, the property of recognized and enforced by law. [de Leon]
the State or of any subdivision thereof, or of 4. Contrary to public order
any government-owned or controlled Public order refers principally to public safety
corporation, or institution, the administration although it has been considered to mean also the
of which has been entrusted to them; this public weal. [de Leon]
provision shall apply to judges and 5. Contrary to public policy
government experts who, in any manner Public policy is the principle under which freedom
whatsoever, take part in the sale; of contract or private dealing is restricted by law
(5) Justices, judges, prosecuting attorneys, clerks for the good of the public. In determining whether
of superior and inferior courts, and other a contract is contrary to public policy, the nature
officers and employees connected with the of the subject matter determines the source from
administration of justice, the property and which such question is to be solved [Ferrazzini v
rights in litigation or levied upon an execution Gsell, G.R. No. L-10712 (1916)]
before the court within whose jurisdiction or
territory they exercise their respective A contract which is neither prohibited by law nor
functions; this prohibition includes the act of condemned by judicial decision, nor contrary to
acquiring by assignment and shall apply to public morals, contravenes no public policy. In the
lawyers, with respect to the property and absence of express legislation or constitutional
rights which may be the object of any litigation prohibition, a court, in order to declare a contract
in which they may take part by virtue of their void as against public policy, must find that the
profession. contract as to the consideration or thing to be
(6) Any others specially disqualified by law. done, has a tendency to injure the public, is
Art. 1782, CC: Persons who are prohibited from against the public good, or contravenes some
giving each other any donation or advantage established interests of society, or is inconsistent
cannot enter into universal partnership with sound policy and good morals, or tends
clearly to undermine the security of individual
Limitations to stipulations/what not to stipulate rights, whether of personal liability or of private
1. Contrary to law property [Gabriel v Monte de Piedad, G.R. No. L-
a. Pactum commisorium: automatic 47806 (1941)]
appropriation
Art. 2088, CC: The creditor cannot appropriate the c. Relativity
things given by way of pledge or mortgage, or
dispose of them. Any stipulation to the contrary is Par. 1, Art. 1311, CC. Contracts take effect only
null and void. between parties, their assigns and heirs, EXCEPT in
case where the rights and obligations arising from
the contract are not transmissible by their (1)
nature, (2) by stipulation, or (3) by provision of law. Creditors of the contracting parties may rescind
The heir is not liable beyond the value of the contracts intended to defraud them although they
property he received from the decedent did not intervene therein [Reyes and Puno]
Art. 1317, CC. No one may contract in the name of 5. Tortious Interference [Art. 1314, CC]
another without being authorized by the latter, or Any third person who induces another to violate
unless he has by law a right to represent him. his contract shall be liable for damages to the
other contracting party (even though the third
A contract entered into in the name of another by person is not bound by the stipulations).
one who has no authority or legal representation or
who has acted beyond his powers, shall be The word "induce" refers to situations where a
unenforceable, unless it is ratified expressly or person causes another to choose one course of
impliedly by the person on whose behalf it has been conduct by persuasion or intimidation.
executed, before it is revoked by the other
contracting party. Requisites:
a. Existence of a valid contract
b. The third person’s knowledge of the third
Exceptions to Relativity (Contracts may bind and affect
person of the existence of the contract
strangers in the ff. cases):
Note: Knowledge alone is not sufficient to
1. Stipulations Pour Autrui [Art. 1311, par.2, CC]
make a third person liable for tortuous
If a contract should contain some stipulation in
interference. To sustain a case for tortuous
favor of a third person, he may demand its
interference, the defendant must have acted
fulfillment, provided:
with malice or must have been driven by
a. He communicated his acceptance to the
purely impious reasons to injure the plaintiff.
obligor before its revocation (by the original
c. Interference by third person without legal
parties).
justification or excuse. [Lagon v CA, G.R. No.
b. The contracting parties must have clearly and
119107 (2005)]
deliberately conferred a favor upon the third
person (A mere incidental benefit or interest
of a person is not sufficient). d. Consensual
c. The stipulation favoring the third person is
only a part of the contract. Art. 1315, CC. Contracts are perfected by mere
d. No relation of agency exists between any of consent and from that moment, the parties are
the parties and the third person favored. bound not only to the fulfillment of what has been
e. The favorable stipulation should not be expressly stipulated but also to all consequences
conditioned or compensated by any kind of which according to their nature may be keeping in
obligation whatsoever. good faith, usage, and law.
2. Accion directa – the creditor is authorized by the
statute to sue on his debtor’s contract Exceptions: Real contracts, such as deposit, pledge
Examples: and commodatum, are not perfected until the delivery
a. Lessor against Sublessee [Art. 1651, 1652, CC] of the object of the obligation [Art. 1316, CC]. And
b. Laborers of Contractor against Owner of the solemn contracts, which are perfected by compliance
work [Art. 1729, CC] with the formalities required by law.
3. Third Person in Possession of Object of Contract
[Art. 1312, CC]
In contracts creating real rights, third persons
e. Obligatory Force
who come into possession of the object of the
contract are bound thereby, subject to the Art. 1159, CC. Obligations arising from contracts
provisions of the Mortgage Law and the Land have the force of law between the contracting
Registration Laws. parties and should be complied with in good faith.
4. Fraud of Creditors by Contracting Parties
(Accion Pauliana) [Art. 1313, CC] Art. 1308, CC. The contract must bind both
Creditors are protected in cases of contracts contracting parties; its validity or compliance
intended to defraud them. cannot be left to the will of one of them.
bound not only to the fulfillment of what has been 1. Unilateral – only one party is bound by the
expressly stipulated but also to all consequences prestation, e.g. commodatum
which according to their nature may be keeping in 2. Bilateral (synallagmatic)- both parties are
good faith, usage, and law. bound by reciprocal prestations, e.g. sale
• All contracts are bilateral in the consent,
but not all are bilateral in effects.
2. C lassification of Contracts j. To their designation/name
1. Nominate – where the law gives the contract
a. To their subject matter a special designation or particular name; e.g.
1. Things, e.g. sale, deposit, pledge deposit
2. Services, e.g. agency, lease of services 2. Innominate – where the contract has no
b. To formation or perfection special name
1. Consensual – consent is sufficient to perfect i. Do ut des (I give so that you may give)
the contract [Art. 1315] ii. Do ut facias (I give so that you may do)
2. Real – delivery, actual or constructive, is iii. Facio ut facias (I do so that you may do)
required in addition to consent [Art. 1316] iv. Facio ut des (I do so that you may give)
3. Solemn or formal – where special formalities
are required for perfection [Art. 1356] Art. 1307, CC. Innominate contracts shall be
c. To relation to other contracts regulated by the stipulations of the parties, by the
1. Principal – may exist alone; e.g. lease provisions of Titles I and II of this Book, by the rules
2. Accessory – depends on another contract for governing the most analogous nominate contracts,
its existence, e.g. guaranty and by the customs of the place
3. Preparatory – a preliminary step towards the
celebration of a subsequent contract; e.g.
agency 3. Stages of a Contract
d. To form
1. Common or informal – may be entered into in a. Preparation (conception or “generation”) – when
whatever form as long as there is consent, negotiations are in progress
object and cause b. Perfection (or birth) – when the parties come to an
2. Special or formal – required by law to be in agreement
certain specified form c. Consummation (or death) - when the contract is
e. To cause/by equivalence of prestations fully executed
1. Onerous – there is an exchange of correlative
values, e. g. sale Preparation Perfection Consummation
2. Remuneratory – where the outstanding Parties come
prestation is premised upon services or Exchanges of
to an Parties perform
benefits already received offers and
agreement. their
3. Gratuitous – where no correlative prestation counter-
All the obligations
is received by one party, e. g. donation, offers.
essential under the
commodatum No contract
requisites contract
f. To purpose yet
concur
1. Transfer of ownership, e.g. sale The stage to
2. Conveyance of Use, e.g. commodatum The stage to
look at to
3. Rendition of Service, e.g. agency look at to
determine the
g. To time of fulfillment determine
status of the
1. Executed – where the obligations are fulfilled whether there
contract (i.e.,
at the time the contract is entered into has been a
valid, voidable,
2. Executory – where fulfillment of obligations breach of the
void,
does not take place at the time the contract is contract
unenforceable)
made
h. To risk
1. Commutative – fulfillment is predetermined 4. E lements of Contracts
in advance
2. Aleatory – fulfillment is dependent upon 1. Essential – those without which there is no
chance contract
i. To the nature of the vinculum produced Consensual Solemn
Real
(ordinary) (formal)
Essential
Elements
Consent, Object, and Cause Essential Requisites
Delivery
of the Formality There is no contract unless the following requisites
Additional concur:
- thing to prescribed
Elements 1. Consent of the contracting parties;
be by law
returned 2. Object certain which is the subject matter of the
contract;
2. Natural – those which are derived from the nature 3. Cause of the obligation which is established. [Art.
of the contract and ordinarily accompany the 1318, CC]
same; they are presumed to exist unless the
contrary is stipulated 1. Consent
3. Accidental – those which exist only if stipulated
The meeting of the minds of the parties on the subject
matter and cause of the contract.
Requisites
a. It must be manifested by the concurrence of the
offer and acceptance [Arts. 1319-1326, CC].
b. The contracting parties must possess the
necessary legal capacity [Arts. 1327-1329, CC].
c. It must be intelligent, free, spontaneous, and real
(not vitiated) [Arts. 1330-1346, CC]
Offer
A unilateral proposition which one party makes to the
other for the celebration of the contract. [Tolentino]
Requisites of an Offer:
a. Definite
b. Intentional
c. Complete
Invitation to make offers (advertisements) “The offer must be certain” and “the acceptance
a. Business advertisements of things for sale are seasonable and absolute; if qualified, the
NOT definite offers, just invitations to make an acceptance would merely constitute a counteroffer.
offer, UNLESS the contrary appears [Art. 1325, [Insular Life v. Asset Builders Corp., G.R. No. 147410,
CC]. (2004)]
b. Advertisements for bidders are invitations to
make proposals, the advertiser is NOT bound to Acceptance must be absolute, unconditional, and
accept the lowest or highest bid; UNLESS the without variance of any sort from the offer. It must
contrary appears. The bidder is the offeror [Art. also be made known to the offeror. An acceptance
1326, CC]. not made in the manner prescribed is not effective
but constitutes a counter-offer. [Malbarosa v. CA,
The Terms and Conditions of the bidding G.R. No. 125761, (2003)]
disseminated… constitutes the "advertisement"
to bid on the project. The bid proposals or Requisites of acceptance:
quotations submitted by the prospective a. Unqualified and unconditional, i.e. it must
suppliers… are the offers. The reply… constitutes conform with all the terms of the offer, otherwise
the acceptance or rejection of the respective it is a counter-offer [Art. 1319, CC]
offers. [Jardine Davies v. CA, G.R. No. 128066, b. Directed and communicated to the offeror and
(2000)] learned by him [Art. 1319, CC] If made through an
c. Statements of intention: no contract results even agent, the offer is accepted from the time the
if accepted. acceptance is communicated to such agent. [Art.
1322, CC]
In a letter informing another that the sender was c. Made within the proper time
“in a position and is willing to entertain” the d. May be express/implied, but is not presumed
purchase of a yacht under some terms, the word
“entertain” applied to an act does not mean the Acceptance must be absolute, unconditional, and
resolution to perform said act, but simply a without variance of any sort from the offer. It must also
position to deliberate for deciding to perform or be made known to the offeror. An acceptance not
not to perform said act. It was merely a position to made in the manner prescribed is not effective but
deliberate whether or not he would purchase the constitutes a counter-offer. [Malbarosa v. CA, supra]
yacht and invitation to a proposal being made to
him, which might be accepted by him or not. Contracts are perfected by mere consent
[Rosenstock v. Burke, G.R. No. 20732, (1924)] Contracts are perfected by mere consent, and from
that moment the parties are bound not only to the
Offer terminates upon— fulfillment of what has been expressly stipulated but
a. Rejection by the offeree also to all the consequences which, according to their
b. Incapacity (death, civil interdiction, insanity, or nature, may be in keeping with good faith, usage and
insolvency) of the offeror or offeree before law. [Art. 1315, CC]
acceptance is conveyed [Art. 1323, CC]
c. Submission of a counter-offer Exceptions:
d. Lapse of the time stated in the offer without a. Real contracts, such as deposit, pledge and
acceptance being conveyed commodatum, are not perfected until the delivery
e. Revocation of the offer before learning of of the object of the obligation [Art. 1316, CC]
acceptance b. Formal contracts, where the law requires that a
f. Supervening illegality before acceptance [Reyes contract be in some form or be proved in a certain
and Puno] way; the intent of the parties have to be
accompanied by the requisite formality [Art. 1356,
Acceptance CC]
To produce a contract, the acceptance must not
qualify the terms of the offer. It is necessary that the Cognition Theory
acceptance be unequivocal and unconditional, and Acceptance made by a letter or telegram does not bind
the acceptance and the proposition shall be without the offeror except from the time it came to his
any variation whatsoever; and any modification or knowledge. The contract, in such a case, is presumed
variation from the terms of the offer annuls the latter to have been entered into in the place where the offer
and frees the offeror. [Tolentino] was made. [par. 2, Art. 1319, CC]
Requisites: Fraud
1. One party is compelled to give his consent by a When, through insidious words or machinations of one
reasonable and well-grounded fear of an evil; of the contracting parties, the other is induced to enter
2. The evil must be imminent and grave; into a contract which, without them, he would not
3. The evil must be upon his person or property, have agreed to. [Art. 1338, CC]
spouse, descendants or ascendants;
4. The evil must be unjust. In order that fraud may make a contract voidable, it
should be serious and should not have been employed
If a contract is signed merely because of “fear of by both contracting parties. [Art. 1344, CC]
displeasing persons to whom obedience and respect
are due”, the contract is still valid, for by itself, Art. 1339, CC. Failure to disclose facts, when there
reverential fear is not wrong. [Paras] is a duty to reveal them, as when the parties are
bound by confidential relations, constitutes fraud.
Violence Intimidation
Physical compulsion Moral compulsion Art. 1340, CC. The usual exaggerations in trade,
External or prevents when the other party had an opportunity to know
Internal or induces the
the will to manifest the facts, are not in themselves fraudulent.
performance of an act
itself
Art. 1341, CC. A mere expression of an opinion does
Note: Violence or intimidation shall annul the
not signify fraud, unless made by an expert and the
obligation, although it may have been employed by a
other party has relied on the former's special
third person who did not take part in the contract. [Art.
knowledge.
1336, CC]
Dolo incidente (Incidental fraud) [Art. 1344, CC] c. The purpose is to deceive or to hide from third
Those which are not serious in character and without persons although it is not necessary that the
which the other party would still have entered into the purpose be illicit or for purposes of fraud
contract.
Absolute Simulation Relative Simulation
Dolo causante (Causal fraud) (Simulados) (Disimulados)
Determines or is the essential cause of the consent, No real transaction is Real transaction is
while dolo incidente refers only to some particular or intended. hidden.
accident of the obligation. The effects of dolo causante Fictitious contract. Disguised contract.
are nullity of the contract and indemnification of Bound as to actual hidden
damages, while dolo incidente obliges the person agreement, so long as it
employing it to pay damages. [Tankeh v. DBP, G.R. No. Void. (Because there is does not prejudice a third
171428 (2013)] an absolute lack of person and is not contrary
cause) to law, morals, good
Fraud to vitiate consent must fulfill two conditions customs, public order or
1. The fraud must be dolo causante or it must be public policy.
fraud in obtaining the consent of the party. The
deceit must be serious. The fraud is serious when The characteristic of simulation is the fact that the
it is sufficient to impress, or to lead an ordinarily apparent contract is not really desired or intended to
prudent person into error; that which cannot produce legal effects or in any way alter the juridical
deceive a prudent person cannot be a ground for situation of the parties. Thus, where a person, in order
nullity. The circumstances of each case should be to place his property beyond the reach of his creditors,
considered, taking into account the personal simulates a transfer of it to another, he does not really
conditions of the victim. intend to divest himself of his title and control of the
2. The fraud must be proven by clear and convincing property; hence, the deed of transfer is but a sham.
evidence and not merely by a preponderance Lacking, therefore, in a fictitious and simulated
thereof. [ECE Realty v. Mandap, G.R. No. 196182, contract is consent which is essential to a valid and
(2014)] enforceable contract. [Manila Banking v. Silverio, G.R.
No. 132887 (2005)]
Note: However, fraud in its general sense (false
representation of a fact) coming about in the If the parties [merely] state a false cause in the
consummation stage of the sale, as opposed to the contract to conceal their real agreement, the contract
negotiation and perfection stages, entitles the is relatively simulated and the parties are still bound
aggrieved party to the rescission of the sales contract. by their real agreement. Hence, where the essential
[Sps. Tongson v. Emergency Pawnshop, GR. No. requisites of a contract are present and the simulation
167874 (2010)] refers only to the content or terms of the contract, the
agreement is absolutely binding and enforceable
SIMULATION OF CONTRACTS between the parties and their successors in interest.
Takes place when the parties do not really want the [Valerio v. Refresca, G.R. No. 163687 (2006)]
contract they have executed to produce the legal
effects expressed by its wordings. It may be absolute With respect to a third person acting in good faith, the
or relative [Arts. 1345-1346, CC] apparent contract must be considered as the true
contract. The declaration that the contract is
The primary consideration in determining the true simulated does not prejudice him.
nature of a contract is the intention of the parties. Such
intention is determined not only from the express Note: Relative simulation is presumed by law in case
terms of their agreement, but also from the of Art. 1602, CC (Contracts presumed to be Equitable
contemporaneous and subsequent acts of the parties. Mortgages)
[Spouses Lopez v. Sps. Lopez, G.R. No. 161925 (2009)]
BUT,
In Fisher v. Robb, G.R. No. 46274 (1939), if the moral
obligation arises wholly from ethical considerations, it
cannot constitute a sufficient cause to support an
onerous contract, as when the promise is made on the
erroneous belief that one was morally responsible for
the failure of an enterprise (moral obligation).
b. A special promise to answer for the debt, property; sales of real property or of an
default, or miscarriage of another; interest therein a governed by Articles 1403,
c. An agreement made in consideration of No. 2, and 1405;
marriage, other than a mutual promise to (2) The cession, repudiation or renunciation of
marry; hereditary rights or of those of the conjugal
d. An agreement for the sale of goods, partnership of gains;
chattels or things in action, at a price not (3) The power to administer property, or any other
less than five hundred pesos, unless the power which has for its object an act
buyer accept and receive part of such appearing or which should appear in a public
goods and chattels, or the evidences, or document, or should prejudice a third person;
some of them, of such things in action or (4) The cession of actions or rights proceeding
pay at the time some part of the purchase from an act appearing in a public document.
money; but when a sale is made by auction
and entry is made by the auctioneer in his All other contracts where the amount involved
sales book, at the time of the sale, of the exceeds five hundred pesos must appear in writing,
amount and kind of property sold, terms of even a private one. But sales of goods, chattels or
sale, price, names of the purchasers and things in action are governed by Articles, 1403, No.
person on whose account the sale is made, 2 and 1405.
it is a sufficient memorandum;
e. An agreement of the leasing for a longer Article 1358 of the Civil Code which requires the
period than one year, or for the sale of real embodiment of certain contracts in a public
property or of an interest therein; instrument, is only for convenience, and registration of
f. A representation as to the credit of a third the instrument only adversely affects third parties.
person. Formal requirements are, therefore, for the benefit of
Those where both parties are incapable of giving third parties. Non-compliance therewith does not
consent to a contract. adversely affect the validity of the contract nor the
contractual rights and obligations of the parties
• This article speaks of contracts that cannot be thereunder. [Fule vs CA, G.R. No. 112212, (1998)]
proved except by written note or memorandum,
unless the party charged waives the objection Before the contracting parties may be compelled to
[Rule 123, Sec. 21, Rules of Court] execute the needed form, the contract should be:
• This article applies to executory contracts only 1. Perfected or valid
[Almirol v Monserrat, G.R. No. 23717, (1925)] 2. Enforceable under the Statute of Frauds
An oral promise to reduce to writing an agreement Enumerated contracts in Art. 1358 are valid even when
that is within the Statute of Frauds is itself not reduced into writing, although parties may have
unenforceable [Reyes and Puno] recourse under Art. 1357 to compel execution of the
writing, except in the following cases:
1. Solemn Contracts (action under Art. 1357 is not
c. For the Effectivity of the available at all)
Contract Against Third 2. Real Contracts (action under Art. 1357 is available
Persons if there is consent, subject matter, cause, and
delivery)
3. Contracts under the Statutes of Fraud (remedy
Art. 1357, CC. If the law requires a document or
under Art. 1357 is applicable only if the defense of
other special form, as in the acts and contracts
the Statute is waived expressly or impliedly by the
enumerated in the following article, the contracting
party charged
parties may compel each other to observe that
form, once the contract has been perfected. This
Action under this Article 1357 may be exercised
right may be exercised simultaneously with the
simultaneously with (i.e. need not be separate nor
action upon the contract.
need it precede) the action to enforce the contract,
although questions of form must be decided first.
Art. 1358, Civil Code. The following must appear in
a public document:
(1) Acts and contracts which have for their object
the creation, transmission, modification or
extinguishment of real rights over immovable
The mistake should be of fact generally, and not of law No fraud exists in the sense that neither of the parties
[BPI v Fidelity and Surety Co., G.R. Ni. L-26743 (1927)] took part therein.
Interpretation of Contract
Exception:
a. Where the statute expressly or by necessary
3. Rule 123, Rules of Court
implication declares the entire contract void
b. Where the terms, clauses, and conditions, by an Note: This is now found in Secs. 10-19, Rule 130.
established connection or by manifest intention of
the parties, is inseparable from the principal Art. 1379, CC. The principles of interpretation
obligation, and is a condition, juridically speaking, stated in Rule 123 of the Rules of Court shall
of that the nullity of which it would also occasion likewise be observed in the construction of
[Manresa] contracts
a. Rescission
Rescission is a remedy granted by law to the
contracting parties and even to third persons, to
secure reparation for damages caused to them by a
contract, even if this should be valid, by means of the
restoration of things to their condition at the moment
prior to the celebration of said contract. [Tolentino]
Relief to protect one of the parties or a third person such that a party’s or unilateral and whether
from all injury and damages which the contract may breach thereof the contract has been
cause, to protect some preferential right [Aquino v. partakes of a tacit fully fulfilled
Tañedo, G.R. No. L-12457 (1919)] resolutory condition
which entitles the
Rescission is a remedy granted by law to the injured party to
contracting parties and even to third persons, to rescission.
secure reparation for damages caused to them by a Predicated on injury to
contract, even if this should be valid, by means of the economic interests of the
restoration of things to their condition at the moment Predicated on breach party plaintiff/lesion.
prior to the celebration of said contract. [Tolentino] of faith. HOWEVER, not all
economic prejudices are
Lesion recognized by law.
The injury which one of the parties suffers by virtue of Principal action that is
a contract which is disadvantageous for him. To give retaliatory in Subsidiary action.
rise to rescission, the lesion must be known or coud character.
have been known at the time of making of the The cause of action is
contract. [Tolentino] subordinated to the
existence of an economic
Lesion does not invalidate a contract except only in The reparation of
prejudice. Hence, where
special cases provided by law [Art. 1355, CC] damages for the
the defendant makes
breach is purely
good the damages
secondary.
b. Characteristics of caused, the action
cannot be maintained or
Rescissible Contracts continued.
Mutual restitution when declared proper as between
1. The defect consists in injury or damage either to the parties involved
one of the contracting parties or to third persons;
Constitutes abrogation
2. Before rescission, they are valid, and therefore,
of the contract from the
legally effective;
Constitutes beginning and to restore
3. They can only be attacked directly only and not
termination of the the parties to their
collaterally;
obligation and release relative positions as if no
4. They can be attacked only by a contracting party
of the parties from contract has been made
or a third person who is injured or defrauded; and
further obligations Declares the contract
5. They are susceptible of convalidation only by
from each other void at its inception and
prescription and not ratification
puts an end to it as
6. Rescission is not a principal remedy, but a
though it never was
subsidiary one. It can only be availed of only if the
May be demanded May be demanded by a
injured party proves that he has no other legal
only by a party to the third party prejudiced in
means to obtain redress for the damage caused
contract the contract
[Art. 1177, CC]
May be denied by
7. The rescission shall only be to the extent
court when there is Extension of time does
necessary to cover the damages caused i.e. partial
sufficient reason to not affect the right to ask
rescission [Art. 1384, CC]
justify the extension of for rescission
8. The action to claim rescission must be
time
commenced within four years [Art. 1389, CC]
Non-performance is Various reasons of equity
the only ground for the are grounds for
c. Distinguished from right to rescission rescission
Rescission/Resolution [Congregation of the Religious Virgin Mary v. Orola,
G.R. No. 169790 (2008)]
under Art. 1191
Art. 1191 – Rescission d. Rescissible Contracts and
Art. 1381 – Rescission by
or Resolution for
Reason of Lesion Their Requisites [Arts.
Breach of Stipulation
Applies only to Applies whether
1381-1383, 1385, 1389, CC]
reciprocal obligations, obligations are reciprocal
Art. 1381, CC. The following contracts are litigation may still be valid but is susceptible for
rescissible: rescission under Art. 1381(4).
(1) Those which are entered into by guardians
whenever the wards whom they represent A definitive judicial determination with respect to the
suffer lesion by more than one-fourth of the thing subject of litigation is not a condition sine qua
value of the things which are the object non before the rescissory action contemplated under
thereof; Article 1381(4) of the Civil Code may be instituted. The
(2) Those agreed upon in representation of primordial purpose of Article 1381(4) of the Civil Code
absentees, if the latter suffer the lesion stated is to secure the possible effectivity of the impending
in the preceding number; judgment by a court with respect to the thing subject
(3) Those undertaken in fraud of creditors when of litigation. [Ada v. Baylon, G.R. No. 182435 (2012)]
the latter cannot in any other manner collect
the claims due them; Requisites before a Contract Entered Into in Fraud of
(4) Those which refer to things under litigation if Creditors May Be Rescinded under Art. 1381 (3):
they have been entered into by the defendant 1. There is a credit existing prior to the celebration of
without the knowledge and approval of the the contract, although not yet due or
litigants or of competent judicial authority; demandable;
2. There is fraud, or at least, the intent to commit
All other contracts specially declared by law to be fraud to the prejudice of the creditor seeking
subject to rescission. rescission, which may be presumed or proved [Art
1387, CC];
Requisites for Rescission under Art. 1381 (1) (2), CC 3. Creditor cannot in any legal manner collect his
1. Contract was entered into by a guardian in behalf credit; insolvency of the debtor is not required;
of his ward or by a legal representative in behalf and
of an absentee [Arts. 1381 (1) and (2) CC] 4. Object of the contract must not be legally in the
possession of a third person who did not act in bad
Note: A guardian is authorized only to manage the faith.
estate of the ward; should he dispose a portion
thereof without authority from the court by way of Accion Pauliana
a contract, the same is unenforceable under Art. The action to rescind contracts in fraud of creditors.
1403(1), irrespective of whether there is lesion or Consequently, accion pauliana presupposes a
not. judgment and unsatisfied execution which cannot
2. It was entered into without judicial approval [Art. exist when the debt is not yet demandable at the time
1386, CC] the rescissory action is brought. [Tolentino]
3. Ward or absentee suffered lesion of more than
one-fourth of the value of the property which is Note: Even secured creditors are entitled to accion
the object of the contract. [Art. 1381 (1) and (2), CC] pauliana.
4. There is no other legal means of obtaining
reparation for the lesion. [Art. 1383, CC] Art. 1382, CC. Payments made in a state of
5. Person bringing the action must be able to return insolvency for obligations to whose fulfillment the
whatever he may be obliged to restore. [Art. debtor could not be compelled at the time they
1385(1), CC] were effected, are also rescissible.
6. Object of the contract must not be legally in the
possession of a third person who did not act in bad Requisites before payment made by Insolvent can
faith [Art. 1385(2), CC] be rescinded:
1. It was made in a state of insolvency;
Note: for Art. 1381 (4): Any disposition of the thing 2. Obligation must have been one which debtor
subject of litigation or any act which tends to render could not be compelled to pay at the time such
inutile the court’s impending disposition in such case payment was effected.
without the knowledge and approval of the litigants or
of the court, is unmistakably and irrefutably indicative Payment made by an insolvent is rescissible. [Art.
of bad faith. 1382, CC], but a debtor can be compelled to pay by the
creditor even before the expiration of the period since
However, even without knowledge or approval from by his insolvency he has already lost his right to the
the court, the conveyance of a property subject of benefit of such period. [Art. 1198(1), CC]
The conflict can be resolved by considering the priority For persons under guardianship and for absentees,
of dates between the two debts. If the obligation with the period of four years shall not begin until the
a period became due before the obligation to the termination of the former's incapacity, or until the
creditor seeking the rescission became due, then the domicile of the latter is known. [Art. 1389, CC]
latter cannot rescind the payment even if such
payment was effected before the expiration of the Do all creditors benefit from the rescission?
period; but if the obligation with a period became due As a rule, the rescission should benefit only the
after the obligation to the creditor seeking rescission creditor who obtained the rescission, because the
became due, then the latter can rescind the payment. rescission is to repair the injury caused to him by the
[Manresa] fraudulent alienation. If a balance is left after
satisfying the claim of the creditor who brought the
Effects of Rescission [Art. 1385, CC] action, other creditors who are qualified to bring an
It creates an obligation of mutual restitutionan accion pauliana should be given the benefit of
obligation to return the things which were the object rescission, instead of requiring them to bring other
of the contract, together with their fruits, and the price rescissory actions. However, creditors who only
with its interests. became such after the fraudulent alienation, cannot
benefit from the rescission.
However, if the object of the contract is in the
possession of third persons in good faith, rescission Presumption of Fraud
cannot take place and indemnity for damages may be When alienation of property presumed in fraud of
demanded from the person causing the loss [Art. 1385, creditors:
CC] 1. Alienation by gratuitous title if the debtor has not
reserved sufficient property to pay all of his debts
Art. 1191 Art. 1381 contracted before alienation [Art. 1387(1), CC]
Rescission in 2. Alienation by onerous title if made by a debtor
Reciprocal Rescission by Reason of against whom some judgment has been rendered
Obligations Lesion in any instance or some writ of attachment has
(Resolution) been issued [Art. 1387(2), CC]
The action is based on a
party’s breach of obligation The test as to whether or not a conveyance is
A resolutory and cannot be instituted fraudulent is if it prejudices the rights of the creditors.
condition is implied except when the party [Tolentino]
upon breach of one suffering damage has no
party. other legal means to Badges of Fraud
obtain reparation. [Art. A conveyance leaving no property for other creditors to
1383, CC] attach is an evidence of fraud. [China Banking v. CA,
Creates the obligation to G.R. No. 129644 (2000)]:
return the things which 1. Consideration is fictitious or inadequate;
were the object of the 2. Transfer was made while suit had begun or
contract, together with pending;
Grants the injured their fruits, and the price 3. Sale was upon credit by insolvent debtor;
party the option to with its interests 4. There was large indebtedness or complete
pursue, either a This can only be carried out insolvency;
rescission or specific when he who demands 5. Transfer consisted of all or nearly all property
performance of the rescission can return what especially when insolvent or greatly;
obligation, with he is obliged to restore, 6. The transfer was made between father and son
payment of also when there are none when other above circumstances present; and
damages in either endangered third persons 7. There was failure of vendee to take exclusive
case who did not act in bad possession of all property embarrassed
faith. Otherwise, damages financially.
may be demanded from
the person causing the
loss. [Art. 1385. CC]
2. V oidable Contracts
Prescribes in 10
Prescribes in 4 years Contracts which are valid until annulled, unless
years
ratified. Defect is more or less intrinsic, as in the case
[Lalicon v. National Housing Authority, G.R. No.
of vitiated consent. [Paras]
185440, (2011)]
Three Ways or Modes of Convalidating a Voidable Ratification does not require the conformity of the
Contract [Jurado] contracting party who has no right to bring an action
1. By prescription of the action for annulment for annulment. [Art. 1385, CC]
[Art.1391, CC]
2. By ratification or confirmation [Art. 1392-1396, CC] Effect of Ratification
3. By loss of the thing which is the object of the It extinguishes the action for annulment of a voidable
contract through the fraud or fault of the person contract. [Art. 1392, CC]
who is entitled to institute the action for the
annulment [Art.1401, CC] It cleanses the contract from all its defects from the
moment it was constituted [Art. 1396, CC]
Prescription of the Action for Annulment
Grounds for being Ratification has a retroactive effect [de Leon].
Reckoning Point
voidable
Intimidation, violence,
Four years from the time 3. Unenforceable Contracts
the defect of the consent
or undue influence
ceases Unenforceable Contracts – contracts that by reason
Four years from of statutory defects do not confer any action to enforce
Fraud or Mistake
discovery thereof the same until and unless they are ratified in the
Minors and Four years from the time manner prescribed by law [Reyes]
Incapacitated Persons the guardianship ceases.
a. Characteristics
Constructive Notice
Discovery or fraud must be reckoned from the time 1. Cannot be enforced by a proper action in court
the document was registered in the office of the 2. Susceptible of ratification
register of deeds. Registration constitutes 3. Cannot be assailed by third persons [Art. 1408, CC]
constructive notice to the whole world. [Carantes v.
CA, G.R. No. L-33360 (1977)]
b. Ratification
The act or means by virtue of which efficacy is given to
a contract which suffers from a vice of curable nullity
[Arts. 1392-1396, CC]. Ratification is either express or
tacit.
b. Kinds of Unenforceable
Contracts [Art. 1403, CC]
1. Unauthorized contracts – those entered into by
one who has no authority or legal representation,
or who has acted beyond his powers [par. 1, Art.
1403, CC]
2. Those which did not comply with the Statute of
Frauds [par. 2, Art. 1403, CC]
3. Those where both parties are incapable of giving
consent to a contract [par. 3, Art. 1403, CC]
4. Sale of goods, chattels or things in action, 2. Must contain the names of the parties, the terms
priced not less
than P500 and conditions of the contract, and a description of
5. Leasing for period longer than one year OR the property sufficient to render it capable of
sale of real
property or of an interest therein identification.
6. Representation to the credit of a 3rd person 3. Must contain the essential elements of the contract
expressed with certainty that may be ascertained
GENERAL RULES OF APPLICATION OF STATUTE from the note or memorandum itself, or some
OF FRAUDS other writing to which it refers or within which it is
1. The Statute of Frauds is a Rule of Exclusion, i.e. connected, without resorting to parol evidence.
oral evidence might be relevant to the
agreements enumerated therein and might The purpose of the Statute is to prevent fraud and
therefore be admissible were it not for the fact perjury in the enforcement of obligations depending
that the law excludes said oral evidence. for their evidence on the unassisted memory of
2. The defense of the Statute of Frauds may be witnesses, by requiring certain enumerated contracts
waived [Art. 1405, CC] and transactions to be evidenced by a writing signed
3. Applies only to executory contracts and not those by the party to be charged. [Asia Productions v. Pano,
which have been consummated either totally or G.R. No. L-51058 (1992)]
partially. Or else, the exclusion of parol evidence
would promote fraud or bad faith. [Carbonnel v. Even if parol evidence was initially inadmissible, the
Poncio, G.R. No. L-11231 (1958)] same became competent and admissible because of
4. The Statute of Frauds is exclusive that is, it applies the cross-examination, which elicited evidence
only to the agreements or contracts enumerated proving the evidence of a perfected contract. The
therein [Quintos v Morata, G.R. No. L-31732, cross-examination on the contract is deemed a waiver
(1930)] of the defense of the Statute of Frauds. [Limketkai
5. The Statute of Frauds is a personal defense, that Sons Milling, Inc. v. CA, G.R. No. 118509 (1995)]
is, a contract infringing it cannot be assailed by
third persons [Art. 1408, CC] WHEN UNENFORCEABLE CONTRACTS BECOME
6. Contracts infringing the Statute of Frauds are not VOIDABLE OR VALID [Art. 1407, CC]
void, they are merely unenforceable [Art. 1403, CC] Unenforceable contracts become voidable when
both parties are incapable of giving consent, if the
EXCEPTIONS TO APPLICATION OF STATUTE OF same is ratified by the parent or guardian of either
FRAUD party, or by one of the parties, after attaining or
1. The Statute of Frauds cannot apply if the action is regaining capacity.
neither for damages because of the violation of an
agreement nor for the specific performance of Unenforceable contracts become valid when
said agreement ratification is made by the parents or guardians of
2. The Statute of Frauds does not determine the both contracting parties or by the parties themselves
credibility or weight of evidence. It merely after attaining or regaining capacity.
concerns itself with the admissibility thereof.
3. The Statute of Frauds does not apply if it is 4. V oid or Inexistent
claimed that the contract does not express the
true agreement of the parties. As long as the true Contracts
or real agreement is not covered by the Statute of
Frauds, it is provable by oral evidence [Cuyugan v. Contracts which have no effect at all and cannot be
Santos, G.R. No. L-10265 (1916)] ratified or validated [Paras]
The Statute of Frauds simply provides the method by Those which, because of certain defects, generally
which the contracts enumerated therein may be produce no effect at all. They are considered as
proved but does not declare them invalid because they inexistent from its inception or from the very beginning
are not reduced to writing. [Swedish Match v. CA, G.R. [de Leon]
No. 128120 (2004)]:
Includes not only those contracts in which one of the
For a note or memorandum to satisfy the Statute, it: essential requisites is totally wanting, but also those
1. Must be complete in itself. It must indicate at what which are declared void by positive provision of law or
price the thing is being sold, and state the mode of statute
payment. It cannot rest partly in writing and partly
in parol. [Swedish Match v. CA, supra]
Art. 1409, CC. The following contracts are Void v. Inexistent Contracts
inexistent and void from the beginning: Void Inexistent
(1) Those whose cause, object or purpose is Those where all the
contrary to law, morals, good customs, public requisites of a contract
order or public policy; are present but the
(2) Those which are absolutely simulated or cause, object or Those where one or
fictitious; purpose is contrary to some or all of the
(3) Those whose cause or object did not exist at law, morals, good requisites essential for
the time of the transaction; customs, public order the validity of a contract
(4) Those whose object is outside the commerce of or public policy, or the are absolutely lacking
men; contract itself is
(5) Those which contemplate an impossible prohibited or declared
service; void by law
(6) Those where the intention of the parties Principle of pari delicto Principle of pari delicto is
relative to the principal object of the contract is applicable inapplicable
cannot be ascertained; May produce legal Cannot produce any
(7) Those expressly prohibited or declared void by effects effect
law Covers Art. 1409 (1), Covers Art. 1409 (2) and
(3), (4), (5), (6) and (7) (3)
These contracts cannot be ratified. Neither can the
right to set up the defense of illegality be waived. Void v. Voidable Contracts
Void Voidable
a. Characteristics of a Void Those where one of
Those where all the
essential requisites are
Contract the essential
present, but consent is
requisites is wanting,
vitiated by want of
1. It does not produce any legal effect; either in fact or in law,
capacity, or by error,
2. It is not susceptible of ratification; or is declared void by
violence, intimidation, or
3. The right to set up the defense of inexistence or statute.
deceit
absolute nullity cannot be waived or renounced; Void; no contract at all Valid until annulled
4. The action or defense for the declaration of their Must be assailed through
inexistence or nullity is imprescriptible; [Art. 1410] an action for that
Note: This provision does not apply to wills. May be assailed purpose by a party to the
[Gallanosa v. Arcangel, G.R. No. L-29300 (1978)] indirectly contract, and never by a
and third person (direct
5. The inexistence or absolute nullity of a contract attack)
cannot be invoked by a person whose interests are Nullity may be set-up
not directly affected. [Art. 1421, CC] Nullity may only be set-
against anyone who
up against a party
asserts a right arising
Note: Article 1421 is subject to exceptions. For thereto.
from it.
instance, the creditors of a party to an illegal contract
Not susceptible to
may, under the conditions set forth in Article 1177 of May be validly ratified
ratification
said Code, exercise the rights and actions of the latter,
Action to declare
EXCEPT only those which are inherent in his person,
nullity does not Action for annulment
including therefore, his right to the annulment of said
prescribe [Art. 1410, prescribes
contract, even though such creditors are not affected
CC]
by the same, except indirectly, in the manner indicated
in said legal provision. [Pascual v. Secretary of Public
The law prohibits the spouses from selling property to
Works, G.R. No. L-10405 (1960)]
each other, subject to certain exceptions. [Art. 1490]
Similarly, donations between spouses during
A contract which is the direct result of a previous
illegal contract is also void and inexistent. [Art. 1421, marriage are prohibited. The prohibitions apply to
CC] common law relations. [Ching v. Goyanko, G.R. No.
165879 (2006)]
2. T wo Conditions Necessary
for Natural Obligations
a. That there be a juridical tie between two persons;
and
b. That this tie is not given effect by law
Natural Civil
Obligations Obligations
Not by court
Court action or
actions, but by
As to the coercive
good
enforceability power of public
conscience of
authority
debtor
Equity and Positive law [Art.
As to basis
natural justice 1157, CC]
d. Minor returns whole thing or price received Art. 1429, CC. When a testate or intestate heir
voluntarily voluntarily pays a debt of the decedent exceeding
the value of the property which he received by will
Consequence: There is no right to demand the thing or or by the law of intestacy from the estate of the
price returned. deceased, the payment is valid and cannot be
rescinded by the payer.
Art. 1427. When a minor between eighteen and
twenty-one years of age, who has entered into a Requisites under Art 1429 (Payment made by Heir)
contract without the consent of the parent or a. Decedent incurred in debt during his lifetime
guardian, voluntarily pays a sum of money or b. Heir voluntarily pays debt
delivers a fungible thing in fulfillment of the c. Value of debt exceeds value of heir’s inheritance
obligation, there shall be no right to recover the
same from the obligee who has spent or consumed Consequence: Payment is valid and heir cannot rescind
it in good faith. it.
Requisites under Art 1427 (Voluntary Payment – Art. 1430, CC. When a will is declared void because
Minor between 18 and 21) it has not been executed in accordance with the
a. There is a civil obligation formalities required by law, but one of the intestate
b. Minor between 18 and 21 entered into the contract heirs, after the settlement of the debts of the
without consent of parent or guardian deceased, pays a legacy in compliance with a
c. Minor pays a sum of money or delivers a fungible clause in the defective will, the payment is effective
thing voluntarily and irrevocable.
d. Obligee spends the money or consumes the thing
in good faith Requisites under Art 1430 (Payment of legacy – Will
declared Void)
Consequence: There is no right to recover the money a. There is a will providing for a legacy
paid or thing delivered. b. The will is declared void because it was not
executed in accordance with the formalities
It is not the voluntary payment that prevents recovery, required by law
but the consumption or spending of the thing or c. Heir pays legacy
money in good faith.
Consequence: Payment is effective and irrevocable.
Arts. 1426 and 1427, CC, distinguished
Art. 1426 Art. 1427
Presupposes a prior No prior annulment is
annulment involved
Refers to money or
Refers to any object
fungible things
Consumption in good Requires consumption
faith is not required in good faith
Guardianship or
Trust
Executorship
Guardians or Executors
do not have legal title but
Trustees has legal
mere actual possession
title to the property
and limited powers over
the property
Trust Contract
Always involves A legal obligation
ownership, embracing a based on an
set of rights and duties undertaking supported
fiduciary in character, by a consideration,
which may be created which obligation may or
by a declaration without may not be fiduciary in
consideration character.
Trust Debt
The beneficiary of a trust A creditor has merely a
has a beneficial interest personal claim against
in the trust property. the debtor.
There is a fiduciary
There is no fiduciary
relationship between a
relationship between a
trustee and a
debtor and a creditor.
beneficiary.
SALES
Civil Law
b. The right to withdraw, however, must not be negating the indispensable element of
exercised whimsically or arbitrarily; consensuality in the perfection of contracts. [Ang
otherwise, it could give rise to a damage Yu v. CA, G.R. No. 109125 (1994)]
claim under Article 19 of the Civil Code which
ordains that "every person must, in the 4. Mutual Promise to Buy and Sell
exercise of his rights and in the performance A promise to buy and sell a determinate thing for a
of his duties, act with justice, give everyone price certain is reciprocally demandable. [Art.
his due, and observe honesty and good faith." 1479, CC]
c. If the period has a separate consideration, a
contract of "option" is deemed perfected, and Such an arrangement would be the true contract to
it would be a breach of that contract to sell, which embodies the main obligation of the
withdraw the offer during the agreed period. seller to enter into a contract of sale upon full
d. The option, however, is an independent compliance with the condition of the buyer fully
contract by itself, and it is to be distinguished paying the purchase price, wherein the main
from the projected main agreement (subject obligation is a person obligation “to do.” Such
matter of the option) which is obviously yet to contracts to sell are really within the policitacion
be concluded. stage for they do not represent a species of a sale
e. If, in fact, the optioner-offeror withdraws the defi ned under Article 1458 of the Civil Code.
offer before its acceptance (exercise of the [Villanueva]
option) by the optionee-offeree, the latter
may not sue for specific performance on the PERFECTION
proposed contract ("object" of the option) The perfection of the contract takes place upon the
since it has failed to reach its own stage of concurrence of the essential elements thereof. [Ang Yu
perfection. v. CA, G.R. No. 109125 (1994)]
f. The optioner-offeror, however, renders
himself liable for damages for breach of the CONSUMMATION
option. In these cases, care should be taken Begins when the parties perform their respective
of the real nature of the consideration given, undertakings under the contract of sale, culminating
for if, in fact, it has been intended to be part in the extinguishment thereof. [San Miguel Properties
of the consideration for the main contract v. Sps. Huang, G.R. No. 137290 (2000)]
with a right of withdrawal on the part of the
optionee, the main contract could be deemed b. Essential Elements of a
perfected; a similar instance would be an
"earnest money" in a contract of sale that can Valid Contract of Sale
evidence its perfection (Art. 1482, CC).
