CIVIL LAW
TABLE OF CONTENTS
GENERAL PRINCIPLES ....................... 1
I. GENERAL PRINCIPLES .............................. 2
A. Effect and Application of Laws ................... 2
1. When Laws Take Effect ........................ 2
2. Ignorance of the Law ............................. 2
3. Retroactivity of Laws ............................. 2
4. Mandatory or Prohibitory Laws ........... 2
5. Waiver of Rights ..................................... 3
6. Repeal of Laws ........................................ 3
7. Judicial Decisions.................................... 3
8. Duty to Render Judgment ..................... 4
9. Presumption and Applicability of
Custom ..................................................... 4
10. Legal Periods ........................................... 4
11. Applicability of Penal Laws .................. 4
12. Binding Effect ......................................... 4
B. Private International Law .............................. 6
1. Introduction ............................................ 6
2. Jurisdiction and Choice of Law ............ 7
3. Personal Law .........................................12
4. Choice of Law Problems .....................16
PERSONS AND FAMILY RELATIONS
23
II. PERSONS AND FAMILY RELATIONS 24
A. Persons and Personality...............................24
1. Concept of Person and Personality ...24
2. Commencement and Termination of
Personality..............................................24
3. Death ......................................................25
4. Juridical Persons ...................................25
5. Restrictions on Civil Capacity ............26
6. Domicile and Residence of Persons ..30
B. Family Code ..................................................30
1. Effect and Retroactivity.......................30
2. Repeal and Amendment ......................30
C. Marriage and Personal Relationship
Between Spouses ..........................................31
1. Concept of Marriage ............................31
2. Breach of Promise to Marry ...............31
3. Agreements Prior to Marriage ............31
4. Requisites ...............................................32
5. Law Governing Validity of Marriages
Abroad ....................................................36
6. Common-Law Marriages .....................38
7. Void and Voidable Marriages .............38
8. The Law on Separation of the Spouses
49
9. Legal Separation ....................................50
D. Rights and Obligations of Spouses............57
1. Live Together ........................................57
2. Family Domicile ................................... 58
3. Support................................................... 58
4. Management of Family Life ............... 58
5. Effect of Neglect of Duty................... 58
6. Exercise of Profession......................... 58
7. Use of Surname .................................... 58
E. Property Relations of Spouses ................... 59
1. Marriage Settlements ........................... 59
2. Donations by Reason of Marriage
(Donations Propter Nuptias) ................. 60
3. Property Regimes – Absolute
Community of Property and Conjugal
Partnership of Gains ............................ 62
F. Family Relations ........................................... 72
1. The Family as an Institution ............... 72
2. Effects of Family Relationship on Legal
Disputes ................................................. 72
3. Family Relations and Criminal Law .. 72
4. The Family Home ................................ 73
G. Paternity and Filiation ................................. 75
1. Legitimate Children.............................. 76
2. Proof of Filiation .................................. 78
3. Illegitimate Children ............................ 78
4. Legitimated Children ........................... 80
H. Adoption........................................................ 81
1. RA 8552: Domestic Adoption Law... 81
2. RA 8043: The Law on Inter-country
Adoption ................................................ 86
I. Support .......................................................... 88
1. What it Comprises................................ 88
2. Who are Obliged .................................. 88
3. Support Pending Litigation on the
Status of Marriage ................................ 89
4. Amount .................................................. 89
5. When Demandable .............................. 89
6. Options to Fulfill Obligation to Give
Support................................................... 89
7. Attachment ............................................ 89
J. Parental Authority and Custody of Children
......................................................................... 90
1. In General.............................................. 90
2. Substitute Parental Authority ............. 91
3. Special Parental Authority .................. 91
4. Rights and Duties ................................. 91
5. Civil Liability ......................................... 92
6. Parental Authority Over the Property
of the Child ........................................... 92
7. Loss of Parental Authority ................. 93
8. Suspension of Parental Authority ...... 93
9. A.M. No. 03-04-04 ............................... 93
K. Emancipation ................................................ 95
L. Summary Judicial Proceedings under FC . 95
1. Separation in Fact ................................. 95
2. Incidents involving Parental Authority
96
 CIVIL LAW
M. Care and Education of Children ................97
N. Surnames ........................................................98
1. Surnames of Children ..........................98
2. Wife After and During Marriage ........98
3. Confusion and Change of Names .....98
O. Rules Governing Persons who are Absent
99
1. Provisional Measures in Case of
Absence [Arts. 381-383, CC] ..............99
2. Declaration of Absence [Arts. 384-389,
CC] ....................................................... 100
3. Administration of the Property of the
Absentee [Arts. 387-389, CC] .......... 100
4. Presumption of Death [Arts. 390-392,
CC] ....................................................... 101
P. Funerals ....................................................... 102
Q. Entries in the Civil Register ..................... 103
1. Civil Code ........................................... 103
2. RA 9048 as Amended by RA 10172104
3. Rule 108, Rules of Court .................. 105
PROPERTY ......................................... 107
III. PROPERTY ................................................... 108
A. Classification .............................................. 108
1. Based on Mobility [Immovable or
Movable] ............................................. 108
2. Based on Ownership/ Rights-Holder
110
B. Ownership .................................................. 112
1. Definition and Concept .................... 112
2. Accession ............................................ 118
C. Co-Ownership............................................ 126
1. Requisites ............................................ 126
2. Sources of Co-Ownership................ 127
3. Rights of Co-Ownership .................. 127
4. Rules .................................................... 130
5. Termination or Extinguishment ..... 131
D. Possession ................................................... 132
1. Concept of Possession...................... 132
2. Essential Requisites of Possession.. 133
3. Classes of Possession ........................ 133
4. Effects of Possession ........................ 134
5. Acquisition of Possession ................ 135
6. Rules on Co-Possession ................... 137
7. Loss or Unlawful Deprivation of a
Movable Property .............................. 137
8. Rules for Loss of Movables ............. 138
E. Usufruct ...................................................... 139
1. Objects of Usufruct........................... 140
2. Characteristics .................................... 140
3. Classification....................................... 140
4. Rights and Obligations of Usufructuary
142
5. Special Cases of Usufruct ................. 145
6. Rights of the Owner.......................... 147
7.
Extinguishment/Termination [Art.
603, CC] ............................................... 147
8. Acts that do not extinguish Usufruct
149
F. Easement/Servitude .................................. 150
1. Essential Features: .............................. 150
2. General Rules ...................................... 151
3. Classification ....................................... 151
4. Rights and Obligations of Owners of
Dominant and Servient Estates ....... 153
5. Extinguishment of Easements ......... 154
6. The Different Legal Easements ....... 155
G. Nuisance ...................................................... 161
1. Classes .................................................. 162
2. Doctrine of Attractive Nuisance ..... 162
3. Liability in Case of Nuisance ............ 162
4. Regulation of Nuisances ................... 163
H. Modes of Acquiring Ownership and Other
Real Rights................................................... 165
1. Occupation .......................................... 165
2. Donation .............................................. 166
3. Tradition .............................................. 175
4. Prescription ......................................... 175
5. Prescription or Limitation of Actions
177
SUCCESSION...................................... 180
IV. SUCCESSION ............................................... 181
A. General Provisions ..................................... 181
1. Definition ............................................ 181
2. Object of Succession and Transmission
181
3. Subjects of Succession ....................... 182
B. Testamentary Succession .......................... 182
1. Wills ...................................................... 182
2. Institution of Heir .............................. 189
3. Substitution of Heirs.......................... 191
4. Testamentary Dispositions with a
Condition, a Term, and a Mode....... 192
5. Legitime ............................................... 193
6. Disinheritance ..................................... 198
7. Legacies and Devises ......................... 200
C. Legal or Intestate Succession ................... 203
1. General Provisions ............................. 203
2. Relationship ......................................... 204
3. Right of Representation .................... 205
4. Order of Intestate Succession .......... 206
D. Provisions Common to Testate and
Intestate Succession ................................... 208
1. Right of Accretion.............................. 208
2. Capacity to Succeed by Will or Intestacy
209
3. Acceptance and Repudiation of the
Inheritance ........................................... 210
4. Collation............................................... 211
 CIVIL LAW
5. Partition and Distribution of Estate213
OBLIGATIONS AND CONTRACTS 217
V. OBLIGATIONS ........................................... 218
A. Obligations, in General ............................ 218
1. Definition ............................................ 218
2. Elements of an Obligation ............... 218
3. Kinds of Prestations.......................... 218
4. Classification of Obligations ............ 218
5. Sources of Obligation ....................... 218
B. Nature and Effect of Obligations ........... 219
1. Obligation “To Give” ....................... 219
2. Obligation “To Do” or “Not To Do”
220
3. Breach .................................................. 221
4. Legal Excuse for Breach................... 224
5. Remedies Available in Case of Breach
225
C. Kinds of Civil Obligations ....................... 227
1. Pure Obligations ................................ 227
2. Conditional Obligations ................... 227
3. Obligations with a Period or Term. 230
4. Alternative or Facultative Obligations
231
5. Divisible and Indivisible Obligations
233
6. Obligations with a Penal Clause ...... 234
7. Joint and Solidary Obligations......... 235
D. Extinguishment of Obligations ............... 238
1. Payment or Performance ................. 238
2. Loss of the Thing Due or Impossibility
or Difficulty of Performance ........... 243
3. Condonation ....................................... 245
4. Confusion or Merger of Rights ....... 248
5. Compensation .................................... 248
6. Novation ............................................. 250
VI. CONTRACTS ............................................... 253
A. General Provisions .................................... 253
1. Principal Characteristics of Contracts
[MARCO] ........................................... 253
2. Classification of Contracts ............... 256
3. Stages of a Contract .......................... 257
4. Elements of Contracts ...................... 257
B. Essential Requisites ................................... 257
1. Consent ............................................... 257
2. Object of Contracts........................... 262
3. Cause of Contracts ............................ 263
C. Form of Contracts ..................................... 264
1. Kinds of Formalities Required by Law
264
D. Reformation of Instruments .................... 266
1. Cases Where Reformation is Proper
267
2. Who May Ask for Reformation ...... 267
3. Cases Where Reformation is Not
Proper ................................................... 267
E. Interpretation of Contract ........................ 268
1. Primacy of Intention .......................... 268
2. Rules on Doubt [Art. 1378, CC] ...... 269
3. Rule 123, Rules of Court ................... 269
F. Defective Contracts ................................... 270
1. Rescissible Contracts ......................... 270
2. Voidable Contracts ............................ 273
3. Unenforceable Contracts .................. 275
4. Void or Inexistent Contracts ............ 277
G. Natural Obligations ................................... 279
1. Four Types of Obligations in Juridical
Science.................................................. 279
2. Two Conditions Necessary for Natural
Obligations .......................................... 279
H. Estoppel ....................................................... 282
1. Definition ............................................ 282
2. Kinds of Estoppel .............................. 282
3. Laches................................................... 282
I. Trusts............................................................ 283
1. Governing Rules ................................. 284
2. Parties [Art. 1440, CC] ...................... 284
3. Kinds of Trust .................................... 284
SALES .................................................. 288
VII. SALES ............................................................. 289
A. Nature and Form........................................ 289
1. Essential Requisites ............................ 289
2. Non-Essential Elements of a Contract
of Sale ................................................... 293
3. Perfection ............................................ 293
4. Contract of Sale Distinguished ........ 295
B. Capacity to Buy or Sell .............................. 297
1. Kinds of Incapacity ............................ 297
2. Effects of Incapacity .......................... 298
C. Effects of the Contract When the Thing
Sold has Been Lost..................................... 299
1. Res Perit domino [Arts. 1263, and 1189
CC] ........................................................ 299
2. Prior to Perfection of Contract ........ 299
3. At Time of Perfection [Arts. 1493 and
1494, CC] ............................................. 299
4. After Perfection but Before Delivery
299
5. After Delivery ..................................... 300
D. Obligations of the Vendor........................ 300
1. Obligations of the Vendor in General
300
E. Obligations of the Vendee........................ 311
1. Obligation to Accept Delivery ......... 311
2. Obligation to pay the price ............... 312
3. Obligation to Bear the Expenses for the
Execution and Registration of the Sale
 CIVIL LAW
and Putting the Goods in a Deliverable
State, if so Stipulated ......................... 312
F. Breach of Contract .................................... 313
1. General Remedies [Art. 1191, CC] . 313
G. Extinguishment of Sales ........................... 319
1. Causes [Arts. 1600, 1231, CC] ......... 319
2. Conventional Redemption (Pacto de
Retro Sale) ........................................... 319
3. Equitable Mortgage ........................... 321
4. Legal Redemption [Art. 1619, CC] . 323
H. Assignment of Credits .............................. 326
1. Definition ............................................ 326
2. Nature .................................................. 326
3. Perfection ............................................ 326
4. Assignment Distinguished from Other
Terms ................................................... 326
5. Binding Effect .................................... 327
6. Consent not Necessary ..................... 327
7. Effect of Payment by Debtor after
Assignment of Credit ........................ 327
8. Extent of Assignment of Credit ...... 327
9. Warranties of the Assignor of Credit
327
10. Sale of Successional or Hereditary
Rights ................................................... 328
11. Sale of Whole of Certain Rights, Rents,
or Products ......................................... 328
12. Liability of Vendor of Inheritance for
Fruits Received................................... 329
13. Liability of Vendee for Debts and
Charges on Estate .............................. 329
14. Legal Redemption in Sale of Credit or
Other Incorporeal Right in Litigation
329
PARTNERSHIP .................................. 330
VIII. PARTNERSHIP .................................... 331
A. Contract of Partnership ............................ 331
1. Elements ............................................. 331
2. Essential Features .............................. 331
3. Parties .................................................. 332
4. Object .................................................. 333
5. Form .................................................... 333
6. Duration .............................................. 334
7. Rules to Determine Existence ......... 334
8. Kinds of Partnerships ....................... 334
9. Kinds of Partners .............................. 335
10. Partnership, Distinguished from Other
Contracts ............................................. 336
B. Rights and Obligations of the Partnership
338
1. Right to Contribution, Right to
Warranty .............................................. 338
2. Right to Have Sums Applied Pro Rata
339
3.
Right to be Compensated ................. 339
4.
Right to Accounting of Profits
Received without the Consent of the
Other Partners .................................... 340
5. Obligation to Reimburse Partners ... 340
C. Rights and Obligations of Partners Inter Se
340
1. Right to Associate Another in Share
340
2. Right to Inspect Partnership Books 340
3. Right to Formal Account .................. 340
4. Property Rights of Partners .............. 341
5. Right to Participate in Management 342
6. Right to be Reimbursed by the
Partnership .......................................... 343
7. Right to Ask for Dissolution [Arts.
1830(2) and 1831, CC] ....................... 343
8. Obligation to Render True and Full
Information ......................................... 343
9. Obligation to Account and Act as
Trustee ................................................. 343
10. Obligation not to Engage in Another
Business ............................................... 344
11. Obligation to Share in the
Profits/Losses ..................................... 344
D. Obligations of the Partnership/Partners to
Third Persons.............................................. 345
1. Operate Under a Firm Name ........... 345
2. Liability for Partnership Debts ........ 345
3. Liability of Partners for Partnership
Contracts.............................................. 346
4. Liability for Admission by a Partner
347
5. Liability for Wrongful Acts of a Partner
347
6. Liability for Misapplication of Money or
Property ............................................... 348
7. Liability in Case of Partnership by
Estoppel ............................................... 348
8. Liability of an Incoming Partner...... 349
9. Liability with Regard to Personal
Creditors of Partners ......................... 350
E. Dissolution and Winding Up ................... 350
1. Concepts .............................................. 350
2. Causes of Dissolution ........................ 351
3. Effects of Dissolution ....................... 352
4. Winding Up Partners ......................... 354
5. Rights of Partners in Case of
Dissolution .......................................... 354
6. Rights of Partners in Case of Rescission
355
7. Settling of Accounts between Partners
355
8. Rights of Creditors of Dissolved
Partnership .......................................... 356
 CIVIL LAW
9.
Rights of a Retired Partner or a
Representative of Deceased Partner357
10. Right to an account ........................... 357
F. Limited Partnership................................... 358
1. Definition ............................................ 358
2. Characteristics .................................... 358
3. General and Limited Partners
Distinguished...................................... 358
4. General and Limited Partnership
Distinguished...................................... 359
5. Formation ........................................... 359
6. Management ....................................... 360
7. Obligations of a Limited Partner .... 361
8. Rights of a Limited Partner.............. 362
9. Dissolution.......................................... 363
10. Settlement of Accounts .................... 363
11. Amendment or Cancellation of
Certificate ............................................ 364
12. Limited Partnerships Formed Prior to
the CC.................................................. 364
AGENCY .............................................. 366
IX. Agency ............................................................. 367
A. Definition of Agency ................................ 367
1. As a Type of Contract ...................... 367
2. As a Legal Relationship .................... 367
3. Effects of Agency .............................. 367
B. Kinds of Agency ........................................ 368
1. In General ........................................... 368
2. As to Manner of Creation ................ 369
3. As to Extent of Business Covered.. 370
4. As to Authority Conferred ............... 370
5. Special Kinds of Agency................... 371
6. Kinds of Agents ................................. 373
C. Rights and Obligations of the Agent ..... 374
1. Rights of Agents ................................ 374
2. Obligations of Agents ....................... 376
3. Liability of Agents ............................. 380
D. Rights and Obligations of the Principal. 381
1. Obligations ......................................... 381
2. Liability of the Principal ................... 383
E. Rights and Obligations of Third Persons
384
1. Rights of Third Persons ................... 384
2. Obligations of Third Persons .......... 384
F. Modes of Extinguishment ....................... 385
1. In General ........................................... 385
2. Revocation .......................................... 385
3. Withdrawal by the Agent.................. 386
4. Death, Civil Interdiction, Insanity or
Insolvency ........................................... 386
5. Dissolution, Accomplishment,
Expiration ........................................... 387
CREDIT TRANSACTIONS ................ 388
X. Credit transactions ......................................... 389
A. Loan.............................................................. 389
1. Commodatum ..................................... 390
2. Mutuum ............................................... 392
B. Deposit......................................................... 394
1. Voluntary Deposit .............................. 394
2. Necessary Deposit.............................. 395
3. Judicial Deposit or Sequestration .... 396
C. Guaranty and Suretyship ........................... 397
1. Nature and Extent of Guaranty ....... 398
2. Nature and Extent of Suretyship ..... 400
3. Effect of Guaranty ............................. 400
4. Extinguishment of Guaranty............ 403
5. Legal and Judicial Bonds ................... 403
D. Pledge ........................................................... 404
1. Characteristics ..................................... 404
2. Kinds .................................................... 404
3. Essential Requisites ............................ 405
4. Requisites for Perfection ................... 405
5. Obligations of Pledgee ...................... 405
6. Rights of Pledgor................................ 406
7. Foreclosure .......................................... 406
8. Pactum Commissorium ..................... 407
9. Equitable Mortgage ............................ 407
E. Chattel Mortgage ........................................ 408
1. Form of Chattel Mortgage ................ 408
2. Objects of Chattel Mortgage ............ 408
3. Mortgagor’s Right to Alienate the
Collateral .............................................. 409
4. Foreclosure .......................................... 409
F. Real Estate Mortgage ................................. 410
1. Objects of Real Mortgage [Art. 2124,
CC] ........................................................ 410
2. Characteristics ..................................... 410
3. Kinds .................................................... 411
4. Principle of Indivisibility of
Pledge/Mortgage [Arts. 2089 to 2090,
CC] ........................................................ 411
5. Recording Required ........................... 412
6. Foreclosure of Mortgage ................... 412
7. Waiver of Security by Creditor ........ 415
8. Redemption ......................................... 415
G. Antichresis ................................................... 416
1. Characteristics ..................................... 416
2. Formal Requisites ............................... 416
3. Object of the Contract ...................... 416
4. As Distinguished from Other Contracts
417
5. Obligations of Antichretic Creditor 417
6. Remedies of Creditor in Case of Non-
Payment of Debt ................................ 417
H. Quasi-Contracts .......................................... 418
1. Negotiorum Gestio
(Unauthorized Management) ... 418
2. Solutio Indebiti (Undue Payment)... 419
 CIVIL LAW

3. Other Quasi-Contracts ..................... 420

I. Concurrence and Preference of Credits 421
1. When Rules on Preference Applicable
421
2. Classification of Credits .................... 421
3. Order of Preference of Credits ....... 424
4. Exempt Property ............................... 425
LAND TITLES AND DEEDS ............ 426
XI. LAND TITLES AND DEEDS ................. 427
A. Torrens System .......................................... 427
1. General Principles ............................. 427
2. Torrens System .................................. 429
3. Administration of the Torrens System
429
4. Certificate of Title.............................. 430
5. Effect of Registration under the
Torrens System .................................. 431
B. The Regalian Doctrine .............................. 432
1. Effects ................................................. 433
2. Concept of Native Title, Time
Immemorial Possession .................... 433
C. Citizenship Requirement .......................... 434
1. Individuals........................................... 434
2. Corporations....................................... 435
D. Original Registration ................................. 436
1. Kinds of Original Registration ........ 436
2. Who May Apply ................................. 436
3. Procedure in Ordinary Land
Registration ......................................... 437
4. Evidence Necessary .......................... 441
E. Subsequent Registration ........................... 442
1. Voluntary Dealings ............................ 443
2. Involuntary Dealings ......................... 444
F. Cadastral Registration ............................... 447
G. Judicial Confirmation of Imperfect Title449
1. Filing of the Application: ................. 449
2. Procedure in Judicial Confirmation 450
3. Evidence Necessary to Substantiate
Application ......................................... 450
H. Remedies ..................................................... 451
I. Petitions and Motions after Original
Registration ................................................. 453
J. Dealings with Unregistered Lands.......... 454
K. Non-Registrable Properties ..................... 455
U.P. LAW BOC GENERAL PRINCIPLES CIVIL LAW

GENERAL
PRINCIPLES
Civil Law

Page 1 of 511
U.P. LAW BOC GENERAL PRINCIPLES
I. GENERAL
PRINCIPLES
A. Effect and Application of
Laws
1. When Laws Take Effect
Laws shall take effect after fifteen days following the
completion of their publication either in the Official
Gazette, or in a newspaper of general circulation in
the Philippines, unless it is otherwise provided. [Art.
2, Civil Code (hereinafter, CC), as amended by E.O.
200]
General Rules:
The clause "unless it is otherwise provided" refers to
the date of effectivity and not to the requirement of
publication itself, which cannot, in any event, be
omitted. [Tañada v. Tuvera, G.R. No. L-63915 (1986)]
Publication is indispensable in every case, but the
legislature may in its discretion provide that the usual
fifteen-day period shall be shortened or extended.
[Tañada v. Tuvera, G.R. No. L-63915 (1986)]
When, on the other hand, the administrative rule goes
beyond merely providing for the means that can
facilitate or render least cumbersome the
implementation of the law but substantially increases
the burden of those governed, it behooves the agency
to accord at least to those directly affected a chance
to be heard, and thereafter to be duly informed,
before that new issuance is given the force and effect
of law. [Commissioner v. Hypermix, G.R. No. 179579
(2012)]
Exception: Interpretative regulations and those internal
in nature. [Tañada v. Tuvera, G.R. No. L-63915 (1986)]
2. Ignorance of the Law
Ignorantia legis non excusat.
Art. 3, CC. Ignorance of the law excuses no one
from compliance therewith.
Conclusive Presumption: That everyone knows the
law, even if they have no actual knowledge of the law.
Page 2 of 511
CIVIL LAW
Mistake of Fact and Difficult Questions of Law
These may excuse a party from the legal consequences
of his conduct; but not ignorance of law.
In specific instances provided by law, mistake as to
difficult legal questions has been given the same effect
as a mistake of fact. [Tolentino]
The laws referred to by this article are those of the
Philippines. There is no conclusive presumption of
knowledge of foreign laws. [Tolentino]
3. Retroactivity of Laws
Laws shall have no retroactive effect, unless the
contrary is provided. [Art. 4. CC.]
General Rule: All statutes are to be construed as having
only prospective operation.
Exceptions:
a. When the law itself expressly provides
Exceptions to Exception:
1. Ex post facto law
2. Impairment of contract
b. In case of remedial statutes
c. In case of curative statutes
d. In case of laws interpreting others
e. In case of laws creating new rights [Bona v. Briones,
G.R. No. L-10806 (1918)].
f. Penal Laws favorable to the accused [Art. 22,
RPC].
4. Mandatory or Prohibitory
Laws
Art. 5, CC. Acts executed against the provisions
of mandatory or prohibitory laws shall be void,
except when the law itself authorizes their validity.
Par. 3, Art. 17, CC. Prohibitive laws concerning
persons, their acts or property, and those which
have for their object public order, public policy
and good customs shall not be rendered ineffective
by laws or judgments promulgated, or by
determinations or conventions agreed upon in a
foreign country.
U.P. LAW BOC GENERAL PRINCIPLES
5. Waiver of Rights
Art. 6, CC. Rights may be waived, unless the
waiver is contrary to law, public order, public
policy, morals, or good customs, or prejudicial to
a third person with a right recognized by law.
Waiver: voluntary and intentional relinquishment or
abandonment of a known legal right or privilege. It
has been ruled that a waiver to be valid and effective
must be couched in clear and unequivocal terms
which leave no doubt as to the intention of a party to
give up a right or benefit which legally pertains to him.
[RB Michael Press v. Galit, G.R. No. 153510 (2008)]
The waiver should be made in a positive manner
[Dona Adela v. Tidcorp, G.R. No. 201931 (2015)]
Requisites of a Valid Waiver:
a. Existence of a right
b. Knowledge of the existence thereof
c. An intention to relinquish the right. [Herrera v.
Borromeo, G.R. No. L-41171, (1987)]
General Rule: Rights may be waived.
Exceptions:
a. If the waiver is contrary to law, public order,
public policy, morals or good customs
b. If the waiver prejudices a third person
c. If the alleged rights do not yet exist
d. If the right is a natural right
No compromise upon the following questions
shall be valid:
a. The civil status of persons;
b. The validity of a marriage or a legal separation;
c. Any ground for legal separation;
d. Future support;
e. The jurisdiction of courts;
f. Future legitime [Art. 2035, CC.].
6. Repeal of Laws
Laws are repealed only by subsequent ones, and their
violation or non-observance shall not be excused by
disuse, or custom or practice to the contrary.
When the courts declared a law to be inconsistent
with the Constitution, the former shall be void and
the latter shall govern.
Page 3 of 511
CIVIL LAW
Administrative or executive acts, orders and
regulations shall be valid only when they are not
contrary to the laws or the Constitution. [Art. 7, CC.]
TWO KINDS OF REPEAL [Tolentino]:
a. Express or Declared: contained in a special
provision of a subsequent law; names the law
repealed.
b. Implied or Tacit: takes place when the
provisions of the subsequent law are
incompatible or inconsistent with those of an
earlier law.
The fundament is that the legislature should be
presumed to have known the existing laws on the
subject and not have enacted conflicting statutes.
Hence, all doubts must be resolved against any
implied repeal, and all efforts should be exerted in
order to harmonize and give effect to all laws on the
subject. [Republic v. Marcopper Mining, G.R. No. 137174
(2000)]
7. Judicial Decisions
Art. 8, CC. Judicial decisions applying or
interpreting the laws or the Constitution shall form
a part of the legal system of the Philippines.
Jurisprudence cannot be considered as an
independent source of law; it cannot create law. [1
Camus 38 as cited in Tolentino]
The doctrine of Stare Decisis gives stability to the
courts and fills the gaps of the law to adapt to
changing times.
The interpretation or construction placed by the
courts establishes the contemporaneous legislative
intent of the law. The latter as so interpreted and
construed would thus constitute a part of that law as
of the date the statute is enacted. It is only when a
prior ruling of this Court finds itself later overruled,
and a different view is adopted, that the new doctrine
may have to be applied prospectively in favor of
parties who have relied on the old doctrine and have
acted in good faith in accordance therewith. [Pesca v.
Pesca, G.R. No. 136921 (2001)]
U.P. LAW BOC GENERAL PRINCIPLES
8. Duty to Render Judgment
Art. 9, CC. No judge or court shall decline to
render judgment by reason of the silence, obscurity
or insufficiency of the laws.
Art. 9, CC talks about the principle of equity which is
justice with mercy.
Exception:
This article does not apply to criminal prosecutions
because where there is no law punishing an act, the
case must be dismissed. [Tolentino]
9. Presumption and
Applicability of Custom
Art. 10, CC. In case of doubt in interpretation or
application of laws, it is presumed that the
lawmaking body intended right and justice to
prevail.
Art. 11, CC. Customs which are contrary to law,
public order or public policy shall not be
countenanced.
Art. 12, CC. A custom must be proved as a fact,
according to the rules of evidence.
Ignorance is positive proof that said custom does not
exist.
10. Legal Periods
Art. 13, CC. When the laws speak of years,
months, days or nights, it shall be understood that
years are of three hundred sixty-five days each;
months, of thirty days; days, of twenty-four hours;
and nights from sunset to sunrise.
If months are designated by their name, they shall
be computed by the number of days which they
respectively have.
In computing a period, the first day shall be
excluded, and the last day included.
Page 4 of 511
CIVIL LAW
Note:
Sec. 31, Revised Administrative Code. "Year"
shall be understood to be twelve calendar months;
"month" of thirty days, unless it refers to a specific
calendar month in which case it shall be computed
according to the number of days the specific
month contains; "day," to a day of twenty-four
hours; and "night," from sunset to sunrise.
Policy on Last Day being a Legal
Holiday/Sunday
If the period arises by statute or orders by the
government, the last day will automatically be
considered the next working day
If the period arises from a contractual relationship,
the act will still be due on that Legal Holiday/Sunday
There obviously exists a manifest incompatibility in
the manner of computing legal periods between the
CC and the Revised Administrative Code of 1987.
Since the Administrative Code is the more recent law,
it governs the computation of legal period [CIR v.
Primetown, G.R. No. 162155 (2007)]
11. Applicability of Penal Laws
Territoriality Principle
Penal laws and those of public security and safety shall
be obligatory upon all who live or sojourn in the
Philippine territory, subject to the principles of public
international law and to treaty stipulations. [Art. 14,
CC.]
Exemptions to the Territoriality Principled under
International Law (Theory of Extraterritoriality):
1. When the offense is committed by a foreign
sovereign while in Philippine territory
2. When the offense is committed by diplomatic
representatives
3. When the offense is committed in a public or
armed vessel of a foreign country.
12. Binding Effect
Nationality Principle
Art. 15, CC. Laws relating to family rights and
duties, or to the status, condition and legal capacity
of persons are biding upon citizens of the
Philippines, even though living abroad.
U.P. LAW BOC GENERAL PRINCIPLES CIVIL LAW

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
divorces, the same being considered contrary to our
concept of public policy and morality. However,
aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid
according to their national law. [Dacasin v. Dacasin,
G.R. No. 168785 (2010)]
Lex Rei Sitae
Art. 16, CC. Real property as well as personal
property is subject to the law of the country where
it is stipulated.
However, intestate and testamentary successions,
both with respect to the order of succession and to
the amount of successional rights and to the
intrinsic validity of testamentary provisions, shall
be regulated by the national law of the person
whose succession is under consideration, whatever
may be the nature of the property and regardless
of the country wherein said property may be
found.
Prohibitive laws concerning persons, their acts or
property, and those which have, for their object,
public order, public policy and good customs shall
not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions
agreed upon in a foreign country.
Lex loci celebrationis: Marriage governed by laws in
the country
Lex loci contractus: Forms and solemnities of
contracts governed by laws of the land where they are
executed
When performed in front of a Filipino diplomatic or
consular office, Filipino solemnities will be used.
Note: Arts. 15, 16 and 17 are rules of conflict of laws.

Personal and real property are governed where the

land (situs) is.

However, intestate and testate succession are

governed by nationality principle and cannot be made
to follow Philippine rule

When a foreign law is involved it must be alleged and

proved or it will be assumed to be same as ours
(Doctrine of Processual Presumption)

Art. 16, par. 2 is bolstered by Art. 1039 of the CC,

which further provides that capacity to succeed is
governed by the law of the nation of the decedent.
[Ancheta v. Guersey-Dalaygon, G.R. No. 139868 (2006)]

Lex Loci Celebrationis; Lex Loci Contractus

Art. 17, CC. The forms and solemnities of
contracts, wills, and other public instruments shall
be governed by the laws of the country in which
they are executed.

When the acts referred to are executed before the

diplomatic or consular officials of the Republic of
the Philippines in a foreign country, the
solemnities established by Philippine laws shall be
observed in their execution.

Page 5 of 511
U.P. LAW BOC GENERAL PRINCIPLES CIVIL LAW

B. Private International Law As to

Public
International
Private
International
Law Law
1. Introduction States and
Persons internationally Individuals or
The world is divided into many territorial units, each involved recognized corporations
imposing its own set of laws. With the developed organizations
means of transportation and communication, States in their Private
distances between these nations have shortened relationships transactions
allowing more and more people to travel and enter amongst between
into contracts. These dynamics cause the occurrence Transactions themselves private
of events that contain elements significant to more involved (Except cases individuals
than one legal system which give rise to problems that of human which involve
private international law seeks to resolve. [Coquia and rights a foreign
Aguiling-Pangalangan] violations) element
State may
a. Basis resort to
diplomatic
Its incorporation in municipal laws is based not on protest,
extraterritorial validity of the foreign law but on peaceful
comity of nations. means of All remedies
settlement of provided by
“Comity,” in the legal sense, is neither a matter of international municipal laws
absolute obligation, on the one hand, nor of mere disputes such of the state
Remedies
courtesy and good will, upon the other. But it is the as diplomatic such as resort
recognition which one nation allows within its negotiations, to courts or
territory to the legislative, executive or judicial acts of arbitration or administrative
another nation, having due regard both to conciliation or tribunals
international duty and convenience, and to the rights adjudication
of its own citizens or of other persons who are under by filing a
the protection of its laws. [Hilton v. Guyot, 159 US 113 case before
(1895)] international
tribunals
b. Definition
c. Scope
That part of municipal law which governs cases
involving a foreign element. 1. Adjudicatory jurisdiction: Determines the
circumstances that allow for a legal order to
That part of law which comes into play when the issue impose upon its judiciary the task of deciding
before the court affects some fact or event, or multi-state and multinational disputes
transaction that is so closely connected with a foreign 2. Choice-of-law: Refers to the probable sources
system of law as to necessitate recourse to that system. from which the applicable law of the controversy
[Chesire] may be derived.
3. Recognition and enforcement of foreign
The law concerning the rights of persons within the judgments: Deals with the study of situations
territory and dominion of one nation by reason of which justify recognition by the forum court of a
acts, private or public, done within the dominion of judgment rendered by a foreign court or the
another nation. [Hilton v. Guyot] enforcement of such within the forum.

Public International Law v. Private International

Law [Coquia and Aguiling-Pangalangan]

Page 6 of 511
U.P. LAW BOC GENERAL PRINCIPLES CIVIL LAW

d. Sources 2. Types of Judicial Jurisdiction

1. Codes and Statutes JURISDICTION OVER THE PERSON

2. Treaties and International Conventions
3. Treatises, Commentaries and Studies of Learned Competence or power of a court to render a judgment
Societies that will bind the parties to a case.
4. Judicial Decisions
Required in in personam proceedings. Acquired by the
voluntary appearance of a party and his submission to
2. Jurisdiction and Choice of authority.
Law
How Acquired
a. Over the person of the PLAINTIFF – acquired
a. Jurisdiction from the moment he invokes the aid of the court
[Coquia and Aguiling-Pangalangan] by filing a suit.
Legislative b. Over the person of the DEFENDANT:
Judicial Jurisdiction
Jurisdiction
• When he enters his appearance
The power or authority The ability of the state to
of a court to try a case, promulgate laws and
Exception: If he appears for the purpose of
render judgment and enforce them on all
protesting the jurisdiction of the court.
execute it in persons and property
accordance with law within its territory
• When he is served with the legal process
within the state
1. Basis of Exercise of Judicial o Personal service [Rule 14, Section 6,
Jurisdiction Rules of Court]
o Substituted service [Rule 14, Section 7,
Traditional Approach: Based on the state’s physical Rules of Court]
power over persons and property within its territory. o When subsequent proceedings arise out
of his original cause of action including
Modern Approach: Minimum contacts and counterclaims filed by the defendant
fundamental fairness test
JURISDICTION OVER THE PROPERTY
Minimum contacts must exist between the forum and
defendant. Due process only requires that a Results either from:
defendant, if not present within the territory, should a. Seizure of the property under a legal process; or
have certain minimum contacts with it such that b. Institution of legal proceedings wherein the
maintenance of the suit does not offend traditional court’s power over the property is recognized
notions of fair play and substantive justice. It includes and made effective
presence in the state through acts of authorized
agents. [International Shoe Co. v. Washington, 326 US 310 Due process is satisfied by summons through
(1945)] publication in these in rem and quasi in rem
proceedings
Minimum contacts must exist among the forum,
defendant and the cause of action. [Shaffer v Heitner, JURISDICTION OVER THE SUBJECT
433 US 186 (1977)] MATTER
Long-Arm Statutes – Municipal Laws that specify the More than the general power conferred by law to take
kinds of contacts upon which jurisdiction will be cognizance of cases of a general class to which the
asserted by the forum court. These laws allow a court case belongs. The power of the court must be
to obtain to obtain personal jurisdiction over an out- properly invoked by filing a petition. Jurisdiction over
of-state defendant who has sufficient connection with the subject matter cannot be conferred by consent of
the state, e.g. tortious act done within the state, or a the parties.
contract celebrated in the state.

Page 7 of 511
U.P. LAW BOC GENERAL PRINCIPLES
DIRECT VS. INDIRECT JURISDICTION
Direct Jurisdiction Indirect Jurisdiction
answers the question
answers the question
WON a court can
WON a court can try
recognize and/or
and decide a case
enforce a judgment
3. Ways of Dealing with a Conflicts
Problem
DISMISS THE CASE
a. For Lack of Jurisdiction: Absent jurisdiction over
the person, property or subject matter, the court
should dismiss the case.
b. Doctrine of Forum Non Conveniens: Literally means
“forum is inconvenient.” Thus, even if the court
assumes jurisdiction over the parties and the
subject matter, it may decline to try the case on
the ground that the controversy may be more
suitably tried elsewhere.
ASSUME JURISDICTION
Courts may apply either:
a. FORUM LAW; or
b. FOREIGN LAW.
The presence of any one of the following factors
would justify the application of forum law:
a. 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, 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 domicilii. [Art. 829, CC]
• Filipinos are prohibited from making joint
wills even when done abroad. [Art. 819, CC]
b. The proper foreign law was not properly pleaded
and proved
• Foreign law must be proved as a fact through
Rules of Evidence (e.g. official publication or
a copy which has been consularized)
• Doctrine of Processual Presumption – absent
contrary proof, foreign law is presumed to be
the same as Philippine law.
Page 8 of 511
CIVIL LAW
c. The case falls under any of the exceptions to the
application of foreign law.
• When the foreign law is CONTRARY to an
important PUBLIC POLICY of the forum;
• When the foreign law is CONTRARY to an
important PUBLIC POLICY of the forum;
• When the foreign law is PENAL in nature;
• When the foreign law is PROCEDURAL in
nature;
• When the foreign law is purely FISCAL OR
ADMINISTRATIVE in nature;
• When the application of foreign law will
work UNDENIABLE INJUSTICE TO
CITIZENS of the forum;
• When the case involves REAL OR
PERSONAL PROPERTY situated in the
forum;
• When the application of the foreign law
might ENDANGER THE VITAL
INTEREST of the state;
• When the foreign law is CONTRARY TO
GOOD MORALS
b. Choice of Law
1. Approaches to Choice of Law
a. Traditional approaches: For simplicity,
convenience, uniformity and predictability. At
times, at the expense of just results.
• Vested-Rights Theory
An act done in a foreign jurisdiction gives
rise to the existence of a right if the laws of
that state provides so.
This right vests in the plaintiffs and carry it
with them to be enforced in any forum he
chooses to bring suit.
The forum refers to the law of the place of
occurrence of the “last act” necessary to
complete the cause of action.
• Local Law Theory
The court treats a case as purely domestic
case and applies local law regardless of
foreign elements.
U.P. LAW BOC GENERAL PRINCIPLES CIVIL LAW

• Cavers’ Principles of Preference • Comparative Impairment

Made with reference to principles of
preference based on considerations of justice
and social expediency and should not be the
result of mechanical application of the rule.
• Functional Analysis
It aims to provide a fair accommodation of
conflicting state policies and afford fair
treatment to the parties.
b. Modern Approaches
Weighs conflicting interests and apply the
law of the state whose interest would be
more impaired if its laws were not followed.
This approach looked into the general
policies of the state beyond those reflected
in its substantive law and to policies and
values “relating to effective and harmonious
intercourse between states.”

• Place of Most Significant Relationship c. The Problem of Characterization

Identifies a plurality of factors and factual
contacts in light of choice of law principles: 1. Characterization and the Single Aspect
o The needs of the interstate and
international system; Method
o Relevant policies of the concerned
states; Single-aspect method (Traditional)
o The relevant policies of other interested Concentrates on one element of a situation in order
states and the relative interests of those to connect the case to a particular legal community.
in the determination of the particular
issue; Multi-aspect method (Modern Approach)
o The protection of justified expectations All important factors of the case are analyzed and the
of the parties; applicable law is arrived at by “rationally elaborating
o The basic policies underlying the and applying the policies and purposes underlying the
particular field of law; particular legal rules that come in question as well as
o Certainty, predictability and uniformity the needs of interstate or international intercourse”
of result; and
o Ease in the determination and the The Philippines follows the single-aspect method.
application of the law to be applied
Examples:
TORT CONTRACT • Philippine law governs citizens of the Philippines
in matters relating to family rights, duties, the
• Law chosen by the
status, condition and legal capacity of persons.
parties.
• Place where the injury [Art. 15, CC]
occurred In absence thereof, the • Real and personal property are governed by the
• Place where negligent following: law of the country where they are situated. [Art.
conduct occurred 16, CC]
• Place of contracting
• Domicile, residence • National law of the deceased person governs
• Place of negotiation
or nationality of the intestate and testamentary succession both with
parties • Place of performance respect to order of succession, amount of
• Place where the • Domicile, residence, successional rights and intrinsic validity of
relationship between nationality, place of testamentary provisions regardless of where the
the parties is entered incorporation and property may be found. [Art. 16, CC]
place of business of • Law of the place of execution governs the forms
the parties and solemnities of wills and other public
instruments. [Art. 17, CC]
• Interest Analysis • When acts are executed before the diplomatic or
Looks at the policy behind the laws of the consular officials of the Republic of the
involved state and the interest each state had Philippines in a foreign country, the solemnities
in applying its own law. established by Philippine laws shall be observed
in their execution. [Art. 17, CC]

Page 9 of 511
U.P. LAW BOC GENERAL PRINCIPLES
• Prohibitive laws concerning persons, acts or
property and those which have as their object,
public order, public policy, and good customs are
to be governed by Philippine law, unaffected by
laws, judgments and determinations of foreign
countries. [Art. 17, CC]
CHARACTERIZATION
Characterization is the process by which a court at the
beginning of the choice-of-law process assigns a
disputed question to an area in substantive law.
It is an escape device because by characterizing the
problem differently, it can produce results which the
forum court considers as just and sound.
Subject-Matter Characterization
Classification by a court of a factual situation into a
legal category.
Substance-Procedure Dichotomy
Directs the court to the extent it will apply foreign
law.
• SUBSTANTIVE – the court MAY apply foreign
law.
• PROCEDURAL – SHALL apply forum law
Statute of Frauds
• SUBSTANTIVE – if the words of the law relate
to forbidding the CREATION of obligation.
• PROCEDURAL – one that forbids
ENFORCEMENT of the obligation.
Statutes of Limitation and Borrowing Statute
General Rule: Statutes of limitations were classified as
procedural because they barred only the legal remedy
without impairing the substantive right involved.
Exception: If the statute provides a shorter period for
certain types of claims that fall within a wider
classification covered by a general statute of
limitations. (Specificity Test)
Borrowing statutes
Bars the filing of a suit in the forum if it is already
barred by the statute of limitations in the place where
the cause of action arose.
2. Dépeçage
Phenomenon where “different aspects of a case
involving a foreign element may be governed by
different systems of laws.”
Page 10 of 511
CIVIL LAW
• A case may be dissected into different issues,
each analyzed as to which law shall apply.
• When such issue by issue analysis results in the
application of different laws to different issues,
then dépeçage occurs.
• Dépeçage is the effect of issue by issue analysis.
d. The Problem of Renvoi
1. Definition
Procedure whereby a jural matter presented is
referred by the conflict of laws rules of the forum to
a foreign state, the conflict of laws rule of which, in
turn, refers the matter to the law of the forum or a
third state.
• Remission – reference is made back to the law of
the forum
• Transmission – reference is made to a third state
2. Limitation
The process of renvoi is not applicable in instances
where there is a FALSE CONFLICT. There’s a false
conflict when one of the states does not have a real
interest in applying its law in the controversy.
Examples:
• Competing states have the same substantive law
and the third concerned state has no interest in
applying its law.
• The decedent was a domiciliary and national of
only one state.
3. Various Ways of Dealing with the
Problem of Renvoi
a. Reject the renvoi - Forum conflict rules is
deemed to refer only to the internal law of that
state (i.e. that which would apply to a domestic
case with no conflict-of-laws complications)
b. Accept the renvoi – looks into not just the
internal law of the foreign state, but also the
choice-of-law rules applicable in multi-state
cases.
c. Desistance or mutual disclaimer of jurisdiction
(i.e. the forum court, upon reference to foreign
law, sees that such law only applies to its own
nationals and has no provision for application to
a non-national)
U.P. LAW BOC GENERAL PRINCIPLES
d. Foreign Court Theory – the forum court would
assume the same position that the foreign court
would take were the case litigated in the foreign
court.
e. Notice and Proof of Foreign Law
1. Extent of Judicial Notice
General Rule: Judge is not authorized to take judicial
notice of foreign law and is presumed to know only
domestic law.
Exception: When judicial notice is allowed. [Rule 129,
Section 1, Rules of Court]
It is allowed when the court is evidently familiar with
such foreign law. [Delgado v. Republic, G.R. No. L-2546
(1950)]
Familiarity with the foreign law may be because
Philippine law was derived therefrom or the judge had
previously ruled upon it in other cases. [Coquia and
Aguiling-Pangalangan]
Burden of Proof
The party whose cause of action or defense depended
upon the foreign law has the burden of proving the
foreign law.
Such foreign law is treated as a question of fact to be
properly pleaded and proved in conformity with the
law of evidence of the state where it is presented.
2. Proof of Foreign Law
Methods to prove foreign law
a. Official publication of the law (and consularized)
[Rule 132, Section 24, Rules of Court]
b. 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]
c. Learned treatises and expert witness for
unwritten foreign law [Rule 130, Section 46,
Rules of Court]
Effect of Failure to Plead and Prove Foreign Law
a. Dismiss the case for inability to establish a cause
of action
b. Processual Presumption / Presumed Identity –
assume that the foreign law is the same as the law
of the forum
Page 11 of 511
CIVIL LAW
c. Apply the law of the forum
Apostille Convention
The Apostille Convention on Authentication of
Documents took effect in the Philippines on May 14,
2019. This means that the DFA will no longer issue
Authentication Certificates and instead will affix an
Apostille to public documents for use abroad as proof
of authentication in Apostille-contracting parties.
An apostille certifies “the authenticity of the
signature, the capacity in which the person signing the
document has acted and, where appropriate, the
identity of the seal or stamp which it bears.” [Art. 5,
Apostille Convention]
3. Exceptions to the Application of
Foreign Law
a. 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 domicilii. [Art. 829, New CC]
• Filipinos are prohibited from making joint
wills even when done abroad. [Art. 819, CC]
b. The proper foreign law was not properly pleaded
and proved.
c. The case falls under any of the exceptions to the
application of foreign law.
• When the foreign law is CONTRARY to an
important PUBLIC POLICY of the forum;
• When the foreign law is PENAL in nature;
• When the foreign law is PROCEDURAL in
nature;
• When the foreign law is purely FISCAL OR
ADMINISTRATIVE in nature;
• When the application of foreign law will
work UNDENIABLE INJUSTICE TO
CITIZENS of the forum;
• When the case involves REAL OR
PERSONAL PROPERTY situated in the
forum;
U.P. LAW BOC GENERAL PRINCIPLES
• When the application of the Foreign law
might ENDANGER THE VITAL
INTEREST of the state;
• When the foreign law is CONTRARY TO
GOOD MORALS
3. Personal Law
a. Nationality
1. Importance of a Personal Law
An individual’s personal law follows him wherever he
is and governs those transactions which affect him
most closely.
Importance of Nationality in the Philippines
Regulates
a. Civil status
b. Capacity
c. Condition
d. Family rights and duties
e. Laws on succession
f. Capacity to succeed
2. Determination of Nationality
According to Article IV of the 1987 Constitution, the
following are Filipino citizens:
a. Those who are citizens of the Philippines at the
time of the adoption of the Constitution (1987)
b. Those whose fathers or mothers are citizens of
the Philippines
c. Those born before January 17, 1973 of Filipino
mothers, who elect Philippine citizenship upon
reaching the age of majority
d. Those who are naturalized in accordance with
law
NATURAL-BORN CITIZENS
Natural-born citizens are those who are citizens of the
Philippines without having to perform any act to
acquire or perfect citizenship.
The Philippines follows the jus sanguinis principle
which means the rule of descent or blood. This is in
contrast with the jus soli principle where nationality is
determined by the law of the place of one’s birth.
Page 12 of 511
CIVIL LAW
NATURALIZED CITIZENS
Naturalized citizens refer those who underwent a
procedure provided by law in order to acquire or
perfect citizenship.
Qualifications for Applicants
a. AGE: Must not be less than 21 years of age on
the date of the hearing of the petition;
b. RESIDENCE: Must have resided in the
Philippines for a continuous period of not less
than 10 years; May be reduced to 5 years in the
following cases:
1. Applicant honorably held office under the
government of the Philippines or any of the
provinces, cities, municipalities or political
subdivisions;
2. Established a new industry or introduced a
useful invention in the Philippines;
3. Married to a Filipino woman;
4. Had been engaged as a teacher in a public or
recognized private school not established for
exclusive instruction of children particular
nationality or race in any of the branches of
education or industry for a period of 2 years;
5. Born in the Philippines
c. CHARACTER
1. Must be of good moral character;
2. Must believe in the principles underlying the
Philippine Constitution; and
3. Must have conducted himself in a proper
and irreproachable manner during the entire
period of his residence in the Philippines
d. PROPERTY
1. Must own real estate in the Philippines worth
not less than P5000; or
2. Must have some lucrative trade, profession
or lawful occupation
e. LANGUAGE: Must be able to speak and write
English or Spanish and any one of the principal
Philippine languages
f. CHILDREN:
1. Enrolled his minor children of school age in
any of the public or private schools
recognized by the Bureau of Private Schools;
where Philippine history, government and
civics are taught and prescribed as part of
school curriculum;
U.P. LAW BOC GENERAL PRINCIPLES
2. During the entire period of the residence
required
3. Prior to the hearing of petition for
naturalization
Disqualification
The following cannot be naturalized [Sec. 4,
Commonwealth Act No. 473]:
a. Commission of a crime involving moral turpitude
b. Not receiving and dealing with Filipinos in his
home or visiting Filipino homes in the
community in a spirit of friendship, friendliness
and equality without any discrimination.
c. Applicant’s country does not grant reciprocal
rights to Filipino citizens at the time of the
hearing of his application.
d. Persons opposed to organized government or
affiliated with any association or group of
persons who uphold and teach doctrines
opposing all organized governments
e. Persons defending or teaching the necessity or
propriety of violence, personal assault, or
assassination for the success and predominance
of their ideas;
f. Polygamists or believers in the practice of
polygamy;
g. Persons suffering from mental alienation or
incurable contagious diseases
h. Citizens or subjects of nations with whom the
United States and the Philippines are at war,
during the period of such war
Rationale: Naturalization is a privilege and not a right.
The law must be strictly construed against the
applicant
Procedure [Com. Act No. 473]
a. Declaration of intention to become a citizen must
be filed 1 year prior to the filing of petition,
unless the applicant is exempted:
1. Born in the Philippines and received their
primary and secondary education in public
or private schools recognized by the
Government not limited to any race or
nationality;
2. Resided continuously for 30 years or more
before filing of application;
3. Widow and minor children of an alien who
declared his intention to become citizen and
dies before naturalization.
b. Petition for naturalization must be filed.
c. The petition will be heard after publication in the
Official Gazette or newspaper of general
publication.
Page 13 of 511
CIVIL LAW
d. If the petition is approved, there will be a
rehearing 2 years after the promulgation of the
judgment awarding naturalization
e. Taking of the oath of allegiance to support and
defend the Constitution and the laws of the
Philippines
Derivative Citizenship [Sec. 15, Com. Act No. 473]
a. Wife shall be deemed a citizen if she is:
1. Any woman who is now or may hereafter be
married to a citizen of the Philippines; and
2. Might herself be lawfully naturalized.
b. Minor children born in the Philippines shall be
considered citizens;
c. FOREIGN-BORN minor children
1. IN THE PHILIPPINES at the time of
naturalization: shall automatically become
Philippine citizens;
2. NOT IN THE PHILIPPINES at the time of
naturalization: deemed a Filipino citizen only
during his minority. Unless, he begins to
reside permanently in the Philippines when
still a minor.
d. FOREIGN-BORN children AFTER
NATURALIZATION are considered citizens if:
1. He registers himself as a Philippine citizen;
and
2. Take the necessary oath of allegiance;
3. Within 1 year from reaching the age of
majority
Loss of Citizenship
a. By naturalization in foreign countries;
b. By express renunciation of citizenship;
c. By subscribing to an oath of allegiance to support
the constitution or laws of a foreign country
upon attaining 21 years of age or more, subject to
certain exceptions;
d. By rendering service to, or accepting commission
in the armed forces of a foreign country, subject
to certain exceptions;
e. By having been declared by competent authority,
a deserter of the Philippine armed forces in time
of war, unless pardoned;
f. By marriage of a woman to a foreigner, if by
virtue of the laws of her husband’s country, she
acquires nationality;
g. By cancellation of the certificate of naturalization
1. It was obtained fraudulently or illegally;
2. Person naturalized shall return to his native
country or to some foreign country and
establish his permanent residence therein
within 5 years from the issuance of the
certificate;
U.P. LAW BOC GENERAL PRINCIPLES CIVIL LAW

3. Petition was made on an invalid declaration opportunity to acquire territory. Commonly

of intention;
4. Minor children failed to graduate from the
schools required through the fault of their
parents either by neglect to support them or
by transfer to another school;
5. Naturalized citizen allowed himself to be
used as a dummy
Methods of reacquiring Philippine citizenship
[Frivaldo v. COMELEC, G.R. No. 87193 (1989)]
a. By direct act of Congress;
b. By naturalization;
c. By repatriation.
3. Problems in Applying Nationality
Principle
Dual or Multiple Citizenship
An individual can be claimed as a national of 2 or
more states pursuant to the rule that each State
determine who its own nationals are. [Hague
Convention on Conflict of National Laws]
Examples:
• Child born of parents who are nationals of a
country applying jus sanguinis in a country
applying jus soli principle;
• Citizen who marries an alien may acquire the
citizenship of his/her spouse if the spouse’s
national law allows.
Not followed under Philippine law – Filipino spouse
retains Philippine citizenship unless by his or her act
or omission, he/she is deemed to have renounced it
Effective nationality
In the determination of the rights of an individual
who may claim multiple nationality in a third state, the
ICJ applied the principle of “effective nationality,” i.e.
that based on stronger factual ties between the person
concerned and one of the States whose nationality is
involved. [Nottebohm Case (Liechtenstein v. Guatemala
[1955] ICJ Rep 4)]
another known as refugees
Illustration
When a child is born in a country following jus
sanguinis principle of parents whose national law
follows jus soli principle
Remedies
a. Convention on the Status of Refugees provided
some basic rights of stateless persons.
b. Convention on the Reduction on Statelessness
enumerates certain conditions such as marriage,
divorce, adoption, naturalization, expatriation,
under which an individual would not lose
nationality at the risk of becoming stateless,
unless a new nationality is provided. Also
prohibits states from depriving their nationals of
their identity as punishment or a discriminatory
instrument for political, religious or ethnic
reasons
b. Domicile
1. Definition
Domicile is defined by municipal law (Philippine Law)
and private international law.
Under municipal law
For the exercise of civil rights and the fulfillment of
civil obligations, the domicile of natural persons is the
place of their habitual residence. [Art. 50, CC]
For juridical persons: domicile is determined by the
law creating or recognizing it. In the absence thereof
it shall be understood to be the place where their legal
representation or place of business is.
Under private international law
The place with which a person has a settled
connection for certain legal purposes, either because
his home is there or because that place is assigned to
him by law. [Restatement (First) of Conflict of Laws]

Statelessness The place of his true, fixed permanent home and

Types principal establishment, and to which, whenever he is
De Jure De Facto absent, he has the intention of returning. [Justice
an individual who has an individual possessed Story]
been stripped of his of a nationality but
nationality by his own whose country does not To acquire a domicile, there must be concurrence of
former government give them protection intention to make it one’s domicile and physical
without having an outsider their own presence.

Page 14 of 511
U.P. LAW BOC GENERAL PRINCIPLES CIVIL LAW

In the absence of concurrence of all these, the

2. General Rules on Domicile domicile of origin is deemed to continue. [Pundaodaya
v. COMELEC, G.R. No. 179313 (2009)]
a. No person shall be without a domicile.
b. A person’s domicile of origin prevails until he c. Principles on Personal Status and
acquires a new domicile.
c. A person can have only one domicile for a given
Capacity
purpose or a given time under the law of a
particular State. 1. Definition

General Rule: A person cannot have two Personal status

simultaneous domiciles. Includes both condition and capacity.

Exception: Domicile may vary depending on the Embraces such matters as:
purpose (e.g. domicile for divorce will be a. The beginning and end of human personality
different from domicile for the purpose of b. Capacity to have rights in general
running for public office.) c. Capacity to engage in legal transactions
d. Protection of personal interests
d. It establishes a connection between a person and e. Family relations, particularly the relations
a particular territorial unit. between:
e. The burden of proving a change of domicile is 1. Husband and wife
upon whoever alleges that a change has been 2. Parent and child
secured. 3. Guardian and ward
Without overwhelming evidence to show a f. Transactions of family law, especially
change of domicile, the court will decide in favor 1. Marriage
of the continuance of an existing domicile. 2. Divorce
3. Separation
3. Kinds Of Domicile 4. Adoption
5. Legitimation
6. Emancipation
a. Domicile of origin – refers to a person’s
g. Succession (both testate and intestate)
domicile at birth
1. Legitimate Child – domicile of father
Capacity
2. Illegitimate Child – domicile of mother
The union of juridical capacity and capacity to act
3. Emancipated Child – may acquire domicile
PRODUCES complete civil capacity
of choice
b. Domicile of choice (Voluntary Domicile) –
freely chosen by a person sui juris Juridical Capacity Capacity to Act
Acquired by the concurrence of physical the fitness of a man to
the power to do acts
presence in the new place and unqualified be the subject of legal
with juridical effects
intention to make that place one’s home relations
c. Constructive domicile
By operation of law, a domicile is assigned to 2. Legislative Jurisdiction Distinguished
person legally incapable of choosing their own from Judicial Jurisdiction
domicile. Included are minors, and the mentally
disabled Status, once established by the personal law of the
party, is given UNIVERSAL RECOGNITION.
How one’s domicile of origin is lost
a. Actual removal or change of domicile 3. Beginning and End of Personality
b. A bona fide intention of abandoning the former
residence and establishing a new one The determination of the exact moment personality
c. Acts which correspond with the purpose begins is referred to the individual’s personal law.