1. Consent or meeting of the minds
3. Right of First Refusal 2. Object or subject Matter
In a right of first refusal, while the object might be 3. Cause or consideration
made determinate, the exercise of the right, [Coronel vs CA, G.R. No. 103577 (1996); De Leon]
however, would be dependent not only on the
grantor's eventual intention to enter into a binding When all 3 elements are present, there being a
juridical relation with another but also on terms, meeting of the minds, then a perfected contract of sale
including the price, that obviously are yet to be arises, and its validity is not affected by the fact that
later firmed up. Prior thereto, it can at best be so previously a fictitious deed of sale was executed, or by
described as merely belonging to a class of the fact of non-performance of the obligations
preparatory juridical relations governed not by thereafter.
contracts (since the essential elements to establish
the vinculum juris would still be indefinite and However, when all 3 elements are present, but there is
inconclusive) but by, among other laws of general defect or illegality constituting any such elements, the
application, the pertinent scattered provisions of resulting contract is voidable or void. [Villanueva]
the Civil Code on human conduct. Even on the
premise that such right of first refusal has been CONSENT OR MEETING OF THE MINDS
decreed under a final judgment, like here, its Consent refers to seller’s consent to transfer
breach cannot justify correspondingly an issuance ownership of, and deliver, a determinate thing, and to
of a writ of execution under a judgment that merely buyer’s consent to pay the price certain.
recognizes its existence, nor would it sanction an
action for specific performance without thereby
Being a consensual contract, the contract of sale is Art 1347, paragraph 2, characterizes a contract
perfected at the moment there is a “meeting of the entered into upon future inheritance as void. Art.
minds” upon the thing which is the object of the 1347 applies when the following requisites concur:
contract and upon the price. [Art. 1475, CC] o Succession has not yet been opened;
o The object of the contract forms part of the
Requisites: inheritance; and
1. Legal Capacity o The promissor has, with respect to the
2. Offer and acceptance, and object, an expectancy of a right which is
3. No vitiation of consent purely hereditary in nature. [Vda. de Cabatu
v. Spouses Tabu, G.R. No. 188417 (2012)]
A person is not incompetent to contract merely • Sale of animals suffering from contagious
because of advanced years or by reason of physical diseases [Art. 1575, CC]
infirmities [Paragas vs. Heirs of D. Balacano, G.R. No. • Sale of animals if the use or service for which they
168220 (2005)]. are acquired has been stated in the contract, and
they are found to be unfit therefor [Art. 1575, CC]
Exceptions to consent being a requisite: • Sale of land in violation of Constitutional
1. Expropriation, prohibition against the transfer of lands to aliens.
2. Ordinary Execution Sale, [Art. XII of Constitution]
3. Judicial Foreclosure Sale, and • When the subject matter is illicit, the contract of
4. Extra-Judicial Foreclosure Sale sale is void [Art. 1409 (7), CC]
Special Case: If sale involves the conjugal property of EXISTING, FUTURE, CONTINGENT
spouses, consent must be given by both. The goods which form the subject of a contract of sale
may either be—
OBJECT OR SUBJECT MATTER a. Existing goods owned or possessed by the
Must be determinate or capable of being determinate, seller;
licit and within the commerce of man, and possible b. Goods to be manufactured, raised, OR
acquired by the seller – “Future Goods”; [Art
Requisites of a Valid Subject Matter [Arts. 1459- 1462, CC]
1465, CC] It is valid only as an executory contract to be
1. Licit fulfilled by acquisition and delivery of goods
2. Existing, Future, Contingent specified.
3. Determinate or determinable c. Things having potential existence may be the
object of a contract of sale. [Art 1461, CC]
Must be licit [Art. 1459, CC] A sale may be made of a thing which, though not
The thing is licit when— yet actually in existence is reasonably certain to
a. Within the commerce of man [Art. 1347, CC] come into existence as the natural increment or
b. Examples of properties that are not within the usual incident of something in existence already
commerce of man: belonging to the seller, and the title will vest in
• Those belonging to the State or its political the buyer the moment the thing comes into
subdivisions intended for public use or public existence. [Sibal vs Valdez, G.R. No. L-26278
service. [Art. 420, CC] (1927)]
• Church
• Narcotics or dangerous drugs except upon Sale of Things Having Potential Existence
prescription (RA 6425, the dangerous drugs Emptio Rei Emptio Rei Spei
act of 1972) Speratei Mere Hope Vain Hope
c. When right is not intransmissible [Art 1347, CC] Sale of a thing Sale of a Sale of a VAIN
d. It does not contemplate a future inheritance, expected or MERE HOPE HOPE or
unless expressly authorized by law future thing or expectancy expectancy
General rule: Exception:
Kinds of illicit things: Valid
Valid Void
a. Per Se – of its nature Example: Sale
b. Per Accidens – due to provision of law. Example: Sale Example: Sale
of the grain a
of a valid of a fake
field may grow
Examples of illicit sale lottery ticket lottery ticket
in a given time
• Sale of future inheritance is void [Art. 1347, CC]
a. Sale is Title and Not Mode If manifest intention is not clear: Barter when the value
of thing is more than the amount of money or its
Delivery or tradition is the mode to transfer ownership equivalent; otherwise, sale. [Art.1468, CC]
and possession to the buyer.
Rules to determine whether contract is sale or
When a contract of sale is perfected, the seller is barter:
merely obligated to transfer ownership and to deliver • Manifest intention of the parties: Even if the
the property. Transfer of ownership is effected only acquisition of a thing is paid for by another object
upon delivery. of greater value than the money component, it
may still be a sale and not a barter, when such was
Sale is merely title that creates the obligation on the the intention of the parties
part of the seller to transfer ownership and deliver • When intention does not appear and
possession, but on its own, sale is not a mode that consideration consists partly in money and partly
transfers ownership. [Equatorial Realty Dev. v. Mayfair in another thing:
Theater, G.R. No. 133879 (2001)]
o BARTER = where the value of the thing given Bilateral promise to buy and sell
as part of the consideration exceeds the A promise to buy and sell a determinate thing for a
amount of money given or its equivalent price certain is reciprocally demandable. [Art. 479, CC]
o SALE = where the value of the thing given as
part of the consideration equals or is less than Like a sale, the thing must be determinate and the
the amount of money given price, certain.
The fact that the object were made by the seller only Conditional Contract of
Contract to sell
when customers placed their orders, does not alter the Sale
nature of the contract of sale, for it only accepted such Sale is already perfected No perfected sale yet
orders as called for the employment of such materials A subsequent buyer is A subsequent buyer is
as it ordinarily manufactured or was in a position presumed to be a buyer presumed to be a
habitually to manufacture such. [Celestino Co & Co v. in bad faith buyer in good faith
Collector, G.R. No. L-8506 (1956)]
f. Agency to Sell
When each product or system executed is always
UNIQUE and could not mass-produce the product Sale Agency to sell
because of its very nature, such is a contract for a piece Buyer receives the goods Agent receives good as
of work. [Commissioner vs. Engineering Equipment and as owner goods of the principal
Supply Co., G.R. No. L-27044 (1975)] Agent delivers the
price which he got from
Buyer pays the price
d. Dacion en Pago his principal
Buyer cannot return the
Sale Dacion en pago object sold as a general Agent can’t return the
No pre-existing debt Pre-existing debt rule goods
Extinguishes the
Creates an obligation obligation (mode of Seller warrants the thing Agent makes no
payment) sold warranty
Price is more freely Not unilaterally
Price is value of the Essentially revocable
agreed upon, fixed by revocable
thing given
the parties
Payment is received by CONTRACT OF AGENCY: A contract whereby a
Buyer has to pay the person binds himself to render some service or to do
the debtor before
price something in representation or on behalf of the
contract is perfected
principal, with the consent or authority of the latter
There is a novation of the contract of loan into a
contract of sale when the creditor agrees to accept a g. Lease
thing in payment of the debt. Hence, if the thing given
in payment turns out to belong to another, the Sale Lease
creditor’s remedy should be governed by the law on Ownership transferred No transfer of
sales, not loan. [Baviera] by delivery ownership
Permanent
Seller must be owner at
Temporary
Capacity to Buy or Sell
Lessor neet not be
time of delivery
owner Art. 1489, CC. All persons who have capacity to
enter into obligations may enter into a contract of
sale
8. K inds of Contract of Sale
General Rule: Any person who has capacity to act may
a. Absolute – when sale is not subject to any enter into a contract of sale. [Villanueva]
condition and the title immediately passes to the
purchaser upon delivery Capacity to act, which is the power to do acts with legal
b. Conditional – ownership of the object remains effect, is acquired and may be lost. [Art. 37, CC]
with the vendor until fulfillment of the condition/s
1. Kinds of Incapacity
a. Absolute incapacity – when persons cannot bind
themselves at all
b. Relative incapacity – only with regard to certain
persons and certain class of property
c. Specific incapacity or Special disqualifications
a. Absolute Incapacity
[Art. 1327, 1397, 139, CC]
1. Minors
2. Insane or Demented
3. Deaf-mutes who do not know how to write
4. Civil Interdiction
5. Judicially-declared Incompetents [Art. 39, CC]
a. Prodigal
b. Imbeciles
c. Absence & presumption of death
d. Persons not of unsound mind but by reason of
age, disease, weak mind, and other similar
causes, cannot take care of themselves and
manage their property without outside aid
(Easy prey for deceit and exploitation)
b. Relative Incapacity:
Married Persons
1. Husband and wife [Art. 1490, CC]
General Rule: Cannot sell property to each other
Exceptions:
a. Separation of property in marriage
settlement, OR
b. Judicial separation of property.
disqualified to become lessees of the things Exception: Sales entered into by guardians,
mentioned therein. administrators, and agents (specific incapacities) in
violation of Art. 1491 may be RATIFIED by means of
and in the form of a new contract when the cause of
2. E ffects of Incapacity nullity has ceased to exist. Ratification is valid only
from date of execution of the new contract and does
a. Absolute Incapacity not retroact.
b. Relative Incapacity
Sale between spouses is void.
Rationale:
1. To protect 3rd persons who may have contracted
with the spouse
2. To avoid undue advantage of the dominant
spouse over the weaker spouse.
3. To avoid circumvention of the prohibition against
donations between spouses. [Medina v CIR, G.R.
No. L-15113 (1961)]
c. Specific Incapacity/
Special Disqualifications
General rule: Contracts expressly prohibited by law are
VOID and CANNOTBERATIFIED. Neither can the right
to set-up the defense of illegality be waived. [Art. 1409
(7), CC]
Res perit domino: Owner bears risk of loss and In reciprocal obligations, the extinguishment of
deterioration the obligation due to loss of the thing
extinguishes the entire juridical relation.
The ownership is transferred only upon delivery.
b. Deterioration
2. P rior to Perfection of [Art. 1189, CC]
Contract Impairment is borne by the BUYER if the thing
deteriorates without the fault of the seller.
Seller bears risk of loss and deterioration.
If it deteriorates through the fault of the seller, the
Basis: Res perit domino buyer may choose between rescission of obligation
and fulfillment, either case with indemnity for
3. At Time of Perfection damages.
[Arts. 1493 and 1494, CC]
5. A fter Delivery
Seller bears risk of loss and deterioration.
General Rule: Buyer bears risk of loss and
Basis: Res perit domino deterioration.
Partial Loss (Or loss which Exceptions [Art. 1504 (1) and (2), CC]
Total Loss results in substantial a. Where delivery has been made either to the buyer
change in character) or to the bailee for the buyer, but ownership in the
Contract is void Buyer may withdraw from goods has been retained by the seller merely to
because the object the contract secure performance by the buyer of his
did not exist at the or obligations under the contract; and
time of the Buy the remainder at a b. Where actual delivery has been delayed through
transaction. proportionate price the fault of either the buyer or seller, the goods are
at the risk of the party in fault.
4. A fter Perfection but
Before Delivery
a. Loss
General Rule: Stipulations in the contract will govern.
In the absence of stipulation, there are two conflicting
views:
1. Res perit creditori or the buyer bears the risk of
loss. This is an exception to the rule of res perit
domino
Basis: Art. 1504, CC only covers goods.
Obligations of the Vendor 2. Owner has either lost the thing or has been
unlawfully deprived. [Art. 559, CC]
b. Reimbursement is necessary before owner can
1. Obligations of the Vendor recover when:
1. Buyer acted in good faith
in General 2. Acquired at a public auction [Art. 559, CC]
c. Recovery no longer possible when:
a. To transfer ownership of the thing [Art. 1495, CC] 1. Buyer in good faith
b. To deliver the thing, with its accessions and 2. Acquired it at a merchant’s store, fair or
accessories, if any [Arts. 1164, 1166, CC] market. [Art. 1506, CC]
c. To warrant against eviction and against hidden
defects [Arts. 1545-1581, CC]
d. To take care of the thing, pending delivery, with
4. M anner of Transfer
proper diligence [Art. 1163, CC] [Arts. 1477, 1496-150, CC]
e. To pay for the expenses of the deed of sale [Art.
1487, CC] General Rule: Ownership of the thing sold shall be
transferred to the vendee upon:
a. Actual; or
2. W hen Seller is Not the b. Constructive
delivery thereof [Art. 1477, CC]
Owner
Obligation to transfer ownership and to deliver is
General Rule: Ownership is not acquired by the buyer. implied in every contract of sale [Arts. 1458-1459, CC]
One cannot give what one does not have. [Art. 1505,
CC] Transfer of ownership requires delivery [Art. 1495, CC]
Exceptions: Exceptions
a. Seller has a right to transfer ownership a. Contrary stipulation
Seller need not be the owner of the thing at the b. Contract to sell
time of perfection of the contract. It is sufficient c. Contract of insurance
that seller has a right to transfer ownership d. Sale on acceptance/Trial
thereof at the time it is delivered. [Art. 1459, CC] e. When seller is not the owner or has voidable title
One who sells something he does not own yet is
bound by the sale when he acquires the thing General Concepts
later. [Bucton v. Gabar, G.R. No. L-36359 (1974)] Under Article 1495, the seller has twin obligations to
b. Estoppel: Owner is, by his conduct, precluded (a) transfer the ownership and (b) deliver the thing,
from denying the seller’s authority to sell. [Art. which is the object of sale to the buyer. In Article 1164,
1434, CC] this includes the obligation to deliver the fruits and
c. Registered land bought in good faith accessories from the time the obligation to deliver it
General rule: Buyer need not go beyond the arises; however he shall acquire no real right over
Torrens Title them until the same has been delivered to him.
Exception: When he has actual knowledge of facts
and circumstances that would impel a reasonably Transfer of ownership is effected even if the purchase
cautious man to make further inquiry has been made on credit. Payment of the purchase
d. Order of courts; Statutory Sale price is not essential to transfer of ownership as long
In execution sale, the buyer merely steps into the as the property sold was delivered.
shoes of the judgment debtor [Sec. 33, Rule 39,
ROC] Intention to transfer ownership
e. When goods are purchased in Merchant’s store, a. All forms of delivery shall be coupled with
Fair, or Market [Art. 1505, CC] intention of delivering the thing sold.
b. Seller must be owner or authorized by owner of
3. Sale by Person having a the thing sold
Voidable Title When right to transfer ownership must exist: At the
time of delivery and not at the time of perfection of
a. True owner may recover the thing when the ff. contract of sale.
requisites concur:
1. Subject matter is movable
Example: Seller points to the property without actually 3. By allowing the buyer to use his rights as new
transferring physical possession thereof. owner with the consent of the seller
Delivery by mere agreement; seller points out to the Delivery to a Common Carrier
buyer the property without need of actually delivering General Rule: Delivery to the courier or carrier is
(as when the thing sold cannot be transferred to the tantamount to delivery to buyer, whether carrier is
possession of the vendee at the time of sale). Delivery named by buyer or not. The buyer assumes the risk of
takes place when the thing is placed in the sight of the loss.
purchaser so that he can take possession of it at
pleasure. With regard to movable property, its delivery Exceptions
may also be made by the delivery of the keys of the 1. Seller reserved title through the form of the bill
place or depository where it is stored or kept. of lading, with intent to remain the owner, not
merely for the purpose of securing payment, OR
When an employer assigned all its rights and title to 2. Contrary intention appears in the contract (i.e.
all surplus property salvaged by the contractor, seller is required to deliver goods to buyer at the
tradition longa manu takes place. Delivery is upon the point of destination)
moment a thing is salvaged. [Board of Liquidators v. 3. Delivery by the seller is in breach of the contract
Floro, , G.R. No. L-15155 (1960)] 4. F.O.B. (Free on Board or Freight on Board)-
When seller bears the expenses of transportation
Tradition Brevi Manu (Short Hand) up to the F.O.B. point.
Delivery of movable property by mere consent or 5. C.I.F. (Cost, Insurance, Freight) - Price quoted
agreement, if the buyer already had it in his possession includes the costs of the goods, insurance, and
for any other reason. [Art. 1499, CC] freight charges on the goods up to the point of
destination.
Happens when the already has possession of the thing 6. F.A.S. (Free Alongside) -Seller bears the
sold before the sale by virtue of another title (as lessee, expenses of transportation until he delivers the
borrower, depositary, etc.) goods alongside a vessel at a named port.
Registration includes any entry made in the Primary General Rule: As a rule, he who asserts the status of a
Entry Book of the registry, including both registration purchaser in good faith and for value has the burden
in its ordinary and strict sense and cancellation, of proving such assertion. [Mathay v. CA, G.R. No.
annotation, and even marginal notes. [Cheng v. 115788 (1998)]
Genato, G.R. No. 129760 (1998)]
When buyer is presumed to be in bad faith
Pencilled entries on the title are not considered a. Annotation of adverse claim: Places any
registration. [AFPMBAI v. Court of Appeals, G.R. No. subsequent buyer of the registered land in bad
126745 (1999)] faith. [Balatbat v. CA, G.R. No. 109410 (1996)]
b. Annotation of Lis Pendens: Buyer cannot be
Second Sale Made by Virtue of Execution and considered an innocent purchaser for value
Attachment where it ignored the lis pendens on the title.
Art. 1544 does NOT apply in cases where the first sale c. A purchaser of a parcel of land cannot close his
of an unregistered immovable occurred prior to an eyes to facts which should put a reasonable man
execution sale and the second sale occurred by virtue upon his guard, such as when the property
The two are not contradictory or repugnant to one If seller has promised that the condition should
another; nor does the existence of one automatically happen or be performed, the buyer may treat the
nullify the other, and if any of the registrations should nonperformance of the condition as a breach of
be considered unnecessary or superfluous, it would warranty. [Art.1545, CC]
be the notice of lis pendens [A. Doronila Resources
Development Inc v. CA, G.R. Nos. L-42956-571988]
a. Express Warranties
Accompanied by vendors duplicate certificate of
For there to be express warranty, the following
title, payment of capital gains tax, and
requisites must concur:
documentary tax registration fees
1. An affirmation of fact or any promise relating to
Must be accompanied by:
the thing sold;
a. Vendor’s duplicate certificate of title
2. The natural tendency of such affirmation or
b. Payment of capital gains tax – 6% of the selling
promise is to induce the buyer to buy;
price or zonal value, whichever is higher
3. The buyer buys the thing relying thereon. [Art.
c. Documentary tax registration fees – 1.5% of the
1546, CC]
selling price or zonal value, whichever is higher
4. Made before the sale not upon delivery or any
other point
10. Risk of Loss
An express warranty can be made by and also be
See Effects of Contracts Where the Thing is Lost above. binding on the seller even in the sale of a second hand
article. [Moles v. IAC, G.R. No. 73913 (1989)]
11. Warranties Express Warranty v. Dealer’s/Trader’s Talk
Dealer’s or Trader’s
A statement or representation made by the seller Express Warranty
Talk
contemporaneously and as part of the contract of sale, Affirmation of the value
having reference to the character, quality, or title of of the thing or
the goods, and by which he promises or undertakes to statement of only the
ensure that certain facts are or shall be as he then seller’s opinion is not a
represents. warranty unless:
What is specifically
1. The seller made it
Not every false representation voids the contract, only represented as true in
as an expert;
those matters substantially affecting the buyer’s said document cannot
2. It was relied upon
interest, not matters of opinion, judgment, probability, be considered as mere
by the buyer.
or expectation. When the buyer undertakes his own dealer's talk. [Moles v.
[Art.1546, CC]
investigation, and the seller does nothing to prevent it IAC, supra]
3. Ordinarily, what
from being as full as the buyer chooses, the buyer does not appear on
cannot afterwards allege misrepresentations. [Songco the face of the
v. Sellner, G.R. No. L-11513 (1917)] written instrument
[Moles v. IAC, supra]
The use contemplated must be that which is Veterinarians are liable if they fail to discover or
stipulated, and in absence of stipulation, that which is disclose the hidden defect through ignorance or bad
adopted to the nature of the thing, and to the business faith. [Art. 1576, CC]
of the buyer.
Seller liable if animal dies within 3 days after its
IMPLIED WARRANTY AS TO MERCHANTABLE purchase due to a disease that existed at the time of
QUALITY AND FITNESS OF GOODS sale. [Art. 1578, CC]
Merchantable Quality
1. Where the goods are brought by description from c. Effects of Warranties
a seller who deals in goods of that description
[Art. 1562, CC] 1. Natural tendency is to induce buyer to purchase
2. In a sale by sample, if the seller is a dealer in the subject matter
goods of that kind and the defect is not apparent 2. Buyer purchases subject matter relying thereon
on reasonable examination of the sample [Art. 3. Seller liable for damages in case of breach
1566, CC]
IMPLIED WARRANTY AGAINST REDHIBITORY One who purchases real estate with knowledge of
DEFECT IN THE SALE OF ANIMALS defect or lack of title cannot claim he acquired title
[Art. 1572, CC] thereto in good faith, as against true owner of land or
of interest therein. [J.M. Tuason v. CA, G.R. No. L-
Redhibitory defect – a hidden defect of animals of 41233 (1979)]
such nature that expert knowledge is not sufficient to
discover it, even in a case where a professional The same rule must be applied to one who has
inspection has been made knowledge of facts which should have put him upon
such inquiry and investigation as might be necessary
No warranty in case of [Art. 1574, CC] to acquaint him with the defects in the title of his
1. Animals sold at fairs or public auctions vendor. A purchaser cannot close his eyes to facts
2. Livestock sold as condemned which should put a reasonable man upon his guard
and then claim that he acted in good faith under the
The following sales are void [Art. 1575, CC] belief that there was no defect in the title of the
1. Sale of animals suffering from contagious vendor.
diseases
2. Sale of animals unfit for the purpose for which e. Buyer’s Options in Case of
they are acquired as stated in the contract
Breach of Warranty
[Art. 1599, CC]
Express Warranty Implied Warranty Exception: Buyer’s right to make a test of goods, but
1. Demand repair only if necessary, to enable him to determine whether
within 30 days to accept or reject the goods.
1. Retain the goods
Extendible for
and recover
causes beyond the MODES
damages
control of the 1. Express acceptance (Buyer intimates to the seller
OR
warrantor that the has accepted them)
2. Reject the goods,
2. Demand refund of 2. Implied acceptance
cancel contract and
price minus a. When the vendee, after delivery of goods,
recover from seller
amount directly does any act inconsistent with the vendor’s
so much of the
attributable to the ownership or makes alteration in them in a
purchase price as
use of the manner proper only for an owner
has been paid +
consumer prior to
damages
the discovery of the Acts inconsistent with vendor’s ownership:
non-conformity • Use of property except if the single act
of use does not affect the condition or
value of the property
• Resale or mortgage
• Alteration
• Conduct after rejection – if the vendee
performs an act inconsistent with the
vendor’s ownership after rejection
Except:
1. If the vendor gives security for the return of the Actions and Remedies
price in a proper case
2. If it has been stipulated
for Breach of Contract of
3. If the vendor caused disturbance or danger to
cease
Sale
4. If the distrubance is a mere act of trespass
5. If the vendee has already fully paid the price [de 1. General Remedies [Art.
Leon]
1191, CC]
c. Payment in installments The following remedies arise from the bilateral nature
of the contract of sale:
General rule: The vendee has no right to pay in a. Specific performance
installments b. Rescission
Exception: Unless otherwise agreed c. Damages
If ownership has not yet passed to the buyer, the seller The seller cannot unilaterally and extrajudicially
cannot maintain an action for the price, unless it rescind a contract absent express stipulation to do
involves (1) or (3). so, except as provided in Art. 1597. [De Leon]
Title to goods passes from the moment the goods are b. Special Remedies of the
placed at the buyer’s disposal when refusal to accept
is without just cause. [de Leon citing Art. 1588, CC] Unpaid Seller [Arts. 1525-
1535, CC]
Action for Damages [Art. 1596, CC]
When ownership has not yet passed and the buyer, 1. Possessory lien;
without lawful cause, neglects or refuses to ACCEPT 2. Stoppage in transitu;
and PAY for the goods 3. Special right of resale; and
4. Special right to rescind,
General rule: Measure of damages is the ESTIMATED
LOSS directly and naturally resulting in the ordinary Note: These special remedies have a hierarchical
course of events from the buyer’s breach. application. The special rights to resell and to rescind
can be availed of by the unpaid seller only when either
Exceptions: of the two prior rights of possessory lien or stoppage
1. Where there is available market for goods: in transitu have been exercised by the unpaid seller.
Difference between the contract price and the [Villanueva]
market price. The market price is fixed at the time
the goods ought to have been accepted, or if no Definition of an Unpaid Seller
time was fixed, at the time of refusal to accept. [Art. 1525, CC]
Note: When there are special circumstances
showing proximate damages of a greater amount A seller is considered to be an unpaid seller if the
than the difference between the contract price whole price has not been paid or tendered, or when
and market price, seller is entitled to such higher check received as a conditional payment was
amount of damages when such damages may be dishonored by non-payment or insolvency of the buyer
reasonably attributed to the non-performance of [Baviera]
the obligation. [de Leon; par. 3, Art. 1596 read
with par. 2, Art. 2201, CC] A seller is unpaid within such definition whether or not
2. Where labor or expense of material amount is title has been passed. Partial payment of the price
necessary on the part of the seller to perform the does not extinguish the unpaid seller’s lien. [de Leon]
contract: Cost of labor performed or expenses
made before receiving notice of buyer’s Term also includes:
repudiation, and unrealized profit. 1. The agent of the seller to whom the bill of lading
was endorsed,
Rescission by giving the buyer notice of the election 2. The consignor or agent who had paid the price or
to rescind [Art. 1597, CC] is responsible for the price
When the goods have not yet been delivered to the 3. Any other person who is in the position of a seller
buyer, and the buyer repudiated the contract of sale, (i.e. buyer who paid the price and had a right to
or manifested his inability to perform his obligations, return the goods). [Baviera]
or has committed a breach of the contract of sale.
POSSESSORY LIEN OVER THE GOODS
Under this rule, rescission would bar an action on the
contract because it means cancellation of the Right to retain possession of goods until payment or
contractual obligations between the parties. [Baviera] tender of the whole price, or unless he agrees to sell
on credit [Arts. 1526-1529, 1503, 1535, CC]
The unpaid seller’s right to rescind for non-
performance is not absolute. Not allowed to rescind When lien available
when: a. The seller is unpaid
rd
1. There are 3 persons possessing the objects of the b. The unpaid seller has possession over the thing
contract to whom no bad faith is imputable [de c. Ownership of the thing has passed to the buyer
Leon; Ocejo Perez & Co. v. International Bank, G.R. d. Any of the following: [Art 1527, CC]
No. L-10658 (1918)] i. Goods are sold without stipulation as to
2. Breach is on slight or casual [de Leon; Song Fo & credit
Co. vs. Hawaiian-Phil. Co., supra]
ii. Goods are sold on credit, but term of d. The seller either takes actual possession, or gives
credit has expired notice of claim to the carrier or other person
iii. Buyer becomes insolvent possessing the goods
T e. The seller must surrender the negotiable
he seller may exercise his right of lien notwithstanding instrument or title, if any, issued by the
that he is in possession of the goods as agent or bailee carrier/bailee
for the buyer [par. 2, Art. 1527, CC] f. The seller must bear the expenses of the delivery
of the goods after exercise of such right.
When unpaid seller loses his lien [Art. 1529, CC]
a. Seller delivers goods to carrier or other bailee for When Goods Are In Transit [par. 1, Art 1531, CC]
transmission to the buyer without reserving a. From the time of delivery to the carrier or other
ownership or right of possession (i.e. under a bailee by the seller, for the purpose of
straight or non-negotiable bill of lading) transmission to the buyer, until the buyer or his
b. Buyer or his agent lawfully obtains possession of agent takes such delivery from the carrier.
goods b. Even when goods have reached their ultimate
c. Seller waives the lien destination, if buyer rejects them and carrier
i. But it is not lost with respect to the retains possession
remainder of the goods when only partial
delivery is made (unless such is symbolic To terminate transit by delivery to a middleman,
delivery of the whole) delivery must be to keep, not to transport.
ii. It is not lost by the mere fact that seller
obtained a judgment for the price In case of misdelivery, the goods are still considered in
transit, hence, the seller may still exercise his right
When Lien May Be Revived After Delivery pursuant to Article 1523.
a. If the buyer refuses to receive the goods after the
same are delivered to the carrier or other bailee on When Goods Are No Longer In Transit [par. 2, Art
his behalf, though the seller has parted with both 1531, CC]
ownership and possession. Here, the seller may a. Buyer obtained delivery of the goods before they
reclaim the goods and revest the lien. [par. 1 (2). have reached their appointed destination
Art 1531, CC] b. Goods have arrived at the appointed destination,
b. If the buyer returns the goods in wrongful and the carrier/bailee acknowledges to hold the
repudiation of the sale, and the seller, in goods on behalf of the buyer
accepting the goods from the buyer, says he does c. Goods have arrived at the appointed destination,
not assent to the rescission. but carrier wrongfully refuses to deliver to
buyer/his agent
Possessory lien is lost after the seller loses possession
but his lien as an unpaid seller remains. His preference Note: If the goods are delivered to a ship, freight train,
can only be defeated by the government’s claim to the truck, or airplane chartered by the buyer, it is a
specific tax on the goods. [Arts. 2241, 2247, CC] question depending on the circumstances of the
particular case, whether they are in the possession of
RIGHT OF STOPPAGE IN TRANSITU the carrier as such or as agent of the buyer.
An extension of the lien for the price; entitles unpaid How Right Is Exercised [Art. 1532, CC]
seller to resume possession of the goods while they are a. By obtaining actual possession of the goods
in transit before the goods come in possession of the b. By giving notice of his claim to the carrier/other
vendee [Arts. 1530-1532, 1535, 1636(2). CC] bailee who has possession of the goods
i. Carrier must redeliver goods to seller, or
Note: This is an old common law remedy which is an according to his instructions
extension of the lien for the price and entitles the ii. Carrier not obliged to redeliver until the
unpaid seller to resume possession of the goods while negotiable document of title, if any, has
they are in transit before the goods come in possession been surrendered for cancellation
of the vendee if the latter is or becomes insolvent.
Effect When Buyer Has Sold the Goods [Art. 1535, CC]
Requisites for the exercise of stoppage in transitu General Rule: Seller’s right to stoppage in transitu is
a. The seller is unpaid not affected even if buyer has sold or disposed of the
b. The buyer is insolvent goods unless the seller has given his assent thereto.
c. The goods are in transit
The seller must exercise reasonable judgment in Lease of personal property with option to buy
making the sale. 1. When lessor has deprived the lessee of the
possession or enjoyment of the thing (i.e. lessor
Effects of Resale files a complaint for replevin against lessee)
a. Seller is no longer liable to the original buyer upon 2. Also applies when seller assigns his credit to
the contract of sale or for any profit made by the someone else
resale
b. Buyer at resale acquires good title as against the
original owner
b. Alternative and Exclusive
c. In case resale is at a loss, seller is entitled to Remedies
recover the difference from the original buyer
d. Seller may recover damages from original buyer The exercise of one remedy bars the exercise of the
for breach of contract others.
1. Specific Performance
General Rule: When the seller has chosen specific b. Specific Performance +
performance, he can no longer seek for rescission
or foreclosure of the chattel mortgage Damages OR Rescission +
Damages
Exception: If specific performance has become [Art. 1191, CC]
impossible, the seller may still choose rescission
[Art. 1191, CC] 1. Seller may choose between specific performance
and rescission, with damages in either case.
2. Cancellation of sale if vendee fails to pay 2 or 2. Court has discretion, for a just cause, to give the
more installments buyer more time to pay even if the seller chooses
a. When the seller cancels the sale by rescission.
repossessing the property sold, he is barred 3. If seller chose specific performance, and such
from exacting payment for its price. becomes impossible, he may still avail of
b. It can only be carried out when he who rescission
demands rescission can return whatever he 4. If absolute sale, seller must make a demand for
may be obliged to restore [Art. 1385, CC] rescission
a. Judicially, OR
3. Foreclosure of Chattel Mortgage if vendee fails b. By a notarial act
to pay 2 or more installments 5. Demand necessary even if automatic rescission is
a. If seller chooses this remedy, he shall have no stipulated
further action to recover any unpaid balance, a. Effect of lack of demand: Buyer can still pay
and any stipulation to the contrary shall be b. Effect of demand: Court may not grant buyer
void. a new term
b. The purpose of the law is to remedy the
abuses committed in foreclosure of chattel
mortgages. It prevents mortgagees from 5. S ecs. 23 and 24, PD 957
seizing the mortgaged property, buying it at
foreclosure sale for a low price and then Non-forfeiture of payments
bringing the suit against the mortgagor for a a. No installment payment made by the buyer shall
deficiency judgment. The almost invariable be forfeited in favor of the owner or developer of
result of this procedure was that the the condominium or subdivision project, after due
mortgagor found himself minus the property notice, when the buyer desists from paying due to
and still owing practically the full amount of the failure of the developer or owner to develop
his original indebtedness. [Bachrach Motor the project according to the approved plans or
Co., Inc. v. Millan, G.R. No. L-42256 (1935)] within the time limit stated.
b. Buyer’s Remedy: At his option, he may reimburse
4. S ale of Immovables the total amount paid including amortization
interest with interest thereon at the legal rate
a. Rescission for Anticipatory c. If the buyer fails to pay the installments for
reasons other than the failure of the owner or
Breach developer to develop the project, his rights shall
[Art. 1591, CC] be governed by RA 6552.
This is applicable to both cash sales and to sales in
installments. 6. M aceda Law (RA 6552):
Requisites
Sale of Immovables on
1. There is delivery of immovable property Installment
2. Vendee has not yet paid the price; and
3. Vendor has reasonable ground to fear the loss of RA 6552 does NOT apply to:
property and the loss of price a. Industrial lots
b. Commercial buildings
If there is no such reasonable ground, Art. 1191 applies c. Sale to tenants under Agricultural Reform Code
(specific performance or rescission with damages). [RA 3844]
Court has no discretion to compel the seller to wait for d. Sale of lands payable in straight terms
the expiration of the period to pay, or to grant the [Sec. 3, RA 6552]
buyer more time to pay.
In case of doubt, a contract purporting to be a sale of the land. [Heirs of Arches v. Diaz, G.R. No. L-27136
with right to repurchase shall be construed as an (1973)]
equitable mortgage [Art. 1603, CC]
Where the petition of the buyer in a pacto de retro sale
c. Rationale behind Provision is for a judicial orders pursuant Art. 1607, so that there
may be consolidation of ownership since there was
on Equitable Mortgage failure to redeem during the redemption period, the
right of action to foreclose or to collect the
1. Circumvention of usury law indebtedness arises from the court judgment
2. Circumvention of prohibition against pactum declaring the contract an equitable mortgage.
commissorium – creditor cannot appropriate the
things given by way of pledge or mortgage since
remedy is foreclosure.
f. Exercise of the Right to
Redeem
d. Remedies of Apparent [Art. 1616, CC]
Vendor The seller can avail himself of the right of repurchase
by returning to the buyer:
1. If the instrument does not reflect the true 1. the price of the sale
agreement: remedy is reformation 2. the expenses of the contract and any other
2. If decreed to be an equitable mortgage: any legitimate payments made by reason of the sale
money, fruits or other benefit to be received by the 3. the necessary and useful expenses made on the
buyer as rent or otherwise considered as interest. thing sold [Art.1616, CC].
3. If decreed as a true sale with right to purchase:
seller may redeem within 30 days from finality of
judgment, even if the period for redemption has
g. How redemption is
expired. exercised
e. Period of Redemption 1. The vendor de retro must complete the
[Art. 1606, CC] repurchase before the expiration of the
redemption period [Panganiban v. Cuevas, G.R.
1. No stipulation: 4 years from the date of contract No. 2001 (1907)]
2. When there is agreement: Period not to exceed 2. A sincere or genuine tender of payment is enough.
10 years The deposit of the amount of the repurchase
3. General Rule: Period starts to run from the date money with the Clerk of Court was simply and
of the execution of the contract additional security [Legaapi v. CA, G.R. No. L-
4. Exception: When the efficacy of the sale is subject 45519 (1986)]
to a suspensive condition, period should be 3. When tender of payment cannot be validly made
counted not from the date appearing on the because the buyer cannot be located, it becomes
instrument, but from the date when the condition imperative for the seller a retro to file a suit for
is fulfilled, marking the consummation of the sale consignation with the courts of the redemption
[Tolentino citing Manresa]. price [Catangcatang v. Legayada, G.R. L-26295
(1978)].
Additional 30 days for Repurchase 4. If the offer or tender of payment for repurchase is
The last paragraph of Art. 1606 giving the vendor the refused, it is not necessary for the vendor a retro
right to repurchase within 30 days from the time of the to consign in court or make judicial deposit of the
rendition of final judgment applies only where the repurchase price [Rosales v. Reyes, G.R. No. 8162
nature and the character of the transaction, whether (1913)].
as a pacto de retro or an equitable mortgage, was put
in issue before the court [Gonzales v. de Leon, G.R. No. The seller a retro is given no option to require the buyer
L-14532 (1965)] a retro to remove the useful improvements on the land
subject of the sale a retro, unlike that granted the
When an unrecorded pacto de retro sale was owner of a land under Arts. 546 and 547. Under Art.
construed as an equitable mortgage, the plaintiff had 1616, the seller a retro must pay for useful
the right to enforce his lien in a separate proceeding improvements introduced by the buyer a retro;
notwithstanding the fact that he had failed to obtain otherwise, the latter may retain possession of the land
judgment declaring him the sole and absolute owner
until reimbursement is made. [Gargollo v. Duero, G.R. The law did not provide
No. L-15973 (1961)] for a particular mode of
written notice, thus any
4. L egal Redemption compliance with
“written notice” should
[Art. 1619, CC]
suffice, including the
giving of a copy of the
Rationale for the law: Public policy (to minimize co-
deed of sale. [Conejero
ownership) and benefit of the redemptioner
v. CA, G.R. No. L-21812
(1966)]
a. Definition Debtor in case a credit
30 days from the date
or
1. Right to be subrogated: the assignee demands
incorporeal right in
a. upon the same terms and conditions payment from debtor
litigation is sold
stipulated in the contract, [Art.1634, CC]
b. in the place of one who acquires a thing by Taxpayer in case of tax 1 year from date of
purchase or dation in payment, or by any sale [Sec. 215, NIRC] forfeiture
other transaction whereby ownership is Judgment debtor,
transmitted by onerous title [Art. 1619, CC] successor–in- interest, 1 year from the date of
2. Applies to transfers of ownership by onerous title or creditor with registration of the
where subrogation is possible. Hence, it cannot subsequent lien, in case certificate of sale
apply to barter or to transfer by gratuitous title or of execution sale [Sec.
hereditary succession. 27, Rule 39, ROC]
3. Applies to sales with pacto de retro [Baviera citing Debtor-mortgagor,
Manresa] successors-in- interest,
judicial/judgment
b. Manner creditor, any person 1 year from the date of
having a lien on the the sale
1. a formal offer to redeem or property, in case of
2. filing of an action in court together with the extrajudicial foreclosure
consignation of the redemption price within the of mortgage [Sec. 6, Act
reglementary period No. 3135]
Debtor-mortgagor in
case of judicial
c. Period to Redeem foreclosure of real
90 days from finality of
estate mortgage IF the
To whom granted Period judgment
mortgagee is a bank or
30 days from notice a banking institution.
1. In writing [General Banking Law
2. By the seller of 2000]
3. Of the actual Agricultural lessee w/o
execution and knowledge of sale of 2 years from the
Co-owner [Art 1620,
delivery of the deed landholding [Sec. 12, registration of the sale
CC]
of sale Agrarian Land
Adjoining owner of Reform Code]
Actual knowledge of
Rural Land [Art 1621,
the sale is immaterial,
CC] The notice required in Art. 1623 must be given by the
absent any showing
seller, because the seller is in a better position to
that the co-owner has
Adjoining owner of identify who his co-owners are. Said provision is
been shown a copy of
urban land [Art. 1622, clear.[Francisco v. Boiser, G.R. No. 137677 (2000)]
the deed of sale
CC]
through a written
communication. d. Instances of Legal
[Doromal v. CA, G.R. Redemption
No. L-36083 (1975)]
a. Redemption by Co-owners [Art. 1621, CC]
A co-owner of a thing may exercise the right of b. If same land area, then the one who first
redemption in case the shares of all the co-owners or requested the redemption
any of them are sold to a third person
a. Third person refers to all persons who are not 3. Redemption by adjoining land-owners of urban
heirs of the vendor, by will or intestate succession land (applies only to small portions of urban
b. The right is available not only to original co- land) [Art. 1621, CC]
owners, but to those who had later acquired the Right of Pre-emption Right of Redemption
share of the co-owner Owner of any adjoining
c. But the right of redemption may be exercised by a land has a right of pre- If the resale has been
co-owner only when part of the community emption at a perfected, the owner of
property is sold to a stranger. When the portion is reasonable price when: the adjoining land shall
sold to another co-owner, the right does not arise a. Urban land is so have a right of
because a new participant is not added to the co- small and so redemption, also at a
ownership [Fernandez v. Sps. Tarun, G.R. No. situated that a reasonable price
143868 (2002)] major portion of it
cannot be used for Priority if 2 or more
If the price of the alienation is grossly excessive, the any practical adjoining owners want
redemptioner shall pay only a reasonable one. purpose w/in a to redeem: owner
reasonable time; whose intended use of
Should two or more co-owners desire to exercise the b. Was bought merely the land appears to be
right, they may also do so in proportion to the share for speculation; best justified
they may respectively have in the thing owned in c. Was resold
common. Arises before sale Arises after sale
No rescission because There can be rescission
The ff. requisites must concur: no sale exists yet of the original sale
a. Co-ownership of a thing The action is directed
b. Alienation of shares of co-owners or all of the Action is directed
against prospective
other co-owners against buyer
seller
c. Sale must be to a third person or stranger
d. Sale must be before partition 4. Redemption of Credit
e. Right must be exercised within the period Available when it is sold while in litigation (From the
specified in Article 1623 time the complaint is answered)
f. Buyer must be reimbursed the price of the sale
Not available when the assignment is in favor of:
Rationale: Public Policy, since co-ownership is a a. Co-heir/co-owner of right assigned
hindrance to the development and administration of b. Creditor in payment of his credit
the property. [Baviera] c. Possessor of a tenement or piece of land which is
subject to the right assigned
b. Redemption by Adjoining Land-owners of rural
land [Art. 1621, CC] How exercised: reimburse the assignee for the:
a. Price paid
The ff. requisites must concur: b. Judicial expenses incurred
a. All lands must be rural lands c. Interest on the price from date of payment
b. Lands must be adjacent to each other
c. A piece of rural land is alienated Under the Public Land Act
d. Area does not exceed one hectare Coverage:
e. Buyer must already own other rural lands a. Every conveyance of land acquired under a free
patent or homestead
When not applicable b. The ownership of the land must have been
a. The grantee does not own any rural land transferred to another. If the transaction is a mere
b. Adjacent lands are separated by brooks, drains, promise to sell, there is no right yet to redeem
roads and other apparent servitudes for the c. This refers to conveyances made after the
benefit of other estates prohibited 5 years from the issuance of the patent
or grant
Order of preference if two or more wishes to exercise
the right: Period:
a. Owner with smaller land area a. Within 5 years from the date of conveyance
b. If pacto de retro sale, the period to redeem cannot daughter. This right of repurchase by the
be less than 5 years homesteader cannot be waived.
that the debtor had knowledge of the assignment contract, and any other legitimate payments by
is on the assignee. [de Leon citing Manresa] reason of the assignment.
2. The liability of assignor in bad faith: Price, all
b. After notice, or before notice but debtor had expenses, and damages
knowledge of assignment
Payment by the debto to the original creditor after c. Duration of Assignor’s
the former had received notice of the assignment,
whether or not he consented, is not valid as Liability Where Debtor’s
against the assignee. Solvency Guaranteed [Art.
If he had knowledge even before the notice and
1629, CC]
still paid to the original creditor, he will not be
released from his obligation. He acted in bad In case of express warranty by assignor of debtor’s
faith. He can be made to pay again. [De Leon] solvency
1. If there is a stipulation, for the term or period fixed
2. If there is NO stipulation,
8. E xtent of Assignment of a. for 1 year from the assignment of the credit
when the period for payment of the credit has
Credit expired
Example: Debtor owed OG Creditor 10k
General rule: All the accessory rights (such as guaranty, payable on November 1, 2017. OG Creditor
mortgage, pledge or preference) are included. [Art. assigns his credit to Newbie Creditor on
1627, CC] December 1, 2017. The liability of OG Creditor
will be for 1 year from December 1, 2017.
Exception: The parties may stipulate otherwise. [de b. For 1 year after its maturity, when such period
Leon] for payment has not yet expired
Example: (Same premise as above) If OG
9. W arranties of the Assignor Creditor assigns his credit to Newbie Creditor
on October 1, 2017, the liability of OG Creditor
of Credit will be 1 year from the maturity date or
November 1, 2018.
a. When a credtor assigns his credit
1. Existence Reasons for this rule:
2. Legality of credit at the perfection of the 1. To prevent fraud
contract 2. To oblige assignee to exert efforts in the recovery
UNLESS the credit had been sold as doubtful of the credit [de Leon, citing Manresa]
b. Liabilities of the Assignor The subject of sale is hereditary right and not the
objects which make up the inheritance. [de Leon]
of Credit
The seller of hereditary rights warrants only the fact of
1. The liability of assignor in good faith: Limited to his heirship but he does not warrant the objects which
the price received and to the expenses of the make up his inheritance. The sale is only a sort of an
aleatory contract. [de Leon]
A document of title which states that the goods A person who negotiates or transfers a document of
referred to therein will be delivered to the bearer, or to title warrants:
the order of any person named in such document [Art. a. The genuineness of document
1508, CC] b. The legal right to negotiate or transfer
c. That there is no knowledge of any fact which
would impair the validity or worth of the
Terms of the Document How negotiated
document
Goods are deliverable to
d. The right to transfer the title to the goods and
bearer
merchantability or fitness for a particular purpose,
whenever such warranties would have been
Endorsed in blank or to By delivery of the
implied
bearer by the person to document to another
whose order the goods
He does not warrant that:
were supposed to be
a. Common carrier will fulfill its obligation to deliver
delivered
the goods
Goods are deliverable to
By indorsement of such b. Previous endorsers will fulfill their obligation [Art.
the order of a specified
person [Art. 1509, CC] 1516-1517, CC]
person
a. Registration of Projects
[Sec. 4, PD 957]
The registered owner of a parcel of land who wishes to
convert the same into a subdivision project shall
submit his subdivision plan to the National Housing
Authority. The same procedure shall be followed in the
case of a plan for a condominium project except that
NHA also approves the building thereon in accordance
with the National Building Code.
project or condominium project shall register the 2. Sale or transfer of a subdivision lot by the original
project with the Authority by filing therewith a sworn purchaser thereof and any subsequent sale of the
registration statement. same lot.