A declaration of death issued by a competent court is

considered valid for all purposes. Upon the death of

Page 15 of 511
U.P. LAW BOC GENERAL PRINCIPLES
a person, some of his rights and obligations are totally
extinguished while others are passed on to his
successors.
4. Absence
Three ways of addressing conflict of laws problem
regarding absence:
a. There is a rebuttable presumption that a person
is dead when he has been absent for a number of
years
b. A person’s unexplained absence is judicially
investigated and established which results in legal
effects similar to those of death
c. A judicial decree shall have to be issued declaring
the person dead before the legal effects of death
take place.
The Philippines follows the first.
5. Name
General Rule: No person can change his name or
surname without judicial authority.
Exceptions (according to Jurisprudence):
a. That the name is ridiculous or tainted with
dishonor or extremely difficult to pronounce.
b. When the change is necessary to avoid confusion
c. When the right to a new name is a consequence
of a change in status
d. A sincere desire to adopt a Filipino name to erase
signs of a former alien nationality which unduly
hamper social and business life.
Whether an alien’s change of name is valid
DEPENDS SOLELY ON HIS PERSONAL LAW.
6. Age of Majority
Age of majority is determined by the individual’s
personal law.
7. Capacity
Capacity to act is governed by his personal law.
The incapacities attached to his legal status go with
him wherever he is.
Page 16 of 511
CIVIL LAW
4. Choice of Law Problems
a. Choice-of-Law in Family
Relations
Art. 15, CC. Laws relating to family rights and
duties, or to the status, condition and legal capacity
of persons are binding upon citizens of the
Philippines, even though living abroad.
Governing Law: Lex Nationalii.
1. 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]
This policy is expressed in various laws.
Examples:
Sec. 2, Art. XV, 1987 Constitution. Marriage, as
an inviolable social institution, is the foundation of
the family and shall be protected by the State.
Art. 220, CC. In case of doubt, all presumptions
favor the solidarity of the family. Thus, every
intendment of law or facts leans toward the validity
of the marriage , the indissolubility of the marriage
bonds, the legitimacy of children, the community
of property during the marriage, the authority of
parents over their children, and the validity of
defense for any member of the family in case of
unlawful aggression.
Extrinsic Validity of Marriage: Lex Loci
Celebrationis
Covers questions relating to formalities or “external
conduct required of the parties or of third persons
especially of public officers, necessary to the
formation of a legally valid marriage.”
Governing Law: Lex Loci Celebrationis
All States recognize as valid marriages celebrated in
foreign countries if they complied with the formalities
prescribed therein [The Hague Convention]
All marriages solemnized outside the Philippines in
accordance with the laws in force in the country
U.P. LAW BOC GENERAL PRINCIPLES
where they were solemnized, and valid there as such,
shall also be valid in this country. [par. 1, Art. 26, FC]
Formal Requisites under Philippine Law: [Art. 3, FC]:
a. Authority of the solemnizing officer
b. A valid marriage license except in cases provided
in Chapter 2 of this Title; and
c. A marriage ceremony which takes place with the
appearance of the contracting parties before the
solemnizing officer and their personal
declaration that they take each other as husband
and wife in the presence of not less than two
witnesses of legal age.
Exceptions to the rule of lex loci celebrationis:
Lex nationalii
a. Either/both parties are below 18 years old
b. Bigamous or polygamous marriages
c. Subsequent marriage without recording:
1. The judgment of nullity of the first marriage
2. Partition and distribution of the properties
of the spouses
3. Delivery of the children’s presumptive
legitimes
d. Mistake as to identity of the contracting party
e. One of the parties was psychologically
incapacitated to comply with the essential marital
obligations
f. Incestuous
g. Void by reason of public policy
The abovementioned involve the question capacity to
marry, which is a substantive requirement for
marriage. Since personal law governs questions of
intrinsic validity, the above are exceptions to lex loci
celebrationis because they are controlled by lex nationalii.
Intrinsic Validity of Marriage: Personal Law of
the Parties – Lex Nationalii or Lex Domicilii
Refers to the capacity or general ability of a person to
marry (e.g. age requirement and parental consent).
Governing Law: Personal Law, either Lex Nationalii
or Lex Domicilii
Note: In the Philippines: Lex Nationalii
Intrinsic requirements of marriage
No marriage shall be valid, unless these essential
requisites are present:
a. Legal capacity of the contracting parties who
must be a male and female; and
b. Consent freely given in the presence of the
solemnizing officer [Art. 2, FC]
Page 17 of 511
CIVIL LAW
Consular marriages
Marriage celebrated by a diplomatic agent or consular
official in accordance with his state law shall be
considered valid as long as it is not prohibited by the
state of celebration. [Art. 9, Hague Convention on
Validity of Marriages]
Under Philippine law, marriage between spouses with
at least 1 Filipino officiated by the Philippine consul
general, consul or vice consul must comply with the
FORMAL AND INTRINSIC REQUIREMENTS
under Philippine law.
a. Valid marriage license and due publication and
registration
b. Alien must comply with marriage requisites
under his or her national law and submit a
certificate of legal capacity to contract marriage
issued by his diplomatic or consular office
c. Stateless persons or refugees shall submit an
affidavit in lieu of the certificate of legal capacity.
Effects of Marriage
Refers to personal relations between spouses and
property relations of the spouses
Governing Law on Personal Relations Between the
Spouses: Lex Nationalii
Includes mutual fidelity, respect, cohabitation,
support and the right of the wife to use the husband’s
family name.
If the spouses are of different nationalities, generally,
the national law of the husband may prevail if not
contrary to law, customs and good morals of the
form.
Under Philippine law, both husband and wife have
the right to fix the family domicile. [Art. 69,FC]
Property Relations of Spouses
According to The Hague Convention on the Law
applicable to Matrimonial Property Regimes the
governing law:
a. Internal law designated by the spouses before the
marriage; or
b. In the absence thereof, the internal law of the
state in which both spouses fix their habitual
residence.
Principle of Immutability
The applicable law continues notwithstanding any
change of their nationality or habitual residence. [Art.
U.P. LAW BOC GENERAL PRINCIPLES
7, The Hague Convention on Matrimonial Property
Regime]
Governing Law for Filipinos: Philippine Law
Under Philippine law, absent a contrary stipulation in
a marriage settlement, property relations are governed
by Philippine law [Art. 80, FC]
Exceptions:
a. Both spouses are aliens
b. With respect to extrinsic validity of contracts
affecting property not situated in the Philippines
and executed in the country where property is
located
c. With respect to extrinsic validity of contracts
entered into in the Philippines but affecting
property situated in a foreign country requiring
different formalities
2. Divorce and Separation
Divorce may be either:
a. Absolute – termination of legal relationship
between spouses by an act of law
b. Relative or Legal Separation – separation from
bed and board
Rules
a. Bases of obtaining jurisdiction over divorce
proceedings:
1. Domicile of one of the parties; or
2. Marital domicile
b. On grant of divorce:
1. Lex nationalii;
2. Lex Fori
Divorce Decrees Obtained by Filipinos
General Rule: Decrees of absolute divorce obtained by
Filipinos abroad are not valid and are not recognized
in Philippine jurisdiction.
Exception: If decree is obtained by alien spouse
capacitating him to marry, the Filipino spouse shall
have capacity to marry. [Art. 26, FC]
Note: However, in the case of Republic v. Tanedo-Manalo
[G.R. No. 221029 (2018)], the Supreme Court
declared that “the foreign divorce secured by a
Filipino against a foreign spouse is also considered
valid in the Philippines.”
Validity of Foreign Divorce Between Foreigners
Page 18 of 511
CIVIL LAW
This will be recognized in the Philippines under the
principle of international comity, provided it does not
violate a strongly held policy of the Philippines.
3. Annulment and Declaration of Nullity
Governing Law
Traditional approach: LEX LOCI
CELEBRATIONIS
Modern Approach: LAW OF THE MARITAL
DOMICILE because it is considered to have the most
significant interest in the status of the spouses.
Note: In both choice of law approaches, since the
action turns on the validity of the marriage, lex fori,
which is crucial in divorce, plays no substantial role in
annulment and declaration of nullity.
Bases of Jurisdiction
a. Lex loci celebrationis,
b. Law of marital domicile,
c. Any court which acquires personal jurisdiction
over the parties.
Grounds
Based on the defects at the time of the celebration of
the marriage
4. Parental Relations
Includes paternity which is the civil status of the
father or mother with respect to the child and filiation
which is the status of the child in relation to his
parents.
Governing Law
Legitimacy of the child is submitted to the personal
law of the parents which is either:
1. Lex nationalii; or
2. Lex domicilii.
Note: In the Philippines, it is determined by the
national law of the parents. If the parents belong to
different nationalities, it is determined by the national
law of the father.
Determination of Legitimacy of a Child
Kinds of filiations
a. Natural
1. Legitimate – governed by the personal law of
the father
2. Illegitimate – governed by the personal law
of the mother
U.P. LAW BOC GENERAL PRINCIPLES
b. Adopted
Parental Authority over the Child
Most countries follow the personal law of the father.
In the Philippines, joint exercise of parental authority
by the father and mother [Art. 211, FC]
5. Adoption
An act by which relations of paternity and affiliation
are recognized as legally existing between persons not
so related by nature.
Bases of Adoption Jurisdiction
General Rule: Child’s personal law, if the adopter and
adoptee have different domiciles
Exception: Adopter’s personal law is considered, if the
child’s domicile is merely constructive
Governing law on the process of adoption: LEX
DOMICILII
b. Choice of Law in Property
1. The Controlling Law
a. Immovable: LEX SITUS
1. Determined by the law of the place where
the land is situated
2. Connecting factor is immovable itself and
not the parties
b. Movables:
1. LEX DOMICILII
Rights over movables are governed by the
law of owner’s domicile. For simplicity and
convenience because it is difficult to
anticipate where they may be situated at a
given time
2. LEX SITUS
Based on the state’s power over its territory.
State where property is located has the sole
power to decide the validity and effects of
transfer of the property
3. LEX LOCI ACTUS
Law of the place where the transaction was
completed
Page 19 of 511
CIVIL LAW
4. PROPER LAW OF THE FORUM
Law of the state having the most real
connection with the transfer
Note: In the Philippines however, in light of Article 16
of the CC, one need not classify the subject property,
as the aforementioned provision expressly provides
that, “real and personal property are subject to the law
of the country where they are situated (LEX SITUS).”
Traditional approach – physically part of the
country and subject to the laws
Modern approach – situs is the place most closely
and significantly related to the issue
Thus, the only time the court has to classify the
subject property is when it is located in a foreign
country WHICH HAS A LAW THAT
DISTINGUISHES BETWEEN REAL AND
PERSONAL PROPERTY. [Coquia and Aguiling-
Pangalangan]
Kinds of Movables:
• Choses in possession – tangible objects
• Choses in action – intangible objects
2. Capacity to Transfer or Acquire
Property
Real property – governed by the law of the place
where the property is located (LEX SITUS)
3. Extrinsic and Intrinsic Validity of
Conveyances
Formalities, essential validity, and effects of
conveyance – governed by LEX SITUS.
Rationale: The validity and effect of conveyance of
property are treated as a question of property rather
than contract.
4. Exception to Lex Situs Rule
a. The transaction does not affect transfer of title
to/ownership of the land – LEX
INTENTIONIS or LEX VOLUNTATIS
b. Contracts where real property is offered by way
of a security for the performance of an obligation
such as a loan.
1. LOAN – covered by rules on ordinary
contracts
U.P. LAW BOC GENERAL PRINCIPLES
2. MORTGAGE – LEX SITUS
c. Testate or intestate succession and capacity to
succeed – LEX NATIONALII
5. Situs of Certain Properties
Situs of Personal Property for Tax Purposes
The maxim mobilia sequuntur personam has been viewed
as a mere fiction of law having its origins in
considerations of general convenience and public
policy. It cannot be applied to limit the right of the
state to tax property within its jurisdiction. It yields to
established facts of legal ownership, actual presence,
and control elsewhere, and cannot be applied if it
would result in inescapable and patent injustice. [Wells
Fargo Bank and Union Trust Compny v. Collector, G.R.
No. 46720 (1940)]
Situs of Money
Where such funds are located physically or where the
institution holding such funds is located
Situs of Debts
Unsettled in Philippine jurisdiction, however, Prof.
Aguiling-Pangalangan suggests that the law which
governs the contract from which the debt arises shall
also govern the transfer of the debt.
Corporate Shares of Stock
a. For tax purposes – domicile of the corporation
b. For sale – place where the title to the goods
passes from the seller to the buyer
c. Choice Of Law In Contracts
1. Extrinsic Validity of Contracts
Lex Loci Celebrationis
Art. 17, CC. The forms and solemnities of
contracts, wills, and other public instruments shall
be governed by the laws of the country in which
they are executed.
When the acts referred to are executed before the
diplomatic or consular officials of the Republic of
the Philippines in a foreign country, the
solemnities established by Philippine laws shall be
observed in their execution.
This principle is derived from a broader proposition
that the place governs the act (locus regit actum).
2. Intrinsic Validity of Contracts
Page 20 of 511
CIVIL LAW
Lex Loci Contractus
Law of the place of making. Looks into where “the
last act is done which is necessary to bring the binding
agreement into being so far as the acts of the parties
are concerned.”
Lex Loci Solutionis
Law of the place of performance governs all
matters relating to the:
a. Time
b. Place and manner of performance
c. Sufficiency of performance
d. Valid excuses for non-performance
Lex Loci Intentionis
Law intended by the parties. Intent may be
expressed in a choice-of-law provision, unless
contrary to law, morals, good customs, public order
or public policy of the Philippines [Art. 1306, CC]; or
May be implied from the parties’ contemporaneous
and subsequent acts
3. Capacity to Enter into Contracts
Governed by the personal law of the parties –
a. LEX NATIONALII; Or
b. LEX DOMICILII
4. Choice of Law Issues in Conflicts
Contracts Cases
Choice of Forum Clause
Under the principle of freedom of contract, parties
may stipulate the law to govern their contract.
• Questions of venue, not jurisdiction
• Includes arbitration, not only choice of court.
Contracts with Arbitration Clause
Arbitration clause – a provision in a contract
stipulating that any dispute arising from the contract
shall be submitted to a particular body for arbitration.
An arbitration clause, stipulating that the arbitral
award is final and binding, does not oust our courts
of jurisdiction as the international arbitral award, is
still judicially reviewable under certain conditions.
The pertinent features of R.A. 9285 applying and
incorporating the UNCITRAL Model Law are the
following: (1) the RTC must refer to arbitration in
proper cases; (2) foreign arbitral awards must be
U.P. LAW BOC GENERAL PRINCIPLES
confirmed by the RTC; (3) the RTC has jurisdiction
to review foreign arbitral awards; (4) grounds for
judicial review different in domestic and foreign
arbitral awards; (5) RTC decision of assailed foreign
arbitral award appealable. [Korea Technologies v. Lerma,
G.R. No. 143581, 2008]
5. Adhesion Contracts
Contracts that are not negotiated by the parties and
drafted by only one dominant party. The only
participation of the other party would be to affix his
signature
General Rule: Not void per se
Exception: The court may not recognize the law
stipulated and invoke public interest or public policy,
when there is an undue advantage made by a
dominant party.
6. Special Contracts
a. Carriage of Goods by Sea
b. Contracts for International Air Transportation
a. The Warsaw Convention was concluded in
order to establish uniform rules and
regulations on the liability of international
airline carriers in cases of death, injuries of
passengers or loss or damage of cargo.
b. Any action for damages may be brought
either:
1. In the court of the domicile of the
carrier; OR
2. In the principal place of business of the
carrier; OR
3. In the place of business of the carrier
through which the contract has been
made; OR
4. Before the court at the place of
destination.
c. The procedural rules of the forum shall
apply.
7. Limitations to Choice of Law
a. Parties may not select a law that has no
connection at all with the transaction or the
parties
b. If the law selected should change, the law as
changed will govern.
Exception: If the change is so revolutionary that it
was never contemplated by the parties
Page 21 of 511
CIVIL LAW
c. Should not be interpreted to oust the jurisdiction
court already acquired over the parties and the
subject matter
d. Public policy deemed written into contracts
impressed with public interest
e. Cognovit Clauses / Confession of Judgment
Clauses – debtor may agree to be subject to the
jurisdiction of a specific court in case of breach
or default in payment.
d. Choice of Law in Wills,
Succession and Administration
of Estates
1. Extrinsic Validity Of Wills
Includes age, testamentary capacity of the testator and
the form of the will.
Art. 17, CC. The forms and solemnities of
contracts, wills, and other public instruments shall
be governed by the laws of the country in which
they are executed.
Art. 815, CC. When a Filipino is in a foreign
country, he is authorized to make a will in any of
the forms established by the law of the country in
which he may be. Such will may be probated in the
Philippines.
Art. 816, CC. The will of an alien who is abroad
produces effect in the Philippines if made with the
formalities prescribed by the law of the place in
which he resides, or according to the formalities
observed in his country, or in conformity with
those which this Code prescribes.
Art. 817, CC. A will made in the Philippines by a
citizen or subject of another country, which is
executed in accordance with the law of the country
of which he is a citizen or subject, and which might
be proved and allowed by the law of his own
country, shall have the same effect as if executed
according to the laws of the Philippines.
Filipino nationals
a. LEX LOCI CELEBRATIONIS – formalities
established by the law of the country where the
will is executed [Art. 17 and 815, CC]
b. LEX NATIONALII – formalities prescribed
under Philippine law
U.P. LAW BOC GENERAL PRINCIPLES CIVIL LAW

5. Probate
Note: There is no express provision, only by analogy
with rules applicable to aliens. The ratio is that it FORUM LAW governs because disallowance is
cannot be assumed that the Code places the Filipino essentially procedural in character
citizen in a worse position that the alien in relation to
our law However, the court will look into the law of the
foreign state where the will was made as to whether
For Aliens the extrinsic requirements in the execution of the will
a. LEX NATIONALII [Art. 816 and 817, CC] have been complied with.
b. LEX DOMICILII
c. LEX LOCI CELEBRATIONIS 6. Administration of Estates
With Regard to Joint Wills Nationality and domicile does not affect
a. By Filipinos: VOID under Philippine law on the administration
ground of public policy. [Art. 818, CC]
b. By Foreigners: VALID UNLESS it affects heirs Authority of the administrator or executor is limited
in the Philippines. to the authority of the court that appointed such.

2. Intrinsic Validity Of Wills

Governed by the national law of the decedent [Art.

16, CC]

Includes issues of substance such as order of

succession, amount of successional rights and
intrinsic validity of testamentary provisions [Art. 16,
CC]

3. Interpretation of Wills

Governed by the rules of interpretation of the

national law of the decedent [Art. 16, CC]

4. Revocation

When done in the Philippines

Philippine Law applies

Done outside the Philippines, by a person

domiciled in the Philippines
a. LEX DOMICILII – Philippine Law
b. LEX LOCI ACTUS – Law of the place of
revocation
c. LEX LOCI CELEBRATIONIS – Law of the
place where the will was made [Balane]

Done outside the Philippines, by a non-

domiciliary
a. LEX LOCI CELEBRATIONIS – Law of the
place where the will was made
b. LEX DOMICILII – Law of the place where
testator was domiciled at the time of revocation

Page 22 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

PERSONS AND
FAMILY RELATIONS
Civil Law

Page 23 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

II. PERSONS AND 2. Commencement and

FAMILY Termination of Personality
RELATIONS Art. 40, CC. Birth determines personality; but the
conceived child shall be considered born for all
purposes favorable to it, provided that it be born
A. Persons and Personality later with the conditions specified in the following
article.
1. Concept of Person and Article 40 [prescribes] that "the conceived child shall
Personality be considered born for all purposes that are favorable
to it" adds further "provided it be born later with the
Persons: Any being, physical, moral, real, juridical conditions specified in the following article" (i.e., that
and legal susceptible of rights and obligations or being the fetus be alive at the time it is completely delivered
the subject of legal relations. [Tolentino citing from the mother's womb as defined under Art. 41
Sanchez Roman and Planio and Ripert] CC). This proviso, however, is not a condition
precedent to the right of the conceived child; for if it
Juridical Capacity Capacity to Act were, the first part of Article 40 would become
Fitness of a person to entirely useless and ineffective. [Quimiging v. Icao, GR.
Power to do acts with No. L-26795 (1970)]
be the subject of legal
legal effect
relations
Passive Active A conceived child has a provisional personality for all
Aptitude for the holding Aptitude for the purposes favorable to it.
and enjoyment of rights exercise of rights a. It is entitled to support [Quimiging v. Icao, GR. No.
Inherent in natural L-26795 (1970)]
Must be acquired b. It may inherit or succeed [Art. 1025, CC]
persons
Lost through death and c. It may receive donations [Art. 742, CC]
Lost upon death
other causes
Can exist without Must exist with juridical Art. 41, CC. For civil purposes, the fetus is
capacity to act capacity considered born if it is alive at the time it is
Cannot be limited or May be restricted or completely delivered from the mother’s womb.
restricted limited However, if the fetus had an intra-uterine life of
less than seven months, it is not deemed born if it
Art. 37, CC. Juridical capacity, which is the fitness dies within twenty-four hours after its complete
to be the subject of legal relations, is inherent in delivery from the maternal womb.
every natural person and is lost only through death.
Capacity to act, which is the power to do acts with Birth: complete removal of the fetus from the
legal effect, is acquired and may be lost. mother’s womb.

Juridical capacity can exist even without capacity to
act; the existence of the latter implies that of the
former. Full civil capacity is the existence of both
capacity to act and juridical capacity.
Capacity and incapacity depends on the law, therefore
it cannot be modified by agreements. It is a matter of
public interest. [Tolentino]
Before birth, a fetus is merely part of the mother’s
internal organs. It is enough that the child lives even
for an instant. [Tolentino]
Proof that the fetus was alive upon separation is
complete respiration as a test or sign of independent
life.
It is presumed that the child was alive and it is the
opposing party who has the burden of proof.

Page 24 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

When Considered Criminal liability ends with death but civil liability may
Intra-Uterine Life
Born be charged against the estate [People v. Tirol, G.R. No.
If alive (e.g. can breathe L-30538 (1981)].
7 months or more independently, etc.)
upon delivery Note: The statutory presumption provided by Article
If alive after completion 43 [CC] applies only when there is doubt on the order
Less than 7 months of 24 hours from of death between persons who are called to succeed
delivery each other.

Personality of Conceived Child The statutory presumption of Article 43 does not

a. Limited: only for purposes favorable to it. apply when there is credible eyewitness as to who died
b. Conditional: it depends upon the child being first [Joaquin v. Navarro, G.R. No. 5426 (1953)].
born alive later
Even mere inference, when drawn from established
A conceived child can acquire rights while still in the facts and weighed by common experience, may
mother’s womb. It can inherit by will or by intestacy. prevail over the presumption of Art. 43 [Joaquin v.
Navarro, G.R. No. 5426 (1953)].
Period of Conception: the first 120 days of the 300
days preceding the birth of the child. [Tolentino] Art. 43, CC v. Sec. 3(jj), Rule 131, Rules of Court
(hereinafter, ROC)
An aborted fetus never acquired legal rights/civil Art. 43 Sec. 3(jj), Rule 131
personality because it was not alive at the time of Only use the presumptions when there are no facts
delivery from the mother’s womb. No damages can to get inferences from
be claimed in behalf of the unborn child since an Only used for Cannot be used for
action for pecuniary damages on account of personal succession purposes succession purposes
injury or death pertains primarily to the one injured. Only during death in
[Geluz v. CA, G.R. No. L-16439 (1961)] In any circumstance calamities, wreck, battle
or conflagration
“This is not to say that the parents [of an aborted
fetus] are not entitled to collect any damages at all. But Sec. 3(jj), Rule 131, ROC: Presumption of
such damages must be those inflicted directly upon Survivorship
them as distinguished from the injury or violation of Age Presumed Survivor
the rights of the [aborted fetus]” e.g. moral damages Both under 15 Older
for their loss and the disappointment of their parental Both above 60 Younger
expectations (Art. 2217, CC). [Geluz v. CA, G.R. No. One under 15, the other
L-16439 (1961)] One under 15
above 60
Both over 15 and under
Male
3. Death 60; different sexes
Both over 15 and under
Older
Art. 42, CC. Civil personality is extinguished by 60; same sex
death. The effect of death upon the rights and One under 15 or over
obligations of the deceased is determined by law, by 60, the other between One between 15 and 60
contract and by will. those ages

Art. 43, CC. If there is a doubt, as between two or 4. Juridical Persons

more persons who are called to succeed each other,
as to which of them died first, whoever alleges the
death of one prior to the other, shall prove the same;
in the absence of proof, it is presumed that they died
at the same time and there shall be no transmission
of rights from one to the other.
The following are juridical persons [Art. 44, CC.]:
a. The State and its political subdivisions;
b. Other corporations, institutions and entities
for public interest or purpose, created by law;
their personality begins as soon as they have been
constituted according to law:

Page 25 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
1. These are governed by the laws creating or
recognizing them. [par. 1, Art. 45, CC]
2. Upon the dissolution of corporations,
institutions and other entities for public
interest or purpose their property and other
assets shall be disposed of in pursuance of
law or the charter creating them. If nothing
has been specified on this point, the property
and other assets shall be applied to similar
purposes for the benefit of the region,
province, city or municipality which during
the existence of the institution derived the
principal benefits from the same. [Art. 47,
CC.]
c. Corporations, partnerships and associations
for private interest or purpose to which the law
grants a juridical personality, separate and distinct
from that of each shareholder, partner or
member.
1. Private corporations are regulated by laws of
general application on the subject.
2. Partnerships and associations for private
interest or purpose are governed by the
provisions of this Code concerning
partnerships [pars. 2 and 3, Art. 45, CC].
Art. 46, CC. Juridical persons may acquire and
possess property of all kinds, as well as incur
obligations and bring civil or criminal actions, in
conformity with the laws and regulations of their
organization.
The concept of Juridical Persons is that an abstract
being (e.g. a corporation) is formed for the realization
of a collective purpose that the law granted with
capacity for rights and obligations. It requires
recognition of the State and is independent of the
members. Its personality is distinct from that of its
members. [Tolentino]
Kinds of Persons
Natural Person Juridical Person
Human beings Artificial, abstract
Products of procreation Products of fiction
Page 26 of 511
CIVIL LAW
5. Restrictions on Civil
Capacity
Presumption of Capacity
Capacity to act is presumed of every person who has
not been previously declared to be incapable. (
Standard Oil Co. V. Codina Aranas)
Art. 37, CC. Juridical capacity, which is the fitness
to be the subject of legal relations, is inherent in
every natural person and is lost only through death.
Capacity to act, which is the power to do acts with
legal effect, is acquired and may be lost.
Restrictions on Capacity to Act
Circumstances which limit capacity to act:
a. Minority
b. Insanity or imbecility,
c. Deaf-mutism,
d. Civil Interdiction (Penalty),
e. Prodigality,
f. Family relations,
g. Alienage,
h. Absence,
i. Insolvency and trusteeship [Art. 39, CC]
Art. 38, CC. Minority, insanity or imbecility, the
state of being a deaf-mute, prodigality and civil
interdiction are mere restrictions on capacity to act,
and do not exempt the incapacitated person from
certain obligations, as when the latter arise from his
acts or from property relations, such as easements.
General Rule: Incapacitated persons are not exempt
from certain obligations arising from his acts or
property relations.
Restrictions in capacity to act generally affect
obligations arising from contracts only. As a rule, they
do not affect those arising from law, quasi-delicts, etc.
[Perez]
Also, certain rights are not affected by incapacity,
such as right to inherit or to support. [Perez]
a. Minority
Who are minors?
Those whose age are below the age of majority.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
RA 6809 (1989): An act lowering the age of majority
from twenty-one to eighteen years.
Effects on Contracts
1. They cannot give consent to a contract [Art. 1327
(1), CC]
2. Minority cannot be asserted by the other party in
an action for annulment [Art. 1397, CC]
3. Not obliged to make restitution except insofar as
he has been benefited [Art. 1399, CC]
4. Minor has no right to demand the thing/price
voluntarily returned by him [Art. 1426, CC]
5. Minor has no right to recover voluntarily paid
sum or delivered thing, if consumed in good faith
[Art. 1427, CC]
6. Must pay reasonable amount for necessaries
delivered to him [Art. 1489, CC]
7. A contract where one of the parties is a minor is
voidable [Art. 1390(1), CC]
8. A contract is unenforceable when both of the
parties are minors (incapable of giving consent)
[Art. 1403(3), CC]
Estoppel works against minors who misrepresent
their ages in a contract and are compelled to comply
with its terms. [Mercado v. Espiritu, G.R. No. L-11872
(1917)]
However, when a minor made no active
misrepresentation as to his minority and such
minority is known to the other party, the contract may
be annulled by the minor upon attaining the age of
majority. [Bambalan v. Maramba, G.R. No. L-277710
(1928)]
Minors are obliged to make restitution insofar as they
have been benefited [Art. 1399, CC; Braganza v. Villa
Abrille, G.R. No. L-12471 (1959)].
Effects on Marriage
1. May not yet contract marriage [Art. 5, Family
Code (hereinafter, FC)].
2. Marriages, where one of the parties is below 18,
even with the consent of parents/guardians, are
void [Art. 35, FC].
Effect on Crimes [R.A. 9344]
General Rule: EXEMPTED from criminal liability
Exception: Acted with discernment, and the minor is
between 15 and 18 years of age.
Page 27 of 511
CIVIL LAW
b. Insanity
Insanity includes many forms of mental disease,
either inherited or acquired. A person may not be
insane but only mentally deficient (idiocy, imbecility,
feeble-mindedness).
Insanity is the complete deprivation of reason or
intelligence or power to discern. (People V. Austria).
On the other hand, imbecility is the weakness of
mind which, without depriving the person entirely of
the use of his reason, leaves only the faculty of
conceiving the most common and ordinary ideas and
such as relate almost always to physical wants and
habits. (Black’s Law Dictionary, 2nd Edition)
Prevailing Presumption: Every person is of sound
mind, in the absence of proof to the contrary. [par. 1,
Art. 800, CC]
It is presumed that a person who enters into a
contract is of sound mind. The burden of proof of
insanity rests upon him who alleges insanity. [Engle v.
Doe, G.R. No. L-23317 (1925)] (see Exception below)
Effect on Contracts
1. Incapacity to give consent to a contract [Art.
1327(2), CC]
2. Contracts entered into during lucid intervals are
valid [Art. 1328, CC]. Burden of proof lies with
party asserting the contract was entered into by
the insane during a lucid interval.
3. Restitution of benefits [Art. 1399, CC]
4. Voidable if one of the parties is insane [Art. 1390,
CC]
5. Unenforceable if both of the parties are insane
[Art. 1403 (3), CC]
Effect on Crimes
General rule: EXEMPTED from criminal liability [Art.
12(1), Revised Penal Code (hereinafter, RPC)]
Exception: Acted during lucid interval [Art. 1328,CC].
Effect on Marriage
May be annulled if either party was of unsound mind
unless such party, after coming to reason, freely
cohabited with the other. [Art. 45(2), FC]
Action for annulment of marriage must be filed by the
sane spouse who had no knowledge of the other’s
insanity, or by any relative/guardian of the insane
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
before the death of either party; or by the insane
spouse during a lucid interval or after regaining
sanity [Art. 47(2), FC]
In the absence of proof that the defendant had lost
his reason or became demented a few moments prior
to or during the perpetration of the crime, it is
presumed that he was in a normal condition of mind.
It is improper to conclude that he acted
unconsciously, in order to relieve him from
responsibility on the ground of exceptional mental
condition, unless his insanity and absence of will are
proven. [USA v. Vaguilar, G.R. No. L-9471 (1914)]
Capacity to act must be supposed to attach to a
person who has not previously been declared
incapable, and such capacity is presumed to continue
so long as the contrary is not proven, that is, that at
the moment of his acting he was incapable, crazy,
insane, or out his mind [Standard Oil v. Arenas, G.R.
No. L-5921 (1911)]
c. Deaf-Mutism
Effect on Contracts
1. Cannot give consent to a contract if he/she also
does not know how to write [Art. 1327(2), CC]
2. Can make a valid WILL, provided: he must
personally read the will. The contents of the same
have either been read personally by him or
otherwise communicated to him by 2 persons
[Art. 807, CC]
3. Cannot be a witness to the execution of a will
[Art. 820, CC]
4. Voidable if one of the parties is a deaf-mute who
does not know how to write [Art. 1390, CC]
5. Unenforceable if both of the parties are deaf-
mutes and do not know how to write [Art.
1403(3), CC]
d. Prodigality
Incompetent includes prodigals [Sec. 2, Rule 92,
ROC]
Prodigality may be inferred but must show a morbid
state of mind and a disposition to spend, waste, and
lessen the estate to such an extent as is likely to expose
the family to want of support, or to deprive the forced
heirs of their undisposable part of the estate. [Martinez
v. Martinez, G.R. No. 445 (1902)]
Page 28 of 511
CIVIL LAW
Note: It is not the circumstance of prodigality, but the
fact of being under guardianship that restricts capacity
to act.
e. Civil Interdiction
It is an accessory penalty imposed upon persons who
are sentenced to a principal penalty not lower than
reclusion temporal [Art. 41, RPC].
Effect on Parental/Marital Authority
Offender is deprived of the rights of parental
authority, or guardianship, of marital authority, of the
right to manage his property and of the right to
dispose of such by any act inter vivos [Art. 34, RPC]
Effect on Marriage and Property
1. For the validity of marriage settlements, the
participation of the guardian shall be
indispensable [Art. 123, FC]
2. Sentence of one’s spouse to a penalty which
carries with it civil interdiction is sufficient cause
for judicial separation of property [Art. 135 (1),
FC]
3. The administration of exclusive property of
either spouse may be transferred by the court to
the other spouse when one of them is sentenced
to civil interdiction [Art. 142 (3), FC]
f. Family Relations
Effect on Crimes
1. Justifying circumstance if acted in defense of
person/rights of spouse, ascendants,
descendants, brothers/sisters, and other relatives
up to the 4th civil degree [Art. 11(2), RPC]
2. Mitigating circumstance if acted in the immediate
vindication of a grave offense/felony committed
against his spouse, ascendants or relatives of the
same civil degree [Art. 13(5), RPC]
3. Descendants cannot be compelled to testify in a
criminal case, against his parents and
grandparents.
Unless: the crime was against the descendant OR
by one parent against the other [Art. 215, FC]
Effect on Marriages
Incestuous and void marriages:
1. Between ascendants and descendants of any
degree;
2. Between brothers and sisters, whether full or
half-blood. [Art. 37, FC]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Effect on Contracts managing or executive officials should be Filipinos.

1. Donations/grants of gratuitous advantage Furthermore, alien Corporations cannot operate for
between spouses during the marriage shall be more than 50 years. [Sec. 11, Art. XII, 1987
VOID, except moderate gifts during family Constitution]
occasions [Art. 87, FC]
2. Prescription does not run between spouses, h. Absence
parent and child, guardian and ward (Art. 1109)
3. Spouses cannot sell property to each other, Note: More thorough discussion under “Rules
EXCEPT: Governing Absent Persons”
a. Absolute separation is agreed upon in the
marriage settlements Absence is a limitation because it is a ground for the
b. Judicial separation of property [Art. 1490] judicial appointment of a representative [Art. 381, FC]
Other Effects
Art. 390, CC. After an absence of seven years, it
A suit between family members cannot prosper
being unknown whether or not the absentee still
without any showing that earnest effort towards a
lives, he shall be presumed dead for all purposes,
compromise have been made but have failed (Art.
except for those of succession.
151, FC)
The absentee shall not be presumed dead for the
EXCEPT:
purpose of opening his succession till after an
1. questions on civil status of persons;
absence of ten years. If he disappeared after the age
2. validity of a marriage or a legal separation;
of seventy-five years, an absence of five years shall
3. any ground for legal separation;
be sufficient in order that his succession may be
4. future support;
opened.
5. jurisdiction of courts; and
6. future legitime [Art. 2035].
The following, after being missing for four years,
shall be presumed dead for all purposes including
g. Alienage the division of the estate among the heirs [Art. 391,
CC.]:
Dual Citizenship v. Dual Allegiance [Cordora v. 1. A person on board a vessel lost during a sea
COMELEC, G.R. No.176947 (2009)] voyage, or an aeroplane which is missing, who
Dual Citizenship Dual Allegiance has not been heard of for four years since the loss
Arises when, as a result of the vessel or aeroplane;
of the concurrent 2. A person in the armed forces who has taken part
Refers to the situation in
application of the in war, and has been missing for four years;
which a person
different laws of two or 3. A person who has been in danger of death under
simultaneously owes, by
more states, a person is other circumstances and his existence has not
some positive act, loyalty
simultaneously been known for four years.
to two or more states
considered a national by
said states The 4 year period provided by Art. 391 is shorter than
Result of individual’s that of Art. 390 (7 and 10 years) because it involves
Involuntary
volition situations where the absentee’s life is in danger.

For candidates with dual citizenship, it should suffice
if, upon the filing of their certificates of candidacy,
they elect Philippine citizenship to terminate their
status as persons with dual citizenship considering
that their condition is the unavoidable consequence
of conflicting laws of different states. [Cordora vs
COMELEC, G.R. No. 176947 (2009)]
i. Insolvency and Trusteeship
Under the Insolvency Law, a debtor who has been
found insolvent cannot dispose of his property or
receive payments. [Perez citing Act No. 1956, Rules
on Corporate Rehabilitation]

Effect on Property
Aliens cannot own or operate public utilities.
Corporations should be at least 40% Filipino and their

Page 29 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
6. Domicile and Residence of
Persons
Domicile of Natural Persons:
The place of their habitual residence [Art. 50, CC]
Domicile of Juridical Persons:
The place where their legal representation is
established, or where they exercise their primary
functions, unless there is a law or other provision that
fixes the domicile [Art. 51, CC]
Domicile v. Residence
While domicile is permanent (there is intent to
remain), residence is temporary and may be changed
anytime (there is no necessary intent to remain).
Requisites of Domicile:
a. Residence or bodily appearance in a new locality
b. Intention to permanently remain there (animus
manendi); and
c. An intention to abandon the old domicile (animus
non revertendi)
There must be animus manendi coupled with animus non
revertendi. One must have actual change of domicile
and a bona fide intention to establish a new residence.
[Poe Llamanzares v. COMELEC, G.R. No. 221697
(2016)]
Kinds of Domicile
a. Domicile of Origin: Domicile of parents of a
person at the time he was born.
b. Domicile of Choice: Domicile chosen by a
person, changing his domicile of origin. Domicile
where he intends to remain (animus revertendi).
c. Domicile by Operation of Law (i.e. Art. 69,
domicile of minor).
A married woman does not lose her domicile to her
husband. Unless there is a clear proof of
abandonment, domicile of origin subsists [Romualdez-
Marcos v. COMELEC, G.R. No. 119976 (1995)].
Foundlings cannot be considered stateless and
citizenship is not required for domicile [Poe-
Llamanzares v. COMELEC, G.R. No. 221697 (2016)]
A house is not necessary to establish domicile [Jalosjos
v. COMELEC, G.R. No. 193237 (2012)
Page 30 of 511
CIVIL LAW
B. Family Code
1. Effect and Retroactivity
Art. 256, FC. This Code shall have retroactive effect
insofar as it does not prejudice or impair vested or
acquired rights in accordance with the CC or other
laws.
The Family Code took effect on August 3, 1988.
General Rule: The Family Code shall have
retroactive effect.
Exception: If it prejudices or impairs vested or
acquired rights in accordance with the Civil Code or
other laws.
For instance, Article 40 of the Family Code requiring
a judicial Declaration of Nullity of Marriage cannot be
retroactively applied to the subsequent marriages
entered into prior to the effectivity of the Family
Code for to do so would prejudice the vested rights
of the spouses and/or the child/children in said
subsequent marriages [Castillo v. De Leon Castillo, G.R.
No. 189607, (April 18, 2016)].
This follows the doctrine first laid down in the
landmark case of Apiag v. Cantero where it was held
that before the effectivity of the Family Code and the
promulgation of Wiegel v. Sempio-Diy (1986), a
declaration of nullity is not needed to declare a
marriage void. [A.M. No. MTJ-95-1070, February 12,
1997]
These rulings seem to be in conflict with the doctrine
laid down in Atienza v. Brillantes, Jr., which
characterized Article 40 as a mere rule of procedure;
thus, could be given retroactive effect. [A.M. No.
MTJ-92-706, (March 29, 1995), 312 PHIL 939-944]
2. Repeal and Amendment
Art. 255, FC. If any provision of this Code is held
invalid, all the other provisions not affected thereby
shall remain valid.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
C. Marriage and Personal
Relationship Between
Spouses
1. Concept of Marriage
Art. 1, FC. Marriage is a special contract of
permanent union between a man and a woman
entered into in accordance with law for the
establishment of conjugal and family life. It is the
foundation of the family and an inviolable social
institution whose nature, consequences, and
incidents are governed by law and not subject to
stipulation, except that marriage settlements may fix
the property relations during the marriage within the
limits provided by this Code. (52a)||| (Family Code
of the Philippines, Executive Order No. 209 , [July
6, 1987])
Marriage:
a. A special contract of permanent union;
b. Between a man and a woman;
c. Entered into in accordance with law;
d. For the establishment of conjugal and family
life.
e. It is the foundation of the family and an
inviolable social institution;
f. Its nature, consequences, and incidents are
governed by law and not subject to stipulation,
Exception: marriage settlements may fix the
property relations during the marriage within the
limits provided by this Code. [Art. 1, FC.]
Sec. 2, Art. XV, Constitution. Marriage, as an
inviolable social institution, is the foundation of the
family and shall be protected by the State/
Marriage is an institution, the maintenance of which
the public is deeply interested. It is a relation for life
and the parties cannot terminate it at any shorter
period by virtue of any contract they may make. The
reciprocal rights arising from this relation, so long as
it continues, are such as the law determines from time
to time, and none other. [Goitia v. Campos Rueda, G.R.
No. 11263 (1916)]
Page 31 of 511
CIVIL LAW
2. Breach of Promise to Marry
Art. 21, CC. Any person who willfully causes loss or
injury to another in a manner that is contrary to
morals, good customs or public policy shall
compensate the latter for the damages.
Mere breach of promise to marry is not an actionable
wrong. But to formally set a wedding and go through
all the above-described preparation and publicity,
only to walk out of it when the matrimony is about to
be solemnized, is quite different. This is palpably and
unjustifiably contrary to good customs for which
defendant must be held answerable in damages in
accordance with Article 21 [CC] aforesaid. [Wassmer v.
Velez, G.R. No. L-20089 (1964)]
Article 21 [CC] may be applied in a breach of promise
to marry where the woman is a victim of moral
seduction. [Baksh v. CA, G.R. No. 97336 (1993)]
The essential feature is seduction, that in law is more
than mere sexual intercourse, or a breach of a promise
of marriage; it connotes essentially the idea of deceit,
enticement, superior power or abuse of confidence on
the part of the seducer to which the woman has
yielded. [Tanjanco v. CA, G.R. No. 18630 (1966)
quoting US v. Buenaventura]
Maintaining intimate sexual relations with another for
a whole year is incompatible with the idea of
seduction. [Tanjanco v. CA, G.R. No. 18630 (1966)]
3. Agreements Prior to
Marriage
Art. 75, FC. The future spouses may, in the marriage
settlements, agree upon the regime of absolute
community, conjugal partnership of gains, complete
separation of property, or any other regime.
See: Property relations between husband and wife
below.
Extrajudicial dissolution of the conjugal partnership
without judicial approval is void. [Espinosa v. Omana,
A.C. No. 9081 (2011)]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
4. Requisites
a. Kinds of Requisites and Effects
of Non-Compliance
Essential Requisites (Art. 2, FC)
1. Legal capacity of the contracting parties, who
must be a male and a female; and
2. Consent (of the contracting parties) freely given
in the presence of a solemnizing officer.
Formal Requisites (Art. 3, FC)
1. Authority of solemnizing officer [subject to
Art. 35(2), FC]
2. A valid marriage license (subject to exceptions)
3. Marriage ceremony
Effect of Absence or Defect/Irregularity of the
Requisites on the Marriage [Art. 4, FC]
Absence Defect or Irregularity
Essential Void Voidable
No effect, but makes
the party responsible
Formal Void for such irregularity
civilly, criminally or
administratively liable
Note: The term “defect” is used for essential requisites
while “irregularity” is used for formal requisites.
b. Essential Requisites
1. Gender
N.B.: The best source for citing the requirement of
male/female is still statutory, as provided explicitly in
the Family Code: Art. 1, FC. Marriage is a special
contract of permanent union between a man and a
woman…
Sex is determined at birth, marriage between two
people who had the same sex at birth is invalid even
if one changes sex by law. [Republic v. Cagandahan, G.R.
No. 166676 (2008)]
Changing of sex in one’s birth certificate on the basis
of sex reassignment shall be denied; otherwise, it
would result in confusion and would allow marriage
between persons of the same sex which is in defiance
Page 32 of 511
CIVIL LAW
of the law, as marriage is a union between a man and
a woman. [Silverio v. Republic, G.R. No. 174689 (2007)]
But when the change in sex happens naturally, as
when the person has Congenital Adrenal Hyperplasia
(CAH) or is “biologically or naturally intersex,” the
determining factor in their gender classification would
be what they, having reached the age of majority, with
good reason thinks is their sex. Change in name and
sex as registered is here allowed. [Republic v.
Cagandahan, G.R. No. 166676 (2008)]
2. Age
Legal Capacity
Art. 5, FC. Any male or female of the age of
eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38, may
contract marriage.
OTHER IMPEDIMENTS REFERENCED:
Art. 37, FC: Incestuous marriages
a. Between ascendants and descendants of any
degree; and
b. Between brothers and sisters, whether of the full
or half blood.
Art. 38, FC: Void for public policy
a. Between collateral blood relatives, whether
legitimate or illegitimate, up to the fourth civil
degree;
b. Between step-parents and step-children; cdt
c. Between parents-in-law and children-in-law;
d. Between the adopting parent and the adopted
child;
e. Between the surviving spouse of the adopting
parent and the adopted child;
f. Between the surviving spouse of the adopted
child and the adopter;
g. Between an adopted child and a legitimate child
of the adopter;
h. Between adopted children of the same adopter;
and
i. Between parties where one, with the intention to
marry the other, killed that other person's spouse
or his or her own spouse.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

LIMITED EMANCIPATION:
Status of
Situation Consent
a. Parental Consent: Needed for parties between Marriage
18 to 21 years old. Either party was of
Vitiated/
unsound mind [Art. 45 (2), Voidable
In case either or both of the contracting parties, Defective
FC]
not having been emancipated by a previous
marriage, are between the ages of eighteen and Mistake as to the identity of
twenty-one, they shall [...] exhibit to the local civil the other party [Art. 35 (5),
registrar, the consent to their marriage of their FC]
Absent Void
father, mother, surviving parent or guardian, or e.g. if one mistakenly
persons having legal charge of them, in the order marries his fiancee's twin
mentioned. [Art. 14, FC] [Tolentino]
Mistake as to the legal
If no parental consent is obtained, it makes the consequences and nature of
marriage voidable [Art. 45, FC]. the marriage ceremony
Absent Void
e.g. thinking the ceremony
The party who may file for annulment is the party is a joke, pretend, or play-
who contracted marriage without parental acting [Tolentino]
consent or the parent/guardian of the party aged
18-20 [Art. 47, FC]. Consent was obtained by
fraud:
b. Parental Advice: Needed for parties between 21 a. Non-disclosure of
to 25 years old. previous conviction of
crime of moral turpitude
However, absence of such does not make the b. Concealment of
marriage void or voidable. Absence will merely pregnancy by another Vitiated/
Voidable
delay the issuance of the marriage license by three man Defective
months (Art 15, FC). c. Concealment of STD
d. Concealment of drug
addiction, habitual
3. Consent Freely Given
alcoholism,
homosexuality, or
Consent here refers to the consent of the contracting
lesbianism [Art. 46, FC]
parties; NOT of the parent/guardian in those cases
where such consent is required (when either party is Consent was obtained by
between 18 to 21 years of age). a. Force
Vitiated/
b. Intimidation Voidable
The consent must refer to the contracting parties’ bona Defective
c. Undue Influence [Art. 45
fide intention to be married to the other. i.e. to make (4), FC]
the woman his wife. [People v. Santiago, G.R. No. 27972
(1927)] Marriage entered into by a
person whose real intent is
In People v. Santiago, it was held that the marriage to avoid prosecution for Absent Void
entered into by a person whose real intent is to avoid rape [People v. Santiago, G.R.
prosecution for rape is void for total lack of consent. No. 27972 (1927)]
Here, it was the intent of the accused, not the victim
of rape, whom he married under duress, that was Note: Defects in consent are discussed further in
considered. The accused did not intend to make the “Voidable or Annullable Marriages.”
victim his wife. He merely used such marriage to
escape criminal liability. [G.R. No. 27972 (1927)]

Absence of consent renders the marriage void while

defective consent makes it voidable [Art. 4, FC].

Page 33 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
c. Formal Requisites
1. Marriage Ceremony
No prescribed form or religious rite for the
solemnization of marriage is required. [Art. 6, FC]
The couple's written agreement where they declare
themselves as husband and wife, signed by them
before a judge and two capable witnesses, even
though it was independently made by them, still
counts as a valid ceremony. [Martinez v. Tan, G.R. No.
L-4904 (1909)]
Minimum Requirements Prescribed by Law:
a. Appearance of contracting parties personally
before the solemnizing officer [Art. 3, FC]
b. Personal declaration that they take each other
as husband and wife. [Art. 3, FC]
c. Presence of at least two witnesses of legal age.
[Art. 3, FC]
d. The declaration shall be contained in the
Marriage Certificate. [Art. 6, FC]
e. Marriage certificate shall be signed by the
contracting parties and their witnesses and
attested by the solemnizing officer. [Art. 6, FC]
N.B. In a marriage in articulo mortis, when one or both
parties are unable to sign the marriage certificate, it
shall be sufficient for one of the witnesses to write the
name of said party, which shall be attested by the
solemnizing officer. [par. 2, Art. 6. FC]
Places where marriage shall be publicly solemnized:
a. Chambers of the judge or in open court
b. Church, chapel, or temple
c. Office of the consul-general, consul, or vice-
consul [Art. 8, FC]
Exceptions to public solemnization requirement:
a. Marriages performed in articulo mortis or in remote
places. [Art. 29, FC]
b. Where both parties request in writing that
marriage be solemnized at a place designated by
them.
Note: Non-compliance with this requirement does not
invalidate the marriage (premise: more witnesses =
more people can notify officer of impediments to
marriage).
Page 34 of 511
CIVIL LAW
2. Authority of The Solemnizing Officer
Who May Solemnize Marriage:
Normal Circumstances
Incumbent member of the Judiciary, within his
jurisdiction. [Art. 7, FC]
Priest, Rabbi, Imam or Minister of any Church or
Religious Sect who must be:
a. Duly authorized by his church or religious sect;
b. Registered with the civil registrar general;
c. Acting within the limits of the written authority
granted to him by his church or religious sect;
d. At least one of the contracting parties belongs to
the solemnizing officer’s church or religious
sect. [Art. 7, FC]
Municipal and City Mayors [Secs. 444-445, Local
Government Code]
Articulo Mortis
(in addition to those above mentioned)
Ship Captain or Airplane Chief may solemnize a
marriage in articulo mortis between passengers or crew
members [Arts. 7 and 31, FC]
A Military Commander of a unit may solemnize
marriages in articulo mortis between persons within the
zone of military operation in the absence of a
chaplain [Arts. 7 and 32, FC]
Marriages Abroad
Consul-general, consul or vice-consul may solemnize
marriages between Filipino citizens abroad [Arts. 7
and 10, FC]
General rule: Those solemnized by any person not
legally authorized to perform marriages are void.
Exception: Unless such marriages were contracted with
either or both parties believing in good faith that the
solemnizing officer had the legal authority to do so.
[Art. 35(2), FC]
Good faith refers to questions of fact not ignorance
of the law (e.g. they did not know the priest’s license
expired vs. thinking a Senator could solemnize their
marriage). [Legarda, Deriquito-Mawis, and Vargas]
Note: An irregularity in a formal requisite will not
affect the validity of the marriage but those
responsible may be held criminally, civilly, and
administratively liable [Art. 4 & 7, FC]
A judge solemnized the marriage of a couple without
a marriage license and held it outside his jurisdiction.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
The marriage is void for lack of license. The judge
was found to have acted in gross ignorance of the
law. [Aranes v. Occiano, A.M. No. MTJ-02-1390 (2002)]
Judge Murcia affixed his signature onto the marriage
contract of the Echevarria spouses even though he
was not the one who solemnized their marriage. Judge
Omelio, whom the spouses believed to have
solemnized their marriage, conducted a
“reenactment” of the marriage for picture taking
purposes without signing the marriage certificate.
Both judges were found guilty of gross misconduct
for violating the “Guidelines on the Solemnization of
Marriage by the Members of the Judiciary” (AO 125-
2007). [Palma v. Omelio, A.M. No. RTJ-10-2223
(2017)]
Judge Murcia solemnized a marriage in the premises
of a travel agency outside of his jurisdiction was found
guilty of grave misconduct and repetition of
offense. [Keuppers v. Murcia, AM No. MTJ-15-1860
(2018)]
An Aglipayan priest who solemnized a marriage
knowing the couple had no marriage license was
found guilty of the performance of illegal marriage
ceremony (Art. 352, RPC) [Ronulo v. People, G.R. No.
182438 (2014)]
3. Marriage License
General Rule: The license required is that which is
issued by local registrar of city or municipality where
either contracting party habitually resides [Art. 9, FC].
Each contracting party should file separately for their
marriage license with the proper local civil registrar.
[Art. 11, FC]
Sec. 15, “The Responsible Parenthood and
Reproductive Health Act of 2012” [R.A. No.
10354]. Certificate of Compliance. – No marriage
license shall be issued by the Local Civil Registrar
unless the applicants present a Certificate of
Compliance issued for free by the local Family
Planning Office certifying that they had duly
received adequate instructions and information on
responsible parenthood, family planning,
breastfeeding, and infant nutrition.
Where Valid: License valid in any part of the
Philippines
Page 35 of 511
CIVIL LAW
Period of Validity: It will be valid for 120 days from
date of issue, automatically cancelled at the expiration
of such period.
Marriages celebrated without a marriage license
before the effectivity of the Family Code are void ab
initio as marriage license was an essential requisite in
the CC. [Kho v. Republic, G.R. No. 147862 (2016)]
A marriage which preceded the issuance of the
marriage license is void and the subsequent issuance
of such license cannot render valid the marriage.
Except in cases provided by law, it is the marriage
license that gives the solemnizing officer the authority
to solemnize a marriage. [Aranes v. Occiano, MTJ-02-
1390 (2002)].
Special Situations
Anyone between 18-21 years old who has not yet
been emancipated by reason of marriage must present
the written consent that was given by his or her parent
or guardian. [Art. 14, FC] Without parental consent,
the marriage is voidable (further discussion under
“Voidable Marriages”).
Anyone between 21-25, on the other hand, must ask
for advice from his or her parents or guardians. If the
advice wasn’t obtained, the marriage license will only
be released 3 months after the publication of the
application. [Art. 15, FC]
Foreign National
a. When either or both parties are foreign nationals:
certificate of legal capacity to contract
marriage issued by a diplomatic or consular
official, shall be submitted before a marriage
license can be obtained [Art. 21, FC]
b. Stateless persons or refugees from other
countries: Affidavit stating circumstances
showing capacity to contract marriage,
instead of certificate of legal capacity [Art. 21,
FC]
Note: The Apostille Convention, which took effect in
the PH on 14 May 2019, simplifies the authentication
of foreign documents. Public documents executed in
Apostille-contracting countries, once Apostillized, no
longer need authentication from the Philippine
embassy or consulate general. In the same way, PH
documents Apostillized by the DFA need not be
authenticated by Foreign embassies or consulate
generals if the country is a member of the convention.
[DFA Public Advisory]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Exceptions to the Marriage License
Requirement
a. Marriage in articulo mortis [Art. 27, FC]
The marriage may be solemnized without the
necessity of a marriage license. It remains valid
even if ailing party survives.
1. Between passengers or crew members in a
ship or airplane [Art. 31, FC]
2. Persons within a military zone [Art. 32, FC]
3. Other situations in articulo mortis
b. Marriage in remote and inaccessible places
[Art. 28, FC]
c. Marriages by Muslims and Ethnic cultural
minorities provided they are solemnized in
accordance with their customs, rites or practices.
[Art. 33, FC]
d. Marriage by parties who have cohabited for at
least 5 years without any legal impediment to
marry each other. [Art. 34, FC; Ninal v. Badayog,
G.R. No. 133778 (2000)]
Note: A false affidavit of having lived together for 5
years as husband and wife cannot be considered as a
mere irregularity in the formal requisites of marriage
but a complete absence, rendering their marriage void
ab initio. [De Castro v. Assidao-De Castro, G.R. No.
160172 (2008)]
Requisites for the 5-year cohabitation to be valid
for the exemption from acquiring a marriage
license
a. The man and woman must have been living
together as husband and wife for at least five
years before the marriage;
b. The parties must have no legal impediment to
marry each other;
c. The fact of absence of legal impediment between
the parties must be present at the time of
marriage;
d. The parties must execute an affidavit stating that
they have lived together for at least five years [and
are without legal impediment to marry each
other]; and
e. The solemnizing officer must execute a sworn
statement that he had ascertained the
qualifications of the parties and that he had found
no legal impediment to their marriage [Borja-
Manzano vs. Judge Sanchez, A.M. MTJ-00-1329
(2001)].
4. Marriage Certificate
Where parties declare that they take each other as
husband and wife; contains the following:
a. Full name, sex, age of party;
Page 36 of 511
CIVIL LAW
b. Citizenship, religion, habitual residence;
c. Date and precise time of celebration of marriage;
d. That marriage license was properly issued (except
in marriages of exceptional character);
e. That parental consent was secured, when
required;
f. That requirement as to parental advice was
complied with, when required;
g. That parties have entered into marriage
settlements, if any [Art. 22, FC]
N.B. Not an essential or formal requisite without
which the marriage will be void [Madridejo v. de Leon,
G.R. No. L-32473 (1930)]. It is the best evidence that
a marriage does exist. [Tenebro v. CA, G.R. No. 150758
(2004)]
Absence and Irregularity of Marriage License
and Contract
There is a presumption of regularity of official acts,
and the issuance of the Civil Registrar of a Certificate
of Due Search and Inability to Find the application
for a marriage license certifies its inexistence,
rendering the marriage void. [Republic v. CA and Castro,
G.R. No. 103047 (1994)]
Before a marriage can be solemnized, a valid marriage
license must be presented first, otherwise, it is void.
[Moreno v. Bernabe, A.M. No. MTJ-94-963 (1995)]
Non-existence of a marriage contract will not
overthrow the presumption of a valid marriage where
all the requisites for its validity have been complied
with. [People v. Borromeo, G.R. No. L-61873 (1984)]
5. Law Governing Validity of
Marriages Abroad
a. General Rule in Contracts
As to form: Governed by the laws of the country in
which they were executed [Art. 17, CC]
As to Substantive Requirements: Laws relating to
family rights and duties, or to the status, condition
and legal capacity of persons, prohibitive laws
regarding the person, his or her property, those which
have for their object public order, public policy and
good customs bind all Filipinos regardless of location.
[Arts. 15 and 17, CC]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

spouse shall have capacity to remarry under

b. Marriages Celebrated Abroad Philippine law. [Art. 26(2)]

General Rule: Marriages solemnized abroad in The citizenship of the spouses at the time of the
accordance with the laws in force in that country shall divorce determines their capacity to obtain a valid
be valid in the Philippines. [par. 1, Art 26, FC] divorce. [Quita v. Dandan, G.R. No. 124862 (1998)]

Exceptions: A marriage between two Filipinos cannot be dissolved

1. Marriage where one or both parties are below 18 even by a divorce obtained abroad, because of
years old [Art. 35(1), FC] Articles 15 and 17 of the CC [Garcia v. Recio, G.R. No.
2. Bigamous or polygamous marriage [Art. 35(4), 138322 (2001)].
FC]
3. Mistake in identity [Art. 35 (5), FC] Question: Since it is the citizenship at the time of the
4. Marriages void under Article 53 [Art. 35 (6), FC] divorce that determines capacity to obtain a valid
5. Psychological incapacity [Art. 36, FC] divorce, can spouses who are both dual citizens
6. Incestuous marriages [Art. 37, FC] (Filipino & Alien) get divorced? What about if both
7. Marriage void for reasons of public policy [Art. spouses were originally Filipino, were later naturalized
38, FC] (i.e. lost their Filipino citizenship), and even later
regained their Filipino citizenship and are now dual
Note: This means that the foreign marriage may still citizens?
be recognized as valid in the Philippines even if it
would have fallen under Art. 35 (2 and 3) of the FC Aliens may obtain divorces abroad, which may be
so long as it is valid under the law of the country in recognized in the Philippines, provided they are valid
which it was solemnized. according to their national law. The marriage tie when
thus severed as to one party, ceases to bind
Essential Requisites Formal Requisites either. [Van Dorn v. Romillo, G.R. No. L-68470 (1985)]
Requirements
Inherent in the parties, A divorce obtained abroad by a couple, who are both
independent of the
carried everywhere aliens, may be recognized in the Philippines, provided
parties
it is consistent with their respective national laws.
Lex Nationalii – Laws
Lex loci celebrationis- [Garcia v. Recio, G.R. No. 138322 (2001)]
relating to family rights
If valid where celebrated,
and duties, or to the
then valid everywhere; Note: Divorces obtained abroad by Filipino citizens
status, condition, and
forms of contracting may now be validly recognized in the Philippines but
legal capacity of persons
marriage are to be only in cases of mixed marriages involving a Filipino
are binding upon Phil
regulated by the law and a foreigner. [Republic of the Philippines v. Manalo,
citizens even though
where it is celebrated. G.R. No. 221029 (2018)]
living abroad [Art. 15,
[Art. 2, CC]
CC]
In mixed marriages involving a Filipino and a
Foreign marriages void
Foreign marriages may foreigner, Article 26 of the Family Code allows the
under Phil law due to
be void under Phil law former to contract a subsequent marriage in case the
lack of an essential
due to absence of a divorce is (1) “validly obtained abroad by the alien
requisite, even if valid
formal requisite under spouse and (2) is of the type that legally dissolves the
under foreign laws, will
foreign laws. marriage and capacitating him or her to remarry.”
not be recognized.
[Garcia v. Recio, G.R. No. 138322 (2001)]
Proof of Foreign Marriage in order that it may be
Note: Following the ruling of Republic of the Philippines
upheld:
v. Manalo, the divorce may now be one that was validly
1. Provisions of the foreign law, and
obtained by the Filipino spouse against the foreigner
2. Celebration of the marriage in accordance with
spouse. This is because Art. 26(2), FC makes no
said provisions
distinction as to who obtains the divorce. All that is
required is that it is validly obtained abroad. A Filipino
Foreign Divorces
who initiates the divorce proceeding against a foreign
If the foreign spouse obtains a valid divorce decree
spouse still ends up in the same position as one whose
abroad capacitating him/her to remarry, the Filipino