3. Sale of a subdivision lot or a condominium unit by
Publication and issuance of registration certificate or for the account of a mortgagee in the ordinary
[Section 4, PD 957] course of business when necessary to liquidate a
A notice of the filing of the registration statement at bona fide debt.
the expense of the applicant-owner or dealer, in two
newspapers general circulation, one published in Grounds for suspension of license to sell [Sec. 8, PD
English and another in Filipino, once a week for two 957]
consecutive weeks. Notice shall state that subdivision 1. misleading, incorrect, inadequate, or incomplete
lots or condominium units are open to inspection information in registration statement
during business hours by interested parties. The 2. fraud upon prospective buyers on the sale or
project shall be deemed registered upon completion offering for a sale
of the publication requirement. The fact of registration
shall be evidenced by a registration certificate issued to Note: suspension is confidential unless order of
the applicant-owner or dealer. suspension has been violated.
All contracts to sell, deeds of sale and other similar e. Failure to Pay Installments
instruments relative to the sale or conveyance of the
subdivision lots and condominium units, whether or
[Sec. 24, PD 957]
not the purchase price is paid in full, shall be
registered by the seller in the Office of the Register of The rights of the buyer in the event of this failure to pay
Deeds of the province or city where the property is the installments due for reasons other than the failure
situated. of the owner or developer to develop the project shall
be governed by RA 6552 [Maceda Law].
b. Mortgages on Unit or Lot f. Issuance of Title [Sec. 25,
by Owner or Developer PD 957]
[Sec. 18, PD 957]
The owner or developer shall deliver the title of the lot
1. Need prior written approval of the NHA or unit to the buyer upon full payment of the lot or unit.
2. Must show that proceeds of mortgage will be used No fee, except those required for the registration of the
for development of the condominium or deed of sale in the Registry of Deeds, shall be collected
subdivision for the issuance of such title. In the event a mortgage
3. Value of each lot or unit determined by the buyer over the lot or unit is outstanding at the time of the
(if there is one) and the buyer shall be notified issuance of the title to the buyer, the owner or
before release of loan developer shall redeem the mortgage or the
4. Buyer may pay directly to mortgagee corresponding portion thereof within six months from
such issuance in order that the title over any fully paid
lot or unit may be secured and delivered to the buyer
in accordance herewith.
2. T ransfers or Conveyances
of a Unit or an Apartment,
Office or Store, or Other
Space Therein [Sec. 5, RA
4726]
a. Transfer or conveyance of a unit or a space therein
includes the transfer or conveyance of
1. undivided interests in common areas
The Bulk Sales Law (as note, memorandum, or other evidence therefor, to
deliver to:
Amended) [Act No. 3952] 1. such vendee, mortgagee, or agent, or
2. if the vendee, mortgagee, or agent be a
corporation, then to the president, vice-president,
1. Sale and Transfer in Bulk treasurer, secretary or manager of said
corporation, or,
[Sec. 2, Act No. 3952] 3. if such vendee or mortgagee be a partnership
firm, then to a member thereof:
Any sale, transfer, mortgage or assignment of: a. A written statement,
a. a stock of goods, i. Sworn to substantially;
b. wares, ii. Containing the names and addresses
c. merchandise, of all creditors to whom said vendor or
d. provisions, or mortgagor may be indebted, together
e. materials with the amount of indebtedness due
1. otherwise than in the ordinary course of or owing, or to become due or owing by
trade; and the regular prosecution of the said vendor or mortgagor to each of
business of the vendor, mortgagor, said creditors,
transferor, or assignor; or b. Which statement shall be verified by an oath
2. sale, transfer, mortgage or assignment of all,
or substantially all, of the business or trade Note: Any vendor, transferor, mortgagor or
theretofore conducted by the vendor, assignor of any stock of goods, wares,
mortgagor, transferor, or assignor, or merchandise, provisions or materials, in bulk, or
3. sale, transfer, mortgage or assignment of all, any person acting for, or on behalf of any such
or substantially all, of the fixtures and vendor, transferor, mortgagor, or assignor, who
equipment used in and about the business of shall knowingly or willfully make, or deliver or
the vendor, mortgagor, transferor, or cause to be made or delivered, a statement, as
assignor, provided for in section three hereof, which shall
shall be deemed to be a sale and transfer in bulk, in not include the names of all such creditors, with
contemplation of this Act. the correct amount due and to become due to
each of them, or shall contain any false or untrue
Note: The applicability of this Act may be waived [Sec. statement, shall be deemed to have violated the
1, Act No. 3952] provisions of this Act. [Section 6]
If such vendor, mortgagor, transferor or assignor, Note further: The sworn statement containing the
produces and delivers a written waiver of the names and addresses of all creditors of the vendor
provisions of this Act from his creditors as shown by or mortgagor provided for in section three of this
verified statements, then, and in that case, the Act, shall be registered in the Bureau of
provisions of Section 1 shall not apply. Commerce. For the registration of each such
sworn statement a fee of five pesos shall be
charged to the vendor or mortgagor of the stock
2. O bligations of the Seller If of goods, wares, merchandise, provisions or
the Transaction is Covered materials, in bulk. [Sec. 9, Act No. 3952]
vendor, transferor, mortgagor or assignor of b. Any such sale, transfer or mortgage shall be
each article to be included in the sale, fraudulent and void.
transfer or mortgage
4. T ransfer without
c. Notify Every Creditor [Sec.
5, Act No. 3952]
Consideration or for
Nominal Consideration
It shall be the duty of every vendor, transferor,
mortgagor, or assignor to notify every creditor whose
[Sec. 7, Act No. 3952]
name and address is set forth in the verified statement
of the vendor, transferor, mortgagor, or assignor, at It shall be unlawful for any person, firm or corporation,
least ten days before transferring possession thereof, as owner of any stock of goods, wares, merchandise,
personally or by registered mail, of the price, terms provisions or materials, in bulk, to transfer title to the
conditions of the sale, transfer, mortgage, or same without consideration or for a nominal
assignment. consideration only.
He shall:
a. Be deemed to have violated this Act, and
AGENCY
Civil Law
Exceptions:
It is possible for an agency to arise even without a
a. Where the agent’s interests are adverse
contract. In such cases, an agency is more properly
to those of the principal;
described as a legal relationship.
b. Where the agent’s duty is not to disclose
It is (a relationship) whereby one party, called the the
information (e.g., he is informed by
principal, authorizes another, called the agent, to act way of
confidential information);
for and in his behalf in transactions with third persons. c. Where the person claiming the benefit of
[Rallos v. Felix Go Chan, G.R. No. L-24332 (1978)]
the rule colludes with the agent to
defraud the principal [de Leon].
As to cause or consideration:
a. Gratuitous;
b. Compensated or onerous.
(6) To make gifts, except customary ones for latter thereby becomes a duly authorized agent, in
charity or those made to employees in the the former case with respect to the person who
business managed by the agent; received the special information, and in the latter
(7) To loan or borrow money, unless the latter case with regard to any person. [Art. 1873 par.1, CC]
act be urgent and indispensable for the
preservation of the things which are under Two Modes
administration; 1. Specific Information: If a person specially informs
(8) To lease any real property to another person another that he has given a power of attorney to a
for more than one year; third person, then that third person becomes his
(9) To bind the principal to render some service agent with respect to the person who received the
without compensation; special information.
(10) To bind the principal in a contract of 2. Public Advertisement: If a person states by public
partnership; advertisement that he has given a power of
(11) To obligate the principal as a guarantor or attorney to a third person, then that third person
surety; becomes his agent with respect to any person.
(12) To create or convey real rights over
immovable property; How Rescinded
(13) To accept or repudiate an inheritance; Par. 2, Art. 1873, CC. The power shall continue to
(14) To ratify or recognize obligations contracted be in full force until the notice is rescinded in the
before the agency; same manner in which it was given.
(15) Any other act of strict dominion.
This is agency by estoppel because no acceptance by
The requirement of special power of attorney refers to the agent is required.
the nature of the authorization, not to its form. Thus,
even if a document is titled as a general power of By remaining silent and thereby clothing the alleged
attorney, the requirement of a special power of agent with authority, the alleged principal is barred
attorney is met if there is a clear mandate from the from questioning the alleged agent’s authority.
principal specifically authorizing the performance of [Pahud v. CA, G.R. No. 160346 (2009), applying
the act [Bravo-Guerrero v. Bravo, G.R. No. 152658 estoppel in general]
(2005)].
BASED ON JURISPRUDENCE – REQUISITES
A special power of attorney can be included in the 1. The principal manifested a representation of the
general power when it is specified therein the act or agent’s authority or knowingly allowed the agent
transaction for which the special power is required to assume such authority
[Veloso v. CA, G.R. No. 102737 (1996)]. 2. The third person, in good faith, relied upon such
representation
A SPOA may be oral or written, but if it is oral, it must 3. Relying upon such representation, such third
be duly established by evidence. [Lim Pin v. Liao Tan, person has changed his position to his detriment.
G.R. No. L-47740 (1982)]
Agency by estoppel is similar to the doctrine of
Art. 1879, CC. A special power to sell excludes the apparent authority. It requires proof of reliance upon
power to mortgage; and a special power to the representation and that the representation
mortgage does not include the power to sell. predated the action which relied on the
representation. [Litonjua v. Eternit, G.R. No. 144805
Art. 1880, CC. A special power to compromise does (2006)]
not authorize the submission to arbitration.
As to liability, implied agency and agency by estoppel
are different in that, in the former, the principal is
5. S pecial Kinds of Agency liable, while in the latter, the person who acts in bad
faith is liable.
a. Agency by Estoppel
Art. 1911, CC states that: “Even when the agent has
BASED ON STATUTE exceeded his authority, the principal is solidarily liable
Par. 1, Art. 1873, CC. If a person specially informs with the agent if the former allowed the latter to act as
another or states by public advertisement that he though he had full powers.” In this case, there is a duly
has given a power of attorney to a third person, the formed agency and estoppel only applies to the excess
of authority. This is an application of the doctrine of agent to establish the agency. [Victorias Milling v. CA,
apparent authority. G.R. No. 117356 (2000)]
Procuring Cause
b. Attorney as Agent of Client A procuring cause starts a series of events, which,
without break in their continuity, result in the
General Rule: The relation of attorney and client is one accomplishment of the prime objective of the
of agency and the ordinary rules of agency apply. An employment of the broker – a sale. [Philippine Health
act performed within the scope of a “general or Care Providers v. Estrada, G.R. 171052 (2008)]
implied authority” is regarded as an act of the client.
[de Leon] The broker becomes entitled to the usual commissions
whenever he brings to his principal a party who is able
Attorneys have authority to bind their clients in any and willing to take the property and enter into a valid
case by any agreement in relation thereto made in contract upon the terms then named by the principal,
writing, and in taking appeals, and in all matters of although the particulars may be arranged and the
ordinary judicial procedure. But they cannot, without matter negotiated and completed between the
special authority, compromise their client’s litigation, principal and the purchaser directly. [Macondray v.
or receive anything in discharge of a client’s claim but Sellner, G.R. No. L-9184 (1916)]The agent is entitled to
the full amount in cash [Sec. 23, Rule 138, Rules of commission even if the (transaction) is consummated
Court]. after the revocation of his authority, if the revocation
was done in bad faith by the principal to avoid
payment of commission. [Infante v. Cunanan, G.R. No.
L-5180 (1953)]
Test
Even if the agent is not the procuring cause of the
transaction, he may still be awarded a sum of money
if he is “somehow instrumental in bringing the parties
together again and finally consummating the
transaction.” [Prats v. CA, G.R. No. L-39822 (1978)]
Art. 1893, CC. In the cases mentioned in Nos.1 and Should the agent have advanced them, the
2 of the preceding article, the principal may principal must reimburse him therefore, even if the
furthermore bring an action against the substitute business or undertaking was not successful,
with respect to the obligations which the latter has provided the agent is free from fault.
contracted under the substitution.
The reimbursement shall include interest on the
General Rule: An agent may appoint a substitute. sums advanced, from the day on which the advance
was made.
Art. 1913, CC. The principal must also indemnify the in fact exceeded the limits of his authority
agent for the damages which the execution of the according to an understanding between the
agency may have caused the latter, without fault or principal and the agent.
negligence on his part.
The Situation: the principal provided limitations to
Art. 1914, CC. The agent may retain in pledge the the authority of the agent orally or through a
things which are the object of the agency until the document other than the written power of attorney.
principal effects the reimbursement and pays the
indemnity set forth in the two preceding articles. General Rule: The third person can rely completely on
the written power of attorney to determine whether
Two scenarios under which the Agent may retain in the agent’s act is within the limits of his authority.
pledge the objects of the agency:
1. When the agent advances funds for the execution Exception: If the third person is aware of the secret
of the agency, or understanding between the principal and the agent.
2. When the agent has suffered injury caused by the
execution of the agency Note: Every person dealing with an assumed agent is
put upon inquiry and must discover upon his peril, if he
would hold the principal liable, not only the fact of the
2. O bligations of Agents agency but the nature and extent of the authority of
the agent. If he does not make such inquiry, he is
a. In General chargeable with knowledge of the agent’s authority,
and his ignorance of that authority will not be any
1. ACT WITHIN SCOPE OF AUTHORITY excuse. [Pineda v. CA, G.R. No. 105562 (1993)]
Art. 1881, CC. The agent must act within the scope
of his authority. He may do such acts as may be Authority of Corporate Officers
conducive to the accomplishment of the purpose of The general principles of agency govern the relation
the agency. between the corporation and its officers or agents,
subject to the articles of incorporation, bylaws, or
relevant provisions of law. [San Juan v. CA, G.R. No.
An agent can bind his principal if he acts within the
129459 (1998)]
scope of authority granted to him.
A corporate officer entrusted with the general
Powers of attorney are generally construed strictly.
management and control of its business, has implied
The general rule is that the power of attorney must be
authority to make any contract or do any other act
pursued within legal strictures, and the agent can
which is necessary or appropriate to the conduct of the
neither go beyond it; nor beside it. The act done must
ordinary business of the corporation. As such officer,
be legally identical with that authorized to be done.
he may, without any special authority from the Board
[Woodchild v. Roxas, G.R. No. 140667 (2004)]
of Directors, perform all acts of an ordinary nature,
which by usage or necessity are incident to his office...
Advantageous Acts
Where similar acts have been approved by the
Art. 1882, CC. The limits of the agent's authority directors as a matter of general practice, custom and
shall not be considered exceeded should it have policy, the general manager may bind the company
been performed in a manner more advantageous to without formal authorization of the board of directors.
the principal than that specified by him. [Board of Liquidators v. Kalaw, G.R. No. L-18805
(1967)]
Collateral Acts
(The agent has the implied authority) to do all of the 2. ACT IN ACCORDANCE WITH INSTRUCTIONS
collateral acts which are the natural and ordinary Art. 1887, CC. In the execution of the agency, the
incidents of the main act or business authorized. agent shall act in accordance with the instructions
[Guinhawa v. People, G.R. No. 162822 (2005)] of the principal.
With Respect to Third Persons In default thereof, he shall do all that a good father
Art. 1900, CC. So far as third persons are of a family would do, as required by the nature of
concerned, an act is deemed to have been the business.
performed within the scope of the agent's
authority, if such act is within the terms of the
power of attorney, as written, even if the agent has
Note: The limits of the agent’s authority shall not be Continuing Business
considered exceeded should it have been performed in Par. 2, Art. 1884, CC. He must also finish the
a manner more advantageous to the principal than business already begun on the death of the
that specified by him. [Art. 1882, CC] principal, should delay entail any danger.
either in person or through the mediation of The Situation: the principal and the agent each
another: contracts with different people for the same thing, and
(2) Agents, the property whose administration or the contracts are incompatible.
sale may have been intrusted to them, unless the
consent of the principal has been given. General Rule [Art. 1544, CC]:
a. The property is a movable, then the person who
The relations of an agent to his principal are fiduciary takes first possession in good faith (PGF) prevails
and it is an elementary and very old rule that in regard b. The property is immovable, then the person who
to property forming the subject matter of the agency, first records it in good faith in the register of deeds
he is estopped from acquiring or asserting a titled prevails. If there is no record, the PGF prevails. If
adverse to that of the principal. His position is there is no PGF, then the person who has the
analogous to that of a trustee and he cannot oldest title. (record > PGF > title)
consistently, with the principles of good faith, be
allowed to create in himself an interest in opposition Exceptions: The contract “of a prior date” shall prevail
to that of his principal or cestui que trust. [Severino v. if:
Severino, G.R. No. L-18058 (1923)] a. None of the buyers had obtained possession over
the movable, or
The prohibition against agents purchasing property in b. None of the buyers had recorded, possessed or
their hands for sale or management is clearly not has title over the immovable
absolute. When so authorized by the principal, the
agent is not disqualified from purchasing the property Liability
he holds under a contract of agency to sell. [Olaguer v. a. If the Agent was in good faith, then the principal
Purugganan, Jr., G.R. No 158907 (2007)] is liable for damages to the third person whose
contract won’t be honored
Double Sales b. If the Agent was in bad faith, then he is liable for
Art. 1916, CC. When two persons contract with damages to the third person and to the principal
regard to the same thing, one of them with the [see Art. 1889, CC]
agent and the other with the principal, and the two
contracts are incompatible with each other, that of a. RENDER ACCOUNT/DELIVER
prior date shall be preferred, without prejudice to Art. 1891, CC. Every agent is bound to render an
the provisions of article 1544. account of his transactions and to deliver to the
principal whatever he may have received by virtue
of the agency, even though it may not be owing to
Art. 1917, CC. in the case referred to in the
the principal.
preceding article, if the agent has acted in good
faith, the principal shall be liable in damages to the
Every stipulation exempting the agent from the
third person whose contract must be rejected. If the
obligation to render an account shall be void.
agent acted in bad faith, he alone shall be
responsible.
If an agent receives a secret gift from a client, he must
report it and deliver it to the principal.
Art. 1544, CC. If the same thing should have been
sold to different vendees, the ownership shall be The law imposes upon the agent the absolute
transferred to the person who may have first taken obligation to make a full disclosure or complete
possession thereof in good faith, if it should be account to his principal of all his transactions and
movable property. other material facts relevant to the agency. If he
makes a secret profit, he is guilty of breach of his
Should it be immovable property, the ownership loyalty, and he forfeits his right to his commission.
shall belong to the person acquiring it who in good [Domingo v. Domingo, G.R. No. L-30573 (1971)]
faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall Note: Report imports a statement of collections.
pertain to the person who in good faith was first in Accounting means settling of account of
the possession; and, in the absence thereof, to the administration or agency, which includes payment.
person who presents the oldest title, provided there [de Leon].
is good faith.
The article has been applied against an agent for Sale of Goods n Credit Without Authority
negligence which caused damage against itself, General rule: The commission agent cannot sell on
credit. Should he do so, the principal may:
thereby preventing it from recovering from the
1. Demand from him payment in cash, in which case
principal what it lost. [Metrobank v. CA, G.R. No. 88166
the commission agent shall be entitled to any
(1991)]
interest or benefit, which may result from such
sale [Art. 1905, CC]; or
b. Factor or Commission 2. Ratify the sale on credit, in which case the
Agent principal will have all the risks and advantages to
him [de Leon].
A factor or commission agent is one whose business is
to receive and sell goods for a commission (also called Exception: The commission agent can sell on credit
factorage) and who is entrusted by the principal with with the express or implied consent of the principal.
the possession of goods to be sold, and usually selling
in his own name. He may act in his own name or in that Sale of Goods on Credit with Authority
of the principal. If the commission agent was authorized to sell on
credit and should he so sell on credit, he shall inform
An ordinary agent need not have possession of the the principal of such sale, with a statement of the
goods of the principal, while the commission agent names of the buyers. Should he fail to inform the
must be in possession [de Leon]. principal, the sale is deemed to have been made for
cash as far as the principal is concerned [Art. 1906,
CC].
Ordinary Agent Commission Agent
Acts for and in behalf of Private rule of guidance The commission agent is obliged to collect the credits
the principal to the agent of his principal when they become due and
Refers to the manner or demandable [Art. 1908, CC].
mode of agent’s action
Need not have General rule: Failing to so collect, the agent shall be
with respect to matters
possession of the goods liable for damages.
within the permitted
scope of authority
Exception: He is not liable if he proves that he
exercised due diligence for that purpose.
Broker Commission Agent Should the commission agent receive a guarantee
Has no custody of the commission (del credere commission) on a sale, in
thing to be disposed of, Has custody or addition to the ordinary commission, he shall:
only acts as possession of the things 1. Bear the risk of collection; and
intermediary between to be sold 2. Pay the principal the proceeds of the sale on the
seller and buyer terms agreed upon with the purchaser [Art.
1907].
3. Liability of Agents as if the transaction were his own, except when the
contract involves things belonging to the principal.
The provisions of this article shall be understood to
a. When Solidary be without prejudice to the actions between the
principal and agent.
Art. 1894, CC. The responsibility of two or more
agents, even though they have been appointed This is called an “Agency with an undisclosed
simultaneously, is not solidary, if solidarity has not principal.”
been expressly stipulated.
General Rule: If the agent enters contract without
General Rule: Two or more agents are jointly liable. notice to the third party that he was acting as an
Each of the agents can be held solidarily liable for the agent, the agent is directly bound as a party to the
non-fulfilment of the agency or for injuries caused by contract, and the principal and the third person have
fault or negligence if: no right of action against one another.
1. The principal simultaneously appoints more than
one agent, and Exception: When the contract involves things
2. There is an express stipulation that such agents belonging to the principal. The principal may seek
are solidarily liable damages for such contract.
An agent will not be solidarily liable if the fellow
agents acted beyond the scope of authority. [Art. 1895, The exception under Art 1883 “does not say that (a
CC] third party) does not have, and cannot bring an action
against the agent also.” [Beaumont v. Prieto, G.R. No.
b. When Personal L-8988 (1916)]
Exceptions:
a. When the agent expressly binds himself
b. When the agent exceeds the limits of his authority
without giving the person he is transacting with
sufficient notice of his powers [Art 1897, CC]
c. When all of the following are present:
i. The person transacting with the agent is
aware of the limits of the agent’s authority
ii. The agent exceeded the scope of his
authority
iii. The agent exceeded his or her authority,
and
iv. The principal did not ratify the contract
Rights and Obligations of Acts which are absolutely void cannot be ratified. [de
Leon]
the Principal When Estoppel Applies
Art. 1911, CC. Even when the agent has exceeded his
1. Obligations authority, the principal is solidarily liable with the
agent if the former allowed the latter to act as
a. Comply with the though he had full powers.
General Rule: the principal must advance or reimburse conducive, advantageous, and collateral acts), for
(with interest) the sums necessary to execute the unauthorized acts which the principal has ratified and
agency. for acts which is estopped from denying.
Sums to be reimbursed include those from Art. 1915, CC. If two or more persons have
unsuccessful undertakings as well as those initially in appointed an agent for a common transaction or
contravention of the principal’s instructions but later undertaking, they shall be solidarily liable to the
becomes a source of benefits. agent for all the consequences of the agency.
b. Rely on Representations by
the Principal
Art. 1873, CC. If a person specially informs another
or states by public advertisement that he has given
a power of attorney to a third person, the latter
thereby becomes a duly authorized agent, in the
former case with respect to the person who
received the special information, and in the latter
case with regard to any person.
The power shall
continue to be in full force until the notice is
rescinded in the same manner in which it was given.
2. O bligations of Third
Persons
Based on Keeler Electric v. Rodriguez, G.R. No. L-19001
(1922),
a. The law indulges in no bare presumptions that an
agency exists: it must be proved or presumed from
facts;
b. The agent cannot establish his own authority,
either by his representations or by assuming to
exercise it;
c. An authority cannot be established by mere rumor
or general reputation;
2. R evocation
a. In General
Art. 1920, CC. The principal may revoke the agency
at will, and compel the agent to return the
document evidencing the agency. Such revocation
may be express or implied.
The principal can revoke the agency even if the period prejudice to the provisions of the two preceding
fixed in the contract has not yet expired. [CMS Logging articles.
v. CA, G.R. No. L-41420 (1992)]
Revocation takes effect when notice is given to the
Art. 1925, CC. When two or more principals have former agent, not when the new agent is appointed.
granted a power of attorney for a common
transaction, any one of them may revoke the same
without the consent of the others.
d. Direct Management by the
Principal
Note: The rule enunciated by Art. 1925, CC is
consistent with Art. 1915, CC which provides that, if Art. 1924, CC. The agency is revoked if the principal
two or more persons have appointed an agent for a directly manages the business entrusted to the
common transaction or undertaking, they shall be agent, dealing directly with third persons.
solidarily liable to the agent for all the consequences
of the agency. If the principal believes that the agent is in breach of
the contract and thereby decides to deal with the
Qualifications: The right of the principal to terminate business directly, then the agency is said to be
the authority of his agent is absolute and unrestricted, revoked. [CMS Logging v. CA, supra] The mere act of
except that he is liable for damages in case: direct management by the principal is not enough to
1. He revokes the agency in bad faith [Danon v. revoke the agency without such intention.
Brimo, G.R. No. 15823 (1921)]; or
2. He revokes the agency before the expiration of the e. Special Authority Revokes
period stipulated in the agency contract.
the General Authority
b. When Revocation is Not Where a Special Matter is
Binding on Third Persons Involved
1. When Notice is Required Art. 1926, CC. A general power of attorney is
Art. 1921, CC. If the agency has been entrusted for revoked by a special one granted to another agent,
the purpose of contracting with specified persons, as regards the special matter involved in the latter.
its revocation shall not prejudice the latter if they
were not given notice thereof. If Agent 1 is given a general agency, and Agent 2 is
later given a special agency, then Agent 1 can no
2. When a Third Person in Good Faith Has No longer perform the powers granted to Agent 2 under
Knowledge of Revocation the special agency
Art. 1922, CC. If the agent had general powers, f. When Agency Cannot be
revocation of the agency does not prejudice third
persons who acted in good faith and without
Revoked
knowledge of the revocation. Notice of the
revocation in a newspaper of general circulation is Art. 1927, CC. An agency cannot be revoked if a
a sufficient warning to third persons. bilateral contract depends upon it, or if it is the
means of fulfilling an obligation already
contracted, or if a partner is appointed manager of
An agent with general powers is most likely, an agent
a partnership in the contract of partnership and his
authorized to transact with the general public in
removal from the management is unjustifiable.
contradistinction to the agent who contracts with
specified persons under Art. 1921, CC.
Art. 1930, CC. The agency shall remain in full force
and effect even after the death of the principal, if it
c. Appointment of New Agent has been constituted in the common interest of the
latter and of the agent, or in the interest of a third
Art. 1923, CC. The appointment of a new agent for person who has accepted the stipulation in his
the same business or transaction revokes the favor.
previous agency from the day on which notice
thereof was given to the former agent, without
Even if the agency is coupled with an interest (which 2. Contract between Agent Without Knowledge of
means that it is irrevocable), it may still be revoked if Death and Third Person in Good Faith
there is just cause to terminate such agency Art. 1931, CC. Anything done by the agent, without
relationship. knowledge of the death of the principal or of any
other cause which extinguishes the agency, is valid
3. Withdrawal by the Agent and shall be fully effective with respect to third
persons who may have contracted with him in good
faith.
Art. 1928, CC. The agent may withdraw from the
agency by giving due notice to the principal. If the
3. Unfinished business
latter should suffer any damage by reason of the
withdrawal, the agent must indemnify him Par. 2, Art. 1884, CC. He must also finish the
therefor, unless the agent should base his business already begun on the death of the
withdrawal upon the impossibility of continuing the principal, should delay entail any danger.
performance of the agency without grave detriment
to himself. c. Death of Agent
General Rule: The agent may withdraw so long as he If the agent dies, his heirs must:
gives due notice to the principal. If the principal suffers 1. Notify the principal thereof; and
damage because of the withdrawal, then the agent 2. In the meantime adopt such measures as the
must indemnify him, except if the basis of his circumstances may demand in the interest of the
withdrawal is because continuing the performance of latter [Art. 1932, CC].
the agency is impossible without grave detriment to
the agent.
5. D issolution,
If the Agent files a complaint against his principal, Accomplishment,
then he is understood to have renounced the agency
because his act was more expressive than words and Expiration
could not have caused any doubt. [Valera v. Velasco,
G.R. No. L-28050 (1928)] Accomplishment: The fulfillment of the purpose for
which agency was created ipso facto terminates
agency even though it was expressly made
4. D eath, Civil Interdiction, irrevocable. If the purpose has not been accomplished,
Insanity or Insolvency the agency continues indefinitely for as long as the
intent to continue is manifested through words or
actions of the parties.
a. In General
Dissolution: The dissolution of a partnership or
By reason of the very nature of the relationship corporation which entrusted (principal) or accepted
between the principal and agent, agency is (agent) the agency extinguishes its juridical existence,
extinguished by the death of the principal or the agent. except for the purpose of winding up its affairs. It is
Any act of an agent after the death of his principal is equivalent to death.
void ab initio unless the same falls under the
exceptions provided for in the aforementioned Art Expiration
1930 and 1931, CC. a. If created for fixed period, expiration of the period
extinguishes agency even if the purpose was not
b. Exceptions accomplished.
b. If no time is specified, the courts may fix the period
1. Agency Coupled with an Interest. as under the circumstances have been probably
Art. 1930, CC. The agency shall remain in full force contemplated by the parties [Art. 1197, CC].
and effect even after the death of the principal, if it Otherwise, the agency terminates at the end of a
has been constituted in the common interest of the reasonable period of time. Either party can
latter and of the agent, or in the interest of a third terminate the relationship at will by giving notice
person who has accepted the stipulation in his to the other [de Leon].
favor. The period contemplated may be implied from terms
of agreement, purpose of agency, and the
circumstances of the parties.
PARTNERSHIP
Civil Law
and for which he receives a share in the profits case of failure to comply with the requirements of
(not salary) of the business. article 1772, first paragraph. [Art. 1768, CC]
d. The object must be lawful;
e. The primary purpose must be to obtain profits and
to divide the same among the parties;
3. Parties
f. The partnership has a juridical personality
separate from individual partners [Art. 1768, CC]. General Rule: Any person capacitated to contract may
enter into a contract of partnership.
a. Lawful Purpose The following persons CANNOT enter into a contract
of partnership:
A partnership: a. Those suffering from civil interdiction;
1. Must have a lawful b. Minors;
a. Object; or c. Insane or demented persons;
b. Purpose; and d. Deaf-mutes who do not know how to write;
2. Must be established for the common benefit or e. Incompetents who are under guardianship.
interest of the partners. [Art. 1770 (1), CC]
Exceptions : The capacity of the following persons to
Consequence if there is no lawful purpose: the enter into a contract of partnership, though
partnership agreement is void ab initio. capacitated to contract generally, are limited:
a. Those who are prohibited from giving each other
Basis: Contracts whose purpose is contrary to law are any donation or advantage cannot enter into a
void from the beginning. [Art. 1409 (1), CC]. universal partnership [Article 1782];
b. A corporation cannot enter into a partnership in
When an unlawful partnership is dissolved by a the absence of express authorization by statute or
judicial decree, the profits shall be confiscated in favor charter. [Mendiola v. CA, G.R. No. 159333 (2006)]
of the State, without prejudice to the provisions of the
Penal Code governing the confiscation of the Although a corporation cannot enter into a
instruments and effects of a crime. [Art. 1770 (2), CC] partnership contract, it may, however, engage in a
joint venture with others [Aurbach vs. Sanitary Wares
Upon the dissolution of an unlawful partnership, the Manufacturing Corp, G.R. No. 75875 (1989)]
profits are simply confiscated by the State. The
previous rule is to give such profits to a charitable On the other hand, there is no prohibition against a
institution. partnership being a partner in another partnership [de
Leon].
The profit and tools/instruments in the partnership
with an unlawful purpose will be confiscated in favor
of the government but if the partners were not in pari 4. O bject
delicto, they may be able to recover their contribution
to the partnership instead of it being forfeited as well. a. Object of Universal
Partnership
b. Common Benefit [Art. 1770,
CC] A universal partnership may refer to:
1. All present property :
A partnership must be established for the common a. The partners contribute all the property
benefit of the partners. This “common benefit” is which belongs to them to a common fund,
always pecuniary based on Art 1799, CC. with the intention of dividing the same
among themselves, as well as the profits they
A stipulation which excludes one or more partners may acquire therewith [Art. 1778, CC].
from any share in the profits or losses is void. [Art. b. The property contributed includes all those
1799, CC] belonging to the partners at the time of the
constitution of the partnership.
c. A stipulation for the common enjoyment of
c. Juridical Personality any other profits may also be made. However,
the property which the partners may acquire
The partnership has a juridical personality separate subsequently by inheritance, legacy or
and distinct from that of each of the partners, even in donation cannot be included in such
stipulation, except the fruits thereof [Art. a. Where immovable property or real rights are
1779, CC]. contributed:
2. All the profits: 1. The contract must appear in a public
a. It comprises all that the partners may acquire instrument; and
by their industry or work during the existence 2. Attached to such instrument must be an
of the partnership. inventory, signed by the parties, of the
b. Only the usufruct over the property of the property contributed [Arts. 1771 and 1773, CC];
partners passes to the partnership [Art. 1780, b. Where the capital is at least P3,000, in money or
CC]. property:
1. The contract must appear in a public
When the articles of universal partnership do not instrument; and
specify its nature (all present property or all the 2. It must be recorded in the Office of the
profits), the partnership will be considered as one only Securities and Exchange Commission (SEC).
of all the profits [Art. 1781, CC].
As to the second, failure to comply with these
Rule on After-Acquired Properties requirements, however, does NOT affect the liability of
Aside from the contributed properties, only the profits the partnership and the partners to third persons
of the contributed common property (no other profits) [Arts. 1768 and 1772, CC].
are included. Thus, should a partner subsquently
acquire a property as remuneration for his work, such Failure to comply with the requirements under Arts.
property and its fruits are not to be enjoyed by the 1771 and 1772, CC affords the parties the remedy of
universal partnership of all present property. [Paras] demanding that it be executed in a public instrument.
[Dauden-Hernaez v. De Los Angeles, G.R. L-27010
Properties subsequently acquired by inheritance, (1969); Art. 1357, CC]
legacy, or donation, cannot be included in the
stipulation but the fruits thereof can be included in the
stipulation
6. D uration
c. General partner, whose liability to third persons reimbursement from profits; if none, in
extends to his separate property; capitalist partners proportion to
d. Limited partner, whose liability to third persons is contribution
limited to his capital contribution;
e. Managing partner, who was designated to Engagement in business
manage the affairs or business of the partnership; Cannot engage, for
f. Liquidating partner, who takes charge of the Cannot engage in
his own account, in
winding up of partnership affairs; business for himself,
the same kind of
g. Partner by estoppel, who is not really a partner unless the partnership
business as that of
but is liable as such for the protection of innocent expressly permits him to
the partnership,
third persons; do so; should he do so
unless there is a
h. Continuing partner, who continues the business without permission, the
stipulation to the
after dissolution of the partnership by admission capitalist partners may:
contrary; should he
of a new partner, or retirement, death or expulsion [1] exclude him from the
do so, he shall bring
of existing partners; firm; or [2] avail
to the common fund
i. Surviving partner, who remains a partner after themselves of the
any profits accruing
dissolution by death of any partner; benefits obtained in
to him from his
j. Subpartner, who is not a member of the violation of the
transactions and
partnership but contracts with a partner with prohibition, with right to
shall personally bear
regard to the share of the latter in the partnership; damages in either case
all the losses [Art.
k. Ostensible partner, who takes active part in the [Art. 1789, CC]
1808, CC]
business of the partnership and is known by the
public;
l. Secret partner, who takes active part in the 10. Partnership,
business, but is unknown to the third persons as a
partner;
Distinguished from Other
m. Silent partner, who does not take active part in Contracts
the business, but may be known to be a partner by
third persons; Partnership Joint venture
n. Dormant partner, who does not take active part
in the business and is not known or held out as a Operates without
Operates with firm name
partner; firm name and legal
and legal personality
o. Original partner, who has been a partner since personality
the constitution of the partnership; Generally relates to a
p. Incoming partner, who is about to be taken as a continuing business of Usually limited to a
member into an existing partnership; various transactions of a single transaction
q. Retiring partner, who is withdrawing from the certain kind
partnership.
Corporations may
Corporations may not
enter into joint
Industrial Capitalist enter into a partnership
ventures
partner partner
Form of contribution A joint venture is an agreement between two parties
Industry Money or property to enter into a commercial undertaking. It may fall
under a partnership with a limited purpose.
Share in profits
According to Under Philippine law, a joint venture is a form of
agreement; if none, partnership and should thus be governed by the laws
Just and equitable share of partnership [Auerbach v. Sanitary Wares
in proportion to
contribution Manufacturing Corp, G.R. No. 75875].
Share in losses
Partnership Co-ownership
According to
Exempted as to losses as Generally created by Generally created by
agreement; if none,
between partners, but either express or law and may exist even
in the same
liable to third persons, implied contract without a contract
proportion as the
without prejudice to
agreed share in
Has juridical
personality (not true
Has no juridical Rights and Obligations of
personality
for GPPs) the Partnership
Commencement is on
Commencement date
the date of the
celebration of the
1. Right to Contribution,
may be stipulated marriage and any Right to Warranty
stipulation to the
contrary is void Every partner is a debtor of the partnership for
Share in profits may whatever he may have promised to contribute thereto.
be stipulated; [Art. 1786, CC]
otherwise, in Share in profits is equal
proportion to Contribution Of Money Or Property
contribution With respect to contribution of property, a partner is
obliged to:
Administration belongs a. To contribute, at the beginning of the partnership
Management shared
to the spouses jointly, or at the stipulated time, the money, property or
by all partners, unless
but decision of husband industry which he undertook to contribute;
otherwise agreed
prevails in case of
upon
disagreement Effect of failure to contribute: Makes the partner
Partner can dispose Spouse cannot dispose ipso jure a debtor of the partnership even in the
of interest even of interest during absence of demand. The remedy is not rescission
without consent of marriage, even with but an action for specific performance with
others consent damages and interest. [Sancho v. Lizarraga, G.R.
L-33580 (1931)]
Partnership Voluntary association Note: When contribution is in goods, the amount
Has juridical thereof must be determined by proper appraisal
Has no juridical
personality (except of the value thereof at the time of contribution.
personality
GPPs) [Art. 1787, CC]
Not always organized
Organized for profit b. In case a specific and determinate thing is to be
for profit
contributed:
Capital is not 1. To warrant against eviction in the same
Capital is either
contributed, although manner as a vendor; and
borrowed or
fees are collected from 2. To deliver to the partnership the fruits of the
contributed
members property promised to be contributed, from
The partnership is The members are liable the time they should have been delivered,
primarily liable; the individually for debts without need of demand [Art. 1786, CC];
partners are liable only which they authorized c. In case a sum of money is to be contributed, or in
subsidiarily or ratified case he took any amount from the partnership
coffers, to indemnify the partnership for:
Share in profits may be 1. Interest; and
stipulated; otherwise, 2. Damages from the time he should have
Share in profits is equal
in proportion to complied with his obligation, or from the time
contribution he converted the amount to his own use,
respectively [Art. 1788, CC].
d. To preserve the property with diligence of a good
father of a family pending delivery to the
partnership. [Art. 1163, CC]
e. To indemnify for any interest and damages
caused by the retention of the property or by delay
in its obligation to contribute a sum of money.
[Art. 1788 and 1170, CC]
General rule:
A partner: 4. R ight to Accounting of
a. Authorized to manage Profits Received without
b. Who collects a demandable sum owed to him
1. In his own name the Consent of the Other
2. From a person who also owes the
partnership a demandable sum,
Partners
Is obliged to apply the sum collected to both credits
Every partner must account to the partnership for any
pro rata, even if he issued a receipt for his own credit
benefit, and hold as trustee for it any profits derived by
only.
him without the consent of the other partners from any
transaction connected with the formation, conduct, or
Requisites:
liquidation of the partnership, or from any use by him
a. There exist at least two debts, one where the
of its property. [Art. 1807, CC]
collecting partner is creditor, and the other, where
the partnership is the creditor;
b. Both debts are demandable ; and
5. O bligation to Reimburse
Partners
Page 325 of 497
U.P. LAW BOC PARTNERSHIP CIVIL LAW
2. R ight to Inspect
Partnership Books
The partnership books shall be kept:
a. At a place agreed upon by the partners;
b. When there is no such agreement, at the principal
place of business of the partnership.
d. Whenever other circumstances render it just and 1. Formal accounting [Art.1809, CC]; or
reasonable [Art. 1809, CC].
2. Dissolution by judicial decree [Art.1831, CC].
d. A partner’s right in such property is not
As long as the partnership exists, any of the partners assignable, except when all the partners assign
may demand an accounting of the partnership their rights in the same property;
business. Prescription of the said right starts to run e. The right is not subject to attachment or
only upon the dissolution of the partnership when the execution, except on claim against the
final accounting is done. [Emnace v. CA, G.R. 126334 partnership.
(2001)]
In case of such attachment, the partners, or any of
4. P roperty Rights of them, or the representatives of a deceased
partner, cannot claim any right under the
Partners homestead or exemption laws.
f. The right is not subject to legal support under
In General Article 291 [Art. 1811, CC].
The property rights of a partner are: g. Contemplates tangible property.
a. Rights in specific partnership property;
b. Interest in the partnership; and Interest In Partnership
c. Right to participate in the management [Art. 1810, A partner’s interest in the partnership is his share of
CC]. the profits and surplus [Art. 1812, CC].
b. Specific and determinate things the ownership which may be revoked at any time. Removal, however,
of which is transferred to the partnership – should also be done by the partners having the
borne by the partnership as owner; controlling interest. [de Leon]
c. Fungible things – partnership, because use is
impossible without the things being consumed or Managing By Two or More Partners
impaired; When there are two or more managing partners
d. Things contributed to be sold – partnership for appointed,
there cannot be any doubt that the partnership a. without specification of their duties;or
was intended to be the owner; and b. without a stipulation on how each one will act:
e. Things brought and appraised in the inventory – 1. Each one may separately execute all acts of
partnership because the intention of the parties administration.
was to contribute to the partnership the prince of 2. If any of them opposes the acts of the others,
the things contributed with an appraisal in the the decision of the majority prevails.
inventory. There is thus an implied sale.
3. In case of a tie, the partners owning the
controlling interest will decide [Art. 1801, CC].
Note: The list presupposes delivery. Without delivery,
the loss is borne by the partner.
Requisites:
i. Two or more partners have been
5. R ight to Participate in appointed
as managers;
Management ii. There is no specification of their
respective
duties; and
Management of the partnership is primarily governed c. There is no stipulation that one of them
shall not
by the agreement of the partners in the articles of act without the consent of all the others.
The
partnership. It may be stipulated that the partnership right to oppose is not given to non-managers
will be managed by: because in appointing their other partners as
a. All the partners; or managers, they have stripped themselves of all
b. A number of partners appointed as managers, participation in the administration. [Paras]
which may be appointed:
1. In the articles of partnership; or The other managers, however, should make the
2. After constitution of the partnership. opposition before the acts produce legal effects
insofar as third persons are concerned.
Powers of A Managing Partner
General rule: The partner designated as manager in the IRRECONCILABLE DEADLOCK
articles may execute all acts of administration despite Those who vote against the contract shall prevail, the
opposition by the other partners. same having been entered into without authority. [de
Leon]
Exception: He cannot do so when he acts in bad faith.
Stipulation of Unanimity
Revocation Of Power By Managing Partner In case there is a stipulation that none of the
General Rule: Power is irrevocable without just or managing partners shall act without the consent of
lawful cause. others,
a. The concurrence of all is necessary for the
The powers of the managing partner may be revoked: validity of the acts, and
a. If appointed in the articles of partnership, when: b. The absence or disability of one cannot be
1. There is just or lawful cause for revocation; alleged,
and unless there is imminent danger of grave or
2. The partners representing the controlling irreparable injury to the partnership. [Art. 1802, CC]
interest revoke such power.
b. If appointed after the constitution of the Management When Manner Not Agreed Upon
partnership, at any time and for any cause [Art. When there is no agreement as to the manner of
1800, CC]. management, the following rules apply:
a. All the partners are considered agents (mutual
Reason: Such appointment is a mere delegation of agency). Whatever any one does alone binds the
power, not founded on a change of will on the part of partnership, unless there is a timely opposition to
the partners, the appointment not being a condition of the act, under Art. 1801, CC.
the contract. It is merely a simple contract of agency,
b. Any important alteration in the immovable that no other money than that contributed as capital
property of the partnership, even if useful to the is involved. [de Leon; Martinez v. Ong Pong Co, G.R.
partnership, requires unanimity. If the alteration No. 5236 (1910)]
is necessary for the preservation of the property,
however, consent of the others is not required [de
Leon].
7. Right to Ask for
Dissolution [Arts. 1830(2)
If the refusal is manifestly prejudicial to the
partnership, court intervention may be sought [Art. and 1831, CC]
1803, CC].
See Dissolution and Winding Up below.
The consent need not be express. It may be presumed
from the fact of knowledge of the alteration without
interposing any objection. [de Leon]
8. O bligation to Render True
and Full Information
Mutual Agency
In addition to the Art. 1801, CC there is effectively a Partners shall render on demand true and full
mutual agency in the following cases: information of all things affecting the partnership to:
a. Partners can dispose of partnership property even a. Any partner;
when in partnership name [Art. 1819, CC]. b. The legal representative of any deceased partner;
b. An admission or representation made by
any or
partner concerning partnership affairs is c. The legal representative of any partner under
evidence against the partnership [Art. 1820, CC]. legal disability [Art. 1806, CC].
c. Notice to any partner of any matter relating to
partnership affairs is notice to the
partnership Even without demand, honesty demands the giving of
vital information, the refraining from all kinds of
[Art. 1821, CC].
concealment. [Paras]
d. Wrongful act or omission of any partner acting for
partnership affairs makes the partnership liable By “information”, it is meant that which can be used
[Art. 1822, CC].
for partnership purposes, it is in the sense of a property
e. Partnership is bound to make good losses
for which the partnership has a valuable right. [de Leon]
wrongful acts or misapplications of partners [Art.
1823, CC].
9. O bligation to Account and
6. R ight to be Reimbursed by Act as Trustee
the Partnership Every partner must:
a. Account to the partnership for any benefit; and
The partnership shall be responsible to every partner b. Hold as trustee for it any profits derived by him
for the amounts he may have disbursed on behalf of without the consent of the other partners:
the partnership and for the corresponding interest, 1. From any transaction connected with the
from the time the expenses are mad; it shall also formation, conduct, or liquidation of the
answer to each partner for the obligations he may partnership; or
have contracted in good faith in the interest of the 2. From any use by him of its property [Art. 1807,
business, and for the risks in consequence of its CC].
management. [Art. 1796, CC]
General Rule: The partner cannot use or apply
The provision is meant to grant to every partner the exclusively to his own benefit partnership assets or
right to demand from the partnership reimbursement results of the knowledge or information gained by him
of advances made on behalf of the partnership as a partner to the detriment of the partnership. [de
business. [Villanueva] Leon]
Article 1796 is not applicable insofar as it provides that Exception: If the taking by the partner is with the
“the partnership shall be responsible to every partner consent of all other partners. [Lim Tanhu v. Ramolete,
for the amounts he may have disbursed on behalf of G.R. L-40098 (1975)]
the partnership and for the corresponding interest
from the time the expenses are made,” for the reason
The duty to account continues until the partnership The test is the possibility of unfair competition.
relation is terminated. A partner occupies a fiduciary position with respect to
his co-partners imposing duties of utmost good faith
This obligation exists even when he issued a receipt for and he may not carry on any other business in rivalry
his share only [Art. 1793, CC]. with the business of the partnership whether in his
own name or for the account of another at the expense
Rationale: In this case, the debt becomes a bad debt. of the partnership. [de Leon]
It would be unfair for the partner who already
collected not to share in the loss of the other partners.
11. Obligation to Share in the
Credit collected after dissolution: The collecting Profits/Losses
partner need not bring the same to the partnership
capital. Art. 1793 presupposes that there exists Rules For Distribution Of Profits And Losses
partnership capital. Upon dissolution of the The distribution of profits and losses shall be in
partnership and the return to each principal of what he accordance with the following rules:
contributed, the community of interest between them a. They shall be distributed in conformity with the
disappears altogether. [de Leon] agreement.
b. If only the share in profits has been stipulated, the
10. Obligation not to Engage share in the losses shall be in the same
proportion.
in Another Business c. In the absence of any stipulation:
1. The share in the profits of the capitalist
FOR INDUSTRIAL PARTNERS partners shall be in proportion to their
General rule: An industrial partner cannot engage in contributions.
business for himself. Should he do so, the capitalist 2. The losses shall be borne by the capitalist
partners, as well as industrial partners [de Leon] may partners, also in proportion to the
either: contributions.
1. Exclude him from the firm; or 3. The share of the industrial partners in the
2. Avail themselves of the benefit which he may profits is that share as may be just and
have obtained. equitable. If he also contributed capital, he
will receive a share of the profits in proportion
Exception: He may engage in business for himself to his contribution; and
when the partnership expressly permits him to do so 4. The industrial partner, who did not contribute
[Art. 1789, CC]. capital, is not liable for losses [Art. 1797, CC].
Where the title is in the names of all the partners, LIABILITY OF THE OTHER PARTNERS UNDER
a conveyance executed by all of them passes all ARTS. 1822 AND 1823, CC
the rights to the property [par. 5, Art. 1819, CC].
All partners are solidarily liable with the partnership
for its liabilities under Arts. 1822 and 1823 [Art. 1824,
4. L iability for Admission by CC].
a Partner
This is without prejudice to the guilty partner being
An admission or representation by any partner may be liable to the other partners. However, as far as third
used as evidence against the partnership when: persons are concerned, the partnership is answerable
a. It concerns partnership affairs; [de Leon].
b. Such affairs are within the scope of his authority
[Art. 1820, CC]. Applicability of the Rule of Respondeat Superior
The rule of respondeat superior (also called the rule of
Instances Where Knowledge of a Partner is command liability) applies to the law on partnership
Considered Knowledge of the Partnership in the same manner as other rules governing the
a. Knowledge of the partner acting in the particular agency relationship [de Leon].
matter
1. Acquired while a partner; or It is not only the partners who are liable in solidum; it
2. Then present to his mind is also the partnership [Art 1824, CC].
b. Knowledge of any other partner who reasonably
could and should have communicated it to the The injured party may proceed against the partnership
acting partner [Art. 1821, CC]. or any partner [Paras].
The partnership is solidarily liable with the partner Criminal Liability for Criminal Acts
who causes loss or injury to any person not a partner, A non-acting partner in a partnership engaged in a
or incurs any penalty through any wrongful act or lawful business is not criminally liable for the criminal
omission: acts of another partner but he is criminally liable if the
a. In the ordinary course of the business of the partnership is involved in an unlawful enterprise with
partnership; or his knowledge or consent.
b. Not in such ordinary course of business, but with
the authority of his co-partners [Art. 1822, CC]. Partnership Liability
a. Does Not Extend to criminal liability where the
wrongdoing is regarded as individual in character,
6. L iability for i.e. embezzlement.
b. Extends to criminal liability where the crime is
Misapplication of Money statutory, especially where it involves fine or
or Property imprisonment [de Leon].
a. In an existing partnership; or b. He is liable jointly and pro rata (as though he were
b. With one or more persons not actual partners a partner in fact) with those who consented to the
[par. 1, Art. 1825,CC]. representation when:
1. There is an existing partnership but not all the
LIABILITY OF A PARTNER BY ESTOPPEL partners consented; or
2. There is no existing partnership and all those
a. Personal Representation represented as partners consented to the
A partner by estoppel is liable to any such representation.
persons: c. He is liable separately when:
1. To whom such representation has been 1. There is an existing partnership but none of
made; and the partners consented; or
2. Who has, on the faith of such representation, 2. There is no existing partnership and not all of
given credit to the actual or apparent those represented as partners consented to
partnership [par. 1, Art. 1825]. the representation.
Notice To Or Knowledge Of The Partnership b. Appoint a receiver of the share of the profits and
The following operate as notice to or knowledge of the of any other money due or to fall due to
the
partnership: partner; and
a. Notice to any partner of any matter relating to c. Make all other orders, directions, accounts
and
partnership affairs;
inquiries, which the debtor partner might have
b. Knowledge of the partner acting in the particular
matter acquired while a partner; made, or which the circumstances may require.
c. Knowledge of the partner acting in the particular
matter then present to his mind; or (4) Knowledge The interest charged may be redeemed before
foreclosure or, in case of sale directed by the
of any other partner who
reasonably could and
court, may be purchased without causing
should have communicated it to the acting
dissolution:
partner.
1. With separate property, by one or more of
These do not apply in case of fraud on the partnership the partners; or
committed by or with the consent of the partner [Art. 2. With partnership property, by one or more of
1821, CC]. the partners, with consent of all, except the
debtor partner [par. 2, Art. 1814, CC].
Preference of Partnership Creditors in Partnership
Property
With respect to partnership assets the partnership
creditors are entitled to priority of payment. However
the private creditors of each partner may ask the
attachment and public sale of the share of the latter in
the partnership assets as provided in Art. 1814, CC.
[Art. 1827, CC].
Property Preference:
a. Partnership Property – Partnership creditors are
preferred
b. Partner’s Individual Property – Partner’s
individual creditors are preferred [de Leon].
Dissolution and Winding 4. By the expulsion of any partner from the business
bona fide in accordance with such a power
Up conferred by the agreement between the partners
[Art. 1830(1), CC].
5. By the civil interdiction of any partner; A person who acquires the interest of a partner may
likewise apply:
Civil interdiction deprives the offender during the 1. After the termination of the specified term or
time of his sentence of the right to manage his particular undertaking;
property and dispose such property by any act or 2. At any time if the partnership was a partnership at
any conveyance inter vivos [Art. 34, RPC]. will when the interest was assigned or when the
charging order was issued
Ratio: One who is without capacity to manage his
own property should not be allowed to manage e. Other Causes
partnership property [de Leon].
1. When a new partner is admitted into an existing
d. By Decree of Court partnership;
2. When any partner retires;
A partner may apply for dissolution in court when: 3. When the other partners assign their rights to the
1. A partner has been declared insane in any judicial sole remaining partner;
proceeding or is shown to be of unsound mind; 4. When all the partners assign their rights in the
partnership property to third persons [Art. 1840,
Note: The partner may have been previously CC].
declared insane in a judicial proceeding;
otherwise, his insanity must be duly proved. It
must materially affect the capacity of the partner
3. Effects of Dissolution
to perform his contractual duties as such [de
Leon]. a. On Authority of the
2. A partner becomes in any other way incapable of Partners
performing his part of the partnership contract;
In general, upon dissolution, the authority of the
Note: The incapacity must be lasting, from which partners to represent the partnership is confined only
the prospect of recovery is remote [de Leon]. to acts necessary to:
3. A partner has been guilty of such conduct as tends 1. Wind up partnership affairs; or
to affect prejudicially the carrying on of the 2. Complete transactions begun but not then
business; finished [par. 1, Art. 1832, CC].
4. A partner willfully or persistently commits a
breach of the partnership agreement, or WITH RESPECT TO PARTNERS
otherwise so conducts himself in matters relating The authority of partners to act for the partnership is
to the partnership business that it is not terminated, with respect to partners:
reasonably practicable to carry on the business in 1. When the dissolution is not by the act, insolvency
partnership with him; or death of a partner; or
2. When the dissolution is by such act, insolvency or
Ratio: They defeat and materially affect and death, when the partner acting for the partnership
obstruct the purpose of the partnership [de Leon]. has knowledge or notice of the cause [Art. 1832
5. The business of the partnership can only be and 1833, CC].
carried on at a loss;
In other cases, each partner is still liable for his share
Note: A court is authorized to decree dissolution in the liability created by the partner acting for the
notwithstanding the partnership has been partnership [Art. 1833, CC].
making profits where it appears at the time of the
application that the business can only be carried WITH RESPECT TO THIRD PERSONS
on at a loss [de Leon 233]. With respect to persons not partners:
6. Other circumstances render a dissolution 1. After dissolution, a partner can bind the
equitable. partnership by any act appropriate for:
a. Winding up partnership affairs; or
Reason for necessity of court decree: In the b. Completing transactions unfinished at
instances mentioned in Art. 1831, the facts may be dissolution.
so far open to dispute as to make necessary 2. He can also bind it by any transaction which would
judicial determination as to dissolution rather bind the partnership as if dissolution had not
than allow them to be the occasion for automatic
dissolution by operation of law [de Leon at 231].
taken place, provided the other party to the b. Had not extended credit to the partnership
transaction: prior to dissolution, and, having no
a. Had extended credit to the partnership prior knowledge or notice of his want of authority,
to dissolution and had no knowledge or the fact of his want of authority has not been
notice thereof; or advertised [Art. 1834, CC].
b. Had not so extended credit but had known of
the partnership prior to dissolution, and Art. 1834, CC does not affect the liability under Art.
having no knowledge or notice of dissolution, 1825, CC of any person who, after dissolution,
the fact had not been advertised in a represents himself or consents to another
newspaper of general circulation in the place representing him as a partner in a partnership
[or in each place if more than one] at which engaged in carrying on business [Art. 1834, CC].
the partnership business was regularly
carried on [par. 1, Art. 1834, CC]. c. On Liability for Contracts
Note the character of the notice required: after Dissolution by
1. As to persons who extended credit to the Specific Causes
partnership prior to dissolution, notice must be
actual. General rule:
2. As to persons who merely knew of the existence of A contract:
the partnership, publication in a newspaper of 1. Entered into by a partner acting for the
general circulation in the place of business of the partnership
partnership is sufficient. 2. After dissolution by
a. act,
b. On Liability for b. death or
c. insolvency
Transactions after of a partner
Dissolution Binds the other partners.
Any act of a partner after dissolution in no case binds Exception: A partner may be relieved when there is an
the partnership in the following cases: agreement to that effect between:
1. Where the partnership is dissolved because it is 1. Himself;
unlawful to carry on the business, unless the act is 2. The partnership creditor; and
appropriate for winding up partnership affairs; 3. The person or partnership continuing the
2. Where the partner has become insolvent; business.
3. Or, where the partner has no authority to wind up
partnership affairs, except by a transaction with Such agreement may be inferred from the course of
one who: dealing between:
a. Had extended credit to the partnership prior 1. the creditor having knowledge of the dissolution
to dissolution and had no knowledge or and
notice of his want of authority; or 2. the person or partnership continuing the
business.
In case of dissolution by death, the individual Note: When dissolution is caused by expulsion,
property of a deceased partner is liable for obligations expelled partner may be discharged from all
of the partnership incurred while he was a partner, partnership liability in the same manner as above but
after payment of his separate debts [Art.1835, CC]. he shall receive in cash only the net amount due him
from the partnership [de Leon].
4. W inding Up Partners
b. Dissolution in
a. Who May Wind Up Contravention of the
Agreement
The following partners have the right to wind up the
partnership affairs: PARTNER WHO DID NOT CAUSE THE
1. Those designated in an agreement; DISSOLUTION
2. Those who have not wrongfully dissolved the The partners who did not cause the dissolution
partnership; or wrongfully has the following rights:
3. The legal representative of the last surviving 1. To demand the right under par. 1, Art. 1837, CC;
partner, who was not insolvent. 2. To be indemnified for damages for breach of the
agreement against the partner who caused the
Any partner or his legal representative or assignee dissolution wrongfully [Art. 1837(1), CC];
may obtain winding up by the court, upon cause 3. To continue the business:
shown [Art. 1836, CC]. a. In the same name;
b. By themselves or jointly with others;
b. Manner of Winding Up c. During the agreed term for the partnership.
1. Extrajudicial, by the partners themselves; or For the purpose of continuing the business, the said
2. Judicial, under the control and direction of the partners may possess the partnership property
proper court. provided:
a. They secure the payment by bond approved by the
The action for liquidation of the partnership is court; or
personal. The fact that sale of assets, including real b. They pay any partner who has caused the
property, is involved does not change its character, dissolution wrongfully the value of his interest in
such sale being merely a necessary incident of the the partnership, less any damages recoverable,
liquidation of the partnership, which should precede and indemnity against all present or future
and/or is part of its process of dissolution [Claridades partnership liabilities [Art. 1837(2), CC].
v. Mercader, G.R. No. L-20341 (1966)].
PARTNER WHO CAUSED THE DISSOLUTION
The partner who caused the dissolution wrongfully
5. R ights of Partners in Case has the following rights:
of Dissolution 1. If the business is not continued, all the rights par.
1, Art. 1837, CC, subject to liability for damages;
2. If the business is continued, the right, as against
a. Dissolution without his co-partners and all claiming through them, to:
Violation of the Agreement a. Ascertainment, without considering the value
of the goodwill of the business, and payment
Each partner may have: to him in cash the value of his partnership
1. The partnership property applied to discharge the interest, less any damage, or have the
partnership liabilities; and payment secured by a bond approved by the
2. The surplus applied in cash to the net amount court; and
owing to the respective partners. b. Be released from all existing liabilities of the
partnership [Art. 1837(3), CC].
This is a right as against his co-partners and all
partners claiming through them in respect of their The goodwill of a business may be defined to be the
interests in the partnership. It cannot be availed if advantage which it has from its establishment or from
there is an agreement to the contrary [Art. 1837 (1), the patronage of its customers, over and above the
CC]. mere value of its property and capital. The goodwill
[which includes the firm name] is part of the
partnership assets and may be subject of sale [de b. Amount of Contribution for
Leon].
Liabilities
T
6. R ights of Partners in Case he rules for distribution of losses shall determine the
of Rescission contributions of the partners [Art. 1839(4), CC]. As
such:
A partner, who is induced by fraud or 1. The contribution shall be in conformity with the
misrepresentation to become such partner, may agreement.
rescind the contract. Without prejudice to any other 2. If only the share in profits has been stipulated, the
right, he is entitled: contribution shall be in the same proportion.
a. To a lien on, or right of retention of, the surplus of 3. In the absence of any stipulation, the contribution
the partnership property after satisfying the shall be in proportion to the capital contribution
partnership liabilities to third persons for any sum [Art. 1797, CC].
of money paid by him for the purchase of an
interest in the partnership and for any capital or c. Enforcement of
advances contributed by him; Contribution
b. To stand, after all liabilities to third persons have
been satisfied, in the place of the creditors of the The following persons have the right to enforce the
partnership for any payments made by him in contributions:
respect of the partnership liabilities; and 1. An assignee for the benefit of creditors;
c. To be indemnified by the person guilty of the fraud 2. Any person appointed by the court; or
or making the representation against all debts 3. To the extent of the amount which he has paid in
and liabilities of the partnership [Art. 1838, CC]. excess of his share of the partnership liability, any
partner or his legal representative [Art. 1839(5)
Nature of Fraud or Deceit and (6), CC].
The fraud or deceit must be material or substantial.
Mere exaggerations of one partner of the prospects of The individual property of a deceased partner shall be
enterprises or of value of the property which he has put liable for the contributions [Art. 1839(7), CC].
into the firm as capital is not ground for dissolution
[Pineda].
d. Order of Application of
7. Settling of Accounts Assets
between Partners The partnership liabilities shall rank, in order of
payment, as follows:
Subject to any agreement to the contrary, the 1. Those owing to creditors other than partners;
following rules shall be observed in settling accounts 2. Those owing to partners other than for capital and
between partners after dissolution. profits;
3. Those owing to partners in respect of capital;
a. Composition of Partnership 4. Those owing to partners in respect of profits [Art.
1839(2), CC].
Assets
1. The partnership property; and
e. Doctrine of Marshaling of
2. The contributions of the partners necessary for Assets
the payment of all the liabilities [Art. 1839(1), CC].
When partnership property and the individual
In accordance with the subsidiary liability of the properties of the partners are in possession of a court
partners, the partnership property shall be applied for distribution:
first to satisfy any liability of the partnership [Art. 1. Partnership creditors have priority on partnership
1839(3),CC]. property;
2. Separate creditors have priority on individual
property, saving the rights of lien of secured
creditors.
3. Anything left from either shall be applied to
satisfy the other [Art. 1839(8), CC].
2. C haracteristics
a. A limited partnership is formed by compliance
with the statutory requirements [Art. 1844, CC].
b. The business is controlled or managed by one or
more general partners, who are personally liable
to creditors [Arts. 1848 and 1850, CC].
c. One or more limited partners contribute to the
capital and share in the profits but do not manage
the business and are not personally liable for
partnership obligations beyond their capital
contributions [Arts. 1845, 1848 and 1856, CC].
d. Obligations or debts are paid out of the
partnership assets and the individual property of
the general partners [Art. 1843, CC].
e. The limited partners may have their contributions
back subject to conditions prescribed by law [Arts.
1844 and 1957, CC].
Creation
b. Purpose of Filing
Partners must: [1] sign
and swear to a 1. To give actual or constructive notice to potential
May be constituted in certificate in creditors or persons dealing with the partnership;
any form, subject to compliance with Art. and
exceptions 1844, CC; and [2] file 2. To acquaint them with its essential features,
the certificate for including the limited liability of limited partners
record in the SEC [de Leon].
d. False Statement in the Thus, if a limited partner takes part in the control of
the business, he becomes liable as a general partner
Certificate [Art. 1848, CC].
If the certificate contains a false statement, one who However, written consent or ratification by all
suffers loss by reliance thereon may hold liable any limited partners is necessary to authorize the
party to the certificate who knew the statement to be general partners to:
false: a. Do any act in contravention of the certificate;
1. At the time he signed the certificate; or b. Do any act which would make it impossible to
2. Subsequently, but within a sufficient time before carry on the ordinary business of the partnership;
the statement was relied upon to enable him to c. Confess a judgment against the partnership;
cancel or amend the certificate, or to file a petition d. Possess partnership property, or assign their
for its cancellation or amendment [Art. 1847, CC]. rights in specific property, for other than a
partnership purpose;
Requisites: e. Admit a person as a general partner;
1. The partner knew the statement to be false: f. Admit a person as a limited partner, unless the
a. At the time he signed the certificate; or right to do so is given in the certificate;
b. Subsequently, but having sufficient time to g. Continue the business with partnership property
cancel or amend it, or file a petition for its on the:
cancellation or amendment, and he failed to 1. Death;
do so; 2. Retirement;
2. The person seeking to enforce liability has relied 3. Insanity;
upon the false statement in transacting business 4. Civil interdiction; or
with the partnership; and 5. Insolvency of a general partner,
3. The person suffered loss as a result of reliance unless the right so to do is given in the certificate
upon such false statement. [Art. 1850, CC]
This fact must be stated in the certificate. The contributions of a limited partner may be cash or
other property, but not services [Art. 1845, CC].
Such person shall have:
1. all the rights and powers, and
A limited partner is liable for partnership obligations c. His surname does not appear in the
when he contributes services instead of only money or partnership name [Art. 1846, CC].
property to the partnership [de Leon].
b. Liability to Partnership
A limited partner is liable to the partnership:
1. For the difference between his actual contribution Creditors
and that stated in the certificate as having been
made; and General rule: A limited partner is not liable as a general
2. For any unpaid contribution which he agreed in partner. His liability is limited to the extent of his
the certificate to make in the future at the time contributions [Art. 1843, CC].
and on the conditions stated in the certificate [par.
1, Art. 1858, CC]. Exceptions: The limited partner is liable as a general
partner when:
He holds as trustee for the partnership: 1. His surname appears in the partnership name,
1. Specific property stated in the certificate as with certain exceptions [par. 2, Art. 1846, CC].
contributed by him, but which was not 2. He takes part in the control of the business [Art.
contributed or which has been wrongfully 1848, CC].
returned; and 3. The certificate contains a false statement of which
2. Money or other property wrongfully paid or he knows and which was relied upon, resulting in
conveyed to him on account of his contribution loss [Art. 1847, CC].
[par. 2, Art. 1858, CC].
In cases (1) and (2), the limited partner is entitled to
These liabilities can be waived or compromised only by reimbursement by the general partner/s.
the consent of all members. Such waiver or
compromise, however, shall not affect the right to Ratio: The general partner/s may not have been aware
enforce said liabilities of a creditor: of such false statement.
1. Who extended credit; or
2. Whose claim arose, after the filing or before a c. Liability to Separate
cancellation or amendment of the certificate, to
enforce such liabilities [par. 3, Art. 1858, CC].
Creditors
Even after a limited partner has rightfully received the On due application to a court of competent jurisdiction
return in whole or in part of his capital contribution, he by any separate creditor of a limited partner, the court
is still liable to the partnership for any sum, not in may:
excess of such return with interest, necessary to 1. Charge his interest with payment of the
discharge its liabilities to all creditors: unsatisfied amount of such claim;
1. Who extended credit; or 2. Appoint a receiver; and
2. Whose claims arose before such return [par. 4, 3. Make all other orders, directions and inquiries
Art. 1858, CC]. which the circumstances of the case may require.
The share of limited partners in respect to their claims limited partner in case of substitution or addition
for capital, profits, or for compensation by way of of a limited or general partner; and
income, is in proportion of their contribution, unless: 3. The writing to amend (with the certificate, as
1. There is a statement in the certificate as to their amended) or to cancel must be filed for record in
share in the profits; or the SEC.
2. There is a subsequent agreement fixing their
share [Art. 1863, CC]. When a person required to sign the writing, a person
desiring the cancellation or amendment may petition
the court to order cancellation or amendment. The
11. Amendment or court shall order the SEC to record the cancellation or
Cancellation of Certificate amendment if it finds that the petitioner has a right to
have the writing executed.
a. Cancellation of Certificate From the moment the amended certificate/writing or
a certified copy of a court order granting the petition
The certificate shall be cancelled when: for amendment has been filed, such amended
1. The partnership is dissolved; or certificate shall thereafter be the certificate of
2. All limited partners cease to be such limited partnership [Art. 1865, CC].
partners.
c. Requirements for
Amendment or
Cancellation
To amend or cancel a certificate:
1. The amendment or cancellation must be in
writing;
2. It must be signed and sworn to by all the members
including the new members, and the assigning
CREDIT TRANSACTIONS
Civil Law
the bailee, the bailor retains ownership of the thing 7. Obligation to be solidarily liable when there are
loaned. two or more bailees to whom a thing is loaned in
the same contract. [Art. 1945, CC]
c. Use by the Bailee 8. No obligation to answer for deterioration of the
thing loaned due only to the use thereof and
Rules as to who may make use of the property without his fault [Art. 1943, CC]
loaned
General rule: the bailee acquires permissive use of the Note: If, for the purpose of making use of the thing
thing loaned only for himself. He may not lend nor loaned, the bailee incurs ordinary or extraordinary
lease the thing loaned to him to a third person. expenses which are neither for the use nor the
preservation of the thing, he is not entitled to
Exception: the members of the bailee’s household reimbursement. [Art. 1950, CC]
may make use of the thing loaned
e. Obligations of the Bailor
Exceptions to the exception:
1. if there is a stipulation to the contrary, or 1. Obligation not to demand the return of the thing
2. the nature of the thing forbids such use. [Art. until the expiration of the term or after the
1939(2), CC] accomplishment of the use [Art. 1946, CC]
Note: Bailor has no right of abandonment; he cannot 1. Death of either the bailor or the bailee [Art. 1939,
exempt himself from payment of expenses or CC]
damages to the bailee by abandoning the thing to the 2. Expiration of term or accomplishment of purpose
latter. [Art. 1952, CC] [Art. 1946, CC]
3. Bailor demands the return in case the bailee
f. Liability for Deterioration committed acts of ingratitude
4. Upon demand in case of precarium
General rule: the bailee is liable for the deterioration of 5. Bailor demands the return (and not just
the thing loaned. temporary use) in case bailor has urgent need of
the thing loaned
Exception: when the deterioration of the thing is due
only to the use thereof and without his fault. [Art. 2. M utuum
1943, CC]
Mutuum – a contract where one of the parties
g. Liability for Loss (creditor) delivers to another (debtor/borrower)
money or other consumable thing upon the condition
General Rule: The Bailee is not liable for loss of the that the same amount of the same kind and quality
thing due to fortuitous event. [Art. 1174, CC] shall be paid.
f. Hotel-Keeper’s Right to
Retention
The hotel-keeper has a right to retain the things
brought into the hotel by the guest, as a security for
credits on account of—
1. lodging,
2. supplies usually furnished to hotel guests [Art.
2004, CC]
3. Judicial Deposit or
Sequestration
Takes place when an attachment or seizure of
property in litigation is ordered [Arts. 2005-2009, CC]
It is the only type of deposit that may involve
immovable property.
A guaranty may secure the performance of a A guaranty may secure the performance of a
voidable, unenforceable, and natural obligation conditional obligation [Art. 2053, CC]
[Art. 2052(2), CC] a. Principal obligation subject to a suspensive
A guaranty may secure the performance of a: condition – the guarantor is liable only after the
a. Voidable contract – such contract is binding, fulfillment of the condition.
unless it is annulled by a proper court action b. Principal obligation subject to a resolutory
b. Unenforceable contract – because such contract condition – the happening of the condition
is not void extinguishes both the principal obligation and
c. Natural obligation – the creditor may proceed the guaranty
against the guarantor although he has no right of
action against the principal debtor for the reason A guarantor’s liability cannot exceed the principal
that the latter’s obligation is not civilly obligation [Art. 2054, CC]
enforceable. When the debtor himself offers a General rule: Guaranty is a subsidiary and accessory
guaranty for his natural obligation, he impliedly contract – guarantor cannot bind himself for more
recognizes his liability, thereby transforming the than the principal debtor and even if he does, his
obligation from a natural into a civil one. liability shall be reduced to the limits of that of the
debtor. But the guarantor may bind himself for less
A guaranty may secure a future debt [Art. 2053, CC] than that of the principal.
Continuing Guaranty
a. Not limited to a single transaction but which
The guarantor has the duty to set up the benefit of b. Effects of Guaranty
excussion [Art. 2060, CC]
As soon as he is required to pay, guarantor must also between the Debtor and
point out to the creditor available property (not in the Guarantor
litigation or encumbered) of the debtor within the
Philippines. The guarantor who pays has the right to be
subrogated to the rights of the creditor [Art. 2067,
The creditor has the duty to resort to all legal CC]
remedies [Arts. 2058 and 2061, CC] A guarantor who pays the debt is entitled to every
After the guarantor has fulfilled the conditions remedy which the creditor has against the principal
required for making use of the benefit of excussion, it debtor, to enforce every security and all means of
becomes the duty of the creditor to: payments; to stand in the place of the creditor not
1. Exhaust all the property of the debtor pointed out only through the medium of the contract, but even by
by the guarantor; means of the securities entered into without the
2. If he fails to do so, he shall suffer the loss for the knowledge of the surety; having the right to have
insolvency of the debtor, but only to the extent of those securities transferred to him though there was
the value of the said property no stipulation for it, and to avail himself of all
securities against the debtor.
The creditor has the duty to notify the guarantor in
the action against the debtor [Art. 2062, CC] However, if a guarantor has compromised with the
Notice to the guarantor is mandatory in the action creditor for the payment of the obligation, then the
against the principal debtor. The guarantor, however, guarantor cannot demand more than what he has
is not duty bound to appear in the case, and his non- really paid.
appearance shall not constitute default, w/ its
consequential effects. The guarantor has the duty to notify the debtor
before paying the creditor [Art. 2068; see also Arts.
Rationale: To give the guarantor the opportunity to 1236 and 1237, CC]
allege and substantiate whatever defenses he may Should payment be made without notification or
have against the principal obligation, and chances to against the debtor’s will, and supposing the debtor
set up such defenses as are afforded him by law has already made a prior payment, the debtor would
be justified in setting up the defense that the
A compromise shall not prejudice the person not obligation has already been extinguished by the time
party to it [Art. 2063, CC] the guarantor made the payment. The guarantor will
A compromise between creditor and principal debtor then lose the right of reimbursement and
benefits the guarantor but does not prejudice him. consequently the right of subrogation.
The guarantor cannot demand reimbursement for
A compromise between guarantor and the creditor payment made by him before the obligation has
benefits but does not prejudice the principal debtor. become due [Art. 2069, CC]
General rule: Since a contract of guaranty is only
Co-guarantors are entitled to the benefit of division subsidiary, the guarantor cannot be liable for the
[Art. 2065, CC] obligation before the period on which the debtor’s
General Rule: The benefit of division applies only when liability will accrue. Any payment made by the
there are several guarantors and one debtor for a guarantor before the obligation is due cannot be
single debt. A co-guarantor is liable only to the extent indemnified by the debtor. Can only demand
of his share in the obligation as divided among all the reimbursement upon expiration of the period.
co-guarantors.
Exception: Prior consent or subsequent ratification by
Exception: the debtor
1. Liability will be solidary if it has been expressly
stipulated. The guarantor may proceed against the debtor even
2. Also, the circumstances enumerated in Art. 2059, before payment has been made [Art. 2071, CC]
CC will preclude application of the benefit of General rule: Guarantor has no cause of action against
division. the debtor until after the former has paid the
obligation.
2. In case of insolvency of the principal debtor; Requisites for the applicability of Art. 2073, CC
3. When the debtor has bound himself to relieve him 1. There are two or more guarantors of the same
from the guaranty within a specified period, and debtor for the same debt
this period has expired; 2. Payment has been made by one guarantor;
4. When the debt has become demandable, by 3. The payment was made because
reason of the expiration of the period for a. Of the insolvency of the debtor, or
payment; b. By judicial demand
5. After the lapse of 10 years, when the principal 4. The paying guarantor seeks to be indemnified
obligation has no fixed period for its maturity, only to the extent of his proportionate share in the
unless it be of such nature that it cannot be total obligation.
extinguished except within a period longer than
10 years; For purposes of proportionate reimbursement, the
6. If there are reasonable grounds to fear that the other guarantors may interpose such defenses
principal debtor intends to abscond; against the paying guarantor as are available to the
7. If the principal debtor is in imminent danger of debtor against the creditor, except those that are
becoming insolvent. personal to the debtor [Art. 2074, CC]
When the Debtor has two or more Guarantors For The guarantors are released if by some act of the
the Same Debt creditor they cannot be subrogated to the rights,
1. The one who pays may demand from each of the mortgages and preferences of the latter. [Art. 2080,
others the share proportionally owing to him CC]
2. If any of the guarantors is insolvent, his share
shall be borne by the others, including the payer, In order to constitute an extension discharging the
in the same proportion [Art. 2073, CC] surety, it should appear that the extension was for:
a. a definite period,
manufactured or the work done. [Art. 1707, CC] e. The thing pledged may be alienated by the
pledgor or owner only with the consent of the
Note: pledgee. Ownership of the thing pledged is
a. In legal pledges, the remainder of the price of the transmitted to the vendee or transferee as soon
sale shall be delivered to the obligor. [Art. 2121, as the pledgee consents to the alienation, but the
CC] latter shall continue to have possession [Art.
b. Public auction of legal pledges may only be 2097, CC].
executed after demand of the amount for which f. Creditor has the right to retain the thing in his
the thing is retained. It shall take place within one possession or in that of a third person to whom it
month after the demand, otherwise the pledgor has been delivered, until the debt is paid [Art.
may demand the return of the thing pledged, 2098].
provided s/he is able to show that the creditor did g. Special laws apply to pawnshops and
not cause the public sale without justifiable establishments engaged in making loans secured
grounds. [Art. 2122, CC] by pledges. Provisions of the CC shall apply
subsidiarily to them. [Art. 2123, CC]
3. Essential Requisites In case of doubt as to whether a transaction is a
pledge or a dation in payment, the presumption is in
Provisions Common to Pledge and Mortgage [Art. favor of pledge, the latter being the lesser
2085, CC] transmission of rights and interests. [Manila Banking
a. Constituted to secure the fulfillment of a principal Corp. v. Teodoro, G.R. No. 53955 (1989)]
obligation.
b. Pledgor or mortgagor must be the absolute
owner of the thing pledged or mortgaged. 4. R equisites for Perfection
c. The persons constituting the pledge or mortgage
have the free disposal of their property, and in the a. For the pledge to take effect between the parties,
absence thereof, that they be legally authorized the thing pledged is placed in the possession of
for the purpose. the creditor or a third person [Art. 2093, CC]
Note: Third persons who are not parties to the b. For the pledge to take effect as against third
principal obligation may secure the latter by persons, a description of the thing pledged and
pledging or mortgaging their own property. [Art. the date of the pledge should appear in a public
2085, CC] instrument [Art. 2096, CC]
d. Cannot exist without a valid obligation, but may
be constituted to guarantee the performance of a
voidable or unenforceable contract. [Art. 2052,
5. O bligations of Pledgee
CC]
a. The pledgee cannot deposit the thing pledged
e. Debtor retains the ownership of the thing given as
with a 3rd person, unless there is a contrary
a security. stipulation [Art. 2100 (1), CC].
f. When the principal obligation becomes due, the b. Pledgee is responsible for the acts of his agents
thing pledged or mortgaged may be alienated for or employees with respect to the thing pledged
the payment to the creditor. [Art. 2087, CC]
[Art. 2100 (2), CC].
c. General Rule: Has no right to use the thing or to
Provisions Applicable Only to Pledge
appropriate its fruits without authority from the
a. Transfer of possession to the creditor or to third
owner. If he does so, or misuses it in any way, the
person by common agreement is essential [Art.
owner may ask that the thing be judicially or
2093, CC]. extrajudicially deposited. [Art. 2104, CC]
b. All movables within the commerce of man may be
pledged as long as they are susceptible of Exception: When the preservation of the thing
possession [Art. 2094, CC].
pledged requires its use, it must be used by the
c. Incorporeal rights may be pledged. The
creditor only for that purpose.
instruments representing the pledged rights
d. May cause the public sale of the thing pledged if,
shall be delivered to the creditor; if negotiable,
without fault on his part, there is danger of
must be indorsed [Art. 2095, CC].
destruction, impairment or diminution in value of
d. Pledge shall take effect against 3rd persons only the thing. The proceeds of the auction shall be a
if the following appear in a public instrument: security for the principal obligation [Art. 2108,
1. Description of the thing pledged. CC].
2. Date of the pledge [Art. 2096, CC].
Effect on Pledge
The nullity of the pactum commissorium does not 1. Form of Chattel Mortgage
affect the validity of the contract of pledge. The
creditor may recover the credit from the proceeds of a The Chattel Mortgage Law prescribes a specific
foreclosure sale effected in accordance with law format for a chattel mortgage. It must be written and
[Gomez-Somera]. subscribed to by the parties in the presence of 2
witnesses. The law also requires it to contain specific
terms.
10. Equitable Mortgage
It is a contract that reveals the intention of the parties
a. Required Recording
to charge property as security for a debt, but contains
nothing impossible or contrary to law [Gomez- General rule: the chattel mortgage shall not be valid
Somera]. against any person unless the mortgage is recorded in
the office of the register of deeds
Essential Requisites
Exception: it shall be valid between the parties
a. Parties entered into a contract denominated as a
contract of sale
Place of Recording
b. The true intention is to secure an existing debt by The mortgage must be recorded in the office of the
way of mortgage
register of deeds:
1. If the mortgagor resides in the Philippines at the
Presumption that there is an equitable mortgage: time of making the mortgage - of the province in
a. When the price of a sale with right to repurchase which the mortgagor resides at the time of
is unusually inadequate; making the same.
b. When the vendor remains in possession as lessee
2. If the mortgagor resides outside the Philippines –
or otherwise;
of the province in which the property is situated
c. When upon or after the expiration of the right to
3. If the province in which the property is situated
repurchase another instrument extending the
and the province of the mortgagor’s place of
period of redemption or granting a new period is
residence are different – it shall be recorded in
executed; both provinces. [Sec. 5, Chattel Mortgage Law]
d. When the purchaser retains for himself a part of
the purchase price;
e. When the vendor binds himself to pay the taxes b. Contents of an Affidavit of
on the thing sold; Good Faith
f. In any other case where it may be fairly inferred
that the real intention of the parties is that the 1. That chattel mortgage is made solely for the
transaction shall secure the payment of a debt or purpose of securing the obligation specified
the performance of any other obligation [Art. therein
1602, CC] 2. That such principal obligation is just and valid,
not entered into for the purpose of fraud
2. O bligations Secured
A chattel mortgage cannot secure after-incurred
obligations or future debts. [Gomez-Somera]
2. O bligations Secured
General Rule: A real estate mortgage is limited to the
principal obligations mentioned in the contract
(within its four corners). [Lim Julian v. Lutero, G.R. No.
L-25235 (1926)]
3. Characteristics
Page 368 of 497
U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW
As a general rule, the mortgagor retains possession of The right to alienate the real estate mortgage credit is
the property. He may deliver said property to the the right of the mortgagee to assign its rights under
mortgagee without altering the nature of the contract the principal obligation secured. Although the
of mortgage. mortgagee does not become the owner of the
collateral, it owns the real estate mortgage and may
Mortgage creates an encumbrance over the property, alienate the same. [Art. 2128, CC; Gomez-Somera]
but ownership of the property is not parted with. It
merely restricts the mortgagor’s jus disponendi over Pactum de non alienando (Sp. pacto de non
the property. The mortgagor may still sell the alienando) is prohibited by Art. 2130
property, and any stipulation to the contrary (pactum 1. Stipulations forbidding the mortgagor from
de non alienando) is void [Art. 2130, CC] selling the collateral
2. Stipulations forbidding the mortgagor from
However, a stipulation prohibiting the mortgagor selling the collateral without the consent of the
from entering into second or subsequent mortgages mortgagee
is valid since there is no law prohibiting it. [Litonjua et
al. v. L&R Corporation, et al., G.R. No. 130722 (1999), Alienation or assignment of mortgage credit is valid
citing Philippine Industrial Co. v. El Hogar & Vallejo, even if it is not registered.
G.R. No. L-20482 (1923)]
b. Characteristics of the
4. K inds
Mortgage a. Voluntary – constituted by the will of the owner
of the property on which it is created
A registered real estate mortgage is a right in rem, a b. Legal – required by law to be executed in favor of
lien that a creditor has on the property; therefore, it is certain persons:
inseparable from the collateral and until discharged, 1. Persons in whose favor the law establishes a
it follows the property. [Gomez-Somera] mortgage have no other right than to
demand the execution and recording of the
A real estate mortgage that is unregistered binds the document in which the mortgage is
parties to the contract and it only gives the mortgagee formalized [Art. 2125, CC]
the right to demand the execution and recording of 2. The bondsman who is to be offered in virtue
the mortgage. To bind third parties, a real estate of a provision of law or of a judicial order shall
mortgage must be recorded in the Registry of have the qualifications prescribed in Art
Property. 2056 [integrity, capacity to bind himself, and
sufficient property to answer for the
It is not an essential requisite that the principal of the obligation], and in other laws [Art. 2082, CC]
credit bears interest, or that the interest as
compensation for the use of the principal and the 3. If the person bound to give a bond should not
enjoyment of its fruits be in the form of a certain be able to do so, a pledge or mortgage
percentage thereof. considered sufficient to recover his obligation
shall be admitted in lieu thereof [Art. 2083,
Mortgage extends to the natural accessions, to the CC]
improvements of growing fruits and the rents or c. Equitable – One which, although lacking the
income not yet received when the obligation becomes proper formalities of a mortgage, shows the
due, including indemnity from insurance, and/or intention of the parties to make the property a
amount received from expropriation for public use security for the debt.
[Art. 2127, CC] 1. Lien created by equitable mortgage ought
1. Applies only when the accessions and accessories not to be defeated by requiring compliance
subsequently introduced belongs to the with formalities necessary to the validity of
mortgagor. voluntary real estate mortgage. Ex.: Pacto de
2. To exclude them, there must be an express retro
stipulation, or the fruits must be collected before 2. Provisions governing equitable mortgage:
the collateral by paying the mortgage obligation. mortgagor or mortgagee. This is an agency
[Top Rate International Services, Inc. v. IAC, G.R. coupled with interest.
Nos. L-67496 and L-68257 (1986)] 3. Public sale should be made after proper notice to
It is this equity of redemption that is conferred on the public; otherwise, it is a jurisdictional defect
the mortgagor’s successors-in-interest or on third which could render the sale voidable.
persons acquiring rights over the collateral from General Rule: Statutory provisions governing
the mortgage subsequent. posting of notice must be strictly complied with
Although these subsequent or junior lien-holders and even slight deviations will invalidate the
acquire the equity of redemption, this right is notice.
strictly subordinate to the superior lien of the first
mortgagee. [Gomez-Somera] Exception: If the objectives are attained,
3. If the mortgagor fails to pay at time directed, the immaterial errors and mistakes may not affect
court, upon motion, shall order the property to be the sufficiency of the notice. [Metropolitan Bank
sold to the highest bidder at a public auction. and Trust Company v. Wong, G.R. No. 120859
4. Upon confirmation of the sale by the court, also (2001) discussing Olizon v. CA, G.R. No. 107075
upon motion, it shall operate to divest the rights (1994)]
of all parties to the action and to vest their rights 4. There is no need to notify the mortgagor, where
to the purchaser subject to such rights of there is no contractual stipulation therefor.
redemption as may be allowed by law.
Note: A foreclosure sale is not complete until it is Proper notice consists of:
confirmed. Thus, after the foreclosure sale but a. posting notice in three public places and/or
before its confirmation, the court may grant the b. publication in newspaper of general
judgment debtor or mortgagor the equity of circulation
redemption. Purpose of notice is to obtain the best bid for the
5. Before the confirmation, the court retains control foreclosed property
of the proceedings; execution on judgment 5. Surplus proceeds of foreclosure sale belong to
6. The proceeds of the sale shall be applied to the the mortgagor.
payment of the: 6. Debtor (who must be a natural person) has the
a. costs of the sale; right to redeem the property sold within 1 year
b. amount due the mortgagee; from and after the date of sale.
c. claims of junior encumbrancers or persons a. If the mortgagee is a bank, quasi-bank or
holding subsequent mortgages in the order trust entity and the debtor is a juridical
of their priority; and person, then there is no right of redemption.
d. the balance, if any shall be paid to the However, juridical mortgagors may redeem
mortgagor the property before the registration of the
7. Sheriff’s certificate is executed, acknowledged TCT to the buyer, which is similar to the
and recorded to complete the foreclosure equity of redemption. The TCT must be
registered within three months after the
Nature of judicial foreclosure proceedings foreclosure.
1. Quasi in rem action. Hence, jurisdiction may be b. The mortgagor can only legally transfer the
acquired through publication. right to redeem and the use of the property
2. Foreclosure is only the result or incident of the during the period of redemption.
failure to pay debt. 7. Remedy of party aggrieved by foreclosure is a
3. Survives death of mortgagor. petition to set aside sale and the cancellation of
writ of possession. However, if the mortgagee is
b. Extrajudicial Foreclosure a bank, the mortgagor is required to post a bond
equal to the value of the mortgagee’s claim.
A real estate mortgage may be extrajudicially 8. Republication of the notice of sale is necessary for
foreclosed only if there is a special power inserted or the validity of the postponed extrajudicial sale
attached to the document in which the real estate 9. In foreclosure of real estate mortgage under Act
mortgage appears and only in accordance with the 3135, the buyer at auction may petition the land
provisions of Act No. 3135. [Gomez-Somera] registration court for a writ of possession pending
the one-year period of redemption of the
Act No. 3135 foreclosed property.
1. Applies to mortgages where the authority to
foreclose is granted to the mortgagee.