Page 37 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
foreign spouse initiated proceedings: they both no
longer have spouses. There should be no distinction
between the two cases in order to avoid the absurd
situation where a Filipino spouse is still married to the
alien spouse even though the latter is capacitated by
his own laws to remarry and is no longer married to
the Filipino. [G.R. No. 221029 (2018)].
Courts will only determine (1) whether the foreign
judgment is inconsistent with an overriding public
policy in the Philippines; and (2) whether any alleging
party is able to prove an extrinsic ground to repel the
foreign judgment, i.e. want of jurisdiction, want of
notice to the party, collusion, fraud, or clear mistake
of law or fact. If there is neither inconsistency with
public policy nor adequate proof to repel the
judgment, Philippine courts should, by default,
recognize the foreign judgment as part of the comity
of nations. [Fujiki vs Marinay, G.R. No. 1196049
(2013)]
6. Common-Law Marriages
Though there is no technical marital partnership
between person living as husband and wife, without
being lawfully married, nevertheless there is between
them an informal civil partnership which would
entitle the parties to an equal interest in property
acquired by their joint efforts [Lesaca v. Lesaca, G.R.
No. L-3605 (1952)]
Property regimes for common-law marriages are
provided for in Art. 147 and 148 of the Family Code
(Refer to “Property Regime of Unions without
Marriage” for further discussion).
7. Void and Voidable
Marriages
Presumption of Marriage
Art. 220, CC. In case of doubt, all presumptions
favor the solidarity of the family. Thus, every
intendment of law or facts leans toward the validity
of the marriage, the indissolubility of the marriage
bonds, the legitimacy of children, the community of
property during marriage, the authority of parents
over their children, and the validity of defense of any
member of the family in case of unlawful aggression.
Semper Praesumitur Pro Matrimonio:
Presumption in favor of a valid marriage [Art. 220,
CC]
Page 38 of 511
CIVIL LAW
The presumption that a man and a woman deporting
themselves as husband and wife have entered into a
lawful contract of marriage is satisfactory if
uncontradicted. [Sec. 3 (aa), Rule 131, ROC]
In marriages of exceptional character, the existence of
the marriage is presumed, even in the total absence of
a marriage license. [Vda. De Jacob v. CA, G.R. No.
135216 (1999)]
If a marriage certificate is missing, and all means have
not yet been exhausted to find it, then the marriage is
presumed to exist [Sevilla v. Cardenas, G.R. No. 167864
(2006)]
Absence of a marriage certificate is not proof of
absence of marriage. To prove the fact of marriage,
the following would constitute competent evidence:
1. the testimony of witnesses to matrimony; 2.
documentary photos or videos of the wedding; 3. the
couple’s public cohabitation; and 4. birth and
baptismal certificates of children born during the
union. [Trinidad v. CA, G.R. No. 118904 (1998)]
a. Void Marriages
TYPES OF VOID MARRIAGES
1. Absence of any formal/essential requisites
[Art. 35, FC]
2. Bigamous and polygamous marriages [Art. 35,
(4)]
3. Subsequent marriage, upon reappearance of
spouse [Art. 42, FC]
4. Bad faith of both spouses in the subsequent
marriage under Art. 41, FC
5. Psychologically Incapacitated spouse [Art. 36,
FC]
6. Void subsequent marriages [Art. 35(6), FC]
7. Incestuous Marriages [Art. 37, FC]
8. Void by reasons of public policy [Art. 38, FC]
PERIOD TO FILE FOR ACTION OR
DEFENSE FOR ABSOLUTE NULLITY
Art. 39, FC. The action or defense for the
declaration of absolute nullity shall not prescribe. (as
amended by RA 8533)
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
1. Absence of Requisites
Art. 4(1), FC. The absence of any essential or formal
requisites shall render the marriage void ab initio,
except as stated in Article 35.
Art. 5, FC. Any male or female of the age of
eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38, may
contract marriage.
Void from the Beginning [Art. 35, FC]
a. Marriage where any party is below eighteen
years of age even with the consent of parents or
guardians
b. Marriage solemnized by any person not
legally authorized to perform marriages unless
such marriages were contracted with either or
both parties believing in good faith that the
solemnizing officer had legal authority to do so.
c. Note: One’s belief in good faith that the
solemnizing officer has the required authority is
a mistake of fact, and not of law.
d. Marriage solemnized without a valid marriage
license, except in marriages under exceptional
circumstances
e. Bigamous or polygamous marriages not
falling under Article 41 (Art. 41: subsequent
marriage by present spouse who obtained a
declaration of presumptive death for absent
spouse prior to the subsequent marriage)
f. There is a mistake as to the identity of the
other contracting party
g. Subsequent marriages that are void under
Article 53 (Non-compliance with Art. 52)
To be considered void on the ground of absence of a
marriage license, the law requires that the absence of
such marriage license must be apparent on the
marriage contract, or at the very least, supported by a
certification from the local civil registrar that no such
marriage license was issued to the parties. [Alcantara v.
Alcantara, G.R. No. 167746 (2007)]
2. Bigamous and Polygamous Marriages
Elements of a Bigamous Marriage
a. Offender legally married
b. Marriage not legally dissolved
c. Offender contracts a subsequent marriage
d. Subsequent marriage has all the essential
requisites for validity, except legal capacity
Page 39 of 511
CIVIL LAW
[Capili v. People, G.R. No. 183805, July 3, 2013]
No Judicial Declaration Of Nullity
A person entered into a subsequent marriage
WITHOUT first getting a judicial declaration of
nullity of the first void marriage. [Art. 40, FC]
Presumptive Death
Failure of the spouse present to obtain a judicial
declaration of presumptive death before entering a
subsequent marriage. [Art. 41, FC]
Bad Faith of both spouses
Both spouses entering a subsequent marriage after
presumptive death, who acted in bad faith. [Art. 44,
FC]
It is now settled that the fact that the first marriage is
void from the beginning is not a defense in a bigamy
charge. As with a voidable marriage, there must be a
judicial declaration of the nullity of a marriage before
contracting the second marriage. [Mercado vs Tan, G.R.
No. 137110 (2000)]
The accused may still be charged with the crime of
bigamy, even if there is a subsequent declaration of
the nullity of the second marriage, so long as the first
marriage was still subsisting when the second
marriage was celebrated. [Capili vs People, G.R. No.
183805 (2013)]
3. Subsequent Marriage when One
Spouse is Absent
Requirements for Subsequent Marriage to be
Valid When Prior Spouse is Absent [Art. 41, FC]
a. Subsequent marriage due to ordinary absence
where:
1. Absent spouse had been absent for 4
consecutive years;
2. The spouse present had a well-founded
belief that the absent spouse is dead; and
3. Judicial declaration of presumptive
death was secured (no prejudice to the effect
of the reappearance of the absent spouse).
b. Subsequent marriage due to extraordinary
absence where:
1. Absent spouse had been missing for 2
consecutive years;
2. There is danger of death under the
circumstances set forth in Art. 391 CC
attendant to the disappearance;
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

• Onboard vessel lost at sea voyage,
airplane,
• Armed forces in war, or
• Danger of death under other
circumstances, existence not known
3. The spouse present had a well-founded
belief that the missing person is dead; and
4. Judicial declaration of presumptive
death was secured (no prejudice to the effect
of the reappearance of the absent spouse).
Exception to the Exception: If there is a judgment
annulling the previous marriage or declaring it void ab
initio. [Art. 42, FC]
Good Faith: Period of absence for presumptive
death is MANDATORY thus cannot be shortened by
good faith and if be done so will be void. This period
is counted from when the party last heard from
his/her absentee spouse. [Jones v. Hortiguela, G.R. No.
43701 (1937)]

Institution of a summary proceeding is not sufficient. Difference between Absence in the CC and
There must also be a summary judgment. [Balane] Family Code
Family Code
CC (Art. 390)
Only the spouse present can file or institute a (Art. 41)
summary proceeding for the declaration of 4 years under
Absent for at
presumptive death of the absentee. [Bienvenido v. CA, normal
least 7 years
G.R. No. 111717 (1994)] circumstances
As to period
2 years under
Absent for at
While an action for declaration of death or absence extraordinary
least 4 years
under Rule 72, Section 1(m), expressly falls under the circumstances
category of special proceedings, a petition for In order to Declaration of
declaration of presumptive death under Article 41 of remarry, presumptive
the Family Code is a summary proceeding, as As to remarriage summary death is not
provided for by Article 238 of the same Code. proceeding is necessary
[Republic v. Granada, G.R. No. 187592 (2012)] necessary
Can be
The belief of the present spouse must be the result of instituted by
proper and honest to goodness inquiries and efforts the spouse
As to who can
to ascertain the whereabouts of the absent spouse and present, any The spouses
institute the
whether the absent spouse is still alive or is already interested themselves
action
dead. This is drawn from circumstances before and party, and the
after the disappearance and the nature and extent of subsequent
inquiries made. [Republic v. Granada, G.R. No. 187592 spouse
(2012)] Subsequent
marriage is Upon
Effect of Reappearance of Absent Spouse automatically reappearance,
General Rule: The subsequent marriage remains valid. terminated by judicial
As to effect on
the recording proceeding is
subsequent
Exception: It is automatically terminated by the of an affidavit necessary to
marriage
recording of the affidavit of reappearance of the of declare
absent spouse at the instance of any interested person, reappearance marriage null
with due notice to the spouses of the subsequent of the absent and void
marriage. [Art. 42, FC] spouse
Well-founded
Generally
Note: It is the recording of the affidavit of belief that the
As to ground believed to be
reappearance that automatically terminates the absent spouse
dead
subsequent marriage. Hence, if absentee spouse is dead
reappears without recording affidavit of
reappearance, then there is no legal effect. Meanwhile,
absentee spouse cannot remarry. [Tolentino]

Page 40 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Related Provisions
Art. 390, CC. After an absence of 7 years, it being
unknown whether or not the absentee still lives, he
shall be presumed dead for all purposes, except for
those of succession.
The absentee shall not be presumed dead for the
purpose of opening his succession till after an
absence of 10 years. If he disappeared after the age
of 75 years, an absence of 5 years shall be sufficient
in order that his succession may be opened.
The following shall be presumed dead for all
purposes, including the division of the estate among
the heirs:
a. A person on board a vessel lost during a sea
voyage, or an aeroplane which is missing, who
has not been heard of for four years since the loss
of the vessel or aeroplane;
b. A person in the armed forces who has taken
part in war, and has been missing for four years;
c. A person who has been in danger of death
under other circumstances and his existence
has not been known for four years. [Art. 391,
CC.]
N.B. Although 7 years is required for the presumption
of death of an absentee in the CC, the FC makes an
exception for the purpose of remarriage by limiting
such requirement to 4 years.
4. Bad Faith of Both Spouses
Art. 44, FC. If both spouses of the subsequent
marriage acted in bad faith, said marriage shall be
void ab initio and all donations by reason of marriage
and testamentary dispositions made by one in favor
of the other are revoked by operation of law.
5. Psychological Incapacity
Art. 36, FC. A marriage contracted by any party
who, at the time of the celebration, was
psychologically incapacitated to comply with the
essential marital obligations of marriage, shall
likewise be void even if such incapacity becomes
manifest only after its solemnization.
The application of Art. 36 is confined to the most
serious cases of personality disorders clearly
demonstrative of an utter insensitivity or inability to
Page 41 of 511
CIVIL LAW
give meaning and significance to the marriage. [Santos
v. CA, G.R. No. 112019 (1995)]
The psychological illness that must have afflicted a
party at the inception of the marriage should be a
malady so grave and permanent as to deprive one
of awareness of the duties and responsibilities of
the matrimonial bond he or she is about to assume.
[Marcos v. Marcos, G.R. No. 136490 (2000)]
There are 3 characteristics for determining
psychological incapacity:
a. Gravity;
b. Juridical Antecedence; and
c. Incurability [Santos v. Bedia-Santos, G.R. No.
112019 (1995)]
Molina Doctrine in Psychological Incapacity
a. The burden of proof to show the nullity of the
marriage belongs to the plaintiff. This is to be
investigated by the OSG for collusion.
b. The root cause of the psychological incapacity
must be:
1. Medically or clinically identified;
2. Alleged in the complaint;
3. Sufficiently proven by the experts; and
4. Clearly explained in the decision.
c. The incapacity must be proven to be existing at
“the time of the celebration” of the marriage.
d. Such incapacity must also be shown to be
medically or clinically permanent or incurable.
e. Such illness must be grave enough to bring
about the disability of the party to assume the
essential obligations of marriage.
f. The essential marital obligations must be
those embraced by Articles 68 up to 71 of the
Family Code as regards the husband and wife as
well as Articles 220, 221, and 225 of the same
Code in regard to parents and their children.
g. Interpretations given by the National
Appellate Matrimonial Tribunal of the
Catholic Church in the Philippines, while not
controlling/decisive, should be given great
respect by our courts.
h. The trial court must order the prosecuting
attorney or fiscal and the Solicitor General to
appear as counsel for the state. No decision
shall be handed down unless the Solicitor
General issues a certification. [Republic v. Molina,
G.R. 108763 (1997)]
Art. 36, FC must not be confused with a divorce law
that cuts the marital bond at the time the grounds for
divorce manifest themselves; rather, it must be limited
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
to cases where there is a downright incapacity or
inability to assume and fulfill the basic marital
obligations, not a mere refusal, neglect or difficulty,
much less, ill will, on the part of the errant spouse.
[Republic v. Romero, G.R. No. 209180 (2016)]
The senseless and protracted refusal of one of the
parties to fulfill the marital obligation "To procreate
children based on the universal principle that
procreation of children through sexual cooperation is
the basic end of marriage." is equivalent to
psychological incapacity. “A man who can but won’t
is psychologically incapacitated” [Tsoi v. CA, G.R.
119190 (1997)]
Psychological incapacity maybe established by the
totality of the evidence presented. Personal medical
examination could be dispensed with. [Marcos v.
Marcos, G.R. No. 136490 (2000)]
There is no requirement that the respondent be
medically examined first. [Republic v. San Jose, G.R.
No. 168328 (2007)]
“Pathological liar” considered as psychological
incapacity, Molina guidelines met. [Antonio v. Reyes,
G.R. No. 155800 (2006)]
Note: This case also gave weight to the fact that the
Church annulled the marriage.
Marriages where both parties are afflicted with grave,
severe and incurable psychological incapacity shall
likewise be void [Te v. Te, G.R. No 161793 (2009)].
In the task of ascertaining the presence of
psychological incapacity as a ground for the nullity of
marriage, the courts, which are concededly not
endowed with expertise in the field of psychology,
must of necessity rely on the opinions of experts in
order to inform themselves on the matter, and thus
enable themselves to arrive at an intelligent and
judicious judgment. [Kalaw v. Fernandez, G.R. No.
166357 (2015)]
The stringent requirements set forth by Molina should
be relaxed and applied case-to-case. To require the
allegation of the root cause of psychological
incapacity by an accredited psychologist may prove
too expensive for the parties. But where the parties
had full opportunity to present expert opinions, such
will be weighed by the Court in its decision. [Ting v.
Velez-Ting, G.R. No. 166562, (2009)]
Page 42 of 511
CIVIL LAW
6. Incestuous Marriages
Marriages between the following are considered
incestuous, and are therefore void ab initio
a. Between ascendants and descendants of any
degree, legitimate or illegitimate
b. Between brothers and sisters, whether full or
half blood, legitimate or illegitimate [Art. 37, FC]
7. Against Public Policy
Marriages between the following are considered
against public policy, and are therefore void ab
initio:
a. Between collateral blood relatives, legitimate or
illegitimate, up to the fourth civil degree;
b. Between step-parents and step-children;
N.B. Stepbrothers and stepsisters can marry
because marriages between them are not among
those enumerated in Article 38.
c. Between parents-in-law and children-in-law;
d. Between adopting parent and adopted child;
e. Between the surviving spouse of the adopting
parent and the adopted child;
f. Between the surviving spouse of the adopted
child and the adopter;
g. Between an adopted child and a legitimate child
of the adopter;
h. Between adopted children of the same adopter;
an:
i. Between parties where one, with the intention to
marry the other, killed that other person's spouse,
or his or her own spouse [Art. 38, FC]
Note: The following relationships are outside of
Articles 37 and 38, and are therefore not impediments
to marriage:
a. Brother-in-law with sister-in-law;
b. Stepbrother with stepsister;
c. Guardian with ward;
d. Adopted with illegitimate child of the adopter;
e. Adopted son of the husband with adopted
daughter of the wife.
8. Non-Compliance with Recording
Requirement after Declaration of
Nullity
Subsequent marriage of spouses, where the
requirements of recording under Art. 52 have not
have been complied with, shall be null and void. [Art.
53, FC]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
The judgment of annulment or of absolute nullity of
the marriage, the partition and distribution of the
properties of the spouses and the delivery of the
children's presumptive legitimes shall be recorded in
the appropriate civil registry and registries of
property; otherwise, the same shall not affect third
persons. [Art. 52, FC.]
Previous marriage declared Void ab Initio or
Annulled
The word “solely” in Art. 40 referred to validating
subsequent marriages but NOT to limiting the
purposes for which a judicial declaration of nullity can
be invoked. [Domingo v. CA, G.R. No. 104818 (1993)]
N.B. Separation of property is also a valid purpose for
filing for a judicial declaration of nullity.
Under the CC, no judicial declaration for nullity of
previous marriage was required to contract a
subsequent marriage. [People v. Mendoza, G.R. No. L-
5877 (1954)]
It is the law effective at the time of the
second/subsequent marriage which controls (i.e.
CC or FC). Thus:
a. Even if the judge’s first marriage contracted in
1965 was void for not having a marriage license,
the requirement for a judicial declaration of
nullity in Art. 40 still applies for because his
subsequent marriage was contracted in 1991.
[Atienza v. Brillantes, MTJ-92-706 (1995)]
b. Where both marriages were contracted prior to
the effectivity of the FC, the requirement of Art.
40 does not apply to the second marriage where
a right is already vested and on which the FC
cannot have retroactive effect. [Apiag v. Cantero,
MTJ-95-1070 (1997)]
EFFECTS OF TERMINATION OF
SUBSEQUENT MARRIAGE UNDER ART. 42
[ARTS. 43, FC]
a. Children of subsequent marriage: conceived
prior to its termination considered legitimate;
custody and support decided by court in a proper
proceeding.
b. Property Regime: dissolved and liquidated
(party in bad faith shall forfeit his/her share in
favor of the common children or if there are
none, children of the guilty spouse by a previous
marriage, and in case there are none, to the
innocent spouse).
Page 43 of 511
CIVIL LAW
c. Donation propter nuptias: remains valid, (but
if the donee contracted marriage in bad faith,
donations are revoked by operation of law)
d. Insurance benefits: innocent spouse may
revoke designation of guilty party as beneficiary,
even if such designation is stipulated as
irrevocable.
e. Succession Rights: party in bad faith shall be
disqualified to inherit from the innocent spouse,
whether testate or intestate.
Both spouses guilty of bad faith
If both spouses of the subsequent marriage acted in
bad faith, all donations by reason of marriage and
testamentary dispositions made by one party in favor
of the other are revoked by operation of law. [Art. 44,
FC]
Who may file the petition for nullity of void
marriages?
General Rule: Only the husband or wife may file the
petition. [AM No. 02-11-10 SC, Sec. 2]
Specifically, A.M. No. 02-11-10-SC extends only to
marriages covered by the Family Code, which took
effect on August 3, 1988, but, being a procedural rule
that is prospective in application, is confined only to
proceedings commenced after March 15, 2003.
[Ablaza v. Republic, G.R. No 158298 (2010)]
Exceptions:
a. Nullity of marriage cases commenced before
effectivity of A.M. No. 02-11-10-SC
b. Marriages celebrated during the effectivity of the
CC. [Carlos v. Sandoval, G.R. No 179922 (2008)]
However, the absence of a provision in the CC cannot
be construed as a license for any person to institute a
nullity of marriage case. Such person must appear to
be the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the
avails of the suit. [Carlos v. Sandoval, G.R. No 179922
(2008)]
Procedure in Attacking a Void Marriage
General Rule: Void Marriages may be attacked
collaterally or directly.
Exception: A person in a void marriage must first file
for a declaration of nullity in order to subsequently
marry.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Requisites for Valid Remarriage
a. The previous marriage should be judicially
declared void or annulled (final judgment) [Terre
v. Terre, A.M. No. 2349 (1992), Atienza v. Brillantes,
A.M. No. MTJ-92-706 (1995)]; Wiegel v. Sempio-
Dy, G.R. No. L-53703 (1986)].
b. Must comply with the requirements of Art. 52,
FC:
Art. 52, FC. The judgment of annulment or of
absolute nullity of the marriage the partition and
distribution of the properties of the spouses and the
delivery of the children's presumptive legitimes shall
be recorded in the appropriate civil registry and
registries of property; otherwise the same shall not
affect third persons.
Safeguard against collusion and No confession of
judgment
In the cases referred to in the preceding paragraph, no
judgment shall be based upon a stipulation of facts or
confession of judgment. [Art. 48 (2), FC]
Stipulation of Facts
An admission by both parties after agreeing to the
existence of any of the grounds or facts that would
constitute a void/voidable marriage
Confession of Judgment
The admission by one party admitting his/her fault to
cause the invalidity of the marriage.
Although the admission of guilt of the wife
constitutes a confession of judgment, the husband
was also able to present other evidence to support the
allegation. Hence, there was no collusion. [Ocampo v.
Florenciano, G.R. No. L-13553 (1960)]
Participation of the OSG
The obvious intent of the AM 02-11-10-SC was to
require the OSG to appear as counsel for the State in
the capacity of a defensor vinculi (i.e., defender of the
marital bond) to oppose petitions for, and to appeal
judgments in favor of declarations of nullity of
marriage under Article 36 of the Family Code, thereby
ensuring that only the meritorious cases for the
declaration of nullity of marriages based on
psychological incapacity-those sufficiently evidenced
by gravity, incurability and juridical antecedence-
would succeed. [Mendoza v. Republic, G.R. No. 157649
(2012)]
Page 44 of 511
CIVIL LAW
No Motion to Dismiss
AM 02-11-10-SC Sec. 7 prohibits the filing of a
motion to dismiss in actions for annulment of
marriage. [Aurelio v. Aurelio, G.R. No. 175367 (2011)]
Effect of pendency of action for declaration of
nullity:
a. The court shall provide for the support of the
spouses,
b. The custody and support of the common
children, giving paramount consideration to their
moral and material welfare, their choice of parent
with whom they wish to remain.
c. The court shall also provide for visitation rights
of other parent. [Art. 49, FC]
Effect of Res Judicata
Suffice it to state that parties are bound not only as
regards every matter offered and received to sustain
or defeat their claims or demand but as to any other
admissible matter which might have been offered for
that purpose and of all other matters that could have
been adjudged in that case. [Mallion vs Alcantara, G.R.
No. 141528 (2006)]
Effect of Final Judgment Declaring Nullity
The effects provided for by paragraphs (2), (3), (4)
and (5) of Article 43 and by Article 44 shall also apply
in the proper cases to marriages which are declared
void ab initio or annulled by final judgment under
Articles 40 and 45 [Art. 50(1), FC].
Final judgment in such cases shall provide for:
a. Liquidation, partition, and distribution of the
properties of the spouses
b. Custody and support of the common children
c. Delivery of their presumptive legitimes
UNLESS: such matters had been adjudicated in
previous judicial proceedings. [Art. 50(2), FC]
All creditors of the spouses/property regime shall be
notified of the proceedings for liquidation [Art. 50(2
and 3), FC]
In the partition, the conjugal dwelling and lot shall be
adjudicated to the spouse with whom majority of the
common children remain [Art. 102 and 129, Art.
50(4), FC]
Tender Years Presumption
Children below 7 years of age will be in the custody
of the mother.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Presumptive legitimes, computed as of the date of
the final judgment, shall be delivered in cash, property
or sound securities:
a. Unless the parties, by mutual agreement
judicially approved, had already provided for
such [Art. 51(1), FC]
b. The children/guardian/trustee of property may
ask for the enforcement of the judgment [Art.
51(2), FC]
c. The delivery of the presumptive legitimes shall
not prejudice the ultimate successional rights, but
the value of the properties already received shall
be considered as advances on their legitime [Art.
51(3), FC]
Generally, children born or conceived within void
marriages are illegitimate.
Exceptions:
a. Children conceived or born before the judgment
under Article 36 has become final and executory
[Art. 54, FC]
b. Children conceived or born of subsequent
marriages under Article 53 [Art. 54, FC]
b. Voidable or Annullable
Marriages
Art. 4, FC states that “xxx A defect in any of the
essential requisites shall render the marriage voidable
as provided in Article 45.”
Grounds for Annulment [Art. 45, FC]
a. The party in whose behalf it is sought to have the
marriage annulled was eighteen years of age or
over but below twenty-one, and the marriage was
solemnized without the consent of the parents,
guardian or person having substitute parental
authority over the party, in that order, unless after
attaining the age of twenty-one, such party freely
cohabited with the other and both lived together
as husband and wife;
b. Either party was of unsound mind, unless such
party after coming to reason, freely cohabited
with the other as husband and wife;
c. The consent of either party was obtained by
fraud, unless such party afterwards, with full
knowledge of the facts constituting the fraud,
freely cohabited with the other as husband and
wife;
d. The consent of either party was obtained by
force, intimidation or undue influence, unless
Page 45 of 511
CIVIL LAW
the same having disappeared or ceased, such
party thereafter freely cohabited with the other as
husband and wife;
e. Either party was physically incapable of
consummating the marriage with the other, and
such incapacity continues and appears to be
incurable; or
f. Either party was afflicted with a sexually-
transmissible disease found to be serious and
appears to be incurable.
Nature of an Action for Annulment
Action in rem, concerns status of parties; res is relation
between parties or marriage tie; jurisdiction depends
on nationality or domicile not the place of celebration.
9. Lack of Parental Consent
18 ≤ x < 21 without parental consent
Note: Art. 14, FC states that in case either or both of
the contracting parties, not having been emancipated
by a previous marriage, are between the ages of
eighteen and twenty-one, THEY SHALL, in addition
to the requirements of the preceding articles:
a. Exhibit to the local civil registrar the consent to
their marriage of their father, mother, surviving
parent or guardian, or persons having legal charge
of them, in the order mentioned
1. Manifested in writing by the interested party,
who personally appears before the proper
local civil registrar, or
2. In the form of an affidavit made in the
presence of two witnesses and attested
before any official authorized by law to
administer oaths
b. Record such personal manifestation in both
applications for marriage license, and the
affidavit, if one is executed instead, shall be
attached to said applications.
In defending the requirement of parental consent, the
Court held that the State has power to make
adjustments in the constitutional rights of minors
based on the following grounds:
a. the peculiar vulnerability of children,
b. to protect minors from immature decision
making and prevent unstable marriages,
c. on the presumption that parents act in the best
interests of their children in child rearing. [Moe v.
Dinkins, (US Case, 1981)]
May be Ratified by the party 18 or above but below
21 upon free cohabitation upon reaching 21
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
10. Insanity
Presumption: A person is presumed to be of sound
mind. The burden of proof is on the person alleging
insanity.
Mental incapacity or insanity is a vice of consent. It
can be ratified by cohabitation after insanity is cured
or during a lucid interval.
Mere mental weakness is not a ground for annulment,
but if found grave enough, it may amount to
psychological incapacity.
Intoxication, somnambulism where one had no
mental capacity to give consent is equivalent to
insanity
Must exist at the time of the celebration of the
marriage. Insanity that occurs after the celebration of
marriage does not constitute a cause for nullity
[Katipunan v. Tenorio, G.R. No. 43442 (1937)]
Test of Insanity: Whether the party at the time of
marriage was capable of understanding the nature and
consequences of marriage itself [Sempio-Diy]
11. Fraud
Art. 46, FC. Any of the following circumstances
shall constitute fraud referred to in Number 3 of the
preceding Article:
Non-disclosure of a previous conviction by final
judgment of the other party of a crime involving
moral turpitude;
Concealment by the wife of the fact that at the time
of marriage, she was pregnant by a man other than
her husband;
Concealment of sexually transmissible disease,
regardless of its nature, existing at the time of
marriage; or
Concealment of drug addiction, habitual alcoholism
or homosexuality or lesbianism existing at the time
of marriage.
No other misrepresentation or deceit as to character,
health, rank, fortune or chastity shall constitute such
fraud as will give grounds for the action of
annulment of marriage.
Note: The enumeration of the grounds for
annulment under Art. 46 for reasons of fraud or vice
of consent is exclusive. No other misrepresentation
Page 46 of 511
CIVIL LAW
or deceit of character, health, rank, fortune or chastity
shall constitute fraud.
Non-Disclosure of Conviction of Crime:
a. The crime must involve moral turpitude
Definition of moral turpitude:
“Conduct that is contrary to justice, honesty,
and morality” [Black’s Law Dictionary].
b. Must be convicted by final judgment
c. Conviction must be prior to marriage
Concealment of Pregnancy
Wife must have:
a. Concealed her pregnancy AND
b. Pregnancy is by another man other than her
husband
Fraud against very essence of marriage:
importance of procreation of children; an assault to
the integrity of the union by introducing ALIEN
BLOOD.
If husband knew of pregnancy, the marriage cannot
be annulled on the ground of concealment.
The woman was 7 months pregnant at the time she
met petitioner. He cannot claim that the pregnancy
was concealed from him and that he was defrauded
into marrying her. [Buccat v. Buccat, G.R. No 47101
(1941)]
But where the wife concealed the fact that she was 4
months pregnant during the time of the marriage and
was “naturally plump,” Delizo could hardly be
expected to know, by mere looking, whether or not
she was pregnant at the time of the marriage. [Aquino
v. Delizo, G.R. No. L-15853 (1960)]
Note: May be ratified upon free cohabitation after
knowledge of fraud.
Affliction vs. Concealment of Sexually
Transmitted Disease
Affliction Concealment
Art. 45 (6) STD Art. 46 (3) STD
The concealing of the
STD is a type of fraud
Ground for annulment
which is a ground for
annulment
Does not have to be
Must be concealed
concealed
Must be serious and Need not be serious nor
incurable incurable
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
It is the concealment
The STD itself is the
that gives rise to the
ground for annulment
annulment
Concealment of Drug Addiction, Habitual
Alcoholism, Homosexuality or Lesbianism
Recovery or rehabilitation from STD, drug addiction,
and habitual alcoholism will NOT bar action for
annulment; the defect is not the disease, but the fraud
which vitiated consent.
It is the concealment of homosexuality, and not
homosexuality per se, that vitiates the consent of the
innocent party. Such concealment presupposes bad
faith and intent to defraud the other party in giving
consent to the marriage. [Almelor v. RTC, G.R. No.
179620 (2008)]
12. Force, Intimidation, Undue Influence
Force must be one as to prevent party from acting as
a free agent; will destroyed by fear/compulsion.
There is violence when in order to wrest consent,
serious or irresistible force is employed. [Art. 1335,
CC]
Intimidation must be one as to compel the party by
a reasonable/well-grounded fear of an imminent
and grave evil upon his person/properties [Art. 1335,
CC]
a. Degree of intimidation: age, sex, condition of
person borne in mind
b. Threat or intimidation as not to act as free agent;
Note: A threat to enforce one’s claim through
competent authority, if one’s claim is just and legal,
does not vitiate consent [Art. 1335, CC]
May be ratified upon voluntary cohabitation after
force, intimidation, or undue influence has ceased or
disappeared.
13. Impotency
Impotency refers to the person’s physical condition
where sexual intercourse with a person of the
opposite sex is impossible. It does not refer to mere
sterility.
Refers to the inability to copulate, not procreate.
Page 47 of 511
CIVIL LAW
Potency is presumed; party who alleges impotency has
burden of proof [Jimenez v. Canizares, G.R. No. L-
12790 (1960)]
To constitute, fraud, the concealed impotency exist at
time of marriage, and be continuous and incurable. If
incapacity can be remedied or is removable by
operation, not annullable [Sarao v. Guevarra, G.R. No.
47063 SUPPL 263 (1940)]
Only the potent spouse can file the action for
annulment and he/she must not have been aware of
the other’s impotency at the time of marriage.
[Sempio-Dy]
If the potent spouse was aware, it is implied that
he/she renounced copulation by consenting to the
marriage. [Tolentino]
When both spouses are impotent, marriage cannot be
annulled because neither spouse is aggrieved.
[Sempio-Dy]
An impotent plaintiff could not have expected
copulation with the other spouse. [Tolentino]
REFUSAL of wife to be examined DOES NOT
PRESUME impotency [Jimenez v Canizares, G.R. No.
L-12790 (1960)]
N.B. If she continues to refuse the physical exam, she
can be held in contempt & ordered confined in jail
until she does so. [Rule 71 § 1 & 8 in rel. to Rule 29 §
2, Rules of Civil Procedure]
14. Sexually-Transmissible Disease
Serious And Incurable
Affliction of STD is unknown to the other spouse.
The other spouse must also be free from a similar
STD. [Balane]
Requisites
a. Should exist at the time of the marriage
b. Should be found serious
c. Should appear to be incurable
Rationale: danger to the health of spouse &
offspring/s
Not subject to ratification: cannot be ratified or
validated by cohabitation.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Who
Ground Ratification
Who may file, prescription, ratification can file Prescription
(Art. 45, (Art. 45,
Who (Art. (art. 47, FC)
Ground Ratification FC) FC)
can file Prescription 47, FC)
(Art. 45, (Art. 45,
(Art. (art. 47, FC) influence
FC) FC)
47, FC) has ceased
Party 18 or
or Within 5 Free disappeared
above years after cohabitation Cannot be
Within 5
but attaining age of the party Potent ratified by
Impotence years after
below of 21 who entered spouse action
marriage
Lack of 21 the marriage prescribes
Parental Parent without Cannot be
Consent parental Within 5
or Healthy ratified by
consent STD years after
guardia Before party party action
after marriage
n who below 21 prescribes
did not reaches 21 attaining age
give of 21 Marriages not subject to ratification
consent a. One spouse is incurably impotent
Sane b. One spouse has incurable STD
Free
spouse
cohabitation
with no Any time Reason: Public policy and health.
of insane
knowle before the
party after
dge of death of Note: Though these marriages cannot be ratified, the
insane party
the either party petition for annulment will prescribe within 5 years.
comes to
other’s
reason
insanity Presence of Prosecutor
Legal To prevent collusion between the parties, fabrication
Insanity guardia or suppression of evidence, the prosecuting attorney
n of or fiscal shall appear on behalf of the State. [Art. 48,
insane FC]
party
During lucid In a legal separation or annulment case, the
interval or prosecuting attorney must first rule out collusion as a
Insane after condition sine qua non for further proceedings. A
party regaining certification by the prosecutor that he was present
sanity, and during the hearing and even cross-examined the
before death plaintiff does not suffice to comply with the
Free mandatory requirement. [Corpuz v. Ochoterena, A.M.
cohabitation No. RTJ- 04-1861 (2004)]
Injured Within 5 of the
(defrau years after defrauded Effects of Pending Decree of Annulment
Fraud The Court shall provide for the support of spouses
ded) discovery of party after
party fraud having full and support and custody of common children (Art.
knowledge 49, FC). In determining which parent should have
of fraud custody of them, their moral and material welfare
Free shall be given paramount consideration. [Art. 49, FC;
Within 5 Luna and Luna v. IAC, G.R. No. L-68374 (1985)]
cohabitation
years after
Force, of the
disappearanc Effects of Decree of Annulment
Intimidati Injured injured party
e of force, (Same as Decree of Nullity)
on, undue party after the
undue
influence force or
influence, or The effects provided for by paragraphs (2), (3), (4)
intimidation
intimidation and (5) of Article 43 and by Article 44 shall also apply
or undue

Page 48 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

in the proper cases to marriages which are declared

void ab initio or annulled by final judgment under 8. The Law on Separation of
Articles 40 and 45 [Art. 50(1), FC].
the Spouses
Comparative Table on Void and Voidable
Marriages De Facto Separation is the separation of spouses in
Void Voidable fact, without obtaining a judicial decree of legal
No validity from separation.
the time of
Valid until
Nature performance; Rule: The separation in fact between husband and
annulled
inexistent from wife shall not affect the regime of absolute
the very beginning community EXCEPT that [Art. 100, FC.]:
Can be ratified, a. The spouse who leaves the conjugal home or
Susceptible to refuses to live therein, without just cause, shall
Cannot be ratified subject to 2
Ratification not have the right to be supported;
exceptions
Only co- b. When the consent of one spouse to any
ownership [Art. ACP or any transaction of the other is required by law,
147, FC] ; No other property judicial authorization shall be obtained in a
Property ACP or CPG regime in summary proceeding;
Relation despite having accordance with c. In the absence of sufficient community property,
entered into a the marriage the separate property of both spouses shall be
marriage settlement solidarily liable for the support of the family. The
settlement spouse present shall, upon proper petition in a
Illegitimate under Children are summary proceeding, be given judicial authority
Art. 165, FC (with legitimate if to administer or encumber any specific separate
Status of property of the other spouse and use the fruits or
Arts. 36 and 53, conceived or
Children proceeds thereof to satisfy the latter’s share.
FC as exceptions born prior to the
under Art. 54, FC) decree
May be attacked Neither does separation in fact affect CPG (Art. 127,
directly or FC), subject to the same exceptions.
collaterally, but
Cannot be Agreement to Separate
for the purpose of
attacked A notary public should not facilitate the disintegration
remarriage, a
collaterally of a marriage and the family by encouraging the
judicial
How separation of the spouses
declaration of
Impugned Cannot be and extrajudicially dissolving the conjugal
nullity is required
impugned after partnership. [Espinosa v. Omana, A.C. No. 9081 (2011)]
[Art. 40, FC]
death of one of
the parties Absolute Divorce
Can be impugned
even after death of Where a marriage between a Filipino citizen and a
the parties foreigner is validly celebrated and a divorce is
A proper thereafter validly obtained abroad by the alien spouse
interested person capacitating him or her to remarry, the Filipino
Who May spouse shall have capacity to remarry under
(depending on the A party to the
Challenge Philippine law. [par. 2, Art. 26, FC, as amended by
dates of marriage marriage
Validity Executive Order 227)]
and of filing of
proceeding)
Susceptible to Does not Note: A foreign divorce obtained by the Filipino
Prescribes spouse against his foreigner spouse is now considered
Prescription prescribe
valid. [Republic v. Manalo, G.R. 221029 (2018)]

If both parties are Muslims, there is a presumption

that the Muslim Code or Muslim law is complied with.
If together with it or in addition to it, the marriage is

Page 49 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

likewise solemnized in accordance with the CC of the Against

Ground Act By
Philippines, whichever comes first is the validating Whom
rite and the second rite is the merely ceremonial one. Final judgment of
But, in this case, as long as both parties are Muslims, imprisonment of
this Muslim Code will apply. [Zamoranos v. People, G.R. more than six years
No. 193902 (2011)] Drug addiction or
habitual alcoholism
One of the effects of irrevocable talaq, as well as other Lesbianism or
kinds of divorce, refers to severance of matrimonial homosexuality
bond, entitling one to remarry. [Zamoranos v. People, Contracting of
G.R. No. 193902 (2011)] subsequent Any spouse
bigamous marriage
Different Kinds of Divorce under Shari’a Law Sexual infidelity or
Divorce under the Code of Muslim Personal Laws perversion
may be effected by: Attempt against the
a. Repudiation of the wife by the husband (talaq); Any spouse Petitioner
life
b. Vow of continence by the husband (ila); Abandonment
c. Injurious assanilation of the wife by the husband without justifiable
(zihar); Any spouse Petitioner
cause for more than
d. Acts of imprecation (li'an); one year
e. Redemption by the wife (khul');
f. Exercise by the wife of the delegated right to Grounds for Legal Separation [Art. 55, FC]:
repudiate (tafwld); or a. Repeated physical violence or grossly
g. Judicial decree (faskh). [Art. 45, Code of Muslim abusive conduct directed against the petitioner,
Personal Laws] a common child, or a child of the petitioner;
b. Physical violence or moral pressure to compel
9. Legal Separation the petitioner to change religious or political
affiliation;
An action for legal separation involves nothing more c. Attempt of respondent to corrupt or induce
than the bed-and-board separation of the spouses. It the petitioner, a common child, or a child of the
is purely personal in nature. [Lapuz Sy v. Eufemio, G.R. petitioner, to engage in prostitution, or
No. L-30977 (1972)] connivance in such corruption or inducement;
d. Final judgment sentencing the respondent to
Grounds for Legal Separation: imprisonment of more than six years, even if
Act by/Against Whom pardoned;
Against e. Drug addiction or habitual alcoholism of the
Ground Act By respondent;
Whom
Petitioner, a f. Lesbianism or homosexuality of the
Repeated physical common respondent;
violence or grossly Any spouse child, or a g. Contracting by the respondent of a subsequent
abusive conduct child of the bigamous marriage, whether in the Philippines
petitioner or abroad;
Physical violence or h. Sexual infidelity or perversion;
moral pressure to
compel the Adultery is not a continuing crime; it is consummated
Any spouse Petitioner at every moment of carnal knowledge. Thus, every
petitioner to change
religious or political sexual act is a ground for legal separation. [People v.
affiliation Zapata and Bondoc, G.R. No. L-3047 (1951)]
Any spouse petitioner, a
Attempt of common A civil action for legal separation based on
respondent to child, or a concubinage may proceed ahead of, or simultaneously
corrupt child of the with, a criminal action for concubinage; conviction is
petitioner not a perquisite [Gandionco v. Penaranda, G.R. No.

Page 50 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
79284 (1987)]
i. Attempt by the respondent against the life of
the petitioner; or
j. Abandonment of petitioner by respondent
without justifiable cause for more than one
year.
Abandonment is not mere physical estrangement but
also financial and moral desertion. There must be an
absolute cessation of marital relations, duties, and
rights with the intention of perpetual separation. [Dela
Cruz. v. Dela Cruz, G.R. No. L-19565 (1968)]
Note: The death of one party in a legal separation case
abates the action. This is because the death of either
spouse automatically dissolves the marriage. An
action for legal separation is also purely personal
between the spouses. [Lapuz Sy v. Eufemio, G.R. No.
L-30977 (1972)]
The grounds for legal separation are exclusive. [Art.
55, FC]
These must be filed within 5 years after occurrence of
cause. [Art. 57, FC]
Acts of Violence according to the “Anti-Violence
Against Women and Their Children Act of 2004”
[R.A. No. 9262] (as grounds for legal separation
under Art. 55(1), FC)
a. Causing physical harm to the woman or her child;
b. Threatening to cause the woman or her child
physical harm;
c. Attempting to cause the woman or her child
physical harm;
d. Placing the woman or her child in fear of
imminent physical harm;
e. Attempting to compel or compelling the woman
or her child to engage in conduct which the
woman or her child has the right to desist from
or desist from conduct which the woman or her
child has the right to engage in, or attempting to
restrict or restricting the woman's or her child's
freedom of movement or conduct by force or
threat of force, physical or other harm or threat
of physical or other harm, or intimidation
directed against the woman or child. This shall
include, but not limited to, the following acts
committed with the purpose or effect of
controlling or restricting the woman's or her
child's movement or conduct:
Page 51 of 511
CIVIL LAW
a.
Threatening to deprive or actually depriving
the woman or her child of custody to her/his
family;
b. Depriving or threatening to deprive the
woman or her children of financial support
legally due her or her family, or deliberately
providing the woman's children insufficient
financial support;
c. Depriving or threatening to deprive the
woman or her child of a legal right;
d. Preventing the woman in engaging in any
legitimate profession, occupation, business
or activity or controlling the victim's own
money or properties, or solely controlling
the conjugal or common money, or
properties;
f. Inflicting or threatening to inflict physical harm
on oneself for the purpose of controlling her
actions or decisions;
g. Causing or attempting to cause the woman or her
child to engage in any sexual activity which does
not constitute rape, by force or threat of force,
physical harm, or through intimidation directed
against the woman or her child or her/his
immediate family;
h. Engaging in purposeful, knowing, or reckless
conduct, personally or through another, that
alarms or causes substantial emotional or
psychological distress to the woman or her child.
This shall include, but not be limited to, the
following acts:
1. Stalking or following the woman or her child
in public or private places;
2. Peering in the window or lingering outside
the residence of the woman or her child;
3. Entering or remaining in the dwelling or on
the property of the woman or her child
against her/his will;
4. Destroying the property and personal
belongings or inflicting harm to animals or
pets of the woman or her child; and
5. Engaging in any form of harassment or
violence;
i. Causing mental or emotional anguish, public
ridicule or humiliation to the woman or her child,
including, but not limited to, repeated verbal and
emotional abuse, and denial of financial support
or custody of minor children of access to the
woman's child/children.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
RULE ON VIOLENCE AGAINST WOMEN
AND THEIR CHILDREN [A.M. No. 04-10-11-
SC]
Who may file a petition for a protection order?
a. The offended party
b. Parents or guardians of the offended party
c. Ascendants, descendants or collateral
relatives of the offended party within the fourth
civil degree of consanguinity or affinity
d. Officers or social workers of the DSWD or
social workers of LGUs
e. Police officers, preferably those in charge of
women and children's desks
f. Punong Barangay or Barangay Kagawad
g. Lawyer, counselor, therapist or healthcare
provider of the petitioner; or
h. At least two concerned, responsible citizens
of the place where the violence against women
and their children occurred and who have
personal knowledge of the offense committed.
[Sec. 8]
Where to File the Petition
The petition may be filed with the Family Court of
the place where the offended party resides. If
there is no existing Family Court, it may be filed with
the regional trial court, metropolitan trial court,
municipal trial court in cities, municipal trial court or
municipal circuit trial court with territorial jurisdiction
over the place of residence of the offended party.
[Sec. 9]
What Reliefs are Available?
The protection order shall include any, some or all of
the following reliefs:
a. Prohibiting the respondent from threatening to
commit or committing, personally or through
another, acts of violence against the offended
party
b. Prohibiting the respondent from harassing,
annoying, telephoning, contacting or
otherwise communicating in any form with the
offended party, either directly or indirectly;
c. Removing and excluding the respondent
from the residence of the offended party,
regardless of ownership of the residence, either
temporarily or permanently where no property
rights are violated.
d. Requiring the respondent to stay away from
the offended party and any designated family
or household member at a distance specified by
the court
Page 52 of 511
CIVIL LAW
e. Requiring the respondent to stay away from the
residence, school, place of employment or
any specified place frequented regularly by
the offended party and any designated family or
household member;
f. Directing lawful possession and use by the
offended party of an automobile and other
essential personal effects, regardless of
ownership, and directing the appropriate law
enforcement officer to accompany the
offended party to the residence of the parties to
ensure that the offended party is safely restored
to the possession of the automobile and other
essential personal effects
g. Ordering temporary or permanent custody of
the child/children with the offended party,
taking into consideration the best interests of the
child. An offended party suffering from Battered
Woman Syndrome shall not be disqualified. In no
case shall custody of minor children be given to
the batterer.
h. Directing the respondent to provide support to
the woman and/or her child, if entitled to legal
import.
i. Prohibiting the respondent from carrying or
possessing any firearm or deadly weapon and
ordering him to surrender the same to the
court for appropriate disposition, including
revocation of license and disqualification to
apply for any license to carry or possess a
firearm.
j. Directing the DSWD or any appropriate agency
to prepare a program of intervention for the
offended party
k. Requiring the respondent to receive
professional counseling from agencies or
persons who have demonstrated expertise and
experience in anger control, management of
alcohol, substance abuse and other forms of
intervention to stop violence.
l. Awarding the offended party actual damages
caused by the violence inflicted, including, but
not limited to, property damage, medical
expenses, childcare expenses and loss of income;
and compensatory, moral, and exemplary
damages
The court may grant such other forms of relief. [Sec.
11]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
DEFENSES FOR LEGAL SEPARATION
Grounds for denying legal separation [Art. 56,
FC]:
a. Condonation by aggrieved party – after the
commission of the offense; may be expressed or
implied.
That plaintiff-husband and his wife agreed to go
to the house of his cousin and there slept
together as husband and wife for two nights – all
these facts have no other meaning than that
reconciliation between them was effected and
there was condonation of the wife by the
husband. This reconciliation occurred almost 10
months after he came to know of her infidelity.
[Bugayong v. Ginez, G.R. No. 10033 (1957)]
b. Consent by aggrieved party to the commission
of the offense – before the commission of the
offense; may be express (e.g. written agreement,
[Matubis v. Praxedes, G.R. No. L-11766 (1960)] or
implied
c. Connivance between parties in the commission
of the offense
d. Mutual guilt or Recrimination between spouses
in the commission of any ground for legal
separation
e. Collusion between parties to obtain decree of
legal separation
f. Prescription of action for legal separation [Art.
57: 5 years from occurrence of the cause of
action]
g. Reconciliation of parties during pendency of
action [Art. 66 (1)]
h. Death of either party during pendency of action
[Lapuz Sy v. Eufemio, G.R. No. L-30977 (1972)]
Who may file the action?
A petition for legal separation may be filed only by
the husband or the wife. [Sec. 2, A.M. No. 02-11-
11-SC (Rule on Legal Separation)]
Where to file the action?
The petition shall be filed in the Family Court of the
province or city where the petitioner or the
respondent has been residing for at least six
months prior to the date of filing "or in The case of a
Page 53 of 511
CIVIL LAW
non-resident respondent, where he may be found
in the Philippines, at the election of the petitioner.
[Sec. 2, A.M. No. 02-11-11-SC]
When to File Action
An action for legal separation shall be filed within
five years from the time of the occurrence of the
cause. [Art. 57, FC and A.M. No. 02-11-11-SC]
Cooling-off and Reconciliation Effects
An action for legal separation shall in no case be tried
before six months shall have elapsed since the filing
of the petition. [Art. 58, FC]
Actions cannot be tried unless the court has
attempted to reconcile the spouses, and determined
that despite such efforts, reconciliation is highly
improbable [Art. 59]
N.B. This is without prejudice to judicial
determination of custody of children, alimony, and
support pendente lite.
Courts can still resolve other issues, pending the
waiting period or cooling off period. In resolving
other issues, courts should try not to touch, as much
as possible, on the main issue (i.e. adultery if that is
the ground used). However, Court must still receive
evidence if just to settle incidental issues of support
and custody. [Araneta v. Concepcion, G.R. No. L-9667
(1956)]
N.B. This provision of the Family Code dictating a
mandatory 6-month cooling-off period does not
apply in cases where violence, as used in R.A. No.
9262 (Anti-Violence Against Women and their
Children), is alleged. The case should be heard as soon
as possible by the court.
Contents and Form of the Petition [Sec. 2, A.M.
No. 02-11-11-SC]
a. Allege the complete facts constituting the cause
of action;
b. Names and ages of the common children of the
parties, specify the regime governing their
property relations, the properties involved, and
creditors, if any.
c. Be verified and accompanied by a certification
against forum shopping.
d. Be filed in six copies.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Confession of Judgment
No decree of legal separation shall be based upon a
stipulation of facts or a confession of judgment. [par.
1, Art. 60, FC]
N.B. Art. 60 par. 1 applies only if the judgment was
based solely on the stipulation of facts or solely on the
confession of judgment. Thus, if other grounds were
used, Art. 60 par. 1 is not applicable. [Balane]
The prohibition on confession of judgment does not
mean that the Court will not grant petition if one party
admits to being guilty of the charges of adultery. The
point of this provision is that the Court should still
admit evidence, not decide just based on an admission
of guilt. Because what is prohibited is handing down
a decree of legal separation based solely on a
confession of judgment. [Ocampo v Florenciano, G.R.
No. 13553 (1960)]
Prohibited Compromise
The court shall not allow compromise on prohibited
matters, such as the following:
a. The civil status of persons;
b. The validity of a marriage or of a legal separation;
c. Any ground lor legal separation;
d. Future support;
e. The jurisdiction of courts; and
f. Future legitime. [Sec. 13, A.M. No. 02-11-11-SC]
Effects of Filing Petition
a. The spouses are entitled to live separately, but the
marital bond is not severed. [Art. 61 (1), FC]
b. Administration of community or conjugal
property – If there is no written agreement
between the parties, the court shall designate one
of them or a third person to administer the ACP
or CPG. [Art. 61, par. 2, FC]
Note: No motion to dismiss the petition shall be
allowed except on the ground of lack of jurisdiction
over the subject matter or over the parties; provided,
however, that any other ground that might warrant a
dismissal of the case may be raised as an affirmative
defense in an answer. [Sec. 4, A.M. No. 02-11-11-SC]
Effects of Pendency
The Court shall provide for: [Art. 62, cf. Art. 49, FC]
a. Support of spouses
b. Custody of children: The court shall give custody
of children to one of them, if there is no written
agreement between the spouses.
c. Visitation rights of the other spouse
Page 54 of 511
CIVIL LAW
Effects of Decree of Legal Separation
a. The spouses can live separately [Art. 63, FC] but
the marriage bonds are not severed.
b. The ACP or CPG shall be dissolved and
liquidated, and the share of the guilty spouse
shall be forfeited in favor the common children,
previous children, or innocent spouse, in that
order [Art. 63, FC; cf. Art. 43(2), FC]
c. Custody of the minor children shall be awarded
to the innocent spouse [Art. 63, FC; cf. Art 213,
FC]
d. Guilty spouse shall be disqualified from
Inheriting from innocent spouse by intestate
succession. The provisions in favor of the guilty
party in the will of the innocent spouse shall also
be revoked by operation of law. [Art. 63, FC]
e. Donations in favor of the guilty spouse may be
revoked [Art. 64, FC] but this action prescribes
after 5 years from the decree of legal separation.
f. Innocent spouse may also revoke designation of
guilty spouse as beneficiary in an Insurance
policy, even if such stipulations are irrevocable.
[Art. 64. FC; cf. Sec. 11, P.D. 612]
g. Obligation for mutual support ceases, but the
court may order the guilty spouse to support the
innocent spouse. [Art. 198]
h. The wife shall continue to use the surname of
the husband even after the decree for legal
separation. [Laperal v. Republic, G.R. No. L-18008
(1992)]
Reconciliation
Should the spouses reconcile, they should file a
corresponding joint manifestation under oath of
such reconciliation, duly signed by them and filed with
the court in the same proceeding for legal separation.
[Art. 65]
Effects of Reconciliation
a. Proceedings for legal separation shall be
terminated at whatever stage. [Art. 66]
b. If there is a final decree of legal separation, it shall
be set aside. [Art. 66]
c. The separation of property and forfeiture of
share of guilty spouse shall subsist, unless the
spouses agree to revive their former property
regime or to institute another property regime.
[Art. 66 cf. Art. 67]
d. Joint custody of children is restored.
e. The right to intestate succession by guilty spouse
from innocent spouse is restored.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

f. The right to testamentary succession depends on

the will of the innocent spouse.

Void Marriages, Voidable Marriages, and Legal Separation

Void Marriages Voidable Marriages Legal Separation
Grounds not relating to
any of the essential or
formal requisites:
1. Absence of essential or 1. Repeated physical
formal requisites violence
a. One is a minor 2. Pressure to compel to
b. No authority to change religious/
marry political affiliations
Defect in any of the
c. No valid marriage 3. Corruption/
essential requisites:
license inducement to engage
1. Lack of parental
d. Bigamous and in prostitution
consent
polygamous 4. Final judgment with
2. Insanity
marriages sentence of more than
Grounds 3. Fraud
e. Mistake of identity 6 years
4. Force, intimidation,
f. Void subsequent 5. Drug addiction/
Undue influence
marriage habitual alcoholism
5. Impotence
2. Psychological 6. Homosexuality/
6. Serious and incurable
incapacity lesbianism
STD
3. Incestuous marriages 7. Bigamous marriage
4. Marriages against 8. Sexual infidelity or
public policy perversion
5. Subsequent marriages 9. Attempts against the
which did not comply life of petitioner
with Art. 52 10. Abandonment without
just cause for more
than 1 year
1. Condonation
2. Consent
3. Connivance
Defenses NONE
4. Collusion
5. Recrimination
6. prescription
1. Lack of parental
consent
a. Spouses – 5 years
after turning 21
b. Parents – before
the spouse turns
21
Within 5 years from the
Prescription No prescription
occurrence of the cause
2. Insanity
a. Insane spouse –
during lucid
intervals
b. Sane
spouse/guardian
– lifetime

Page 55 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Void Marriages Voidable Marriages Legal Separation

3. Fraud – 5 years after
the discovery of the
fraud

4. Force, intimidation,
undue influence – 5
years after cessation

5. Impotence/STD – 5
years from marriage
According to A.M. No.
02-11-10-SC):
1. Before March 18, 2003
(petition for nullity or
celebration of Only the spouses (cannot Only the spouses (cannot
Who can file marriage) – any party survive the death of the survive the death of the
2. On and after March 18, plaintiff) plaintiff)
2003 (petition for
nullity or celebration of
marriage) – only the
spouses
1. Live separately
2. Designate either of
In the absence of adequate provisions in a written them or a third person
agreement: as administrator of
Effects of Pendency 1. Support of spouses property
2. Support and custody of children 3. Support of spouses
3. Visitation rights 4. Support and custody
of children
5. Visitation rights
1. Properties [art. 147 1. Properties [Art. 50,
1. Properties [Art.
and 148, FC] FC]
63(2)]
a. Art. 147 (equal a. ACP/CPG
a. Dissolution and
shares) governs dissolved, share
Liquidation of
property relations forfeited to
ACP or CPG
of void marriages, heirs if bad faith.
b. Art. 148 (in b. Donations valid,
2. Support and
proportion) except if bad
Custody [Art. 213,
governs property faith.
FC]
relations of c. Insurance may
a. Parental
bigamous, be revoked if
Effect of Decree authority to the
adulterous bad faith.
parent
relationships. d. No succession
designated by
for spouse in
Court after all
2. Status of Children bad faith.
relevant
[Art. 54, FC]
considerations
2. Status of Children
b. Tender years
General Rule: conceived [Art. 54, FC]
presumption for
or born before the a. Conceived or
Child under 7
judgment of absolute born before
[Art. 213(2), FC]
nullity, illegitimate judgment,
legitimate.

Page 56 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Void Marriages Voidable Marriages Legal Separation

Exceptions: conceived 3. Inheritance,
or born 3. Continued Use of Donations and
a. Before the Surname [Art. 371, Designation in
judgment of CC] Insurance Policies
Annulment; a. Dependent on [Sec. 22, Rules on
b. Before the her being the Legal Separation]
judgment of innocent or a. can be revoked.
Absolute Nullity guilty party
under Art. 36 4. Continued sUse of
(Psychological Surname [Art. 372,
Incapacity); CC]
c. Of the
subsequent
marriage under
Art. 53 (Failure to
Record the
Decree of Nullity
of Annulment);
d. Prior to the
termination of
the subsequent
marriage under
Art. 42 (when the
absent spouse
files an affidavit
of re-appearance)

Exception: One spouse living abroad or there are valid

D. Rights and Obligations and compelling reasons [Art. 69 (2), FC] – at the
of Spouses discretion of the court.

N.B. These rights and duties are not subject to
stipulation between the spouses and though they may
voluntarily agree to any change in their personal
relations, this agreement will be void and have no legal
effect.
1. Live Together
The right to live together refers to the right of
consortium which is “not susceptible of precise or
complete definition but, broadly speaking,
companionship, love, affection, comfort, mutual
services, sexual intercourse—all belonging to the
marriage state—taken together make up what we
refer to as consortium.
General Rule: It is their obligation to cohabit. It is also
their obligation to observe mutual love, respect and
fidelity and render mutual help and support. (Art. 68)
Exception to the Exception: Incompatibility with the
solidarity of the family [Art. 69 (2). FC]
If the wife abandons the family domicile (vs
obligation of cohabitation) with justifiable cause i.e.
being forced to perform lewd sexual acts, the
husband’s obligation to support her is not terminated.
The law will not permit the husband to terminate the
obligation to support his wife by his own wrongful
acts in driving the wife to seek protection in her
parents’ home. [Goitia v. Campos Rueda, G.R. No.
11263 (1916)]
A court cannot compel a married woman to go back
to her husband, but the court may decree that support
be terminated. [Arroyo v. Vasquez de Arroyo, G.R. No.
L-17014 (1921)]

Page 57 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
2. Family Domicile
The husband and wife shall fix the family domicile.
[Art. 69, FC]
In case of disagreement, the court shall decide. [Art.
69 (1), FC]
3. Support
The spouses are jointly responsible for the support of
the family. The expenses for such support and other
conjugal properties shall be paid:
a. From the conjugal property;
b. If none, income or the fruits of their separate
properties;
c. If none, from their separate properties,
wherein they shall be liable in proportion to
their properties [Art. 70, FC]
In the case of a separation de facto, if it is proved that
the husband and wife were still living together at the
time of his death, it would be safe to presume that she
was dependent on the husband for support, unless it
is shown that she is capable of providing for herself.
[SSS v. Aguas, G.R. No. 165546 (2006)]
4. Management of Family Life
This is the right and duty of both spouses. The
expenses for such management shall be paid in
accordance with the provisions of Article 70 [Art. 71,
FC].
5. Effect of Neglect of Duty
In case the other spouse neglects his or her duties or
commits acts which tend to bring danger, dishonor or
injury to the family, the aggrieved party may apply to
the court for relief. [Art. 72. FC]
Note: Injury contemplated is physical, moral,
emotional or psychological, not financial.
6. Exercise of Profession
Either spouse may exercise any legitimate profession,
without need for consent of the other. [Art. 73, FC]
Page 58 of 511
CIVIL LAW
The other spouse may only object on valid, serious,
and moral grounds.
In case of disagreement, the Court shall decide
whether:
a. The objection is proper, and
b. Benefit has accrued to the family
o if accrued before the objection: enforce
against community property
o if accrued after the objection: enforce
against separate property of spouse who has
not obtained consent. [Art. 73, FC]
7. Use of Surname
Note: For a more detailed discussion, refer to the
section entitled “Surnames”
Although marriage is one of the events required to be
recorded in the civil register, a woman does not
register her married name. Neither does a married
woman file a petition for change of name in order to
use her husband’s surname.
Specific Rules:
a. For Married Women
A woman may use [Art. 370, CC]:
1. Her maiden first name and surname and add
her husband’s surname; or
2. Her maiden first name and her husband’s
surname; or
3. Her husband’s full name, but prefixing a
word indicating that she is his wife, such as
Mrs.
b. For Widows: A widow may use the deceased
husband’s surname as though he were still living,
in accordance with Art. 370 [Art. 373, CC]
c. In case of Annulment [Art. 371, CC]
1. If the wife is the guilty party, she shall resume
her maiden name and surname
2. If the wife be innocent
a. She may resume her maiden name and
surname; or
b. She may choose to continue employing
her former husband’s surname, unless:
1. The court decrees otherwise; or
2. She or the former husband is
married again to another person
d. For Legally Separated Spouses [Art. 372, CC] -
The wife shall continue using her name and
surname employed before the legal separation.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Note: From the foregoing provisions, it can be gleaned

E. Property Relations of
that a woman is not mandated by law to adopt her
husband’s name after marriage. Art. 370, CC is merely
Spouses
directory, since it provides that a woman may choose
any of the options provided. 1. Marriage Settlements
According to Art. 74, FC, property relations
between husband and wife are governed:
a. By marriage settlements executed before the
marriage;
b. By the provisions of this Code;
c. By the local custom.

Requisites for Validity

Art. 75, FC. The future spouses may, in the marriage
settlements, agree upon the regime of absolute
community, conjugal partnership of gains, complete
separation of property, or any other regime. In the
absence of marriage settlement, or when the regime
agreed upon is void, the system of absolute
community of property as established in this Code
shall govern.

The parties have the freedom to stipulate regarding

their property relations in their marriage settlements
in which the lex intentionis of the parties governs the
contract. When the couple agrees on a property
regime in their marriage settlement, the provisions of
the Code are merely suppletory.

N.B. Marriage settlements are considered accessory to

the marriage, therefore as per Art. 81, stipulations in
consideration of future marriage and donations will
be void if the marriage does not take place.

Should the surviving spouse contract a subsequent

marriage without compliance with the foregoing
requirements, a mandatory regime of complete
separation of property shall govern the property
relations of the subsequent marriage [Art. 103(3), FC]

Marriage Settlement Rules

When modifications can be made
General rule: Determined before the celebration of
marriage [Art. 76, FC}
Property regime is dissolved and liquidated upon
finality of legal separation, subject to forfeiture for
the guilty spouse [Art. 63 (2). FC]
In case of reconciliation, the separation of property
subsists unless the parties agree to revive their
former property regime [Arts. 66 and 67, FC]
Abandoned spouse may petition the court for
judicial separation of property [Art. 128, FC]

Page 59 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Sufficient cause for judicial separation of property
[Art. 135, FC]
Voluntary dissolution of ACP or CPG by the
spouses [Art. 136, FC]
Requirements of marriage settlements and any
modification thereof [Art. 77, FC]
Made in writing
Signed by the parties
Executed before the marriage celebration
Not to prejudice third persons unless registered in
the local civil registry where the marriage is recorded
and in registries of property
If executed by a person below 21 years, valid only
when persons required to give consent to the
marriage (father, mother, or guardian, respectively)
are made parties to the agreement [Art. 78, FC]
c. Donations made in favor of persons other than
the spouses even if founded on the intended
marriage
Who may donate
a. Spouses to each other
b. Parents of one or both spouses
c. Third persons to either or both spouses
Rules for Donations BEFORE Marriage
General rule: Future spouses who agree upon a regime
other than ACP cannot donate to each other more
than 1/5 of their present property (excess shall be
considered void). [Art. 84, FC]
Reason for excluding ACP: All property will again be
shared by both spouses after the marriage.

Exception: The limit of ⅕ only applies when the

2. Donations by Reason of
Marriage (Donations Propter
Nuptias)
Donations propter nuptias are made in consideration of
marriage. There can be a valid donation even if the
marriage never took place, but the absence of
marriage is a ground for the revocation of the
donation. [Solis v. Barroso , G.R. No. 27939 (1928)]
The donation must be in a public document and not
merely privately stipulated. [Solis v. Barroso , G.R. No.
27939 (1928)]
donation is contained in the marriage settlements. If
it is contained in another instrument, the general rules
on inofficious donations shall apply.
Donations of property subject to encumbrances
a. Are considered valid.
b. In case of foreclosure:
1. if property value < obligation, donee shall
not be liable for the deficiency
2. if property value > obligation, donee shall be
entitled to the excess [Art. 85, FC]
Grounds for Revocation of Donation Propter
Nuptias [Art. 86, FC]

Donations propter nuptias are without onerous

a. Marriage not Donation Revoked by
consideration, marriage being merely the occasion or
celebrated contained in operation of
motive for the donation, not its cause. Being
marriage law- does not
liberalities, they remain subject to reduction for
settlement prescribe
inofficiousness upon the donor’s death, if they should
infringe the legitime of a forced heir. [Mateo v. Donation Donor’s
Lagua,G.R. No. L-26270 (1969)] contained in a choice- within
separate 5 years from
Requisites of donations propter nuptias instrument supposed date
a. Made before the celebration of marriage of marriage
b. Made in consideration of marriage
c. In favor of one or both of the future spouses
b. Void GR: there must be a judicial
Donations excluded marriage declaration of nullity for the void
a. Ordinary wedding gifts given after the marriage
celebration of the marriage
b. Donations in favor of future spouses made
before marriage but not in consideration thereof

Page 60 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

1. Art 40, in If donee-

rel. to Art 52 spouse e. Legal Separation Donor’s choice- within
and 53 contracted the 5 years from finality of
(subsequent second decree of legal
marriage marriage in separation
before bad faith
securing (knowing that Exception: if cause is
judicial it was void)- adultery or concubinage,
declaration donations in revoked by operation
of nulli favor of the of law
second
marriage If both parties
revoked by acted in good f. Resolutory condition Donor’s choice- within
operation of faith- donor’s complied with 5 years from happening
law. choice; within of resolutory condition
5 years from
2. Art 44 (bad If either or date of finality Exception: if the other
faith in both spouses of the judicial spouse is the donor,
securing in the declaration of action does not
declaration subsequent nullity. prescribe
of marriage acted
presumptive in bad faith
death) (knowing that g. Acts of ingratitude Donor’s choice- within
the person was (Art 765, CC) 1 year from knowledge
still alive)- of fact of ingratitude
donations in with donor being
favor of the capable of bringing suit
subsequent
marriage Rules for Donations DURING Marriage
revoked by General rule: Spouses cannot donate to each other,
operation of directly or indirectly; donations made by spouses to
law. each other during the marriage are void. [Art. 87, FC]
These donations refer to donations inter vivos.
3. All other Donor’s
[Tolentino]
void choice,
marriages regardless of
Exception: Moderate gifts on the occasion of any
good/bad faith
family rejoicing.
of the donee.
The prohibition on donations can only be assailed by
persons who bear such relation to the parties or the
c. No consent of GR: does not require final
property itself, that their rights are being interfered
parents or decree of annulment
with. Here, the insurance company of the donated
guardian
Donor’s choice- within 5 car cannot assail the validity of the donation. In
years from discovery that addition, the codal exception of “moderate gifts”
consent was not obtained depends on the income class of the spouses and a car
could be considered a “moderate gift” that does not
infringe the prohibition of donation between spouses.
d. Other causes of Revoked by operation [Harding v. Commercial Union, G.R. No. L-12707
annulment of law if donee is the (1918)]
guilty spouse who acted
in bad faith A spouse cannot donate to persons which the other
spouse may inherit from as it constitutes an indirect
donation. [Nazareno v. Birog, 45 O.G. No. 5 (1947)]

Page 61 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

b. With respect to the extrinsic validity of contracts

Rules for Donations Between Common-Law affecting property not situated in the Philippines
Spouses and executed in the country where the property
The donation between common-law spouses falls is located
within the provision prohibiting donations between c. With respect to the extrinsic validity of contracts
spouses during marriage. [Matabuena v. Cervantes, G.R. entered into in the Philippines but affecting
No. L-2877 (1971)] property situated in a foreign country whose laws
require different formalities for its extrinsic
In order to fall under the prohibition, it must be validity [Art. 80, FC]
proved that they were living in a common-law
relationship at the time of the donation. [Sumbad v. Question: The facts show a marriage between a
CA, G.R. No. 106060 (1999)] Filipino and a foreign spouse, celebrated in both
countries, and with properties in both jurisdictions.
Distinguished from Ordinary Donations How will you resolve property regime issues in this
Donations propter situation?
Ordinary Donations
nuptias
Does not require Express acceptance Art. 81, FC. Everything stipulated in the settlements
express acceptance required or contracts referred to in the preceding articles in
May include future consideration of a future marriage, including
Cannot include future
property (subject to donations between the prospective spouses made
property
formalities of wills) therein, shall be rendered void if the marriage does
If present property is not take place. However, stipulations that do not
No limit to donation of
donated and property depend upon the celebration of marriage shall be
present property
regime is not absolute valid.
provided legitimes are
community, limited to
not impaired
1/5 [Art. 84, FC] e.g. recognition of paternity of illegitimate child
Grounds for revocation
Grounds for revocation
found in donation laws Waiver Not Allowed
found in Art. 86, FC
CC provisions General Rule: No waiver of rights, shares and effects of
the absolute community of property during the
3. Property Regimes – Absolute marriage can be made

Community of Property and Exception: In case of judicial separation of property.

Conjugal Partnership of
Gains
Governing Law
Art. 80, FC. In absence of a contrary stipulation in
a marriage settlement, the property relations of the
spouses shall be governed by Philippine laws,
regardless of the place of the celebration of the
marriage and their residence.
N.B. By the Nationality Rule [Art. 15, CC], the rule
that Absolute Community Property (ACP) is the
default mode of property relations absent any
marriage settlement applies to all Filipinos, regardless
of the place of the marriage and their residence.
Exceptions
a. Where both spouses are aliens
When the waiver takes place upon a judicial
separation of property, or after the marriage has been
dissolved or annulled, the same shall appear in a
public instrument and shall be recorded as provided
in 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.]
Provisions on Co-ownership Apply
The provisions on co-ownership shall apply to the
absolute community of property between the spouses
in all matters not provided for in this Chapter. [Art.
90., FC]
N.B. 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.

Page 62 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

a. Absolute Community of Property
The community property consists of all the property
owned by the spouses at the time of the celebration
of the marriage and those either one or both of them
acquired during the marriage. There is a presumption
in law that properties acquired during the marriage
belong to the community, unless it is proved that it is
one of those excluded therefrom.
b. Conjugal Partnership of Gains
This property regime was formerly the default regime
under the CC. In this regime, the spouses retain
ownership of their separate property. However, the
spouses also place in a common fund the proceeds,
products, fruits and income of their separate property
and those acquired by either or both spouses through
their efforts or by chance.
The presumption applies that all properties acquired
during the marriage belong to the CPG. There are 3
distinct patrimonies in this system, the husband’s
capital property, the wife’s paraphernal property and
the conjugal property.
c. Separation of Property
Each spouse has complete control and ownership of
his or her own properties which will include “all
earnings from his or her profession, business or
industry and all fruits, natural, industrial or civil, due
or received during the marriage form his or her
separate property.” Expenses of the family shall be
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
properties.

Comparison of ACP and CPG

Absolute Community of Property
When it At the precise moment of the celebration of the
commences marriage [Art. 88, FC]
All the property owned by the spouses at the
time of the celebration of the marriage or
acquired thereafter [Art. 91, FC]
Under the ACP, spouses cannot exclude specific
properties from the regime unless done in
settlement.
Winnings from gambling shall accrue to the
community property but obligations from
What it gambling shall not. [Art. 95, FC]
consists of
Property acquired during is presumed to have
been obtained through joint efforts of parties,
even though one did not actually participate in
the acquisition. This is true for a party whose
efforts consisted in the care and maintenance of
the family household. Such is regarded as
contributions to the acquisition of common
property by one who has no salary, income, work
or industry. [Ocampo v. Ocampo, G.R. No. 198908
(2015)]
Conjugal Partnership of Gains
Default property regime for marriages
celebrated before the Family Code took effect
For marriages after the Family Code, if agreed to
by the parties through a marriage settlement.
Proceeds, products, fruits, and income of their
separate properties
Everything acquired by them during marriage
through their own efforts
Everything acquired through their efforts or by
chance.
Specific properties (Art. 117, FC)
1. Acquired by onerous title during the
marriage at the expense of the common
fund;
2. Acquired through the labor, industry, work,
or profession of either or both spouses
3. Fruits from common property and net fruits
of the exclusive property of each spouse
4. Share of either spouse in hidden treasure,
whether as finder or owner of property
where treasure was found
5. Acquired through occupation such as
fishing or hunting
6. Livestock existing at dissolution of
partnership in excess of what is brought by
either spouse to the marriage
7. Acquired by chance, such as winnings from
gambling or betting

Page 63 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Absolute Community of Property
Properties acquired before the marriage, for
those with legitimate descendants by a former
marriage (to protect rights of children by a
former marriage)
Properties acquired during the marriage by a
gratuitous title, i.e. donation, inheritance by
What remains testate and intestate succession, including the
exclusive fruits of such properties
property
Except: When expressly provided by the donor
or testator that the property shall form part of
the ACP
Properties for personal use
Page 64 of 511
CIVIL LAW
Conjugal Partnership of Gains
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
Property brought into the marriage by each
spouse as his/her own
Properties acquired during the marriage by a
gratuitous title, i.e. donation, inheritance by
testate and intestate succession (but the fruits of
such properties form part of the CPG)
Except: When expressly provided by the donor
or testator that the property shall form part of
the CPG
Property acquired by right of redemption, by
barter, or by exchange with property belonging
to either spouse
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Absolute Community of Property Conjugal Partnership of Gains

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)Even if the installment is
completed after the marriage, the property is
exclusive if ownership was vested in one spouse
before the marriage [Lorenzo v. Nicolas, G.R.
No. L-4085 (1952)]
All property acquired during the marriage,
All properties acquired during the marriage form
whether made, contracted, or registered in the
Presumption part of the ACP, unless it be proven that they are
name of one spouse, are presumed conjugal
excluded. (Art. 93, FC)
unless the contrary is proven. (Art. 116, FC)
Art. 94, 121-123 FC
1. Support of the following:
a. Spouses;
b. Common children;
c. Legitimate children of previous marriage;
d. Illegitimate children – follow the provisions on Support; common property liable in case
Charges and of absence or insufficiency of the exclusive property of the debtor-spouse, but the payment
Obligations shall be considered as an advance to the share of the debtor-spouse.
2. Expenses to enable either spouse to commence/complete a professional/vocational course or
activity for self-improvement;
3. Value donated or promised by both spouses in favor of common legitimate children for the
exclusive purpose of commencing/ completing a professional/ vocational course or activity for
self-improvement
4. Generally: all expenses incurred with the consent of the spouses or for the benefit of the family.

Page 65 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Absolute Community of Property Conjugal Partnership of Gains

If conjugal partnership property is insufficient,
the spouses are solidarily liable for the unpaid
balance from their separate properties.

Gambling losses of any kind (i.e. legal or illegal)

shall be borne by the losing spouse’s separate
property (Art. 123, FC)
If community property is insufficient, the
DBP v. Adil, G.R. No. L-4085 (1988): Loan
spouses are solidarily liable for the unpaid
contracts signed by both spouses are conjugal,
balance from their separate properties except
and they are jointly liable for payment, even if
for:
only one spouse signs a subsequent promissory
1. Debts contracted by either spouse before
note.
marriage which have not redounded to the
benefit of the family;
Ayala Investment v. Ching, G.R. No. 118305
2. Support of illegitimate children; and
(1998): The Supreme Court ruled that the
3. Liabilities incurred by either spouse arising
indirect benefits that might accrue to a husband
from crime or quasi-delict.
in signing as a surety or guarantee in an
agreement not in favor of the family but in favor
Gambling losses of any kind (i.e. legal or illegal)
of his employer corporation are not benefits that
shall be borne by the losing spouse’s separate
can be considered as giving a direct advantage
property (Art. 95, FC)
accruing to the family. Hence, the creditors
cannot go against the conjugal partnership
property in satisfying the obligation subject of
the surety agreement. A contrary view would put
in peril the conjugal partnership by allowing it to
be given gratuitously as in cases of donation of
conjugal partnership property, which is
prohibited.
The administration and enjoyment of the community/conjugal property shall belong to both
spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to
the court by the wife for a proper remedy, within 5 years from the date of contract (Art. 96, 124 FC)
De Ansaldo v. Sheriff of Manila, G.R. No. L-43257
(1937): Spouses are not co-owners of CPG
during the marriage and cannot alienate the
supposed ½ interest of each in the said
properties. The interest of the spouses in the
CPG is only inchoate or a mere expectancy and
Ownership,
does not ripen into title until it appears after the
administratio
dissolution and liquidation of the partnership
n, enjoyment,
that there are net assets.
and
disposition Disposition or encumbrance of conjugal
Either spouse may, through a will, dispose of his
property requires the following: Authority of the
or her interest in the community property. (Art.
court or written consent of the other spouse.
97, FC) However, the will should refer only to
The absence of such will render such
his or her share in the community property.
encumbrance void. (Art. 124, par. 2, FC)
Donation of one spouse without the consent of the other is not allowed. (Art. 98, 125 FC)

Exceptions:
Moderate donations to charity or on occasion of family rejoicing or distress
Jader-Manalo v. Camaisa, G.R. No. 147978 (2002): Mere awareness of a transaction is NOT consent.

Page 66 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Absolute Community of Property Conjugal Partnership of Gains

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.

Cheeseman v. IAC, G.R. No. 7483 (1991): If however, one of the spouses is an alien, the Filipino
spouse may encumber or dispose of the property w/o the consent of the former. The property is
presumed to be owned exclusively by the Filipino spouse.
Terminates upon [Art. 99, 126 FC]:
1. Death of either spouse – follow rules in Art. 103
Dissolution 2. Legal separation – follow rules in Arts. 63 and 64
of the regime 3. Annulment or judicial declaration of nullity – follow rules in Arts. 50 and 52

Judicial separation of property during marriage – follow rules in Arts. 134 to 138
De facto separation does not affect the ACP/CPG, except that:
1. Spouse who leaves the conjugal home without just cause shall not be entitled to support;
however, he/she is still required to support the other spouse and the family
Rules on de
2. If consent is necessary for transaction but is withheld or otherwise unobtainable, authorization
facto
may be obtained from the court
separation
3. Support for family will be taken from the ACP/CPG
4. If ACP/CPG is insufficient, spouses shall be solidarily liable

If it is necessary to administer or encumber separate property of spouse who left, spouse present
Effect of de may ask for judicial authority to do this.
facto
separation If ACP/CPG is not enough and one spouse has no separate property, spouse who has property is
liable for support, according to provisions on support.
Abandonment [Art. 101, 128 FC]
Present/aggrieved spouse may petition the court for:
1. Receivership
2. Judicial separation of property
3. Authority to be the sole administrator of the absolute community, subject to precautionary
conditions that the court may impose

A spouse is deemed to have abandoned the other when he or she has left the conjugal dwelling
without any intention of returning.
Rules on
Abandonmen Spouse is prima facie considered to have abandoned the other spouse and the family if he or she
t has:
1. Left for a period of 3 months
2. Failed to inform the other spouse of his or 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. 102, FC]
Liquidation Procedure [Art. 129, FC]
1. Prepare an inventory of assets of ACP and
of assets and 1. Prepare an inventory of all properties
of spouses with market values
liabilities

Page 67 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Absolute Community of Property
2. Obligations are paid with community
property, and separate obligations not
charged to ACP paid by respective assets of
spouses
If obligations exceed the assets of the ACP,
nothing is divided. Creditors can go after the
separate properties of the spouses, which are
solidarily liable for the deficiency
3. Delivery of whatever remains in their
exclusive property
4. Balance, or net remainder is divided equally
between the spouses, or in accordance to the
proportion agreed upon in the marriage
settlement, irrespective of how much each
brought into the community
5. If personal obligations of a spouse exceed
his/her separate property, creditor can go
after the share of the spouse on the net
remainder of the ACP, without prejudice to
the provisions of law on forfeitures and
delivery of presumptive legitimes
6. After covering all community obligations
and obligations of spouses, balance of
separate properties shall be delivered to
respective spouses or their heirs, and they
will also divide into two equal shares
whatever is left of the community assets,
without prejudice to the provisions of law on
forfeitures and delivery of presumptive
legitimes
7. Presumptive legitimes are delivered to
common children
8. Conjugal dwelling goes to:
a. Spouse with whom majority of
common children choose to remain
(below 7 y.o. = deemed to have chosen
the mother based on the tender years
presumption)
b. Whoever the court chooses in case of
lack of majority
Rules in case of termination of marriage by death of one of the spouses [Art. 104, FC]:
1. The community property shall be liquidated in the same proceeding for the settlement of the
estate of the deceased spouse.
2. If no such judicial settlement proceeding is instituted, surviving spouse shall liquidate the
community property either judicially or extra-judicially within one year from the death of the
deceased spouse.
Page 68 of 511
CIVIL LAW
Conjugal Partnership of Gains
2. Amounts advanced by CPG in payment of
personal debts and obligations shall be
credited to the CPG
3. Reimburse each spouse for the use of
his/her exclusive funds in the acquisition of
property or for the value of his or her
exclusive property, the ownership of which
has been vested by law in the conjugal
partnership
4. Debts and obligations of CPG shall be paid
out of the conjugal assets, otherwise both
spouses are solidarily liable with their
exclusive property
5. Remains of the exclusive properties shall be
delivered to respective owner-spouses.
6. Indemnification for loss/deterioration of
movables belonging to either spouse, even
due to fortuitous event, used for the benefit
of the family
7. Net remainder of CPG shall constitute the
profits which shall be divided equally
between husband and wife except when:
a. A different proportion or division was
agreed upon in the marriage settlements
b. There has been a voluntary waiver or
forfeiture of such share as provided in
the FC
8. Presumptive legitimes are delivered to
common children
9. Conjugal dwelling goes to:
a. Spouse with whom majority of
common children choose to remain
(below 7 y.o. = deemed to have chosen
the mother based on the tender years
presumption)
b. Whoever the court chooses in case of
lack of majority
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Absolute Community of Property Conjugal Partnership of Gains

a. If no liquidation is made within the period, any disposition or encumbrance involving
community property of the terminated marriage shall be void.
b. Non-compliance with liquidation procedures would mean that a subsequently contracted
marriage will follow a regime of complete separation of property.
Procedure for liquidation of properties of two marriages [Art. 104, FC]:
Determine the capital, fruits, and income of each community upon such proof as may be considered
according to the rules of evidence.
In case of doubt as to which community the existing properties belong, they shall be divided between
two communities in proportion to the capital and duration of each.

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.

If the spouses did not execute a written agreement regarding their property regime prior to the marriage, they can
no longer change it after the marriage ceremony has taken place unless they have secured judicial approval.

Sufficient Causes and Grounds for Return to Previous Regime

Sufficient Causes for Judicial Separation of
Property [Art. 135, FC]
Spouse of petitioner has been sentenced to a penalty
which carries with it the penalty of civil interdiction
Spouse of petitioner is judicially declared an absentee
Loss of parental authority of the spouse of petitioner
has been decreed by the court
Spouse of petitioner has abandoned the latter or failed
to comply with his or her obligations to the family
The spouse granted the power of administration in the
marriage settlements has abused that power
At the time of the petition, the spouses have been
separated in fact for at least 1 year and reconciliation is
highly improbable.
Grounds for Return to Previous Regime
[Art. 141, FC]
Termination of the civil interdiction
Reappearance of absentee spouse
Restoration of parental authority to the spouse previously
deprived of it
When the spouse who left the conjugal home without legal
separation resumes common life with the other
When the court, being satisfied that the spouse granted the
power of administration in will not again abuse that power,
authorizes the resumption of said administration
Reconciliation and resumption of common life of the
spouses who had been separated in fact for at least 1 year
When after voluntary dissolution of the ACP or CPG has
been judicially decreed upon the joint petition of the
spouses, they agree to the revival of the former property
regime. No voluntary separation of property may
thereafter be granted.

Page 69 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

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
Present or future property or both
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
May be total or partial
If partial, property not considered separate is presumed to pertain to the ACP
Family expenses: Both spouses are liable in proportion to their income; if insufficient, based on
Liabilities the current value of their separate properties
Creditors for family expenses: Spouses solidarily liable
Spouses may own, dispose, possess, and administer separate estates without the consent of the
other

Ownership, Administration of exclusive properties may be transferred between spouses when:

administration, One spouse becomes the other spouse’s guardian
enjoyment, and 1. One spouse is judicially declared an absentee
disposition 2. One spouse is given the penalty of civil interdiction
3. One spouse becomes a fugitive

Conveyance between the spouses is allowed under Art. 1490, NCC.

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.

Maquilan v. Maquilan, G.R. No. 155409 (2007): A compromise agreement with judicial recognition is valid,
pending petition for declaration of nullity of marriage.

Page 70 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Property Regime of Unions without Marriage (Arts. 147-148)

Art. 147, FC Art. 148, FC
Man and woman living together as husband
and wife, with capacity to marry (Art.5,
without any legal impediment) Man and woman living together as husband and
1. at least 18 years old wife, NOT capacitated to marry
2. not violative of Art. 37 (incestuous void 1. Under 18 years old
marriage) 2. Adulterous relationship
Applicability
3. not violative of Art. 38 (void marriage 3. Bigamous/polygamous marriage
by reason of public policy) 4. Incestuous marriages under Art. 37
4. not bigamous 5. Void marriages by reason of public policy
under Art. 38
Other void marriages due to absence of
formal requisite
Salaries and
Owned in equal shares Separately owned by parties
wages
Properties
acquired through Remains exclusive, provided there is proof Remains exclusive
exclusive funds
Properties
acquired by both Owned in common in proportion to respective
Governed by rules on co-ownership
through work and contribution
industry
Owned in equal shares since it is presumed
to have been acquired through joint efforts

If one party did not participate in

acquisition, presumed to have contributed
No presumption of joint acquisition. When there
Properties jointly, if the former’s effort consisted in the
is evidence of joint acquisition but none as to the
acquired while care and maintenance of family and
extent of actual contribution, there is a
living together household
presumption of equal sharing.
N.B. Neither party can encumber or dispose
by acts inter vivos his share in co-owned
property without the consent of the other
party until cohabitation is terminated.

Where only one party to a void marriage is
in good faith, share of party in bad faith is
forfeited:
• In favor of their common children
• In case of default of or waiver by any or
Forfeiture all of the common children or their
descendants, each vacant share shall
belong to the respective surviving
descendants
• In the absence of such descendants, such
share belongs to the innocent party
If one party is validly married to another his/her
share in the co-owned properties will accrue to
the ACP/CPG of his/her existing valid marriage.
If the party who acted in bad faith is not validly
married to another, his/her share shall be
forfeited in the same manner as that provided in
Art 147.
The same rules on forfeiture shall apply if both
parties are in bad faith.

Page 71 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
F. Family Relations
1. The Family as an Institution
Art. 149, FC. The family being the foundation of the
nation is a basic social institution which public policy
cherishes and protects. Consequently, family relations
are governed by law and no custom practice or
agreement destructive of the family shall be
recognized or given effect.
Art. 150, FC. Family relations include those:
a. Between husband and wife
b. Between parents and children
c. Among other ascendants and descendants
d. Among brothers and sisters, full or half blood
The family is an institution that is governed by law.
The internal aspect of the family is sacred and
inaccessible to law because law must respect the
freedom of action of man.
2. Effects of Family
Relationship on Legal
Disputes
Art. 151, FC. No suit between members of the same
family shall prosper unless it should appear from the
verified complaint or petition that earnest efforts
toward a compromise have been made but that the
same have failed. If it is shown that no such efforts
were in fact made the case must be dismissed.
Note: In case of doubt, all presumptions favor the
solidarity of the family. [Art. 220, CC]
General Rule: No suit between members of the same
family shall prosper. [Art. 151, FC]
Exception: Suits between members of the same family
shall prosper only if it shall appear in a verified
complaint or petition that:
a. Earnest efforts towards a compromise have been
made;
b. Such efforts have failed; and
c. Such earnest efforts and the fact of failure must
be alleged.
The case will be dismissed if it is shown that no such
efforts were made. [Art. 151, FC]
Page 72 of 511
CIVIL LAW
Exception to the Exception:
A verified complaint or petition is not needed for
matters not subject to compromise.
Under Art 2035, CC the following cannot be
subject of compromise:
a. Civil status of persons,
b. Validity of marriage or a legal separation
c. Any ground for legal separation,
d. Future support (as it is presumed to be needed
for the survival of the one receiving support),
e. Jurisdiction of courts,
f. Future legitime.
Art. 151, FC only applies when the case is exclusively
among family members. Whenever a stranger is
included as a party to the case, Art. 151 does not
apply. [Hontiveros v. RTC, G.R. No. 125465 (1999)]
Suits between brothers-in-law can prosper even
without a verified complaint or petition. [Guerrero v.
RTC, G.R. No 109068 (1994)]
The enumeration of brothers and sisters as members
of the same family under does not comprehend
sisters-in-law and brothers-in-law. [Gayon v. Gayon,
G.R. No. L-28394 (1970)].
3. Family Relations and
Criminal Law
Murder or homicide is qualified to parricide if the
deceased is:
a. The father, mother, or child (legitimate or
illegitimate)
b. Legitimate other ascendant or descendant
c. Legitimate spouse
Of the accused [Art. 246, RPC]
Family relations leads exemptions from criminal
liability for theft, estafa, or malicious mischief. Only
civil liability is incurred if the offender is:
a. The spouse, ascendant, descendant, or relative by
affinity in the same line of the offended,
b. The widowed spouse with respect to the property
the deceased spouse before the same has passed
into the possession of another
c. Brother, sister, or brothers-in-law and sisters-in-
law, if living together [Art. 332, RPC]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

4. The Family Home rendered service or furnished material for the

construction of the building. [Art. 155, FC]
What Constitutes the Family Home
Beneficiaries of the Family Home
The family home is the dwelling house where family
a. The husband and wife, or an unmarried person
resides and the land on which it is sustained [Art. 152]
who is the head of a family; and
b. Their parents, ascendants, descendants, brothers,
Limitations on the Family Home
and sisters whether relationship be legitimate or
The family home must be part of the properties of the
illegitimate, who are living in the family home and
absolute community or the conjugal partnership, or
who depend on the head of the family for
of the exclusive properties of either spouse with the
support. [Art. 154, FC.]
other’s consent. It may also be constituted by an
unmarried head of a family in his or her own property.
Requisites to be a Beneficiary of the Family
[Art. 156, FC]
Home:
a. The relationship is within those enumerated in
The actual value of the family home shall not exceed,
Art. 150, FC.
at the time of its constitution, the amount of P300,000
b. They live in the family home
in urban areas, and P200,000 in rural areas, or such
c. They are dependent for legal support on the head
amounts as may hereafter be fixed by law. [Art. 157,
of the family
FC]
Occupancy of a family home must be “actual” in
A person may constitute, or be the beneficiary of, only
order for one to be a beneficiary. Actual occupancy,
one home. [Art. 161, FC]
need not be by the owner of the house specifically.
Rather, the property may be occupied by the
Who May Constitute the Family Home
“beneficiaries” enumerated in Art. 154, FC, which
The family home may be constituted
may include the in-laws where the family home is
a. Jointly by the husband and wife; or
constituted jointly by the husband and wife. But the
b. An unmarried head of the family [Art. 152]
law definitely excludes maids and overseers. They are
not the beneficiaries contemplated by the Code.
Note: A person may constitute and be the beneficiary
[Patricio v. Dario, G.R. No. 170829 (2006)]
of only one family home [Art. 161]
The term "descendants" contemplates all descendants
When Deemed Instituted
of the person or persons who constituted the family
The family home is deemed constituted on a house
home without distinction; hence, it must necessarily
and lot from the time it is occupied as a family
include the grandchildren and great grandchildren of
residence. [Art. 153, FC]
the spouses who constitute a family home. However
descendants cannot be considered beneficiaries if
Exemption from Forced Sale, Execution,
they are supported by their own parents and not by
Attachment
the ascendants who constituted the family home.
General Rule: The family home is exempt from the
[Patricio v. Dario, G.R. No. 170829 (2006)]
following from the time of its constitution and so long
as any of its beneficiaries actually resides therein:
Requirements for the sale, alienation, donation,
a. Execution;
assignment, or encumbrance of the family home
b. Forced sale;
a. The written consent of the person constituting it;
c. Attachment [Art. 153]
b. That of the spouse of the person constituting it;
and
Exceptions in the exemption of the family home from execution:
c. That of majority of the beneficiaries of legal age
a. Nonpayment of taxes.
[Art. 158, FC]
b. Debts incurred prior to the constitution of the
family home.
c. Debts secured by mortgages on the premises
before or after such constitution.
d. Debts due to laborers, mechanics, architects,
builders, materialmen and others who have

Page 73 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
When Terminated
The family home shall continue despite the death of
one or both of the spouses or of the unmarried head
of the family:
a. for a period of ten years; or
b. for as long as there is a minor beneficiary
And the heirs cannot partition the same unless the
court finds compelling reasons therefor. The rule shall
apply regardless of whoever owns the property or
constituted the family home [Art. 159, FC.]
Article 159 imposes the proscription against the
immediate partition of the family home
regardless of its ownership. This signifies that even
if the family home has passed by succession to the co-
ownership of the heirs, or has been willed to any one
of them, this fact alone cannot transform the family
home into an ordinary property, much less dispel the
protection cast upon it by the law. The rights of the
individual co-owner or owner of the family home
cannot subjugate the rights granted under Article 159
to the beneficiaries of the family home. [Arriola v.
Arriola, G.R. No. 177703 (2008)]
When the Family Home may be Sold
The family home may be sold alienated, donated,
assigned, or encumbered by the owner or owners
thereof with the written consent of the person
constituting the same the latter’s spouse and a
majority of the beneficiaries of legal age. In case
of conflict the court shall decide. [Art. 158, FC.]
Re: Claims Not Among Those in Art. 155
When a creditor whose claim is not among those
mentioned in Art. 155, obtains a judgment in his
favor, and he has reasonable grounds to believe that
the family home is actually worth more than the
maximum amount fixed in Art. 157, he may apply to
the court which rendered the judgment for an order
directing the sale of the property under execution.
[Art. 160, par. 1, FC.]
To warrant the execution of sale of the family home
under Art 160, the following facts need to be
established:
a. there was an increase in actual value,
b. the increase resulted from voluntary
improvements,
c. the increase in actual value exceeded the
maximum limit allowed by Art 157 [Eulogio vs.
Bell, G.R. No. 186322 (2015)]
Page 74 of 511
CIVIL LAW
The actual value of the family home shall not
exceed at the time of its constitution the amount
of three hundred thousand pesos in urban areas
and two hundred thousand pesos in rural areas or
such amounts as may hereafter be fixed by law.
In any event, if the value of the currency changes after the
adoption of this Code, the value most favorable for the
constitution of a family home shall be the basis of
evaluation.
Urban areas include chartered cities and
municipalities. All others are deemed to be rural areas.
[Art. 157, FC.]
Procedure to avail of right under Art. 160
a. The creditor must file a motion in the court
proceeding where he obtained a favorable
decision for a writ of execution against the family
home.
b. There will be a hearing on the motion where the
creditor must prove that the actual value of the
family home exceeds the maximum amount fixed
by the FC either at the time of its constitution or
as a result of improvements introduced
thereafter.
c. If the creditor proves that the actual value
exceeds the maximum amount the court will
order its sale in execution.
d. If the family home is sold for more than the value
allowed, the proceeds shall be applied as follows:
1. First, the obligation enumerated in Article
157 must be paid
2. Then the judgment in favor of the creditor
will be paid, plus all the costs of execution
3. The excess, if any, shall be delivered to the
judgment debtor
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)]
Note: The provisions of this Chapter shall also govern
existing family residences insofar as said provisions
are applicable. [Art. 162, FC.]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

G.Paternity and Filiation

The filiation of children may be by nature or by adoption. Natural filiation may be legitimate or illegitimate.
[Art. 163, FC.]

Kinds of Filiation [Arts. 163, 164, 165]:

1. Natural
a. Legitimate
b. Illegitimate
2. Legal Fiction (Adoption)

Status Children Who Have this Status Rights Effects on Succession

a. Conceived OR born during
the valid marriage of the
parents [Art. 164, FC]
b. Conceived through artificial
insemination [Art. 164, FC]
c. Children of a subsequent
a. Bear the surnames of
marriage (after declaration of
the father and the
presumptive death)
mother
conceived prior to its
b. Receive support from Legitimate children are
termination [Art. 43, FC]
parents, ascendants, and entitled to 1/2 of the
d. Conceived or born before
Legitimate brothers/sisters in estate of the parent
the final judgement of
proper cases divided amongst
annulment under Art. 45 or
c. Entitled to legitimate themselves [Art. 888, CC]
absolute nullity under Art. 36
and other successional
[Art. 54, FC]
rights [Art. 174, FC]
e. Conceived or born of the
d. To claim legitimacy [Art.
subsequent marriage under
173, FC]
Art. 53 [Art. 54, FC]
f. Legitimated children* [Art.
177, FC]
g. Adopted Children** [RA
8552]
a. Bear the surname of the
mother
b. Bear the surname of the
father if filiation has
been expressly
recognized by the father
Each illegitimate child is
through: record of birth,
Conceived AND born outside a entitled to an amount 1/2
Illegitimate public document, or
valid marriage [Art. 165, FC] the share of a legitimate
private handwritten
child [Art. 176, FC]
instrument
c. Receive support
d. Entitled to successional
rights [Art 176, FC]
e. To establish illegitimate
filiation [Art 175, FC]

Page 75 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

Status Children Who Have this Status Rights Effects on Succession

Conceived AND born outside a
valid marriage provided that:
a. At the time of conception:
the parents were NOT
disqualified to marry each
other (unless the Same as Legitimate Child
Legitimated* Same as Legitimate Child
impediment was minority of [Art. 179, FC]
either or both of them) [Art.
177, FC] AND
b. The parents subsequently
enter into a valid marriage
[Art. 178, FC]
From Domestic
Adoption Act:
a. Same as Legitimate
Child [Sec. 18, RA
8552] BUT the
adopted child cannot
From the Domestic
inherit by
Adoption Act:
Those adopted through representation
a. Same as Legitimate
Domestic [RA 8552] or because the
Adopted** Child [Sec. 17, RA 8552]
Intercountry Adoption [RA relationship is only
b. 2. Right to rescind
8043] between adopter and
adoption under specific
adoptee [Sayson v.
cases [Sec. 19, RA 8552]
CA, G.R. No. 89224-
25 (1992)]
b. May also inherit from
biological parents if
they left a will [Sec. 18,
RA 8552]

1. Legitimate Children
NATURAL/BIOLOGICAL
A child conceived or born during a valid marriage is
WHO ARE LEGITIMATE CHILDREN:
presumed to belong to that marriage, regardless of the
a. Children conceived OR born during the valid
existence of extramarital relationships. [Liyao v. Liyao,
marriage of the parents [Art. 164, FC]
G.R. No. 138969 (2002)]
b. Children conceived through artificial
insemination [Art. 164, FC]
ARTIFICIAL INSEMINATION [Art. 164, FC]
c. Children of a subsequent marriage conceived
Requisites to be considered legitimate:
prior to its termination [Art. 43, FC]
a. Artificial insemination made on wife
This refers to those subsequent marriages which
b. Sperm comes from any of the following:
were terminated after the reappearance of the
1. Husband
spouse presumed dead
2. Third Person Donor
d. Children conceived or born before the
3. Husband and third person donor
judgement of annulment under Art. 45 or
c. In case of donor sperm, husband and wife must
absolute nullity under Art. 36 has become final
authorize/ratify insemination in a written
and executory [Art. 54, FC]
instrument
e. Children conceived or born of the subsequent
1. Executed & signed by husband and wife
marriage under Art. 53 [Art. 54, FC]
before the birth of the child.
f. Legitimated children [Art. 177, FC]
2. Recorded in the civil registry together with
g. Adopted Children [RA 8552]
the birth certificate of the child.

Page 76 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Dual consent is required whether the semen used
comes from the husband or a third person donor
[Tolentino]
Common children born before the annulment are
legitimate, and therefore entitled to support from
each of the spouses. [De Castro v. Assidao-De Castro,
G.R. No. 160172 (2008)]
IMPUGNING LEGITIMACY
Legitimacy of a Child may be Impugned only on
the Following Grounds: [Art. 166, FC]
a. Physical impossibility for the husband to have
sexual intercourse with his wife within the first
120 days of the 300 days which immediately
preceded the child's birth due to:
1. Physical incapacity of the husband to have
sexual intercourse with his wife
2. Husband and wife were living separately as
to make sexual intercourse impossible
3. Serious illness of the husband absolutely
preventing sexual intercourse
b. Other biological or scientific reasons, except
Artificial Insemination
c. And in case of Artificial Insemination, the
written consent of either parent was vitiated
through fraud, violence, mistake, intimidation, or
undue influence
Mere proximate separation between the spouses is
not sufficient physical separation to constitute as
ground for impugning legitimacy. [Macadangdang v.
CA, G.R. No. L-49542 (1980)]
Serious illness of the husband which absolutely
prevented him from having sexual intercourse with
his wife, like if the husband was already in comatose
or in a vegetative state, or sick with syphilis in the
tertiary stage so that copulation was not possible. But
tuberculosis, even in its most crucial stage, does not
preclude copulation between the sick husband and his
wife. [Andal v. Macaraig, G.R. No. 2474 (1951)]
Blood-type matching is an acceptable means of
impugning legitimacy, covered by Art. 166(2), under
"biological or other scientific reasons." But this is only
conclusive of the fact of non-paternity. [Jao v. CA,
G.R. No. L-49162 (1987)]
Only the man (and his heirs in certain situations) can
impugn the legitimacy of the child. [Benitez-Badua v.
CA, G.R. No. 105625 (1994)]
Page 77 of 511
CIVIL LAW
Legitimacy with Regard to the Mother:
a. Child considered legitimate although [Art. 167,
FC]:
1. Mother may have declared against its
legitimacy
2. Mother may have been sentenced as an
adulteress (also applies to wife who was
raped)
b. If the marriage is terminated and the mother
contracted another marriage within 300 days after
the termination of the former marriage, the
following rules shall govern in the absence of
proof to the contrary [Art 168]:
1. If born before 180 days after the solemnization
of the subsequent marriage – child is
considered conceived during the former
marriage, provided it be born within 300
days after termination of the former
marriage
2. If born after 180 days following the
celebration of the subsequent marriage –
child is considered conceived during such
marriage, even if it be born within 300 days
after the termination of the former marriage
Day of Birth of the Child Status of the Child
Relative to the 2 Marriages [Art 168, FC]
1st marriage: within 300 days
of termination
Legitimate to the 1st
AND
Marriage
2nd marriage: before 180
days after solemnization
1st marriage: within 300 days
of termination
Legitimate to 2nd
AND
Marriage
2nd marriage: after 180 days
following solemnization
Note: The legitimacy or illegitimacy of a child born
after 300 days following the termination of the
marriage – burden of proof upon whoever alleges the
status. [Art. 169]
If nobody asserts the legitimacy or illegitimacy of the
child described in Art. 169, the child should be
considered illegitimate unless legitimacy is proved.
Legitimacy cannot be presumed here since the birth
was beyond the 300-day period of gestation. While it
goes against the policy of law to lean in favor of
legitimacy, this interpretation is better than the
anomalous situation created by Art. 169, which is a
child without a status. [Tolentino]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Action for Impugning Legitimacy [Arts. 170 and
171, FC.]
May be brought within 1, 2, or 3 years from the
knowledge of the birth, or the knowledge of
registration of birth.
a. Within 1 year - if husband or any heirs reside in
the same city or municipality where the child was
born or his birth was recorded.
b. Within 2 years - if the husband or all heirs live
in the Philippines but do not reside in the same
city or municipality where the child's birth took
place or was recorded
c. Within 3 years - if the husband or all heirs live
outside the Philippines when the child's birth
took place or was recorded in the Philippines
If the birth of the child has been concealed or was
unknown to the husband, the above periods shall be
counted:
a. From the discovery or knowledge of the birth of
the child, or
b. From the discovery or knowledge of its
registration, whichever is earlier.
General Rule: Only the husband can impugn the
legitimacy of a child. If he does not bring an action
within the prescribed periods, he cannot file such
action anymore thereafter, and this is also true with
his heirs.
Exception: That the heirs of the husband may file the
action or continue the same within the periods
prescribed in Art. 170 [Art. 171]:
a. If the husband died before the expiration of the
period fixed for bringing his action
b. If he should die after the filing of the complaint
without having desisted therefrom
c. If the child was born after the death of the
husband.
Example:
If the husband was living in Dubai and the child was
born in Quezon City, and he had older children (heirs)
also living in Quezon City, the period for impugning
legitimacy would be within 1 year from knowledge of
birth or registration. Although the husband resided
abroad, he still had heirs residing in the same city.
Legitimacy can only be attacked directly. [Sayson v.
CA, G.R. No. 89224-25 (1992)]
2. Proof of Filiation
Page 78 of 511
CIVIL LAW
Legitimate children may establish their filiation
by any of the following [Art. 172, FC]:
a. Primary Evidence
1. Their record of birth appearing in the civil
registry or a final judgement.
2. An admission of his filiation by his parent in
a public document or a private handwritten
instrument and signed by said parent
b. Secondary Evidence
1. Proof of open and continuous possession of
status as legitimate child
2. Any other means stated by the rules of court
or special laws
Note: Only in the absence of primary evidence can
secondary evidence be admitted
Action for Claiming Filiation (Legitimate
Children) [Art. 173, FC]:
a. The child can bring the action during his or her
lifetime
b. If the child dies during minority or in a state of
insanity, such action shall be transmitted to his
heirs, who shall have a period of five years within
which to institute the action.
c. The action commenced by the child shall survive
notwithstanding the death of either or both of
the parties
Rights of Legitimate Children [Art. 174, FC]
a. To bear the Surnames of the father and the
mother, in conformity with the provisions of the
CC on surnames
b. To receive support from their parents, their
ascendants, and in proper cases, their brothers
and sisters, in conformity with the provisions of
the Code on Support
c. To be entitled to the legitimate and other
Successional rights granted to them by the CC
3. Illegitimate Children
Children conceived and born outside a valid marriage
are illegitimate, unless otherwise provided in this Code.
[Art. 165.]
Who are illegitimate children
General Rule: Those conceived and born outside of a
valid marriage. [Art. 165]
Exceptions:
a. Children of marriages void under Art. 36
(psychological incapacity); and
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
b. Under Art. 53 (subsequent marriages which did
not comply with Art. 52). [SEMPIO-DY]
Illegitimate children may establish their illegitimate
filiation in the same way and on the same evidence as
legitimate children.
Action for Claiming Filiation [Art. 175, FC]
a. For actions based on primary evidence, the same
periods stated in Art. 173 apply.
b. For actions based on secondary evidence, the
action may only be brought during the lifetime of
the alleged parent.
Primary Evidence
Baptismal certificates are given probative value only
for births before 1930. Birth certificates must be
signed by the parents and sworn for it to be admitted
as evidence. [Mendoza v. Mella, G.R. No. L-18752
(1966)]
Signature of the father on the birth certificate is
considered as an acknowledgement of paternity and
mere presentation of a duly authenticated copy of
such certificate will successfully establish filiation.
[Eceta v. Eceta, G.R. 157037 (2004)]
Unsigned birth certificates are not evidence of
recognized filiation. [Baluyut v. Baluyut, G.R. No. L-
33659 (1990)]
The due recognition of an illegitimate child in a record
of birth, a will, a statement before a court of record,
or in any authentic writing, is in itself a consummated
act of acknowledgement of the child, and no further
court action is required. [De Jesus v. Estate of Decedent
Juan Gamboa Dizon, G.R. No. 142877 (2001)]
Secondary Evidence
Rule 130, Sec. 40 is limited to objects commonly
known as family possessions reflective of a family's
reputation or tradition regarding pedigree like
inscriptions on tombstones, monuments, or coffin
plates. [Jison v. CA, G.R. No. 124853 (1998)]
"Su padre [Your father]" ending in a letter is only
proof of paternal solicitude and not of actual
paternity. Signature on a report card under the entry
of "Parent/Guardian" is likewise inconclusive of
open admission. [Heirs of Rodolfo Bañas v. Heirs of
Bibiano Bañas, G.R. No. L-25715 (1985)]
Mere possession of status as an illegitimate child does
not make an illegitimate child recognized but is only a
Page 79 of 511
CIVIL LAW
ground for bringing an action to compel judicial
recognition by the assumed parent. [Gono-Javier vs.
CA, G.R. No. 111994 (1994)]
To prove open and continuous possession of the
status of an illegitimate child, there must be evidence
of the manifestation of the permanent intention of
the supposed father to consider the child as his, by
continuous and clear manifestations of parental
affection and care, which cannot be attributed to pure
charity. [Perla v. Baring, G.R. No. 172471 (2012)]
Meanwhile, the lack of participation of the supposed
father in the preparation of a baptismal certificate
renders this document incompetent to prove
paternity. Baptismal certificates are per
se inadmissible in evidence as proof of filiation and
they cannot be admitted indirectly as circumstantial
evidence to prove the same [Perla v. Baring and Perla
(2012)]
By "open and continuous possession of the status of
a legitimate child" is meant the enjoyment by the child
of the position and privileges usually attached to the
status of a legitimate child, like bearing the paternal
surname, treatment by the parents and family of the
child as legitimate, constant attendance to the child's
support and education, and giving the child the
reputation of being a child of his parents. [De Jesus v.
Syquia, G.R. No. L-39110 (1933)]
Other Evidence
DNA evidence can be used as proof of paternity.
[Agustin v. CA, G.R. No. 162571 (2005)]
DNA evidence can still be used even after the death
of the parent. [Estate of Rogelio Ong v. Diaz, G.R. No.
171713 (2007)]
Marriage certificates cannot be used as proof of
filiation. [Lim v. CA, G.R. Ni. L-39381 (1975)]
There are four significant procedural aspects of a
traditional paternity action that parties have to face:
a prima facie case, affirmative defenses, presumption
of legitimacy, and physical resemblance between the
putative father and the child. A prima facie case exists
if a woman declares — supported by corroborative
proof — that she had sexual relations with the
putative father; at this point, the burden of evidence
shifts to the putative father. Further, the two
affirmative defenses available to the putative father
are: (1) incapability of sexual relations with the mother
due to either physical absence or impotency, or (2)
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
that the mother had sexual relations with other men
at the time of conception. [Gotardo v. Buling, G.R. No.
165166 (2012)]
Illegitimate children shall use the surname and shall
be under the parental authority of their mother, and
shall be entitled to support in conformity with this
Code. The legitime of each illegitimate child shall
consist of one-half of the legitime of a legitimate
child. Except for this modification, all other
provisions in the CC governing successional rights
shall remain in force. [Art. 176, FC.]
Rights of Illegitimate Children:
a. Use the Surname and be under the parental
authority of the mother
b. However, may use the surname of father if
1. Their filiation has been expressly recognized
by the father through the record of birth
appearing in the civil register; or
2. There is an admission in a public document
or private handwritten instrument made by
the father.
3. Provided, the father has the right to institute
an action before the regular courts to prove
non-filiation during his lifetime [RA 9255]
4. The use of the word “may” in Art. 176
readily shows that an acknowledged
illegitimate child is under no compulsion to
use the surname of his illegitimate father.
The word “may” is permissive and operates
to confer discretion upon the illegitimate
children. [Grande v. Antonio, G.R. No. 206248
(2014)]
c. Shall be entitled to Support in conformity with
the Family Code
d. Legitime shall consist of one-half of the legitime
of a legitimate child.
4. Legitimated Children
Children conceived and born outside of wedlock of
parents who, at the time of conception of the former,
were not disqualified by any impediment to marry
each other, or were so disqualified only because either
or both of them were below eighteen (18) years of age,
may be legitimated. [Art. 177, FC. (as amended by RA
9858)]
General Rule: "Legitimated" children are illegitimate
children who because of the subsequent marriage of
their parents are, by legal fiction, considered
legitimate.
Page 80 of 511
CIVIL LAW
To be Capable of Legitimation:
a. The child must have been conceived and born
outside of wedlock; and
b. The parents, at the time of the child's conception,
were not disqualified by any impediment to marry
each other, or disqualified only because either or
both of them were below 18 years old. [Art. 177,
as amended by RA 9858, FC.]
Procedure and Effects:
a. Legitimation shall take place by a subsequent
valid marriage between the parents. The
annulment of a voidable marriage shall not affect
the legitimation. [Art. 178]
b. Effects of legitimation shall retroact to the time
of the child’s birth [Art. 180]
c. Legitimation of children who died before the
celebration of the marriage shall benefit their
descendants [Art. 181]
Grounds for Impugning Legitimation:
a. The subsequent marriage of the child's parents is
void.
b. Those born under these circumstances:
1. There was an impediment to the marriage at
the time of conception AND
2. The subsequent marriage of the parents is
valid
c. The child is not really the child of the alleged
parents. [Sempio-Dy]
Rights:
The same as those of legitimate children [Art. 179,
FC]
Impugning legitimation [Art. 182, FC]
a. May be made only by those who are prejudiced
in their rights
b. Within five years from the time their cause of
action accrues
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

H. Adoption
Adoption is a juridical act, which creates between two persons a relationship similar to that which results from
legitimate paternity and filiation.

It requires a proceeding in rem, and may only be proven by a judicial decree issued by a court of competent
jurisdiction, not by open and continuous cohabitation

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

Who should apply
Effect on parent-child
relationship
Except:
1. One spouse seeks to adopt the
legitimate child of the other
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 a Creates a relationship only between
legitimate child not only in relation to the child and the adopting parents
the legitimizing parents but also to [Sayson v. CA, G.R. No. 89224-25
other relatives (1992)]

1. RA 8552: Domestic Adoption f. In a position to support and care for his/her

children in keeping with the means of the
Law family
g. Has undergone pre-adoption services
a. Who can adopt [Sec. 7]
2. Aliens [Sec. 7b]
1. Filipino Citizens [Sec. 7a] Same for Filipinos provided further that:
a. Of legal age a. His/her country has diplomatic relations
b. With full civil capacity and legal rights with the Philippines
c. Of good moral character and has not been b. Has been living in the Philippines for 3
convicted of any crime involving moral continuous years prior to the filing of
turpitude application and maintains such residence
d. Emotionally and psychologically capable of until the decree is entered
caring for children
e. At least sixteen (16) years older than adoptee, Note: absences not exceeding 60 days per 1
except when adopter is biological parent of year for professional, business, or emergency
the adoptee or is the spouse of the adoptee’s reasons are allowed
parent
c. Has been certified by his/her diplomatic or
consular office or any appropriate

Page 81 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
government agency that he/she has the legal
capacity to adopt in his/her country
d. His/her government allows the adoptee to
enter his/her country as his/her adoptee and
reside there permanently as an adopted child
e. Has submitted all the necessary clearances
and such certifications as may be required
Requirements of residency and certification
of legal capacity may be waived under the
following circumstances:
a. Adopter is a former Filipino Citizen who
seeks to adopt a relative within the 4th degree
of consanguinity or affinity
b. Adopter seeks to adopt the legitimate child
of his/her Filipino spouse
c. Adopter is married to a Filipino Citizen and
seeks to adopt jointly with his/her spouse a
relative within the 4th degree of
consanguinity or affinity of the Filipino
spouse
Note: Requirements may not be waived for
an alien married to a former Filipino
3. Guardians [Sec 7c.]:
With respect to their wards, after the termination
of the guardianship and clearance of his/her
accountabilities.
General Rule: Husband and wife must jointly
adopt
Exception [Sec. 7]:
a. One spouse seeks to adopt the legitimate
child of the other
b. One spouse seeks to adopt his own
illegitimate child, provided that the other
spouse has signified their consent thereto
c. Spouses are legally separated from each
other
b. Who can be Adopted [Sec. 8]
1. Minor (below 18) who has been administratively
or judicially declared available for adoption
2. Legitimate son/daughter of one spouse by
another
3. Illegitimate son/daughter by a qualified adopter
to improve the child’s status to that of legitimacy
4. A person of legal age if, prior to the adoption,
said person has been consistently considered and
treated by the adopter(s) as his/her child since
minority
Page 82 of 511
CIVIL LAW
5. A child whose previous adoption has been
rescinded
6. A child whose biological or adoptive parent(s)
has died, provided that no proceedings shall be
initiated within 6 months from the time of death
of said parent(s)
Exceptions to the Requirement of a Certification
that the Child is Available for Adoption [Sec. 4]:
1. Adoption of an illegitimate child by his/her
biological parent;
2. Adoption of a child by his/her stepparent;
3. Adoption by a relative within the 4th civil degree
by consanguinity or affinity
Persons whose written consent is necessary for
adoption [Sec. 9]
1. The prospective adoptee if 10 years or older
2. The prospective adoptee’s biological parents,
legal guardian or the government instrumentality
or institution that has custody of the child
3. The prospective adopters’ legitimate and adopted
children who are 10 years or older
4. The prospective adopters’ illegitimate children, if
any, who are 10 years or older and living with
them
5. The spouse, if any, of the person adopting or to
be adopted.
Note: A decree of adoption shall be effective as of the
date the original petition was filed. It also applies in
case the petitioner dies before the issuance of the
decree of adoption to protect the interest of the
adoptee. [Sec. 13]
c. Foundlings
Foundling shall refer to a deserted or abandoned
infant or a child found, with parents, guardian, or
relatives being unknown, or a child committed in an
orphanage or charitable or similar institution with
unknown facts of birth and parentage and registered
in the Civil Register as a foundling. [Sec. 3 (h), Rules
And Regulations To Implement The Domestic Adoption Act
Of 1998]
When is a child considered a foundling
It shall be the duty of the DSWD or the child-placing
or child-caring agency which has custody of the child
to exert all efforts to locate his/her unknown
biological parent(s). If such efforts fail, the child
shall be registered as a foundling and subsequently
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

be the subject of legal proceedings where he/she shall
be declared abandoned. [Sec. 5, RA 8552]
If efforts to locate the child's parent/s fail, the child
shall be registered as a foundling and within three (3)
months from the time he/she is found, be the subject
of legal proceedings where he/she shall be declared
abandoned. [Sec. 5, Rules And Regulations To Implement
The Domestic Adoption Act Of 1998]
Domestic laws on adoption also support the principle
that foundlings are Filipinos. These laws do not
provide that adoption confers citizenship upon the
adoptee. Rather, the adoptee must be a Filipino in the
first place to be adopted. The Inter-Country
Adoption Act (R.A. No. 8043), the Domestic
Adoption Act (R.A. No. 8552) and the Court's A.M.
No. 02-6-02-SC or the "Rule on Adoption," all
expressly refer to "Filipino children" and include
foundlings as among Filipino children who may be
adopted. [Poe-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
Posting of the petition, then recommendation by the
Regional Director of the DSWD (5 days each)
↓
Issuance of certification by DSWD Secretary
declaring the child legally available for adoption
within 3 months following involuntary commitment
3. Required supporting documents for a
petition for the declaration of involuntary
commitment:
a. Social Case Study Report by DSWD / LGU
/ institution charged with child’s custody
b. Proof of efforts to locate the child’s
parents/known relatives
• Written certification that a
local/national radio/TV case was aired
on 3 different occasions
• Publication in 1 newspaper of general
circulation
• Police report / barangay certification of
due diligence
• Returned registered mail to last known
address of parents
c. Birth certificate, if available
d. Recent photo and photo upon abandonment
of child

Counseling on their options other than adoption

↓
Explaining to them the implications of losing their
parental authority over the child
↓
Continuing services shall be provided after
relinquishment to cope with feelings of loss, etc. and
other services for the reintegration to the community
of the biological parent(s)
↓
Biological parent(s) who decided to put the child for
adoption shall sign the Deed of Voluntary
Commitment (DVC), which shall be rescissible
within 3 months from signing of the same

2. Involuntary Commitment of abandoned or

neglected child

Filing of a petition at Regional DSWD in the form

of an affidavit and with the required supporting
documents
↓

Page 83 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

e. Adoption Procedures
[Aguiling-Pangalangan]

Page 84 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Note:
DSWD must certify the child as legally available for
adoption as a prerequisite for adoption proceedings.
[R.A. 9253]
After the decree of adoption, the court may also issue
a travel authority, if needed.
The case study report by the DSWD/LGU is
indispensable. Without it, the adoption decree shall be
void. [DSWD v. Judge Belen, RTJ-96-1362 (1997)]
f. Who May Not Adopt
Art. 184, FC (as amended by RA 8552)
The following may not adopt:
a. The guardian, with respect to the ward, prior to
the approval of the final accounts rendered upon
the termination of the guardianship
b. Any person convicted of a crime of moral
turpitude
g. Rights of an Adopted Child
1. Parental Authority [Sec. 16, RA 8552]
Except in cases where the biological parent is the
adopter’s spouse, all legal ties between biological
parent and adoptee shall be severed, and the same
shall then be vested on the adopters.
2. Legitimacy [Sec. 17, RA 8552]
The adoptee shall be considered the legitimate
son/daughter of the adopters for all intents and
purposes, and as such is entitled to all rights and
obligations provided by law to legitimate children
born to them without discrimination of any kind.
The adoptee is entitled to love, guidance, and
support in keeping with the means of the family.
3. Succession [Sec. 18, RA 8552]
In legal and intestate succession, the adopter and
the adoptee shall have reciprocal rights of
succession without distinction from legitimate
filiation. However, if the adoptee and his/her
biological parents had left a will, the law on
testamentary succession shall govern.
Legal or intestate succession to the estate of the
adopted shall be governed by the following rules:
a. Legitimate and illegitimate children,
descendants and the surviving spouse of the
adoptee shall inherit in accordance with the
ordinary rules of legal/intestate succession
Page 85 of 511
CIVIL LAW
b. When the surviving spouse OR illegitimate
children AND adopters concur, they shall
inherit on a 50-50 basis
c. When the surviving spouse AND illegitimate
children AND adopters concur, they shall
inherit on a 1/3-/1/3-1/3 basis
d. When only adopters survive, they shall
inherit 100% of the estate
e. When only collateral blood relatives survive,
ordinary rules of legal or intestate succession
shall apply. [Art. 190 (as amended), FC]
4. Name [Art. 365, CC.]
An adopted child shall bear the surname of the
adopter
Sec. 13 of RA 8552 allows the change of first
name to be instituted in the same proceeding as
the adoption: “the decree of adoption shall state
the name by which the child is to be known.”
The law is silent as to what middle name the
adoptee may use but the SC has held that an
adoptee is entitled to all the rights provided by
law to a legitimate child, including the right to
bear the surname of her father and mother. [In re:
Adoption of Stephanie Nathy Astorga Garcia, G.R.
No. 148311 (2005)]
5. Nationality
Adoption does not confer citizenship: Sec. 3, Art.
4 of the Constitution: Philippine citizenship may
be lost/acquired [only] in the manner provided by law.
The adoption of an alien is not a means of
acquiring Philippine citizenship. A Filipino
adopted by an alien does not lose his Philippine
citizenship.
The right to confer citizenship belongs to the
State (political) and cannot be granted by a citizen
through adoption. Adoption creates a
relationship between the adopter and adoptee,
not between the State and the adoptee.
[Tolentino]
h. Rescission of Adoption
Adoptee may file action for rescission, with the
assistance of DSWD if he/she is a minor or over 18
but incapacitated, based on the ff grounds [Sec. 19,
RA 8552]:
1. Repeated physical and verbal maltreatment by
adopters despite having undergone counseling
2. Attempt on life of adoptee
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
3. Sexual assault or violence
4. Abandonment or failure to comply with parental
obligations
Note: Adoption, being in the best interest of the child,
shall not be subject to rescission by the adopter.
However, the adopter may disinherit the child based
on causes enumerated in Art. 919 [CC]:
1. Conviction of an attempt on the life of the
adopter
2. Having accused, without grounds, the adopter of
a crime punishable by imprisonment for more
than 6 years
3. Conviction of adultery/concubinage with the
adopter’s spouse
4. Having caused the adopter to make or change a
will by force, intimidation or undue influence
5. Refusal without just cause to support the adopter
6. Maltreatment of the adopter by word/deed
7. Living a dishonorable/disgraceful life
8. Conviction of a crime which carries with it the
penalty of civil interdiction
Effects of Rescission [Sec. 20, RA 8552]:
1. Parental authority of the adoptee's biological
parents, if known, OR the legal custody of the
DSWD shall be restored IF the adoptee is still a
minor or incapacitated
2. Reciprocal rights and obligations of the adopters
and the adoptee shall be extinguished
3. Court shall order the Civil Registrar to cancel the
amended certificate of birth of the adoptee and
restore his/her original birth certificate
4. Succession rights shall revert to its status prior to
adoption, but only as of the date of judgment of
judicial rescission
5. Vested rights prior to judicial rescission shall be
respected
Note: Rescission contemplates a situation where the
adoption decree remains valid until its termination
i. Rectification of Simulated Birth
Simulation of birth is the tampering of LCR records
to make it appear that a certain child was born to a
person who is not his/her biological parent, causing
said child to lose his/her true identity/status.
Page 86 of 511
CIVIL LAW
Sec. 21-b [RA 8552]: Any person who shall cause the
fictitious registration of the birth of a child under the
name(s) of a person(s) who is not his/her biological
parent(s) shall be guilty of simulation of birth, and
shall be punished by prision mayor in its medium period
and a fine not exceeding P50,000.00.
Sec. 22 [RA 8552]: A person who has, prior to the
effectivity of RA 8552, simulated the birth of a child
shall not be punished for such act, PROVIDED:
• The simulation was for the child’s best interest
• Child has been treated consistently as his own
• Petition filed within 5 years of RA 8552’s
effectivity (2003)
Three-in-one Procedure
• Correction of entries in birth certificate
• Deed of Voluntary Commitment or Declaration
of abandonment
• Adoption decree
2. RA 8043: The Law on Inter-
country Adoption
INTER-COUNTRY ADOPTION refers to the
socio-legal process of adopting a Filipino child by a
foreigner or a Filipino citizen permanently residing
abroad where the petition is filed, the supervised trial
custody is undertaken, and the decree of adoption is
issued outside the Philippines
a. When Allowed (Sec. 11)
No child shall be matched to a foreign adoptive family
unless it can be satisfactorily shown that the child
cannot be adopted locally.
b. Who Can Adopt (Sec. 9)
Any foreign national or a Filipino citizen permanently
residing abroad who:
1. Is at least 27 years of age and at least 16 years
older than the child to be adopted, at the time of
application unless the adopter is the parent by
nature of the child to be adopted or the spouse
of such parent
2. If married, his/her spouse must jointly file for the
adoption
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
3. Has the capacity to act and assume all rights and
responsibilities of parental authority under his
national laws, and has undergone the appropriate
counseling from an accredited counselor in
his/her country
4. Has not been convicted of a crime involving
moral turpitude
5. Is eligible to adopt under his/her national law
6. Is in a position to provide the proper care and
support and to give the necessary moral values
and example to all his children, including the
child to be adopted
7. Agrees to uphold the basic rights of the child as
embodied under Philippine laws, the U.N.
Convention on the Rights of the Child, and to
abide by the rules and regulations issued to
implement the provisions of this Act
8. Comes from a country with whom the
Philippines has diplomatic relations and whose
government maintains a similarly authorized and
accredited agency and that adoption is allowed
under his/her national laws
9. Possesses all the qualifications and none of the
disqualifications provided in applicable
Philippine laws.
c. Who Can be Adopted
1. Only a legally-free child may be the subject of inter-
country adoption. [Sec. 8]
A legally-free child is one who has been
voluntarily or involuntarily committed to the
DSWD of the Philippines, in accordance with the
Child and Youth Welfare Code. [Sec. 3(f)]
2. A Filipino child [Sec. 3(a)]
3. Below 15 years old [Sec. 3(b)]
In order that such child may be considered for
placement, the following documents must be
submitted to the Board:
1. Child study
2. Birth Certificate / Foundling Certificate
3. Deed of Voluntary Commitment/ Decree of
Abandonment/ Death Certificate of parents
4. Medical Evaluation / History
5. Psychological Evaluation, as necessary
6. Recent photo of the child [Sec. 8]
Where the petition for adoption was granted after the
child had shot and killed a girl, the Supreme Court did
not consider the retroactive effect given to the decree
of adoption so as to impose a liability upon adopting
Page 87 of 511
CIVIL LAW
parents at a time when adopting parents had no actual
or physically custody over the child. Retroactive effect
may perhaps be given where such is essential to
permit the accrual of some benefit or advantage in
favor of the adopted child. In the instant case,
however, to hold that parental authority had been
retroactively lodged in the adopting parents so as to
burden them with liability for a tortuous act that they
could not have foreseen and which they could not
have prevented would be unfair and unconscionable.
[Tamargo v. CA, G.R. No. 85044 (1992)]
Adoption is a juridical act, proceeding in rem. Because
it is artificial, the statutory requirements in order to
prove it must be strictly carried out. Petition must be
announced in publications and only those proclaimed
by the court are valid. Adoption is never presumed.
[Lazatin v. Campos, G.R. No. L-43955-56 (1979)]
Validity of facts behind a final adoption decree cannot
be collaterally attacked without impinging on that
court’s jurisdiction. [Santos v. Aranzanso, G.R. No. L-
23828 (1966)]
Participation of the appropriate government
instrumentality in performing the necessary studies
and precautions is important and is indispensable to
assure the child’s welfare. [DSWD v. Belen, GRTJ-96-
1362 (1997)]
Consent for adoption must be written and notarized.
[Landingin v. Republic, G.R. No. 164948 (2006)]
Adopted children do not have a right to represent
their adopters in successional interests. Although an
adopted child is deemed to be a legitimate child and
have the same rights as the latter, these rights do not
include the right of representation (because the
adopted child has no right to inherit from the
grandparent). The relationship created by the
adoption is between only the adopting parents and the
adopted child. It does not extend to the blood
relatives of either party. [Sayson v. CA, G.R. No.
89224-25 (1992)]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
I. Support
1. What it Comprises
Consists of everything indispensable for sustenance,
dwelling, clothing, medical attendance, education and
transportation, in keeping with the financial capacity
of the family. [Art. 194, FC]
a. Education includes a person’s schooling or
training for some profession, trade or vocation,
the right to which shall subsist beyond the age of
majority. [Art. 194, FC]
b. Transportation includes expenses in going to and
from school, or to and from place of work. [Art.
194, FC]
2. Who are Obliged
To support each other:
a. Spouses
b. Legitimate ascendants and descendants;
c. Parents and their children (legitimate and
illegitimate) and the children of the latter
(legitimate and illegitimate);
d. Legitimate brothers and sisters, whether of full or
half-blood; [Art. 195, FC]
e. Illegitimate brothers and sisters, whether of full
or half-blood, except when the need for support
of one (of age) is due to a cause imputable to
his/her fault or negligence. [Art. 196, FC]
Note: Both legitimate and illegitimate children are
entitled to support. The only difference is the source
of support, which for illegitimate children is the
parent’s separate properties. Where the illegitimate
parent is legally married to another person, their CPG
or ACP cannot answer for support for the illegitimate
child of one of them unless the parent has no
adequate separate property, in which case support will
be taken from the CPG or ACP subject to
reimbursement (Arts. 122, 197, FC).
Order of support:
If there are multiple obligors
a. Spouse
b. Descendants, nearest in degree
c. Ascendants, nearest in degree
d. Brothers and Sisters [Art. 199, FC]
The order of liability among ascendants and
descendants would be: 1. legitimate children and
descendants, 2. legitimate parents and ascendants, 3.
Page 88 of 511
CIVIL LAW
illegitimate
[Tolentino]
children and their descendants.
When two or more are obliged to give support, the
payment shall be divided between them in
proportion to their resources.
Also, in case of urgent need and by special
circumstances, judge may order only one obligor to
furnish support without prejudice to reimbursement
from other obligors of the share due from them. [Art.
200, FC]
If there are multiple recipients and only one obligor,
and the latter has no sufficient means to satisfy all
claims:
a. Observe order in Article 199 as to whose claim
shall be satisfied first;
b. But if the concurrent obligees are the spouse and
a child subject to parental authority, the child
shall be preferred.
The above preference given to a child under parental
authority over the spouse should prevail only if the
person obliged to support pays it out of his separate
property. So if the support comes from ACP or CPG,
the above rule of preference for the child does not
apply. [Tolentino]
Properties Answerable for Support
CPG or ACP shall answer for the support of the
spouse, their common children, and the legitimate
children of either spouse [Arts. 94 and 121, FC]
For legitimate ascendants; [all other] descendants,
whether legitimate or illegitimate; and brothers and
sisters, whether legitimately or illegitimately related:
From the separate property of the obligor. If no
separate property, the ACP/CPG (if financially
capable) shall advance the support, to be deducted
from the obligor’s share upon liquidation of such
regime. [Art. 197, FC]
Even if the parents-in-law were the ones who called
for the physician’s services for the childbirth of their
daughter-in-law, it is the woman’s husband who is
bound to pay the fees due to the physician. [Pelayo v.
Lauron, G.R. No. L-4089 (1909)]
The amount of support is variable and, for this
reason, no final judgment on the amount of support
is made as the amount shall be in proportion to the
resources or means of the giver and the necessities of
the recipient. [Gotardo v. Buling, G.R. No. 165166
(2012)]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

be reduced or increased if such circumstances change.