2. Authority is not extinguished by death of
5. O bligations of Antichretic
Creditor
a. To pay taxes and charges on the estate, including
necessary expenses [Art. 2135, CC]
Note: The creditor may avoid said obligation by:
1. Compelling the debtor to reacquire
enjoyment of the property
2. By stipulation to the contrary
b. To apply all the fruits, after receiving them, to the
payment of interest, if owing, and thereafter to
the principal
c. To render an account of the fruits to the debtor
d. To bear the expenses necessary for its
preservation and repair
6. R emedies of Creditor in
Case of Non-Payment of
Debt
a. Action for specific performance
b. Petition for the sale of the real property as in a
foreclosure of mortgage under Rule 68 of the
Rules of Court [Art. 2137, CC]
1. The parties, however, may agree on an
extrajudicial foreclosure in the same manner
as they are allowed in contracts of mortgage
and pledge [Tavera v. El Hogar Filipino, Inc.,
G.R. 45963 (1939)]
2. A stipulation authorizing the antichretic
creditor to appropriate the property upon the
non-payment of the debt within the agreed
period is void [Art. 2088, CC]
1. The gestor has acted in good faith; and c. When Money or Thing
2. The property or business is intact, ready to be
returned to the owner. [Art. 2151, CC] Delivered is Owned by
Third Person
c. Effect of Ratification
The payee cannot demand that the payor prove his
The ratification of the management by the owner of ownership of the thing delivered.
the business produces the effects of an express
agency, even if the business may not have been Nevertheless, should he discover that the thing has
successful. [Art. 2149, CC] been stolen and who its true owner is, he must advise
the latter.
d. Extinguishment of If the owner, in spite of such information, does not
Management claim it within the period of one month, the payee
shall be relieved of all responsibility by returning the
1. When the owner repudiates or puts an end thing deposited to the payor.
thereto
2. When the gestor withdraws from the If the payee has reasonable grounds to believe that
management, subject to Art. 2144 the thing has not been lawfully acquired by the payor,
3. By the death, civil interdiction, insanity or the former may return the same. [Art. 2158]
insolvency of the owner or the gestor. [Art. 2153,
CC] d. Liability of Payee
2. S olutio Indebiti (Undue If in bad faith, he shall be liable:
1. For legal interest if a sum of money is involved,
Payment) or
2. For the fruits received or which should have been
Solutio indebiti – takes place when something is received if the thing produces fruits, and
received when there is no right to demand it, and it 3. For any loss or impairment of the thing for any
was unduly delivered through mistake. The recipient cause, and
has the duty to return it [Art. 2154, CC]. 4. For damages to the person who delivered the
thing, until it is recovered. [Art. 2159, CC]
This situation my cover payment by reason of a
mistake in the construction or application of a If in good faith, he shall be liable:
doubtful or difficult question of law [Art. 2155, CC] 1. For the impairment or loss of the thing certain
and determinate or its accessories and accessions
The Government also comes within the scope of insofar as he has thereby been benefited.
solution indebiti. Tax refunds are based on such. [CIR 2. For the return of the price or assign the action to
v. Acesite, G.R. No. 147295 (2007)] collect the sum if he has alienated the same. [Art.
2160, CC]
a. When Debt Not Yet Due
e. Exemption from the
If the payer was in doubt whether the debt was due,
he may recover if he proves that it was not due. [Art.
Obligation to Restore the
2156, CC] Payment Unduly Made
b. Responsibility of Two or A person who, believing in good faith that the
payment was being made of a legitimate and
More Payees subsisting claim,
1. destroyed the document, or
When there has been payment of what is not due, 2. allowed the action to prescribe, or
their responsibility is solidary. [Art. 2157, CC] 3. gave up the pledges, or
4. cancelled the guaranties for his right shall be
exempt from the obligation to restore.
The person who paid unduly may proceed only regulations concerning property, undertakes to
against the true debtor or the guarantors with regard do the necessary work, even over his objection, he
to whom the action is still effective. [Art. 2162, CC] shall be liable to pay the expenses. [Art. 2169, CC]
g. When by accident or other fortuitous event,
f. Presumption of Payment movables separately pertaining to two or more
persons are commingled or confused, the rules
by Mistake, Defense on co-ownership shall be applicable. [Art. 2170,
CC]
The presumption arises if something which had never h. The rights and obligations of the finder of lost
been due or had already been paid was delivered; but personal property shall be governed by Articles
he from whom the return is claimed may prove that 719 and 720. [Art. 2171, CC]
the delivery was made out of liberality or for any other i. The right of every possessor in good faith to
just cause. [Art. 2163, CC] reimbursement for necessary and useful
expenses is governed by Article 546. [Art. 2172,
3. Other Quasi-Contracts CC]
Note: Possessor in good faith may retain the thing
a. When, without the knowledge of the person until he has been reimbursed [Casis].
obliged to give support, it is given by a stranger, j. When a third person, without the knowledge of
the latter shall have a right to claim the same the debtor, pays the debt, the rights of the former
from the former, unless it appears that he gave it are governed by Articles 1236 and 1237. [Art. 2173,
out of piety and without intention of being repaid. CC]
[Art. 2164, CC] Note: Cannot compel creditor to subrogate him in
b. When funeral expenses are borne by a third his rights [Art. 1237, CC].
person, without the knowledge of those relatives k. When in a small community a nationality of the
who were obliged to give support to the inhabitants of age decide upon a measure for
deceased, said relatives shall reimburse the third protection against lawlessness, fire, flood, storm
person, should the latter claim reimbursement. or other calamity, anyone who objects to the plan
[Art. 2165, CC] and refuses to contribute to the expenses but is
rd
Note: Only necessary expenses. 3 person must benefited by the project as executed shall be
claim [Casis]. liable to pay his share of said expenses. [Art. 2174,
c. When the person obliged to support an orphan, CC]
or an insane or other indigent person unjustly l. Any person who is constrained to pay the taxes of
refuses to give support to the latter, any third another shall be entitled to reimbursement from
person may furnish support to the needy the latter. [Art. 2175, CC]
individual, with right of reimbursement from the
person obliged to give support. The provisions of
this article apply when the father or mother of a
child under eighteen years of age unjustly refuses
to support him. [Art. 2166, CC]
d. When through an accident or other cause a
person is injured or becomes seriously ill, and he
is treated or helped while he is not in a condition
to give consent to a contract, he shall be liable to
pay for the services of the physician or other
person aiding him, unless the service has been
rendered out of pure generosity. [Art. 2167, CC]
e. When during a fire, flood, storm, or other
calamity, property is saved from destruction by
another person without the knowledge of the
owner, the latter is bound to pay the former just
compensation. [Art. 2168, CC]
Note: Just compensation probably pertains to
value of service rendered, not the value of the
property saved [The Law on Contracts, Casis
(2016), p. 285].
f. When the government, upon the failure of any
person to comply with health or safety
Concurrence and Note: Only taxes in Arts. 2241 and 2242, CC enjoy a
preference; for all other claims, there is only a
Preference of Credits concurrence of credits. [Gomez-Somera]
preferred creditors may be bindingly adjudicated [De (7) For expenses of salvage, upon the goods
Barretto v. Villanueva, G.R. No. L-14938 (1962)]. This salvaged;
applies to cases involving either specific immovable or (8) Credits between the landlord and the tenant,
specific movable property. [DBP v CA, G.R. No. arising from the contract of tenancy on shares,
126200 (2001)] on the share of each in the fruits or harvest;
(9) Credits for transportation, upon the goods
Taxes and assessments in 2244 do not have the carried, for the price of the contract and
overriding preference that 2241 and 2242 create. incidental expenses, until their delivery and for
[Gomez-Somera] thirty days thereafter;
(10) Credits for lodging and supplies usually
c. Common Credits furnished to travellers by hotel keepers, on the
movables belonging to the guest as long as
These enjoy no preference, as there is only a such movables are in the hotel, but not for
concurrence of credits, which must be paid pro rata money loaned to the guests;
regardless of dates [Arts. 2245, 2251, CC]. (11) Credits for seeds and expenses for cultivation
and harvest advanced to the debtor, upon the
These are not liens and do not attach to any specific fruits harvested;
property of the debtor. [Gomez-Somera] (12) Credits for rent for one year, upon the personal
property of the lessee existing on the
immovable leased and on the fruits of the
d. Special Preferred Credits same, but not on money or instruments of
on Specific Movable credit;
Property (13) Claims in favor of the depositor if the
depositary has wrongfully sold the thing
Art. 2241, CC. With reference to specific movable deposited, upon the price of the sale.
property of the debtor, the following claims or
liens shall be preferred: In the foregoing cases, if the movables to which the
(1) Duties, taxes and fees due thereon to the State lien or preference attaches have been wrongfully
or any subdivision thereof; taken, the creditor may demand them from any
(2) Claims arising from misappropriation, breach possessor, within thirty days from the unlawful
of trust, or malfeasance by public officials seizure.
committed in the performance of their duties,
on the movables, money or securities obtained
Trade-related claim preference over trade-related
by them;
assets
(3) Claims for the unpaid price of movables sold,
Trade-related claims of clients or customers of a
on said movables, so long as they are in the
securities market participant which, for purposes of
possession of the debtor, up to the value of the
investor protection, are hereby deemed to have
same; and if the movable has been resold by
absolute priority over all other claims of whatever
the debtor and the price is still unpaid, the lien
nature or kind insofar as trade-related assets are
may be enforced on the price; this right is not
concerned. [Sec 136, RA 10142]
lost by the immobilization of the thing by
destination, provided it has not lost its form,
substance and identity; neither is the right lost e. Special Preferred Credits
by the sale of the thing together with other on Specific Immovable
property for a lump sum, when the price
thereof can be determined proportionally; Property and Real Rights
(4) Credits guaranteed with a pledge so long as
the things pledged are in the hands of the Art. 2242, CC. With reference to specific
creditor, or those guaranteed by a chattel immovable property and real rights of the debtor,
mortgage, upon the things pledged or the following claims, mortgages and liens shall be
mortgaged, up to the value thereof; preferred, and shall constitute an encumbrance on
(5) Credits for the making, repair, safekeeping or the immovable or real right:
preservation of personal property, on the (1) Taxes due upon the land or building;
movable thus made, repaired, kept or (2) For the unpaid price of real property sold, upon
possessed; the immovable sold;
(6) Claims for laborers' wages, on the goods (3) Claims of laborers, masons, mechanics and
manufactured or the work done; other workmen, as well as of architects,
engineers and contractors, engaged in the (7) Fines and civil indemnification arising from a
construction, reconstruction or repair of criminal offense;
buildings, canals or other works, upon said (8) Legal expenses, and expenses incurred in the
buildings, canals or other works; administration of the insolvent's estate for the
(4) Claims of furnishers of materials used in the common interest of the creditors, when
construction, reconstruction, or repair of properly authorized and approved by the
buildings, canals or other works, upon said court;
buildings, canals or other works; (9) Taxes and assessments due the national
(5) Mortgage credits recorded in the Registry of government, other than those mentioned in
Property, upon the real estate mortgaged; Articles 2241, No. 1, and 2242, No. 1;
(6) Expenses for the preservation or improvement (10) Taxes and assessments due any province,
of real property when the law authorizes other than those referred to in Articles 2241,
reimbursement, upon the immovable No. 1, and 2242, No. 1;
preserved or improved; (11) Taxes and assessments due any city or
(7) Credits annotated in the Registry of Property, municipality, other than those indicated in
in virtue of a judicial order, by attachments or Articles 2241, No. 1, and 2242, No. 1;
executions, upon the property affected, and (12) Damages for death or personal injuries caused
only as to later credits; by a quasi-delict;
(8) Claims of co-heirs for warranty in the partition (13) Gifts due to public and private institutions of
of an immovable among them, upon the real charity or beneficence;
property thus divided; (14) Credits which, without special privilege,
(9) Claims of donors or real property for pecuniary appear in [a] a public instrument; or (b) in a
charges or other conditions imposed upon the final judgment, if they have been the subject of
donee, upon the immovable donated; litigation. These credits shall have preference
(10) Credits of insurers, upon the property insured, among themselves in the order of priority of
for the insurance premium for two years. the dates of the instruments and of the
judgments, respectively.
f. Ordinary Preferred Credits
Worker preference in case of bankruptcy
In the event of bankruptcy or liquidation of an
Art. 2244, CC. With reference to other property,
employer’s business, his workers shall enjoy first
real and personal, of the debtor, the following
preference as regards their wages and other monetary
claims or credits shall be preferred in the order
claims, any provisions of law to the contrary
named:
notwithstanding. Such unpaid wages and monetary
(1) Proper funeral expenses for the debtor, or
claims shall be paid in full before claims of the
children under his or her parental authority
government and other creditors may be paid. [Art. 110,
who have no property of their own, when
Labor Code]
approved by the court;
(2) Credits for services rendered the insolvent by
employees, laborers, or household helpers for g. Common Credits
one year preceding the commencement of the
proceedings in insolvency; Art. 2245, CC. Credits of any other kind or class, or
(3) Expenses during the last illness of the debtor by any other right or title not comprised in the four
or of his or her spouse and children under his preceding articles, shall enjoy no preference.
or her parental authority, if they have no
property of their own;
(4) Compensation due the laborers or their 3. Order of Preference of
dependents under laws providing for Credits
indemnity for damages in cases of labor
accident, or illness resulting from the nature of a. Credits which enjoy preference with respect to
the employment; specific movables exclude all others to the extent
(5) Credits and advancements made to the debtor of the value of the personal property to which the
for support of himself or herself, and family, preference refers [Art. 2246, CC].
during the last year preceding the insolvency; b. If there are two or more credits with respect to the
(6) Support during the insolvency proceedings, same specific movable property, they shall be
and for three months thereafter; satisfied pro rata, after the payment of duties,
4. E xempt Property
a. Present property
1. Family home [Arts. 152, 153 and 155, CC]
2. Right to receive support, as well as money or
property obtained by such support, shall not
be levied upon on attachment or execution.
[Art. 205, CC]
3. Rule 39, Sec. 13
4. Sec 118, Public Land Act [CA 141, as
amended]
b. Future property:
1. A debtor who obtains a discharge from his
debts on account of insolvency, is not liable
for the unsatisfied claims of his creditors with
said property [Sec. 68 and 69, Insolvency
Law, Act 1956]
2. Property in custodia legis and of public
dominion
SUCCESSION
Civil Law
2. A will was made in a foreign country by an alien 2. By the testator’s name written by a
[Art. 816] representative in his presence and under his
3. A will was made in the Philippines by an Alien express direction.
[Art. 817]
ATTESTATION CLAUSE: Attested and subscribed
Governing Law as to Place of Execution of Will by 3 or more credible witnesses in the presence of
Place of the testator and of one another [Art. 805, CC]
Testator Execution Governing Law
of Will The attestation clause shall state the following [par.
Philippine Law [Art. 3, Art. 805, CC]:
Philippines 1. Number of pages;
16, CC]
1. Law of the 2. The fact that the testator or his representative
country in which it under his express direction signed the will and
Filipino Outside of every page in the presence of instrumental
is executed [Art.
the witnesses
17, CC]; or
Philippines 3. That the witnesses signed the will and all its
2. Philippine Law
[Art. 815, CC] pages in the presence of the testator and of one
1. Philippine Law; or another.
However, those omissions which cannot be supplied PAGE NUMBERINGS: Numbered correlatively in
except by evidence aliunde would result in the letters placed on the upper part of each page (i.e.
invalidation of the attestation clause, and Page One of Five Pages). [Art. 805, CC]
consequently, of the will itself. • Mandatory part: pagination by means of a
conventional system
Example: • Directory part: pagination in letters on the
Whether the testator signed in the presence of the upper part of each page [Balane]
witnesses, or the witnesses signed in the presence of
the testator and of one another. ACKNOWLEDGED before a notary public by the
testator and the witnesses [Art. 806, CC]
Substantial Compliance Rule refers ONLY to the
form of the attestation clause The certification of acknowledgement need not be
Substantial compliance rule applies only in cases signed by the notary in the presence of the testator
when such defects and imperfections can be and the witnesses. [Javellana v. Ledesma, G.R. L-
supplied by an examination of the will itself. 7179 (1955)]
Supervening incompetency shall not prevent the Note, however, that in the case of Kalaw v. Relova,
allowance of the will [Art. 822, CC]. the alteration involved the designation of the
testator’s sole heir.
HOLOGRAPHIC WILLS
EFFECT OF INSERTION WRITTEN BY ANOTHER
FORMAL REQUIREMENTS FOR HOLOGRAPHIC PERSON ON THE VALIDITY OF A HOLOGRAPHIC
WILLS WILL
1. In writing [Art. 804, CC] When Made Effect
2. In a language known to the testator [Art. 804, Insertion considered
CC] After the execution, not written. Validity
3. Entirely written, dated and signed in the hand without consent of cannot be defeated by
of the testator himself [Art. 810, CC] testator the malice or caprice
of a third person
WITNESSES REQUIRED FOR PROBATE [Art. 811, After execution, with Will is valid, insertion
CC] consent is void
1. At least one witness who knows the Contemporaneous to Will is void because it
handwriting and signature of the testator; the execution of the is not written entirely
explicitly declare that it is the testator’s will by the testator
2. If contested – at least 3 of such witnesses
3. In the absence of a competent witness, expert JOINT WILLS
testimony may be resorted to 1. A single testamentary instrument,
2. Which contains the wills of two or more
General rule: The holographic will itself must be persons,
presented for probate [Gan v. Yap, G.R. No. L-12190 3. Jointly executed by them,
(1958)] 4. Either for their reciprocal benefit or for the
benefit of a third person.
Exception: If there is a photostatic copy or xerox copy
of the holographic will, it may be presented for Filipinos cannot make Joint Wills
probate [Rodelas v. Aranza, G.R. No. L58509 (1982)] Joint wills executed by Filipinos, whether in the
Philippines or abroad, are prohibited.
ADDITIONAL DISPOSITIONS
In holographic wills, the dispositions of the testator Note: Separate documents, each serving as one
written below his signature must be dated and independent will (even if written on the same sheet)
signed by him in order to make them valid as are not considered joint wills.
testamentary dispositions [Art. 812, CC]
MUTUAL WILLS
When a number of dispositions appearing in a 1. Executed pursuant to an agreement between
holographic will are signed without being dated, two or more persons,
and the last disposition has a signature and date, 2. Jointly executed by them,
such date validates the dispositions preceding it, 3. Either for their reciprocal benefit or for the
whatever be the time of prior dispositions. [Art. 813, benefit of a third person.
CC]
This is prohibited under Article 818.
INSERTION, CANCELLATION, ERASURE OR
ALTERATION [Art. 814, CC] RECIPROCAL WILLS
1. Testators name each other as beneficiaries in
Testator must authenticate by his full signature. their own wills (there are therefore 2 separate
Note: Full signature does not necessarily mean the documents),
testator’s full name; it rather means his usual and 2. Under similar testamentary plans - valid
customary signature [Balane].
4. by which any disposition made in the original Note: Even if a holographic will was not intended to
will is explained, added to, or altered. be revoked, unless a xerox copy exits, it can no
5. in order that it may be effective, it shall be longer be proved.
executed as in the case of a will. [Arts. 825-826,
CC] Law Governing Revocation [Art. 829, CC]
Place of Testator’s
Governing Law
Note: A codicil must be in the form of a will – can Revocation Domicile
have a notarial codicil attached to a holographic Philippines,
will, and a holographic codicil attached to a notarial or some
will. Philippines Philippine Law
other
country
e. Incorporation by 1. Law of
Domicile -
Reference Philippines Philippine
(This law
Requisites [Art. 827, CC] situation is 2. Law of lace of
1. The document or paper referred to in the will not Revocation
must be in existence at the time of the execution governed by 3. Law of Place
of the will. Art. 829) of Execution
2. The will must clearly describe and identify the of Will
same, stating among other things the number [Balane]
of pages thereof. Outside the
1. Law of the
3. It must be identified by clear and satisfactory Philippines
Place of
proof as the document or paper referred to Execution of
therein; and Will; or
4. It must be signed by the testator and the 2. Law of the
witnesses on each and every page, except in Foreign
place in which
case of voluminous books of account or Country
the testator
inventories. had his
domicile at
Note: Not available to holographic wills. the time of
revocation
f. Revocation
General Rule: A revocation made in a subsequent
A will may be revoked by the testator at any time will shall take effect, even if the new will should
before his death [Art. 828, CC] become inoperative by reason of the incapacity of
the heirs, devisees or legatees designated therein,
Modes of Revocation [Art. 830, CC] or by their renunciation. [Art. 832, CC]
1. By implication of law (e.g. preterition [Art. 854,
CC]; legal separation [Art. 63, FC]; Exception: Doctrine of Dependent Relative
unworthiness to succeed [Art. 1032, CC], et al.); Revocation [Molo v. Molo, G.R. No. L-2538 (1951)]
or
2. By the execution of a will, codicil or other writing The rule that where the act of destruction is
executed as provided in the case of wills (may connected with the making of another will so as to
be total or partial); or fairly raise the inference that the testator meant the
3. By burning, tearing, canceling, or obliterating revocation of the old to depend upon the efficacy of
the will with the intention of revoking it, by the the new disposition intended to be substituted, the
testator himself, or by some other person in his revocation will be conditional and dependent upon
presence, and by his express direction. the efficacy of the new disposition; and if for any
reason, the new will intended to be made as a
The act contemplating revocation must be done at substitute is inoperative, the revocation fails and the
any time before the death of the testator. The right original will remain in full force.
of revocation cannot be waived or restricted. [Art.
828, CC] The failure of the new testamentary disposition
upon whose validity the revocation depends is
equivalent to the non-fulfillment of a suspensive
condition and hence prevents the revocation.
False Cause/Illegal Cause The testator himself may, during his lifetime
A revocation based on a false cause or illegal cause petition the court having jurisdiction for the
is null and void [Art. 833, CC]. allowance of his will [Art. 838, CC].
It must appear from the will that the testator is Kinds of Probate
revoking because of the cause which he did not 1. Post-mortem: after death
know was false. 2. Ante-mortem: during the testator’s lifetime
Effect of Final Decree of Probate, Res Judicata on Effect of Predecease of Heir [Art. 856, CC]
Formal Validity Any heir who dies before the testator or is
The probate of a will by the probate court having incapacitated to succeed or renounces the
jurisdiction thereof is usually considered as inheritance transmits no rights of the testator to his
conclusive as to its due execution and validity and is own heirs. This is without prejudice to the rights of
also conclusive that the testator was of sound and representation [TOLENTINO].
disposing mind at the time when he executed the
will, and was not acting under duress, menace, a. Manner of Distribution
fraud, or undue influence, and that the will is
genuine and not a forgery. [Mercado v. Santos, G.R. 1. Heirs instituted without designation of shares
No. 45629 (1938)] shall inherit in equal parts [Art. 846, CC]
2. If the institution pertains to some heirs
Grounds for Denying Probate individually and others collectively, the
1. If the signature of the testator was procured by presumption is that all are individually
fraud; instituted [Art. 847, CC].
2. If it was procured by undue and improper 3. If siblings are instituted (whether full or half-
pressure and influence, on the part of the blood), the presumption is that the inheritance
beneficiary or some other person; is to be distributed equally [Art. 848, CC]. This
3. If the testator acted by mistake or did not is different from the rules of distribution in
intend that the instrument he signed should be intestate succession.
his will at the time affixing his signature 4. If parents and children are instituted, they are
thereto; presumed to have been instituted
4. If the testator was insane or otherwise mentally simultaneously and not successively [Art. 849,
incapable of making a will at the time of its CC].
execution;
5. If the formalities required by law have not been Note: By “unknown,” the Code actually means
complied with; or persons who could not be ascertained; a disposition
6. If it was executed through force or under in favor of a stranger is valid [Tolentino].
duress, or the influence of fear, or threats. [Art.
839, CC]
b. Preterition
2. I nstitution of Heir NOT NAMED ALTHOUGH NAMED
He is not named in the He is neither:
A will shall be valid even though it—
will. 1. Instituted as an heir
a. should not contain an institution of an heir; or 2. Expressly disinherited
b. such institution should not comprise the entire
3. Assigned any part of
estate; or
the estate
c. the person so instituted should not accept the
Thus: tacitly deprived of his right to legitime.
inheritance or be incapacitated to succeed.
In such cases, the testamentary dispositions made Concept [Art. 854, CC]
in accordance with law shall be complied with and 1. There must be a total omission of one, some or
the remainder of the estate shall pass to the legal all of the heir/s from the inheritance. [Seangio
heirs. [Art. 841, CC] v. Reyes, G.R. Nos. 140371-72 (2006)]
2. The omission must be that of a compulsory heir.
Extent of Grant [Art. 842, CC] 3. The compulsory heir omitted must be of the
Freedom of disposition depends upon the existence, direct line.
kind and number of compulsory heirs. 4. The omitted compulsory heir must be living at
a. No compulsory heirs – Testator has full power the time of the testator’s death or must at least
of disposition have been conceived before the testator’s
b. One with compulsory heirs cannot disregard the death.
rights of the latter; may only dispose of the free
portion of his estate If the heir in question is instituted in the will but the
portion given to him by the will is less than his
legitime – there is no preterition. [Reyes v. Barretto-
Datu, G.R. No. L-17817 (1967)]
Legend:
LC – legitimate ILC – illegitimate SS – surviving LP – legitimate ILP – illegitimate
children children spouses parents parents
¼ in equal
LP, ILC ½
portions
LP, SS ¼ ½
LP, SS, ILC 1/8 ¼ ½
½ in equal
ILC alone
portions
1/3 in equal
ILC, SS 1/3
portions
GR: ½
Exception:
marriage in
articulo mortis
and testator
dies within 3
months from
marriage – 1/3
SS alone
Exception to
the exception:
Have been
living together
as husband
and wife for
more than 5
years – 1/2
ILP alone ½
ILP, SS ¼ ¼
exercise it; should the latter not make use of it, the
How are Devises and Legacies with usufructs, life property shall be sold at public auction at the
annuities and pensions reduced? instance of any one of the interested parties [Art.
1. If the value of these grants exceeds the free 913, CC].
portion, it impairs the legitimes and should be
reduced Note: Rule on Reduction of Legitimes (Shares)
2. The compulsory heir has 2 options: Legitimate Never reduced, they are primary
a. Delivering to the devisee or legatee the free children and preferred
portion Surviving
b. Complying with the testamentary provision Never reduced
spouse
Subject to reduction, pro rata,
Note: Illegitimate without preference (you get the
If the devise subject to reduction should consist of children remaining portion, divide it by the
real property, which cannot be conveniently divided, number of illegitimate children)
it shall go to the devisee if the reduction does not
absorb ½ of its value; and in a contrary case, to the
compulsory heirs; but the former and the latter shall 6. R eserva Troncal
reimburse each other in cash for what respectively
belongs to them. The ascendant who inherits from his descendant
any property which the latter may have acquired by
The devisee who is entitled to a legitime may retain gratuitous title from another ascendant, or a
the entire property, provided its value does not brother or sister, is obliged to reserve such property
exceed that of the disposable portion and of the as he may have acquired by operation of law for the
share pertaining to him as a legitime [Art. 912, CC]. benefit of relatives who are within the third degree
and who belong to the line from which said property
If the heirs or devisees do not choose to avail came [Art. 891, CC].
themselves of the right granted by the foregoing,
any heir or devisee who did not have such right may
Origin
R’ista
Operation of law
Gratuitous title (legitimes or
(donation or intestacy) By instestacy
succession
Preposituss
Prepositus
R’ios
Modes of Revocation of Disinheritance Note: The moment that testator uses one of the acts
a. Reconciliation [Art. 922, CC] of unworthiness as a cause for disinheritance; he
b. Subsequent institution of the disinherited heir thereby submits it to the rules on disinheritance.
c. Nullity of the will which contains the Thus, reconciliation renders the disinheritance
disinheritance. ineffective.
Order of Payment in Case the Estate Is Not Sufficient to Cover All the Legacies and Devises
Art. 911: Order or Preference Art. 950
• Remuneratory legacy/devise
• Preferential legacy/devise
• Legitime of compulsory heirs
• Legacy for support
• Donations inter vivos
• Legacy for education
• Preferential legacies or devises
• Legacy/devise of specific, determinate thing which
• All other legacies or devises pro rata
forms a part of the estate
• All others pro rata
Application
• When the reduction is necessary to preserve the • When there are no compulsory heirs and the entire
legitime of compulsory heirs from impairment estate is distributed by the testator as legacies or
whether there are donations inter vivos or not; or
devises; or
• When, although, the legitime has been preserved • When there are compulsory heirs but their
by the testator himself there are donations inter legitime has already been provided for by the
vivos.
testator and there are no donations inter vivos.
Art. 911, CC governs when there is a conflict between Art. 950, CC governs when the question of reduction is
compulsory heirs and the devisees and legatees.
exclusively among legatees and devisees themselves.
Note: Section 16 of the Domestic Adoption Act (RA If the children survive alone, they inherit in their own
8552) provides that all legal ties between the right and share in equal proportions or per capita [Art.
biological parent(s) and the adoptee shall be severed 975, CC].
and the same shall then be vested on the adopter(s).”
Right of representation in the collateral line is only
b. Right of Representation possible in intestate succession. It cannot take place
in testamentary succession.
Representation – right created by fiction of law, by
virtue of which the representative is raised to the place Per stirpes
and the degree of the person represented, and Inheritance per stirpes means that the
acquires the rights which the latter would have if he representative/s shall receive only what the person
were living or if he could have inherited [Art. 970, CC] represented would have received, if he were living or
could inherit [Art.975, CC].
Effect of Representation
The representative heir acquires the rights which the If there are more than one representative in the same
person represented would have if he were living or if degree, then it shall be divided equally, without
he could have inherited. prejudice to the distinction between legitimate and
illegitimate, if applicable.
When it occurs
Representation is allowed with respect to inheritance The Double Heirship Test
conferred by law (legitime and intestate based on Art. In determining whether or not representation is
923) proper, it is necessary that the representative must be
a legal heir of both the person he is representing and
It occurs only in the following instances: (DIP) the decedent [Art. 973, CC].
1. Predecease of an heir
2. Incapacity or unworthiness But the representative need not be qualified to
3. Disinheritance [Art. 923, CC] succeed the person represented [Art. 971, CC]. In the
same manner, the person represented need not be
Note: There is no representation to a devise or a qualified to succeed the decedent, as it is his
legacy. disqualification which gives rise for representation to
apply.
A renouncer can represent, but cannot be • Legitimate children may not be represented by
represented. Rationale is found in Art. 971 which their illegitimate descendants (because of the bar
states that “The representative does not succeed the in Art. 992). In contrast, illegitimate children
person represented but the one whom the person may be represented by their legitimate and
represented would have succeeded.” illegitimate descendants [Art. 902].
• Illustration: A has legitimate son L and
Representation in the Direct Descending Line illegitimate son I. L has an illegitimate son L-1
Representation takes place ad infinitum in the direct while I also has an illegitimate son I-1. I-1 may
descending line but never in the direct ascending line inherit from A by representation of I (under Art.
[Art. 972, CC]. 902, CC), but L-1 may not inherit from A (because
of the barrier under Art. 992, CC).
General rule: Grandchildren inherit from the
grandparents by right of representation, if proper. Representation in Adoption
If the adopting parent should die before the adopted
Exception: Whenever all the children repudiate, the child, the latter cannot represent the former in the
grandchildren inherit in their own right because inheritance of the parents or ascendants of the
representation is not proper [Art. 969, CC]. adopter. The adopted child is not related to the
deceased in that case, because filiation created by
Representation in Collateral Line fiction of law is exclusively between the adopter and
In the collateral line, representation takes place only the adopted [Tolentino].
in favor of the children of the brothers or sisters (i.e.,
nephews and nieces) whether of the full or half-blood
[Art. 972, CC] and only if they concur with at least one
uncle or aunt. In this case, they share in the
inheritance per stirpes.
Note: In partial intestacy, the testamentary proportions that they are entitled to receive from
dispositions can reduce the shares of intestate heirs, such disposable portion as intestate heir.
provided that their legitimes, if they are also c. If the legal or intestate share of a compulsory
compulsory heirs, are not impaired. More heir is equal to his legitime, then the amount of
specifically: the testamentary disposition must be deducted
a. The law of legitimes must be brought into only from the legal or intestate shares of the
operation in partial intestacy. others.
b. If among the concurring intestate heirs there are d. If the testamentary dispositions consume the
compulsory heirs whose legal or intestate entire disposable portion, then the intestate
portions exceed their respective legitimes, the heirs who are compulsory heirs will get only
amount of the testamentary disposition must be their legitimes, and those who are not
deducted from the disposable portion, to be compulsory heirs will get nothing [Tolentino].
borne by all the intestate heirs in the
Outline of Intestate Shares Surviving spouse gets ½ of the estate, while the
a. Legitimate children only rest gets the other ½ with the nephews and
Divide entire estate equally among all nieces inheriting by representation if proper
legitimate children [Art. 979, CC] [Art. 1001].
Legitimate children include an adopted child. o. Surviving spouse and illegitimate brothers
b. Legitimate children and Illegitimate children and sisters, nephews and nieces
Divide entire estate such that each illegitimate Surviving spouse gets ½ of the estate while the
child gets ½ of what a legitimate child gets [Art. rest gets the other ½ with the nephews and
983, CC and Art. 176, FC] nieces inheriting by representation, if proper;
Ensure that the legitime of the legitimate Note that all the other relatives should be
children are first satisfied. “illegitimate” because of the iron-curtain rule
c. Legitimate children and surviving spouse [Art. 994, CC].
Divide entire estate equally between the p. Illegitimate parents only
legitimate children and the surviving spouse, Entire estate goes to the illegitimate parents
the latter deemed as one child. The same rule [Art. 993, CC].
holds where there is only one child. q. Illegitimate parents and children of any kind
d. Legitimate children. Surviving spouse, and (whether legitimate or illegitimate child)
Illegitimate children Illegitimate parents are excluded and do not
Divide the entire estate such that the surviving inherit. For the rule on the respective shares of
spouse is deemed one legitimate child and each the children, see numbers 1, 2 or 10, whichever is
illegitimate child getting ½ of what the applicable.
legitimate child gets. [Art. 996, CC and Art. 176, r. Legitimate brothers and sisters only
FC] Divide the entire estate such that full-blood
Ensure that the legitime of the legitimate brothers/sisters gets a share double the amount
children and the spouse are first satisfied. of a half-blood brother or sister [Art. 1004 and
e. Legitimate parents only 1006, CC].
Divide the entire estate equally [Art. 985]. s. Legitimate brothers and sisters, nephews and
f. Legitimate ascendants only (excluding nieces
parents) Divide the entire estate observing the 2 is to 1
Divide the entire estate equally but with the ratio for full and half-blood relationships with
observance of the rule of division by line [Art. respect to the brothers and sisters, with the
987]. nephews and nieces inheriting by
g. Legitimate parents and illegitimate children representation, if proper [Art. 1005 & 1008, CC].
Legitimate parents get ½ of the estate, t. Nephews and nieces only
illegitimate children get the other ½ [Art. 991]. Divide the entire estate per capita, observing the
h. Legitimate parents and surviving spouse 2 is to 1 ratio [Arts. 975 and 1008, CC].
Legitimate parents get ½ of the estate; The u. Other collaterals [Arts. 1009 and 1010]
surviving spouse gets the other ½ [Art. 997]. Divide entire estate per capita. Collateral
th
i. Legitimate parents, surviving spouse and relatives must be with the 5 degree of
illegitimate children consanguinity.
Legitimate parents get ½ of the estate; surviving Note: the nearer relative excludes the more
spouse and the illegitimate child each get ¼ remote relatives.
each, the latter to share among themselves if v. State
more than one [Art. 1000]. If there are no other intestate heirs, the State
j. Illegitimate children only inherits the entire estate through escheat
Divide the entire estate equally [Art. 988]. proceedings [Art. 1011, CC].
k. Illegitimate children and surviving spouse
Illegitimate children get ½ of the estate; the
surviving spouse gets the other ½ [Art. 998].
l. Surviving spouse only
Entire estate goes to the surviving spouse [Art.
994/995].
m. Surviving spouse and illegitimate parents
Illegitimate parents get ½ and the spouse gets
the other ½ [by analogy with Art. 997].
n. Surviving spouse and legitimate brothers and
sisters, nephews and nieces
succession, whether right to the legitime them – the heir must first accept the
testate or intestate [Art. 815, CC] inheritance before he can dispose of it.
2. If the heir renounces the same, even though
gratuitously, for the benefit of one or more
Determination of Capacity [Tolentino]
of his co-heirs – this is actually a donation.
General Rule: At the death of the decedent [Art.
The heir must first accept the inheritance
1034, CC]
before he can donate it.
3. If the heir renounces it for a price in favor of
Exceptions:
all his co-heirs indiscriminately – this is
a. Those falling under 2, 3, and 5 of Art. 1032 –
actually an onerous disposition. The heir
when the final judgment is rendered
must first accept the inheritance before he
b. Those falling under 4 of Art. 1032 – when the
can dispose of it.
month allowed for the report expired
c. If the institution is conditional – when the
Note: But if the renunciation should be gratuitous,
condition is complied with
and in favor of all the co-heirs (to whom the portion
renounced should devolve by accretion), the
3. Acceptance and inheritance shall not be deemed as accepted [Art.
1050, CC]. This is a true case of renunciation.
Repudiation of the
Inheritance FORMS OF REPUDIATION [Art. 1051, CC]
a. In a public instrument acknowledged before a
Definition of Acceptance notary public; or
The act by which the person called to succeed by b. In an authentic document – equivalent of an
universal title either by the testator or by law indubitable writing or a writing whose
manifests his will of making his own the universality authenticity is admitted or proved; or
of the rights and obligations which are transmitted c. By petition presented to the court having
to him [Tolentino]. jurisdiction over the testamentary or intestate
proceeding
Definition of Repudiation
The manifestation by an heir of his desire not to HEIRS IN TWO CAPACITIES [Art. 1055, CC]
succeed to the rights and obligations transmitted to a. If a person is called to the same inheritance as
him [Tolentino]. an heir by will and by law and he repudiates the
inheritance in his capacity as a testamentary
REQUISITES [Art. 1043, CC] heir, he will be considered to have also
a. Certainty of death of the decedent repudiated the inheritance as a legal heir.
b. Certainty of the right to the inheritance b. If he repudiates it as a legal heir, without
knowledge of his being a testamentary heir, he
FORMS OF ACCEPTANCE [Arts. 1049 – 1050, CC] may still accept it in the latter capacity.
a. Express Acceptance – one made in a public or
private document [Art. 1049, par. 1, CC] IRREVOCABILITY OF ACCEPTANCE OR
b. Tacit Acceptance – one resulting from acts by REPUDIATION
which the intention to accept is necessarily General Rule: The acceptance or repudiation of an
implied or from acts which one would have no inheritance, once made, is irrevocable and cannot
right to do except in the capacity of an heir. be impugned.
c. Implied Acceptance - Within thirty days after
the court has issued an order for the distribution Exceptions:
of the estate in accordance with the Rules of a. When the acceptance or repudiation suffers
Court, the heirs, devisees and legatees shall from any of the vices which annul consent; and
signify to the court having jurisdiction whether b. When an unknown will appears [Art. 1056, CC]
they accept or repudiate the inheritance; if they
do not do so within that time, they are deemed 4. C ollation
to have accepted the inheritance [Art. 1057, CC].
Concept of Collation
An inheritance is deemed accepted: To collate is to bring back or to return to the
1. If the heir sells, donates, or assigns his right hereditary mass in fact or by fiction property which
to a stranger, or to his co-heirs, or to any of came from the estate of the decedent, during his
lifetime by donation or other gratuitous title but to collation what their parent has received
which the law considers as an advance from the gratuitously from their grandparent.
inheritance [Art. 1061, CC].
What to Collate
It is the act by virtue of which, the compulsory heir a. Any property or right received by gratuitous title
who concurs with other compulsory heirs in the during the testator’s lifetime [Art. 1061, CC]
inheritance brings back to the common hereditary b. All that they may have received from the
mass the property which they may have received decedent during his lifetime [Art. 1061, CC]
from the testator so that a division may be effected c. Expenses incurred by the parents in giving their
according to law and the will of the testator. children a professional, vocational or other
career shall not be brought to collation unless
In reducing inofficious donations, the last to be the parents so provide, or unless they impair the
donated should be the first to be reduced. legitime; but when their collation is required,
the sum which the child would have spent if he
Rationale for collation: If donations inter vivos will had lived in the house and company of his
not be collated, then the rule on legitimes shall be parents shall be deducted therefrom [Art. 1068,
circumvented or disregarded. CC]
d. Any sums paid by a parent in satisfaction of the
Operations Related to Collation [Tolentino] debts of his children, election expenses, fines,
a. Collation – adding to the mass of the hereditary and similar expenses shall be brought to
estate the value of the donation or gratuitous collation [Art. 1069, CC]
disposition.
b. Imputing or Charging – crediting the donation Note: Only the value of the thing donated shall be
as an advance on the legitime (if the donee is a brought to collation.
compulsory heir) or on the free portion (if the
donee is a stranger, i.e., not a compulsory heir). PROPERTIES NOT SUBJECT TO COLLATION
[Balane at 522] Absolutely no collation
c. Reduction – determining to what extent the Expenses for support, education (only elementary
donation will remain and to what extent it is and secondary), medical attendance, even in
excessive or inofficious. extraordinary illness, apprenticeship, ordinary
d. Restitution – returning or the act of payment of equipment, or customary gifts [Art. 1067, CC]
the excess to the mass of hereditary estate.
Generally not imputable to legitime/ cannot be
Persons Obliged to Collate collated, subject to exceptions
General rule: Compulsory heirs a. Expenses incurred by parents in giving their
children professional, vocational or other career
Exceptions: unless the parents so provide, or unless they
a. When the testator should have so expressly impair the legitime [Art. 1067, CC]
provided [Art. 1062, CC] – in which case you b. Wedding gifts by parents and ascendants,
collate against the disposable free portion consisting jewelry, clothing and outfit, except
because there MUST be collation. when they exceed 1/10 of the sum disposable by
b. When the compulsory heir should have will [Art. 1070, CC]
repudiated his inheritance [Art. 1062, CC] c. Neither shall donations to the spouse of the
c. When there is only ONE compulsory heir! child be brought to collation; but if they have
been given by the parent to the spouses jointly,
Grandchildren who survive with their uncles, aunts, the child shall be obliged to bring to collation
or first cousins and inherit by right of representation one-half of the thing donated [Art. 1066, CC]
[Art. 1064, CC]
Note: Parents are not obliged to bring to collation in
Note: Grandchildren may inherit from their the inheritance of their ascendants any property
grandparents in their own right, i.e., as heirs next in which may have been donated by the latter to their
degree, and not by right of representation if their children [Art. 1065, CC].
parent repudiates the inheritance of the
grandparent, as no living person can be represented Wedding Gifts:
except in cases of disinheritance and incapacity. In The wedding gift under Article 1070 of the Civil Code
this case, the grandchildren are not obliged to bring may be compared to a donation propter nuptias as
follows:
3. Even if a prohibition is imposed, the heirs by partition by title under any other person, or by title
mutual agreement can still make the partition. paramount to the title of the parties among whom
the partition may have been made [Rule 69, Sec. 12,
Effects of Inclusion of Intruder in Partition [Art. ROC].
1108, CC]
1. Between a true heir and several mistaken heirs A judicial partition in probate proceedings does not
– partition is void. bind the heirs who were not parties thereto
2. Between several true heirs and a mistaken heir [Tolentino].
– transmission to mistaken heir is void
3. Through error or mistake, share of true heir is Warranty
allotted to mistaken heir – partition shall not be After the partition has been made, the co-heirs shall
rescinded unless there is bad faith or fraud on be reciprocally bound to warrant the title to, and the
the part of the other persons interested, but the quality of, each property adjudicated [Art. 1092, CC].
latter shall be proportionately obliged to pay
the true heir of his share. The partition with The reciprocal obligation of warranty shall be
respect to the mistaken heir is void [SEMPIO- proportionate to the respective hereditary shares of
DY]. the co-heirs.
Right of Redemption in Partition If any one of them should be insolvent, the other co-
Should any of the heirs sell his hereditary rights to a heirs shall be liable for his part in the same
stranger before the partition, any or all of the co- proportion, deducting the part corresponding to the
heirs may be subrogated to the rights of the one who should be indemnified.
purchaser by reimbursing him for the price of the
sale, provided they do so within the period of one Those who pay for the insolvent heir shall have a
month from the time they were notified in writing of right of action against him for reimbursement,
the sale by the vendor [Art. 1088, CC]. should his financial condition improve [Art. 1093,
CC].
Strangers – those who are not heirs on the
succession. An action to enforce the warranty among the co-
heirs must be brought within ten years from the date
Legal Redemption by Co-Heir; Requisites: the right of action accrues [Art. 1094, CC].
1. That there are several heirs of the common
inheritance; If a credit should be assigned as collectible, the co-
2. That one of them sells his hereditary rights; heirs shall not be liable for the subsequent
3. That the sale is made to a stranger, and before insolvency of the debtor of the estate, but only for
the partition has been made; his insolvency at the time the partition is made [Art.
4. That one or more of the co-heirs demand the 1095, CC].
repurchase within a period of one month,
counted from the time he or they were notified The warranty of the solvency of the debtor can only
in writing of the sale; and be enforced during the five years following the
5. That the buyer is reimbursed the price of the partition.
sale [Garcia v. Calaliman, G.R. No. L-26855
(1989)]. Co-heirs do not warrant bad debts, if so known to,
and accepted by the distributee.
Note: The redemption can be exercised only by a co-
heir. But if such debts are not assigned to a co-heir, and
should be collected, in whole or in part, the amount
b. Effects of Partition collected shall be distributed proportionately
among the heirs [Art. 1095, CC].
Effect
A partition legally made confers upon each heir the End of Warranty
exclusive ownership of the property adjudicated to The obligation of warranty among co-heirs shall
him [Art. 1091, CC]. cease in the following cases:
1. The testator himself has made the partition
No partition shall be construed so as to prejudice, Unless it appears, or it may be reasonably
defeat, or destroy the right or title of any person presumed, that his intention was otherwise, but
claiming the real estate involved in the action for the legitime shall always remain unimpaired.
2. When it has been so expressly stipulated in the 5. A partition which includes a person believed to
agreement of partition be an heir, but who is not, shall be void only with
Unless there has been bad faith respect to such person [Art. 1105, CC].
3. When the eviction is due to a cause subsequent
to the partition, or has been caused by the fault The action for rescission on account of lesion shall
of the distributee of the property [Art. 1096, CC]. prescribe after four years from the time the partition
was made [Art. 1100, CC].
c. Rescission and
The heir who is sued shall have the option of
Nullification of Partition indemnifying the plaintiff for the loss, or consenting
to a new partition
Causes for Rescission or Annulment
1. A partition may be rescinded or annulled for the Indemnity may be made:
same causes as contracts [Art. 1097, CC]. 1. By payment in cash or
2. A partition, judicial or extra-judicial, may also 2. By the delivery of a thing of the same kind and
be rescinded on account of lesion, when any quality as that awarded to the plaintiff.
one of the co-heirs received things whose value
is less by at least one-fourth, than the share to If a new partition is made, it shall affect neither
which he is entitled, considering the value of the those who have not been prejudiced nor those who
things at the time they were adjudicated [Art. have not received more than their just share [Art.