When Stranger Gives Support [Arts. 201, 202, FC]
When, without the knowledge of the person obliged
to give support, it is given by a stranger, the stranger 5. When Demandable
has the right to claim the same from the person
obliged, unless it appears that he gave it without
The obligation to give support shall be demandable
intention of being reimbursed. [Art. 206, FC]
from the time the person who has a right to receive
the same needs it for maintenance, but it shall not be
Person Obliged Refuses or Fails To Give Support
paid except from the date of judicial or extra-
When the person obliged to give support unjustly
judicial demand.
refuses or fails to give support when urgently
needed, any third person may furnish support to the
Support pendente lite may be claimed in accordance
needy individual, with right of reimbursement from
with the Rules of Court.
the 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. Options to Fulfill Obligation
Reason: The amount of support agreed upon in the
to Give Support
contract or given in the will can be more than what
the recipient needs. [Sempio-Diy] a. Payment of the amount; or
b. Receiving and maintaining the recipient in the
Furthermore, contractual support shall be subject to home of the provider, unless there is a legal or
adjustment whenever modification is necessary due to moral obstacle for doing so. [Art. 204, FC]
changes in circumstances manifestly beyond the
contemplation of the parties. [Art. 208, FC] 7. Attachment

3. Support Pending Litigation The right to receive support as well as any money or
property obtained as such support shall not be levied
on the Status of Marriage upon on attachment or execution. [Art. 205, FC]

Pending legal separation or annulment, and for This is to protect that which the law gives to the
declaration of nullity, support pendente lite for spouses recipient against want and misery. [Tolentino]
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]

Note: In Art. 100, de facto separation does not affect

the ACP and the CPG, except that the spouse who
leaves the conjugal home without just cause shall not
be entitled to support.

4. Amount
The amount of support is in proportion to the means
of the provider and the needs of the receiver, and can

Page 89 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
J. Parental Authority and
Custody of Children
1. In General
Parental authority is the mass of rights and obligations
which parents have in relation to the person and
property of their children until their emancipation,
and even after this under certain circumstances.
[Manresa]
Parental Authority includes [Art. 209, FC]:
a. The caring for and rearing of children for civic
consciousness and efficiency;
b. The development of their moral, mental and
physical character and well-being
Parental authority and responsibility may not be
renounced or transferred except in the cases
authorized by law. [Art. 210, FC]
Cases When Parental Authority May Be
Transferred or Terminated:
a. Adoption;
b. Guardianship; or
c. Commitment of the child in an entity or
institution engaged in child care or in a children’s
home
Rules as to the Exercise of Parental Authority
Jointly exercised by the father and mother over their
common children, but in case of disagreement, the
father's decision shall prevail, unless there is a judicial
order to the contrary [Art. 211, FC]
Exercised by the mother if the child is illegitimate
[Art.176, FC]
Children under parental authority shall always observe
respect and reverence towards their parents and are
obliged to obey them [Art. 211, FC]
Characteristics of Parental Authority
a. Natural right and duty of parents [Art. 209, FC]
b. Cannot be renounced, transferred or waived,
except in cases authorized by law [Art. 210, FC]
c. Jointly exercised by the father and the mother
[Art. 211, FC]
d. Purely personal and cannot be exercised through
agents
e. Temporary
Page 90 of 511
CIVIL LAW
Parental Preference Rule
The natural parents, who are of good character and
who can reasonably provide for the child, are
ordinarily entitled to custody as against all persons.
[Santos v. CA, G.R. No. 112019 (1995)]
Descendant’s Privilege of Refusal to Testify [Art.
215, FC]: No descendant shall be compelled, in a
criminal case, to testify against his parents and
grandparents.
Exception: When such testimony is indispensable in:
a. a crime against the descendant, or
b. a crime by one parent against the other.
Who Exercises Authority in Cases of Death,
Absence, Unsuitability, Remarriage, or
Separation of Parents:
In case one parent is absent or already dead, the
present or surviving parent [Art. 212, FC]
Remarriage of the surviving parent shall not affect
his/her parental authority over the children, unless
the court appoints another person to be the guardian
of the children or their property [Art. 212, FC]
a. In case of a void/annulled marriage, and there is
no agreement between spouses, the parent
designated by the court [Art. 43 par. 1; Art. 49,
FC]
b. Innocent spouse gets custody of minor children
in legal separation [Art. 63 par. 3, FC]
c. The court shall take into account all relevant
considerations, especially the choice of the child
over seven years of age, unless the parent chosen
is unfit [Art. 213 par. 1, FC]
d. Substitute parental authority [Art. 214, FC]
In case of death, absence or unsuitability of the
parents, substitute parental authority shall be
exercised by the surviving grandparent
TENDER YEARS PRESUMPTION
No child under 7 years of age shall be separated from
the mother, unless the court finds compelling reasons
to order otherwise. [Art. 213 par 2; Art. 363, CC;
Gamboa v. CA, G.R. No. 174485 (2007)]
Examples of compelling reasons for custody to
be granted to the father:
a. When the mother is insane;
b. With a communicable disease that might
endanger the life or health of the child;
c. Is maltreating the child; or
d. Has another child by another man who lives with
her. [Cervantes v. Fajardo, G.R. No. 79955 (1989)]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Note: Alleged lesbianism [Gualberto v. Gualberto, G.R.
No. 154994 (2005)], prostitution or infidelity to
husband does not necessarily make a mother unfit as
parent. It must be shown that such lesbianism,
prostitution or infidelity adversely affect the child.
2. Substitute Parental Authority
Substitute parental authority is exercised in case of
death, absence, or unsuitability of the parents. [Art.
214, FC]
The person exercising substitute parental authority
shall have the same authority over the person of the
child as the parents. [Art. 233, FC]
IN DEFAULT OF PARENTS OR
JUDICIALLY APPOINTED GUARDIAN
EXERCISED BY [Art. 216, FC] (in this order):
a. The surviving grandparent [Art. 214, FC]
- When several grandparents survive, the one
designated by the court shall exercise
parental authority, taking into account all
relevant considerations, especially the choice
of the child over seven years of age, unless
the grandparent chosen is unfit
b. Oldest brother or sister, over 21 years old, unless
unfit or unqualified.
c. Child’s actual custodian, over 21 years old, unless
unfit or unqualified.
Note: The same order applies to the appointment of
judicial guardian over the property of the child
SUBSTITUTE PARENTAL AUTHORITY
OVER DISADVANTAGED CHILDREN [Art.
217, FC]
Entrusted in summary judicial proceedings to:
a. Heads of children’s homes
b. Orphanages
c. Similar institutions duly accredited by the proper
government agency (such as the DSWD)
Who Are Disadvantaged Children:
a. Foundlings – one who is deserted or abandoned
as an infant or a child, with parents, guardian, or
relatives being unknown or one who is
committed in an orphanage or charitable or
similar institution with unknown facts of birth
and parentage
b. Abandoned – one who has no proper parental
care or guardianship, or whose parents or
Page 91 of 511
CIVIL LAW
guardians have deserted him for a period of at
least six continuous months
c. Neglected – one whose basic needs have been
deliberately unattended or inadequately attended
d. Abused – one who is taken advantage of,
exploited and maltreated
e. Others similarly situated
3. Special Parental Authority
Special parental authority is temporary custody and is
concurrent with the authority of the parents or those
exercising substitute parental authority.
PERSONS EXERCISING SPECIAL
PARENTAL AUTHORITY [Art. 218, FC]
a. School, its administrators and teachers; or
b. The individual, entity or institution engaged in
child care
Note: Exercised over minor child while under their
supervision, instruction or custody. It applies to all
authorized activities whether inside or outside the
premises of the school, entity, or institution.
4. Rights and Duties
Those exercising parental authority have the
following rights and duties [Art. 220, FC]
a. Keep the children in their company, support,
educate, and instruct them by right precept,
provide for their upbringing in keeping with their
means
b. Give love, affection, advice, counsel,
companionship, and understanding
c. Provide moral and spiritual guidance, inculcate
honesty, integrity, self-discipline, self-reliance,
industry and thrift, stimulate interests in civic
affairs, inspire compliance with duties of
citizenship
d. Furnish them with good educational materials
supervise activities with others, protect them
from bad company, prevent habits detrimental to
health, studies, and morals
e. Represent them in all matters affecting their
interests
f. Demand from them respect and obedience
g. Impose discipline on them as may be required by
the circumstances
1. May petition the proper court of the place
where the child resides, for an order
providing for disciplinary measures over the
child. The child is entitled to the assistance
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
of counsel. A summary hearing shall be
conducted wherein both petitioner and child
shall be heard. If the court finds the
petitioner at fault or when circumstances so
warrant, deprivation or suspension of
parental authority may be ordered. [Art. 223,
FC]
2. The disciplinary measures may include the
commitment of the child for not more than
30 days in entities or institutions engaged in
child care or in children’s homes duly
accredited by the proper government agency.
Such commitment may be terminated by the
court upon proper petition or at its own
instance [Art. 224, FC]
3. Those exercising special parental authority
may not inflict corporal punishment upon
the child. [Art. 233, FC]
h. Other duties imposed by law
5. Civil Liability
Parents and other persons exercising parental
authority shall be civilly liable for the injuries and
damages caused by their unemancipated children who
are:
a. Living in their company and
b. Under their parental authority [ Art. 221, FC]
c. Exception: diligence of a good father of a family
[Art. 2180, CC]
LIABILITY OF SPECIAL PARENTAL
AUTHORITY [Art. 219, FC]
Those mentioned in Art. 218 are principally and
solidarily liable for damages caused by the acts or
omissions of the unemancipated minor. Parents,
guardians or those with substitute parental authority
shall be subsidiarily liable.
Exception: No liability if it is proven that the proper diligence
required by the particular circumstances was exercised.
6. Parental Authority Over the
Property of the Child
The father and mother shall jointly exercise legal
guardianship over the property of the unemancipated
common child. A court appointment is not necessary.
[Art. 225, FC]
General Rule: In case of disagreement, the father’s
decision prevails.
Page 92 of 511
CIVIL LAW
Exception: When there is a judicial order to the
contrary
Parents are mere administrators of the child’s
property. They cannot alienate or encumber the
child's property without judicial authorization
otherwise, the transaction is void [Lindain v. CA G.R.
95305 (1992); Hebron v. Loyola G.R. 168960 (2010)]
The property of the unemancipated child earned or
acquired with his work or industry or by onerous or
gratuitous title shall belong to the child in ownership
and shall be devoted exclusively to the latter’s support
and education, unless the title or transfer provides
otherwise. The right of the parents over the fruits and
income of the child’s property shall be limited
primarily to the chid’s support and secondarily to the
collective daily needs of the family [Art. 226, FC]
Note: In the case of a working child, not more than
20% of the child’s income may be used for the
collective needs of the family. [R.A. 9231, Sec. 12B]
Bonds
If the value of the property or annual income of the
child exceeds 50,000 Php, the parent must furnish a
bond in the amount determined by the court. Such
amount will not be less than 10% of the value of the
property or annual income. There will be a summary
special proceeding for approval of the bond. [Art.
225, FC]
Trusts
If the child’s wages from work or other income
amounts to at least 200,000 Php, the parent or legal
guardian shall set up a trust fund for at least 30% of
the amount for which a semi-annual accounting of the
fund to the DOLE. The child shall have full control
over the trust fund upon reaching the age of majority.
[R.A. 9231 Sec. 12C]
If administration of the properties of the parents is
entrusted to the unemancipated child, the child shall
be given a reasonable monthly allowance in an
amount not less that what would be paid by the owner
to an administrator, unless the owner grants the
entirety of the proceeds of the property to the child.
In any case, the amount given shall not be charged to
the child’s legitime [Art. 227, FC]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
7. Loss of Parental Authority
a. Permanent Termination
1. Death of the parents
2. Death of the child
3. Emancipation of the child [Art. 228, FC]
4. Terminated by the court if the person
exercising parental authority has subjected
the child or allowed him to be subjected to
sexual abuse [Art. 232, FC]
b. Non-permanent termination (may be revived by
the courts through final judgement)
1. Adoption of the child
2. Appointment of a general guardian
3. Judicial declaration of abandonment of a
child
4. Final judgement divesting parental authority
5. Judicial declaration of absence or incapacity
of the person exercising parental authority
[Art. 229, FC]
8. Suspension of Parental
Authority
a. Conviction of the parent or person exercising
parental authority of a crime which carries with it
the penalty of civil interdiction. Authority is
automatically reinstated upon service of the
penalty, pardon, or amnesty of the offender [Art.
230, FC]
b. Judicial suspension by the court in an action filed
for the purpose if the parent or person exercising
parental authority:
1. Treats the child with excessive harshness or
cruelty
2. Gives the child corrupting orders, counsel,
or example
3. Compels the child to beg
4. Subjects the child or allows him to be
subjected to acts of lasciviousness
5. Other grounds when necessary to protect
the child
c. These grounds include cases which have resulted
from culpable negligence of the parent or person
exercising parental authority [Art. 231, FC]
d. Deprivation by the court if the degree of
seriousness so warrants or the welfare of the
child so demands.
Parental authority may be revived in a case filed for
the purpose or in the same proceeding if the court
Page 93 of 511
CIVIL LAW
finds that the cause therefore has ceased and will not
be repeated [Art. 231, FC]
9. A.M. No. 03-04-04
(Rule on Custody of Minors and Writ of Habeas
Corpus in Relation to the Custody of Minors)
PETITION FOR THE CUSTODY OF
MINORS
Who files: the party claiming rightful custody with
the respondent being the person the petition is filed
against [Sec. 2]
Where to file: Family Court where petitioner resides
or where minor can be found [Sec. 3]
The petition must contain:
a. The personal circumstances of the petitioner
and of the respondent;
b. The name, age and present whereabouts of
the minor and his or her relationship to the
petitioner and the respondent;
c. The material operative facts constituting
deprivation of custody; and
d. Such other matters which are relevant to the
custody of the minor. [Sec. 4]
Duty of a social worker:
The court may order a social worker to make a case
study of the minor and the parties and to submit a
report and recommendation to the court at least three
days before the scheduled pre-trial [Sec. 8]
What happens in the pre-trial:
a. the parties may agree on the custody of the
minor.
b. If the parties fail to agree, the court may refer the
matter to a mediator.
c. If the issue is not settled through mediation, the
court shall proceed with the pre-trial
conference,and consider matters which may aid
in the prompt disposition of the petition.[Sec. 12]
While the case is pending, the court may award
provisional custody in the ff. order of preference:
a. Both parents jointly;
b. Either parent, taking into account the choice of
the minor over seven years of age and of
sufficient discernment, unless the parent chosen
is unfit;
c. The grandparent, or if there are several, the one
chosen by the minor over seven years of age and
of sufficient discernment, unless unfit or
disqualified;
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

d. The eldest brother or sister over twenty-one
years of age, unless he or she is unfit or
disqualified;
e. The actual custodian of the minor over twenty-
one years of age, unless the former is unfit or
disqualified; or
f. Any other person or institution the court may
deem suitable to provide proper care and
guidance for the minor. [Sec. 13]
b. Issue any order that is just and reasonable
permitting the parent who is deprived of the care
and custody of the minor to visit or have
temporary custody. [Sec. 18]
PETITION FOR WRIT OF HABEAS CORPUS
Where to file:
a. Primarily: Family Court
Enforceable in its judicial región

What the court considers when awarding Other places to file:

custody: b. Regular Court: in the absence of a presiding judge
a. Primary consideration: best interests of the in the Family Court or when there are no Family
minor, his material and moral welfare. Courts
Enforceable in its judicial region
Other considerations: c. Supreme Court or Court of Appeals: Enforceable
b. Any extrajudicial agreement which to comply anywhere in the Philippines.
with respecting the rights of the minor to - The writ may be made returnable to a Family
maintain direct contact with the non custodial Court or to any regular court within the
parent on a regular basis, except when there is an region where the petitioner resides or where
existing threat or danger of physical, mental, the minor may be found for hearing and
sexual or emotional violence which endangers decision on the merits.
the safety and best interests of the minor;
c. The desire and ability of one parent to foster Upon return of the writ, the court shall decide the
an open and loving relationship between the issue on custody of minors. [Sec. 20]
minor and the other parent;
d. The health, safety and welfare of the minor;
e. Any history of child or spousal abuse by the
person seeking custody or who has had any filial
relationship with the minor, including anyone
courting the parent;
f. The nature and frequency of contact with both
parents;
g. Habitual use of alcohol, dangerous drugs or
regulated substances;
h. Marital misconduct;
i. The most suitable physical, emotional, spiritual,
psychological and educational environment for
the holistic development and growth of the
minor; and
j. The preference of the minor over seven years
of age and of sufficient discernment, unless the
parent chosen is unfit. [Sec. 14]

The court may provide for visitation rights and issue

Hold Departure Orders and Protection Orders [Secs.
15, 16, & 17]

Judgement
Aside from awarding custody, the court may also:
a. Order either or both parents to give an amount
necessary for the support, maintenance and
education of the minor, irrespective of who may
be its custodian.

Page 94 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
K. Emancipation
Art. 234, FC. Emancipation takes place by the
attainment of majority. Unless otherwise provided,
majority commences at the age of eighteen years. (as
amended by RA 6809)
Effects of Emancipation [Art. 236, FC]
1. Emancipation shall terminate parental authority
over the person and property of the child who
shall then be qualified and responsible for all acts
of civil life, save the exceptions established by
existing laws in special cases.
2. Contracting marriage shall require parental
consent until the age of twenty-one.
Art. 236, FC. Nothing in this Code shall be construed
to derogate from the duty or responsibility of parents
and guardians for children and wards below twenty-
one years of age mentioned in the second and third
paragraphs of Article 2180 of the CC.
Page 95 of 511
CIVIL LAW
L. Summary Judicial
Proceedings under FC
Procedural rules provided for in this Title shall apply
to:
1. Separation in fact between husband and wife
2. Abandonment by one of the other
3. Incidents involving parental authority
Note: Until modified by the Supreme Court, the
procedural rules herein shall apply in all cases falling
under the aforementioned matters. Such cases shall be
decided in an expeditious manner, without regard to
technical rules. [Art. 238, FC]
1. Separation in Fact
A verified petition alleging the following facts is
required when [Art. 239, FC]:
a. A husband and wife are separated in fact; or,
b. One has abandoned the other
Situation: Where one of them seeks judicial
authorization for a transaction where the consent of
the other spouse is required by law but such consent
is withheld or cannot be obtained
The petition shall:
a. Attach the proposed deed, if any, embodying the
transaction, if none, shall describe in detail the
said transaction and state the reason why the
required consent thereto cannot be secured.
b. The final deed duly executed by the parties shall
be submitted to and approved by the court. [Art.
239, FC]
Separate Claim for Damages: Claims for damages
by either spouse, except costs of the proceedings, may
be litigated only in a separate action. [Art. 240, FC]
Jurisdiction: Jurisdiction over the petition shall,
upon proof of notice to the other spouse, be exercised
by the proper court authorized to hear family cases, if
one exists, or in the regional trial court or its
equivalent sitting in the place where either of the
spouses resides. [Art. 241, FC]
Notification to other spouse:
a. Upon the filing of the petition, the court shall
notify the other spouse, whose consent to the
transaction is required, of said petition, ordering
said spouse to show cause why the petition
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
should not be granted, on or before the date set
in said notice for the initial conference.
b. The notice shall be accompanied by a copy of the
petition and shall be served at the last known
address of the spouse concerned. [Art. 242, FC]
Procedure:
a. A preliminary conference shall be conducted by
the judge personally without the parties being
assisted by counsel.
b. After the initial conference, if the court deems it
useful, the parties may be assisted by counsel at
the succeeding conferences and hearings. [Art.
243, FC]
c. If the petition is not resolved at the initial
conference, said petition shall be decided in a
summary hearing. Basis of summary hearing (at
the sound discretion of the court):
1. Affidavits
2. Documentary evidence
3. Oral testimonies at the court’s sound
discretion. If testimony is needed, the court
shall specify the witnesses to be heard and
the subject-matter of their testimonies,
directing the parties to present said
witnesses. [Art. 246(a), FC]
When appearance of spouses required:
a. In case of non-appearance of the spouse whose
consent is sought, the court shall inquire into the
reasons for his failure to appear, and shall require
such appearance, if possible. [Art. 244, FC]
b. If, despite all efforts, the attendance of the non-
consenting spouse is not secured, the court may
proceed ex parte and render judgment as the facts
and circumstances may warrant. In any case, the
judge shall endeavor to protect the interests of
the non-appearing spouse. [Art. 245, FC]
Nature of judgment
The judgment of the court shall be immediately final
and executory. [Art. 247, FC]
Rules applicable for administering or
encumbering separate property of spouse
The petition for judicial authority to administer or
encumber specific separate property of the
abandoning spouse and to use the fruits or proceeds
thereof for the support of the family shall also be
governed by these rules. [Art. 248, FC]
Page 96 of 511
CIVIL LAW
2. Incidents involving Parental
Authority
Procedure
a. Such petitions shall be verified and filed in the
proper court of the place where the child resides.
[Art. 250, FC]
b. Upon the filing of the petition, the court shall
notify the parents or, in their absence or
incapacity, the individuals, entities or institutions
exercising parental authority over the child. [Art.
251, FC]
Note:
Petitions filed under Articles 223, 225 and 235 of this
Code involving parental authority shall be verified.
[Art. 249, FC]
The rules in Chapter 2 hereof shall also govern
summary proceedings under this Chapter insofar as
they are applicable [Art. 253, FC]
The rules for Separation in Fact and Incidents
Involving Parental Authority shall govern summary
proceedings filed for:
a. Declaration of presumptive death [Art. 41, FC]
b. Delivery of presumptive legitime [Art. 51, FC]
c. Fixing of family domicile [Art. 69, FC]
d. Disagreements regarding one spouse’s
profession, occupation, business, or activity [Art.
73, FC]
e. Disposition or encumbrance of common
property in ACP where one spouse is
incapacitated or unable to participate in the
administration; administration of ACP in a
disagreement and the wife takes recourse within
five years [Art. 96, FC]
f. Disposition or encumbrance of common
property in CPG where one spouse is
incapacitated or unable to participate in the
administration; administration of CPG in a
disagreement and the wife takes recourse within
five years, [Art. 124, FC]
When wife and husband are de facto separated and
the CPG is insufficient, the spouse present shall, upon
a petition, be given judicial authority to administer or
encumber any specific property of the other spouse
and use the fruits and proceeds thereof to satisfy the
latter’s share. [Art. 127 (3), FC]
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

M. Care and Education of b. Encourage the cultivation of the duties of parents

c. Protect and assist abandoned or mistreated
Children children, and orphans
d. Take steps to prevent juvenile delinquency
Rights of a child e. Adopt measures for the health of children
Every child: f. Promote the opening and maintenance of
a. Is entitled to parental care; playgrounds
b. Shall receive at least elementary education; g. Coordinate the activities of organizations
c. Shall be given moral and civic training by the devoted to the welfare of children, and secure
parents or guardian; their cooperation. [Art. 360, NCC]
d. Has a right to live in an atmosphere conducive to
his physical, moral and intellectual development. Whenever a child is found delinquent by any court,
[Art. 356, NCC] the father, mother, or guardian may in a proper case
be judicially admonished. [Art. 362, NCC]
Duties of a child
Every child shall:
a. Obey and honor his parents or guardian;
b. Respect his grandparents, old relatives, and
persons holding substitute parental authority;
c. Exert his utmost for his education and training;
d. Cooperate with the family in all matters that
make for the good of the same. [Art. 357, NCC]

Role of parents
Every parent and every person holding substitute
parental authority shall see to it that the rights of the
child are respected and his duties complied with, and
shall particularly, by precept and example, imbue the
child with high-mindedness, love of country,
veneration for the national heroes, fidelity to
democracy as a way of life, and attachment to the ideal
of permanent world peace. [Art. 358, NCC]

Role of the government

To promote the full growth of the faculties of every
child, the government will establish, whenever
possible:
a. Schools in every barrio, municipality and city
where optional religious instruction shall be
taught as part of the curriculum at the option of
the parent or guardian;
b. Puericulture and similar centers;
c. Councils for the Protection of Children;
d. Juvenile courts. [Art. 359, NCC]
Juvenile courts will be established, as far as
practicable, in every chartered city or large
municipality.[Art. 361, NCC]

Council for the Protection of Children

The Council for the Protection of Children shall look
after the welfare of children in the municipality. It has
the following functions:
a. Foster the education of every child in the
municipality

Page 97 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
N. Surnames
1. Surnames of Children
a. Legitimate and legitimated children shall
principally use the surname of the father. [Art.
364, FC]
b. An adopted child shall bear the surname of the
adopter. [Art. 365, FC]
c. A natural child acknowledged by both parents
shall principally use the surname of the father. If
recognized by only one of the parents, a natural
child shall employ the surname of the recognizing
parent. [Art 366, FC]
d. Natural children by legal fiction shall principally
employ the surname of the father [Art. 367, FC]
e. Illegitimate children referred to in Article 287
shall bear the surname of the mother. [Art 368,
FC]
f. Children conceived before the decree annulling a
voidable marriage shall principally use the
surname of the father. [Art. 369, FC]
2. Wife After and During
Marriage
a. A married woman may use [Art. 370, FC]:
1. Her maiden first name and surname and add
her husband's surname, or
2. Her maiden first name and her husband's
surname or
3. Her husband's full name, but prefixing a
word indicating that she is his wife, such as
"Mrs."
b. In case of annulment of marriage, and the wife is
the guilty party, she shall resume her maiden
name and surname. If she is the innocent spouse,
she may resume her maiden name and surname.
However, she may choose to continue employing
her former husband's surname, unless [Art. 371,
FC]:
1. The court decrees otherwise, or
2. She or the former husband is married again
to another person.
c. When legal separation has been granted, the wife
shall continue using her name and surname
employed before the legal separation. [Art. 372,
FC]
d. A widow may use the deceased husband's
surname as though he were still living, in
accordance with Article 370. [Art 373, FC]
Page 98 of 511
CIVIL LAW
3. Confusion and Change of
Names
In case of identity of names and surnames, the
younger person shall be obliged to use such additional
name or surname as will avoid confusion. [Art. 374,
FC]
In case of identity of names and surnames between
ascendants and descendants, the word "Junior"
can be used only by a son. Grandsons and other direct
male descendants shall either [Art. 375, FC]:
a. Add a middle name or the mother's surname, or
b. Add the Roman Numerals II, III, and so on.
Usurpation of a name and surname may be the
subject of an action for damages and other relief. [Art.
377, FC]
The unauthorized or unlawful use of another
person's surname gives a right of action to the latter
[Art. 378, FC]
General rule: No person shall use different names and
surnames. [Art 380, FC]
Exception/s: The employment of pen names or stage
names is permitted, provided it is done in good faith
and there is no injury to third persons. Pen names and
stage names cannot be usurped. [Art. 379, FC]
Illegitimate Children shall use the surname and
shall 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:
a. record of birth in civil register
b. admission in public document
c. admission in private handwritten document
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

O. Rules Governing founded belief that the absent spouse was already
dead. In case of disappearance where there is danger
Persons who are Absent of death under the circumstances set forth in the
provisions of Article 391 of the CC, an absence of
only two years shall be sufficient. [Article 41., FC]
1. Provisional Measures in
Case of Absence [Arts. 381- General Rule: Marriage contracted by any person
during the subsistence of a previous marriage is void.
383, CC]
Exceptions: The following subsequent marriage of the
Art. 43, CC. If there is a doubt as between two or present spouse is valid:
more persons who are called to succeed each other a. Subsequent marriage due to ordinary absence
as to which of them died first whoever alleges the where:
death of one prior to the other shall prove the same; 1. The prior spouse had been absent for 4
in the absence of proof it is presumed that they died consecutive years;
at the same time and there shall be no transmission 2. The spouse present had a well-founded
of rights from one to the other. belief that absent spouse is dead; and
3. Judicial declaration of presumptive death
Note: Art, 43 provides a statutory presumption when was secured (no prejudice to the effect of the
there is doubt on the order of death between persons reappearance of the absent spouse).
who are called to succeed each other (only). b. Subsequent marriage due to extraordinary
absence where:
Presumption in the Rules of Court [Rule 131, sec. 1. The prior spouse had been missing for 2
3, (jj.) (Presumption of survivorship)] consecutive years;
2. There is danger of death attendant to the
Age Presumed Survivor disappearance [Art. 391, CC];
3. The spouse present had a well-founded
Both under 15 Older
belief that the missing person is dead; and
Both above 60 Younger
Judicial declaration of presumptive death was secured
One under 15, the other (no prejudice to the effect of the reappearance of the
One under 15 absent spouse).
above 60
Exception to the Exception:
Both over 15 and under
Male Art. 381, CC. When a person disappears from his
60; different sexes
domicile, his whereabouts being unknown, and
without leaving an agent to administer his property,
Both over 15 and under
Older the judge, at the instance of an interested party, a
60; same sex
relative, or a friend, may appoint a person to represent
One under 15 or over him in all that may be necessary.
60, the other between One between 15 and 60
those ages This same rule shall be observed when under similar
circumstances the power conferred by the absentee
has expired.
Note: Applicable only to two or more persons who
perish in the same calamity, and it is not shown who
died first, and there are no particular circumstances Art. 382, CC. The appointment referred to in the
from which it can be inferred. preceding article having been made, the judge shall
take the necessary measures to safeguard the rights
A marriage contracted by any person during and interests of the absentee and shall specify the
subsistence of a previous marriage shall be null and powers, obligations and remuneration of his
void, unless before the celebration of the subsequent representative, regulating them, according to the
marriage, the prior spouse had been absent for four circumstances, by the rules concerning guardians.
consecutive years and the spouse present has a well-

Page 99 of 511
U.P. LAW BOC PERSONS AND FAMILY RELATIONS
Art. 383, CC. In the appointment of a representative,
the spouse present shall be preferred when there is no
legal separation.
If the absentee left no spouse, or if the spouse present
is a minor, any competent person may be appointed
by the court.
Requisites: The judge may appoint a person to
represent absentee when:
a. Person disappears from his domicile
b. His whereabouts are unknown
c. No agent to administer his property
d. An interested party, a relative, or a friend files the
action
Who may be appointed as representative?
a. Spouse present shall be preferred when there is
no legal separation
b. If no spouse or spouse is incapacitated, any
competent person
2. Declaration of Absence
[Arts. 384-389, CC]
Art. 384, CC. Two years having elapsed without any
news about the absentee or since the receipt of the
last news, and five years in case the absentee has left
a person in charge of the administration of his
property, his absence may be declared.
The following may ask for the declaration of absence:
a. The spouse present;
b. The heirs instituted in a will, who may present an
authentic copy of the same;
c. The relatives who may succeed by the law of
intestacy;
d. Those who may have over the property of the
absentee some right subordinated to the
condition of his death [Art. 385, CC].
Art. 386, CC. The judicial declaration of absence
shall not take effect until six months after its
publication in a newspaper of general circulation.
When may absence be declared?
Two years without any news about the absentee.
Five years if the absentee left a person in charge of
administration of his property.
Page 100 of 511
CIVIL LAW
Declaration takes effect only after six months after
publication in a newspaper of general circulation.
Who may ask for a declaration of absence?
a. Spouse present
b. Heirs instituted in a will, who may present an
authentic copy of the same;
c. Relatives who may succeed by the law of
intestacy;
d. Those who may have some right over the
property of the absentee, subordinated to the
condition of his death.
3. Administration of the
Property of the Absentee
[Arts. 387-389, CC]
An administrator of the absentee's property shall be
appointed in accordance with Article 383. [Art. 387,
CC]
The wife who is appointed as an administratrix of the
husband's property cannot alienate or encumber the
husband's property, or that of the conjugal
partnership, without judicial authority. [Art. 388., CC]
The administration shall cease in any of the following
cases [Art. 389, CC]:
a. When the absentee appears personally or by
means of an agent;
b. When the death of the absentee is proved and his
testate or intestate heirs appear;
c. When a third person appears, showing by a
proper document that he has acquired the
absentee's property by purchase or other title.
In these cases the administrator shall cease in the
performance of his office, and the property shall be at
the disposal of those who may have a right thereto
Who may administer the property?
Spouse present shall be preferred when there is no
legal separation
If no spouse or spouse is incapacitated, any
competent person
When will the administration of property cease?
Administrator shall cease in performance of his
office, and property shall be disposed in favor of
those who have a right thereto when
a. Absentee appears personally or by means of an
agent
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

b. Testate or intestate heirs appear, upon proof of
death of absentee
c. Third person appears, with a proper document
showing he has acquired absentee’s property by
purchase or other title
4. Presumption of Death [Arts.
390-392, CC]
After an absence of 7 years, it being unknown
whether or not the absentee still lives, he shall be
presumed dead for all purposes, except for those of
succession. [Art 390, CC]
The absentee shall not be presumed dead for the
purpose of opening his succession till after an absence
of 10 years. If he disappeared after the age of 75 years,
an absence of 5 years shall be sufficient in order that
his succession may be opened. [Art. 390, CC]
The following shall be presumed dead for all
purposes, including the division of the estate among
the heirs:
a. A person on board a vessel lost during a sea
voyage, or an aeroplane which is missing, who
has not been heard of for four years since the loss
of the vessel or aeroplane;
b. A person in the armed forces who has taken part
in war, and has been missing for four years;
c. A person who has been in danger of death under
other circumstances and his existence has not
been known for four years. [Art. 391, CC]
General rule: A person shall be presumed dead for all
purposes after absence for a period of 7 years.
Exception: Succession
a. In succession, 10 years is required for
presumption of death.
b. If absentee disappeared after age of 75, 5 years
shall be sufficient.
Note: Although 7 years is required for the
presumption of death of an absentee in the CC, Art.
41 of the Family Code makes an exception for the
purpose of remarriage by limiting such requirement to
4 years.
Art. 41 also limits the required 4 years in Art. 391 for
absence under exceptional circumstances to only 2
years.
Art. 392, CC. If the absentee appears or without
appearing his existence is proved he shall recover his
property in the condition in which it may be found and
the price of any property that may have been alienated
or the property acquired therewith; but he cannot
claim either fruits or rents.

All purposes For the purpose of For the purpose of

Circumstance
excluding succession succession marriage

Also known as Extraordinary

Absence, absence of the
following persons gives rise to
presumption of death
- A person on board a lost
sea vessel or a missing
aeroplane, who has not
been heard of for four years
since the loss; 7 years
7 years [Art 391, CC] 2 years [Art. 41, FC]
- A person in the armed [Art. 391, CC]
forces who has taken part in
war, and has been missing
for four years
- A person who has been in
danger of death and his
existence has not been
known for four years.
[Art. 391, CC]

Page 101 of 511

U.P. LAW BOC PERSONS AND FAMILY RELATIONS
All purposes For the purpose of For the purpose of
Circumstance
excluding succession succession
Person disappears, it being 7 years [Art. 390, CC]
unknown whether or not the
absentee still lives.
P. Funerals
The duty and the right to make arrangements for the
funeral of a relative shall be in accordance with the
order established for support, under Article 294 [Art.
305, CC]:
1. Spouse
2. Descendants in the nearest degree. In case of
descendants of the same degree, the oldest shall
be preferred.
3. The ascendants in the nearest degree. In case of
ascendants, the paternal shall have a better right
4. The brothers and sisters, the oldest shall be
preferred.
5. Municipal authorities – if there are no persons
who are bound to support or if such persons are
without means
Nature of funeral: Every funeral shall be in keeping
with the social position of the deceased. [Art. 306,
CC]
The funeral shall be:
1. In accordance with the expressed wishes of the
deceased.
2. In the absence of such expression, his religious
beliefs or affiliation shall determine the funeral
rites.
3. In case of doubt, the form of the funeral shall be
decided upon by the person obliged to make
arrangements for the same, after consulting the
other members of the family [Art. 307, CC]
Note: No human remains shall be retained, interred,
disposed of or exhumed without the consent of the
persons mentioned in articles 294 and 305.
Page 102 of 511
CIVIL LAW
marriage
5 years if person who
disappeared is older than
75 years. 4 years [Art. 41, FC]
Otherwise 10 years
[Art. 390, CC]
Damages: Any person who shows disrespect to the
dead, or wrongfully interferes with a funeral shall be
liable to the family of the deceased for damages,
material and moral [Art. 309, CC]
Funeral Expenses: The construction of a tombstone
or mausoleum shall be deemed a part of the funeral
expenses, and shall be chargeable to the conjugal
partnership property, if the deceased is one of the
spouses [Art. 310, CC].
Guidelines in Making Funeral Arrangements
1. The persons who are preferred in the right to
make funeral arrangements may waive the right
expressly or impliedly in which case the right and
duty immediately descend to the person next in
the order.
2. It must be in keeping with the social position of
the deceased.
3. Law shall prevail over the will of the persons who
have the right to control the burial of deceased –
exhumation, evidential purpose, disposition of
corpse by deceased, mutilation of corpses and
autopsies.
4. Corpses which are to be buried at public
expenses may also be used for scientific purposes
under certain conditions.
5. Expressed wishes of the deceased is given
priority provided that it is not contrary to law and
must not violate the legal and reglementary
provisions concerning funerals and disposition of
the remains (time, manner, place or ceremony)
6. In the absence of expressed wishes, his religious
beliefs or affiliation shall determine the funeral
rights.
7. In case of doubt, the persons in Art. 199 shall
decide.
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

8. Any person who disrespects the dead or

interferes with the funeral shall be liable for
Q. Entries in the Civil
material and moral damages. Register
1. Civil Code
Acts, events and judicial decrees concerning the civil
status of persons shall be recorded in the civil register.
[Art. 407, CC]

The following shall be entered in the civil register

[Art. 408, CC]:
a. Births;
b. marriages;
c. deaths;
d. legal separations;
e. annulments of marriage;
f. judgments declaring marriages void from the
beginning;
g. legitimations;
h. adoptions;
i. acknowledgments of natural children;
j. naturalization;
k. loss, or
l. recovery of citizenship;
m. civil interdiction;
n. judicial determination of filiation;
o. voluntary emancipation of a minor; and
p. changes of name.

In cases of legal separation, adoption, naturalization

and other judicial orders mentioned in the preceding
article, it shall be the duty of the clerk of the court
which issued the decree to ascertain whether the same
has been registered, and if this has not been done, to
send a copy of said decree to the civil registry of the
city or municipality where the court is functioning.
[Art. 409, CC]

The books making up the civil register and all

documents relating thereto shall be considered public
documents and shall be prima facie evidence of the
facts therein contained. [Art. 410, CC]

Every civil registrar shall be civilly responsible for any

unauthorized alteration made in any civil register, to
any person suffering damage thereby. However, the
civil registrar may exempt himself from such liability
if he proves that he has taken every reasonable
precaution to prevent the unlawful alteration. [Art.
411, CC]

Page 103 of 511

U.P. LAW BOC PERSONS AND FAMILY RELATIONS
All other matters pertaining to the registration of civil
status shall be governed by special laws. [Art. 413, CC]
2. RA 9048 as Amended by RA
10172
An act authorizing the city or municipal civil registrar
or the consul general to correct a clerical or
typographical error in an entry and/or change of first
name or nickname in the civil register without need of
a judicial order, amending for this purpose articles 376
and 412 of the CC of the Philippines.
General Rule: No entry in a civil register shall be
changed or corrected without a judicial order
Exceptions:
a. Clerical or typographical errors or
b. Intersex persons
Clerical or Typographical Errors
Change of: first name or nickname, day and month in
the date of birth, or sex of a person
This exception applies where it is patently clear that
there was a clerical or typographical error or mistake
in the entry, which can be corrected or changed by the
concerned city or municipal civil registrar or consul
general in accordance with the provisions of this Act
and its implementing rules and regulations
Intersex persons
Sexual development of intersex persons—those
whose sex chromosomes, genitalia, and/or secondary
sex characteristics are determined to be neither
exclusively male nor female, makes gender
classification at birth inconclusive. It is only at
maturity that the gender of such persons become
fixed.
In the case of Jennifer Cagandahan, who suffered
from Congenital Adrenal Hyperplasia and had two
sex organs and whose female sex organs did not
develop normally, the Court granted her petition to
change her registered sex from female. [Republic v
Cagandahan, G.R. No. 166676 (2008)].
Note:
Clerical or typographical error refers to a mistake
committed in the performance of clerical work in
writing, copying, transcribing or typing an entry in the
civil register that is harmless and innocuous (i.e.
misspelled name, misspelled place of birth, mistake in
Page 104 of 511
CIVIL LAW
the entry of day and month in the date of birth or the
sex of the person or the like, which is visible to the
eyes or obvious to the understanding, and can be
corrected or changed only by reference to other
existing record or records)
Before the amendment by RA 10172, no correction
must involve the change of sex, nationality, age or
status of the petitioner. After the amendment, change
of sex can now be subjected to correction without
judicial order under the rules of this Act.
Who may file the petition and where? [Sec. 3, RA
9048]
Any person having direct personal interest in the
correction of a clerical or typographical error in an
entry and/or change of first name or nickname in the
civil register.
Verified petition with the local civil registry office of
the city or municipality
a. where the record being sought to be corrected or
changed is kept
b. where the interested party is presently residing or
domiciled, if it will be impractical to submit in the
place where record is kept (i.e. when party has
migrated to another place in the country)
c. nearest Philippine Consulates, if the petitioner is
presently residing or domiciled in foreign
countries
Note: All petitions for the clerical or typographical
errors and/or change of first names or nicknames
may be availed of only once.
Grounds for Change of First Name or Nickname.
[Sec. 4, RA 9048]
The petition for change of first name or nickname
may be allowed in any of the following cases:
a. The petitioner finds the first name or nickname
to be ridiculous, tainted with dishonor or
extremely difficult to write or pronounce.
b. The new first name or nickname has been
habitually and continuously used by the
petitioner and he has been publicly known by that
first name or nickname in the community: or
c. The change will avoid confusion.
Form and Contents of the Petition: The petition
for correction of a clerical or typographical error, or
for change of first name or nickname, as the case may
be, shall be:
a. in the form of an affidavit,
U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

b. subscribed and sworn to before any person General rule: No petition involving change of gender
authorized by the law to administer oaths. shall be entartained.

The affidavit shall set forth facts necessary to establish Exceptions: if the petition is accompanied by a
the merits of the petition and shall show affirmatively certification issued by an accredited government
that the petitioner is competent to testify to the physician attesting to the fact that the petitioner has
matters stated. The petitioner shall state the particular not undergone sex change or sex transplant.
erroneous entry or entries, which are sought to be
corrected and/or the change sought to be made. [Sec. 3. Rule 108, Rules of Court
5, RA 9048]
Cancellation or correction of entries in the civil
The petition shall be supported with the
registry
following documents:
a. A certified true machine copy of the certificate or
Who may file petition and where it may be filed.
of the page of the registry book containing the
Any person interested in any act, event, order or
entry or entries sought to be corrected or
decree concerning the civil status of persons which
changed.
has been recorded in the civil register, may file a
b. At least two (2) public or private documents
verified petition for the cancellation or correction of
showing the correct entry or entries upon which
any entry relating thereto, with the Court of First
the correction or change shall be based; and
Instance of the province where the corresponding
c. Other documents which the petitioner or the city
civil registry is located. [Rule 108, Sec. 1, ROC]
or municipal civil registrar or the consul general
may consider relevant and necessary for the
Entries subject to cancellation or correction [Rule
approval of the petition.
108, Sec. 2, ROC]
Upon good and valid grounds, the following entries
The petition for change of first name or nickname, or
in the civil register may be cancelled or corrected:
for correction of erroneous entry concerning the day
a. births;
and month in the date of birth or the sex of a person,
b. marriages;
as the case may be, shall be published at least once a
c. deaths;
week for two (2) consecutive weeks in a newspaper of
d. legal separations;
general circulation.
e. judgments of annulments of marriage;
f. judgments declaring marriages void from the
Furthermore, the petitioner shall submit a
beginning;
certification from the appropriate law enforcement
g. legitimations;
agencies that he has no pending case or no criminal
h. adoptions;
record.
i. acknowledgments of natural children;
j. naturalization;
The petition and its supporting papers shall be filed in
k. election, loss or recovery of citizenship
three (3) copies to be distributed as follows: first copy
l. civil interdiction;
to the concerned city or municipal civil registrar, or
m. judicial determination of filiation;
the consul general; second copy to the Office of the
n. voluntary emancipation of a minor; and
Civil Registrar General; and third copy to the
o. changes of name.
petitioner
Parties
General rule: No petition for correction of erroneous
When cancellation or correction of an entry in the
entry concerning the date of birth or the sex of a
civil register is sought, the civil registrar and all
person shall be entertained.
persons who have or claim any interest which would
be affected thereby shall be made parties to the
Exceptions: If the petition is accompanied by earliest
proceeding. [Rule 108, Sec. 3, ROC]
school record or earliest school documents such as,
but not limited to, medical records, baptismal
Notice and Publication
certificate and other documents issued by religious
Upon the filing of the petition, the court shall, by an
authorities;
order, fix the time and place for the hearing of the
same, and cause reasonable notice thereof to be given

Page 105 of 511

U.P. LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW

to the persons named in the petition. The court shall

also cause the order to be published once a week for
three (3) consecutive weeks in a newspaper of general
circulation in the province. [Rule 108, Sec. 4, ROC]

Opposition
The civil registrar and any person having or claiming
any interest under the entry whose cancellation or
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.
[Rule 108, Sec. 5, ROC]

Expediting Proceedings.
The court in which the proceeding is brought may
make orders expediting the proceedings, and may also
grant preliminary injunction for the preservation of
the rights of the parties pending such proceedings.
[Rule 108, Sec. 6, ROC]

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]

Note: In the case of one who, due to being biologically

intersex, was registered at birth as female but later
showed more matured male genitalia and himself
identified as male, the Court granted the petition to
change their registered sex from female to male.
[Republic v Cagandahan, G.R. No. 166676 (2008)]

Page 106 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

PROPERTY
Civil Law

Page 107 of 511

U.P. LAW BOC PROPERTY
III. PROPERTY
Property – All things which are, or may be, the object
of appropriation. [Art. 414, CC]
CHARACTERISTICS
Things cannot be considered as property when they
are not susceptible of appropriation because of
physical impossibility (i.e., sun and moon) or legal
impossibility (i.e., live human body). [de Leon]
A. Classification
1. Based on Mobility
[Immovable or Movable]
a. Real or Immovable Property
[Art. 415, CC]
IMMOVABLES BY NATURE: cannot be moved
from place to place; their intrinsic qualities have no
utility except in a fixed place. [pars. 1 & 8]
1. Land, buildings, roads, and constructions of
all kinds adhered to the soil [415 (1)]
2. Mines, quarries, and slag dumps, while the
matter thereof forms part of the bed, and
waters either running or stagnant. [415 (8)]
Note: Buildings have been considered as
immovables by nature, despite:
• Agreement by the parties e.g. they constitute a
separate mortgage on the building and the land
[Punsalan v. Lacsamana, G.R. No. L -55729 (1983)]
• Separate Ownership i.e. a building on rented land
is still considered an immovable. [Tolentino]
• No matter who built it e.g. whether it is erected
by the owner, usufructuary, or lessee of the land
[Ladera v. Hodges, G.R. No. 8072-R (1952)]
Note further: Where Building Is Treated As
Personal Property: Doctrine of Estoppel
Parties may by agreement (e.g. as a chattel mortgage)
treat buildings as movables, effective only as to them,
but void if rights of third persons are involved. It is
based, partly, upon the principle of estoppel.
[Tumalad v. Vicencio, G.R. No. L-30173 (1971);
Evangelista v. Alto Surety, G.R. No. L-11139 (1958)]
Page 108 of 511
CIVIL LAW
IMMOVABLES BY INCORPORATION:
movables but are attached to an immovable in such a
way as to be an integral part [Pars. 2, 3, & 7]
1. Trees and plants: only immovables when they
are attached to the land or form an integral part
of an immovable. Note: By special treatment of
Act 1508 (Chattel Mortgage Law), growing crops
may be subject of a Chattel Mortgage. For the
purpose of attachment: growing crops are to be
attached in the same manner as realty. [Sec. 7,
Rule 59]
2. Everything attached to an immovable in a
fixed manner, in such a way that it cannot be
separated therefrom without breaking the
material or deterioration of the object.
Note: Whether attached by the owner himself
or some other person
3. Fertilizer actually used on a piece of land
IMMOVABLES BY DESTINATION: essentially
movables but by the purpose for which they have
been placed in an immovable, partake of the nature
of an immovable [Pars. 4, 5, 6 & 9]
Note: Must be attached by the owner himself or
his agent.
1. Statues, reliefs, paintings etc. [415 (4)]
Requisites:
a. Placed by the owner or by the tenant (as
agent);
b. With intention of attaching them
permanently even if adherence will not
involve breakage or injury.
c. Where the improvement or ornaments
placed by the lessee are not to pass to the
owner at the expiration of the lease, they
remain movables for chattel mortgage
purposes. [Davao Sawmill v. Castillo, G.R. No.
L-40411 (1935)]
2. Machinery, receptacles, instruments or
implements INTENDED by the OWNER
of the tenement which tend directly to meet
the needs of the said industry or works [415
(5)] (e.g. sewing machines owned by the owner
of a garment factory)
The moment they are separated, (from the
immovable or from the industry or work in
which they are utilized) they revert to being
movables.
U.P. LAW BOC PROPERTY
Requisites:
a. Must be machinery, receptacles,
instruments, or implements
b. Placed by the owner or the tenant (as agent);
c. The machine, receptacle, instrument,
implement must also be essential to the
business (tend directly to meet the needs of
industry or work) in order to be considered
realty. [Mindanao Bus Co. v City Assessor, G.R.
No. L-17870 (1962)]
Note:
Machinery which is movable in its nature only
becomes immobilized when placed in a plant by
the owner of the property or plant, but not when
so placed by a tenant, a usufructuary, or any
person having only a temporary right, unless
such person acted as the agent of the owner.
[Davao Sawmill v. Castillo, G.R. No. L-40411
(1935)]
Parties may, by agreement, treat as personal
property that which by nature would be real, as
long as no third parties would be prejudiced.
That characterization is effective between the
parties. [Makati Leasing v. Wearever, G.R. No. L-
58469 (1983)]
3. Animal houses, etc. [415 (6)]
Requisites:
a. Placed by the owner or the tenant (as agent);
b. With the intention of permanent
attachment;
c. Forming a permanent part of the
immovable.
4. Docks and structures which, though
floating, are intended by their nature and
object to remain at a fixed place on a river,
lake, or coast (need not be placed by owner
of land) [415 (9)]
BY ANALOGY [Par. 10]
Contracts for public works, servitudes, other real
rights over immovable property e.g. usufruct and lease of
real property for a period of 1 year and registered.
b. Personal or Movable
CATEGORIES OF MOVABLES [Arts. 416, 417
CC]:
1. Everything not included in Art. 415 (by
exclusion);
Page 109 of 511
CIVIL LAW
2. All things that can be transported from one place
to another without substantial injury to the
immovable to which it is attached (by
description)
Unless expressly included in Art. 415 (Test by
Exclusion is Superior)
3. Real property which by any special provision of
law is considered as a movable
4. Forces of nature brought under the control of
science (e.g. electricity, gas, heat, oxygen)
5. Obligations and actions which have for their
object movables or demandable sums (i.e. any
credit)
6. Shares of stock of agricultural, commercial and
industrial entities, although they may have real
estate (e.g. stock certificates of a corporation)
c. Importance and Significance of
Classification under the CC
1. In the determination of the offenses committed
(e.g. Arts. 293, 308, 312, RPC)
2. In the forms of contracts
a. Subject matter of specific contracts (e.g.
REM, Antichresis, Pledge, Chattel
Mortgage)
b. Donations of real property to be valid are
required to be in a public instrument [Art.
749, CC] but a donation of a movable may
be made orally or in writing, unless the value
of the movable exceeds five thousand pesos.
[Art. 748, CC]
3. For acquisitive prescription
4. Actions for recovery of possession
a. Possession of real property - recovered
through accion reivindicatoria, accion publiciana,
forcible entry and unlawful detainer (accion
interdictal).
b. Possession of movable property - recovered
through replevin.
5. Determination of Proper Venue of Actions; Real
Actions v. Personal Actions [Secs. 1-2, Rule 4,
ROC]
6. Determination of the governing law (Private
International Law)
Note: Distinction unimportant for property
situated in the Philippines
7. In Transactions Affecting third persons
a. In transactions involving real property –
must be recorded in the Registry of Property
to affect third persons.
8. Preference of credits – only applicable in
insolvency proceedings [2242, CC]
U.P. LAW BOC
9. Double sales – first one to register in good faith
the sale to him of immovable property shall be
the owner. If no registration, first in good faith
possession. If no registration and no possessor
in good faith, then oldest title in good faith. [Art.
1544, CC]
10. Taxation - If the property is subject to real estate
taxes
2. Based on Ownership/
Rights-Holder
Property is either:
a. Of public dominion; or
b. Of private ownership. [Art. 419, CC]
Churches and other consecrated objects are
considered outside the commerce of man; they are
considered neither public nor private property.
(Tolentino)
a. Public Dominion
Property of public dominion is outside the commerce
of man. They cannot be the subject matter of
private contracts, cannot be acquired by
prescription and they are not subject to attachment
and execution nor burdened with a voluntary
easement.
As enumerated by Art.
Public Dominion
420, CC
Used in Art XII,
Public Domain Section 2, 1987
Constitution
Public Lands Public Land Act
CLASSIFICATIONS
Administered by the State [Art. 420, CC]
1. Those intended for public use. (roads, canals,
rivers, torrents, ports and bridges constructed by
the State, banks, shores, roadsteads, and others
of similar character)
2. Those (w/o being for public use) and are
intended for some public service: May be used
only by authorized persons but exists for the
benefit of all, e.g. fortresses, unleased mines and
civil buildings.
3. Those for the development of the national
wealth. Includes natural resources such as
minerals, coal, oil and forest.
Page 110 of 511
PROPERTY CIVIL LAW
PATRIMONIAL PROPERTY [421,CC]:
Owned by the State over which it has the same rights
as private individuals in relation to their own
property.
Subject to the administrative laws and regulations on
the procedure of exercising such rights, e.g. friar
lands, escheated properties and commercial
buildings.
Purpose:
• Enables the State to attain its economic ends
• Serves as a means for the State’s subsistence and
preservation
• Enables the State to fulfill its primary mission
Note: Patrimonial Property is owned by the state and
can be the subject of contracts.
Conversion of property of public dominion for
public use to patrimonial property:
1. Property of public dominion, when no longer
intended for public use or for public service,
shall form part of the patrimonial property of the
State [Art. 422, CC]
2. An express declaration by the State (either by
the Congress or by the President, if the power
was provided by law) that the property of public
dominion has been converted into patrimonial
property, even though it was classified as
alienable or disposable. [Heirs of Malabanan v.
Republic, G.R. No. 179987 (2009)]
The fact that the Roppongi site has not been
used for a long time for actual Embassy service
does not automatically convert it to
patrimonial property. Any such conversion
happens only if the property is withdrawn from
public use (Laurel v. Garcia, G.R. No. 92013
(1990) citing Cebu Oxygen and Acetylene Co. v.
Bercilles, 66 SCRA 481 [1975])
Administered by Municipal Corporations [Art.
424 (1), CC]
1. Property for public use, in the provinces, cities,
and municipalities, consist of the provincial
roads, city streets, municipal streets, the squares,
fountains, public waters, promenades, and public
works for public service paid for by said
provinces, cities, or municipalities.
2. Patrimonial property of Municipal Corporations:
a. All other property possessed by any of them
(provinces, cities, and municipalities) [Art.
424 (2), CC]
U.P. LAW BOC PROPERTY
b. The province or municipality, as a juridical
entity, also possesses private property to
answer for its economic necessities.
c. General Presumption: that land comes
from the State upon the creation of the
municipality. All lands in the possession of
the municipality are properties of public
dominion held in trust for the State’s
inhabitants are subject to the control and
supervision of the State.
Exception: Properties acquired with their own funds in
their private or corporate capacity over which the
political subdivision has ownership and control. A
municipal corporation must prove that they acquired
the land with their own corporate funds. [Salas v.
Jarencio,G.R. No. L-29788 (1972)]
Note:
The Local Government Code classifies property of
LGUs into:
1. Property of LGU in its governmental character,
which is broader than Art. 424, CC
2. Property of LGU in its proprietary character.
b. Private Ownership
Can be exercised by the state in its private capacity or
by private persons.
KINDS
1. Patrimonial property - Property owned by the
State and its political subdivisions in their private
capacity; all property of the State not included in
NCC 420 (on public dominion) [NCC 421-424]
2. Property belonging to private persons, either
individually or collectively [Art. 425, CC]
CONVERSION
Alienable Public Land converted to Private Property
through Prescription
Alienable public land (Patrimonial property
ONLY) held by a possessor – personally/through
predecessors-in-interest, openly, continuously and
exclusively – for 30 years is converted to private
property by the mere lapse or completion of the
period. The application for confirmation is a mere
formality, because land had already been converted,
giving rise to a registrable title. [Director of Lands v.
IAC, G.R. No. 73002 (1986)]
Page 111 of 511
CIVIL LAW
Private Land converted to Property of Public
Dominion through abandonment and
reclamation
Through the gradual encroachment or erosion by the
ebb and flow of the tide, private property may
become public if the owner appears to have
abandoned the land, and permitted it to be totally
easten up by the sea so as to become part of the
shore. The land having disappeared on account of the
gradual erosion in case of natural expropriation, and
having remained submerged until they were
reclaimed by the government, they are public land.
[Government v. Cabangis, G.R. No. L-28379 (1929)]
c. Based on Consumability
Only applies to movable property, determined by
nature [Art. 418, CC]
1. Consumable goods: movables which cannot be
used in a manner appropriate to their nature
without their being consumed.
2. Non-consumable goods: all those excluded in
the first category
d. Based on Susceptibility to
Substitution
Only applies to movables, determined by the
intention of the parties.
1. Fungibles: things that, because of their nature
or the will of the parties, are capable of being
substituted by others of the same kind, not
having a distinct individuality.
2. Non-fungibles: things that cannot be
substituted for another; if the parties agreed that
the same thing be returned, it is not fungible.
e. Hidden Treasure
Any hidden and unknown deposit of money, jewelry
or other precious objects, the lawful ownership of
which does not appear. [Art. 439, CC]
General Rule: Hidden treasure belongs to the owner of
the land, building, or other property on which it is
found [Art. 438, CC]
Exceptions:
Finder of hidden treasure is entitled to one-half (1/2)
if:
1. Finding is by chance;
2. Finder is not co-owner of the property where it
is found;
U.P. LAW BOC PROPERTY CIVIL LAW

3. Finder is not trespasser;

4. Finder is not an agent of landowner;
5. Finder is not owner of the land, building, or
other property
If the things found may be of interest to science or
the arts, the State has a right to acquire them at their
just price, which shall be divided in conformity with
the rule stated. [Art. 438, CC]
For purposes of hidden treasure, a usufructuary is
considered a stranger to property; naked owner gets
owner’s share (Art. 566, CC).
B. Ownership
1. Definition and Concept
It is the independent right of exclusive enjoyment and
control of a thing for the purpose of deriving
therefrom all the advantages required by the
reasonable needs of the owner (or holder of the right)
and the promotion of general welfare, but subject to
the restrictions imposed by law and the rights of
others. (JBL REYES, found in Prof. Labitag
Syllabus).

f. Based on the Constitution [Sec. May be exercised over things or rights. [Art. 427, CC]
3, Art. XII]
a. Types of Ownership
1. Public Agricultural Land;
2. Mineral Land; 1. Full Ownership - With complete rights over the
3. Timber Land; property.
4. National Parks. 2. Naked Ownership - Absence of jus fruendi and
jus utendi, jus possidendi
3. Sole Ownership - Ownership vested only in one
person
4. Co-Ownership - Ownership vested in 2 or
more persons in ideal shares or undivided
interest.
5. Beneficial ownership - Right to enjoy the use
and fruits of a property

b. 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]

Page 112 of 511

U.P. LAW BOC
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
unjustified.
14. Right of owner of land to its surface and
everything under it, except natural resources -
the owner may make any works, plantations, and
excavations subject to servitudes and special laws
and ordinances and reasonable needs of aerial
navigation [Art. 437, CC]
1. Protecting Property
REAL RIGHTS v. PERSONAL RIGHTS
Real Rights
Rights that confer upon its holder an autonomous
power to derive directly from a thing certain
economic advantages independently of whoever the
possessor of the thing.
The number of real rights is an open classification:
a. Ownership
b. Real right of Possession
c. Usufruct
d. Easement
e. Recorded lease
f. Real Estate Mortgage
g. Chattel Mortgage
h. Pledge
i. Antichresis
j. Retention
k. Pre-emption
l. Redemption
m. Stewardship
n. Certificate of Ancestral Domain Title; Certificate
of Ancestral Domain Claims in the IPRA Law
Personal Rights
Rights of a person to demand from another as a
definite passive subject, the fulfillment of a prestation
to give, to do or not to do.
ACTION IN REM v. ACTION IN
PERSONAM v. ACTION QUASI IN REM
Action in rem - Action against a property, judgment
binding against the whole world.
Action in personam - Action against a specific
person, judgment binding against that particular
person.
Page 113 of 511
PROPERTY CIVIL LAW
Action quasi in rem - Action against a specific
property with respect to a person.
2. Remedies
DOCTRINE OF SELF-HELP [Arts. 429-430,
CC]
Requisites:
a. Person exerting force is owner or lawful
possessor
b. There is actual or threatened unlawful physical
invasion or usurpation of property
c. Force used against aggressor is reasonably
necessary to repel/prevent such aggression
Exception: Cannot be used against agents of the state
acting in their official functions or from other lawful
form of action against the possessor
Every owner may enclose or fence his land or
tenements by any other means without detriment to
servitudes constituted thereon. [430, CC]
3. Actions to Recover Ownership and
Possession of Property
IMMOVABLE PROPERTY
Accion Reivindicatoria
An action to recover ownership of real property. It
includes, but is not limited to possession.
Accion Publiciana
An action for the recovery of real right of
possession of real property (posession de jure).
Note: actions for ejectment not filed within 1 year
must be filed as accion publiciana.
Accion Interdictal - Action for Ejectment
A summary action for recovery of actual, material or
de facto physical possession through an action for
Forcible Entry or Unlawful Detainer.
U.P. LAW BOC PROPERTY CIVIL LAW

Forcible Entry Unlawful Detainer MOVABLE PROPERTY

Lawful possessor
Possessor refused to Replevin
deprived through
vacate upon demand For manual delivery of movable property, for either
FISTS:
by owner ownership or possession
a. Force
Note: Legal possession Requisites for recovery of property [Art. 434, CC]
b. Intimidation
(by permission/ a. Property must be identified; and
c. Strategy
tolerance) becomes b. Plaintiff must rely on the strength of his title
d. Threats, and
unlawful upon failure
e. Stealth
to vacate Ei incumbit probatio qui dicit, non qui
Period to Bring
negat: “He who asserts, not he who denies must
prove.”
Action: 1 year from
dispossession
Period to Bring
(force,
Action: 1 year from last
intimidation,
demand to vacate.
threats) or from
knowledge of
dispossession
(strategy, stealth)

Page 114 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

ACTION TO QUIET TITLE/PREVENT CLOUD

ACTION TO QUIET TITLE

A common law remedy for the removal if any cloud upon a doubt or uncertainty with respect to title to
real property. [Paras]. A cloud on title is a semblance of title (legal or equitable) which legally appears
valid but is, in fact, unfounded. It is in the nature of a quasi in rem action.

In General Applicable to real property, subject to certain exceptions.

a. To declare the invalidity of a claim on a title or the invalidity of an interest in property.

b. To free the plaintiff and all those claiming under him from any hostile claim on the
property.

Purpose Notes:
To prevent multiplicity of suits, an action for quieting of title takes precedence over an
ejectment case. [Luzuriaga v. Adil, G.R. No. L-58912 (1985)
Pending an action for quieting of title, possession of actual possessor must be respected until
the case is decided on the merits. [Balbecino v. Judge Ortega, G.R. No. L-14231 (1962).

a. To prevent future or further litigation on the ownership of the property.

Why Bring an
b. To protect the true title and possession.
Action to
c. To protect the real interest of both parties.
Quiet Title
d. To determine and make known the precise state of the title for the guidance of all.

a. To questions involving interpretation of documents;

b. To mere written or oral assertions of claim, EXCEPT IF made in a legal proceeding or asserts
that an instrument or entry in plaintiff’s favor is not what it purports to be;
Is Not c. To boundary disputes;
Applicable To: d. To deeds by strangers to the title UNLESS purporting to convey the property of the
plaintiff;
e. To instruments invalid on their face; or
f. Where the validity of the instrument involves a pure question of law
a. There is a cloud on title to real property or any interest to real property;
Requisites b. The plaintiff must have legal or equitable title to, or interest in the real property; and
c. Plaintiff must return the benefits received from the defendant.

When the plaintiff is in possession of the property, the action to quiet title does not
prescribe.

When the plaintiff is not in possession of the real property, the action to quiet title may
prescribe depending upon the right of action filed by the plaintiff:
Prescription a. 10 yrs. – if plaintiff is a possessor with a real right, i.e. accion publiciana, or if action is for
reconveyance on the basis of a constructive trust under Art. 1456, CC
b. 30 yrs. – if plaintiff is the owner of real property

Note: An action to quiet title may be defeated by a claim of ordinary or extraordinary acquisitive
prescription by the defendant.

Page 115 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

ACTION TO PREVENT A CLOUD

“Cloud on title” means a semblance of title, either legal or equitable, or a claim or a right in real property,
appearing in some legal form but which is, in fact, invalid or which would be inequitable to enforce.

Legal Title v. Legal title: the party is the registered owner of the property.
Equitable
Title Equitable title: the person has the beneficial ownership of the property.
a. There is a claim emerging by reason of:
1. Any instrument e.g. a contract, or any deed of conveyance, mortgage, assignment,
waiver, etc. covering the property concerned;
2. Any record, claim, encumbrance e.g. an attachment, lien, inscription, adverse claim, lis
pendens, on a title; or
3. Any proceeding e.g. an extrajudicial partition of property.

b. The claim should appear valid or effective and extraneous evidence is needed to prove
A Cloud
their validity or invalidity;
Exists If [Art.
Test: Would the owner of the property in an action for ejectment brought by the adverse
476]:
party be required to offer evidence to defeat a recovery?
As a general rule, a cloud is not created by mere verbal or parole assertion of ownership
or an interest in property.

c. Such instrument, etc. is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, or has
been extinguished or terminated, or has been barred by extinctive prescription; and

d. Such instrument, etc. may be prejudicial to the true owner or possessor.

a. To questions involving interpretation of documents;
b. To mere written or oral assertions of claim, EXCEPT IF made in a legal proceeding or asserts
Does Not that an instrument or entry in plaintiff’s favor is not what it purports to be;
Cover and Is c. To boundary disputes;
Not d. To deeds by strangers to the title UNLESS purporting to convey the property of the
Applicable To: plaintiff;
e. To instruments invalid on their face; or
f. Where the validity of the instrument involves a pure question of law
a. Plaintiff has a title to a real property or interest therein;
b. Defendant is bent on creating a cloud on the title or interest therein. The danger must not
Requisites be merely speculative or imaginary but imminent; and
c. Unless the defendant is restrained or stopped, the title or interest of the plaintiff will be
prejudiced or adversely affect

Page 116 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

c. Actions in a State of Necessity

c. Limitation of Ownership The owner of a thing has no right to prohibit the
interference of another with the same, if the
General Limitations interference is necessary to avert an imminent
a. Taxation danger and the threatened damage, compared to
b. Eminent domain the damage arising to the owner from the
c. Police power interference, is much greater. The owner may
demand from the person benefited, indemnity
Specific Limitations for the damage to him. [Art. 432, CC]
a. Legal Servitudes [Arts. 644, 678, 679, 649, 637,
652, 676, 684-687, CC] d. Nuisance [Art. 694, CC]
Once requisites are satisfied, the servient owner
may ask the Court to declare the existence of an e. Limitations imposed by the owner himself
easement. (e.g. Easement of Right of Way, (e.g. voluntary easements)
Easement of Light and View etc.)
f. Limitations imposed by the party
b. Must not injure the rights of a third person transmitting the property either by the
[Sic Utere Tuo Ut Alienum Non Laedas (Art. 431, contract or will (e.g. onerous donations or
CC)] easement constituted when dividing one
property)

SUMMARY OF ACTIONS
Action Venue Summon Prayer Basis Prescription Jurisdiction
Prior physical
possession for
Forcible
forcible entry;
Entry/ Real In
Possession Notice to 1 year MTC
Unlawful Action personam
vacate for
Detainer
unlawful
detainer
Accion Real In Real right of 10 years
Possession RTC
Publiciana Action personam Possession [Art. 555(4), CC]
GF: 10 years
BF: 30 years
[Art. 1137, CC]

Exception (i.e. no
Accion Real In
Possession Ownership acquisitive RTC
Reivindicatoria Action personam
prescription): 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
RTC or MTC
Quieting of Real Quasi-in Quieting possession,
Ownership (depending on
Title Action rem of Title imprescriptible.
value)

Page 117 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Action Venue Summon Prayer Basis Prescription Jurisdiction

Otherwise, 10 years
(based on constructive
trust) [Heirs of Jose Olviga
vs. CA, G.R, No.
104813 (1993)]
GF: 4 years RTC or MTC
Personal In Possession or
Replevin Possession BF: 8 years [Art. 1132, (depending on
Action personam Ownership
CC] value)

2. Accession a. Possession in good faith (fruits belong to

possessor by good faith for as long as he remains
in good faith)
Accession – the right by virtue of which the owner
b. Usufruct (to usufructuary)
of a thing becomes the owner of everything that is
c. Lease (to lessee in civil law lease of agricultural
produced thereby, or which is incorporated or
land; lessor gets rentals as civil fruits)
attached thereto, either naturally or artificially. [Art.
d. Antichresis
440, CC]
KINDS OF FRUITS
Not a mode of acquiring property; it does not depend
upon a new title.
a. Natural – spontaneous products of soil and the
young and other products of animals [Art. 442
Accessories – things joined to or included with the
(1), CC]
principal thing for the latter’s embellishment, better
use, or completion, but which cannot be separated
Partus sequitur ventrem: To the owner of female
without damage or injury.
animals would also belong the young of such
animals although this cannot apply when the
GENERAL PRINCIPLES OF ACCESSION
owner mixes his cattle with those of another and
a. Accessio cedit principali - the accessory
they interbreed, thus co-ownership is applied.
follows the principal, and not the other way
[Siari Valley Estate v. Lucasan, G.R. No. L-13281
around [Philippine National Bank v De Jesus, G.R.
(1960)].
No. 149295 (2003)]
b. Industrial – produced by lands of any kind
Note exception found in Art. 120, FC on reverse
through cultivation or labor [Art. 442 (2), CC].
accession.
Standing trees are not fruits since they are
b. No one shall be unjustly enriched at the expense
considered immovables although they produce
of another [Arts. 447-452]
fruits themselves. However, they may be
considered as industrial fruits when they are
a. Classification of Accession cultivated or exploited to carry on an industry, as
in tree plantation.
1. With Respect to Immovables
c. Civil – easily prorated for under Art. 544, CC
ACCESSION DISCRETA they are deemed to accrue daily and belong to the
Right of ownership to the fruits. [Art. 441, CC] possessor in good faith in that proportion (e.g.
dividends, rents of buildings, price of leases or
General Rule: To the owner of the principal belongs the lands and the amount of perpetual or life
natural, industrial and civil fruits. annuities or other similar income).

Exceptions: [GULA – Good faith, Usufruct, Lease,

Antichresis]

Page 118 of 511

U.P. LAW BOC PROPERTY
Note:
Natural and industrial fruits are real property while
still ungathered.
Only those that are manifest or born are considered
as natural or industrial fruits.
Principles Applicable to Accession Discreta
a. Time of Accrual depending on kind:
1. Annuals: from the time seedlings appear on
the ground.
2. Perennials: from the time fruits actually appear
on the plants.
3. Young of animals: from the time they are in the
womb, although unborn – beginning of
maximum ordinary period of gestation.
4. Fowls: from the time of incubation.
b. Pay expenses to third person possessor in good
faith - He who receives the fruits has the
obligation to pay the expenses incurred by a third
person in the production, gathering and
preservation of the fruits. [Art. 443, CC]
1. Exception: Owner does not have to pay if land
is recovered before gathering from a
possessor in bad faith.
2. But if owner recovers land from possessor in
bad faith, he may choose to acquire the land
and he can make the possessor, builder,
planter, sower account for the fruits that
have been gathered, with the obligation to
deduct the expenses for producing,
harvesting and preservation of the fruits.
ACCESSION CONTINUA
Right pertaining to the owner of a thing over
everything that is incorporated or attached thereto
either naturally or artificially (by external forces).
ACCESSION CONTINUA ARTIFICIAL OR
INDUSTRIAL
Building, planting or sowing on land owned by
another (over immovables).
General rule: Whatever is built, planted or sown on the
land of another + improvements or repairs made
thereon, belong to the owner of the land subject to the
rules on BPS. [Art. 445, CC]
Presumptions:
a. All works, sowing and planting are presumed
made by the owner and at his expense, unless
the contrary is proved.
Page 119 of 511
CIVIL LAW
b. The owner of the principal thing owns the
natural, industrial and civil fruits, except when the
following persons exist:
1. Possessor in Good Faith
2. Usufructuary
3. Lessee
4. Antichretic creditor
MEANING OF BAD FAITH
On the part of the landowner
Whenever the building, planting or sowing was done
with his knowledge and without opposition on his
part. [par. 2, Art. 453, CC]
On the part of the owner of materials
Allows the use of his materials without protest.
On the part of the builder, planter and sower
One who has knowledge of any flaw or defect in his
title or mode of acquisition (Art. 526)
He is a possessor in bad faith at the time of BPS if he
knows that
a. He does not have title to the land, and thus, has no
right to build thereon; or
b. He has no permission to build, plant, or sow on
the land which he possesses but does not own.
Note:
Bad faith leads to liability for damages and the loss of
the works or the improvement without
reimbursement. [Art. 449, CC]
If both parties are in bad faith, then treat them as if
they are both in good faith. [Art. 453 (1), CC]
RULES [Arts. 446-455, CC]
a. Case where the landowner differs from the
owner of materials [Art. 447, CC]
Situation #1: Both the landowner (LO) and the
owner of materials (OM) are in GF
Rights: Shall own what is built,
planted, sown
(materials/improvements)
[Accessio cedit principali]
LO in GF
Liabilities: shall pay for the
value of the materials (no one
shall be unjustly enriched at the
expense of another)
U.P. LAW BOC
Rights:
a. Limited right of removal (can
only be resorted to if no
OM in GF injury can be inflicted on the
work constructed); or
b. Right to reimbursement for
the value of materials.
Situation #2: Both the LO and OM are in BF
Both LO and Parties will be treated as though
OM in BF both acted in GF [Art. 453, CC]
Situation #3: LO in BF, while OM in GF
Rights: To own what is built,
planted, sown
(materials/improvements)
Liabilities: shall pay for the
LO in BF
value of the materials, as well as
pay OM indemnity for damages
Note: Subject to OM’s absolute
right of removal
Rights:
a. Absolute right of removal +
Right to indemnification for
damages; OR
OM in GF
b. Right to reimbursement for
the value of materials + Right
to indemnification for
damages
Situation #4: LO in GF, while OM in BF
Rights:
a. Right to acquire the
improvements without
paying indemnity
LO in GF
b. Right to acquire indemnity
for damages if there are
hidden defects known to
OM
Lose materials without right to
OM in BF
indemnity (no right of removal)
b. CASE WHERE ONE BUILDS, PLANTS,
OR SOWS ON LAND OWNED BY
ANOTHER (BPS v. LO) [Arts. 448-454, CC]
Page 120 of 511
PROPERTY CIVIL LAW
Situation #1: BPS in GF [Art. 448, CC]
Options:
a. Acquire improvements after
paying BPS for their value; or
b. Oblige the one who built or
Landowner planted to pay the price of
[Art. 446, CC] the land unless its value is
considerably more than that
Note: Option of the building or trees, and
is given solely the one who sowed, the
to LO, GF of proper rent.
BPS is c. If the value is considerably
immaterial more, then the court can
force the parties to enter into
a forced lease. [Art. 448, CC]
Note: The difference between a
BUILDER and a SOWER
• Generally, has right to
reimbursement for the
improvement.
• Pending LO’s payment, has
right to retention of the land
(during this period, BPS is
not required to pay rent)
• Whatever fruits (rents) he
BPS in GF receives during the period of
retention must be deducted
from whatever indemnity is
due to him; and in case it
exceeds the value of the
indemnity, the excess shall be
returned to the owner of the
land. [de Leon, citing
Mendoza v. De Guzman, G.R.
No. L-28721 (1928)]
NOTE, HOWEVER: Landowner can be forced to
choose under pain of direct contempt or court
can choose for him.
NOTE: In every case, the BPS is entitled to
reimbursement of necessary expenses for the
preservation of the land. [Art. 452, CC]
Situation #2: Both the LO and BPS are in BF
Parties will be treated as though
Both LO and
both acted in GF, so apply Art.
BPS in BF
446. [Art. 453, CC]
Situation #3: LO in BF, while BPS in GF
U.P. LAW BOC
a. Must indemnify BPS for the
improvements AND pay
damages as if he himself did
the BPS
LO in BF
b. Has no option to sell the land
and cannot compel BPS to
buy the land without the
latter’s consent
Rights:
a. Absolute right of removal +
Right to indemnification for
damages; OR
BPS in GF
b. Right to reimbursement for
the value of materials + Right
to indemnification for
damages
Situation #4: LO in GF, while BPS in BF [Art.
449-451, CC]
Right to collect damages in any
case AND option to:
a. Acquire improvements
without paying indemnity if
the improvements are still
standing on the land;
b. Sell the land to BP or collect
rent from the sower unless
value of the improvements in
which case there will be a
LO in GF
forced lease; or
c. Order demolition of
improvements or restoration
of land to its former
condition at the expense of
the BPS
Landowner must STILL pay for
necessary expenses for
preservation
a. Pay damages to landowner
b. Loses materials without right
to indemnity
BPS in BF c. No right to refuse to buy the
land
Recover necessary expenses for
preservation of land
Page 121 of 511
PROPERTY CIVIL LAW
c. CASE WHERE LO, BPS, AND OM ARE
DIFFERENT PERSONS [Art. 455, CC]
Note: If there are 3 parties in BPS, solve the problem by
considering the options open to the landowner vis-à-vis BPS
depending on their good faith or bad faith; apply Art. 455, CC
re: one who acted in good faith. Art. 455, CC shall not apply
if the owner makes use of the right granted by Article
450.
GENERAL RULES [de Leon]:
a. OM in GF entitled to reimbursement for the
value of the materials used (regardless of the GF
or BF of the LO and/or the BPS),
PRIMARILY, from the BPS. If the BPS be
insolvent, then the LO shall be subsidiarily liable
to the OM [par. 1, Art. 455, CC]
Requisites for the LO’s subsidiary liability
• The OM acted in GF;
• BPS is insolvent; and
• The LO appropriates the accession to
himself.
b. The BPS who has paid the OM may seek
reimbursement from the LO (value of materials +
labor) [par. 2, Art. 455, CC]
Requisites:
• The BPS acted in GF; and
• The LO appropriates the improvement to
himself.
c. if only the OM is in BF, he loses his materials, as
well as his right to indemnity. He also becomes
liable for damages. [Arts. 449, 451, CC]
d. If only the BPS acted in BF, he becomes liale to the
OM for the value of the materials + damages.
Should he become insolvent, the LO shall pay for
the value of the materials, but will not be liable
for damages. Additionally, he shall still be liable
to the LO [Arts. 450-451, CC]
e. If only the LO acted in GF, he can exercise any
of his options under Arts. 449 and 450, both
having an additional right to ask for damages
[Art. 451, CC].He shall also not be subsidiarily
liable to the OM.
U.P. LAW BOC PROPERTY CIVIL LAW

f. If ALL acted in BF, they shall be treated as

though all of them acted in GF [Art. 453, CC]

Landowner Builder/Planter/Sower Owner of Materials

ALL Acted in Good Faith

a. Right to acquire improvements a. Collect value of material

and pay indemnity to BPS; primarily from BPS and
a. Right of retention until
subsidiary liability to OM subsidiarily to landowner if
necessary and useful expenses
b. Sell the land to BP except if the BPS is insolvent; and
are paid
value of the land is considerably b. Limited right of removal (if the
b. To pay value of materials to OM
more; or removal will not cause any
c. Rent to S injury)

LO in GF BPS in GF OM in BF

a. Right to acquire improvements a. Right of retention until

and pay indemnity to BPS;
b. Sell land to BP except if the
value of the land is considerably b.
more; or
c. Rent to S
necessary and useful expenses
a. Lose the material without right
are paid
to indemnity
Keep improvements without
b. Must pay for damages to BPS
indemnity to OM and collect
damages from him

LO in GF BPS in BF OM in BF

a. Right to collect damages from

BPS in any case and the option a. Recover from BPS (as if both
to either are in GF)
1. Acquire improvements b. If BPS acquires improvements,
Recover necessary expenses for
w/o paying for indemnity; remove materials if feasible
preservation of land from LO unless
2. Demolition or restoration; w/o injury
LO sells land
or c. No action against LO but may
3. Sell to BP, or to rent to be liable to LO for
sower consequential damages
b. Pay necessary expenses to BPS

ALL Acted in Bad Faith

Same as when all acted in GF under Art. 453

LO in BF BPS in GF OM in GF

a. Acquire improvement after

paying indemnity and damages
to BPS unless the latter decides a. May remove improvements a. Remove materials at any event
to remove b. Be indemnified for damages in b. Collect value of materials from
b. Subsidiarily liable to OM for any event BPS; subsidiarily from LO, if
value of materials if he acquires c. Pay OM the value of the LO is made to pay for
improvements and pays materials improvements and damages
damages to BPS; no subsidiary
liability if BPS chooses removal
in any event.

Page 122 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Landowner Builder/Planter/Sower Owner of Materials

LO in BF BPS in BF OM in GF
a.
Collect value of materials
a. Right to acquire improvements primarily from BPS and
and pay indemnity to BPS; subsidiarily from LO if LO
subsidiarily liable to OM acquires the improvements
a. No right of retention
b. Has option to: b. Collect damages from BPS
b. Pay value of materials to OM
1. Sell the land to BP except c. Absolute right to remove
and pay him damages
if the value of the land is materials in any event (if BPS
considerably more; or acquires improvements)
2. Rent to S

LO in GF BPS in BF OM in GF

LO has right to collect damages

a. Collect value of materials
from BPS in any case and the option
primarily from BPS and
to either:
a. Right to necessary expenses subsidiarily from LO
a. Acquire improvements w/o
b. Pay value of materials to OM b. Collect damages from BPS
paying for indemnity;
c. Pay damages to OM/LO c. If BPS acquires improvements,
b. Demolition or restoration; or
absolute right of removal in any
c. Sell to BP or rent to S
event
Pay necessary expenses to BPS

LO in BF BPS in GF OM in BF
Acquire improvements and pay
a. Receive indemnity for damages
indemnity and damages to BPS a. Right to indemnity
b. Absolute right of removal of
unless the latter decides to remove b. Loses right to the materials
improvements in any event
materials

ACCESSION CONTINUA NATURAL LAND registered property in his name. (Grande v. CA, G.R.
DEPOSITS, ETC. No. L-17652 [1962])

Alluvium
Soil is gradually deposited on banks adjoining the
river.
Requisites: [GAC – Gradual, Adjacent, Currents]
a. Deposit of soil or sediment is gradual and
imperceptible;
b. As a result of the action of the currents of the
waters of the river and should have no human
intervention;
c. Land where the accretion takes place is adjacent
to the banks of the rivers (RIPARIAN
LAND); and
d. Deemed to Exist: When the deposit of the
sediment has reached a level higher than the
highest level of the water during the year, i.e.
higher than the river bank. (Meneses v. CA, G.R.
No. 82220 [1995])
Effect: The riparian owner automatically owns the
Alluvion but it does not automatically become
AVULSION
A known portion of land is segregated from one
estate by the forceful current of a river, creek or
torrent and transferred to another. [Article 459, CC]
Requisites: [ACFI – Abrupt, caused by Current or
other Forces of nature, Identifiable]
a. Segregation and transfer of land is sudden and
abrupt;
b. Caused by the current of the river, creek or
torrent; and
c. The portion of land transported must be known
and identifiable; or
Effect: The ownership of the detached property is
retained by the owner subject to removal within 2
years from the detachment.
UPROOTED TREES [Art. 460, CC]
In case of uprooted trees, the owner retains
ownership if he makes a claim within 6 months. This

Page 123 of 511

U.P. LAW BOC PROPERTY
refers only to uprooted trees and does not include
trees which remain planted on a known portion of
land carried by the force of the waters. In this latter
case, the trees are regarded as accessions of the land
through gradual changes in the course of adjoining
stream. [Payatas v. Tuazon, G.R. No. L-30067 (1929)]
CHANGE OF COURSE OF RIVER [Art. 461-
462, CC]
Requisites:
a. Change in the natural course of the waters of the
river; and
b. Such change causes the abandonment of the river
beds.
“Natural Bed”: ground covered by its waters
during the highest floods. [Binalay v. Manalo, G.R.
No. 92161 (1991)]
c. Such change is sudden or abrupt
d. Change is permanent
Effects:
a. Owners whose lands are occupied by the new
course of the river automatically become owners
of the old bed, in proportion to the 124ill they
lost [Art. 461, CC]
b. Owners of the lands adjoining the old bed are
given the right to acquire the same by paying the
value of the land. Not exceeding the value of the
land invaded by the new bed (the old property of
the owner) [Art. 461, CC]
c. The new bed opened by the river on a private
estate shall become of public dominion. [Art.
462, CC]
Exceptions:
a. Where the river simply dries up, abandoned
riverbed belongs to the State because there are no
persons whose lands are occupied by the
124ill124e of the river. So it is 124ill124en public
dominion still.
b. Where the government reverts back the course of
the river, no compensation.
Division of River into Branches:
When the current causes 124ill124en124 of river into
branches and a piece of land or part thereof is isolated
or separated, there is no accession and the owner of
the land retains his ownership. [Art. 463]
Page 124 of 511
CIVIL LAW
FORMATION OF ISLANDS
They belong to the State if [Art. 464]:
a. Formed on the seas within the jurisdiction of the
Philippines.
b. Formed on lakes, or
c. Formed on navigable or floatable rivers:
1. Capable of affording a channel or passage
for ships and vessels;
2. Must be sufficient not only to float bancas
and light boats, but also bigger watercraft;
3. Deep enough to allow unobstructed
movements of ships and vessels.
Test of whether river is navigable: Whether it can
be used as a highway of commerce, trade and travel
They belong to the private owner of the separated
land if [Art. 463]:
• the island is formed in a place not mentioned in
Art. 464.
Note: There is no accession when islands are formed
by the branching of a river; the owner retains
ownership of the isolated piece of land.
They belong to the owners of the nearest margins
or 124ill124 if [Art. 465]:
a. Formed through successive accumulation of
alluvial deposits
b. On non-navigable and non-floatable rivers
c. If island is in the middle: divided longitudinally in
half.
d. if nearer to one margin or bank, to the nearer
124ill124en124 owner
Note: If a landowner allows the sea or a lake 124ill124e
up his land completely, it is a case of natural
expropriation and if the land later reappears, he does
not regail ownership thereof. [Republic v. Cabangis,
G.R. No. L-28379 (1929)]
2. With Respect to Movable Property
CONJUNCTION/ADJUNCTION
There is adjunction or conjunction when 2 movables
belonging to different owners are attached to each
other such that separation is 124ill124en124124
without injury. For example, the 124ill124 of B is
124ill124en the canvass of C.
Basic Rule: If separation is 124ill124en without
injury, then should separate. If this is not 124ill124en,
then adjunction or conjunction.
U.P. LAW BOC PROPERTY
Kinds
a. Inclusion (e.g. jewel on ring)
b. Soldering (adjoining two or more metals)
c. Ferruminatio (same metals)
d. Plumbatura (different metals)
e. Escritura (writing)
f. Pintura (painting)
g. Weaving
Requisites
a. There are 2 movables belonging to 2 different
owners;
b. They are united in such a way that they form a
single object; and
c. They are so inseparable that their separation
would impair their nature or result in substantial
injury to either component.
OWNERSHIP OF NEW OBJECT FORMED
BY ADJUNCTION
Owner of Principal Object
Good Faith: Acquires the thing but with the duty to
indemnify the owner of the accessory [Article 466].
Owner of Accessory
Good Faith: Has a right to demand separation even
though there may be damage if the accessory is more
valuable.
If Owner of Principal Object in Bad Faith:
Demand value of the accessory plus damages, OR
Demand separation even if the principal will be
destroyed plus damages [par. 2, Art.470]
If Owner of Accessory in Bad Faith: Loses the
thing plus is liable for damages [Article 470]
If both are in bad faith, treat as if both are in good
faith [Article 453 by analogy].
Rules in Determination of the Principal Thing
[Art. 467-468, CC]
In the order of application, the principal thing is that:
a. To which the other has been united as an
ornament or for its use or perfection (“Rule of
importance and purpose”).
b. Thing of greater value.
c. Thing of greater volume.
d. That of greater merits, taking into consideration
all the pertinent legal provisions, as well as the
comparative merits, utility and volume of their
respective things. [Manresa]
Page 125 of 511
CIVIL LAW
Exception: In painting and sculpture, writings, printed
matter, engraving and lithographs the MATERIAL
(board, metal, stone, canvas, paper or parchment)
which the writer/artist used shall be deemed the
accessory thing in all cases. [Art. 468, CC]
When separation allowed
a. When separation will not cause any injury, the
respective owners can demand separation [Art.
469, CC]; or
b. When the accessory is more precious:
1. Owner of accessory may demand separation
even though the principal thing may suffer
[Art. 469, CC].
2. Owner who caused the union shall bear the
expenses for separation even if he acted in
good faith.
c. When the any of the owners are in bad faith
1. If owner of accessory in BF, then he shall
lose the accessory and pay damages to owner
of principal.
2. If owner of principal in BF, then the owner
of the accessory shall choose between paying
the value of the principal or have the
accessory separated from the principal even
if the principal thing is destroyed, and be
paid damages.
MIXTURE
The 125ill125 of materials belonging to different
owners where the components lose their identity.
Kinds
a. Commixtion: mixture of solid things
b. Confusion: mixture of liquid things, and includes
mixture of gases
Rules [Art. 472 – 473, CC]:
a. If caused by the 125ill of the parties or by chance
or by the 125ill of one party but is in 125ill faith,
then there 125ill be a co-ownership
125ill125en125 proportional value (not
125ill125en).
b. If caused by the 125ill of one party in bad faith,
then the party in bad faith loses the entire thing
and must pay indemnity for damages.
Note:
Good faith in accession does not necessarily exclude
negligence, which gives rise to damages. [Art. 456, CC
by analogy]
Also, there is a co-ownership.
U.P. LAW BOC PROPERTY CIVIL LAW

In accession, everything goes to one party. Thus, this

C. Co-Ownership
happens only if one party is in bad faith.
The form of ownership when the ownership of an
SPECIFICATION [Art. 474, CC] undivided thing or right belongs to different persons.
[Art. 484, CC]
Takes place when the work of a person is done on the
material of another, such material, in consequence of 1. Requisites
the work itself, undergoes a transformation.
a. Plurality of owners;
It is the transformation of another’s material by the b. Object must be an undivided thing or right; and
application of labor, into a thing of a different kind. c. Each co-owner’s right must be limited only to his
ideal or abstract share of the physical whole.
Examples: Turning grapes into wine, flour into bread
What Governs Co-Ownership
Rules: a. Contracts;
a. Worker/Maker in good faith [Art. 474, CC] b. Special laws; and
c. The CC
General rule: Worker becomes the owner but must
indemnify the owner (who was also in good faith) Characteristics
for the value of the material. [Art. 474 par.1, CC] a. There are 2 or more co-owners.
b. There is a single object which is not materially or
Exception: If the material is more valuable than the physically divided and his ideal share of the
new thing, the owner of the material may choose whole.
[Art. 474 par.2, CC]: c. There is no mutual representation by the co-
1. To take the new thing but must pay for the owners.
value of the work or labor; or d. It exists for the common enjoyment of the co-
2. To demand indemnity for the value of the owners.
material. e. It has no distinct legal personality.
f. It is governed first of all by the contract of the
If the owner was in bad faith, maker may parties; otherwise, by special legal provisions, and
appropriate the new thing without paying the in default of such provisions, by the provisions
owner, or require the owner to pay him the value of Title III on Co-Ownership.
of the thing or his work, with right to indemnity.
Only limitation
b. Worker/Maker in bad faith [Art. 474 par. 3, Each co-owner of realty held pro indiviso exercises his
CC] rights over the whole property and may use and enjoy
the same with no other limitation than that he shall
General rule: Owner may either appropriate the not injure the interests of his co-owners. [Pardell v.
new thing to himself without paying the maker, Bartolome, G.R. No. L-4656 (1912)]
or owner may demand value of material plus
damages Co-ownership Distinguished from Partnership
Co-Ownership Partnership
Exception: The first option is not available in case
As to creation
the value of the work, for artistic or scientific
reasons, is considerably more than that of the Can be created without Can be created only by
material, in which case the owner of the material formalities of a contract, express or
can ask for payment of material and damages. contract implied
As to Juridical Personality
c. Worker/Maker made use of material with Has juridical
Has no juridical or
consent and without objection of owner personality distinct
legal personality
from partners
Rights shall be determined as though both acted As to Purpose
in good faith. [Apply 474 par. 1, CC]

Page 126 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Co-Ownership Partnership
Purpose is collective Purpose is to obtain c. Intestate Succession
enjoyment of the thing profits
As to Disposition of Shares Co-ownership between the heirs before partition of
Consent of other co- the estate [Art. 1078, CC]
Partner needs to be
owners not needed;
authorized; he cannot
transferee
substitute another as a d. Testamentary Disposition or
automatically becomes
co-owner
partner in his place Donation Inter Vivos
As to Existence of Mutual Agency When a donation is made to several persons jointly, it
There is no mutual A partner can generally is understood to be in equal shares, and there shall be
representation bind the partnership no right of accretion among them, unless the donor
As to Effect of Death or Incapacity has otherwise provided. [Art. 753, CC]
Does not result in
Results in dissolution Exception: Donations to spouses jointly, right of
dissolution
accretion is presumed unless donor provides
As to Formal Requisites
otherwise.
No public instrument
is needed even if the May be made in any A donor or testator may prohibit partition for a
object of the co- form except when real period which shall not exceed 20 years.
ownership is a real property is contributed
property
e. By Fortuitous Event or by
As to Agreement on the Period
An agreement to keep There may be
Chance
the thing undivided for agreement as to a
Co-ownership between owners of 2 things that are
a period of more than definite term without
mixed by chance or by will of the owners [Art. 472,
10 years is void limit set by law
CC]
Hidden Treasure [Art. 438, CC]
2. Sources of Co-Ownership
When the discovery is made on the property of
a. Law another, or of the State or any of its subdivisions, and
by chance, one-half shall be allowed to the finder.
1. Cohabitation: co-ownership between common
law spouses [See Arts. 147, 148, 90, FC] f. By Occupancy
2. Purchase creating implied trust [Art. 1452, CC]
3. Easement of party wall: co-ownership of part- Harvesting and Fishing: Co-ownership by two or more
owners of a party wall [Art. 658, CC] persons who have seized a res nullius thing
4. Condominium Law: co-ownership of the
common areas by holders of units [Sec. 6, RA 3. Rights of Co-Ownership
4726]
a. Right to Share in the Benefits as
b. Contract
Well as the Charges [Art. 485,
1. By Agreement of Two or More Persons [Art. 494, CC]
CC]
2. By the creation of a Universal Partnership of all 1. Proportionality – The share of the co-owners
present property [Arts. 1778-1779, CC] shall be proportional to their respective interests.
3. By Association and Societies with Secret Articles Any stipulation to the contrary is void. [Art. 485,
[Art. 1775, CC] par. 1, CC]

2. Presumption of Equal share – The portions

belonging to the co-owners in the co-ownership

Page 127 of 511

U.P. LAW BOC
shall be presumed equal, unless the contrary is
proved. [Art. 485, par. 2, CC]
b. Right to Use the Thing Owned
In Common [Art. 486, CC]
Limitations:
1. In accordance with the purpose for which the co-
ownership is intended.
– the purpose of the co-ownership may be
changed by agreement, express or implied.
2. In such a way as not to injure the interest of the
co-ownership.
3. In such a way as not to prevent the other co-
owners from using it according to their right.
c. Right to Bring an Action in
Ejectment [Art. 487, CC]
A co-owner may bring such an action without joining
all the other co-owners as co-plaintiffs because the
suit is presumed to have been filed to benefit his co-
owners. If the plaintiff/co-owner claims to be the sole
owner, the action should be dismissed. [Adlawan vs.
Adlawan, G.R. No. 161919, (2006)]
d. Right to Compel Other Co-
Owners to Contribute to the
Expenses of Preservation and to
the Taxes [Art. 488, CC]
Obligation to contribute to expenses of
preservation and to taxes
Each co-owner shall have a right to compel the other
co-owners to contribute:
1. To the necessary expenses (incurred for
preservation of the thing or right)
If practicable, he must first notify his co-owners
of the necessity for such repairs. [Art. 489, CC]
2. To the taxes [Art. 488, CC]
Exception to paying necessary expenses and taxes: Co-
owner no longer has to pay if he renounces his
undivided interest as equivalent to his share of
expenses and taxes. [Art. 488, CC]
Exception to Exception: No waiver shall be made if
prejudicial to co-ownership. [Art. 488, CC]
Page 128 of 511
PROPERTY CIVIL LAW
3. To the useful expenses (expenses to improve or
embellish the thing) [Arts. 546, 547, CC]
Not refundable unless they shall be decided upon
by a majority. [Art. 489, CC]
As for the expenses for pure luxury or mere
pleasure, these are not refundable for not serving
purposes of preservation. [Art. 548, CC]
e. Right to Reimbursement for
Necessary Repairs [Art. 488 and
489]
General rule: A co-owner has the right to compel the
other co-owners to contribute to the expenses of
preservation, maintenance, or necessary repairs of the
thing or right owned in common and to the taxes.
[Art. 488, CC]
Requirement of notice: If practicable, the co-owner
must first notify the co-owners of the necessity for
the repairs. [Art. 489, CC]
Exception to the requirement of notice: If
impracticable or where the repairs are very urgent and
the other co-owners are in remote places and cannot
be reached by an ordinary means of communication.
Lack of notice even if practicable: Does not
exempt other co-owners to contribute. The co-owner
who advanced them has the burden of proving that
they were properly incurred.
f. Right to Oppose Alterations [Art.
491, CC]
General Rule: Unanimous Consent
None of the co-owners shall, without the consent of
the others, make alterations in the thing owned in
common, even though benefits for all would result
therefrom.
Rationale: Alteration is an act of ownership.
Alteration – a change in the nature or use of a thing,
it contemplates a PERMANENT CHANGE.
Examples:
1. Change of the thing from the state or essence in
which the others believe it should remain
2. Withdrawal of the thing from the use to which
they wish it to be intended
U.P. LAW BOC PROPERTY
3. Any other transformation which prejudices the
condition or substance of the thing or its
enjoyment by the others. (Manresa)
Exception: If the withholding of the consent by one or
more of the co-owners is clearly prejudicial to the
common interest, the courts may afford adequate
relief.
g. Right to Full Ownership of His
Part and of the Fruits and
Benefits Pertaining thereto [Art.
493, CC]
He may therefore alienate, assign or mortgage his
part, and even substitute another person in its
enjoyment, except when personal rights are involved.
Exception: When personal rights are involved.
h. Right to Partition [Art. 494, CC]
GENERAL PRINCIPLE: No co-owner is
obligated to remain in co-ownership.
General Rule: Each co-owner may demand at any time
the partition of the thing owned in common, insofar
as his share is concerned. [Art. 494 par.1, CC]
Limitations
1. An agreement to keep the thing undivided for a
certain period of time, not exceeding 10 years,
shall be valid. [Art. 494, CC]
2. A donor or testator may prohibit partition for a
period which shall not exceed 20 years. [Art. 494,
CC]
3. Neither shall there be any partition when it is
prohibited by law. [Art. 494, CC]
4. When physical partition would render the thing
unserviceable for the use for which it is intended.
[Art. 495, CC]
EXCEPTION: If it is indivisible (physical
partition not possible), allot to one of the co-
owners who shall indemnify others or have it sold
and divide the process from the sale. [Art. 498,
CC]
5. When another co-owner has possessed the
property as exclusive owner and for a period
sufficient to acquire it by prescription.
Note: No prescription shall run in favor of a co-owner
or co-heir against his co-owners or co-heirs so long as
Page 129 of 511
CIVIL LAW
he expressly or impliedly recognizes the co-
ownership. [Art. 494, CC]
For prescription to run in favor of a co-owner, the
following elements must concur to show adverse
possession of a co-owner:
1. He has performed unequivocal acts of
repudiation amounting to an ouster of the other
co-owners;
2. Such positive acts of repudiation have been made
known to the other co-owners; and
3. The evidence thereon must be clear and
convincing. [Salvador v. CA, supra]
4. His possession is open, continuous, exclusive,
and notorious.
i. Right to Redemption [Art. 1619,
CC]
Legal redemption – the right to be subrogated, upon
the same terms and conditions stipulated in the
contract, in the place of one who acquires a thing by
purchase or dation in payment, or by any other
transaction whereby ownership is transmitted by
onerous title.
A co-owner of a thing may exercise the right of
redemption in case the shares of all the other co-
owners or of any of them are sold to third person.
[Art. 1620, CC]
As legal redemption is intended to minimize co-
ownership, once a property is subdivided and
distributed among the co-owners, the community
ceases to exist and there is no more reason to sustain
any right of legal redemption. Every act intended to
put an end to indivision among co-heirs is deemed to
be a partition. [Avila vs. Sps. Barabat, supra]
j. Right to Participate in
Administration of Property
owned in common[Art. 492, CC]
For the administration and better enjoyment of the
thing owned in common, the resolutions of the
majority of the co-owners shall be binding. [Art. 492
par. 1, CC)
There shall be no majority unless the resolution is
approved by the co-owners who represent the
controlling interest in the object of the co-ownership.
[Art. 492 par. 2, CC)
U.P. LAW BOC PROPERTY CIVIL LAW

Exceptions to acts of administration only by majority: Act of Co-Owner Consent Needed

1. If there be no majority, or May be made at will by
2. If the resolution of the majority is seriously any co-owner, but
prejudicial to those interested in the property Preservation preferably notice is
owned in common. given to others. [488
– In which case, the court will intervene: The and 489, CC]
court, at the instance of an interested party,
shall order such measures as it may deem Consensus of all co-
Alterations
proper, including the appointment of an owners [491, CC]
administrator Consensus of all co-
Lease for more than 1 owners (considered an
Examples of acts seriously prejudicial: year act of alteration, see
1. Call for a substantial change of the thing Tolentino)
2. Authorizing leases, loans, and other contracts
without the necessary security, thereby exposing Majority of co-owners
Acts of administration
the property to serious danger [Art. 492, CC]
3. Continued employment of an administrator who Improvement/
is guilty of fraud or negligence in his management Majority of co-owners
Embellishing the
(Manresa) [Art. 489 and 492, CC]
Thing/ Useful expenses

4. Rules c. Rules on Multi-Story House [Art.

490, CC]
a. On Renunciation of Share
Applies when:
A co-owner may exempt himself from the payment a. The different stories of a house belong to
of expenses of preservation by renouncing his different owners;
undivided interest in the co-ownership as may be b. The titles of ownership do not specify the terms
equivalent to his share in of the necessary expenses under which they should contribute to the
and taxes. [Art. 488, CC] necessary expenses; and
c. There exists no agreement on the subject.
A co-owner who has not waived his share in the co-
ownership may be compelled to pay his share in the Manner of
cost of its maintenance but he may not be compelled Part of the House
Contribution
to renounce.
Main and party walls, All owners contribute in
the roof, and the other proportion to the value
Waiver of renunciation is not allowed if it is
things used in of the story belonging
prejudicial to the co-ownership. [Art. 488, CC]
common to each
b. Repairs for Preservation Floor of the entrance,
front door, common All owners contribute
Embellishments or yard, and sanitary pro rata or equally
Improvements works common to all
Each owner bears the
General rule: Requires consent of majority of co- The floor of each co-
cost of maintaining the
owners representing the controlling interest in the owner’s story
floor of his story
undivided thing. [Art. 489 and 492, CC]

Note: The rules under Art. 492 are applicable, so

judicial intervention may be resorted to.

Page 130 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Manner of 1. Extrajudicial partition – The agreement may be

Part of the House
Contribution oral or written, done outside of court.
Stairs from the first 2. Judicial partition – governed by the Rules of
entrance to the first Court insofar as they are consistent with the CC.
story – pro rata sharing [Art. 496, CC]
of all owners except the
owner of the ground Action for partition will determine:
floor 1. Whether or not the plaintiff is indeed a co-owner
Stairs Stairs from the first to of the property
the second story - pro 2. How the property will be divided between the
rata sharing of all plaintiff and defendant.
owners except the
owner of the ground Incidents of Partition
floor and that of the 1. Mutual accounting for benefits received and
first story; and so on. reimbursement for expenses made [Art. 500, CC]
2. Payment of damages by each co-owner by reason
of his negligence or fraud. [Art. 500, CC]
5. Termination or 3. Liability of each co-owner for defects of title and
Extinguishment quality of the portion assigned to each of the co-
owners. [Art. 501, CC]
a. Total destruction of the thing owned in common
b. Merger of All Interests in One Person Effects of Partition
c. Partition 1. Confers exclusive ownership of the property
d. Sale of Property Co-Owned adjudicated to a co-heir.
e. Termination of Period Agreed upon in Co- 2. Co-heirs shall be reciprocally bound to warrant
ownership the title to and the quality of each property
adjudicated.
a. Total Destruction of Thing or 3. Reciprocal obligation of warranty shall be
proportionate to the respective hereditary shares
Loss of the Property Co-Owned of co-heirs.
4. An action to enforce warranty must be brought
EXCEPTION: Is there still co-ownership if a within 10 years from the date the right accrues.
building is destroyed? Yes, over the land and the 5. The co-heirs shall not be liable for the
debris. [Tolentino] subsequent insolvency of the debtor of the estate.

b. Merger of All Interests in One Right of third parties in cases of Partition:

Person
This may take place by any of the causes which are
sufficient to transmit title to an obligation, either by
assignment, subrogation, and sale of inheritance.
c. Acquisitive Prescription
This is a mode of acquiring ownership by a possessor
through the requisite lapse of time.
It may be ordinary or extraordinary. [Art. 1117, CC]
d. Partition or Division [Art. 496,
CC]
May be judicial or extrajudicial:
1. The partition of a thing owned in common shall
not prejudice third persons, who shall retain the
rights of mortgage, servitude, or any real rights
belonging to them before the division was made.
[Art. 499, CC]
2. The creditors or assignees of the co-owners may
take part in the division of the thing owned in
common and object to its being effected without
their concurrence. [Art. 497, CC]
Exception: If the partition was already executed they
cannot impugn the same.
Exception to Exception: There was fraud or a previous
formal opposition against the partition, without
prejudice to the right of the debtor or assignor to
maintain its validity. [Art. 497, CC]

Page 131 of 511

U.P. LAW BOC PROPERTY
Rules on notice to creditors and assignees:
1. The law does not expressly require previous
notice to the creditors and assignees before a
partition, but the latter have the right of creditors
and assignees to take part in the division.
If notice is not given, the partition may be
impugned by creditor/assignee if made in fraud
of creditors.
Once notice has been given, it is the duty of
creditors and assignees to intervene and make
known their stand.
2. If they fail, they cannot question the division
made, except in cases of fraud.
3. If they formulate a formal question, they can
contest such partition
Partition of an indivisible thing [Art. 498, CC]
1st option: The co-owners can agree that one of them
shall be the sole owner by paying the value of other
co-owners’ shares
2nd option: If they cannot agree who among them shall
be sole owner, the property will be sold to a 3rd person
and the proceeds distributed among them
e. Sale of Property Co-Owned
The sale shall be resorted to only if:
1. The property is essentially indivisible
2. The co-owners cannot agree that the entire
property be allotted or assigned to one of them,
who shall reimburse the other co-owners of their
shares.
f. Termination of Period Agreed
Upon by the Co-Owners
1. An agreement to keep the thing undivided for a
certain period of time, not exceeding 10 years,
shall be valid. [Art. 494, CC]
2. A donor or testator may prohibit partition for a
period which shall not exceed 20 years. [Art. 494,
CC]
Expropriation
This is the taking of private property rights by the
government for just compensation when it is for a
public purpose.
Page 132 of 511
CIVIL LAW
D. Possession
The holding of a thing or the enjoyment of a right.
[Art. 523, CC]
FOUR TYPES OF POSSESSION
1. With just title from true owner - Possession
derived from the right of dominion or possession
of an owner. This is the highest degree of
possession.
2. With just title but not from the true owner -–
Possession of an adverse claimant whose title is
sufficient to transfer ownership but is defective
such as when the seller is not the true owner or
could not transmit his rights thereto to the
possessor who acted in good faith;
3. With juridical title - Possession is predicated on
a juridical relation existing between the possessor
and the owner of the thing, e.g., lessee,
usufructuary, depositary, agent, pledgee, and
trustee;
4. Without title - Mere holding or possession
without any right or title at all, e.g., theft, squatter,
etc.;
1. Concept of Possession
Possession includes the idea of occupation – i.e. the
person exercises control over the object. It cannot
exist without it.
Right of possession Right to possess
(jus possessionis) (jus possidendi)
Incident to
Independent right
ownership
Possession is not a definitive proof of ownership nor
is non-possession inconsistent therewith [Heirs of G.
Bofill v. CA, G.R. No. 107930 (1994)].
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.
Possession in the eyes of the law does not mean that
a man has to have his feet on every square meter of
U.P. LAW BOC PROPERTY
ground before it can be said that he is in possession.
[Ramos vs. Director of Lands, G.R. No. 13298, (1918)]
Object of Possession [Art. 530, CC]
a. Must be susceptible of being appropriated
b. Need not be susceptible of prescription – things
must be within the commerce of men
What May Not Be Possessed
a. Res communes
b. Property of public dominion
c. Right under discontinuous and/or non-apparent
easement
2. Essential Requisites of
Possession
a. Occupancy – There must be holding or control
of a thing or right. Also known as possession in
fact.
b. Intent to possess (animus possidendi) – The
holding must be with intention to possess.
3. Classes of Possession
a. Possession for Oneself, or
Possession Exercised in One’s
Own Name and Possession in
the Name of Another [Art. 524,
CC]
In one’s own name – the fact of possession and the
right to such possession is found in the same person.
In the name of another – the one in actual
possession is without any right of his own, but is
merely an instrument of another in the exercise of the
latter’s possession. It can either be:
1. Voluntary – when exercised by virtue of an
agreement, E.g. agents or administrators
appointed by the owner or possessor. Third
person may also voluntary exercise possession in
the name of another, but it does not become
effective unless ratified by the person in whose
name it is exercised.
2. Necessary or legal – when exercised by virtue
of law, E.g. representatives who exercise
possession in behalf of a conceived child,
juridical persons, persons not sui juris, and the
CPG.
Page 133 of 511
CIVIL LAW
b. Possession in the Concept of a
Holder with the Ownership
Belonging to Another [Art. 525,
CC]
One who possesses as a mere holder, not in the
concept of owner, acknowledges in another a superior
right which he believes to be ownership, whether his
belief is right or wrong: e.g. tenant, usufructuary,
borrower in commodatum.
c. Possession in the Concept of an
Owner.
• May be exercised by the owner himself or one
who claims to be so.
• DOES NOT refer to the possessor‘s inner belief
or disposition regarding the property in his
possession.
• Possession in the concept of an owner refers to
his overt acts which tend to induce the belief on
the part of others that he is the owner.
• Possession in the concept of an owner is ius
possidendi.
d. Possession in Good Faith and
Possession in Bad Faith [Art.
456, CC]
POSSESSOR IN GOOD FAITH [Arts. 526-527,
544, 546-547, 548, 552, 1132, 1134, CC]
One who is unaware that there exists a flaw which
invalidates his acquisition of the thing. He believes
that the person from whom he received a thing was
the owner of the same and that therefore he is now
the owner based upon ostensible title or mode of
acquisition, e.g. sale, donation, inheritance, or other
means of transmitting ownership.
Note: Error in the application of the law or in the legal
consequences of certain acts, or in the interpretation
of doubtful provisions or doctrines, may properly
serve as basis for good faith. [Ortiz v. Kayanan, 1979;
G.R. No. L-32974]
Rights of the Possessor:
1. Fruits
2. Necessary expenses to every possessor
3. Useful Expenses when possessor in good faith
U.P. LAW BOC PROPERTY
4. Right of retention when there are unpaid
necessary or useful expenses [Art. 546, CC]
5. Removal of useful/ornamental without damage
6. No liability for deterioration.
7. May acquire full ownership by prescription.
8. Presumption of just title [Art. 541, CC]
9. Possessor can bring all actions necessary to
protect his possession (action in ejectment or
accion publiciana)
10. He can ask for the inscription of possession in
the registry of property.
11. He can do on the thing possessed everything that
the law authorizes an owner to do: he can
exercise the right of pre-emption and is entitled
to the indemnity in case of appropriation.
12. Has presumption of continuity of good faith
[Arts. 528 and 529, CC)
13. Non-interruption of possession (possession
during intermediate period) [Arts. 554 and 561,
CC]
14. Right to be respected in his possession and
protected in his possession [Art. 539, CC]
“Every possessor” – includes all kinds of
possession, from that of an owner to that of a
mere holder, except that which constitutes a
crime.
15. Lawful possessor can employ self-help [Art. 429,
CC]
Reason for the rule: To prevent anyone from taking
the administration of justice into his own hands.
Even the owner cannot forcibly eject the
possessor, but must resort to the courts (in
relation to Art. 539).
16. Possession of an immovable extends to the
movables within or inside [Arts. 542 and 426, CC]
Exception: Shown or proven they should be
excluded.
Page 134 of 511
CIVIL LAW
4. Effects of Possession
a. Possession in the concept of
owner is converted into
ownership after the required
lapse of time necessary of
prescription [Art. 540, CC]
To consolidate title by prescription, the possession
must be under claim of ownership, and it must be
peaceful, public and uninterrupted [Art 1118, CC].
Acts of possessory character done by virtue of a
license or mere tolerance on the part of the real owner
do not apply for purposes of acquisitive prescription.
[Art. 1119, CC]
The following cannot acquire title by prescription (i.e.
they are not adversely possessing the property)
• Lessees, trustees, pledges, tenants on shares or
planters and all those who hold in the name or in
representation of another.
• Mere holders placed in possession of the
property by the owner, such as agents,
employees.
• Those holding in a fiduciary character like
receivers, attorneys, depositaries and antichretic
creditors.
• Co-owner, with regard to common property:
EXCEPT: when he holds the same adversely
against all of them with notice to them the
exclusive claim of ownership.
b. Entitlement to fruits/expenses:
1. Possessor in Good Faith – Arts. 544,
526-527, CC
AS TO THE FRUITS
Fruits already received [Art. 544(1), CC]
• Entitled to all the fruits until possession is legally
interrupted (i.e. before summons, or demand see
Art. 528 for when possession in good faith is
interrupted)
Fruits still pending [Art. 545, CC]
• Entitled pro-rata to the fruits already growing
when his possession is legally interrupted.
U.P. LAW BOC
AS TO NECESSARY EXPENSES [ART. 546, (1),
CC]
Definition: necessary for the preservation of the
thing [Art. 452, CC by analogy]
The possessor in good faith may retain the thing until
he is reimbursed for necessary expenses.
AS TO USEFUL EXPENSES [ARTS. 546 (2)
AND 547, CC]
Definition: incurred to give greater utility or
productivity to the thing
• They are reimbursed only to the possessor in GF
as a compensation or reward for him. Possessor
in BF cannot recover such expenses
• The possessor in good faith may retain the thing
until he is reimbursed for useful expenses.
• The person who defeats the possessor in
possession has the option to:
– Refund the amount of expenses; or
– Pay the increase in value which the thing may
have acquired
• The possessor has the option of removing the
useful improvements may remove them,
provided there is no damage to the principal
thing. [Art. 547, CC]
Exception: When the option to pay for the value
of the expenses or the increase in value of the
thing is exercised by the person who recovered
possession.
AS TO ORNAMENTAL EXPENSES OR
EXPENSES FOR PURE LUXURY [ART. 548,
CC]
The possessor in good faith is not entitled to a refund
for ornamental expenses. But he may remove the
ornamental improvements if they do not cause
damage to the principal thing.
Exception: The one who recovers possession decides
to refund the ornamental expenses/ expenses for
pure luxury.
Page 135 of 511
PROPERTY CIVIL LAW
2. Possessor in Bad Faith
One who is aware that there exists in his title or mode
of acquisition a flaw which invalidates it. [Art. 526,
CC]
Requisites:
a. Possessor has a title or mode of acquisition;
b. There is a flaw or defect in said title or mode;
Examples of vice or defect in title:
1. Grantor was not the owner
2. Requirements for transmission were not
complied with
3. Mistake in the identity of the person
4. Property was not really res nullius
c. The possessor is aware of the flaw or defect in
the title
Rights of a possessor in bad faith
a. Right to be respected in possession; [Art. 539,
CC]
b. Right to necessary expenses and the expenses for
production, gathering, and preservation of fruits;
[Arts. 545 and 546, CC; Art. 443, CC]
c. Does not have right to reimbursement of
expenses for luxury but may remove them as long
as the principal thing suffers no injury, or may sell
them to the owner who opts to buy the
removable ornaments. [Art. 549, CC]
d. No right to reimbursement for useful
improvements and no limited right of removal.
Obligations of a possessor in bad faith
a. Reimburse the value of fruits received and which
the legitimate possessor could receive; [Art. 549,
CC]
b. Pay in proportion to the charges, expenses of
cultivation and the net proceeds upon cessation
of good faith; [Art. 545, CC]
c. Costs of litigation; [Art. 550, CC]
d. Liability to the deterioration/loss of a thing
possessed in every case, including fortuitous
events. [Art. 552, CC]
5. Acquisition of Possession
a. Ways of Acquiring Possession
[Art. 531, CC]
1. Occupation or exercise of a right
U.P. LAW BOC
2. Subject to action of our will
3. Proper acts and legal formalities for acquiring
possession
1. By the material occupation of a thing
or the exercise of a right
a. Possession is acquired through the following
modes of constructive delivery:
– Traditio brevi manu – If the transferee/buyer
already had possession of the object under a
different title even before the sale (e.g., lessee
subsequently buys the property)
– Traditio constitutum possessorium – the
transferor/seller continues in the possession
of the object, but not in the concept of an
owner (e.g., owner sells the property and
becomes lessee)
b. Constructive possession (See discussion in Concept
of Possession)
2. By the fact that the thing is subject to
the action of our will
Possession is acquired through the following modes
of constructive delivery:
a. Traditio simbolica – delivering an object or symbol
placing the thing under the control of the
transferee
b. Traditio longa manu – the transferor points out to
the transferee the things which are being
transferred, or they merely agree or consent that
delivery has been effected
3. By the proper acts and legal
formalities established for acquiring
such right
Acquisition by virtue of a just title such as when
property is transmitted by succession, donation,
contract, or execution of a public instrument, etc.
b. By Whom May Possession be
Acquired [Art. 532, CC]
1. The same person who is to enjoy it
2. His legal representative
3. His agent
4. Any person without any power whatsoever
– Only acquired upon ratification in whose
name the possession is acquired, without
Page 136 of 511
PROPERTY CIVIL LAW
prejudice to the application of negotiorum
gestio.
c. Preference of Possession [Art.
538, CC]
Possession as a fact cannot be recognized at the same
time in two different personalities except in the cases
of co-possession.
In case a dispute arises, the order of preference is as
follows:
1. The present possessor shall be preferred
2. If there are two possessors, the one longer in
possession is preferred
3. If the dates of the possession are the same, the
one who presents a title is preferred
4. If all the foregoing conditions are equal, the thing
shall be placed in judicial deposit pending
determination of its possession or ownership
through proper proceedings.
d. What Does Not Affect
Possession [Art. 537, CC]
The person in possession does not lose the same nor
does the person who resorts to the following acquire
it:
Acts merely tolerated
1. Those which because of neighborliness or
familiarity, the owner of property allows another
person to do on the property;
2. Permissive use merely tolerated by the possessor
cannot affect possession and cannot be the basis
of acquisitive prescription. Possession to
constitute the foundation of prescriptive right
must be possession under claim of title; it must
be adverse. [Cuaycong v. Benedicto, G.R. No. L-9989
(1918)]
3. A possessor by tolerance is necessarily bound by
an implied promise to vacate upon demand,
failing which a summary action for ejectment is
the proper remedy against him. [Peran vs. CFI,
G.R. No. L-57259, (1983)]
Acts executed clandestinely and without the
knowledge of the possessor [Art. 1118, CC]
Possession by possessor is not affected as long as it
remains clandestine and unknown. Possession has
to be in the concept of an owner, public, peaceful
and uninterrupted.
U.P. LAW BOC PROPERTY CIVIL LAW

Possessor in GF Possessor in BF
Acts of violence as long as the possessor objects
thereto [Art. 536, CC] cultivation and gathering
1. Possession cannot be acquired through force or of the fruits [Art. 545, CC]
intimidation as long as there is a possessor who Charges
objects thereto. This includes forcibly taking Must share with the
away the property from another, and also when
legitimate possessor, in
one occupied the property in the absence of Same as with GF [Art.
proportion to the time of
another, and repels the latter upon his return. 545, CC]
the possession [Art. 545,
2. He who believes that he has an action or a right CC]
to deprive another of the holding of a thing must
invoke the aid of a competent court, if holder Necessary Expenses
refuses to deliver the thing [Art. 536, CC]. Right to reimbursement
3. Ratio: Acts mentioned do not constitute true Reimbursement [Art.
and retention [Art. 546,
possession. They do not interrupt the period of 546, CC]
CC]
prescription nor affect the rights to the fruits.
Useful Expenses
6. Rules on Co-Possession Right of retention until
reimbursed; Owner’s
option to reimburse him
a. For the entire period that the co-possession
either for expenses or for
lasted, each one of the participants of a thing
increase in value which
possessed in common shall be deemed to have
the thing may have
exclusively possessed the part allotted to him No right to
acquired [Art. 546, CC]
upon division thereof [Art. 543, CC] reimbursement and no
b. Interruption in the possession of the whole or a right of removal [Art.
Limited right of removal –
part of the thing possessed in common shall be 547, CC]
should not damage
to the prejudice of all possessors [Ibid].
principal and owner does
c. In case of civil interruption, Rules of Court
not exercise option of
applies [Ibid].
paying the expenses or
increase in value [Art. 547,
Possessor in GF Possessor in BF CC]
Fruits Received Ornamental Expenses
Limited right of removal Limited right of removal
Must reimburse the [Art. 548, CC] [Art. 549, CC]
Entitled to the fruits while
legitimate possessor for
possession is in good faith Deterioration or Loss
fruits received or could
and before legal
have been received, less No liability unless due to
interruption [Art. 544, Liable in every case [Art.
expenses under Art. 443, fraud or negligence [Art.
CC) 552, CC]
CC [Art. 549, CC] 552, CC]
Costs of Litigation
Pending Fruits
Bears cost [Art. 550, CC] Bears cost [Art. 550, CC]
Entitled to part of the
expenses of cultivation, 7. Loss or Unlawful
and to a part of the net Goes to the legitimate
harvest, in proportion to possessor who recovers
Deprivation of a Movable
the time of the possession. possession (Art. 549, Property
CC)
Indemnity may be, at the One who has lost any movable or has been unlawfully
owner’s option, in money, deprived thereof, may recover it from the person in
OR by allowing full possession of the same. [Art. 559, CC]

Page 137 of 511

U.P. LAW BOC PROPERTY
a. Possession of Movable Acquired
in Good Faith (in Concept of
Owner) is Equivalent to Title
[Art. 559, CC]
Doctrine of irrevindicability: Possession in good
faith of a movable is presumed ownership. However,
it is merely presumptive because it can be defeated by
the true owner.
Rationale: To facilitate transactions on movable
property which are usually done without special
formalities
Requisites of the doctrine of irrevindicability:
1. The possession should be in good faith;
2. The former owner voluntarily parted with the
possession of the thing; and
3. The possession is in the concept of owner.
Exceptions:
1. Owner or possessor has lost the movable
property; or
2. Owner or possessor has been unlawfully
deprived of a movable.
Unlawful deprivation – includes all cases of taking
that constitute a criminal offense (conviction is not
necessary), such as theft, robbery, estafa, etc.,
including those involving abuse of cionfidence. [Dizon
v. Suntay, G.R. No. L-30817, (1972)]
b. Period to Recover Movable
Property [Arts. 1140, 1132, 1133,
CC]
8 years – from the time the possession of the
movable is lost, for uninterrupted possession
(whether in bad faith or good faith) [Art. 1140, CC]
Subject to Article 1505 and Article 559.
4 years – action to recover prescribes if there is
uninterrupted possession in good faith, subject to
Article 1505 and Article 559. [Art. 1132, CC]
No prescription – if possessed through a crime [Art.
1133, CC]
Page 138 of 511
CIVIL LAW
c. Finder of Lost Movable [Arts.
719-720, CC]
1. Whoever finds a movable, which is not a treasure,
must return it to its previous possessor.
2. If the previous possessor is unknown, the finder
shall immediately deposit it with the mayor of the
city or municipality where the finding has taken
place.
3. The finding shall be publicly announced by the
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.
d. Loss/Termination of Possession
[Art. 555, CC]
A possessor may lose his possession:
1. By the abandonment of the thing;
2. By an assignment made to another either by
onerous or gratuitous title;
3. By the destruction or total loss of the thing, or
because it goes out of commerce;
4. By the possession of another for more than one
year, subject to the provisions of Art. 537 (Acts
merely tolerated, clandestine acts and violence).
But the real right of possession is not lost till after
the lapse of 10 years.
8. Rules for Loss of Movables
General rule: Rightful Owner may recover it from the
person in possession of the same [Art. 559, CC]
Exceptions:
1. Possession Acquired in Good Faith in Public
Sale: The original owner must reimburse the
price paid for the movable. [Art. 559, CC]
2. Possession Acquired in Merchant’s Store, fair
or markets: No Recovery [Art. 1505, CC] This is
U.P. LAW BOC PROPERTY CIVIL LAW

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)]
3. Possession acquired by purchasing in good faith,
for value and without notice of defect in title of
the seller from one who has a voidable title
thereto, which has not been annulled at the time
of the sale: No Recovery [Art. 1506, CC]
4. If the present possessor has already become
owner of the thing through acquisitive
prescription.
Exception: If acquired through a crime. [Art.
1133]
E. Usufruct
Usufruct is a temporary real right which gives a right
to enjoy the property as well as its fruits of another
with the obligation of preserving its form and
substance, unless the title constituting it or the law
otherwise provides. [Art. 562, CC]
Constituted by: [PILL: Prescription, Inter vivos acts,
Law, Last Will]
1. Law
2. Will of private persons expressed in acts inter
vivos
3. Will of private persons expressed in a last will
4. Prescription [Art. 563, CC]

Can be constituted over:

1. The whole or part of the fruits of the thing
2. A right, provided it is not strictly personal or
intransmissible. [Art. 564, CC]

Kind Governing law

Usufruct in general CC (Arts. 561, 566-612)
Legal usufruct Law which created it
Voluntary usufruct Act constituting it
Law on prescription and
Mixed usufruct
the extent of use

Easement Usufruct
May be constituted only May be constituted on
on an immovable either movable or
property immovable property
Extinguished by the
Not extinguished by the
death of usufructuary,
death of dominant
unless provided
owner
otherwise.
Involves a right of
Non-possessory right
possession in an
over an immovable
immvovable
Limited to particular or
Includes all the uses and
specific use of the
the fruits of the property
servient estate

Note: There can be no easement over a usufruct

because an easement may be constituted only on
corporeal real property.