1098, CC]. 1101, CC].
• This article applies only to cases of partition
among-coheirs An heir who has alienated the whole or a
• Lesion is the injury suffered in consequence considerable part of the real property adjudicated to
of inequality of situation by one party who him cannot maintain an action for rescission on the
does not receive the full equivalent for what ground of lesion, but he shall have a right to be
she gives in a sale or any commutative indemnified in cash [Art. 1102, CC].
contract
3. The partition made by the testator cannot be The omission of one or more objects or securities of
impugned on the ground of lesion, except when the inheritance shall not cause the rescission of the
the legitime of the compulsory heirs is thereby partition on the ground of lesion, but the partition
prejudiced, or when it appears or may be shall be completed by the distribution of the objects
reasonably be presumed, that the intention of or securities which have been omitted [Art. 1103,
the testator was otherwise [Art. 1099, CC]. CC].
4. Preterition of a compulsory heir in the
partition [Art. 1104, CC]: Difference of Nullity from Rescission
• Partition shall not be rescinded unless bad • Nullity – the act is supposed to never have
faith or fraud on the part of other heirs is existed
proved. • Rescission – the act is valid at the origin though
• The culpable heirs shall share in the it afterwards became ineffective
damages of the prejudiced compulsory heir
proportionately.
XII. LAND TITLES AND 2. Fee Tail – One designed to pass title from
grantee to his heirs, in the intent of the
There is no need to personally notify the owners or 5. To issue a certificate of title to the owner
claimants of the land sought to be registered if it is which shall be the best evidence of his
involved in a land registration case since it is a ownership of the land
proceeding in rem. This gives automatic power and 6. To avoid conflicts of title in and to real estate
authority to the court over the res. [Guido-Enriquez v. and to facilitate transactions
Victorino, et al. G.R. No. 180427 (2013)] d. As held in Capitol Subdivisions, Inc. v. Province of
Negros Occidental [G.R. No. L-16257 (1963)]
Laws Implementing Land Registration 1. To avoid possible conflicts of title in and to
a. Public Land Act [CA 141, as amended] real property, and
b. Property Registration Decree [PD 1529, as 2. To facilitate transactions relative thereto by
amended] giving the public the right to rely upon the
c. Cadastral Act [Act 2259, as amended] face of the Torrens certificate of title and to
d. Indigenous Peoples Rights Act of 1997 [RA 8371] dispense with the need of inquiring further
e. Emancipation Decree [PD 27, as amended]
f. Comprehensive Agrarian Reform Law of 1988 [RA Object of Registration – Only real property or real
6657, as amended] rights may be the object of registration under the
existing land registration laws.
To simplify and streamline land registration
proceedings, Presidential Decree No. 1529 was issued Classification Of Lands: [Art. XII, Sec. 3, 1987
on June 11, 1978, otherwise known as the Property Constitution]
Registration Decree, governing registration of lands a. Private or public
under the Torrens system as well as the recording of b. Alienable or inalienable
transactions relating to unregistered lands, including c. Registered or unregistered
chattel mortgages. This Decree consolidates, in d. Registrable or Non-registrable
effect, all pre-existing laws on property registration
with such appropriate modifications as are called for Classification of lands is an exclusive prerogative of
by existing circumstances. [Peña] the executive department. In the absence of such
classification, the lands remain as unclassified until it
Purposes Of Land Registration is released therefrom and rendered open to
Registration is merely a species of notice. The act of disposition. The President, through a Presidential
registering a document is never necessary in order to Proclamation or Executive Order can classify or
give it legal effect as between the parties. The system reclassify land to be included or excluded from the
maintains a permanent record of landholdings, in public domain. The DENR Secretary is also
order to prevent fraudulent claims to land by empowered to approve a land classification and
concealment of transfers. declare such land as alienable and disposable.
[Agcaoili, citing Fortuna v. Republic, G.R. No. 173423
Another purpose is to notify and protect the interests (2014)]
of strangers to a given transaction, who may ignorant
thereof. However, where a document so registered is Registrable lands are:
invalid or legally defective, registration will not in any a. Alienable public agricultural lands,
way render it valid or cure its defect. If the land is in the public domain, the land must
be classified as alienable and disposable. It must
a. Constructive notice to the whole world. [Sec. 52, be classified as such at the time of filing the
PD 1529] application for registration. [Republic v. CA and
b. To notify and protect the interests of strangers to Naguit, G.R. No. 144057 (2005)]
a given transaction, who may be ignorant thereof b. Private lands
[Sapto, et al. v. Fabiana, G.R. No. L-11285 (1958)]
c. As held in Legarda v. Saleeby [G.R. No. L-8936 Non-registrable lands - those found in the CC
(1915)] dealing with non-registrable properties (e.g. property
1. To quiet title to the land and to stop forever of public dominion)
any question as to the legality of said title
2. To relieve the land of unknown claims
3. To guarantee the integrity of land titles and
2. T orrens System
to protect their indefeasibility once the claim
of ownership is established and recognized Torrens System - A system for registration of land
4. To give every registered owner complete under which, upon landowner’s application, the court
peace of mind may, after appropriate proceedings, direct the
issuance of a certificate of title. [Black’s Law General Rule: A title once registered cannot be
Dictionary]; those systems of registration of impugned, altered, changed, modified, enlarged, or
transactions with interest in land whose declared diminished.
object is, under governmental authority, to establish
and certify to the ownership of an absolute and Exception: Direct proceeding permitted by law,
indefeasible title to realty, and to simplify its transfer. usually for the protection of innocent third persons
[Grey Alba v. De la Cruz, G.R. No. L-5246 (1910)]
of such denial in writing, stating the ground or c. Patents – Whenever public land is by the
reason therefore, and advising him of his right to Government alienated, granted or conveyed to
appeal by consulta in accordance with Sec. 117 of any person, the same shall be brought forthwith
PD 1529. under the operation of this Decree [PD 1529, Sec.
4. Prepare and keep and index system which 103, par. 1]
contains the names of all registered owners and 1. Patents only involve public lands which are
lands registered. alienated by the Government pursuant to the
Public Land Act [CA 141, as amended]
The function of the ROD with reference to registration 2. The patent (even if denominated as deed of
of deeds, encumbrances, instruments, and the like is conveyance) is not really a conveyance but a
ministerial in nature, provided the applicant contract between the grantee and the
complies with all the requisites. [Baranda v. Gustilo, Government and evidence of authority to the
G.R. No. 81163 (1988)] Register of Deeds to make registration.
3. The act of registration is the operative act to
Instances when ROD may validly deny registration of affect and convey the land.
a voluntary instrument:
• When there is more than 1 copy of the owner’s Probative Value: A Torrens Certificate of Title is valid
duplicate certificate of title and not all such and enforceable against the whole world. It may be
copies are presented to the ROD; received in evidence in all courts of the Philippines,
• Where the voluntary instrument bears on its face and shall be conclusive as to all matters contained
an infirmity; therein, principally the identity of the owner of the
• Where the validity of the instrument sought to be covered land thereby and identity of the land.
registered is in issue in a pending court suit,
notice of which must be given to parties; A Torrens title, once registered, cannot be defeated,
• Where required certificates or documents such as even by adverse, open and notorious possession. A
DAR clearance, copy of latest tax declaration, are registered title under the Torrens system cannot be
not submitted defeated by prescription. The title, once registered, is
[Balbin v. ROD, G.R. No. L-20611 (1969)] notice to the whole world. All persons must take
notice. No one can plead ignorance of the registration.
Note: When the ROD is in doubt as to the proper [Egao v. CA,G.R. No. L-79787 (1989)]
action to take on an instrument or deed presented to
him for registration, he should submit the question to 5. E ffect of Registration
the Administrator of the LRA en consulta [P.D. 1529,
Sec 117] under the Torrens System
a. Land is placed under the operation of the Torrens
4. C ertificate of Title system
b. Claims and liens of whatever character existing
The Torrens Title – Certificate of ownership issued by against the land prior to the issuance of the
the Register of Deeds naming and declaring the certificate of title are cut off by such certificate
owner of the real property described therein free from and the certificate so issued binds the whole
all liens and encumbrances, except such as may be world, including the government
expressly noted thereon or otherwise reserved by law 1. It is an elemental rule that a decree of
a. Original Certificate of Title (OCT) – It is the first registration bars all claims and rights which
certificate of title issued in the name of the arose or may have existed prior to the decree
registered owner by the Register of Deeds of registration. By the issuance of the decree,
covering a parcel of land which had been the land is bound and title thereto quieted,
registered under the Torrens System, by virtue of subject only to certain exceptions under the
judicial or administrative proceedings property registration decree. [Heirs of
b. Transfer Certificate of Title (TCT) – The Alejandra Delfin, namely, Leopoldo Delfin, et
subsequent certificate of title pursuant to any al. v. Avelina Rabadon, G.R. No. 165014
deed of transfer or conveyance to another person. (2013)]
The Register of Deeds shall make a new 2. Exceptions:
certificate of title and give the registrant an i. Those claims noted on the certificate
owner’s duplicate certificate. The previous ii. Liens, claims, or rights arising or
certificate shall be stamped “cancelled.” existing under the laws and the
Constitution, which are not by law
Effect of Non-Registration
If a purchaser, mortgagee or grantee should fail to
register his deed the conveyance, in light of our
existing registration laws, shall not be valid against
any person unless registered.
Exceptions:
a. The grantor,
b. His heirs and devisees, and
c. Third persons having actual notice or knowledge
thereof.
The Regalian Doctrine The President shall notify the Congress of every
contract entered into in accordance with this
provision, within thirty days from its execution.
A western legal concept that was first introduced by
the Spaniards into the country through the laws of the
The principle of State ownership of lands and all other
Indies and the Royal Cedulas whereby the Philippines
natural resources had its roots in the 1935
passed to Spain by virtue of “discovery” and conquest.
Constitution, which expressed the overwhelming
Consequently, all lands became the exclusive
sentiment in the Convention in favor of the principle
patrimony and dominion of the Spanish Crown.
of State ownership of natural resources and the
[Agcaoili]
adoption of the Regalian doctrine as articulated in
Sec. 1, Art XIII.
Sec. 2, Art. XII, 1987 Constitution.
All lands of the public domain, waters, minerals, The 1973 Constitution reiterated the Regalian
coal, petroleum, and other mineral oils, all forces Doctrine in Sec. 8, Art. XIV.
of potential energy, fisheries, forests or timber,
wildlife, flora and fauna, and other natural The present Constitution provides that, except for
resources are owned by the State. With the agricultural lands of the public domain which alone
exception of agricultural lands, all other natural may be alienated, forest or timber, and mineral lands,
resources shall not be alienated. The exploration, as well as all other natural resources must remain
development, and utilization of natural resources with the State, the exploration, development, and
shall be under the full control and supervision of utilization of which shall be subject to its full control
the State. The State may directly undertake such and supervision albeit allowing it to enter into co-
activities, or it may enter into co-production, joint production, joint venture, or production-sharing
venture, or production-sharing agreements with agreements, or into agreements with foreign-owned
Filipino citizens, or corporations or associations at corporations involving technical or financial
least 60 per centum of whose capital is owned by assistance for large-scale exploration, development,
such citizens. Such agreements may be for a and utilization. [Secs. 2 and 3, Art. XII; La Bugal-B’laan
period not exceeding twenty-five years, renewable Tribal Association, Inc. v. Ramos, G.R. No. 127882
for not more than twenty-five years, and under (2004)]
such terms and conditions as may be provided by
law. In cases of water rights for irrigation, water The Regalian Doctrine is enshrined in the 1987
supply, fisheries, or industrial uses other than the Constitution [Art 12, Sec 2 & 3] which states that all
development of waterpower, beneficial use may lands of public domain belong to the State, thus
be the measure and limit of the grant. private title to land must be traced to some grant,
express or implied, from the State, i.e. The Spanish
The State shall protect the nation’s marine wealth Crown or its successors, the American Colonial
in its archipelagic waters, territorial sea, and government and thereafter the Philippine Republic
exclusive economic zone, and reserve its use and
enjoyment exclusively to Filipino citizens. It does not negate native title to lands held in private
ownership since time immemorial. [Cruz v. Sec. of
The Congress may, by law, allow small-scale Environment and Natural Resources, G.R. No. 135385
utilization of natural resources by Filipino citizens, (2000)]
as well as cooperative fish farming, with priority to
subsistence fishermen and fish workers in rivers, Native title recognizes ownership of land by Filipinos
lakes, bays, and lagoons. independent of any grant from the Spanish crown on
the basis of possession since time immemorial [cf:
The President may enter into agreements with Cariño v. Insular Government, G.R. No. 2869 (1907)]
foreign-owned corporations involving either Lands embraced by native title are presumed to have
technical or financial assistance for large-scale been held prior to the Spanish conquest and never to
exploration, development, and utilization of have been public land.
minerals, petroleum, and other mineral oils
according to the general terms and conditions
provided by law, based on real contributions to 1. Effects
the economic growth and general welfare of the
country. In such agreements, the State shall a. All lands of public domain belong to the State,
promote the development and use of local and that the State is the source of any asserted
scientific and technical resources. right to ownership in land and charged with the
conservation of such patrimony [Republic v. IAC, interrupted by war, force majeure or displacement by
G.R. No. 71285 (1987)] force, deceit, stealth or as a consequence of
b. Under the Regalian doctrine, all lands of government projects or any other voluntary dealings
whatever classification and other natural entered into by government and private
resources not otherwise appearing to be clearly individuals/corporations, and which are necessary to
within private ownership are presumed to belong ensure their economic, social and cultural welfare.
to the State which is the source of any asserted
right to ownership of land. [Repubic v. Remnan It shall include ancestral lands, forests, pasture,
Enterprises, Inc. G.R. No. 199310 (2014)] residential, agricultural, and other lands individually
c. The burden of proof in overcoming the owned whether alienable and disposable or
presumption of State ownership of the lands of otherwise, hunting grounds, burial grounds, worship
the public domain is on the person applying for areas, bodies of water, mineral and other natural
registration (or claiming ownership), who must resources, and lands which may no longer be
prove that the land subject of the application is exclusively occupied by ICCs/IPs but from which they
alienable or disposable. To overcome this traditionally had access to for their subsistence and
presumption, incontrovertible evidence must be traditional activities, particularly the home ranges of
established that the land subject of application ICCs/IPs who are still nomadic and/or shifting
(or claim) is alienable or disposable. [Valiao v. cultivators
Republic, G.R. No. 170757 (2011)]
Certificate of Ancestral Domain Title (CADT) refers
to a title formally recognizing the rights of possession
2. C oncept of Native Title, and ownership of ICCs/IPs over their ancestral
Time Immemorial domains identified and delineated in accordance with
this law [Sec. 3(c), IPRA]
Possession
Certificate of Ancestral Lands Title (CALT) refers to
A recognized exception to the theory of jura regalia, a title formally recognizing the rights of ICCs/IPs over
the ruling in Cariño v. Insular Government (supra) their ancestral lands.
institutionalized the recognition of the existence of
native title to land, or ownership of land by Filipinos Individually-owned ancestral lands, which are
by virtue of possession under a claim of ownership agricultural in character and actually used for
since time immemorial and independent of any grant agricultural, residential, pasture, and tree farming
from the Spanish Crown [Agcaoili] purposes, including those with a slope of eighteen
percent (18%) or more, are hereby classified as
Lands under native title are not part of public domain, alienable and disposable agricultural lands [Sec. 12,
“lands possessed by an occupant and his IPRA]
predecessors since time immemorial, such possession
would justify the presumption that the land had never Native title, however, is a right of private ownership
been part of the public domain or that it had been particularly granted to ICCs/IPs over their ancestral
private property even before the Spanish conquest lands and domains. The IPRA categorically declares
[Republic v. CA, G.R. No. 130174 (2000)] ancestral lands and domains held by native title as
never to have been public land. [Cruz v. Sec. of
Certificate of Ancestral Domain Title Environment and Natural Resources, supra]
A formal recognition, when solicited by Indigenous
Cultural Communities/ Indigenous People (ICCs/IPs)
concerned, shall be embodied in a Certificate of
Ancestral Domain Title (CADT), which shall recognize
the title of the concerned ICCs/IPs over the territories
identified and delineated [Sec. 11, IPRA]
General Rule: Non-Filipinos cannot acquire or hold Limitations to Ownership of Land by Corporations:
title to private lands of public domain, except only by a. For private lands:
way of legal succession [Halili v. CA, G.R. No. 113539 • At least 60% Filipino [Sec. 2, Art. XII, 1987
(1998); Secs. 2 and 5, Art. XII, 1987 Constitution] Constitution; Agcaoili]
• Restricted as to extent reasonably necessary
Exceptions: to enable it to carry out the purpose for which
a. Aliens by way of hereditary succession [Sec. 7, Art. it was created
XII, 1987 Constitution]
• If engaged in agriculture, it is restricted to
b. Natural born citizens who have lost their
1,024 hectares
citizenship:
b. For patrimonial property of the State [Sec. 3, Art.
For business use: limited to 5,000 sq. m. for
XII, 1987 Constitution]
urban land and 3 hectares for rural land [RA No.
7042 as amended by RA No. 8179] • Lease only for a limited period of 25 years
• Limited to 1,000 hectares
But where a Filipino citizen naturalized as a • Applies to both Filipino and Foreign
citizen in a foreign country has “reacquired” his Corporations
Philippine citizenship under the terms of RA 9225 • This limitation does not apply where the
(2003) otherwise known as the “Citizenship corporation acquired the land, the same was
Retention and Re-acquisition Act of 2003,” the already private land [Republic v. IAC and
1. Kinds of Original
Registration
a. Voluntary – by filing with the proper court under:
1. PD 1529, Property Registration Decree
2. CA 141, Public Land Act
3. RA 8371, IPRA
b. Involuntary – as in Cadastral Proceedings
• This is compulsory registration initiated by
the government to adjudicate ownership of
the land
• Involuntary on the part of the claimant but
they are compelled to substantiate their
claim or interest
2. W ho May Apply
a. Under Sec. 14, PD 1529
1. Those who by themselves or through their
predecessors-in-interest, have been in open,
continuous, exclusive and notorious
possession and occupation of alienable and
disposable lands of the public domain under
a bona fide claim of ownership since June 12, of owner since time immemorial or for
1945, or earlier. a period of not less than thirty (30)
2. Those who have acquired ownership of years immediately preceding the
private lands by prescription under the approval of this Act and uncontested
provisions of existing laws. by the members of the same ICCs/IPs
3. Those who have acquired ownership of shall have the option to secure title to
private lands or abandoned river beds by their ancestral lands
right or accession or accretion under the ii. Option granted shall be exercised
existing laws. within 20 years from the approval of
4. Those who have acquired ownership of land RA 8371
in any other manner provided for by law (see:
Republic represented by Mindanao Medical JURISDCITION
Center v CA, G.R. No. 40912 (1976)] Where to File: The court that should take cognizance
i. If land is owned in common, ALL co- of a registration case is that which has territorial
owners shall file the application jointly jurisdiction over the property.
ii. If land has been sold under pacto de
retro, the vendor a retro may file an General Rule: RTC of the province, city, or municipality
application for the original where the property is situated
registration of the land, provided, The RTC shall have exclusive jurisdiction over all
however that should the period for applications original for registration of title, with
redemption expire during the power to hear and determine all questions arising
pendency of the registration upon such applications or petition. [Sec. 2, par. 2, P.D.
proceedings and ownership to the No. 1529]
property consolidated in the vendee a
retro, the latter shall be substituted for Exception: Delegated jurisdiction to the MTC, MeTC,
the applicant and may continue the and MCTC by the Supreme Court in cadastral and
proceedings. land registration cases IF:
iii. A trustee on behalf of his principal a. There is no controversy over the land, OR
may apply for original registration of b. Its value is less than P100,000 [Sec. 34, BP 129]
any land held in trust by him, unless
prohibited by the instrument creating
the trust.
3. Procedure in Ordinary
b. Under Sec. 12, CA 141; Any person who: Land Registration
1. Is a citizen of the Philippines over the age of
18, or the head of a family STEP 1: Survey of the land by the Bureau of Lands or
2. Does not own more than 24 hectares of land a duly registered private surveyor
in the Philippines, or has not had the benefit
of any gratuitous allotment of more than 24 Note: No plan of such survey, whether it be original or
hectares of land since the occupation of the subdivision, may be admitted in land registration
Philippines by the United States proceedings until approved by the Director of Lands
[Sec. 1858, Administrative Code]
Note: they may enter a homestead of not
exceeding 24 hectares of agricultural land of STEP 2: Filing of application for registration by the
the public domain applicant at the RTC of the province, city, or
c. Under RA 8371 municipality where the property is located;
1. Sec. 11 – Formal recognition of ancestral a. Form of the application
domains by virtue of Native Title may be 1. In writing
solicited by ICCs/IPs concerned 2. Signed by the applicant/s or person duly
2. Sec. 12 – Option to secure certificate of title authorized in his behalf
under CA 141 or Land Registration Act 496 3. Sworn before any officer authorized to
i. Individual members of cultural administer oath for the province or city where
communities with respect to the application was actually signed
individually-owned ancestral lands 4. Application is presented in duplicate
who, by themselves or through their b. Contents of the application:
predecessors-in -interest, have been 1. A description of the land
in continuous possession and 2. The citizenship and civil status of the
occupation of the same in the concept applicant, whether single or married, and, if
married, the name of the wife or husband, 3. Intestate Estate of Don Mariano San Pedro v.
and, if the marriage has been legally CA G.R. No. 130727 (1996)]: A person
dissolved, when and how the marriage claiming ownership of real property must
relation terminated. It shall also state: clearly identify the land claimed by him.
3. The full names and addresses of all 4. In re: Application for Land Registration v.
occupants of the land and those of the Republic [G.R. No. 147359 (2008)] An
adjoining owners, if known, and, if not applicant in a land registration case must
known, it shall state the extent of the search prove the facts and circumstances
to find them. evidencing the alleged ownership of the land
4. Whether the property is conjugal, applied for. General statements which are
paraphernal or exclusively owned by the mere conclusions of law and not factual
applicant. proof of possession are unavailing. The
c. Documents to accompany the application [from deeds in its favor only proved possession of
Regulations in Ordinary Land Registration Cases] its predecessors-in-interest as early as 1948.
1. Tracing-cloth plan duly approved by the (The law now stands that a mere showing of
Director of Lands, together with two possession for 30 years is not sufficient.
blueprint or photographic copies thereof; Open, continuous, exclusive, and notorious
2. Three copies of the corresponding technical (OCEN) possession must be shown to have
descriptions; started on June 12, 1945 or earlier.)
3. Three copies of the surveyor’s certificate;
4. All original muniments of title in the STEP 3: Setting of the date for the initial hearing of
possession of the applicant which prove his the application by the Court;
rights, to the title he prays for or to the land a. The Court shall issue an order setting the date
he claims; and and hour of the initial hearing within 5 days from
5. Certificate in quadruplicate of the city or filing of the application
provincial treasurer of the assessed value of b. The initial hearing shall be 45 – 90 days from the
the land, at its last assessment for taxation, date of the order [Sec. 23, PD 1529]
or, in the absence thereof, that of the next
preceding year. However, in case the land STEP 4: Transmittal to the LRA
has not been assessed, the application may The application and the date of initial hearing
be accompanied with an affidavit in together with all the documents or other evidences
quadruplicate of the fair market value of the attached thereto are transmitted by the Clerk of Court
land, signed by three disinterested persons. to the Land Registration Authority (LRA)
d. Amendments to the Application
1. Sec. 19, PD 1529 permits the applicants to STEP 5: Publication of a Notice of the Filing of the
amend the application at any stage of the Application and date and place of hearing
proceedings upon such just and reasonable a. Publication shall be sufficient to confer
terms as the court may order; jurisdiction upon the court. [Sec. 23, PD 1529]
2. However, Sec. 23, PD 1529 mandates that b. Form and contents of the notice:
there is a need to comply with the required 1. Addressed to all persons appearing to have
publication and notice as in an original an interest in the land involved
application if the amendment is substantial 2. Requires all persons concerned to appear in
as in: court on the date and time indicated to show
i. A change in the boundaries cause why the application for registration
ii. An increase in the area of the land should not be granted
applied for; or c. The public shall be given notice of the initial
iii. The inclusion of an additional land hearing of the application by publication
e. Special Cases: 1. The Commissioner of Land Registration
1. If the land is bounded by a road, the (CLR) shall cause it to be published once in
applicant must state in his application if he the Official gazette AND once in a
claims any portion of the land within the newspaper of general circulation
limits of the road, or if he likes to have the 2. This is sufficient to confer jurisdiction to the
boundaries determined. [Sec. 20, PD 1529] court
2. If the applicant is a non-resident, he shall d. It is not necessary to give personal notice to the
appoint an agent or representative who is a owners or claimants of the land sought to be
Philippine resident. [Sec. 16, PD 1529] registered to vest the court with authority over the
res. Land registration proceedings are actions in
rem. [Director of Lands v. CA, G.R. No. 102858 3. The court may also cause notice to be served
(1997)] to such other persons and in such manner as
e. Once the registration court had acquired it may deem proper.
jurisdiction over a certain parcel, or parcels, of c. Notice of application and initial hearing by
land in the registration proceedings in virtue of publication is sufficient and the mere fact that a
the publication of the application, that person purporting to have a legitimate claim in
jurisdiction attaches to the land or lands the property did not receive personal notice is not
mentioned and described in the application. If it a sufficient ground to invalidate the proceedings
is later shown that the decree of registration had although he may ask for the review of the
included land or lands not included in the original judgment or the reopening of the decree of
application as published, then the registration registration, if he was made the victim of actual
proceedings and the decree of registration must fraud. [Republic v. Abadilla, CA, G.R. No. 6902-R
be declared null and void insofar — but only (1951)]
insofar — as the land not included in the
publication is concerned. [Benin v. Tuason, G.R. STEP 7: Filing of answer or opposition to the
No. L-26127 (1974)] application by any person whether named in the
notice or not;
STEP 6: Service of notice upon contiguous owners, a. Who may file? Any person claiming an interest,
occupants and those known to have interest in the whether named in the notice or not
property by the Sheriff; b. When to file? On or before the date of initial
a. Mailing: hearing, or within such further time as may be
1. Within 7 days from publication, the CLR shall allowed by the court.
mail a copy of the notice c. What shall it contain? It shall state all the
2. Copies of the notice shall be mailed to: objections and the interest claimed by the party
i. Every person named in the notice the remedy desired.
whose address is known. d. How shall it be made? It shall be signed and
ii. the Secretary of Public Highways, to sworn to by him or by some other duly authorized
the Provincial Governor, and to the person. Sec. 25, PD 1529 provides for the
Mayor of the municipality or city, in requisites of an opposition:
which the land lies, if the applicant 1. It shall set forth “all the objections to the
requests to have the line of a public application” and
way or road determined 2. It shall state the “interest claimed by the
iii. Secretary of Agrarian Reform, the party filing the same”
Solicitor General, the Director of e. Effect of Failure to Answer:
Lands, the Director of Mines and/or 1. If no one appears/files an answer, upon
the Director of Fisheries and Aquatic motion, the court shall order a default to be
Resources, (as appropriate) if the recorded.
land borders on a river, navigable 2. By the description in the notice "To all Whom
stream or shore, or on an arm of the It May Concern", all the world are made
sea where a river or harbor line has parties defendant and shall be concluded by
been established, or on a lake, or if the default order.
it otherwise appears from the 3. Where an appearance has been entered and
application or the proceedings that an answer filed, a default order shall be
a tenant-farmer or the national entered against persons who did not appear
government may have a claim and answer.
adverse to that of the applicant 4. Absence of opposition does not justify
b. Posting: outright registration. [Director of Lands vs.
1. CLR shall cause the sheriff or his deputy to Agustin, G.R. No. L-16173 (1921)]
post the notice at least 14 days before the f. Effects of Default:
hearing: 1. With respect to the Applicant – he has the
2. In a conspicuous place on each parcel of land right to present or adduce evidence ex parte
included in the application and in a 2. With respect to those covered by the default
conspicuous place on the bulletin board of order – they have no legal standing in court;
the municipal building of the municipality or therefore, they are no longer allowed to
city in which the land or portion thereof is participate and no opportunity to present
situated. evidence
g. For relief from an order of default, see Sec. 3, Rule c. Finality of Judgment - Sec. 30, par. 1, PD 1529
18, Rules of Court provides that the judgment becomes final upon
the expiration of 30 days counted from receipt of
STEP 8: Hearing of the case by the court notice of judgment.
a. Applicable procedural law:
1. Reception of evidence is governed by PD Note: This has been MODIFIED to the lapse of 15
1529 days counted from receipt of notice of judgment
2. Rules of Court shall, insofar as not as per Sec. 39, BP 129
inconsistent with the provisions of the
Decree, be applicable to land registration STEP 10: Issuance of the decree
and cadastral cases by analogy or in a a. If the court finds after hearing that the applicant
suppletory character and whenever or adverse claimant has title as stated in his
practicable and convenient [Sec. 34, PD 1529] application or adverse claim and proper for
b. Sec. 27, PD 1529: Court may either: registration, a decree of confirmation and
1. Hear the parties and their evidence, or registration shall be entered
2. Refer the case or any part thereof to a referee b. The Court declares the decision final and
i. Referee shall hear the parties, receive instructs the LRA to issue a decree of
their evidence, and submit his report confirmation and registration within 15 days from
thereon to the Court within 15 days entry of judgment
after termination of such hearing Note: It is not the court that issues the decree,
ii. Hearing before a referee may be held but the LRA
at any convenient place within the c. One year after issuance of the decree, it becomes
province or city as may be fixed by him incontrovertible and amendments of the same
and after reasonable notice thereof will not be allowed except in cases of clerical
shall have been served to the parties errors
concerned
iii. Upon receipt of the report the Court Court retains jurisdiction over the case until after
may: the expiration of 1 year from the issuance of the
a) Adopt the same decree of registration. [Gomez v. CA, 1988]
b) Set aside the report
c) Modify the report Note: While a decision in land registration
d) Refer back or recommit the case proceeding becomes final after the expiration of
to the referee for presentation of thirty days from the date of service of its notice,
evidence the decree of registration does not become final
until after the lapse of one year from the date of
STEP 9: Promulgation of judgment by the Court; its issuance and entry.
a. This is the adjudication, determination, and
resolution of the issue of ownership STEP 11: Entry of the decree of registration
b. Forms of Judgment: a. Decree is entered in the LRA
1. Dismissal of the application – with b. Every decree of registration shall:
prejudice or without prejudice 1. Bear the day of the year, hour, and minute of
2. Partial Judgment – in a case where only a its entry,
portion of the land subject of registration is 2. Be signed by the Administrator of the Land
contested, the court may render partial Registration Authority in his ex officio
judgment provided that a subdivision plan capacity as Clerk of Court in land registration
showing the contested and uncontested matters
portions approved by the Director of Land is 3. State whether the owner is:
previously submitted to said court. [Sec. 28, i. Married or unmarried, and if married,
PD 1529] the name of the husband or wife,
3. Judgment Confirming Title - Judgment may provided that if the land adjudicated is
be rendered confirming the title of the conjugal property, it shall be issued in
applicant, or the oppositor as the case may the names of both spouses.
be, to the land or portions thereof upon ii. If the owner is under disability, it shall
finding that the party concerned has state the nature of the disability,
sufficient title proper for registration. [Sec. iii. If the owner is a minor, his age
29, PD 1529] 4. Contain a description of the land as finally
determined by the court,
Proofs necessary in land registration General Rule: A forged deed is an absolute nullity and
a. Proofs that land has been declassified from the conveys no title.
forest zone, is alienable or disposable, and is
registrable (e.g. Presidential proclamation, Exception: If there is good faith, a TCT has already
legislative acts) been issued to the purchaser, the latter being an
b. Identity of the land (e.g. survey plan) innocent purchaser for value according to Sec. 39, PD
c. Possession and occupation of the land for the 1529, then the title is good.
length of time and in the manner required by law
[Sec. 4, PD 1073 amending Sec. 48(b) and (c) of General Rule: A person dealing with registered
Public Land Act] property need not go beyond, but only has to rely on,
d. If he claims private ownership not because of his the title. [Campillo v. PNB, G.R. No. L-19890 (1969)]
possession, he must prove the basis of such claim
by submitting muniments of title. He is charged with notice only of such burdens and
claims which are annotated on the title, for
Proving Private Ownership: registration is the operative act that binds the
a. Spanish titles are inadmissible and ineffective property.
proof of ownership in land registration
proceedings filed AFTER Aug. 16, 1976 [PD 892 as Exception: When should a purchaser investigate?
discussed in Santiago v. SBMA, G.R. No. 156888, 1. Banks are required to exercise more care and
(2006)] prudence in dealing with registered lands for
b. Tax declaration and receipts are not conclusive their business is one affected with public interest.
but have strong probative value when The general rule does not apply.
accompanied by proof of actual possession. 2. When party concerned has actual knowledge of
[Municipality of Santiago v. CA, G.R. No. L-49903 facts and circumstances that would impel a
(1983)] reasonably cautious man to make inquiry. [Leung
c. Other proofs such as testimonial evidence Yee v. Strong Machinery Company, G.R. No. L-
11658 (1918)]
3. When purchaser is in bad faith; e.g. he had full
knowledge of a previous sale. [Jamoc v. CA, 200
SCRA 74 (1991)]
4. When a person buys land from one whose rights
over the land is evidenced only by a deed of sale
2. The national, provincial and city b. If ONLY A PORTION of property is the subject
governments are exempted from payment of [Sec. 58, PD 1529]
entry fees 1. Include a plan which shows all the portions
3. RA 456 prohibits registration of documents already subdivided with verified and
affecting real property which is delinquent in approved technical description.
the payment of real estate taxes. Further, if 2. That plan with the certified copy of the
evidence of such payment is not presented technical descriptions shall be filed with the
with 15 days from the date of entry of said Register of Deeds for annotation in the TCT.
document in the primary entry book of the 3. Register of Deeds shall issue a TCT and
register of deeds the entry shall be deemed cancel the grantor's certificate partially OR it
cancelled. may be cancelled totally and a new one
d. Entry of the Instrument in the Primary Entry Book: issued describing therein the remaining
Instruments are regarded as registered from the portion
time the Register of Deeds enters them in the c. If there are SUBSISTING encumbrances and
book annotations: They shall be carried over in the new
e. TCT shall then be issued certificate or certificates; except when they have
been simultaneously discharged.
Registration of Dealings Less than Ownership [Sec.
54, PD 1529] Registration of Mortgages and Leases [Sec. 60, PD
If an instrument does not divest ownership or title 1529]
from owner or from transferee of the registered Sec. 60, PD 1529 provides that mortgages and leases
owners, then NO NEW CERTIFICATE shall be entered shall be registered in the manner provided in Sec. 54
or issued. (Dealings less than ownership)
Process of Registration for Dealings less than The deed shall take effect upon the title only from the
Ownership time of registration.
a. Filing of the instrument with the Register of
Deeds When a deed of mortgage is presented, the Register
b. A brief memorandum thereof is made: of Deeds will enter upon the OCT and upon the
1. On the certificate of title by the Register of owner’s duplicate a memorandum thereof and shall
Deeds and signed by him, and sign said memorandum.
2. On the owner’s duplicate
Registration of Powers of Attorneys
Cancellation or extinguishment of such interests shall [Sec. 64, PD 1529]
be registered in the same manner. Powers of attorney and revocations shall be
registered with the Register of Deeds of the province
Registration of Deeds of Sale and Transfers or city where the land lies.
a. If ENTIRE property is the subject [Sec. 57, PD
1529] Any instrument revoking such power shall be
1. Owner executes and registers the deed which registered in like manner.
must be sufficient in form.
2. A new certificate of title is issued and Registration of Trusts
Register of Deeds prepares and delivers to Registration is by memorandum:
grantee his owner's duplicate certificate a. A memorandum by the words “in trust” or “upon
3. Register of Deeds notes upon the OCT and condition” or other apt words is made if a deed or
the duplicate certificate the date of other instrument is filed in order to:
transfer, the volume and page of the 1. Transfer registered land in trust, or upon any
registration book where the new certificate is equitable condition or limitation expressed
registered therein, or
4. The original and the owner's duplicate of the 2. Create or declare a trust or other equitable
grantor's certificate shall be stamped interests in such land without transfer [Sec.
"cancelled". 65, PD 1529]
5. The deed of conveyance shall be filed and b. A memorandum by the words “with power to
indorsed with the number and the place of sell,” or “power to mortgage” or other apt words
registration of the certificate of title of the is made when: The instrument creating or
land conveyed. declaring a trust or other equitable interest
contains an EXPRESS POWER to sell, mortgage, 2. Court after notice shall enter an order to
or deal with the land in any manner owner to surrender certificate at time & place
to be named therein.
However, if an implied or constructive trust is claimed, c. Although notice of attachment is not noted in
person claiming such must execute a sworn duplicate, notation in book of entry of Register of
statement thereof with the Register of Deeds, Deeds produces effect of registration already
containing a description of the land, the name of the
registered owner and a reference to the number of the Effect of registration of attachment
certificate of title. Such claim shall not affect the title a. Creates real right
of a purchaser for value and in good faith before its b. Has priority over execution sale
registration. [Sec. 68, PD 1529] c. But between 2 attachments – one that is earlier
in registration is preferred
2. I nvoluntary Dealings Duty of Register of Deeds - Duty is ministerial but
may refuse registration in the following
The following involuntary dealings affecting circumstances:
registered land must be registered: a. Title to land is not in the name of defendant
a. Attachments [Sec. 69, PD 1529] Exception: If petitioner is an heir
b. Adverse claim [Sec. 70, PD 1529] b. No evidence is submitted to show that he has
c. Sale on execution or for taxes or for any present or possible future interest in land
assessment [Sec. 74, PD 1529]
d. Notice of lis pendens [Sec. 76, PD 1529] Registration of Adverse Claim
A claim is adverse when: [Sec. 70, par. 1, PD 1529]
Registration of Attachment a. Claimant’s right or interest in registered land is
Attachment is a writ issued at the institution or during adverse to the registered owner, and
progress of an action commanding the sheriff to b. Such right arose subsequent to date of original
attach the property, rights, credits or effects of the registration, and
defendant to satisfy demands of the plaintiff. c. No other provision is made in the Decree for the
registration of such right or claimant
Kinds
a. Preliminary Requisites for registration of an adverse claim:
b. Garnishment a. The adverse claimant must give a statement of
c. Levy on execution the following in writing:
1. His alleged right or interest
Process of Registration 2. How and under whom such alleged right or
a. Copy of writ in order to preserve any lien, right or interest is acquired
attachment upon registered land shall be filed 3. The description of the land in which the right
with the Register of Deeds where the land lies, or interest is claimed and
containing number of certificate of title of land to 4. The number of the certificate of title
be affected or description of land [PD 1529, Sec b. The statement must be:
69] 1. Signed by the adverse claimant
b. Register of Deeds to index attachment in names 2. Sworn before a notary public
of both plaintiff & defendant or name of person c. The statement must also state his residence or
whom property is held or in whose name stands the place to which all notices may be served upon
in the records him. [Lozano v Ballesteros, G.R. No. 49470 (1991)]
1. If duplicate of certificate of title is not
presented: Duration of an adverse claim
i. Register of Deeds shall within 36 a. 30 days from the date of registration.
hours send notice to registered owner b. After that the annotation of adverse claim may be
by mail stating that there has been cancelled upon filing of a verified petition by the
registration & requesting him to party in interest.
produce duplicate so that When cancelled, no second adverse claim based
memorandum be made on the same ground may be registered by the
ii. If owner neglects or refuses – Register same claimant.
of Deeds shall report matter to court.
Adverse claim is not ipso facto cancelled after 30 days, Registration of Notice Lis Pendens
hearing is necessary. [Sajonas v. CA, G.R. No. 102377 Purpose of notice of lis pendens: To keep the subject
(1996)] matter within the power of the court until the entry of
final judgment. It therefore creates merely a
REGISTRATION OF EXECUTION AND TAX contingency & not a lien.
DELINQUENCY SALES
When notice of lis pendens is proper:
Execution sale a. To recover possession of real estate
a. To enforce a lien of any description on registered b. To quiet title
land, any execution or affidavit to enforce such c. To remove clouds upon the title thereof
lien shall be filed with Register of Deeds where d. For partition
the land lies e. Other proceedings of any kind in court directly
b. Register in the registration book & memorandum affecting the title to land or the use or occupation
upon proper certificate of title as adverse claim or thereof or the buildings thereon
as an encumbrance
c. To determine preferential rights between 2 liens: When notice of lis pendens is NOT proper:
priority of registration of attachment a. Proceedings for the recovery of money judgments
b. Attachments
Tax sale c. Proceedings on the probate of wills
a. Sale of land for collection of delinquent taxes and d. Administration of the estate of deceased persons
penalties due the Government e. Levies on execution
b. In personam (all persons interested shall be f. Foreclosure
notified so that they are given opportunity to be
heard) Process of Registration: By Memorandum or Notice
1. Notice to be given to delinquent tax payer at stating
last known address a. The institution of the action or proceeding
2. Publication of notice must also be made in b. The court wherein the same is pending
English, Spanish & local dialect & posted in a c. The date of the institution of the action
public & conspicuous place in place wherein d. Reference to the number of the certificate of title
property is situated & at the main entrance of e. Adequate description of the land affected and
the provincial building registered owner thereof
c. Sale cannot affect rights of other lien holders
unless they are given the right to defend their Other parties who need to register
rights: due process must be strictly observed a. Assignee in involuntary proceeding for insolvency
d. Tax lien superior to attachment 1. Duty of the officer serving notice to file a copy
of the notice to the Register of Deeds where
Note: No need to register tax lien because it is the property of debtor lies
automatically registered once the tax accrues. 2. Assignee elected or appointed by court shall
However, sale of registered land to foreclose a tax be entitled to entry of new certificate of
lien needs to be registered. registered land upon presentment of copy of
assignment with bankrupt’s certificate of
Process of Registration title (duplicate)
a. Officer’s return shall be submitted to Register of 3. New certificate shall note that it is entered to
Deeds together with duplicate title him as assignee or trustee in insolvency
b. Register in the registration book proceedings
c. Memorandum shall be entered in the certificate b. Government in eminent domain
as an adverse claim or encumbrance 1. Copy of judgment shall be filed in the
d. After the period of redemption has expired & no Register of Deeds which states description
redemption (2 years from registration of auction of property, certificate number, interest
sale) is made: cancellation of title & issuance of a expropriated, nature of public use
new one 2. Memorandum shall be made or new
e. Before cancellation, notice shall be sent to certificate of title shall be issued
registered owner: to surrender title & show cause
why it shall not be cancelled Effect of registration
a. Impossibility of alienating the property in dispute
Note: Actual knowledge of a person is equivalent to during the pendency of the suit – may be
registration as against him
2
Santiago v. Santos, G.R. No. 31568, March 19, 1930;;
Verzosa v. Nicolas, G.R. No. 9227, February 10, 1915
A copy of the notice shall also be sent to: RA 931, effective June 20, 1953 for five (5) years,
• Mayor of the municipality authorizing the reopening of cadastral cases under
• Barangay captain certain conditions and which had been extended until
• Sangguniang Panlalawigan and Dec. 31, 1968, is no longer in force.
Sangguniang Bayan concerned
Courts are thus without jurisdiction or authority to
STEP 5: Geodetic engineers or other Bureau of Land reopen a cadastral proceeding since Dec. 31, 1968.
employees in charge of the survey shall give notice [Aquino, citing Republic v. Estenzo, G.R. No. L-35512
reasonably in advance of the date of the survey (1988)]
They shall also mark the boundaries of the lands with
monuments
3
Director of Lands v. CA & Pastor, G.R. No. L-47847, July 31,
1981
Petition to Reopen or Review Decree of Registration b. The registration of the land in the name of
– Sec. 32, PD 1529 the defendant was procured through fraud or
1. To whom available: Only to an aggrieved party other illegal means;
who has been deprived of land or any estate or c. The property has not yet passed to an
interest therein by decree of registration innocent purchaser for value; and
2. When to file: Any time after the rendition of the d. The action is filed after the certificate of title
court’s decision and before the expiration of 1 year had already become final and
from entry of decree of registration incontrovertible but within 4 years from the
a. Upon expiration of the 1 year period, every discovery of the fraud [Balbin v. Medalla, G.R.
decree becomes incontrovertible No. L-46410 (1981)] or not later than 10 years
b. The Court held that the petition may be filed in the case of an implied trust [New Regent
at any time after rendition of the court’s Sources, Inc. v. Tanjuatco, G.R. No. 168800
decision (no need to wait for actual entry in (2009)]
the LRA) and before expiration of one year
from entry of the final decree of registration. Quieting of Title – remedy for the removal of any
[Rivera v. Moran, G.R. No. L-24568 (1925); cloud of doubt or uncertainty with respect to real
Director of Lands v. Aba, G.R. No. L-45648 property
(1939)] 1. Who may file: See Sec. 1, Rule 63, ROC
3. Sole and ONLY Ground: Actual Fraud 2. Requisites:
a. Actual fraud proceeds from an intentional a. Plaintiff or complainant has a legal or an
deception practiced by means of equitable title to or interest in the real
misrepresentation or concealment of property subject of the action; and
material fact b. The deed, claim, encumbrance or proceeding
b. The fraud must consist in an intentional claimed to be casting a cloud on his title
omission of fact required by law to be stated must be shown to be in fact invalid or
in the application or a wilful statement of a inoperative despite its prima facie
claim against the truth appearance of validity or legal efficacy.