There can be no usufruct over an easement, because

easement cannot exist by itself. The object of usufruct

Page 139 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

must have an existence of its own separate from the A servitude which is dependent on the tenement to
property. which it attaches cannot be the object of usufruct.

Lease Usufruct Things

• Non-consumable things: Consumable things,
Generally covers only a Covers all fruits and uses
but only as to their value if appraised, or on an
particular or specific use as a rule
equal quantity and quality if they were not
Real right only if, as in appraised.
the case of a lease over a • Unproductive things: e.g. sterile or absolutely
real property, the lease is unproductive land, or things for mere pleasure,
registered, or is for more Always a real right such as promenades, statues or paintings, even if
than one year. they do not produce any utility.
Otherwise, it is only a
personal right
2. Characteristics
Lessor may or may not
Can be created only by
be the owner (as when a. It is a real right;
the owner or by a duly
there is sublease or when b. Of temporary duration;
authorized agent acting
the lessor is only a c. The purpose is to derive all advantages from the
in behalf of the owner
usufructuary) thing due to normal exploitation.
May be created, as a rule, May be created by law,
only by contract and by contract, last will, or Natural Characteristics
way of exception by law prescription a. Includes jus abutendi, jus utendi, jus fruendi and jus
possidendi and jus vindicandi. The only thing left with
The owner or owner is
Owner is passive the grantor of the usufruct is the jus disponendi.
more or less active
b. Usufructuary must preserve the form or
As the usufructuary has substance of the thing.
Lessee generally has no
the duty to make c. Preservation is a natural requisite, not essential
duty for repairs
ordinary repairs because the title constituting it or the law may
Usufructuary pays for provide otherwise.
Lessee generally pays no d. Usufruct is extinguished by the death of the
the annual charges and
taxes usufructuary.
taxes on the fruits
e. Natural because a contrary intention may prevail.
Lessee cannot constitute
Usufructuary may lease
a usufruct on the Reasons for preserving form and substance
the property to another
property leased a. To prevent extraordinary exploitation;
b. To prevent abuse, which is frequent;
1. Objects of Usufruct c. To prevent impairment.

Independent Rights Exception: In an abnormal usufruct, alteration is

allowed.

3. Classification
Voluntary: created by the will of private persons
1. By act inter vivos– such as contracts and donations:
2. By donation of the usufruct;
As to manner
3. By retention of the usufruct by donor;
of creation
4. Where a usufruct is constituted inter vivos and for valuable consideration, the contract
is unenforceable unless in writing;
5. By act mortis causa – such as testament
Legal: as provided by law.

Page 140 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

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
Limitations
of 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 of Abnormal or irregular: when the usufruct includes things which cannot be used in a manner
usufruct 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 resolutory
As to (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)
Total: all consumed by the usufruct.
As to Fruits
As to the Partial: only on certain aspects of the usufruct’s fruits.
extent of the Singular: only on particular property of the owner.
usufruct As to the object Universal: pertains to the usufruct over universal property, i.e. over
an entire patrimony, a while inheritance of a compulsory heir, a dowry;

Page 141 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

4. Rights and Obligations of Fruits pending at the Fruits pending at the

beginning of the termination of the
Usufructuary usufruct usufruct

Rights: Without prejudice to the Rights of innocent 3rd

a. Right to the thing right of 3rd persons e.g. if parties should not be
b. Right to the fruits the fruits arose by prejudiced.
c. Right to lease the thing building, planting,
d. Right to improve the thing sowing by a possessor in
e. Right of Retention good faith, the pending
f. Right to mortgage or alienate the right of usufruct crop expenses of
cultivation and of the net
Obligations: harvest and charges shall
a. To make inventory be prorated between said
b. To give a bond for faithful performance of duties possessor and the
as usufructuary usufructuary in
c. To take care of the thing proportion to the time of
d. To undertake ordinary repairs possession [Art. 545, CC]
e. To notify owner of need to undertake extra-
ordinary repairs N.B. In the case of civil
f. To pay annual charges and taxes on the fruits. fruits, no need to prorate,
g. To shoulder costs of litigation as civil fruits accrue daily
h. To deliver the thing in usufruct to the owner in [Art. 544, CC]
the condition received.
Right to Civil fruits – deemed to accrue daily, and
belong to the usufructuary in proportion to the time
a. Rights of Usufructuary the usufruct may last. [Art. 569, CC]
1. Rights as to the Thing and its Fruits SPECIAL RULES:
[SER3IAL: Set-off, Enjoy, Receive, Remove, Retain, Special Rule as to Usufruct on Rent, Pension or
Improve, Accession, Lease] Interest:
Whenever a usufruct is constituted on the right to
a. To enjoy the property personally [Art. 572, CC] receive a rent or periodical pension, whether in money
b. To receive the fruits of the property [Art. 567, or in fruits, or in the interest on bonds or securities
CC] payable to bearer, each payment due shall be
considered as the proceeds or fruits of such right.
2. Right to natural and industrial fruits [Art. 570 par. 1, CC]
pending at the beginning of usufruct
Special Rule to benefits from enterprise with no
Fruits pending at the Fruits pending at the date fixed for distribution:
beginning of the termination of the Whenever it consists in the enjoyment of benefits
usufruct usufruct accruing from a participation in any industrial or
commercial enterprise, the date of the distribution of
Belong to the Belong to the naked which is not fixed, such benefits shall have the same
usufructuary owner character. [Art. 570 par. 2, CC]
Without need to The owner shall
reimburse the expenses reimburse to the Special Rule for a Usufruct over a co-owned
to the owners usufructuary ordinary property:
cultivation expenses To exercise all rights of the particular co-owner with
from the proceeds of the respect to the administration and collection of
fruits (not to exceed the fruits/interests from the alicot share of property [Art.
value of the fruits) 582, CC]

Page 142 of 511

U.P. LAW BOC PROPERTY
Should co-ownership cease by reason of partition, the
usufruct of the part allotted to the co-owner shall still
belong to the usufructuary.
3. Right to lease the thing in usufruct
[Art. 572, CC]
General Rules:
a. Can be leased without consent of owner.
Exceptions:
• Caucion Juratoria, wherein the lease would
show that the property is not needed by the
usfructuary and therefore the use for which
the usufruct was constituted is changed.
• Condition imposed by naked owner i.e.
Usufruct is purely personal, e.g. title creating
usufruct provides that usufructuary shall
personally use and enjoy the property given
in usufruct.
• Legal usufructs cannot be leased
b. The period of the lease is co-extensive with the
period of usufruct.
Exception: Lease of rural lands will subsist during the
agricultural year despite expiration of the usufruct
[Art. 572, CC]
Rules as to Lease:
• A lease executed by the usufructuary before the
termination of the usufruct and subsisting after
the termination of the usufruct must be
respected, but the rents for the remaining period
will belong to the owner.
• If the usufructuary has leased the lands or
tenements given in usufruct, and the usufruct
should expire before the termination of the lease,
he or his heirs and successors shall receive only
the proportionate share of the rent that must be
paid by the lessee. [Art. 568, CC]
• It is the usufructuary and not the naked owner
who has the right to choose the tenant. [Fabie v.
Gutierrez David, G.R. L-123 (1945)].
• A lease executed by the owner before the creation
of the usufruct is not extinguished by such
usufruct.
Notes:
Future crops may be sold but such sale would be void
if usufruct terminates prior to harvest of future fruits.
The buyer’s remedy is to recover from the
usufructuary.
Page 143 of 511
CIVIL LAW
The usufructuary-lessor is liable for the act of the
substitute.
A usufructuary who alienates or leases his right of
usufruct shall answer for any damage which the things
in usufruct may suffer through the fault or negligence
of the person who substitutes him. [Art. 590, CC]
4. To enjoy any increase which the thing
may acquire through accession [Art.
571, CC]
5. To make improvements on the
property as he may deem proper [Art.
579, CC]
a. He may improve the thing without altering its
form and substance.
b. He is not entitled to indemnification.
c. He may also remove improvements made by him
if it is possible to do so without damage to
property.
Note: The option to remove improvements
belongs to the usufructuary, and the naked owner
cannot compel him to do so, neither can the
owner compel the usfructuary to leave the
improvements and just pay for their value.
d. The usfuructuary has the right to set-off the
imrpvoements on the property against any
damage to the same [Art. 580]
Registration of improvements – to protect
usufructuary against 3rd persons
6. Right of Retention: To retain the
thing/property until he is reimbursed
for taxes on the capital and advances
for extraordinary expenses [Art. 612,
CC]
The usufructuary has the right of retention until he is
reimbursed of the amount he paid for taxes and the
increase in value cause by extraordinary repairs he
made.
b. Rights as to the Legal Right of
Usufruct Itself
[ABE – Alienate, Bring action, Exercise all rights]
U.P. LAW BOC PROPERTY
1. To alienate or mortgage the right itself
– Art. 572, CC
The usufructuary may alienate his right of usufruct,
even by a gratuitous title (e.g. donation); but all the
contracts he may enter into as such usufructuary shall
terminate upon the expiration of the usufruct. [Art.
572, CC]
Except:
a. Parental usufruct [Arts. 225 and 226, FC]
b. Usufruct given in consideration of the person of
the usufructuary intended to last during his
lifetime
The surviving spouse of the usufructuary may dispose
his/her usufructuary right like any other hereditary
property, and may be the subject of attachment or
execution [Bogacki v. Inserto, G.R. No. L-39187 (1982)]
2. To bring action and oblige the owner
to give him proper authority and
necessary proof in cases of usufruct to
recover real property, real right, or
movable property [Art. 578, CC]
The action may be brought in the name of the
usufructuary.
If a favorable judgement is obtained, the usufruct
shall be limited to the fruits, and the naked ownership
shall belong to the owner. [Art. 578, CC]
c. Obligations of Usufructuary
1. Obligations at the Beginning of the
Usufruct or before Exercising the
Usufruct
a. To make, after notice to the owner or his
legitimate representative, an inventory of all the
property, which shall contain an appraisal of the
movables and a description of the condition of
the immovables; and [Art. 583 (1), CC]
Exceptions to making inventory:
1. No one will be injured thereby [Art. 585, CC]
2. Title constituting usufruct excused the
making of inventory.
3. Title constituting the usufruct already made
the inventory.
Page 144 of 511
CIVIL LAW
b. To give security, binding himself to fulfill the
obligations imposed upon him in accordance
with this Chapter. [Art. 583 (2), CC]
Exceptions to Giving Security:
1. No prejudice would result; [Art. 585, CC]
2. Usufruct is reserved by a donor; [Art. 584,
CC]
3. Gratitude on the donee’s part demands that
the donor be excused from filing the bond.
4. Title constituting usufruct excused
usufructuary.
5. A usufructuary may take possession under a
caucion juratoria (bond by oath) [Art. 587,
CC]
Requisites of Caucion juratoria:
a. Proper court petition;
b. Usufruct is over a house, furniture or tools of a
trade and the necessity for delivery of furniture,
implements or house included in the usufruct;
c. Approval of the court; and
d. Sworn promise.
Note: These requirements are not conditions
precedent to the commencement of the right of the
usufruct but merely to the entry upon the possession
and enjoyment of the property.
Effect of failure to give bond: [Art. 586, CC]
a. The owner may demand that the immovable
properties be placed under administration;
b. That the movable properties be sold and the
proceeds of the sale be the property held in
usufruct – legal interest of 6% shall be the fruits;
c. That the public bonds, instruments of credit
payable to order or to bearer be converted into
registered certificates or deposited in a bank or
public institution; and
d. That the capital or sums in cash and the proceeds
of the sale of the movable property be invested
in safe securities.
e. The owner may, until the usufructuary gives
security, retain in his possession the property in
usufruct as administrator, subject to the
obligation to deliver to the usufructuary the net
proceeds, after deducting the sums, which may be
agreed upon or judicially allowed him for such
administration.
U.P. LAW BOC PROPERTY
2. Obligations during the Usufruct
[CAPCORN – Care, Allow improvements, Pay AIDE
(Annual taxes, Interest, Debts, Expenses for
litigation), Collect credit, Ordinary repairs, Replace
animals, Notify UP (Urgent repairs, Prejudicial act)]
a. To take care of the property as a good father of
the family [Art. 589]
b. To make ordinary repairs – required by the wear
and tear due to the natural use of the thing and
are indispensable for its preservation. [Art. 592,
CC]
c. To inform/notify the owner of urgent
extraordinary repairs [Art. 593, CC]
d. To allow the naked owner to make works and
improvements of which the immovable in
usufruct is susceptible, or plantings, if rural [Art.
595, CC].
Provided:
1. The works or improvements are not
prejudicial to the usufructuary’s rights.
2. No diminution in the value of the object in
usufruct.
e. To pay annual taxes and charges on the fruits for
the time the usufruct lasts. [Art. 596, CC]
f. To pay interest on taxes on capital paid by the
naked owner. [Art. 597, CC]
g. To pay debts if the usufruct is over the entirety
of a patrimony [Art. 598, CC]
h. To secure the approval of the owner or the court
to collect credit which form part of the usufruct,
if he has not given proper security or has been
excused from giving security. [Art. 599, CC]
i. To notify owner of any prejudicial act to the
rights of ownership over the usufruct, by a third
person. [Art. 601, CC]
Consequence: he is liable for damages if he fails
to give notice.
j. To pay expenses and costs for litigation if
incurred because of the usufruct. [Art. 602, CC]
k. To answer for fault or negligence of the one he
alienated, leased to the object of the usufruct or
the fault or negligence of the usufructuary’s
agent. [Art. 590, CC]
3. Obligations at the Time of the
Termination of the Usufruct
[RIP – Return, Indemnify, Pay interest2]
a. To return the thing upon termination
Page 145 of 511
CIVIL LAW
b. To pay legal interest for the duration of the
usufruct on the expenses for extraordinary
repairs, if naked owner made the repairs [Art.
594, CC]
c. To pay proper interest on sums paid as taxes by
the owner
d. To indemnify the naked owner for any loss
caused by the negligence of the usufructuary or
his transferees
5. Special Cases of Usufruct
a. Usufruct over a Pension or a
Periodical Income [Art. 570, CC]
Each payment/benefit shall be considered a civil fruit.
Being a civil fruit, the usufructuary is entitled to it in
proportion to the time the usufruct lasts.
b. Usufruct of Property Owned in
Common [Art. 582, CC]
The usufructuary takes the place of the co-owner as
to:
1. Management;
2. Fruits; and
3. Interest.
Effect of partition:
1. The right of the usufructuary is not affected by
the division of the property in usufruct among
the co-owners.
2. After partition, the usufruct is transferred to the
part allotted to the co-owner.
c. Usufruct Constituted on a Flock
or Herd of Livestock [Art. 591,
CC]
On sterile stock: same rules on fungible property
govern. (i.e. it is an abnormal usufruct – may dispose
of or consume the animal [Art. 574, CC]
ON FRUITFUL STOCK:
Must replace ordinary losses of the stock with the
young if:
1. Some animals die from natural causes; or
2. Some animals are lost due to rapacity of beasts of
prey.
U.P. LAW BOC PROPERTY
Note: If the number of the young produced is less than
the animals that died from natural causes or due to
beasts of prey, then the usufructuary does not have to
replace those which are in excess of the young that he
currently has.
No obligation to replace if:
1. There is a total loss of animals because of some
unexpected or unnatural loss (like contagious
disease or any other uncommon event, provided
the usufructuary has no fault); or
2. All perish, the usufructuary should deliver the
remains to the owner.
If there is partial loss, the usufruct subsists on the
remainder.
Note:
1. If all the animals should perish, without his fault,
the usufructuary shall still deliver the remains
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.
3. Bad use as provided in Art. 603 gives the owner
the right to bring an action, but does not warrant
the extinguishment of the usufruct. [Art. 610,
CC]
d. Usufruct over Fruit Bearing
Trees and Shrubs and
Woodlands [Arts. 575-577, CC]
The usufructuary may fell or cut trees in accordance
to the following:
1. habitual felling or cutting of the owner;
2. customs of the place as to manner, amount, and
season
Note the rule in accession if a tree falls on another’s
land.
He cannot fell or cut trees in a manner that will
prejudice the land.
The usufructuary may make necessary thinnings to
ensure that the remaining trees may properly grow.
Page 146 of 511
CIVIL LAW
e. Usufruct on a Right of Action to
Recover Property or Real Rights
Over Property [Art. 578, CC]
The action may be brought in the name of the
usufructuary.
If the purpose is the recovery of the property or right,
he has the also the right to oblige the owner to give
the authority for such purpose, as well as to furnish
him whatever pieces of evidence he may have.
f. Usufruct on Mortgaged Property
[Art. 600, Cc]
If the usufruct is over the entire patrimony of the
owner, Art. 598, CC should apply.
If the usufructuary mortgaged the usufruct himself,
he is liable to pay his own debt.
g. Usufruct over an Entire
Patrimony [Art. 598, CC]
Applies when:
1. the usufruct is a universal one
2. the naked owner has debts or is obliged to make
periodical payments
General Rule: The usufructuary is NOT liable for the
owner’s debts.
Exceptions:
1. when stipulated, in which case the usufructuary
shall be liable for the debt specified
2. if there is no specification, he is liable only for
debts incurred by the owner before the usufruct
was constituted
3. when the usufruct is constituted in fraud of
creditors
In no case shall the usufructuary be responsible for
debts exceeding the benefits under the usufruct
(except when the contrary intention appears).
U.P. LAW BOC PROPERTY
h. Usufruct over Property that
Deteriorates [Art. 573, CC]
Definition of Deteriorates: Without being
consumed, gradually deteriorate through wear and
tear
Right of Usufructuary: To make use of it in
accordance with the purpose for which they are
intended.
Obligation of Usufructuary: Returns the things in
the condition in which they may have been found at
the time of the expiration of the usufruct despite
ordinary defects caused by use and deterioration
produced by age and time.
Exception: when it is caused by the usufructuary’s
fraud and negligence
If usufructuary does not return the things upon the
expiration of the usufruct, he should pay an indemnity
equivalent to the value of the things at the time of
such expiration.
i. Usufruct over Consumable
Property [Art. 574, CC]
Consumable: Cannot be used without being
consumed; example: food.
Right of Usufructuary: To make use of them
Obligation of Usufructuary upon return:
1. If they were appraised at the time of delivery pay
their appraised value.
2. If they were not appraised at time of deliver,
either return the same goods in the same quality
and quantity or pay the current price at time of
cessation of usufruct.
6. Rights of the Owner
At the Beginning of the Usufruct
See obligations of usufructuary at the beginning
of the usufruct discussed above.
During the Usufruct
• Retains title to the thing or property.
Page 147 of 511
CIVIL LAW
• He may alienate the property: he may not alter
the form or substance of the thing; nor do
anything prejudicial to the usufructuary.
• He may construct buildings, make improvements
and plantings, provided:
1. The value of the usufruct is not impaired;
and
2. The rights of the usufructuary are not
prejudiced.
• He can constitute a voluntary easement over
land/building held in usufruct, but if it affects the
usufructuary right, the usufruct must give his
consent. [Art. 689, CC]
o If easement is perpetual, consent of both
must be obtained [Art. 690, CC]
7. Extinguishment/Termination
[Art. 603, CC]
a. BY THE DEATH OF THE
USUFRUCTUARY, UNLESS A
CONTRARY INTENTION CLEARLY
APPEARS
Exceptions:
1. In cases of multiple usufructs, the usufruct
ends at the death of the last survivor [Art. 611,
CC]
a. If it was simultaneously constituted: ALL
USUFRUCTUARIES must be alive or at
least conceived at the time of the
constitution
b. If successively constituted by virtue of a
donation: ALL DONEES -
USUFRUCTUARIES must be alive at the
time of donation
c. If successively constituted by virtue of a will:
there should only be 2 successive
usufructuaries and both must have been alive
at the time of testator’s death
2. If the period is fixed using the life of another
person as reference or there is a resolutory
condition
a. In this case, the death of the usufructuary
would not affect the usufruct and the right is
instead transmitted to the heirs of the
usufructuary until the expiration of the term
or the fulfillment of the condition
U.P. LAW BOC PROPERTY CIVIL LAW

3. When the contrary intention appears f. BY THE TOTAL LOSS OF THE THING
a. If the usufructuary dies before the IN USUFRUCT;
happening of the resolutory condition = Situation Effect
USUFRUCT EXTINGUISHED
b. Usufruct is personal and it cannot be Art. 607, CC
extended beyond the lifetime of the If destroyed property is not insured
usufructuary. [Sanchez Roman and SC] Usufruct continues over
If the building forms part
the land and materials
of an immovable under
b. BY THE EXPIRATION OF THE (plus interests), if owner
usufruct
PERIOD FOR WHICH IT WAS does not rebuild.
CONSTITUTED. Usufruct continues over
the land and materials
SPECIAL CASES OF PERIOD: (plus interests), if owner
does not rebuild.
Special case of juridical persons [Art. 605, CC]
But if the owner wants to
– Usufruct cannot be constituted in favor of a construct another
town, corporation, or association for more than building, he can occupy
fifty years. the land and use the
– If before the expiration of such period the town materials.
is abandoned, or the corporation or association is If usufruct is on the
dissolved, the usufruct shall be extinguished. building only
If owner uses the
materials and occupies
Special Case of third person attaining certain age
the land, he must pay the
[Art. 606, CC]: usufructuary during the
– Subsists for the period specified (until the continuance of the
birthday at which the person would’ve attained usufruct the interest on
that age) the value of the land and
materials.
Exception: The usufruct has been expressly
granted only in consideration of the existence of
such person. Art. 608, CC
If destroyed property is insured before
c. BY THE FULFILLMENT OF ANY termination of the usufruct
RESOLUTORY CONDITION Usufructuary can
PROVIDED IN THE TITLE CREATING continue enjoying the
THE USUFRUCT; new building if a new one
is built.
d. BY MERGER OF THE USUFRUCT AND When insurance premium
OWNERSHIP IN THE SAME PERSON; paid by owner and
Usufructuary shall
usufructuary (par. 1)
receive interest on the
e. BY RENUNCIATION OF THE interest on the insurance
USUFRUCTUARY; indemnity if owner does
not wish to rebuild.
Limitations:
1. Must be express: tacit renunciation is not Owner shall receive the
sufficient; full amount of the
2. Does not need the consent of naked owner; and When the insurance taken insurance indemnity in
3. If made in fraud of creditors, they may rescind by the naked owner only case of loss, and either of
the waiver through an action under Art. 1381, CC because usufructuary the following, depending
(accion pauliana). refuses to contribute to on the case:
the premium (par. 2)
If he does not rebuild,
usufruct continues over

Page 148 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Situation Effect Exception: If both the naked owner and the

the remaining land and
materials (plus interests)
If the owner rebuilds,
usufruct does not
continue on the new
building, but owner
should pay interest on
the value of the land and
materials
Insurance proceeds go to
When insurance taken by the usufructuary.
usufructuary only No obligation to rebuild.
depends on value of Usufruct continues on
usufructuary’s insurable the land.
interest Owner has no share in
insurance proceeds.
g. BY THE TERMINATION OF THE
RIGHT OF THE PERSON
CONSTITUTING THE USUFRUCT;
Example: usufructs constituted by a vendee a retro
terminate upon redemption.
h. BY PRESCRIPTION.
Adverse possession against the owner or the
usufructuary.
It is not the non-use which extinguishes the usufruct
by prescription, but the use by a 3rd person.
usufructuary were separately given indemnity, each
owns the indemnity given to him, the usufruct being
totally extinguished.
If usufructuary alone was given the indemnity:
1. He must give it to the naked owner and compel
the latter to return either the interest or to replace
the property.
2. He may even deduct the interest himself, if the
naked owner fails to object.
b. Bad Use of Thing in Usufruct
[Art. 610, CC]
Does not extinguish the usufruct but entitles the
owner to demand delivery and administration of the
thing with the obligation to pay the net proceeds of
fruits.
The bad use must cause considerable injury not
to the thing, but to the owner.
Usufructuary is liable for damages caused to property.
c. Usufruct over a Building of
Thing in Usufruct [Art. 607 and
608, CC]
See Table above for the application.

There can be no prescription as long as the

usufructuary receives the rents from the lease of the
property, or he enjoys the price of the sale of his right.

8. Acts that do not extinguish

Usufruct
a. Expropriation of Thing in
Usufruct [Art. 609, CC]
If naked owner alone was given the indemnity, he has
the option:
1. To replace with equivalent thing; or
2. To pay to the usufructuary legal interest on the
indemnity. This requires a security to be given by
the naked owner for the payment of the interest.

Page 149 of 511

U.P. LAW BOC PROPERTY
F. Easement/Servitude
Definition: a real right which burdens a thing with a
presentation consisting of determinate servitudes for
the exclusive enjoyment of a person who is not its
owner or of a tenement belonging to another, or, it is
the real right over an immovable by nature (i.e.
land and buildings), by virtue of which the owner of
the same has to abstain from doing or to allow
somebody else to do something in his property for the
benefit of another thing/or person.
An easement or servitude is an encumbrance
imposed upon an immovable by nature for the
benefit of another immovable belonging to a different
owner. [Art. 613, CC]
TWO ESTATES:
Dominant Estate – the immovable in favor of which
the easement is established.
Servient Estate – the immovable which is subject to
the easement.
1. Essential Features:
a. It is a real right – it gives rise to an action in rem
or real action against any possessor of the
servient estate. It is enforceable against the whole
world.
b. It is a right enjoyed over another’s property
(jus in re aliena), i.e. it cannot exist in one’s own
property.
c. It can only exist between neighboring estates
in case of real easements.
d. It is a right constituted ONLY over an
immovable by nature (land and buildings),
not over movable properties or even immovable
by incorporation, by destination or by analogy.
[Art. 613, CC]
They cannot be established on things beyond the
commerce of man, (i.e. property of public
dominion).
e. It limits the servient owner’s right of
ownership for the benefit of the dominant
estate. Right of limited use but no right to own
and possess the servient estate.
Page 150 of 511
CIVIL LAW
f. It creates a relation between tenements.
General Rule: It may consist in the owner of the
dominant estate demanding that the owner of the
servient estate refrain from doing something
(servitus in non faciendo) or that the latter permit
that something be done over the servient
property (servitus in patendo), but not in the right
to demand that the owner of the servient do
something (servitus in faciendo)
Exception: if such act is an accessory obligation
to a praedial servitude (obligation propter rem)
Exception: Praedial servitudes
• Right to place beams in an adjoining wall to
support a structure.
• Right to use another’s wall to support a
building.
g. It is inherent or inseparable from estate to
which they actively or passively belong. [Art.
617, CC]
Easements are merely accessory to the
tenements, and a “quality thereof.” They cannot
exist without tenements.
Easements exist even if they are not expressly
stated or annotated as an encumbrance on the
titles.
h. It is intransmissible.
It cannot be alienated separately from the
tenement affected or benefited.
Any alienation of the property covered carries
with it the servitudes affecting said property. But
this affects only the portion of the tenement with
the easement, meaning that the portions
unaffected can be alienated without the servitude.
i. It is indivisible. [Art. 618, CC]
If the servient estate is divided among co-owners,
each owner must bear the easement imposed on
their part of the property.
If the dominant estate is divided among co-
owners, each owner may make use of the whole
easement.
U.P. LAW BOC PROPERTY CIVIL LAW

j. It has permanence because once it attaches, Illustration: Under Art. 680, CC: the owner of a
whether used or not, it continues and may be tree whose branches extend over to a
used anytime neighboring property is required to cut off the
extended branches, but the real essence of the
Perpetual: exists as long as property exists, unless easement is the obligation NOT TO ALLOW
it is extinguished. the branches of the tree to extend beyond the
land.
Easement Distinguished from Lease
Easement Lease c. Servitus servitutes esse non potest: There can
be no servitude over another servitude.
Real right only when it is
registered, or when its d. A servitude must be exercised civiliter – in a
Real right, whether
subject matter is real way least burdensome to the owner of the
registered or not
property and the duration servient estate.
exceeds one year
May be constituted only e. A servitude must have a perpetual cause.
May be constituted on
on an immovable by
real or personal property
nature 3. Classification
Limited to use of real Real or Praedial: exists for
Limited right to both the
property of another but the benefit of a particular
use and possession of the
without the right to tenement. [Art. 613, CC]
property of another As to recipient
possess
of benefits Personal: exists for the
benefit of persons without a
Easement Distinguished from Usufruct dominant tenement [Art.
Easement Usufruct 614, CC]
May be constituted only May be constituted on Continuous: Use is or may
on an immovable by either movable or be incessant, without the
nature immovable property As to its intervention of any act of
exercise [ Art. man
Not extinguished by the
Extinguished by the death 615, CC] Discontinuous: Used at
death of dominant
of usufructuary intervals, and dependent
owner
upon the acts of man.
Involves a right of
Non-possessory right Apparent: Made known
possession in an
over an immovable and continually kept in view
immovable
by external signs that reveal
Limited to particular or As indication the use and enjoyment of
Includes all the uses and
specific use of the of its existence the same
the fruits of the property
servient estate [Art. 615, CC]
Non-apparent: No
external indication of their
2. General Rules existence.
Positive: Imposes upon the
a. Nulli res sua servi: No one can have a servitude owner of the servient estate
over one’s own property. the obligation of allowing
As to the something to be done, or of
b. Servitus in faciendo consistere nequit: A object or doing it himself.
servitude cannot consist in doing. obligation
imposed [Art. Negative: Prohibits the
616, CC] owner of the servient estate
Exception: Praedial Servitude, where the from doing something that
positive obligation is an accessory to the he could lawfully do if the
negative easement. easement did not exist

Page 151 of 511

U.P. LAW BOC PROPERTY
Legal [Art. 619 and 634,
CC]: created by law,
whether for public use or
for the interest of private
persons.
Example: Natural drainage
of waters, Abutment of
land, Aqueduct, etc.
Voluntary [Art. 619, CC]:
created by the will of the
owners of the estate
through contract, last will or
donation.
These must be recorded in
As to its cause the Registry of Property to
or origin prejudice third persons.
Mixed: created partly by
will or agreement and partly
by law.
Note:
There is no such thing as a
JUDICIAL EASEMENT.
The Courts cannot create
easements, they can only
declare the existence of one,
if it exists by virtue of the
law or will of the parties.
[Castro v. Monsod, G.R. No.
183719 (2011)]
a. Relevance of Classifications
1. Determines whether or not the easement can be
acquired by Prescription or by title. [See Art. 620
and 622, CC]
2. Determines how to compute the prescriptive
period in case it can be acquired by prescription.
[Art. 621, CC]
3. Determines how easement is lost by prescription
[Art. 631 (2), CC]
b. Creation
An easement is either acquired through a
title/juridical act OR by prescription (only a
continuous and apparent easement can be acquired
through prescription)
When an easement is established, all rights necessary
for its use are considered granted. [Art. 625, CC]
Page 152 of 511
CIVIL LAW
4. By Title or by Something Equivalent
to a Title
Refers to law, donations contracts or wills.
a. Continuous and apparent easements may be
acquired by virtue of a title. [Art. 620, CC]
b. Continuous non-apparent easements, and
discontinuous ones, whether apparent or not, are
acquired only by virtue of a title. [Art. 622, CC]
c. The absence of a document or proof showing the
origin of an easement which cannot be
acquired by prescription may be cured by a
deed of recognition by the owner of the servient
estate or by a final judgment. [Art. 623, CC]
Form of recognition: either: (1) By an affidavit
or a formal deed acknowledging the servitude; or
(2) By final judgment: Owner of the dominant
estate must file a case in Court to have the
easement declared by proving its existence
through other evidence or (3) Apparent Sign of
Easement.
d. The existence of an apparent sign of easement
between two estates, established or maintained
by the owner of both, shall be considered as a title
in order that the easement may continue actively
and passively. Applicable to cases of co-
ownership
Exception: The title of conveyance provides for
the contrary (says the easement will not continue)
or the apparent sign of easement is removed
before the execution of the deed of conveyance.
[Art. 624, CC]
Illustration: The presence of 4 windows was
considered an apparent sign that created a
negative easement of light and view (altius non
tollendi) i.e. not to build a structure that will cover
the windows. [Amor v. Florentino, G.R. No. L-
48384 (1943)].
e. By Will of the Owner (Voluntary Easements)
Every owner of a tenement or a piece of land may
establish the easements that he may deem
suitable and best provided he does not
contravene the laws, public policy, or public
order. [Art. 688, CC]
Note: If an owner constitutes an easement over
his own property and makes such easement
U.P. LAW BOC PROPERTY
available to the general public, said owner may
not arbitrarily discriminate against certain
persons by not letting them use the easement.
[Negros Sugar Company v Hidalgo, G.R. No. L-
42334 (1936)]
Rules for Special Cases of Voluntary Easement:
• When the property subject of the easement is also
in usufruct, the owner can impose an easement
on the property, WITHOUT consent of the
usufructuary; provided, the right of the
usufructuary is not injured. [Art. 689, CC]
• Whenever the naked ownership belongs to one
person and the beneficial ownership to another,
no perpetual voluntary easement may be
established thereon without the consent of both
owners. [Art. 690, CC]
• When the property is co-owned, consent of all
co-owners is required to impose an easement.
[Art. 691, CC]
5. By Law (Legal Easements)
Easements imposed by law have for their object either
public use or the interest of private persons. [Art. 634,
CC]
These easements may be modified by agreement of
the interested parties, whenever the law does not
prohibit it or no injury is suffered by a third person.
[Art. 636, CC]
6. By Prescription
Continuous and apparent easements may be acquired
by prescription of 10 years. [Art. 620, CC]
Requisites:
a. The easement must be continuous and apparent;
b. The easement must have been used for 10 years;
and
c. There is no need for good faith or just title.
Note:
Example of a continuous and apparent easement is of
light and view, as opposed to a right of way which is
discontinuous but apparent, and thus cannot be
acquired by prescription.
Mere passage which was permitted and is under an
implied license cannot be the basis of prescription.
[Archbishop of Manila v Roxas, G.R. No. L-7386 (1912)]
Page 153 of 511
CIVIL LAW
4. Rights and Obligations of
Owners of Dominant and
Servient Estates
a. Rights of Dominant Estate
Owner
1. To use the easement and exercise all rights
necessary for it [Art. 625, CC]
2. The owner of the dominant estate is granted the
right to use the principal easement, and all
accessory servitudes.
Example: Easement of drawing water carries with
it the easement of right of way to the place where
water is drawn.
Limitation: Only for the original immovable and
the original purpose.
3. To make, at his own expense, on the servient
estate, any works necessary for the use and
preservation of the servitude, but without altering
it or rendering it more burdensome. [Art. 627(1),
CC]
4. In a right of way, to ask for change in width of
easement sufficient for the needs of the
dominant estate. [Art. 651, CC]
The needs of the dominant property ultimately
determine the width of the passage. And these
needs may vary from time to time. [Encarnacion v.
CA, G.R. No. 77628 (1991)]
5. To renounce totally the easement, if he desires to
be exempt from contributing to the expenses.
[Art. 628, CC]
b. Obligations of Dominant Estate
Owner
1. To use the easement for the benefit of
immovable and in the manner originally
established [Art. 626, CC]
If established for a particular purpose, the
easement cannot be used for a different one.
However, if established in a general way, without
U.P. LAW BOC PROPERTY
specific purpose, the easement can be used for all
the needs of the dominant estate.
2. To notify the owner of the servient estate before
making repairs and to make repairs in a manner
least inconvenient to the servient estate [Art.
627(2), CC]
3. Not to alter the easement or render it more
burdensome. [Art. 627, CC]
In an easement of a right of way, widening the
road means making the easement more
burdensome. [Valderrama v. North Negros Sugar
Co., G.R. No. L-23810 (1925)]
4. To contribute to expenses of works necessary for
use and preservation of servitude, if there are
several dominant estates. [Art. 628, CC]
The contribution is in proportion to the benefits
which each may derive from the work.
c. Rights of the Servient Estate
Owner
1. To retain the ownership of the portion of the
estate on which the easement is established [Art.
630, CC]
2. To use the easement, provided he shall also be
obliged to pay the expenses necessary for the
preservation and use of the servitude. [par. 2, Art.
628, CC]
Exception to paying expenses: There is an agreement
to the contrary.
3. To change the place or manner of the use of the
easement, provided it be equally convenient [par.
2, Art. 629, CC]
In case the easement becomes very inconvenient for
the servient estate owner, or if it prevents him from
making any important works, repairs, or
improvements, the easement MAY BE CHANGED,
provided:
1. He offers another place/manner equally
convenient
2. Does not cause injury to the dominant estate
owner
3. Does not cause injury to those who have a right
to use the easement, if any.
Page 154 of 511
CIVIL LAW
d. Obligations of Servient Estate
Owner
1. Not to impair the use of the easement [Art.
629(1), CC]
2. To contribute proportionately to expenses if he
uses the easement [Art. 628(2), CC]
Exception: Unless there is an agreement to the
contrary.
3. To pay for the expenses incurred for the change
of location or form of the easement
5. Extinguishment of
Easements
Ways by which an easement may be
extinguished: [Art. 631, CC] [MINERRO – Merger,
Impossibility, Non-use, Expiration, Renunciation,
Redemption, Other causes]
a. By merger in the same person of the
ownership of the dominant and servient
estates – must be absolute, perfect and definite,
and not merely temporary. If the merger is
temporary, there is at most a suspension of the
easement, but no extinguishment.
b. By non-user for ten years – there is inaction,
and not outright renunciation. This is due to the
voluntary abstention by the dominant owner, and
not due to a fortuitous event.
– If discontinuous easement, period is counted
from day it ceased to be used. If continuous
easement, counted from the day an act adverse
to the exercise of the right of easement took
place.
– Note use by a co-owner bars prescription as
to others as well. [Art. 633, CC]
c. Impossibility of use – impossibility referred to
must render the entire easement unusable for all
time. Impossibility of using the easement due to
the condition of the tenements (e.g. flooding)
only suspends the servitude until it can be used
again. Exception: If the suspension exceeds 10
years, the easement is deemed extinguished by
non-use.
d. By the expiration of the term or the
fulfillment of the resolutory condition -
applies only to voluntary easements.
e. By the renunciation of the owner of the
dominant estate – must be specific, clear,
express (distinguished from non-user); or
U.P. LAW BOC PROPERTY
f. By the redemption agreed upon between the
owners of the dominant and servient estates.
Other Causes Not Mentioned in Art. 631,
CC
a. Annulment and rescission of the title constituting
the voluntary easement;
b. Termination of the right of grantor of the
voluntary easement;
c. Abandonment of the servient estate;
Owner of the servient estate gives up ownership
of the easement (e.g. the strip of land where the
right of way is constituted) in favor of the
dominant estate. The easement is extinguished
because ownership is transferred to the dominant
owner, who now owns both properties.
d. Eminent domain;
The government’s power to expropriate property
for public use, subject to the payment of just
compensation.
e. Special cause for extinction of legal rights of way:
if right of way no longer necessary. [Art. 655, CC]
Right of way ceases to be necessary [Art. 655,
CC]:
– Owner of the dominant estate has joined to
another abutting on a public road.
– A new road is opened giving access to the
isolated estate.
– Owner of the servient estate must return
indemnity he received (value of the land)
with interest deemed as rent.
– Requisite: the public highway must
substantially meet the needs of the dominant
estate.
Note: The Owner of the servient estate burdened
by the right of way may demand that the
easement be extinguished when it is shown that
the easement ceases to be necessary [Art. 655,
CC]
6. The Different Legal
Easements
Easements imposed by law have for their object either
public use of the interest of private persons. [Art. 634,
CC]
a. Law Governing Legal Easements
1. For public easements
• Special laws and regulations relating thereto.
(e.g. PD 1067 (Water Code) and PD 705
(Forestry Code))
Page 155 of 511
CIVIL LAW
• By the provisions of Chapter 2, Title VII,
Book II, CC.
2. For private legal easements
• By agreement of the interested parties
whenever the law does not prohibit it and no
injury is suffered by a 3rd person.
• By the provisions of Chapter 2, title VII,
Book II.
b. Kinds of Private Legal
Easements provided by the New
Civil Code
1. Those Established for The Use of
Waters or Relating to Waters
a. NATURAL DRAINAGE [ART. 637,
CC]
Lower estates are obliged to receive the
waters which naturally and without the
intervention of man descend from the higher
estates (as well as the stones or earth which
they carry with them).
b. RIPARIAN BANKS [ART. 638, CC]
The banks of rivers and streams are subject
throughout their entire length and within a
zone of 3 meters for urban areas, 20 meters
for agricultural areas and 40 meters for forest
areas (PD 1067, Water Code as amended by PD
1067) along their margins, to the easement of
public use in the general interest of
navigation, floatage, fishing, recreation and
salvage.
Estates adjoining the banks of navigable or
floatable rivers are subject to the easement of
towpath for the exclusive service of river
navigation and floatage. If it be necessary to
occupy lands of private ownership, the
proper indemnity shall first be paid.
c. ABUTMENT OF A DAM [ART. 639,
CC]
Whenever for the diversion of water it
should be necessary to build a dam, and the
person who is to construct it is not the owner
of the banks, or lands which must support it,
U.P. LAW BOC PROPERTY
he may establish the easement of abutment
of a dam, after payment of the proper
indemnity.
d. DRAWING WATER AND WATERING
ANIMALS [ARTS. 640-641, CC]
Compulsory easements for drawing water or
for watering animals can be imposed only for
reasons of public use in favor of a town or
village, after payment of the proper
indemnity.
Accessory Obligation: To allow passage to
persons and animals to the place where such
easements are to be used, and the indemnity
shall include this service.
Limitation as to measurements of easement:
Width must not exceed 10 meters [Art. 657,
CC].
e. AQUEDUCT [ARTS. 642-646, CC]
Definition [Art. 642, CC]: Any person who
may wish to use upon his own estate any
water of which he can dispose shall have the
right to make it flow through the intervening
estates.
– with the obligation to indemnify their
owners, as well as the owners of the
lower estates upon which the waters
may filter or descend.
Requisites to establish easement of
Aqueduct [Art. 643]:
a. To prove that he can dispose of the
water and that it is sufficient for the use
for which it is intended;
b. To show that the proposed right of way
is the most convenient and the least
onerous to third persons;
c. To indemnify the owner of the servient
estate in the manner determined by the
laws and regulations.
What it cannot be imposed on [Art. 644,
CC]: Easement of aqueduct for private
interest cannot be imposed on buildings,
courtyards, annexes, or outhouses, or on
orchards or gardens already existing.
Right of servient estate owner [Art. 645,
CC]: This easement does not prevent the
Page 156 of 511
CIVIL LAW
owner of the servient estate from closing or
fencing it, or from building over the
aqueduct in such manner as not to cause the
latter any damage, or render necessary
repairs and cleanings impossible.
Treatment under law [Art. 646, CC]: This
easement is considered as continuous and
apparent, even though the flow of the water
may not be continuous, or its use depends
upon the needs of the dominant estate, or
upon a schedule of alternate days or hours.
N.B.: In the appropriation of water, there is
a need to apply for water rights.
f. STOP LOCK OR SLUICE GATE [ART.
649, CC]
The construction of a stop lock or sluice gate
in the bed of the stream from which the
water is to be taken, for the purpose of
improving an estate.
Such person may demand that the owners of
the banks permit its construction, after
payment of damages, including those caused
by the new easement to such owners and to
the other irrigators.
2. Right of Way [Arts. 649-657, CC]
Who may demand
a. The owner of the dominant estate; or
b. Any person with the real right to cultivate or use
the dominant estate e.g. a usufructuary, a de jure
possessor.
Note: a lessee cannot demand such easement, because
the lessor is the one bound to maintain him in the
enjoyment of the property.
Note: A right of way can be established through the
will of parties as well, and the provisions on the legal
easement of right of way will not govern.
Requisites for legal demand to establish the
easement of right of way [Art. 649 and Floro v.
Llenado, G.R. No. 75723, 1995]]:
a. The dominant estate is surrounded by other
immovables owned by other persons;
b. There must absolutely be no access i.e. means of
entrance or exit/egress to a public highway;
c. Even if there is access, it is difficult or dangerous
to use, or grossly insufficient;
U.P. LAW BOC PROPERTY CIVIL LAW

– Mere inconvenience in the use of an outlet Permanent right of Temporary right of

does not render the easement a necessity; way way
– An adequate outlet is one that is sufficient
for the purpose and needs of the dominant Necessary repairs
owner, and can be established at a reasonable Dominant owner to
Servient owner to spend.
expense; spend.
– Does not necessarily have to be by land – an
Share in taxes
outlet through a navigable river or a lake or
the sea if suitable to the needs of the The dominant owner
tenement is sufficient; shall reimburse a
Servient owner to spend
d. The isolation of the immovable is NOT due to proportionate share of
on such.
the dominant owner’s own acts e.g. if he taxes to the proprietor of
constructs building to others obstructing the old the servient estate.
way; and
e. There is payment of indemnity; Rules on Indemnity for Estates Enclosed
– If right of way is permanent and continuous Through a Sale, Exchange, Partition or
for the needs of the dominant estate = value Donation.
of the land + amount of damage caused to Sale, exchange or
the servient estate; Donation
partition
– If right of way is limited to necessary passage
for cultivation of the estate and for gathering Buyer, grantee or donee
crops, without permanent way = damage as dominant owners
caused by encumbrance. The buyer or grantee
The donee shall pay the
shall grant the right of
Different cases on establishing Right of Way: donor indemnity.
way without indemnity.
a. The criterion of least prejudice to the servient estate
Seller, grantor or donor
must prevail over the criterion of shortest distance
as dominant owners
although this is a matter of judicial
appreciation. While shortest distance may ordinarily The donee shall grant
The seller or grantor
imply least prejudice, it is not always so as when the right of way without
shall pay indemnity.
there are permanent structures obstructing the indemnity.
shortest distance; while on the other hand, the longest
distance may be free of obstructions and the Notes on extinguishment
easiest or most convenient to pass a. Extinguishment is not automatic. The owner of
through. [Quimen v. CA, G.R. No. 112331 (1996)] the servient estate must ask for such
b. The fact that LGV had other means of egress to extinguishment.
the public highway cannot extinguish the said b. Indemnity paid to the servient owner must be
easement, being voluntary and not compulsory. returned without interest. Interest on account of
The free ingress and egress along Mangyan Road indemnity is deemed to be rent for use of
created by the voluntary agreement between the parties is easement.
thus legally demandable with the corresponding
duty on the servient estate not to obstruct the Special Rights of Way
same. [La Vista Association v. CA, G.R. No. 95252 a. Right of way to carry materials for the
(1997)] construction, repair, improvement, alteration or
beautification of a building through the estate of
Obligations in Permanent and Temporary another.
Easements of Right of Way
Permanent right of Temporary right of b. Right of way to raise on another’s land
way way scaffolding or other objects necessary for the
work.
Indemnity
Consists of the damages If it be indispensable for the construction, repair,
Consists of the damages
and the value of the improvement, alteration or beautification of a
only.
land. building, to carry materials through the estate of

Page 157 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

another, or to raise therein scaffolding or other exclusive benefit

objects necessary for the work, the owner of such because he would be
estate shall be obliged to permit the act, after invading the rights of
receiving payment of the proper indemnity for the others.
the damage caused him. [Art. 656, CC] Any owner may free
himself from
c. Right of way for the passage of livestock known contributing to the cost In a co-ownership,
as animal path, animal trail, watering places, of repairs and partial renunciation is
resting places, animal folds. [Art. 657, CC] construction of a party allowed.
wall by renouncing all
Easements of the right of way for the passage of his rights thereto.
livestock known as animal path, animal trail or
any other, and those for watering places, resting When Existence of Easement of Party Wall is
places and animal folds, shall be governed by the Presumed [Art. 659, CC]
ordinances and regulations relating thereto, and, a. In dividing walls of adjoining buildings up to the
in the absence thereof, by the usages and customs point of common elevation.
of the place. b. In dividing walls of gardens or yards situated in
cities, or towns, or in rural communities.
Limitations as to measurements of animal path: c. In fences, walls and live hedges dividing rural
Max width of 75 meters. lands.

Limitation as to measurement of animal trail: Note: A title or an exterior sign, or any other proof
Max width of 37 meters and 50 centimeters. showing that the entire wall in controversy belongs
exclusively to one of the adjoining property owners
Limitation as to measurement for a watering may rebut these presumptions.
place for animals: Max width of 10 meters
When Existence of An Exterior Sign Is Presumed
3. Party Wall [Arts. 658-666, CC] [Art. 660, CC]
a. Whenever in the dividing wall of buildings there
Definition and characteristics is a window or opening.
a. A common wall which separates two estates, built b. Whenever one side is straight and plumb on all
by common agreement at the dividing line such its facement, and on the other, it has similar
that it occupies a portion of both estates on equal conditions on the upper part, but the lower part
parts. slants or projects outward.
b. A party wall is a special form of co-ownership c. Whenever the entire wall is built within the
(see Art. 658, CC). boundaries of one of the estates.
– Each owner owns part of the wall but it d. Whenever the dividing wall bears the burden of
cannot be separated from the other portions the binding beams, floors and roof frame of one
belonging to the others. A party wall has a of the buildings, but not those of the others.
special characteristic that makes it more of e. Whenever the dividing wall between courtyards,
an easement as it is called by law. gardens, and tenements is constructed in such a
– An owner may use a party wall to the extent way that the coping sheds the water upon only
of the ½ portion on his property. one of the estates.
f. Whenever the dividing wall, being built of
Party Wall Co-Ownership masonry, has stepping stones, which at certain
Before division of intervals project from the surface on one side
Shares of the co-owners shares, a co-owner only, but not on the other.
cannot be physically cannot point to any g. Whenever lands enclosed by fences or live
segregated but they can definite portion of the hedges adjoin others that are not enclosed.
be physically identified. property as belonging
to him. Note: The deposit of earth or debris on one side alone
None of the co-owners is an exterior sign that the owner of that side is the
There is no such owner of the ditch or drain. The presumption is an
may use the community
limitation.
property for his

Page 158 of 511

U.P. LAW BOC PROPERTY
addition to those enumerated in Art. 660, CC, found
in Art. 661, CC.
RIGHTS OF OWNERS OF A PARTY WALL
a. Generally, part-owners may use the wall in
proportion to their respective interests,
provided that [Art. 666, CC]:
– The right to use by the other party is not
interfered with;
– The consent by the other owner is needed if
a party wants to open a window; and
– The condition of the building is determined
by experts.
b. To increase the height of the wall [Art. 664,
CC].
– He does this at his expense, including the
thickening of the wall on his land.
– He shall indemnify the other party for any
damages.
c. To acquire a half-interest in any increase in
height or thickness of the wall, paying a
proportionate share in the cost of the work
and the value of the land covered [Art. 665,
CC].
d. To renounce his part ownership of a party
wall if he desires to demolish his building
supported by the wall. [Art. 663, CC]
– He shall bear all the expenses of repairs and
work necessary to prevent any damage which
the demolition may cause to the party wall.
Obligations of Owners of a Party Wall
a. To contribute proportionately to the repair and
maintenance of the party wall [Art. 662, CC].
Exception: He renounces his part-ownership, and
this includes the renunciation of the share in the
wall and the land
Exception to exception: He cannot renounce his part
if his building is being supported by the party wall
b. If he raises the height of the wall, he must [Art.
664, CC]:
1. Bear the cost of maintenance of the
additions;
2. Bear the cost of construction, if the wall
cannot support the additional height;
3. Give additional land, if necessary to thicken
the wall;
4. Pay for damages, if necessary, even if
temporary; and
5. Bear the increased expenses for preservation
Page 159 of 511
CIVIL LAW
4. Easement of Light and View [Arts.
667-673, CC]
Easement of light (jus luminum) is the right to
admit light from the neighboring estate by virtue of
the opening of a window or the making of certain
openings.
Easement of view (jus prospectus) is the right to
make openings or windows, to enjoy the view through
the estate of another and the power to prevent all
constructions or works which would obstruct such
view or make the same difficult.
The easement of view necessarily includes the
easement of light, because It is impossible to have a
view only without a light. However, it is possible to
have light without a view.
How Acquired: Through period of prescription of
10 years, counted depending on whether it was
positive or negative in nature.
Nature [Art. 668, CC]
a. Positive: Opening a window through a party wall
1. Period of prescription begins upon the
opening being made through the wall of
another.
• When a part owner of a party wall opens
a window therein, such act implies the
exercise of the right of ownership by the
use of the entire thickness of the wall.
2. The easement is created only after the lapse
of the prescriptive period.
b. Negative: Opening a window through a wall on
the dominant estate.
1. Period of prescription begins upon the
formal prohibition upon the owner of the
adjoining land or tenement. Formal means
that the prohibition has been notarized.
Meaning notice and demand was given to the
owner of the possible servient estate [Cortes v
Yu-Tibo, G.R. No. 911 (1903)]
• When a person opens a window on his
own building, he is exercising his right
of ownership on his property, which
does not establish an easement.
2. Coexistent is the right of the owner of the
adjacent property to build or plant on his
own land, even if such structures or planting
cover the window.
U.P. LAW BOC
3. If the adjacent owner does not build
structures to obstruct the window, such is
considered mere tolerance and NOT a
waiver of the right to build.
4. An easement is created only when the owner
opens up a window and subsequently
prohibits or restrains the adjacent owner
from doing anything that may tend to cut off
or interrupt the light and the 10-year
prescriptive period has lapsed by a notarial
prohibition.
Limitations as to Measurements:
General Rule: If an easement is acquired to have direct
views, balconies or belvederes, the owner of the
servient estate must not build at less than 3 meters
from the boundary line of the two tenements. Neither
can side or oblique views upon or towards such
conterminous property be had, unless there be a
distance of sixty centimeters. [Art. 670, CC].
Exception: In buildings separated by a public way or
alley, not less than 3 meters wide, the distances
required (2 m, 60 cm) do not apply [Art/ 672, CC].
Exception: The distances may be stipulated by the
parties, PROVIDED: The distance should not be less
than what is prescribed by the law (2 meters and 60
cm).
Note: Breach of the required distances results into the
prescriptive period not running.
Notes on the Acquisition of the Easement
Period of acquisitive prescription depends upon
whether the easement of light and view is positive or
negative.
• If positive, then the prescription period is
counted from the day the window is opened.
• If negative, then the prescription period is
counted from the formal prohibition made on
the owner of the servient estate.
5. Drainage of Buildings [Art. 674,
CC]
The owner of a building is obliged to construct its
roof or covering in such manner that the rain water
shall fall on his own land or on a street or public place,
and NOT on the land of his neighbor, even though
the adjacent land may belong to two or more persons,
one of whom is the owner of the roof.
Page 160 of 511
PROPERTY CIVIL LAW
Even if it should fall on his own land, the owner shall
be obliged to collect the water in such a way as not to
cause damage to the adjacent land or tenement.
The true easement is Article 675 where the adjacent
estate has the obligation of receiving the rain water
falling from a neighboring roof and giving it an outlet
on his own lot so as not to cause damage to the
dominant estate.
Easement of drainage if buildings [Art. 676, CC] – to
give outlet to rain water collected
6. Intermediate Distances [Arts. 677-681,
CC]
Prohibiting the contraction and plantings near
fortified places or fortresses without complying with
special laws, ordinances and regulations relative
hereto. Art. 677, CC, in effect, establishes an
easement in favor of the State. The general
prohibition is dictated by the demands of national
security.
The following must comply with the regulations or
customs of the place:
a. Construction of aqueduct, well, sewer, etc. [Art.
678, CC]
b. Constructions, which by reason of their nature or
products are dangerous or noxious.
Planting of trees [Art. 679, CC]
No trees shall be planted near a tenement or piece of
land belonging to another except at the distance
authorized by the ordinances or customs of the place.
IN THE ABSENCE OF REGULATIONS:
a. At least 2 meters from the dividing line of the
estates if tall trees are planted.
b. At least 50 centimeters if shrubs or small trees
are planted.
In case of violation, a landowner shall have the right
to demand the uprooting of the plant even if it has
grown spontaneously.
Branches, Roots and Fruits
If the branches of any tree should extend over a
neighboring estate, tenement, garden or yard, the
owner of the latter shall have the right to demand that
they be cut off.
U.P. LAW BOC PROPERTY CIVIL LAW

If it be the roots of a neighboring tree, which should

penetrate into the land of another, the latter may cut
them off himself within his property.
Fruits naturally falling upon adjacent land belong to
the owner of said land.
7. Lateral and Subjacent Support [Arts.
684-687, CC]
The proprietor is prohibited from making dangerous
excavations upon his land as to deprive any adjacent
land or building of sufficient lateral or subjacent
support.
Easement of lateral and subjacent support is deemed
essential to the stability of buildings.
Support is lateral when a vertical plane divides the
supported and supporting lands.
Support is subjacent when the supported land is
above the supporting land.
8. Easement Against Nuisance [Arts.
682-683, CC]
Every building or piece of land is subject to the
easement which prohibits the proprietor or possessor
from committing nuisance through noise, jarring,
offensive odor, smoke, heat, dust, water, glare and
other causes. [Art. 682, CC].
Subject to zoning, health, police and other laws and
regulations, factories and shops may be maintained
provided the least possible annoyance is caused to the
neighborhood. [Art. 683, CC]
G. Nuisance
Art. 694, CC A nuisance is any act, omission,
establishment, condition of property, or anything
else which:
1. Injures or endangers the health or safety of
others; or
2. Annoys or offends the senses; or
3. Shocks, defies or disregards decency or
morality; or
4. Obstructs or interferes with free passage of
any public highway or street, or any body of
water; or
5. Hinders or impairs the use of property.
A municipal body has the power to declare and abate
nuisances. BUT it has no power to find as fact that a
particular thing is a nuisance. The determination of
whether or not a nuisance exists is a judicial
function, because to declare something a nuisance is
to deprive its use. [Iloilo Cold Storage v Mun. Council of
Iloilo, G.R. No. L-7012 (1913)].
Nuisance v. Trespass
Nuisance Trespass
Use of one’s own
property in such a
manner as to cause injury
to the property or right Direct infringement of
or interest of another, another’s right of
and generally results property.
from the commission of
an act beyond the limits
of the property affected.
Injury is consequential. Injury is immediate.