4. Requisites for Petition to Reopen or Review
a. The petitioner has a real and dominical right; Cancellation of Title – It is initiated by a private party
b. That he has been deprived thereof (through usually in a case where there are two titles issued to
fraud); different persons for the same lot. [Agcaoili]
c. That the action is filed within one year from
the issuance and entry of the decree of Action for Damages - It can be availed of when
registration; and reconveyance is no longer possible as when the land
d. That the property has not been transferred to has been transferred to an innocent purchaser for
an innocent purchaser for value; [Agcaoili, value [Ching v. CA, G.R. No. L-59731 (1990)]
citing Walstrom v. Mapa, G.R. No. 38387
(1990)] Action for Compensation from the Assurance Fund
Requisites:
Action for Reconveyance: 1. That a person sustains loss or damage, or is
1. When to file: deprived of any estate or interest in land;
a. Before issuance of decree, or within/after 1 2. On account of the bringing of land under the
year from entry operation of the Torrens System arising after
b. If based on implied trust, 10 years; original registration;
c. If based on express trust and void contract, or 3. Through fraud, error, omission, mistake or
if the plaintiff is in possession of the land, misdescription in a certificate of title or entry or
imprescriptible memorandum in the registration book;
d. If based on fraud, 4 years from the discovery 4. Without negligence on his part; and
2. It does not reopen proceedings but a mere 5. Is barred or precluded from bringing an action for
transfer of the land from registered owner to the the recovery of such land or estate or interest
rightful owner [Esconde v. Barlongay, supra] therein. [Agcaoili]
3. Requisites:
a. The action must be brought in the name of a Reversion - Instituted by the government, thru the
person claiming ownership or dominical Solicitor General in all cases where lands of public
right over the land registered in the name of domain are held in violation of the Constitution or
the defendant; were fraudulently conveyed.
Process of Registration
1. Registration is by way of annotation
2. The instrument dealing with unregistered land is
presented before the Register of Deeds
3. The Register will then determine if it can be
registered:
a. If, on the face of the instrument, it appears
that it is sufficient in law, the Register of
Deeds shall forthwith record the instrument
b. In case the Register of Deeds refuses its
administration to record, he shall advise the
party in interest in writing of the ground or
grounds for his refusal
i. The waste waters of fountains, sewers, and to registration. [Republic v. CA, G.R. No. L-61647
public establishments (1984)]
Specific kinds of non-registrable properties or lands 13. Reservations for public and semi-public
1. Forest or timberland, public forest, forest purposes – Sec. 14, Chapter 4, Book III of EO No.
reserves 292 provides that the President shall have the
2. National parks – Under the present Constitution, power to reserve for settlement or public use, and
national parks are declared part of the public for specific public purposes, any of the lands of
domain, and shall be conserved and may not be public domain, the use of which is not otherwise
increased nor diminished, except by law [Rep. v directed by law.
AFP Retirement and Separation Benefits System,
G.R. No. 180463,(2013)] The land registration court has no jurisdiction over
3. Mangrove swamps - Mangrove swamps or non-registrable property and cannot validly adjudge
mangroves should be understood as comprised the registration of title thereof in favor of a private
within the public forests of the Philippines as applicant. [Peña]
defined in Sec. 1820, Administrative Code of 1917.
[Director of Forestry v. Villareal, G.R. No. L-32266 Thus, where it has so been adjudged, the river not
(1980)] being capable of private appropriation or acquisition
4. Mineral lands - Both under the 1987 Constitution by prescription, the title thereto may be attacked,
and Sec. 2 of the Public Land Act, mineral lands either directly or collaterally, by the State which is not
are not alienable and disposable. [Lepanto bound by any prescriptive period provided by the
Consolidated Mining Co. v. Dumyung, G.R. No. L- Statute of Limitation. [Peña, citing Martinez v. CA,
31666 (1979)] G.R. No. L-31271 (1974)]
5. Foreshore land and seashore and reclaimed
lands- Seashore, foreshore, and/or portions of
territorial waters and beaches, cannot be
registered. Even alluvial formation along the
seashore is part of public domain. [Aquino, citing
Dizon v. Rodriguez, G.R. Nos. L-20300-01 (1965)]
6. Lakes - Lakes are part of public dominion. [Art.
502(4), CC]
7. Creeks and Streams – A dried up creek bed is
property of public dominion [Fernando v. Acuna,
G.R. No. 161030 (2011)]
8. Military or Naval Reservations - The reservation
made segregates it from the public domain and
no amount of time in whatever nature of
possession could have ripen such possession into
private ownership. [Republic v. Marcos, G.R. No.
L-32941 (1973)]
9. Watershed - The Constitution expressly
mandates the conservation and utilization of
natural resources, which includes the country’s
watershed. [Tan v. Director Of Forestry, G.R. No. L-
24548, (1983)]
10. Grazing lands - While the 1987 Constitution does
not specifically prove that grazing lands are not
disposable, yet if such lands are part of a forest
reserve, there can be no doubt that the same are
incapable of registration. [Aquino, citing Director
of Lands v. Rivas, G.R. No. L-61539 (1986)]
11. Previously titled land - Proceeds from the
indefeasibility of the Torrens title.
12. Alluvial deposit along river when man-made -
Such deposit is really an encroachment of a
portion of the bed of the river, classified as
property of the public domain under Art. 420,
par. 1 and Art. 502 (1) of the CC, hence not open
XIII. TORTS/QUASI- cannot recover damages twice for the same act or
omission of the defendant.
DELICTS Art. 100, RPC. Every person criminally liable for a
felony is also civilly liable.
Preliminary Considerations
An act or omission causing damage to another may
give rise to two separate civil liabilities on the part of
1. Definition of Tort the offender—for civil liability ex delicto, and
independent civil liabilities. The choice is with the
Tort plaintiff who makes known his cause of action in his
A private or civil wrong violating a right for which the initiatory pleading or complaint [LG Foods v.
law provides a remedy in the form of damages Philadelfa, G.R. No. 158995 (2006)]
CULPA CULPA
AQUILIANA CONTRACTUAL
Negligence
A breach in the
becomes source
performance of
Vinculum juris of obligation
an obligation
between persons
already existing
not formerly
do [Culion v. Philippine Motors, G.R. No 32611 only, and this is to be determined in each case by
(1930)]. the circumstances of the case [Taylor v. Manila
Railroad, G.R. No. 4977 (1910)].
4. Doctors
Whether or not a physician has committed an No contributory negligence can be imputed to
‘inexcusable lack of precaution’ in the treatment children below 9 years old [Jarco Marketing v. CA,
of his patient is to be determined according to the G.R. No. 129792 (1999)].
standard of care observed by other members of
the profession in good standing under similar The degree of care required to be exercised must
circumstances bearing in mind the advanced vary with the capacity of the person endangered
state of the profession at the time of treatment of to care for himself. …The standard of conduct to
present state of medical science. It is in this aspect which a child must conform for his own protection
of medical malpractice that expert testimony is is that degree of care ordinarily exercised by
essential to establish not only the standard of care children of the same age, capacity, discretion,
of the profession but also that the physician’s knowledge and experience under the same or
conduct in the treatment and care falls below similar circumstances [Ylarde v. Aquino, G.R. No.
such standard [Cruz v. CA, GR. No. 122445 (1997)] L-33722 (1988)].
5. Pharmacists c. Presumptions of
The profession of pharmacy, it has been said
again and again, is one demanding care and skill. Negligence
Even under the first conservative expression,
"ordinary care" with reference to the business of a IN MOTOR VEHICLE MISHAPS
druggist…must be held to signify "the highest
practicable degree of prudence, thoughtfulness, Liability of the owner
and vigilance, and most exact and reliable
safeguards consistent with the reasonable Art. 2184, CC. In motor vehicle mishaps, the owner
conduct of the business in order that human life is solidarily liable with his driver, if the former, who
may not constantly be exposed to the danger was in the vehicle, could have, by the use of the due
flowing from the substitution of deadly poisons diligence, prevented the misfortune. xxx
for harmless medicine [US v. Pineda, G.R. No. L- If the owner was not in the motor vehicle, the
12858 (1918)].” provisions of article 2180 are applicable.
Mistake is negligence and care is no defense Art. 2186, CC. Every owner of a motor vehicle shall
[Mercury Drug v. de Leon, G.R. No. 165622 file with the proper government office a bond
(2008)]. executed by a government-controlled corporation
or office, to answer for damages to third persons.
6. Possessor of Extremely Dangerous The amount of the bond and other terms shall be
Instrumentalities fixed by the competent public official.
[A] higher degree of care is required of someone
who has in his possession or under his control an The owner is solidarily liable with the driver for motor
instrumentality extremely dangerous in vehicle mishaps when:
character, such as dangerous weapons or 1. The owner was IN the vehicle at the time, AND
substances. Such person in possession or control 2. The owner could have, by the use of due diligence,
of dangerous instrumentalities has the duty to prevented the misfortune.
take exceptional precautions to prevent any injury
being done thereby. Unlike the ordinary affairs of Note: If the owner was NOT inside the vehicle, Art.
life or business which involve little or no risk, a 2180 applies.
business dealing with dangerous weapons
requires the exercise of a higher degree of care The presumption is against the owner of the motor
[Pacis v. Morales, G.R. No. 169467 (2010)]. vehicle. He has the burden of proving due diligence.
Thus, once a driver is proven negligent in causing
7. Children damage, the law presumes the vehicle owner equally
The conduct of an infant of tender years is not to negligent and imposes upon the latter the burden of
be judged by the same rule, which governs that of proving proper selection and supervision of employee
an adult. …The care and caution required of a as a defense.
child is according to his maturity and capacity
establishment or latter are employed or on the parental authority is exercised by both the father and
enterprise occasion of their functions the mother. Thus, the distinction in Art. 2180 where
the father is liable before the mother no longer
Employees and household applies.
helpers acting within the
scope of their assigned tasks, Who are liable for minors?
Employers
even though the former are 1. Parents/Adoptive parents
not engaged in any business 2. Court-appointed guardians
or industry 3. Substitute Parental Authorities
State Special agent a. Grandparents
b. Oldest qualified sibling over 21 years old
Teachers or heads of Pupils and students or
c. Child’s actual custodian, provided he is
establishments of apprentices, so long as they
qualified and over 21 years old.
arts and trades remain in their custody
4. Special Parental Authorities
a. School
a. Persons exercising parental authority b. Administrators
c. Teachers
Art. 2180 (2), CC. The father and, in case of his d. Individual, entity, or institution engaged in
death or incapacity, the mother, are responsible for child care
the damages caused by the minor children who live
in their company. Illegitimate children
Responsibility is with the mother whom the law vests
Art. 221, FC. Parents and other persons exercising with parental authority.
parental authority shall be civilly liable for the
Basis of liability of parents and adopters
injuries and damages caused by the acts or
Parental liability is anchored upon parental authority
omissions of their unemancipated children living in
coupled with presumed parental dereliction in the
their company and under their parental authority
discharge of the duties accompanying such authority.
subject to the appropriate defenses provided by
The parental dereliction is, of course, only presumed
law.
and the presumption can be overturned under Article
2180 of the CC by proof that the parents had exercised
Art. 216, FC. In default of parents or a judicially all the diligence of a good father of a family to prevent
appointed guardian, the following person shall the damage [Tamargo v. CA, G.R. No. 85044 (1992)].
exercise substitute parental authority over the child
in the order indicated: Meaning of “Minority”
(1) The surviving grandparent, as provided in Art. Par. 2 and 3 of Art. 2180 speak of minors. Minors here
214; refer to those who are below 21 years of age, not below
(2) The oldest brother or sister, over twenty-one 18 years. The law reducing the majority age from 21 to
years of age, unless unfit or disqualified; and 18 years old did not amend these paragraphs. Basis is
(3) The child's actual custodian, over twenty-one FC, Art. 236 (3), as amended by RA 6809, provides,
years of age, unless unfit or disqualified. “Nothing in this Code shall be construed to derogate
from the duty or responsibility of parents and
Whenever the appointment or a judicial guardian guardians for children and wards below 21 years of age
over the property of the child becomes necessary, mentioned in the second and third paragraphs of 2180
the same order of preference shall be observed. of the CC.”
Art. 217, FC. In case of foundlings, abandoned Art. 2180 (3), CC. Guardians are liable for damages
neglected or abused children and other children caused by the minors or incapacitated persons who
similarly situated, parental authority shall be are under their authority and live in their company.
entrusted in summary judicial proceedings to
heads of children's homes, orphanages and The liability of guardians with respect to their wards is
similar institutions duly accredited by the proper governed by the same rule as in the liability of parents
government agency. with respect to their children below 21 years and who
live with them
Art. 221 FC provides that persons exercising parental
authority shall be civilly liable for the torts of the
children in their care. Art. 211 FC then states that “Incompetent” includes (Rule 92, ROC):
school, which includes recess time [Palisoc v. 2. Tortious act had been committed while the
Brillantes, G.R. No. L-29025 (1971)]. tortfeasor was acting in the normal course of
employment
As long as it is shown that the student is in the school
premises pursuant to a legitimate student objective, in BASIS OF LIABILITY: NOT RESPONDEAT
the exercise of a legitimate right, or the enjoyment of SUPERIOR, BUT PATER FAMILIAS
a legitimate student privilege, the responsibility of the
school authorities over the student continues RESPONDEAT SUPERIOR PATER FAMILIAS
[Amadora v CA, G.R. No. L-47745 (1988)]. There is only a
Master is absolutely liable
presumption of
to servant’s act or
STUDENTS COVERED negligence on the part
omission
of the employer
ARTS. 218-219 ART. 2180
Defense of negligence
All students, even those no No defense of negligence
available
longer minors, as long as they
Minor students only Embodied in the
remain in the custody of the Embodied in primary
persons responsible subsidiary liability under
liability under Art. 2180,
RPC – no defense of
where the defense of
diligence; only lack of
c. Owners/managers of diligence is available
criminal liability
establishments/employers
Art. 2180 (4), FC. The owners and managers of an “Owners and managers of an establishment or
establishment or enterprise are likewise enterprise” does not include a manager of a
responsible for damages caused by their corporation. (Spanish term “directores” connotes
employees in the service of the branches in which “employer.” But manager of a corporation is not an
the latter are employed or on the occasion of their employer, but rather merely an employee of the
functions. owner.) [Philippine Rabbit v. Philam Forwarders, G.R.
No. L-25142 (1975)].
Art. 2180 (5), FC. Employers shall be liable for the The liability imposed upon employers with respect to
damages caused by their employees and damages occasioned by the negligence of their
household helpers acting within the scope of their employees to whom they are not bound by contract is
assigned tasks, even though the former are not based on the employer’s own negligence, such as
engaged in any business or industry. when he places a powerful automobile in the hands of
a servant whom he knows to be ignorant of the
NATURE OF EMPLOYERS’ LIABILITY method of managing such vehicle [Cangco v. Manila
The basis of his liability is not his Railroad, supra].
employee’s negligence, but his own
Direct This Court still employs the "control test" to determine
negligence in hiring and supervising
the employee. the existence of an employer-employee relationship
between hospital and doctor. Under the "control test",
The amount for which he is liable an employment relationship exists between a
may be pursued without having to physician and a hospital if the hospital controls both
Primary exhaust the employee’s assets, as the means and the details of the process by which the
opposed to subsidiary liability under physician is to accomplish his task. The Court earlier
the RPC. ruled that there was employer-employee relationship
He may recover the full amount of between the doctor and employee but reversed itself
the liability from his employee, as upon motion for reconsideration. They still held the
Solidary per Art. 2181, and not merely a hospital liable on the basis of agency and corporate
prorated amount, unlike in Art. responsibility [Professional Services v. CA and Agana,
2184, CC. G.R. No. 126297 (2010)].
which case what is provided in Article 2176 shall be Art. 2194, FC. The responsibility of two or more
applicable. persons who are liable for quasi-delict is solidary.
and producing the injury, either immediately or by cause and the injury a distinct, successive,
setting other events in motion, all constituting a unrelated, and efficient cause of the injury, even
natural and continuous chain of events, each though such injury would not have happened but
having a close causal connection with its for such condition or occasion [Manila Electric v.
immediate predecessor, the final event in the Remonquillo, G.R. No. L-8328 (1956)].
chain immediately effecting the injury as a natural
and probable result of the cause which first acted, 3. Intervening Cause
under such circumstances that the person The test of determining whether or not the
responsible for the first event should, as an intervening cause is sufficient to absolve a prior
ordinary prudent and intelligent person, have cause of the injury is as follows: whether the
reasonable ground to expect at the moment of his intervention of a later cause is a significant part of
act or default that an injury to some person might the risk involved in the defendant’s conduct, or is
probably result therefrom [Bataclan v. Medina, so reasonable connected with it that the
supra]. responsibility should not be terminated. In the
affirmative, such foreseeable intervening forces
Respondent was mistakenly given Dormicum, a are within the scope of the original risk, and hence
potent sleeping tablet, instead of medication for his of the defendant’s negligence. In the negative,
blood sugar. He took a pill for 3 consecutive days and there exists an efficient intervening cause that
on the third day, he fell asleep on the wheel and relieves the defendant of liability.
figured in a vehicular accident. The Court found that
the proximate cause of the accident was the Mercury If the intervening cause is one which in ordinary
Drug employee’s mistake in reading the prescription human experience is reasonably to be anticipated,
[Mercury Drug v. Baking, G.R. No. 156037 (2007)]. or one which the defendant has reason to
anticipate under the particular circumstances, the
Note: Here, 3 days have elapsed from the time of the defendant may be negligent, among other
negligent act determined by the Court as the reasons, because of failure to guard against it.
proximate cause; thus, the Court did not consider the There is an intervening cause combining with the
time element in determining proximate cause but the defendant’s conduct to produce the result, and
nature and gravity of the injury. the defendant’s negligence consists in failure to
protect the plaintiff against that very risk [Phoenix
Differentiated from: Construction v. IAC, G.R. No. L-65295 (1987)].
1. Concurrent Cause – Several causes producing the
injury, and each is an efficient cause without b. Tests to Determine
which the injury would not have happened. The
injury is attributed to any or all the causes, and Proximate Cause
recovery may be had against any or all of those
responsible. 1. But for / Sine qua non rule
Whether such negligent conduct is a cause
Note: They’re the same thing from the point of without which the injury would not have occurred
view of solidarity. or is the efficient cause which set in motion the
chain of circumstances leading to the injury.
As a general rule, that negligence in order to [Bataclan v. Medina, supra]
render a person liable need not be the sole cause
of an injury. It is sufficient that his negligence, 2. Sufficient link
concurring with one or more efficient causes other Plaintiff, however, must establish a sufficient link
than the plaintiff’s, is the proximate cause of the between the act or omission and the damage or
injury. injury. That link must not be remote or far-
fetched; otherwise, no liability will attach. The
2. Remote Cause – a cause which would have been damage or injury must be a natural and probable
a proximate cause, had there been no efficient result of the act or omission. [Dy Teban Trading,
intervening cause after it and prior to the injury. Inc. v. Ching, G.R. No. 161803 (2008)]
conduct is a substantial factor and there would be merely serves to reduce the recovery of damages
legal causation. Thus, when this test is utilized, it by the plaintiff but does not exculpate the
is also being applied as a test of actual causation defendant from his breach of contract
or “cause in fact’’ test. [de Leon] [Consolidated Bank v. CA, G.R. No. 138569
(2003)].
4. Mixed considerations
There is no exact formula to determine probable Last clear chance applies only if the person who
cause. It is based upon mixed considerations of allegedly had the last opportunity to avert the
logic, common sense, policy and precedent [Dy accident was aware of the existence of peril or
Teban v. Jose Ching, supra]. should, with exercise of due care, have been
aware of it. The doctrine can never apply where
5. Cause v. condition the party charged is required to act
The distinction between cause and condition has instantaneously, and if the injury cannot be
already been almost entirely discredited. So far as avoided by application of all means at hand after
it has any validity at all, it must refer to the type of the peril is or should have been discovered
case where the forces set in operation by the [Pantranco v. Baesa, G.R. No. 79051-51(1989)].
defendant have come to rest in a position of
apparent safety, and some new force intervenes. The doctrine of last clear chance, as enunciated in
But even in such cases, it is not the distinction Anuran v. Buno, applies in a suit between the
between “cause” and “condition” which is owners and drivers of colliding vehicles. It does
important, but the nature of the risk and the not arise where a passenger demands
character of the intervening cause [Phoenix responsibility from the carrier to enforce its
Construction v. IAC, supra]. contractual obligations. It will be inequitable to
exempt the negligent driver of the jeepney and its
6. Last clear chance owners on the ground that the other driver was
likewise guilty of negligence [Bustamante v. CA,
The Doctrine of Last Clear Chance G.R. No. 89880 (1991)].
Also known as: "doctrine of discovered peril” or
“doctrine of supervening negligence” or Note:
“humanitarian doctrine”. • If plaintiff is the proximate cause: no recovery can
be made.
The antecedent negligence of the plaintiff does • If plaintiff is not the proximate cause: Recovery
not preclude him from recovering damages can be made but such will be mitigated.
caused by the supervening negligence of the • If negligence of parties is equal in degree, then
defendant, who had the last fair chance to prevent each bears his own loss.
the impending harm by the exercise of due
diligence [PNR v. Brunty, supra].
3. Defenses
If both parties are found to be negligent; but, their
negligence are not contemporaneous, the person a. Due Diligence to Prevent
who has the last fair chance to avoid the
impending harm and fails to do so is chargeable the Damage under Art.
with the consequences, without reference to the 2180, CC
prior negligence of the other party [Picart v. Smith,
supra]. Art. 2180, CC. The obligation imposed by Article
2176 is demandable not only for one’s own acts or
The doctrine of last clear chance finds no omissions, but also for those of persons for whom
application in a case where the proximate cause one is responsible.
of the injury has been established [PNR v Brunty,
supra]. xxx
The doctrine of last clear chance does not apply in (8) The responsibility treated of in this article shall
a case of culpa contractual, where neither the cease when the persons herein mentioned prove
contributory negligence of the plaintiff nor his last that they observed all the diligence of a good father
clear chance to avoid the loss, would exonerate of a family to prevent damage.
the defendant from liability. Such contributory
negligence or last clear chance by the plaintiff
The presumption of negligence on the part of the part of the remedy allowed for the injury caused by a
master or employer, either in the selection of breach or wrong [Custodio v. CA, G.R. No. 116100
servant/employee or in the supervision, when an injury (1996)].
is caused by the negligence of a servant/employee
may be rebutted if the employer shows to the INJURY DAMAGE DAMAGES
satisfaction of the court that in the selection and
supervision, he has exercised the care and diligence of Loss, hurt, harm Recompense or
Illegal invasion
a good father of a family [Ramos v. PEPSI, G.R. No. L- resulting from compensation
of a legal right
22533 (1967)]. the injury awarded
b. Acts of Public Officers One who made use of his own legal right does no
injury, thus, whatever damages are caused to another
should be borne solely by him under the principle of
A public officer is not liable for damages which a
damnum absque injuria. This principle, however, does
person may suffer arising from the just performance of
not apply when there is an abuse in the exercise of a
his official duties and within the scope of his assigned
person’s right. [Amonoy v. Gutierrez, G.R. No. 140420
tasks. An officer who acts within his authority to
(2001)]
administer the affairs of the office which he/she heads
is not liable for damages that may have been caused
to another, as it would virtually be a charge against the e. Plaintiff’s Negligence is
Republic, which is not amenable to judgment for the Proximate Cause
monetary claims without its consent. However, a
public officer is by law not immune from damages in Art. 2179, CC. When the plaintiff’s own negligence
his/her personal capacity for acts done in bad faith was the proximate cause of his injury, he cannot
which, being outside the scope of his authority, are no recover damages. xxx
longer protected by the mantle of immunity for official
actions. [Vinzons-Chato v Fortun, G.R. No. 141309
(2008)]. This defense of plaintiff’s negligence as proximate
cause is absolute, for it bars recovery on the part of the
plaintiff. In Manila Electric v. Remoquillo, supra, the
c. Authority of :aw Court did not allow recovery by Magno, ruling that his
death was primarily caused by his own negligence and
Art. 5, CC. Acts executed against the provisions of in some measure by the too close proximity of the
mandatory or prohibitory laws shall be void, “media agua” to the electric wire.
except when the law itself authorizes their validity.
If the plaintiff in a negligence action, by his own
Art. 11, CC. The following do not incur any criminal carelessness contributed to the principal occurrence,
liability: xxx that is, to the accident, as one of the determining
(5) Any person who acts in the fulfillment of a causes thereof, he cannot recover [Bernardo v. Legaspi,
duty or in the lawful exercise of a right or office G.R. No. 9308 (1914)].
xxx
(8) Any person who acts in obedience to an order f. Contributory Negligence of
issued by a superior for some lawful purpose
the Plaintiff
d. Damnum Absque Injuria Art. 2179, CC. xxx But if his negligence was only
contributory, the immediate and proximate cause
There can be damage without injury in those instances of the injury being the defendant's lack of due care,
in which the loss or harm was not the result of a the plaintiff may recover damages, but the courts
violation of a legal duty. shall mitigate the damages to be awarded.
Right to recover damages does not arise from the Art. 2214, CC. In quasi-delicts, the contributory
mere fact that the plaintiff suffered losses. To warrant negligence of the plaintiff shall reduce the
the recovery of damages, there must be both a right of damages that he may recover.
action for a legal wrong inflicted by the defendant, and
damage resulting to the plaintiff therefrom. Wrong
without damage, or damage without wrong, does not Contributory negligence is defined as conduct on the
constitute a cause of action, since damages are merely part of the injured party, which contributed as a legal
cause to the harm he has suffered, which falls below
the standard to which he is required to conform for his precludes the recovery of damages by one who has
own protection [Valenzuela v. CA, GR. No. 115024 knowingly and voluntarily exposed himself to danger,
(1996)]. even if he is not negligent in doing so. This is so
because, in theory, the plaintiff’s acceptance of the risk
Contributory negligence does not defeat an action if it has wiped out the defendant’s duty, and as to the
can be shown that the defendant might, by the plaintiff the defendant’s negligence is not a legal
exercise of reasonable care and prudence, have wrong.
avoided the consequences of the injured party's
negligence. Where the plaintiff contributes to the Requisites:
principal occurrence as one of its determining factors, 1. That the plaintiff had actual knowledge of the
he cannot recover. Where, in conjunction with the danger;
occurrence, he contributes only to his own injury, he 2. That he understood and appreciated the risk from
may recover the amount that the defendant the danger; and
responsible for the event should pay for such injury, 3. That he voluntarily exposed himself to such risk
less a sum deemed a suitable equivalent for his own
imprudence [MH Rakes v. Atlantic, G.R. No. L-1719 The defense is not applicable in the following cases:
(1907)]. A person is excused from the force of the rule (volenti
non fit injuria), that when he voluntarily assents to a
The defense of contributory negligence does not apply known danger he must abide by the consequences, if
in criminal cases committed through reckless an emergency is found to exist or if the life or property
imprudence, since one cannot allege the negligence of of another is in peril or when he seeks to rescue his
another to evade the effects of his own negligence endangered property [Ilocos Norte v. CA, G.R. No.
[Genobiagon v. CA, G.R. No. 40452 (1989)]. 53401 (1989)].
g. Fortuitous Event The doctrine does not find application to the case
because even if respondent Reyes assumed the risk of
being asked to leave the pary, petitioners, under
Art. 1174, CC. Except in cases expressly specified
Articles 19 and 21 of the CC, were still under the
by the law, or when it is otherwise declared by
obligation to treat him fairly in order not to expose him
stipulation, or when the nature of the obligation
to unnecessary ridicule and shame [Nikko Hotel v.
requires the assumption of risk, no person shall be
Roberto Reyes, G.R. No. 154259 (2005)].
responsible for those events which, could not be
foreseen, or which, though foreseen, were
inevitable. i. Prescription
Elements of caso fortuito [Juntilla v. Fontanar, G.R. Art. 1146, CC. The following actions must be
No. L-45637 (1985)]: instituted within four years:
1. The cause of the unforeseen and unexpected (1) Upon an injury to the rights of the plaintiff;
occurrence, or of the failure of the debtor to (2) Upon a quasi-delict;
comply with his obligation, must be independent
of the human will; However, when the action arises from or out of any
2. It must be impossible to foresee the event or if it act, activity, or conduct of any public officer
can be foreseen, it must be impossible to avoid; involving the exercise of powers or authority
3. The occurrence must be such as to render it arising from Martial Law including the arrest,
impossible for the debtor to fulfill his obligation detention and/or trial of the plaintiff, the same
in a normal manner; and must be brought within one (1) year.
4. The obligor must be free from any participation
in the aggravation of the injury resulting to the Art. 1150, CC. The time for prescription for all
creditor. kinds of actions, when there is no special provision
which ordains otherwise, shall be counted from
h. Plaintiff’s assumption of the day they may be brought.
risk /Volenti Non Fit Injuria Prescription periods:
The doctrine of volenti non fit injuria (that to which a • 4 years for QD
person assents is not presumed in law as injury) refers • 1 year for defamation
to self-inflicted injury or to the consent to injury which
2. Malicious Prosecution
Art. 21, CC. Any person who willfully causes loss or
Malicious prosecution is the institution of any
injury to another in a manner that is contrary to
action or proceeding, either civil or criminal,
morals, good customs or public policy shall
maliciously and without probable cause.
compensate the latter for the damage.
Elements: [Magbanua v. Junsay, G.R. No.132659
This article is designed “to expand the concept of torts (2007)]
and quasi-delict in this jurisdiction by granting a. The fact of the prosecution or that the
adequate legal remedy for the untold number of moral prosecution did occur and that the defendant
wrongs which is impossible for human foresight to was himself the prosecutor or that he
specifically enumerate and punish in statute books” instigated its commencement;
[Baksh v. CA, supra]. b. That the action finally terminated with an
acquittal;
Elements: [Albenson v. CA, supra]. c. That in bringing the action, the prosecutor
1. There is an act which is legal; acted without probable cause
2. But which is contrary to morals, good customs, d. That the prosecutor was actuated or impelled
and public policy; and by legal malice, that is, by improper or sinister
3. It is done with intent to injure. motive.
Examples of acts contrary to morals: The mere dismissal of the criminal complaint by
1. Breach of Promise to Marry and Moral the fiscal’s office did not create a cause of action
Seduction for malicious prosecution, because the
Mere breach of promise to marry is not an proceedings therein did not involve an exhaustive
actionable wrong. But to formally set a wedding examination of the elements of malicious
and go through all the above-described prosecution. To constitute such, there must be
preparation and publicity, only to walk out of it proof that the prosecution was prompted by a
when the matrimony is about to be solemnized, is sinister design to vex and humiliate a person and
quite different. This is palpably and unjustifiably that it was initiated deliberately by the defendant
contrary to good customs xxx [Wassmer v. Velez, knowing that his charges were false and
G.R. No. L-20089 (1964)]. groundless [Que v. IAC, G.R. No. 66865 (1989)].
Where a man's promise to marry is in fact the Malicious prosecution involves not only criminal
proximate cause of the acceptance of his love by a but civil and administrative suits as well
woman and his representation to fulfill that [Magbanua v. Junsay, supra].
promise thereafter becomes the proximate cause
of the giving of herself unto him in a sexual 3. Public Humiliation
congress, proof that he had, in reality, no intention Lolita’s family filed a case against Alfonse Pe, a
of marrying her and that the promise was only a married man, for allegedly seducing Lolita and
subtle scheme or deceptive device to entice or causing great damage to the name of her parents,
inveigle her to accept him and to obtain her brothers, and sisters. The Court sustained the
consent to the sexual act, could justify the award claim, finding an injury to Lolita’s family in a
of damages pursuant to Article 21 not because of manner contrary to morals, good customs and
such promise to marry but because of the fraud public policy as contemplated in Article 21 of the
and deceit behind it and the willful injury to her new CC [Pe v. Pe, G.R. No. L-17396 (1962)].
honor and reputation. It is essential, however, that
such injury should have been committed in a It is against morals, good customs and public
manner contrary to morals, good customs or policy to humiliate, embarrass and degrade the
public policy [Baksh v. CA, supra]. dignity of a person. Everyone must respect the
dignity, personality, privacy and peace of mind of
However, when for one whole year, the plaintiff, a his neighbors and other persons (Article 26, CC)
woman of legal age, maintained sexual relations [Grand Union v. Espino, G.R. No. L-48250 (1979)].
with the defendant, with repeated acts of
intercourse, there is here voluntariness. No case 4. Oppressive Dismissal
The right of an employer to dismiss an employee
is not to be confused with the manner in which this The restitution must cover the loss suffered by the
right is to be exercised and the effects flowing plaintiff but it can never exceed the amount of unjust
therefrom. If the dismissal was done antisocially enrichment of the defendant if it is less than the loss
or oppressively, then there is a violation of Article of the plaintiff.
1701, which prohibits acts of oppression by either
capital or labor against the other, and Article 21, Requisites:
which makes a person liable for damages if he 1. That the defendant has been enriched;
willfully causes loss or injury to another in a 2. That the plaintiff has suffered a loss;
manner that is contrary to morals, good customs, 3. That the enrichment of the defendant is without
or public policy. When the manner in which the just or legal ground; and
company exercised its right to dismiss was 4. That the plaintiff has no other action based on
abusive, oppressive and malicious, it is liable for contract, crime or quasi-delict.
damages [Quisaba v. Sta. Ines, G.R. No. L-38000
(1974)]. e. Violation of Human Dignity
d. Unjust Enrichment Art. 26, CC. Every person shall respect the dignity,
personality, privacy and peace of mind of his
Art. 22, CC. Every person who through an act of neighbors and other persons. The following and
performance by another, or any other means, similar acts, though they may not constitute a
acquires or comes into possession of something at criminal offense, shall produce a cause of action
the expense of the latter without just or legal for damages, prevention and other relief:
ground, shall return the same to him. (1) Prying into the privacy of another’s residence;
(2) Meddling with or disturbing the private life or
Art. 23, CC. Even when an act or event causing family relations of another;
damage to another’s property was not due to the (3) Intriguing to cause another to be alienated
fault or negligence of the defendant, the latter from his friends;
shall be liable for indemnity if through the act or (4) Vexing or humiliating another on account of
event he was benefited. his religious beliefs, lowly station in life, place
of birth, physical defect, or other personal
Art. 2142, CC. Certain lawful, voluntary and condition.
unilateral acts give rise to the juridical relation of
quasi-contract to the end that no one shall be Article 26 specifically applies to intentional acts which
unjustly enriched or benefited at the expense of fall short of being criminal offenses. It itself expressly
another. refers to tortious conduct which "may not constitute
criminal offenses." The purpose is precisely to fill a gap
Art. 2143, CC. The provisions for quasi contracts in or lacuna in the law where a person who suffers injury
this Chapter do not exclude other quasi-contracts because of a wrongful act not constituting a crime is
which may come within the purview of the left without any redress. Under Article 26, the person
preceding article. responsible for such act becomes liable for "damages,
prevention and other relief." In short, to preserve
peace and harmony in the family and in the
One person should not be permitted to unjustly enrich
community, Article 26 seeks to eliminate cases of
himself at the expense of another, but should be
damnum absque injuria in human relations [MVRS
required to make restitution of, or for property or
Publications v. Islamic Da'wah Council, G.R. No.
benefits received, retained, or appropriated where it is
135306 (2003)].
just and equitable that such restitution be made, and
where such action involves no violation or frustration
The principal rights protected under this provision are
of law or opposition to public policy, either directly or
the following:
indirectly.
1. The right to personal dignity
2. The right to personal security
Enrichment at the expense of another is not per se
3. The right to family relations
forbidden. It is such enrichment without just or legal
4. The right to social intercourse
cause that is contemplated here. Just and legal cause
5. The right to privacy
is always presumed, and the plaintiff has the burden
6. The right to peace of mind
of proving its absence.
rule has more frequently been applied in the case Art. 28, CC. Unfair competition in agricultural,
of advice given to a married daughter, but it is commercial or industrial enterprises or in labor
equally applicable in the case of advice given to a through the use of force, intimidation, deceit,
son. [Tenchavez v. Escaño, G.R. No. L-19671 machination or any other unjust, oppressive or
(1965)]. highhanded method shall give rise to a right of
4. Social Relations action by the person who thereby suffers damage.
Meddling with or disturbing family relations
Art. 26, CC. Every person shall respect the dignity,
personality, privacy and peace of mind of his
f. Dereliction of Duty
neighbors and other persons. The following and
similar acts, though they may not constitute a Art. 27, CC. Any person suffering material or moral
criminal offense, shall produce a cause of action loss because a public servant or employee refuses
for damages, prevention and other relief; or neglects, without just cause, to perform his
xxx official duty may file an action for damages and
(2) Meddling with or disturbing the private life or other relief against the latter, without prejudice to
family relations of another; any disciplinary administrative action that may be
taken.
3. Economic Relations
This applies only to acts of nonfeasance or the
a. Interference with contractual relations nonperformance of some acts which a person is
obliged or has responsibility to perform. The duty of
Art. 1314, CC. Any person who induces another to
the public servant must be ministerial in character. If
violate his contract with another person shall be
the duty is discretionary, he is not liable unless he
liable for damages to the other contracting party.
acted in a notoriously arbitrary manner.
Elements of tort interference: [So Ping Bun v. CA, The defense of good faith is not available because an
G.R. No. 120554 (1999)] officer is under constant obligation to discharge the
i. Existence of a valid contract duties of his office, and it is not necessary to show that
ii. Knowledge on the part of the third person his failure to act was due to malice or willfulness.
of the existence of contract; and
iii. Interference of the third person is without Requisites: [Amaro v. Sumanguit, G.R. No. L-14986
legal justification or excuse. (1962)]
1. Defendant is a public officer charged with a
Everyone has a right to enjoy the fruits and performance of a duty in favor of the plaintiff;
advantages of his own enterprise, industry, skill 2. He refused or neglected without just cause to
and credit. He has no right to be protected against perform the duty;
competition; but he has a right to be free from 3. Plaintiff sustained material or moral loss as a
malicious and wanton interference, disturbance consequence of such non-performance;
or annoyance. If disturbance or loss comes as a 4. The amount of such damages, if material.
result of competition, or the exercise of like rights
by others, it is damnum absque injuria, unless
some superior right by contract or otherwise is 2. I ndependent Civil Actions
interfered with. Thus, a plaintiff loses his cause of
action if the defendant provides a sufficient Sec. 3, Rule 111, ROC. In the cases provided for in
justification for such interference, which must be Articles 32, 33, 34 and 2176 of the CC of the
an equal or superior right in themselves. The Philippines, the independent civil action may be
defendant may not legally excuse himself on the brought by the offended party. It shall proceed
ground that he acted on a wrong understanding independently of the criminal action and shall
of his own rights, or without malice, or bona fide, require only a preponderance of evidence. In no
or in the best interests of himself [Gilchrist v. case, however, may the offended party recover
Cuddy, G.R. No. 9356 (1915)]. damages twice for the same act or omission
charged in the criminal action.
Bad faith/Malice is required to make the
defendant liable for damages in cases of tortuous
interference [So Ping Bun v. CA, supra]. a. Violation of Civil and
Political Rights
b. Unfair Competition
Art. 32, CC. Any public officer or employee, or any independently of any criminal prosecution (if the
private individual, who directly or indirectly latter be instituted) and may be proved by a
obstructs, defeats, violates or in any manner preponderance of evidence.
impedes or impairs any of the following rights and
liberties of another person shall be liable to the The indemnity shall include moral damages.
latter for damages: Exemplary damages may also be adjudicated.
(1) Freedom of religion
(2) Freedom of speech The responsibility herein set forth is not
(3) Freedom to write for the press or to maintain demandable from a judge unless his act or
a periodical publication omission constitutes a violation of the Penal code
(4) Freedom from arbitrary or illegal detention or any other penal statute.
(5) Freedom of suffrage
(6) The right against deprivation of property Art.32, CC
without due process of law 1. Speaks of a particular specie of an “act” that may
(7) The right to just compensation when property give rise to an action for damages against a public
is taken for public use officer, and that is, a tort for impairment of rights
(8) The right to equal protection of the laws and liberties. [Vinzons-Chato v. Fortune, supra]
(9) The right to be secure in one’s person, house, 2. Not only public officers but also private
papers and effects against unreasonable individuals can incur civil liability for violation of
searches and seizures rights enumerated therein. Because the provision
(10) The liberty of abode and of changing the same speaks of an officer, employee or person “directly
(11) The right to privacy of communication and or indirectly” responsible for the violation of the
correspondence constitutional rights and liberties of another, it is
(12) The right to become a member of associations not the actor alone who must answer for damages
and societies for purposes not contrary to law under Article 32. It is not even necessary that the
(13) The right to take part in a peaceable assembly defendant should have acted with malice or bad
and petition the government for redress of faith, otherwise, it would defeat its main purpose,
grievances which is the effective protection of individual
(14) The right to be free from involuntary servitude rights. [Silahis v. Soluta, G.R. No. 163087 (2006)]
in any form 3. It is obvious that the purpose of Art. 32 is to
(15) The right of the accused against excessive bail provide a sanction to the deeply cherished rights
(16) The right of the accused to be heard by himself and freedoms enshrined in the Constitution.
and counsel, to be informed of the nature and
the cause of the accusation against him, to Its message is clear; no man may seek to violate
have a speedy and public trial, to meet the those sacred rights with impunity. In times of great
witnesses face to face, to have compulsory upheaval or of social and political stress, when the
process to secure the attendance of witnesses temptation is strongest to yield. [Aberca, et al. v.
on is behalf; Ver, et al., G.R. No. 69866(1988)].
(17) Freedom from being compelled to be a
witness against one’s self, or from being
forced to confess his guilt, or from being
b. Defamation, Fraud,
induced by a promise of immunity or reward to Physical Injuries
make such confession, except when the
person confessing becomes a State witness. Art. 33, CC. In cases of defamation, fraud, and
(18) Freedom from excessive fines, or cruel and physical injuries, a civil action for damages,
unusual punishment, unless the same is entirely separate and distinct from the criminal
imposed or inflicted in accordance with a action, may be brought by the injured party. Such
statute which has not been judicially declared civil action shall proceed independently of the
unconstitutional; criminal prosecution, and shall require only a
(19) Freedom of access to the courts preponderance of evidence.
In any of the cases referred to in this article, The civil action for damages that Article 33 allows to
whether or not the defendant’s act or omission be instituted is ex-delicto. This is manifest from the
constitutes a criminal offense, the aggrieved party provision which uses the expressions “criminal action”
has a right to commence an entirely separate and and “criminal prosecution”. Quoting Tolentino, the
distinct civil action for damages, and for other Court ruled that this provision is an exception to the
relief. Such civil action shall proceed general rule that the civil action for recovery of civil
liability arising from the offense charged is impliedly but in their generic sense. With these apparent
instituted with the criminal action. Where the offense circumstances in mind, it is evident that the
is defamation, fraud, or physical injuries, a civil action term “physical injuries” could not have been
may be filed independently of the criminal action, even used in its specific sense as a crime defined in
though no reservation is made [Madeja v. Caro, G.R. the Revised Penal Code, for it is difficult to
No. 51183 (1983)]. believe that the Code Commission would have
used terms in same article—some in this general
1. Defamation – the offense of injuring a person’s and others in its technical sense. In other words,
character, fame or reputation through false or the term “physical injuries” should be understood
malicious statements. Defamation is an invasion to mean bodily injury, not the crime of physical
of a relational interest since it involves the opinion injuries, because the terms used with the latter
which others in the community may have, or tend are general terms [Carandang v. Santiago and
to have, of the plaintiff. Valenton, G.R. No. L-8238 (1955)].
Elements of libel pursuant to Art. 353, RPC: Paje was acquitted of the charge of homicide and
a. An allegation or imputation of a discreditable double serious physical injuries through reckless
act or condition concerning another imprudence on the ground that the collision was
b. Publication of the imputation a pure accident and the negligence charged
c. Identity of the person defamed against him did not exist. In a separate civil action
d. Existence of malice to enforce civil liability filed by the heirs of the
deceased, the Court ruled that criminal
Where the defamation is alleged to have been negligence is not one of the three crimes
directed at a group or class, it is essential that the mentioned in Article 33, which authorizes the
statement must be so sweeping or all-embracing institution of an independent civil action.
as to apply to every individual in that group or Although in the case of Dyogi v. Yatco, the Court
class, or sufficiently specific so that each held that the term “physical injuries” includes
individual in the class or group can prove that the homicide, it is borne in mind that the charge
defamatory statement was specifically pointed to against Paje was for reckless imprudence
him [MVRS Publications, Inc. v. Islamic, supra]. resulting in homicide, and the law penalizes the
negligent or careless act, not the result thereof
In determining whether certain utterances are [Corpus v. Paje, G.R. No. L-26737 (1969)].
defamatory, the words used are to be construed in
their entirety and taken in their plain, natural and c. Neglect of Duty
ordinary meaning, as they would naturally be
understood by persons hearing or reading them,
Art. 34, CC. When a member of a city or municipal
unless it appears that they were used and
police force refuses or fails to render aid or
understood in another sense. When malice in fact
protection to any person in case of danger to life or
is proven, assertions and proofs that the libelous
property, such peace officer shall be primarily
articles are qualifiedly privileged communications
liable for damages, and the city or municipality
are futile, since being qualifiedly privileged
shall be subsidiarily responsible therefor. The civil
communications merely prevents the
action herein recognized shall be independent of
presumption of malice from attaching in a
any criminal proceedings, and a preponderance of
defamatory imputation [Yuchengco v. Manila
evidence shall suffice to support such action.
Chronicle, G.R. No. 184315 (2009)].
2. Fraud – Estafa under Art. 315, RPC; violations of Art. 34 covers a situation where:
B.P. 22 are not covered 1. There is danger to the life or property of a person;
2. A member of a city or municipal police force who
3. Physical Injuries (Assault and Battery) is present in the scene refused or failed to render
aid or protection to the person; and
Defamation and fraud (in Art. 33) are used in their 3. Damages are caused whether to the person
ordinary sense because there are no specific and/or property of the victim.
provisions in the Revised Penal Code using these
terms as names of offenses defined therein, so Nature of liability
that these two terms defamation and fraud must 1. Of the police officer – Primary
have been used not to impart to them any 2. City or municipality – Subsidiary
technical meaning in the laws of the Philippines,
public buildings, and other public works under Liability does not attach to the proprietor if the
their control or supervision. damage was caused by any defect in the construction
mentioned in Article 1723, in which case the action
It is not even necessary that the defective roads or should be against the engineer or architect.
streets belong to the province, city or municipality for
liability to attach. The article only requires that either Under Article 2190, the plaintiff is required to prove:
control or supervision be exercised over said street or 1. The total or partial collapse of a building or
road [Guilatco v. Dagupan, G.R. No. 61516 (1989)]. structure
2. That the defendant is the proprietor
3. That the collapse was due to the lack of necessary
c. Proprietor of Building or repairs
Structure
Note: There is no requirement to prove negligence.
Art. 2190, CC. The proprietor of a building or
structure is responsible for the damages resulting Under Article 2191, with the exception of No. 1,
from its total or partial collapse, if it should be due negligence is also not an issue.
to the lack of necessary repairs.
The owner or proprietor of a place of public
amusement impliedly warrants that the premises,
Art. 2191, CC. Proprietors shall also be responsible
appliances and amusement devices are safe for the
for damages caused:
purpose for which they are designed, the doctrine
(1) By the explosion of machinery which has not being subject to no other exception or qualification
been taken care of with due diligence, and the
than that he does not contract against unknown
inflammation of explosive substances which
defects not discoverable by ordinary or reasonable
have not been kept in a safe and adequate
means [Gotesco Investment Corp. v. Chatto, G.R. No.
place;
87584 (1992)].
(2) By excessive smoke, which may be harmful to
persons or property;
(3) By the falling of trees situated at or near d. Engineer or Architect of
highways or lanes, if not caused by force Collapsed Building
majeure;
(4) By emanations from tubes, canals, sewers or Art. 1723, CC. The engineer or architect who drew
deposits of infectious matter, constructed up the plans and specifications for a building is
without precautions suitable to the place. liable for damages if within fifteen years from the
completion of the structure, the same should
Art. 2192, CC. If damage referred to in the two collapse by reason of a defect in those plans and
preceding articles should be the result of any specifications, or due to the defects in the ground.
defect in the construction mentioned in article The contractor is likewise responsible for the
1723, the third person suffering damages may damages if the edifice falls, within the same
proceed only against the engineer or architect or period, on account of defects in the construction or
contractor in accordance with said article, within the use of materials of inferior quality furnished by
the period therein fixed. him, or due to any violation of the terms of the
contract. If the engineer or architect supervises the
Ownership of a building imposes on the proprietor construction, he shall be solidarily liable with the
thereof the duty to maintain it in good condition at all contractor.
times to the end that it may not collapse either totally
or partially as to cause damage or injury to another’s Acceptance of the building, after completion, does
person or property. This duty obtains whether the not imply waiver of any of the cause of action by
building is leased or held in usufruct. Considering, reason of any defect mentioned in the preceding
however, that the lessee or usufructuary has direct and paragraph.
immediate control of the building, the law imposes on
him the duty to notify the proprietor of such urgent or The action must be brought within ten years
extraordinary repairs. And where the proprietor’s following the collapse of the building.
failure to make the necessary repairs was due to the
failure of the lessee or usufructuary to notify him, the Engineer or architect who drew up the plans and
proprietor is entitled to indemnification for damages specifications is liable if the building collapses within
he may have been required to pay to the parties. 15 years due to:
1. A defect in those plans and specifications; or employers” [Alarcon v. Alarcon, G.R. No. L-15692
2. Due to the defects in the ground. (1961)].
noxious or harmful substances used, although no manufacturer. In case of imported products, the
contractual relation exists between them and the manufacturer's representatives or, in his absence,
consumers. the importer, shall be deemed the manufacturer.
Under the foregoing provision, liability is not made to Article 92. Exemptions. – If the concerned
depend upon fault or negligence of the manufacturer department finds that for good or sufficient
or processor. The provision likewise dispensed with reasons, full compliance with the labeling
any contractual relation between the manufacturer requirements otherwise applicable under this Act is
and the consumer, thereby clearly implying that impracticable or is not necessary for the adequate
liability is imposed by law as a matter of public policy. protection of public health and safety, it shall
promulgate regulations exempting such
Proof of negligence under this provision is not substances from these requirements to the extent
necessary; as such, traditional contract and warranty it deems consistent with the objective of
defenses as (1) lack of privity; (2) lack of reliance on a adequately safeguarding public health and safety,
warranty; (3) lack of notice to the defendant of the and any hazardous substance which does not bear
breach of warranty; and (4) disclaimer of implied a label in accordance with such regulations shall be
warranties are inapplicable. deemed mislabeled hazardous substance.
Requisites of liability Article 97. Liability for the Defective Products. – Any
1. Defendant is a manufacturer or possessor of Filipino or foreign manufacturer, producer, and
foodstuff, drinks, toilet articles and similar goods; any importer, shall be liable for redress,
2. He used noxious or harmful substances in the independently of fault, for damages caused to
manufacture or processing of the foodstuff, drinks consumers by defects resulting from design,
or toilet articles consumed or used by the plaintiff; manufacture, construction, assembly and erection,
3. Plaintiff’s death or injury was caused by the formulas and handling and making up,
product so consumed or used; and presentation or packing of their products, as well as
4. The damages sustained and claimed by the for the insufficient or inadequate information on the
plaintiff and the amount thereof. use and hazards thereof.
(c) he does not adequately preserve perishable paragraph; but such shall not be less than seven (7)
goods. The party making payment to the nor more than one hundred and eighty (180) days.
damaged party may exercise the right to
recover a part of the whole of the payment The consumer may make immediate use of the
made against the other responsible parties, in alternatives under the second paragraph of this
accordance with their part or responsibility in Article when by virtue of the extent of the
the cause of the damage effected. imperfection, the replacement of the imperfect
parts may jeopardize the product quality or
Article 99. Liability for Defective Services. – The characteristics, thus decreasing its value.
service supplier is liable for redress, independently
of fault, for damages caused to consumers by If the consumer opts for the alternative under sub-
defects relating to the rendering of the services, paragraph (a) of the second paragraph of this
as well as for insufficient or inadequate information Article, and replacement of the product is not
on the fruition and hazards thereof. possible, it may be replaced by another of a
different kind, mark or model: Provided, That any
The service is defective when it does not provide difference in price may result thereof shall be
the safety the consumer may rightfully expect of it, supplemented or reimbursed by the party which
taking the relevant circumstances into caused the damage, without prejudice to the
consideration, including but not limited to: provisions of the second, third and fourth
4. the manner in which it is provided; paragraphs of this Article.
5. the result of hazards which may reasonably be
expected of it; Article 101. Liability for Product Quantity
6. the time when it was provided. Imperfection. – Suppliers are jointly liable for
imperfections in the quantity of the product when,
A service is not considered defective because of the in due regard for variations inherent thereto, their
use or introduction of new techniques. net content is less than that indicated on the
container, packaging, labeling or advertisement,
The supplier of the services shall not be held liable the consumer having powers to demand,
when it is proven: alternatively, at his own option:
(a) that there is no defect in the service rendered; (a) the proportionate price
that the consumer or third party is solely at fault. (b) the supplementing of weight or measure
differential;
Article 100. Liability for Product and Service (c) the replacement of the product by another of
Imperfection. – The suppliers of durable or the same kind, mark or model, without said
nondurable consumer products are jointly liable imperfections;
for imperfections in quality that render the products (d) the immediate reimbursement of the amount
unfit or inadequate for consumption for which they paid, with monetary updating without
are designed or decrease their value, and for those prejudice to losses and damages if any.
resulting from inconsistency with the information
provided on the container, packaging, labels or The provisions of the fifth paragraph of Article 99
publicity messages/advertisement, with due regard shall apply to this Article.
to the variations resulting from their nature, the
consumer being able to demand replacement to The immediate supplier shall be liable if the
the imperfect parts. instrument used for weighing or measuring is not
gauged in accordance with official standards.
If the imperfection is not corrected within thirty
(30) days, the consumer may alternatively demand Article 102. Liability for Service Quality
at his option: Imperfection. – The service supplier is liable for
(a) the replacement of the product by another of any quality imperfections that render the services
the same kind, in a perfect state of use; improper for consumption or decrease their value,
(b) the immediate reimbursement of the amount and for those resulting from inconsistency with the
paid, with monetary updating, without information contained in the offer or advertisement,
prejudice to any losses and damages; the consumer being entitled to demand
(c) a proportionate price reduction. alternatively at his option:
(a) the performance of the services, without any
The parties may agree to reduce or increase the additional cost and when applicable;
term specified in the immediately preceding
(b) the immediate reimbursement of the amount (3) Shocks, defies or disregards decency or
paid, with monetary updating without morality; or
prejudice to losses and damages, if any; (4) Obstructs or interferes with the free passage of
(c) a proportionate price reduction. any public highway or street, or any body of
water; or
Reperformance of services may be entrusted to (5) Hinders or impairs the use of property.
duly qualified third parties, at the supplier's risk and
cost. Art. 696, CC. Every successive owner or possessor
of property who fails or refuses to abate a nuisance
Improper services are those which prove to be in that property started by a former owner or
inadequate for purposes reasonably expected of possessor is liable therefor in the same manner as
them and those that fail to meet the provisions of the one who created it.
this Act regulating service rendering.
Art. 697, CC. The abatement of a nuisance does not
Article 103. Repair Service Obligation. – When
preclude the right of any person injured to recover
services are provided for the repair of any product,
damages for its past existence.
the supplier shall be considered implicitly bound to
use adequate, new, original replacement parts, or
those that maintain the manufacturer's technical Art. 698, CC. Lapse of time cannot legalize any
specifications unless, otherwise authorized, as nuisance, whether public or private.
regards to the latter by the consumer.
Nuisance is a condition and not an act or failure to act,
Article 104. Ignorance of Quality Imperfection. – The so that if a wrongful condition exists, the person
supplier's ignorance of the quality imperfections responsible for its existence is responsible for the
due to inadequacy of the products and services resulting damages to others.
does not exempt him from any liability.
A person who creates or maintains a nuisance is liable
Article 105. Legal Guarantee of Adequacy. – The for the resulting injury to others regardless of the
legal guarantee of product or service adequacy degree of care or skill exercised to avoid the injury. The
does not require an express instrument or creation or maintenance of a nuisance is a violation of
contractual exoneration of the supplier being an absolute duty. [Sangco]
forbidden.
Liability for Negligence v. Liability for Nuisance
Article 106. Prohibition in Contractual Stipulation. – NEGLIGENCE NUISANCE
The stipulation in a contract of a clause preventing, Liability is based Liability attaches
exonerating or reducing the obligation to indemnify on lack of proper regardless of the
for damages effected, as provided for in this and in Basis
care and skill exercised to
the preceding Articles, is hereby prohibited, if there diligence avoid the injury
is more than one person responsible for the cause
of the damage, they shall be jointly liable for the There is continuing
redress established in the pertinent provisions of harm being suffered
Act complained
this Act. However, if the damage is caused by a by the aggrieved
of is already done
component or part incorporated in the product or Condition party because of the
which caused
service, its manufacturer, builder or importer and of the act maintenance of the
injury to the
the person who incorporated the component or part act or thing which
plaintiff
are jointly liable. constitutes the
nuisance
h. Nuisance Remedy
Action for
Abatement
damages
Art. 694, CC. A nuisance is any act, omission,
establishment, business, condition of property, or Easement against Nuisance
anything else which:
(1) Injures or endangers the health or safety of Art. 682, CC. Every building or piece of land is
others; or subject to the easement which prohibits the
(2) Annoys or offends the senses; or proprietor or possessor from committing nuisance
through noise, jarring, offensive odor, smoke, heat, A nuisance is, according to Blackstone, "Any thing
dust, water, glare and other causes. that works hurt, inconvenience, or damages."
They arise from pursuing particular trades or
Art. 683, CC. Subject to zoning, health, police and industries in populous neighborhoods; from acts
other laws and regulations, factories and shops of public indecency, keeping disorderly houses,
may be maintained provided the least possible and houses of ill fame, gambling houses, etc.
annoyance is caused to the neighborhood. Nuisances have been divided into two classes:
Nuisances per se, and nuisances per accidens. To
the first belong those which are unquestionably
The provisions impose a prohibition upon owners of
and under all circumstances nuisances, such as
buildings of land from committing therein a nuisance
gambling houses, houses of ill fame, etc. The
or using such buildings or lands in a manner as will
number of such nuisances is necessarily limited,
constitute a nuisance. It is based on the maxim sic
and by far the greater number of nuisances are
utere tuo ut alienum non laedas (so use your own as not
such because of particular facts and
to injure another’s property).
circumstances surrounding the otherwise
harmless cause of the nuisance. For this reason, it
The general rule is that everyone is bound to bear the
will readily be seen that whether a particular thing
habitual or customary inconveniences that result from
is a nuisance is generally a question of fact, to be
the proximity of others, and so long as this level is not
determined in the first instance before the term
surpassed, he may not complain against them. But if
nuisance can be applied to it [Iloilo Ice and Cold
the prejudice exceeds the inconveniences that such
Storage Co. v. Municipal Council, G.R. No. L-7012
proximity habitually brings, the neighbor who causes
(1913)].
such disturbances is held responsible for the resulting
damage, being guilty of causing nuisance. There can be
3. Public nuisance
no doubt that commercial and industrial activities
which are lawful in themselves may become nuisances
if they are so offensive to the senses that they render Art. 695, CC. Nuisance is either public or private.
the enjoyment of life and property uncomfortable. It is A public nuisance affects a community or
no defense that skill and care have been exercised and neighborhood or any considerable number of
the most improved methods and appliances employed persons, although the extent of the annoyance,
to prevent such result. In this case, the Court ruled that danger or damage upon individuals may be
causing or maintaining disturbing noises or sounds unequal. A private nuisance is one that is not
may constitute an actionable nuisance [Velasco v. included in the foregoing definition.
Manila Electric Co., G.R. No. 18390 (1971)].
A public nuisance is the doing of or the failure to do
Types of Nuisance: something that injuriously affects safety, health, or
1. Nuisance per se morals of the public, or works some substantial
It is recognized as a nuisance under any and all annoyance, inconvenience or injury to the public. It
circumstances because it constitutes a direct causes hurt, inconvenience, or damage to the public
menace to public health and safety and, for that generally, or such part of the public as necessarily
reason, may be abated summarily under the comes in contact with it in the exercise of a public or
undefined law of necessity. common right.
To become a nuisance per se, the thing must, of Art. 699, CC. The remedies against a public
itself, because of its inherent qualities, without nuisance are:
complement, be productive of injury, or, by reason (1) A prosecution under the Penal Code or any
of the matter of its use or exposure, threaten or be local ordinance: or
dangerous to life or property. (2) A civil action; or
(3) Abatement, without judicial proceedings.
2. Nuisance per accidens
It becomes a nuisance depending upon certain Art. 700, CC. The district health officer shall take
conditions and circumstances, and its existence care that one or all of the remedies against a
being a question of fact, it cannot be abated public nuisance are availed of.
without due hearing thereon in a tribunal
authorized to decide whether such a thing does in
law constitute a nuisance. Art. 701, CC. If a civil action is brought by reason
of the maintenance of a public nuisance, such
a. According to Purpose
Definition
1. For adequate reparation of the injury
Damages may be defined as the pecuniary a. Compensatory damages
compensation, recompense, or satisfaction for an (reparation of pecuniary losses)
injury sustained, or as otherwise expressed, the b. Moral (reparation for non-pecuniary losses:
pecuniary consequences, which the law imposes for injury to feelings; physical suffering, etc.)
the breach of some duty or the violation of some right 2. For vindication of the right violated:
[People v. Ballesteros, G.R. No. 120921 (1998)]. a. Nominal damages
3. For less than adequate reparation:
The recompense or compensation awarded for the a. Moderate
damage suffered [Custodio v. CA, G.R. No. 116100 4. For deterring future violations:
(1996)]. a. Exemplary or corrective
2. T ypes of Damages
Art. 2197, CC. Damages may be:
(1) Actual or compensatory;
(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated; or
The award of damages for loss of earning capacity is In case of fraud, bad faith, malice or wanton
concerned with the determination of losses or attitude, the obligor shall be responsible for all
damages sustained by the [plaintiffs], as dependents damages which may be reasonably attributed to
and intestate heirs of the deceased, and that said the non-performance of the obligation.
damages consist, not of the full amount of his
earnings, but of the support they received or would Art. 2214, CC. In quasi-delicts, the contributory
have received from him had he not died in negligence of the plaintiff shall reduce the
consequence of negligence of [defendant’s] agent… damages that he may recover.
Only net earnings, and not gross earnings are to be
considered. That is, the total of the earnings less
expenses necessary in the creation of such earnings or Art. 2215, CC. In contracts, quasi-contracts, and
income and less living and other incidental expenses quasi-delicts, the court may equitably mitigate the
[Candano Shipping Lines, Inc. v. Sugata-on, G.R. No. damages under circumstances other than the case
163212 (2007)]. referred to in the preceding article, as in the
following instances:
Extent or scope of actual damages (1) That the plaintiff himself has contravened the
SOURCE EXTENT OF LIABILITY terms of the contract;
(2) That the plaintiff has derived some benefit as
• If the obligor acted in
a result of the contract;
GOOD FAITH, he shall be
(3) In cases where exemplary damages are to be
liable for natural and
awarded, that the defendant acted upon the
probable consequences of
advice of counsel;
the breach, which the
(4) That the loss would have resulted in any
parties have foreseen or
event;
could have reasonably
(5) That since the filing of the action, the
foreseen at the time the
defendant has done his best to lessen the
Contracts obligation was
Art. plaintiff's loss or injury.
and Quasi- constituted.
2201
contracts
The damages recoverable upon breach of contract are,
• If the obligor acted with
primarily, the ordinary, natural and in a sense the
FRAUD, BAD FAITH,
necessary damages resulting from the breach. Other
MALICE or WANTON
damages, known as special damages, are recoverable
ATTITUDE, he shall be
where it appears that the particular conditions which
responsible for all
made such damages a probable consequence of the
damages which may be
breach were known to the delinquent party at the time
reasonably attributed to
the contract was made [Daywalt vs. Recoletos et al.,
the breach.
G.R. No. L-13505 (1919)].
Liability extends to all
damages which are the
Bad faith does not simply connote bad judgment or
natural and probable
negligence; it imports a dishonest purpose or some
consequence of the act or
Crimes and moral obliquity and conscious doing of wrong; it
Art. omission complained of
Quasi- partakes of the nature of fraud…BPI-FB acted out of
2202
delicts the impetus of self-protection and not out of
WON the damage was
malevolence or ill will. BPI-FB was not in the corrupt
foreseen or could have been
state of mind contemplated in Article 2201 and should
reasonably foreseen by the
not be held liable for all damages now being imputed
defendant is irrelevant
to it for its breach of obligation [BPI Family Bank v.
Franco, G.R. No. 123498 (2007)].
In contracts and quasi-contracts
Art. 2201, CC. In contracts and quasi-contracts, the That there was fraud or bad faith on the part of
damages for which the obligor who acted in good respondent airline when it did not allow petitioners to
faith is liable shall be those that are the natural and board their flight in spite of confirmed tickets cannot
probable consequences of the breach of the be disputed. Overbooking amounts to bad faith,
obligation, and which the parties have foreseen or entitling the passengers concerned to an award of
could have reasonably foreseen at the time the moral damages [Spouses Zalamea v. CA, G.R. No.
obligation was constituted. 104235 (1993)].
Contributory negligence of the plaintiff, in case of Formula for the net earning capacity
quasi-delicts, shall reduce the damages to which he Net earning capacity = Life Expectancy × (Gross
may be entitled. However, in case of crimes, there is no annual income –Reasonable living expenses)
mitigation for contributory negligence of the plaintiff. [People vs. Aringue, G.R. No. 116487 (1997)].
decedent's inheritance by the law of testate or to be imposed, and maintained the same at Php.
intestate succession, may demand support 75,000 [People v. Bartolini, G.R. No. 179498 (2010)].
from the person causing the death, for a period
not exceeding five years, the exact duration to In cases of rape with homicide, civil indemnity in the
be fixed by the court; amount of Php. 100,000 should be awarded to the
(3) The spouse, legitimate and illegitimate heirs of the victim [People vs. Pascual, G.R. No. 172326
descendants and ascendants of the deceased (2009)].
may demand moral damages for mental
anguish by reason of the death of the Attorney’s fees and expenses of litigation
deceased. Art. 2208, CC. In the absence of stipulation,
attorney's fees and expenses of litigation, other
Civil/death indemnity than judicial costs, cannot be recovered, except:
Mere commission of the crime shall entitle the heirs of (1) When exemplary damages are awarded;
the deceased to such damages. (2) When the defendant's act or omission has
compelled the plaintiff to litigate with third
But there has been inconsistency as to whether persons or to incur expenses to protect his
indemnity is 50,000 or 75,000 [Casis. interest;
(3) In criminal cases of malicious prosecution
As to the loss of earning capacity against the plaintiff;
General Rule: Shall be awarded in every case, and that (4) In case of a clearly unfounded civil action or
claimant shall present documentary evidence to proceeding against the plaintiff;
substantiate claim for damages. (5) Where the defendant acted in gross and
evident bad faith in refusing to satisfy the
Exceptions: plaintiff's plainly valid, just and demandable
1. If the deceased was self-employed and earning claim;
less than the minimum wage; or (6) In actions for legal support;
2. The deceased was a daily wage worker earning (7) In actions for the recovery of wages of
less than the minimum wage. household helpers, laborers and skilled
workers;
Additional Exception: Testimonial evidence suffices to (8) In actions for indemnity under workmen's
establish a basis for which the court can make a fair compensation and employer's liability laws;
and reasonable estimate of the loss of earning (9) In a separate civil action to recover civil liability
capacity [Pleyto v. Lomboy, G.R. No. 148737 (2004)] arising from a crime;
(10) When at least double judicial costs are
Note: Such an exception to documentary proof awarded;
requirement only exists as to the loss of earning (11) In any other case where the court deems it just
capacity. and equitable that attorney's fees and
expenses of litigation should be recovered.
In Rape Cases
No statutory basis but in several cases the court In all cases, the attorney's fees and expenses of
awards compensatory damages to victims of rape. litigation must be reasonable.
Civil indemnity, in the nature of actual and General Rule: Attorney’s fees and costs of litigation are
compensatory damages, is mandatory upon the recoverable IF stipulated.
finding of the fact of rape. Awarded Php. 50,000 for
simple rape [People v. Astrologo, G.R. No. 169873 Exceptions:
(2007)]. If there is no stipulation, they are recoverable only in
the following cases:
When imposable penalty is death, then the civil 1. By reason of malice or bad faith
indemnity must be Php. 75,000 [People vs. Apattad, a. When exemplary damages are awarded
G.R. No. 193188 (2011)]. b. In case of a clearly unfounded civil action
c. Where defendant acted in gross and evident
The SC held that it could not be proven that the age of bad faith
the victim was such that it would support a penalty of d. When at least double judicial costs are
death. Thus, it imposed reclusion perpetua instead. awarded
But SC said that this should not affect the civil liability 2. By reason of plaintiff’s indigence in
a. Actions for legal support
b. Actions for recovery of wages of laborers, Art. 2210, CC. Interest may, in the discretion of the
etc. court, be allowed upon damages awarded for
c. Actions for workmen’s compensation breach of contract.
3. By reason of crimes in
a. Criminal cases of malicious prosecution Art. 2211, CC. In crimes and quasi-delicts, interest
b. Separate actions to recover civil liability as a part of the damages may, in a proper case, be
arising from crime adjudicated in the discretion of the court.
4. By reason of equity
a. Where the defendant’s act compelled
plaintiff to litigate with third persons Art. 2212, CC. Interest due shall earn legal interest
b. Where the Court deems it just and equitable from the time it is judicially demanded, although
the obligation may be silent upon this point.
Note: In all cases, attorney’s fees and costs of litigation
must be reasonable. Art. 2213, CC. Interest cannot be recovered upon
unliquidated claims or damages, except when the
Even if expressly stipulated, attorney’s fees are demand can be established with reasonable
subject to control by the Courts. certainty.
Attorney’s fees in CC 2208 is an award made in favor
of the litigant, not of his counsel, and the litigant, not Interest accrues when:
his counsel, is the judgment creditor who may enforce 1. The obligation consists in the payment of a sum of
the judgment for attorney's fees by execution money
[Quirante v. IAC, G.R. No. 73886 (1989)]. 2. Debtor incurs in delay
3. There being no stipulation to the contrary
Attorney's fees cannot be recovered except in cases
provided for in CC 2208 [MERALCO v. Ramoy, G.R. No. No interest may be recovered on unliquidated (not
158911 (2008)]. fixed in amount) claims or damages, except when the
demand can be established with reasonable certainty
Attorney’s fees and expenses of litigation are at the Court’s discretion.
recoverable only in the concept of actual damages, not
as moral damages nor judicial costs. Hence, such must Compounding of interest
be specifically prayed for…and may not be deemed Interest due shall earn legal interest from the time it is
incorporated within a general prayer for "such other judicially demanded, although the obligation may be
relief and remedy as this court may deem just and silent on the point.
equitable [Briones v Macabagdal, G.R. No. 150666 Note that interest due can earn only at 6%, whether
(2010)]. the rate of interest of the principal is greater than 6%.
For Art. 2208 (2), CC, an adverse decision does Determination of legal interest
not ipso facto justify an award of attorney’s fees to the 1. When an obligation, regardless of its source (i.e.,
winning party. Even when a claimant is compelled to law, contracts, quasi-contracts, delicts or quasi-
litigate with third persons or to incur expenses to delicts) is breached, the contravenor can be held
protect his rights, still attorney’s fees may not be liable for damages.
awarded where no sufficient showing of bad faith 2. With regard particularly to an AWARD OF
could be reflected in a party’s persistence in a case INTEREST in the concept of actual and
other than an erroneous conviction of the compensatory damages, the RATE of interest, as
righteousness of his cause [Bank of America v. well as the ACCRUAL thereof, is imposed, as
Philippine Racing Club, G.R. No. 150228 (2009)]. follows [Eastern Shipping Lines v. CA, G.R. No.
97412 (1994) as modified by Nacar v. Gallery
Interest Frames, G.R. No. 189871 (2013)]:
Art. 2209, CC. If the obligation consists in the BASE RATE ACCRUAL
payment of a sum of money, and the debtor incurs When the a. That which
To be computed
in delay, the indemnity for damages, there being obligation is may have
from default, i.e.,
no stipulation to the contrary, shall be the breached, been
from JUDICIAL or
payment of the interest agreed upon, and in the and it stipulated
EXTRAJUDICIAL
absence of stipulation, the legal interest, which is consists in in writing.
demand under
six per cent per annum. the b. In the
and subject to
PAYMENT absence of
the provisions of
OF A SUM stipulation,
OF MONEY, the rate of Article 1169 of Note: The new rate of legal interest (6%) in Nacar does
i.e., a loan or interest the CC. not apply to judgments that have become final and
forbearance shall be executory prior to July 1, 2013.
of money, the 6% per
interest due annum Start of Delay
should be- (legal 1. Extrajudicial: Demand letter
interest) 2. Judicial: Filing of complaint
Furthermore, 3. Award
the From the time it
INTEREST Legal interest is JUDICIALLY Duty to Minimize
DUE shall demanded. Art. 2203, CC. The party suffering loss or injury
itself earn must exercise the diligence of a good father of a
When an family to minimize the damages resulting from the
If claim or
obligation, act or omission in question.
damages are
NOT
LIQUIDATED,
constituting a Article 2203 of the CC exhorts parties suffering from
from default, i.e.,
loan or loss or injury to exercise the diligence of a good father
from judicial or
forbearance of a family to minimize the damages resulting from the
extrajudicial
of money, is act or omission in question. One who is injured then by
demand. (Art.
breached, an the wrongful or negligent act of another should
1169, CC)
interest on exercise reasonable care and diligence to minimize
the AMOUNT the resulting damage. Anyway, he can recover from
If
OF the wrongdoer money lost in reasonable efforts to
UNLIQUIDATED,
DAMAGES preserve the property injured and for injuries incurred
from the time the
awarded may in attempting to prevent damage to it [Lim and
demand can be
be imposed Gunnaban vs. CA, G.R. No. 125817 (2002)].
6% per established with
at the
annum. reasonable
discretion of Burden of Proof
certainty. Hence,
the court. The DEFENDANT has the burden of proof to establish
the interest shall
begin to run only that the victim, by the exercise of the diligence of a
The actual good father of a family, could have mitigated the
FROM THE DATE
base for the damages. In the absence of such proof, the amount of
THE JUDGMENT
computation damages cannot be reduced.
OF THE COURT
of legal
IS MADE (at
interest Note:
which time the
shall be on The victim is required only to take such steps as an
quantification of
the amount ordinary prudent man would reasonably adopt for his
damages may be
finally own interest.
deemed to have
adjudged.
been reasonably
ascertained).
When the
JUDGMENT
of the court
awarding a
From FINALITY
sum of
UNTIL ITS
money
SATISFACTION,
becomes
6% per this period being
final and
annum deemed to be an
executory,
equivalent to a
whether or
forbearance of
not the case
credit.
consists in
the payment
of a sum of
money
Art. 2217, CC. Moral damages include physical General Principles of Recovery:
suffering, mental anguish, fright, serious anxiety, 1. Moral damages must somehow be proportional to
besmirched reputation, wounded feelings, moral the suffering inflicted.
shock, social humiliation, and similar injury. 2. In culpa contractual or breach of contract, moral
Though incapable of pecuniary computation, damages may be recovered when the defendant
moral damages may be recovered if they are the acted in bad faith or was guilty of gross
proximate result of the defendant's wrongful act or negligence (amounting to bad faith) or in wanton
omission. disregard of his contractual obligation and,
exceptionally, when the act of breach of contract
Art. 2218, CC. In the adjudication of moral itself is constitutive of tort resulting in physical
damages, the sentimental value of property, real injuries.
or personal, may be considered. 3. By special rule in Article 1764, in relation to Article
2206, moral damages may also be awarded in
Moral damages are emphatically not intended to case the death of a passenger results from a
enrich a complainant at the expense of the defendant. breach of carriage.
Its award is aimed at the restoration, within the limits 4. In culpa aquiliana or quasi-delict,
of the possible, of the spiritual status quo ante, and it a. when an act or omission causes physical
must be proportional to the suffering inflicted [Visayan injuries, or
Sawmill v. CA, G.R. No. 83851 (1993)]. b. where the defendant is guilty of intentional
tort, moral damages may aptly be recovered.
Mental suffering means distress or serious pain as This rule also applies to contracts when
distinguished from annoyance, regret or vexation breached by tort.
[Bagumbayan Corp. v. IAC, G.R. No. L-66274 (1984)]. 5. In culpa criminal, moral damages could be
lawfully due when the accused is found guilty of
Mental anguish is intense mental suffering. Generally, physical injuries, lascivious acts, adultery or
damages for mental anguish are limited to cases in concubinage, illegal or arbitrary detention, illegal
which there has been a personal physical injury or arrest, illegal search, or defamation.
where the defendant willfully, wantonly, recklessly, or 6. Malicious prosecution can also give rise to a claim
intentionally caused the mental anguish. for moral damages. The term "analogous cases,"
referred to in Article 2219, following the ejusdem
When awarded generis rule, must be held similar to those
Awarded when injury consists of: expressly enumerated by the law.
1. Physical suffering 7. Although the institution of a clearly unfounded
2. Besmirched reputation civil suit can at times be a legal justification for an
3. Mental anguish award of attorney's fees, such filing, however, has
4. Fright almost invariably been held not to be a ground for
5. Moral shock an award of moral damages. [Expertravel & Tours
6. Wounded feelings vs. CA., G.R. No. 130030 (1999)].
7. Social humiliation 8. The burden rests on the person claiming moral
8. Serious anxiety damages to show convincing evidence for good
9. Similar injury faith is presumed. In a case involving simple
negligence, moral damages cannot be recovered.
Requisites for awarding moral damages [Villanueva v. Salvador, G.R. No. 139436 (2006)].
The conditions for awarding moral damages are 9. Failure to use the precise legal terms or
[Sulpicio Lines v. Curso, G.R. No. 157009 (2010)]: "sacramental phrases" of "mental anguish, fright,
1. There must be an injury, whether physical, serious anxiety, wounded feelings or moral shock"
mental, or psychological, clearly substantiated by does not justify the denial of the claim for
the claimant; damages. It is sufficient that these exact terms
2. There must be a culpable act or omission factually have been pleaded in the complaint and evidence
established; has been adduced [Miranda-Ribaya v. Bautista,
3. The wrongful act or omission of the defendant G.R. No. L-49390 (1980)].
must be the proximate cause of the injury 10. Even if the allegations regarding the amount of
sustained by the claimant; and damages in the complaint are not specifically
denied in the answer, such damages are not
deemed admitted. [Raagas, et al. v. Traya et al, The spouse, descendants, ascendants, and
G.R. No. L-20081 (1968)]. brothers and sisters may bring the action
11. An appeal in a criminal case opens the whole case mentioned in No. 9 of this article, in the order
for review and this 'includes the review of the named.
penalty, indemnity and damages’. Even if the
offended party had not appealed from said award, In Criminal Offense Resulting in Physical Injuries
and the only party who sought a review of the Under paragraph (1), Article 2219 of the CC, moral
decision of said court was the accused, the court damages may be recovered in a criminal offense
can increase damages awarded. [Sumalpong v. resulting in physical injuries. In its generic sense,
CA, G.R. No. 123404 (1997)]. "physical injuries" includes death [People v. Villaver,
12. It can only be awarded to natural persons. The G.R. No. 133381 (2001)].
award of moral damages cannot be granted in
favor of a corporation because, being an artificial In a case where the father of a family was stabbed to
person and having existence only in legal death, the SC said that “a violent death invariably and
contemplation, it has no feelings, no emotions, no necessarily brings about emotional pain and anguish
senses, It cannot, therefore, experience physical on the part of the victim’s family… For this reason,
suffering and mental anguish, which can be moral damages must be awarded even in the absence
experienced only by one having a nervous system. of any allegation and proof of the heirs’ emotional
The statement in People vs. Manero and suffering [Arcona v CA, G.R. No. 134784 (2002)].”
Mambulao Lumber Co. vs. PNB that a corporation
may recover moral damages if it "has a good In Quasi-Delicts Causing Physical Injuries
reputation that is debased, resulting in social In culpa aquiliana, or quasi-delict, moral damages may
humiliation" is an obiter dictum [ABS-CBN v. CA, be recovered (a) when an act or omission causes
G.R. No. 128690 (1999)]. physical injuries, or (b) where the defendant is guilty of
intentional tort. The SC held that an employer that is
While it is true that besmirched reputation is included vicariously liable with its employee-driver may also be
in moral damages, it cannot cause mental anguish to held liable for moral damages to the injured plaintiff
a corporation, unlike in the case of a natural person, [B.F. Metal v. Lomotan, G.R. No. 170813 (2008)].
for a corporation has no reputation in the sense that
an individual has, and besides, it is inherently In seduction, abduction, rape and other lascivious
impossible for a corporation to suffer mental anguish acts
[NAPOCOR v. Philipp Brothers, G.R. Ni, 126204 Anent the award of damages, civil indemnity ex delicto
(2001)]. is mandatory upon finding of the fact of rape while
moral damages is awarded upon such finding without
When Recoverable need of further proof because it is assumed that a rape
Art. 2219, CC. Moral damages may be recovered in victim has actually suffered moral injuries entitling the
the following and analogous cases: victim to such award. If without factual and legal
(1) A criminal offense resulting in physical bases, no award of exemplary damages should be
injuries; allowed [People v. Calongui, G.R. No. 170566(2006)].
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other In a case where the offender-father was convicted of
lascivious acts; simple rape instead of qualified rape due to the
(4) Adultery or concubinage; prosecution’s failure to specifically allege the age and
(5) Illegal or arbitrary detention or arrest; minority of the victim-daughter, but such was
(6) Illegal search; nonetheless established during the trial, the award of
(7) Libel, slander or any other form of civil indemnity and moral damages in a conviction for
defamation; simple rape should equal the award of civil indemnity
(8) Malicious prosecution; and moral damages in convictions for qualified rape.
(9) Acts mentioned in article 309; Truly, [the victim’s] moral suffering is just as great as
(10) Acts and actions referred to in articles 21, 26, when her father who raped her is convicted for
27, 28, 29, 30, 32, 34, and 35. qualified rape as when he is convicted only for simple
rape due to a technicality [People v. Bartolini, supra].
The parents of the female seduced, abducted,
raped, or abused, referred to in No. 3 of this article, Where there are multiple counts of rape and other
may also recover moral damages. lascivious acts, the SC awarded moral damages for
each count of lascivious acts and each count of rape
[People v. Abadies, G.R. Nos. 13946-50 (2002)].
Note: Recovery may be had by the offended party and (3) Intriguing to cause another to be alienated
also by her parents. from his friends;
(4) Vexing or humiliating another on account of
In Illegal or Arbitrary Detention or Arrest his religious beliefs, lowly station in life, place
Since the crime committed in this case is kidnapping of birth, physical defect, or other personal
and failure to return a minor under Article 270 of the condition.
Revised Penal Code, the same is clearly analogous to
illegal and arbitrary detention or arrest, thereby Violation of Human Dignity
justifying the award of moral damages [People v. The law seeks to protect a person from being unjustly
Bernardo, G.R. No. 144316 (2002)]. humiliated. Using this provision, the SC awarded
moral damages to the plaintiff, a married man,
In Case of Malicious Prosecution against the defendant, who confronted the plaintiff
As a rule, no moral damages is imposed for litigation, face-to-face, invading the latter’s privacy, to hurl
because the law could not have meant to impose a defamatory words at him in the presence of his wife
penalty on the right to litigate. A person's right to and children, neighbors and friends, accusing him of
litigate, as a rule, should not be penalized. This right, having an adulterous relationship with another
however, must be exercised in good faith. Absence of woman [Concepcion v. CA, G.R. No. 120706 (2000)].
good faith in the present case is shown by the fact that
petitioner clearly has no cause of action against Art. 27, CC. Any person suffering material or moral
respondents but it recklessly filed suit anyway and loss because a public servant or employee refuses
wantonly pursued pointless appeals, thereby causing or neglects, without just cause, to perform his
the latter to spend valuable time, money and effort in official duty may file an action for damages and
unnecessarily defending themselves, incurring other relief against the latter, without prejudice to
damages in the process [Industrial Insurance v. any disciplinary administrative action that may be
Bondad, G.R. No. 136722 (2000)]. taken.
Moral damages cannot be recovered from a person
Refusal or Neglect of Duty
who has filed a complaint against another in good
Under Art. 27, in relation to Arts. 2219 and 2217, a
faith, or without malice or bad faith. If damage results
public officer may be liable for moral damages for as
from the filing of the complaint, it is damnum absque
long as the moral damages suffered by [the plaintiff]
injuria [Mijares v. CA, G.R. No. 113558(1997)].
were the proximate result of [defendant’s] refusal to
perform an official duty or neglect in the performance
The adverse result of an action does not per se make
thereof. In fact, under Articles 19 and 27 of the CC, a
the act wrongful and subject the actor to the payment
public official may be made to pay damages for
of moral damages. The law could not have meant to
performing a perfectly legal act, albeit with bad faith
impose a penalty on the right to litigate; such right is
or in violation of the "abuse of right" doctrine
so precious that moral damages may not be charged
[Concepcion v. CA, supra].
on those who may exercise it erroneously [Barreto v.
Arevalo, G.R. No. L-7748 (1956)].
Art. 28, CC. Unfair competition in agricultural,
In acts referred to in Arts. 21, 26, 27, 28, 29, 32, 34 commercial or industrial enterprises or in labor
and 35, CC through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or
Art. 21, CC. Any person who wilfully causes loss or
highhanded method shall give rise to a right of
injury to another in a manner that is contrary to
action by the person who thereby suffers damage.
morals, good customs or public policy shall
compensate the latter for the damage.
Art. 29, CC. When the accused in a criminal
prosecution is acquitted on the ground that his
Art. 26, CC. Every person shall respect the dignity,
guilt has not been proved beyond reasonable
personality, privacy and peace of mind of his
doubt, a civil action for damages for the same act
neighbors and other persons. The following and
or omission may be instituted. Such action
similar acts, though they may not constitute a
requires only a preponderance of evidence. Upon
criminal offense, shall produce a cause of action
motion of the defendant, the court may require the
for damages, prevention and other relief:
plaintiff to file a bond to answer for damages in
(1) Prying into the privacy of another's residence:
case the complaint should be found to be
(2) Meddling with or disturbing the private life or
malicious.
family relations of another;
If in a criminal case the judgment of acquittal is statute which has not been judicially declared
based upon reasonable doubt, the court shall so unconstitutional; and
declare. In the absence of any declaration to that (19) Freedom of access to the courts.
effect, it may be inferred from the text of the
decision whether or not the acquittal is due to that In any of the cases referred to in this article,
ground. whether or not the defendant's act or omission
constitutes a criminal offense, the aggrieved party
Art. 32, CC. Any public officer or employee, or any has a right to commence an entirely separate and
private individual, who directly or indirectly distinct civil action for damages, and for other
obstructs, defeats, violates or in any manner relief. Such civil action shall proceed
impedes or impairs any of the following rights and independently of any criminal prosecution (if the
liberties of another person shall be liable to the latter be instituted), and mat be proved by a
latter for damages: preponderance of evidence.
(1) Freedom of religion;
(2) Freedom of speech; The indemnity shall include moral damages.
(3) Freedom to write for the press or to maintain Exemplary damages may also be adjudicated.
a periodical publication;
(4) Freedom from arbitrary or illegal detention; The responsibility herein set forth is not
(5) Freedom of suffrage; demandable from a judge unless his act or
(6) The right against deprivation of property omission constitutes a violation of the Penal Code
without due process of law; or other penal statute.
(7) The right to a just compensation when
private property is taken for public use; Violation of Civil and Political Rights
(8) The right to the equal protection of the laws; The purpose of [CC 32] is to provide a sanction to the
(9) The right to be secure in one's person, house, deeply cherished rights and freedoms enshrined in the
papers, and effects against unreasonable Constitution. Under [CC 32], it is not necessary that the
searches and seizures; public officer acted with malice or bad faith. To be
(10) The liberty of abode and of changing the liable, it is enough that there was a violation of the
same; constitutional rights of petitioner, even on the pretext
(11) The privacy of communication and of justifiable motives or good faith in the performance
correspondence; of one's duties [Cojuangco v. CA, G.R. No. 119398
(12) The right to become a member of associations (1999)].
or societies for purposes not contrary to law;
(13) The right to take part in a peaceable assembly Article 32 of the CC provides that moral damages are
to petition the government for redress of proper when the rights of individuals, including the
grievances; right against deprivation of property without due
(14) The right to be free from involuntary servitude process of law, are violated [Meralco v Spouses Chua,
in any form; G.R. No. 160422 (2010)].
(15) The right of the accused against excessive
bail; Art. 34, CC. When a member of a city or municipal
(16) The right of the accused to be heard by himself police force refuses or fails to render aid or
and counsel, to be informed of the nature and protection to any person in case of danger to life or
cause of the accusation against him, to have a property, such peace officer shall be primarily
speedy and public trial, to meet the witnesses liable for damages, and the city or municipality
face to face, and to have compulsory process shall be subsidiarily responsible therefor. The civil
to secure the attendance of witness in his action herein recognized shall be independent of
behalf; any criminal proceedings, and a preponderance of
(17) Freedom from being compelled to be a evidence shall suffice to support such action.
witness against one's self, or from being
forced to confess guilt, or from being induced Art. 35, CC. When a person, claiming to be injured
by a promise of immunity or reward to make by a criminal offense, charges another with the
such confession, except when the person same, for which no independent civil action is
confessing becomes a State witness; granted in this Code or any special law, but the
(18) Freedom from excessive fines, or cruel and justice of the peace finds no reasonable grounds to
unusual punishment, unless the same is believe that a crime has been committed, or the
imposed or inflicted in accordance with a prosecuting attorney refuses or fails to institute
criminal proceedings, the complaint may bring a (3) Seduction, abduction, rape, or other
civil action for damages against the alleged lascivious acts;
offender. Such civil action may be supported by a (4) Adultery or concubinage;
preponderance of evidence. Upon the defendant's (5) Illegal or arbitrary detention or arrest;
motion, the court may require the plaintiff to file a (6) Illegal search;
bond to indemnify the defendant in case the (7) Libel, slander or any other form of
complaint should be found to be malicious. defamation;
(8) Malicious prosecution;
If during the pendency of the civil action, an (9) Acts mentioned in article 309;
information should be presented by the (10) Acts and actions referred to in articles 21, 26,
prosecuting attorney, the civil action shall be 27, 28, 29, 30, 32, 34, and 35.
suspended until the termination of the criminal
proceedings. The parents of the female seduced, abducted,
raped, or abused, referred to in No. 3 of this article,
Art. 2220, CC. Willful injury to property may be a may also recover moral damages.
legal ground for awarding moral damages if the
court should find that, under the circumstances, The spouse, descendants, ascendants, and
such damages are justly due. The same rule brothers and sisters may bring the action
applies to breaches of contract where the mentioned in No. 9 of this article, in the order
defendant acted fraudulently or in bad faith. named.
Plaintiff’s negligence
Even if Manila Electric is negligent, in order that it may
be held liable, its negligence must be the proximate
and direct cause of the accident [Manila Electric v.
Remonquillo, supra].
referred to in the preceding article, as in the illegal contract; no suit can be maintained for its
following instances: specific performance, or to recover the property
1. That the plaintiff himself has contravened the agreed to be sold or delivered, or the money agreed to
terms of the contract; be paid, or damages for its violation; and where the
2. That the plaintiff has derived some benefit as parties are in pari delicto, no affirmative relief of any
a result of the contract; kind will be given to one against the other."
3. In cases where exemplary damages are to be
awarded, that the defendant acted upon the This rule, however, is subject to exceptions that permit
advice of counsel; the return of that which may have been given under a
4. That the loss would have resulted in any void contract to:
event; 1. the innocent party (Arts. 1411-1412, CC);
5. That since the filing of the action, the 2. the debtor who pays usurious interest (Art. 1413,
defendant has done his best to lessen the CC);
plaintiff's loss or injury. 3. the party repudiating the void contract before the
illegal purpose is accomplished or before damage
GROUNDS FOR MITIGATION OF DAMAGES is caused to a third person and if public interest is
subserved by allowing recovery (Art. 1414, CC);
For contracts: 4. the incapacitated party if the interest of justice so
1. Violation of terms of the contract by the plaintiff demands (Art. 1415, CC);
himself; 5. the party for whose protection the prohibition by
2. Obtention or enjoyment of benefit under the law is intended if the agreement is not illegal per
contract by the plaintiff himself; se but merely prohibited and if public policy would
3. Defendant acted upon advice of counsel in cases be enhanced by permitting recovery (Art. 1416,
where exemplary damages are to be awarded CC); and
such as under Articles 2230, 2231, and 2232; 6. the party for whose benefit the law has been
4. Defendant has done his best to lessen the intended such as in price ceiling laws (Art. 1417,
plaintiff’s injury or loss. CC) and labor laws (Arts. 1418-1419, CC).