Nuisance v. Negligence
Nuisance Negligence
Whether it was
Whether the defendant’s
unreasonable for the
use of his property was
defendant to act as he did
unreasonable as to
in view of the threatened
plaintiff, without regard
danger or harm to one in
to foreseeability of injury.
plaintiff’s position.
Liability for the resulting
injury to others
Liability is based on a
regardless of the degree
want of proper care
of care or skill exercised
to avoid such injury.

Page 161 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Principles ordinarily 1. Public: Nuisance that affects a community or

apply where the cause of Principles ordinarily neighborhood or any considerable number of
action is for continuing apply where the cause of persons [Art. 695, CC].
harm caused by action is for harm
continuing or recurrent resulting from one act Public nuisances are indictable (person liable may be
acts which cause which created an charged with a crime).
discomfort or annoyance unreasonable risk of
to plaintiff in the use of injury. 2. Private: One which violates only private rights
his property. and produces damages to but one or a few
specific persons.

1. Classes 2. Doctrine of Attractive

a. According to Nature Nuisance
One who maintains on his premises dangerous
Per se Per accidens
instrumentalities or appliances of a character likely to
An act, occupation or attract children in play, and who fails to exercise
One that becomes a
structure which is a ordinary care to prevent children from playing
nuisance by reason of
nuisance at all times and therewith or resorting thereto, is liable to a child of
circumstances and
under any circumstances, tender years who is injured thereby, even if the child
surroundings.
regardless of location or is technically a trespasser in the premises. [Jarco
surroundings Marketing Corp. v. CA, G.R. No. 129792 (1999)]
The wrong is established
Proof of the act and its Reason for doctrine: Although the danger is
by proof of the mere act.
consequences are apparent to those of age, it is so enticing or alluring to
It becomes a nuisance as
necessary. children of tender years as to induce them to
a matter of law.
approach (Ibid).
Note: a nuisance per accidens can be at the same time
Note: The attractive nuisance doctrine is generally not
the violation of a local building code and therefore
applicable to bodies of water in the absence of some
can be demolished pursuant to the procedure under
unusual condition or artificial feature.
that Code.
A swimming pool is not an attractive nuisance, for
“As such, petitioner is correct that the hotel is not a
while it is attractive, it is merely a duplication of a
nuisance per se, but to Our mind, it is still a nuisance
work of nature [Hidalgo Enterprises v. Balandan, G.R. L-
per accidens. […] This twin violation of law and
3422, (1952)]
ordinance warranted the LGU’s invocation of Sec.
444 (b)(3)(vi) of the LGC, which power is separate
and distinct from the power to summarily abate 3. Liability in Case of Nuisance
nuisances per se. Under the law, insofar as illegal
constructions are concerned, the mayor can, after Who are Liable
satisfying the requirement of due notice and hearing, a. Person responsible for creating the nuisance
order their closure and demolition.” [Aquino vs. b. Every successive owner or possessor of property
Municipality of Aklan (2014)] who fails or refuses to abate a nuisance in that
property started by a former owner or possessor
b. According to Scope of Injurious is liable therefor in the same manner as the one
who created it. [Art. 696, CC]
Effects – Provided that he knew of the nuisance.
– “To render the new owner or possessor
Test: Not the number of persons annoyed but the liable, it is necessary that he has actual
possibility of annoyance to the public by the invasion knowledge of the existence of the nuisance,
of its rights – the fact that it is in a public place and and that it is within his power to abate the
annoying to all who come within its sphere. same.

Page 162 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

– If he cannot physically abate the nuisance 2. A civil action; or

without legal action against another person, 3. Extrajudicial abatement.
then he shall not be liable for such nuisance. • It must be reasonably and efficiently
exercised
Nature of Liability • Means employed must not be unduly
All persons who participate in the creation or oppressive on individuals, and
maintenance of a nuisance are jointly and severally • No more injury must be done to the
liable for the injury done. property or rights of individuals than is
necessary to accomplish the abatement.
If 2 or more persons who create or maintain the
• No right to compensation if property taken
nuisance act entirely independent of one another, and
or destroyed is a nuisance.
without any community of interest, concert of action,
or common design, each is liable only so far as his acts
Abatement without Judicial Proceedings
contribute to the injury.
1. Police Power of the State
For solidary liability, there must be some joint or
The police power of the State includes the right
concurrent act or community of action or duty, or the
to destroy or abate by summary proceeding
several wrongful acts done at several times must have
whatever may be regarded as a public nuisance
concurred in their effects as one single act to produce
the injury complained of.
2. Right to Compensation
Property taken or destroyed for the purpose of
If there exists a common design, or some joint or
abating a nuisance is not taking for public use;
concurrent act or community of action or duty, or
thus, there is no obligation to make
several wrongful acts done at several times which
compensation for such taking.
have concurred in their effects as one single act to
produce the injury complained of, liability is solidary
3. Need for Abatement
One of the most serious hindrances to the
RIGHT TO RECOVER DAMAGES
enjoyment of life and property is a nuisance.
Provisions for its abatement are indispensable
The abatement of a nuisance does not preclude the
(Report of the Code Commission, p.51).
right of any person injured to recover damages for its
past existence. [Art. 697, CC]
Process for Extrajudicial Abatement against
public nuisance:
Abatement and damages are cumulative remedies.
1. The district health officer shall take care that one
or all of the remedies against a public nuisance
No Extinctive Prescription to abate a nuisance or
are availed of. [Art. 700, CC]
Acquisitive Prescription for the right to use of the
2. The district health officer shall determine
property that creates such nuisance.
whether or not abatement, without judicial
The action to abate a public or private nuisance is
proceedings, is the best remedy against a public
NOT extinguished by prescription. [Art. 1143(2), CC]
nuisance. [Art. 702, CC]
Lapse of time cannot legalize any nuisance [Art. 698,
Process for Judicial Abatement (through Civil
CC]
Action) against public nuisance:
General Rule: If a civil action is brought by reason of
4. Regulation of Nuisances the maintenance of a public nuisance, such action
shall be commenced by the city or municipal mayor.
a. Public Nuisance [Art. 701, CC]

Remedies Exception: A private person may file an action on

The remedies against a public nuisance [Art. 699, account of a public nuisance if it is especially injurious
CC]: to him. [Art. 703, CC]
1. Prosecution under the Penal Code or any local
ordinance; Rationale for Exception: An individual who has suffered
some special damage different from that sustained by

Page 163 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

the general public may maintain a suit in equity for an
injunction to abate it, or an action for damages which
he has sustained. The action becomes a tort if an
individual has suffered particular harm, in which case
the nuisance is treated as a private nuisance with
respect to such person.
Requisites of the right of a private individual to
bring a civil action to abate a public nuisance
[Art. 704, CC]
1. That demand be first made upon the owner or
possessor of the property to abate the nuisance;
2. That such demand has been rejected;
3. That the abatement be approved by the district
health officer and executed with the assistance of
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
nuisance is acquired or should have been
acquired by the person entitled to abate.
3. The person who has the right to abate must give
reasonable notice of his intention to do so, and
allow thereafter a reasonable time to enable the
other to abate the nuisance himself.
4. The means employed must be reasonable and for
any unnecessary damage or force, the actor will
be liable. The right to abate is not greater than the
necessity of the case and is limited to the removal
of only so much of the objectionable thing as
actually causes the nuisance.
5. The property must not be destroyed unless it is
absolutely necessary to do so.
a. The procedure for extrajudicial abatement of
a public nuisance by a private person will also
be followed.
Note: see Municipal health officer under Art.
700 and Art. 702.
b. No breach of peace or doing unnecessary
Injury.
Liability for invalid extrajudicial abatement:
The person (whether private person or public official)
extrajudicially abating a nuisance is liable for damages
if:
a. If he causes unnecessary injury; or
b. If an alleged nuisance is later declared by the
courts to be not a real nuisance.
Methods of abatement [Art. 706, CC]:
a. By removing the thing causing the nuisance
b. By destroying the thing causing the nuisance.
Remedies of the property owner
A person whose property is seized or destroyed as a
nuisance may resort to the courts to determine
whether or not it was in fact a nuisance.
a. An action for replevin;
b. To enjoin the sale or destruction of the property;
c. An action for the proceeds of its sale and
damages if it has been sold; or
d. To enjoin private parties from proceeding to
abate a supposed nuisance.

b. Private Nuisance
Private Nuisance: That which is not included in the
definition of a public nuisance [Art. 695, CC]

Remedies [Art. 705, CC]

The remedies against a private nuisance are:
1. A civil action; or
2. Extrajudicial abatement
Requisites for a valid extrajudicial abatement
[Art. 706, CC]:

Page 164 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

c. By finding movables which have been abandoned

by the owner
H. Modes of Acquiring d. By finding hidden treasures
Ownership and Other [See Arts 438-439, CC]

Real Rights a. Requisites of Occupation

1. Occupation 1. The property must be a corporeal personal
2. Intellectual Creation property susceptible of appropriation;
3. By operation of Law 2. The property is either res nullius (no owner) or res
4. Donation derelict (abandoned property);
5. Succession (Testate and Intestate) 3. There is seizure or apprehension with the intent
6. Tradition to appropriate; and
7. Prescription 4. There is an observance of requisites or conditions
prescribed by law. [Labitag]
Mode vs. Title (Tolentino)
Mode Title b. Kinds
Serves merely to give the
Directly and immediately
produces a real right.
occasion for its 1. Of Animals
acquisition or existence.
Cause Means a. Wild or feral animals – seizure
(hunting/fishing) in open season by means not
Proximate cause Remote cause prohibited.
Essence of the right, b. Tamed/domesticated animals – General Rule:
Means whereby that belong to the tamer for as long as tamed animal
which is to be created or
“essence” is transmitted. retains the habit of returning to the place where
transmitted.
it is kept, but upon recovering freedom, are
susceptible to occupation unless claimed within
1. Occupation 20 days from seizure by another. [Art. 716, CC]
i.e. not acquired by occupation except when
Occupation Possession abandoned by owner.
Mode of acquiring Raises the presumption
ownership of ownership 2. Of Other Personal Property
Only of corporeal Over any kind of
personal property property a. Abandoned – may be acquired
Object must be b. Lost
Object may be with or
without an owner (res c. Hidden treasure – finder gets ½ by occupation;
without an owner
nullius) landowner gets ½ by accession; except in CPG
May be had in the system, share goes to the partnership.
Requires an intent to
concept of a mere
acquire ownership
holder 3. Of Land
May not take place
May exist without
without some form of Land cannot be the object of occupation [Art. 714,
occupation
possession CC]
Generally of longer
Short duration
duration Land of Public Domain: belong to the State
Cannot lead to May lead to another
another mode of mode which is Abandoned Private Land: deemed as patrimonial
acquisition prescription property of the State

How Occupation Is Effected:

a. By hunting and fishing
b. By finding movables which never had any owner

Page 165 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

b. If the finder is a trespasser, he shall not be

c. Special Rules [Art. 716, CC]
1. Occupation of a Swarm of Bees
The owner of a swarm of bees shall have a right to
pursue them to another’s land, indemnifying the
possessor of the latter for the damage.
If the owner has not pursued the swarm, or ceases to
do so within 2 consecutive days, the possessor of the
land may occupy or retain the same, the owner having
lost his ownership by leaving, abandoned them (no
more intention to recover).
2. Occupation of Domesticated Animals
[Art. 560, CC]
Wild animals are possessed only while they are under
one's control; domesticated or tamed animals are
considered domestic or tame if they retain the habit
of returning to the premises of the possessor.
3. Pigeons and Fish [Art. 717, CC]
Pigeons or fish which change their breeding place to
another belonging to a different owner. Unless
enticed by some artifice or fraud, they shall belong to
the owner of the breeding place to which they have
transferred.
4. Hidden Treasure [Arts. 718, 438, CC]
a. He who by chance discovers hidden treasure in
another’s property: ½ shall be allowed to the
finder.
entitled to any share of the treasure.
c. If the things found be of interest to science or the
arts, the State may acquire them at their just price,
which shall be divided in conformity with the rule
stated.
5. Lost Movables; Procedure After
Finding Lost Movables [Art. 719, CC]
a. Rights and obligations of the finder of lost
personal property are based on a quasi-contract.
b. One who has lost his property does not
necessarily abandon it.
c. Lost things cannot be acquired by prescription,
even if extraordinary.
d. Owner may still recover it from the person in
possession of the same.
e. If the owner is not known, finder must deliver
the thing to the mayor of the city or municipality
where it was found. The finding shall be publicly
announced by the mayor for two consecutive
weeks as he deems best.
f. Abandonment must be voluntary and intentional.
Implied abandonment is presumed when six (6)
months from publication have elapsed without
the owner having appeared - in which case, the
thing is awarded to the finder.
g. If the owner should appear in time, he is obliged
to give finder a reward one-tenth of the sum or
price of the thing found. [Art. 720, CC]
h. The expenses, including transportation, storage,
and publication, shall be reimbursed by the
finder, or by the owner in case the latter claims
the thing.

2. Donation
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) [Art. 725, CC]

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. [Tolentino]
Nature Generally, donation includes all forms of gratuitous dispositions.
Effect The patrimony or asset of the donor is decreased, while that of the donee is increased.

Page 166 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

[CADAF – Capacity, Animus donandi, Delivery, Acceptance, Form]

a. Capacity of donor to make donation
b. Donative intent (animus donandi)
c. Delivery (actual or constructive)
Requisites
d. Acceptance by donee
e. Necessary form prescribed by law
Note: Acceptance by the donee 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) [Art. 726, CC]
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) [Art. 726, CC]
Donation Inter Vivos [Art. 729-731, CC]
Donation which shall take effect during the lifetime of the donor upon
concurrence of the requirements of donation, though the property shall not be
delivered until after the donor's death.

General Rule: Irrevocable

Exceptions:
a. Subsequent birth of the donor’s children [Art. 760, CC];
b. Donor’s failure to comply with imposed conditions [Art. 764, CC];
c. Donee’s ingratitude [Art. 765, CC]; or
d. Reduction of donation by reason of inofficiousness [Art. 752, CC].
Donation Propter Nuptias [Art. 82, FC]
A special type of donation made by reason of marriage.

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.
Kinds of As to its
Donations taking effect Causes for revocation of donation propter nuptias [Art. 86, FC]:
a. If the marriage is not celebrated or judicially declared void ab initio, except
donations made in the marriage settlements, which shall be governed by
Article 81;
b. When the marriage takes place without the consent of the parents or
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.

Page 167 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

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.
c. Onerous - imposes a burden inferior in value to property donated.
As to cause
d. Improper - burden equal in value to property donated.
or
e. Sub-modo or modal - imposes a prestation upon donee as to how property
consideration
donated will be applied.
f. Mixed donations – e.g. sale for price lower than value of property. [Labitag
Syllabus]

Ordinary Donations v. Donations Propter Nuptias

Ordinary Propter Nuptias
As to requirement of express acceptance
Necessary [Art. 745-747, CC] Not necessary. Implied acceptance is enough.

As to future property
May include future property (same rule as wills) [Art.
Cannot include future property [Art. 751, CC]
84, FC]
As to limit on donation of present property
No limit to donation of present property provided If present property is donated and property regime is
legitimes are not impaired. [Art. 750 and 752, CC] other than ACP, limited to 1/5. [Art. 84, FC]
As to grounds for revocation
Enumerated in Arts. 760, 764, and 765, CC Enumerated in Art. 86, FC

Page 168 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Inter Vivos v. Mortis Causa

Inter vivos Mortis causa
As to formalities
Executed and accepted with formalities prescribed by CC Must be in the form of a will, with all the formalities
(Art. 748 and 749). for the validity of wills. [Art. 728, CC]
As to effectivity
Effective during the lifetime of the donor. It takes effect
Effective after the death of the donor. [Art. 728, CC]
independently of the donor’s death. [Art. 729, CC]
As to acceptance
Acceptance must be made after the death of the
donor, the donation being effective only after the
Acceptance must be made during the lifetime of the death of donor. Acceptance during the donor’s
donor. [Art. 746, CC] lifetime is premature and ineffective because there
can be no contract regarding future inheritance. [Art.
728, CC]
As to transfer of ownership for right of disposition
Ownership is immediately transferred. Delivery of Upon acceptance by the donee, but the effect of such
possession is allowed after death. retroacts to the time of death of the donor.
As to revocation
Irrevocable – may be revoked for the reasons provided in Revocable upon the exclusive will of the donor.
Arts. 760, 764, 765, CC. [Ganuelas v. Cawed, G.R. No. 123968 (2003]
As to reduction or suppression
When it is excessive or inofficious [Art. 750, CC] or for
any of the reasons provided for in Art. 760, CC. Being When it is excessive or inofficious, it is reduced first,
preferred, it is reduced only after the donations mortis or even suppressed.
causa had been reduced or exhausted.
As to effect if donor survives donee
Donation is void. [Maglasang v. Heirs of Cabatingan,
Not affected.
G.R. 131953 (2002)]

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. [Tolentino]

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. [Labitag Syllabus]

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)
]

Page 169 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

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 for it to be
writing. Oral donation requires simultaneous
valid.
delivery.
If donation and acceptance are in the same instrument:
a. It must in a public instrument.
b. Instrument must specify the property donated and
the value of the charges.

If donation and acceptance are in separate instruments:

If value of property exceeds P5,000:
a. Donation and acceptance must be in writing;
otherwise, it is void.
b. It need not be in public instrument; neither is it
necessary that the acceptance be in the same
instrument as the deed of donation. [Tolentino]
If value is P5,000 or less:
a. If orally: there must be simultaneous delivery
b. If in writing: donation is valid even without
simultaneous delivery
c. In every case, acceptance must be made known to
the donor for perfection of a donation to take
place. [Art. 746, CC]
a. It must be in a public instrument.
b. Instrument must specify the property and the value
of the charges.
c. Acceptance must also be in a public instrument.
d. It must be made during the lifetime of the donor.
[Art. 746, CC]
e. Donor must be notified in authentic form of such
acceptance made in a separate instrument.
f. Fact of such notification must be noted in both
instruments.
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].

What may be donated

All present property of the donor or part thereof. [Art. 750, CC]
Limitation:
a. The donor reserves, in full ownership or usufruct, sufficient means for support of himself and all relatives
entitled to be supported by donor at the time of acceptance. [Art. 750, CC]
b. The donor reserves property sufficient to pay donor’s debts contracted before donation, otherwise, donation is
in fraud of creditors. [Arts. 759, 1387, CC]
c. Donations provided for in marriage settlements between future spouses – must be not more than 1/5 of present
property. [Art. 84, FC]

Page 170 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

d. Donation propter nuptias by an ascendant consisting of jewelry, furniture or clothing not to exceed 1/10 of
disposable portion. [Art. 1070, CC]
What may not be donated
a. Future property; those which the donor cannot dispose of at the time of the donation [Art. 751, CC]
b. More than what he may give or receive by will [Art. 752, CC]
If it exceeds what he may give or receive by will, then it is considered inofficious
Limitations
a. Reservation of sufficient means for support of donor and relatives [Art. 750, 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 considered future property. However, upon the death
of his predecessor, the inheritance ceases to be future and 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)]

No accretion – one donee does not get the share of the other donees who did not accept. [Art. 753, CC]

Exception: those given to husband and wife, except when the donor otherwise provides. [Art. 753, CC]
Donor
Who are allowed: All persons who may contract (of legal age) and dispose of their property. [Art. 735, CC]

Donor’s capacity is determined at the time of the making of donation [Art. 737, CC] Subsequent incapacity is
immaterial.

Note: Capacity to donate is NOT required for donations mortis causa. [Tolentino]

Who are NOT allowed:

a. Guardians and trustees with respect to the property entrusted to them. [Art. 736, CC]
b. Those disqualified by reason of public policy: [Art. 739, CC]
c. Those made between persons guilty of adultery or concubinage at the time of the donation;
d. Those made between persons guilty of the same criminal offense if the donation is made in consideration
thereof; or
e. Those made to a public officer, his spouse, descendants, and/or ascendants by reason of the office.
Donee
Who are allowed to accept donations:
a. Those who are not specifically disqualified by law. [Art. 738, CC]
b. Those who are allowed, with qualifications:

Page 171 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

1. Minors, insane/imbecile, deaf-mute and others who are incapacitated [see Art. 38, CC], provided that their
acceptance is done through their parents or legal representatives. [Art. 741, CC]
2. Conceived and unborn children, provided that the donation is accepted by those who would legally
represent them if they were already born. [Art. 742, CC]

Who are not allowed:

a. Made between persons who are guilty of adultery or concubinage. [Art. 739, CC]
b. Made between persons found guilty of the same criminal offense, in consideration thereof. [Art. 739, CC]
c. Made to a public officer or his wife, descendant and ascendants, by reason of his office. [Art. 739, CC]
d. Those who cannot succeed by will. [Art. 740, CC] – covers those stated under Arts. 1027 and 1032, CC.
e. Those made to incapacitated persons, although simulated under the guise of another contract. [Art. 743, CC]
Acceptance of the donation
Who may accept: [Art. 745, CC]
a. Donee personally; or
b. Authorized person with a special power for the purpose, or with a general sufficient power.

When to accept: During the lifetime of the donor and of the donee. [Art. 746, CC]
What the donee acquires with the thing
He shall be subrogated to all the rights and actions that would pertain to the donor in case of eviction. [Art. 754,
CC]
Obligation of the donor
No obligation to warrant. [Art. 754, CC]

Exceptions:
a. when the donation is onerous. [Art. 754, CC]
In which case, the donor shall be liable for eviction to the concurrence of the burden; and

b. liable for eviction or hidden defects in case of bad faith on the donor’s part.
Obligation of the donee
If the donation so states, the donee may be obliged to pay the only debts previously contracted by the donor and
in no case shall he be responsible for the debts exceeding the value of the thing donated. [Art. 758, CC]

Exception: When a contrary intention clearly appears. [Art. 758, CC]

SPECIAL PROVISIONS
What may be reserved by the donor [Art. 755, CC]
The right to dispose of some of the things donated, or of some amount which shall be a charge thereon

Exception: If the donor dies without exercising this right. In which case, the property or amount reserved shall
belong to the done.
Donation of naked ownership to one donee and usufruct to another [Art. 756, CC]
The naked ownership and the usufruct may be donated separately, provided that all the donees are living at the
time of the donation.
Payment of donor’s debt [Art. 758, CC]
a. If expressly stipulated, the donee must pay only the debts contracted before the donation unless specified
otherwise.

Page 172 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

But in no case shall the donee be responsible for debts exceeding the value of the property donated unless
clearly intended.
b. If there’s no stipulation, the donee will be answerable only for the donor’s debt only in case the donation is in
fraud of creditors. [Art. 759, CC]
Reversion [Art. 757, CC]
The property donated may be restored or returned to:
a. Donor or his estate (reversion may be for any case and circumstance); or
b. Other persons (such persons MUST all be living at the time of the donation)

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. [Art. 1544, CC]
b. If immovable: One who first recorded in Registry of Property in good faith. [Art. 1544, CC]
c. If there is no inscription, the one who first took possession in good faith. [Art. 1544, CC]
d. In the absence thereof (possession), one who can present the oldest title, provided there is good faith. [Art.
1544, CC]
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. [Art. 771, CC]

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. [Art. 772, CC]

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. [Art. 773, CC]
Donations cannot comprehend future property [Art. 751, CC]
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. [Tolentino] Remember
latin maxim: nemo dat quod non habet.
In fraud of creditors [Art. 759, CC]
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.

There being no stipulation regarding the payment of debts, 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 [Art. 87, FC]
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.

Page 173 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

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 donor’s heirs (except when made on the ground of the appearance of a child).

Time of Action Transmissibility Effect Liability (Fruits)

Birth, appearance, adoption [Art. 760, CC]
• Property is returned.
• If the property has been
sold, its value at the time
of donation shall be
returned.
Within 4 years from birth, Transmitted to children and Fruits returned from the
legitimation and adoption. descendants upon the death • If the property was filing of the complaint. [Art,
[Art. 763, CC] of donor. [Art. 763, CC] mortgaged, the donor 768, CC]
may redeem the
mortgage, by paying the
amount guaranteed, with
right to recover the
amount from the done.
[Art. 762, CC]
Non-compliance with condition [Art. 764,CC]
Property returned to the
May be transmitted to Fruits received after having
donor, alienations by the
Within 4 years from non- donor’s heirs and may be failed to fulfill condition are
done and mortgages void
compliance. exercised against donee’s to be returned. [Art, 768,
subject to rights of third
heirs. CC]
persons in good faith.
Ingratitude [Art. 765, CC]
Applies to all donations
EXCEPT: Mortis causa; Propter nuptias; Onerous donations
Property returned, but
Within 1 year after Not transmitted to heirs of alienations and mortgages
knowledge by donor of the donor/ donee, but if donor effected before the notation Fruits received from the
fact and it was possible for dies during pendency of of the complaint for filing of the complaint
him to bring the action. case, heirs may be revocation in the registry of returned. [Art, 768, CC]
[Art. 769, CC] substituted. [Art. 770, CC] property subsist. Later ones
shall be void. [Art. 776, CC]
Failure to reserve sufficient means for support [Art. 750, CC]
Reduced to the extent
At any time, by the donor or Donee entitled. [Art. 771,
Not transmissible. necessary to provide
relatives entitled to support. CC]
support. [Art. 771, CC]

Page 174 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Inofficiousness for being in excess of what the donor can give by will [Art. 752, CC]
Donation takes effect on
Within 5 years from the the lifetime of donor.
Transmitted to donor’s Donee entitled. [Art. 771,
death of the donor. [NCC Reduction only upon his
heirs. [Art. 772] CC]
1149] death with regard to the
excess. [Art. 771, CC]
Fraud against creditors [Art. 1381]
Rescission within 4 years Fruits returned, or if
Transmitted to creditor’s Returned for the benefit of
from the perfection of impossible, indemnify
heirs or successors-in- the creditor who brought
donation (knowledge of the creditor for damages. [Art.
interest. the action. [Art. 1388, CC]
donation). [Art. 1389, CC] 1385 and 1388, CC]

3. Tradition Constructive Tradition: Delivery of the thing is not

It is a derivative mode of acquiring ownership and
other real rights by virtue of which, there being
intention and capacity on the part of the grantor and
grantee and the pre-existence of said rights in the
estate of the grantor, they are transmitted to the
grantee through a just title.
a. Requisites
[JOPIC – Just cause, Outward form, Pre-existence,
Intention, Capacity]
1. Pre-existence in the estate of the grantor of the
right to be transmitted;
2. Just cause or title for the transmission;
3. Intention on the part of the grantor to grant and
on the part of the grantees to acquire;
4. Capacity to transmit and to acquire; and
5. An act that gives it outward form, physically,
symbolically, or legally.
b. Purpose
real nor material but consists merely in certain facts
indicative of the same.
a. Symbolic tradition - Delivery of signs or things
which represent that which is being transmitted
(e.g. delivery of keys or title).
b. Tradition by public instrument - Substitution
of real delivery of possession by a public writing
with the delivery of the document which
evidences the transaction.
c. Tradition longa manu - Grantor points out to
the grantee the thing to be delivered.
d. Tradition brevi manu - When the grantee is
already in possession of the thing under another
title [e.g. lessee buys the thing leased to him (lessee becomes
owner)].
e. Tradition constitutum possessorium -
Opposite of brevi manu; owner alienates a thing
but remains in possession [e.g. owner sells a property
but continues to posess the same as a lessee (owner becomes
lessee)].
Quasi tradition: Delivery of incorporeal things or
rights by the use of grantee of such rights with
grantor’s consent.

Ownership and other real rights are transferred,
among other means, by tradition. [Art. 712, CC]
The delivery of a thing constitutes a necessary and
indispensable requisite for the purpose of acquiring
the ownership of the same by virtue of a contract.
c. Kinds
Real Tradition (Physical delivery): Thing is
physically delivered or transferred from hand to hand.
By operation of law: Those not included in the
foregoing modes but is effected solely by virtue of an
express provision of law (e.g. Art. 1434, CC on
estoppel).
4. Prescription
By prescription, one acquires ownership and other
real rights through the lapse of time in the manner and
under the conditions laid down by law. In the same
way, rights and conditions are lost by prescription.
[Art. 1106, CC]

Page 175 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Note: For purposes of ACQUIRING OWNERSHIP, The following are only required in ordinary acquisitive
only ACQUISITIVE PRESCRIPTION is being prescription [Tolentino]:
referred to. a. Good faith of the possessor; and
b. Proof of just title.
a. Rationale
Note:
It is purely statutory in origin. It is founded on • For extraordinary prescription, only possession
grounds of public policy which requires for the peace in the concept of owner is required; no need of
of society, that juridical relations susceptible of doubt good faith and just title.
and which may give rise to disputes, be fixed and • Possession has to be in the concept of an owner,
established after the lapse of a determinate time so public, peaceful, and uninterrupted. [Art. 1118,
that ownership and other rights may be certain for CC]
those who have claim in them.
2. Extinctive Prescription
b. Kinds of Prescription
The loss or extinguishment of property rights or
1. Acquisitive Prescription actions through the possession by another of a thing
for the period provided by law or through failure to
The acquisition of ownership and other real rights bring the necessary action to enforce one’s right
through possession in the concept of owner of a thing within the period fixed by law.
in the manner and condition provided by law.
Acquisitive
Extinctive Prescription
May be ordinary or extraordinary: Prescription
a. Ordinary: requires possession of things in good Requires positive action Requires inaction of the
faith and with just title for the time fixed by law. of the possessor (a owner out of possession
b. Extraordinary: acquisition of ownership and claimant) who is not the or neglect of one with a
other real rights without need of title or of good owner. right to bring his action.
faith or any other condition.
Applicable to all kinds of
Applicable to ownership
Prescription where possession in good faith rights, whether real or
and other real rights.
converted into possession in bad faith: personal.
a. Ordinary Vests the property and Vests the property and
• Movable properties - 4 years [Art. 1132, CC] raise a new title in the raise a new title in the
• Immovable properties - 10 years [Art. 1134, occupant. occupant.
CC] Results in the acquisition
Merely results in the loss
of ownership or other
b. Extraordinary: of a real or personal right,
real rights in a person as
• Movable properties - 8 years [Art. 1132 and or bars the cause of
well as the loss of said
1140, CC] action to enforce said
ownership or real rights
right.
• Immovable properties - 30 years [Art. 1137, in another.
CC] Can be proven under the Should be affirmatively
general issue without its pleaded and proved to
As a mode of acquisition, prescription requires being affirmatively bar the action or claim of
existence of following [Tolentino]: pleaded. the adverse party.
a. Capacity of the claimant to acquire by
prescription;
b. A thing capable of acquisition by prescription; 3. No Prescription Applicable
c. Adverse possession of the thing under certain
conditions; and By offender: The offender can never acquire,
d. Lapse of time provided by law. through prescription, movable properties possessed
e. Possession must be in the concept of owner, not through a crime. [Art. 1133, CC]
holder.

Page 176 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Registered lands: No title to registered land in Prescription Laches

derogation of the title of the registered owner shall be
acquired by prescription or adverse possession. [PD Statutory. NOT statutory.
1529] Applies at law. Applies at equity.
Cannot be availed of
Rights not extinguished by prescription [Art. Being a defense of equity,
unless it is especially
1143, CC] need not be specifically
pleaded as an affirmative
a. To demand a right of way, regulated in Art. 649, pleaded.
allegation.
CC;
b. To bring an action to abate a public or private NOT based on a fixed
Based on a fixed time.
nuisance. time.

Action to quiet title if plaintiff is in possession

When plaintiff is in possession of the property: the
5. Prescription or Limitation of
action to quiet title does not prescribe. Actions
The reason is that the owner of the property or right a. To Recover Movable Properties
may wait until his possession is disturbed or his title
is assailed before taking steps to vindicate his right.
1. The action prescribes in 8 years from the time the
possession thereof is lost. [Art. 1132 and 1140,
Void contracts
CC]
The action or defense for the declaration of the
2. However, the action shall not prosper if it is
inexistence of a contract does not prescribe. [Art.
brought after 4 years when the possessor has
1410, CC]
already acquired title by ordinary acquisitive
prescription. [Art. 1132, CC]
Action to demand partition
3. If the possessor acquired the movable in good
No prescription shall run in favor of a co-owner or
faith at a public sale, the owner cannot obtain its
co-heir against his co-owners or co-heirs so long as he
return without reimbursing the price paid. [Art.
expressly or impliedly recognizes the co-ownership.
559, CC]
[Art. 494, CC]

Property of public dominion b. To Recover Immovables

Prescription, both acquisitive and extinctive, does not
run against the State in the exercise of its sovereign General Rule: Real actions prescribe after 30 years [Art.
function to protect its interest EXCEPT with respect 1141, CC]
to its patrimonial property which may be the object
of prescription. [Art. 1113, CC] Exception: The possessor has acquired ownership of
the immovable by ordinary acquisitive prescription
Prescription distinguished from laches [Nielsen & through possession of 10 years. [Art. 1134, CC]
Co., Inc. v. Lepanto Consolidated Mining Co., L-21601
(1966)] c. Action for reconveyance
Prescription Laches 1. Based on fraud: Prescribes 4 years from the
discovery of fraud. [Art. 1391, CC]
Concerned with the fact Concerned with the
2. Based on implied or constructive trust: 10
of delay. effect of delay.
years from the alleged fraudulent registration or
Principally a question of date of issuance of certificate of title over the
inequity of permitting a property. [Art. 1144, CC]
claim to be enforced, this
inequity being founded
A matter of time.
on some subsequent
change in the condition
or the relation of the
parties.

Page 177 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

5. To rescind or recover
d. Other Actions damages if immovable is
sold with non-apparent
Prescriptive burden or servitude. [Art.
Period 1560 (3,4), CC]
1. Action to foreclose a
mortgage (from the time the 6. To enforce warranty of
principal obligation solvency of debts in
becomes due and assignment of credits. [Art.
10 years [Art. demandable 1629, CC]
1144, CC] 2. Actions upon:
a. A written contract e. Interruption [Art. 1155, CC]
b. An obligation created
by law Prescription of actions is interrupted when:
c. A judgment 1. They are filed before the court;
Actions upon: 2. When there is a written extrajudicial demand by
6 years [Art. the creditors; and
1. An oral contract
1145, CC] 3. When there is any written acknowledgment of
2. A quasi-contract
All other actions whose periods the debt by the debtor.
5 years [Art.
are not fixed in the CC or in
1149, CC] Types of interruption
other laws.
Actions upon: 1. Natural - Any natural cause that interrupts the
4 years [Art. 1. An injury to the rights of possession for more than one year. [Art. 1121,
1145, CC] the plaintiff. CC]
2. A quasi-delict. 2. Civil [Art. 1123, CC]
1. Actions for Art. 1147, CC. a. For acquisitive prescription – starts from the
a. Forcible entry within time judicial summons are received.
one year from date of b. For extinctive prescription – starts from the
dispossession thru time action is filed in court, written
FISTS or unlawful extrajudicial demand by the creditors is
detainer 1 year from received, or when there is written
date of last demand. acknowledgment of the debt by the debtor.
b. Defamation [Art. 1155, CC]

2. Actions upon an injury to Civil actions are deemed commenced from the date
the rights of the plaintiff or of the filing and docketing of the complaint with the
upon a quasi-delict Clerk of Court. [Cabrera v. Tiano, G.R. No. L-17299
resulting from any act of (1963)]
1 year any public officer
involving the exercise of A written extrajudicial demand wipes out the period
powers arising from that has already elapsed and starts anew the
Martial Law including the prescriptive period. [The Overseas Bank of Manila v.
arrest, detention and/or Geraldez, G.R. No. L-46541 (1979)]
trial of the plaintiff.
Not all acts of acknowledgement of a debt interrupt
3. To recover possession de prescription. To produce such effect, the
facto. [Art. 554 (4), CC] acknowledgment must be “written”, so that the
payment, if not coupled with the communication
4. To revoke a donation on signed by the payor would interrupt the running of
the ground of ingratitude. the period of prescription. [PNB v. Osete, G.R. No. L-
[Art. 769, CC] 24997 (1968)]

Page 178 of 511

U.P. LAW BOC PROPERTY CIVIL LAW

Suspension in case of acquisitive prescription

The period of interruption shall be counted in favor
of prescription (i.e. as if interruption never happened
but is merely suspended) if:
1. Judicial summons is void
2. Plaintiff should desist from the complaint
3. Possessor be absolved from the complaint

Note: There is no suspension in extinctive

prescription.

Effects of interruption
1. All the benefits acquired so far from the
possession ceases.
2. When the prescription runs again, it will be reset
(i.e. entirely new prescriptive period).

Page 179 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

SUCCESSION
Civil Law

Page 180 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

IV. SUCCESSION • Criminal responsibility

2. Intransmissible by stipulation
A. General Provisions 3. Intransmissible by provision of law

Examples:
1. Definition • Usufruct [Art. 603, CC]
• Agency [Art. 1919, CC]
Succession is a mode of acquisition by virtue of
• Commodatum [Art. 1939, CC]
which the property, rights and obligations, to the
extent of the value of the inheritance, of a person
b. Monetary debts left by the decedent are
are transmitted through his death to another or others
intransmissible in the sense that they are paid
either by his will or by operation of law. [Art. 774, CC]
from the estate of the decedent and only the net
estate or remainder goes to the heirs. If the
Succession is one of the modes of acquiring
decedent’s estate is not sufficient to pay his debts,
ownership and other real rights over property. [par 2,
his heirs cannot be held liable for said debts in
Art. 712, CC]
their personal capacity [Rule 88-90, Rules of
Court].
Kinds of Succession:
a. Testamentary
Rule on Transmission
b. Legal or Intestate
General rule: All property rights which have accrued to
c. Mixed
the hereditary estate since the opening of succession
d. Compulsory
are transmitted to the heirs [Art. 777, CC].

2. Object of Succession and Rules on Opening of Succession

Transmission
Scope of Inheritance
General rule:
a. All the property, rights and obligations of a
person which are not extinguished by his death
[Art. 776, CC]
b. Not only the property and the transmissible
rights and obligations existing at the time of his
death, but also those which have accrued thereto
since the opening of the succession [Art. 781,
CC]
Exceptions:
a. Rights and obligations extinguished by
death and are not transmissible [Art. 1311, CC]
1. Intransmissible by nature: this refers to
rights and obligations which are strictly
personal (intuitu personae)
Examples:
• Those relating to family relations
• Those arising from public law
• Those which involve or require the
personal skills, qualifications,
characteristics or circumstances of a
particular individual
a. The rights to succession are transmitted from
the moment of the death of the decedent. [Art.
777, CC]
Implications of this principle:
1. The law in effect at the time of death of the
decedent governs the succession [Art. 2236,
CC]
2. The heir becomes the owner of his share as
well as all fruits which accrue after the death
of the decedent.
3. Upon death of the decedent, heirs may
immediately possess, administer and dispose
of their shares in the estate (in the absence of
existing debts/claims against the estate);
4. Since succession takes place by operation of
law at the moment of the death of the
decedent, the heirs can sue upon the rights
of the decedent, without having to be
appointed executor or administrator [Emnace
v. CA, G.R. No. 126334 (2001)], and without
need of a judicial declaration of their status
as heirs [De Vera v. Galauran, 67 Phil 213
(1939)]. Heirs may also be sued without a
previous declaration of heirship, provided
there is no pending special proceeding for
the settlement of estate of the decedent
[Gayon v. Gayon, G.R. No. L-28394 (1970)].

Page 181 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

5. The possession of hereditary property is

deemed transmitted to the heir without
B. Testamentary Succession
interruption and from the moment of death
of the decedent, in case the inheritance is 1. Wills
accepted [Art. 533, CC]
6. Estate taxes accrue upon death of the a. In General
decedent, even if the heirs come into
possession only later.
A will is an act whereby a person is permitted, with
the formalities prescribed by law to control to a
b. A person may be “presumed” dead for the
certain degree the disposition of his estate to take
purpose of opening his succession. In this case,
effect after his death [Art. 783, CC].
succession is only of provisional character
because there is always a chance that the absentee
KINDS OF WILLS
may still be alive [Arts. 390-391, CC].
1. Notarial – an ordinary or attested will, which
must comply with the requirements of the law
3. Subjects of Succession [Arts. 804-808, CC]
2. Holographic – a will entirely written, dated and
a. Decedent – person whose property is signed by the hand of the testator [Art. 810, CC]
transmitted through succession, whether or not
he left a will [Art. 775, CC] CHARACTERISTICS OF WILLS
1. Purely personal – the making of a will is non-
Testator – a decedent who left a will [Art. 775, delegable
CC]
What cannot be
b. Successor – person who succeeds to the What may be entrusted
delegated to 3rd
property of the decedent. He may be either— to 3rd persons
persons
1. Heirs – those who are called to the whole or a. designation of
an aliquot portion of the inheritance either person/institution
by will or by operation of law [Art. 782, CC] a. designation of heirs, falling under a class
specified by testator
• Compulsory Heirs devisees 
and
b. manner of
• Voluntary or Testamentary Heir legatees
distribution of
• Legal or Intestate Heirs b. duration/efficacy of
property specified by
2. Devisees and Legatees designation
testator [Art. 786,
• Devisees are persons to whom gifts of c. determination of
CC]
real property are given by virtue of a will. portions, when
[Art. 782] referred to by name
Note: testator must first
• Legatees are persons to whom gifts of [Art. 785, CC] 
 specify the class and the
personal property are given by virtue of amount of property for
a will. [Art. 782] proper delegation

Note: The distinction between heir and 2.
legatee/devisee is significant in case of preterition,
which annuls the institution of heirs, but does not 3.
affect the institution of legatees and devisees to the
extent that the legitimes are not impaired [Art. 854,
CC]. 4.
Free and intelligent [Art. 839, CC]
Solemn or formal – if the form is defective, the
will is void
Revocable and ambulatory – will can be
revoked at any time before the testator’s death
[Art. 828, CC]

5. Mortis causa - takes effect upon the testator’s

death

Page 182 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

6. Individual – prohibition against joint wills [Art. 2. Amount of successional rights;

818, CC] 3. Intrinsic validity of testamentary provisions; and
4. Capacity to succeed [Art. 16, CC]
7. Executed with animus testandi – intent to
dispose of the property b. Testamentary Capacity and
8. Executed with testamentary capacity Intent

9. Unilateral act – does not involve an exchange of Time of Determining Capacity

values or depend on simultaneous offer and Capacity to make a will is determined as of the time
acceptance of making thereof [Art. 798, CC].

10. Dispositive – disposes of property Supervening incapacity does not invalidate an

effective will nor is the will of an incapable validated
A will disinheriting a compulsory heir is still a by a supervening of capacity [Art. 801, CC].
dispositive will even in the absence of dispositive
provisions because a disinheritance has the effect Requisites for Capacity to Make a Will
of disposing the legitime of the disinherited 1. The testator must not be expressly prohibited by
compulsory heir in favor of other compulsory law to make a will [Art. 796, CC]
heirs [Seangio v. Reyes, G.R. Nos. 140371-72
(2006)]. 2. The testator must not be under 18 years of age
[Art. 797, CC]
Exceptions: Non-dispositive wills.
e.g. A will recognizing an illegitimate child “Year” shall be understood to be 12 calendar
months [Sec. 31, Book 1, Administrative Code]
11. Statutory grant – permitted only by law, not a
constitutional right 3. The testator must be of sound mind at the time
of execution [Art. 798, CC]
RULES OF CONSTRUCTION AND
INTERPRETATION [Arts. 788-795] Test of soundness of mind: To be of sound mind,
the testator must know:
Main principle: Testacy is preferred to intestacy and a. The nature of the estate to be disposed of;
the intent of the testator is paramount and must be b. The proper objects of his bounty;
given effect as far as legally possible. c. The character of the testamentary act [Art.
799, CC]
Note: There is no real difference in the prescribed
solution for either latent or patent ambiguity. In either General rule: Soundness of mind is presumed [Art.
case, extrinsic evidence or evidence of external 800, CC]
circumstances can be considered. Moreover, in either
case, the oral declarations of the testator are excluded. Exceptions:
a. When the testator, one month or less before
Governing Laws, In General the execution of the will, was publicly known
Aspect of the Will Governing Law to be insane. [Art. 800, CC]
b. When the testator executed the will after
Law in force at the time
being placed under guardianship or ordered
Formal Validity the will was executed
committed, in either case, for insanity under
[Art. 795, CC]
Rules 93 and 101 of the Rules of Court, and
Law of decedent’s
before said order has been lifted. [Torres v.
nationality at the time
Intrinsic Validity Lopez, G.R. No. L-25966 (1926); Balane]
of his death [Arts. 16
and 2263, CC]

Aspects of the Will Governed by the National Law of

the Decedent:
1. Order of succession;

Page 183 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

c. Form ATTESTED OR NOTARIAL WILLS

In General [Art. 804, CC] Formal requirements for notarial wills

1. The will must be in writing 1. Subscribed at the end
2. It must be in a language or dialect known to the 2. Attestation clause
testator 3. Marginal signatures
4. Page numbers
Applicable Laws as to Formal Validity 5. Acknowledged by a notary public
Formal validity is governed by the law in force at the 6. Additional requirements for handicapped
time the will was executed [Art. 795, CC] testators
7. Subscribed by 3 or more witnesses in the
As to the place, forms and solemnities of a will are presence of the testator and of one another
governed by the law of the country in which the will
was executed [Art. 17, CC] Note: Unlike in holographic wills, there is no
requirement that an attested will should be dated.
Arts. 815-81, CC (summarized in the table below)
provide for the various governing laws in these SUBSCRIPTION: Subscribed to, at the end of the
instances: will [Art. 805, CC]
1. A will was made in a foreign country by a Filipino 1. By the testator himself; or
[Art. 815] 2. By the testator’s name written by a representative
2. A will was made in a foreign country by an alien in his presence and under his express direction.
[Art. 816]
3. A will was made in the Philippines by an Alien ATTESTATION CLAUSE: Attested and
[Art. 817] subscribed by 3 or more credible witnesses in the
presence of the testator and of one another [Art. 805,
Governing Law as to Place of Execution of Will CC]
Place of
Testator Execution Governing Law The attestation clause shall state the following [par. 3,
of Will Art. 805, CC]:
Philippine Law [Art. 1. Number of pages;
Philippines 2. The fact that the testator or his representative
16, CC]
1. Law of the country under his express direction signed the will and
in which it is every page in the presence of instrumental
Filipino Outside of witnesses
executed [Art. 17,
the 3. That the witnesses signed the will and all its pages
CC]; or
Philippines in the presence of the testator and of one
2. Philippine Law [Art.
815, CC] another.
1. Philippine Law; or
The signatures of the witnesses must be at the
2. Law of the country
bottom of the attestation clause [Cagro v. Cagro,
Philippines of which testator is
G.R. No. L-5826 (1953)].
a citizen or subject
[Art. 817, CC]
The notary public cannot be counted as an
1. Law of the place
attesting witness [Cruz v. Villasor, G.R. No. L-
where the will is
32213 (1973)].
executed [Art. 17,
Alien
CC]; or
Test of presence: Not whether they actually saw
Outside of 2. Law of the place
each other sign, but whether they might have
the where the testator
seen each other sign had they chosen to do so
Philippines resides; or
considering their mental and physical condition
3. Law of the testator’s
and position with relation to each other at the
country; or
moment of inscription of each signature [Jaboneta
4. Philippine Law [Art.
v. Gustilo, G.R. No. 1641 (1906)].
816, CC]

Page 184 of 511

U.P. LAW BOC SUCCESSION
Effect of Omissions
Omissions can be supplied by an examination of the
will itself, without the need of resorting to extrinsic
evidence, will not be fatal and will not prevent
allowance of the will.
Examples:
1. The fact that the testator/witnesses signed each
and every page of the will can be proved also by
the mere examination of the signatures appearing
on the document itself.
Omission of this fact in the attestation clause is
not fatal.
2. The failure to state in the attestation clause the
number of pages of the instrument is ordinarily a
fatal flaw. However, such omission will not
invalidate the will if the number of pages appears
elsewhere in the will itself so that no evidence
aliunde is necessary.
However, those omissions which cannot be supplied
except by evidence aliunde would result in the
invalidation of the attestation clause, and
consequently, of the will itself.
Example:
Whether the testator signed in the presence of the
witnesses, or the witnesses signed in the presence of
the testator and of one another.
Substantial Compliance Rule refers ONLY to the
form of the attestation clause
Substantial compliance rule applies only in cases when
such defects and imperfections can be supplied by an
examination of the will itself.
Example:
The signature in the attestation clause is sufficient
compliance for marginal signatures on the same page
because the signature in the attestation clause also
authenticates the page which is the purpose of the
marginal signatures.
The marginal signature, however, is not sufficient
compliance with the requirement of signing the
attestation clause because the purpose of the marginal
signature is only to authenticate the page. The
attestation clause has a purpose that is not fulfilled by
the marginal signature (attest to the act of signing by
testator and witnesses) [Balane].
Page 185 of 511
CIVIL LAW
Note: The doctrine of substantial compliance applies
only as to defects in the form or language of the
attestation clause.
MARGINAL SIGNATURES
General rule: Testator or his representative shall write
his name, and the witnesses shall sign each and every
page except the last page [Art. 805, CC].
Exceptions:
1. When the will consists of only one page
2. When the will consists of only two pages, the first
of which contains all dispositions and is signed at
the bottom by the testator and the witnesses, and
the second page contains only the attestation
clause duly signed at the bottom by the witnesses.
[Abangan v. Abangan, G.R. No. L-13431 (1919)]
3. The use of thumbprint was allowed [Matias v.
Salud, G.R. No. L-10751 (1958)]
4. The inadvertent failure of one witness to affix his
signature to one page of a testament, due to the
simultaneous lifting of two pages in the course of
signing, is not per se sufficient to justify denial of
probate. [Icasiano v. Icasiano, G.R. No. L-18979
(1964)]
PAGE NUMBERINGS: Numbered correlatively in
letters placed on the upper part of each page (i.e. Page
One of Five Pages). [Art. 805, CC]
• Mandatory part: pagination by means of a
conventional system
• Directory part: pagination in letters on the upper
part of each page [Balane]
ACKNOWLEDGED before a notary public by the
testator and the witnesses [Art. 806, CC]
The certification of acknowledgement need not be
signed by the notary in the presence of the testator
and the witnesses. [Javellana v. Ledesma, G.R. L-7179
(1955)]
ADDITIONAL RULES FOR HANDICAPPED
TESTATORS:
1. Deaf Mute [Art. 807, CC]
a. Testator must personally read the will; or
b. Testator shall personally designate two
persons to read the contents and
communicate it to him in some practicable
manner.
2. Blind [Art. 808, CC]
U.P. LAW BOC SUCCESSION
a. The will shall be read to the testator twice –
By one of the subscribing witnesses and by
the notary public acknowledging the will.
b. A testator suffering from glaucoma may be
considered as legally blind [Garcia v. Vasquez,
G.R. No. L-26615 (1970)]
WITNESSES
Qualifications [Art. 820, CC]
1. Of sound mind
2. Aged 18 years or over
3. Not blind, deaf or dumb
4. Able to read and write
Disqualifications [Art. 821, CC]
1. Person not domiciled in the Philippines
2. Those who have been convicted of falsification,
perjury, or false testimony.
Rules on Interested Witness [Art. 823, CC]
General Rule Exception
If there are three other
Devises or legacies in competent witnesses,
favor of an interested the devise or legacy
witness or his or her shall be valid and the
spouse, parent, or child interested witness shall
will be void be treated as a mere
surplusage
Creditors may be witnesses [Art. 824, CC].
Supervening incompetency shall not prevent the
allowance of the will [Art. 822, CC].
HOLOGRAPHIC WILLS
FORMAL REQUIREMENTS FOR
HOLOGRAPHIC WILLS
1. In writing [Art. 804, CC]
2. In a language known to the testator [Art. 804,
CC]
3. Entirely written, dated and signed in the hand of
the testator himself [Art. 810, CC]
WITNESSES REQUIRED FOR PROBATE
[Art. 811, CC]
1. At least one witness who knows the handwriting
and signature of the testator; explicitly declare
that it is the testator’s
2. If contested – at least 3 of such witnesses
3. In the absence of a competent witness, expert
testimony may be resorted to
Page 186 of 511
CIVIL LAW
General rule: The holographic will itself must be
presented for probate [Gan v. Yap, G.R. No. L-12190
(1958)]
Exception: If there is a photostatic copy or xerox copy
of the holographic will, it may be presented for
probate [Rodelas v. Aranza, G.R. No. L58509 (1982)]
ADDITIONAL DISPOSITIONS
In holographic wills, the dispositions of the testator
written below his signature must be dated and
signed by him in order to make them valid as
testamentary dispositions [Art. 812, CC]
When a number of dispositions appearing in a
holographic will are signed without being dated, and
the last disposition has a signature and date, such date
validates the dispositions preceding it, whatever be
the time of prior dispositions. [Art. 813, CC]
INSERTION, CANCELLATION, ERASURE
OR ALTERATION [Art. 814, CC]
Testator must authenticate by his full signature.
Note: Full signature does not necessarily mean the
testator’s full name; it rather means his usual and
customary signature [Balane].
If such change is not authenticated by the testator,
such change is considered not made. Thus, “the will
is not thereby invalidated as a whole, but at most only
as regards the particular words erased, corrected, or
inserted.” [Kalaw v. Relova, G.R. No. L-40207 (1984),
citing Velasco v. Lopez (1903)]
Note, however, that in the case of Kalaw v. Relova, the
alteration involved the designation of the testator’s
sole heir. In this case, the holographic Will had only
one substantial provision, which was altered by
substituting the original heir with another, but which
alteration did not carry the requisite of full
authentication by the full signature of the testator, the
effect must be that the entire Will is voided or revoked
for the simple reason that nothing remains in the Will
after that which could remain valid.
EFFECT OF INSERTION WRITTEN BY
ANOTHER PERSON ON THE VALIDITY OF
A HOLOGRAPHIC WILL
When Made Effect
After the execution, Insertion considered
without consent of not written. Validity
testator cannot be defeated by
U.P. LAW BOC SUCCESSION CIVIL LAW

When Made Effect

the malice or caprice of e. Incorporation by Reference
a third person
After execution, with Will is valid, insertion is Requisites [Art. 827, CC]
consent void 1. The document or paper referred to in the will
Will is void because it is must be in existence at the time of the execution
Contemporaneous to
not written entirely by of the will.
the execution of the will
the testator 2. The will must clearly describe and identify the
same, stating among other things the number of
JOINT WILLS pages thereof.
1. A single testamentary instrument, 3. It must be identified by clear and satisfactory
2. Which contains the wills of two or more persons, proof as the document or paper referred to
3. Jointly executed by them, therein; and
4. Either for their reciprocal benefit or for the 4. It must be signed by the testator and the
benefit of a third person. witnesses on each and every page, except in case
of voluminous books of account or inventories.
Filipinos cannot make Joint Wills
Joint wills executed by Filipinos, whether in the Note: Not available to holographic wills.
Philippines or abroad, are prohibited.
f. Revocation
Note: Separate documents, each serving as one
independent will (even if written on the same sheet)
A will may be revoked by the testator at any time
are not considered joint wills.
before his death [Art. 828, CC]
MUTUAL WILLS
Modes of Revocation [Art. 830, CC]
1. Executed pursuant to an agreement between two
1. By implication of law (e.g. preterition [Art. 854,
or more persons,
CC]; legal separation [Art. 63, FC]; unworthiness
2. Jointly executed by them,
to succeed [Art. 1032, CC], et al.); or
3. Either for their reciprocal benefit or for the
2. By the execution of a will, codicil or other writing
benefit of a third person.
executed as provided in the case of wills (may be
total or partial); or
This is prohibited under Article 818.
3. By burning, tearing, canceling, or obliterating the
will with the intention of revoking it, by the
RECIPROCAL WILLS
testator himself, or by some other person in his
1. Testators name each other as beneficiaries in their
presence, and by his express direction.
own wills (there are therefore 2 separate
documents),
The act contemplating revocation must be done at
2. Under similar testamentary plans - valid
any time before the death of the testator. The right of
revocation cannot be waived or restricted. [Art. 828,
d. Codicils CC]

Codicil Note: Even if a holographic will was not intended to

1. It is a supplement or addition to a will, be revoked, unless a xerox copy exits, it can no longer
2. made after the execution of a will, be proved.
3. and annexed to be taken as a part of the will,
4. by which any disposition made in the original will Law Governing Revocation [Art. 829, CC]
is explained, added to, or altered. Place of Testator’s
5. in order that it may be effective, it shall be Governing Law
Revocation Domicile
executed as in the case of a will. [Arts. 825-826, Philippines,
CC] or some
Philippines Philippine Law
other
Note: A codicil must be in the form of a will – can country
have a notarial codicil attached to a holographic will,
and a holographic codicil attached to a notarial will.

Page 187 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

Place of Testator’s It must appear from the will that the testator is
Governing Law
Revocation Domicile revoking because of the cause which he did not know
1. Law of was false.
Domicile -
Philippines Recognition of Illegitimate Child
Philippine law
(This The recognition of an illegitimate child does not lose
2. Law of lace of
situation is its legal effect even though the will wherein it was
Revocation
not made should be revoked [Art. 834, CC].
3. Law of Place
governed by
of Execution
Art. 829) Principle of Instanter
of Will
[Balane] Revoking clause in the 2nd will is not testamentary in
Outside the 1. Law of the character but operates to revoke the prior will
Philippines Place of instanter (immediately) upon the execution of the will
Execution of containing it. The revocation of the 2nd will does not
Will; or revive the 1st will which has already become a nullity.
2. Law of the
Foreign
Country
place in which g. Republication and Revival
the testator
had his Republication vs.Revival
domicile at Republication Revival
the time of • Takes place by an act • Takes place by
revocation of the testator operation of law
• Corrects extrinsic • Restores a revoked
General Rule: A revocation made in a subsequent will
and intrinsic defects will
shall take effect, even if the new will should become
inoperative by reason of the incapacity of the heirs,
devisees or legatees designated therein, or by their Art. 835 Art. 836
renunciation. [Art. 832, CC] Void as to:
Void as to form [Art.
1. Non-formal defect
805, CC]
Exception: Doctrine of Dependent Relative 2. Previously revoked
Revocation [Molo v. Molo, G.R. No. L-2538 (1951)] How to Republish: How to Republish:
1. Execute new will 1. Execute new will or
The rule that where the act of destruction is 2. Copy out the codicil
connected with the making of another will so as to provisions from the 2. Simply make
fairly raise the inference that the testator meant the original void will references to old will
revocation of the old to depend upon the efficacy of Reference to original Reference to original
the new disposition intended to be substituted, the insufficient sufficient
revocation will be conditional and dependent upon
the efficacy of the new disposition; and if for any h. Allowance and Disallowance of
reason, the new will intended to be made as a Wills
substitute is inoperative, the revocation fails and the
original will remain in full force. Probate Requirement
No will shall pass either real or personal property
The failure of the new testamentary disposition upon unless it is proved and allowed in accordance with
whose validity the revocation depends is equivalent to the Rules of Court [Art. 838, CC]
the non-fulfillment of a suspensive condition and
hence prevents the revocation. Probate – a proceeding in rem required to establish
the validity of a will and in order to pass real or
False Cause/Illegal Cause personal property [Art. 838, CC]
A revocation based on a false cause or illegal cause is
null and void [Art. 833, CC]. The testator himself may, during his lifetime petition
the court having jurisdiction for the allowance of his
will [Art. 838, CC].

Page 188 of 511

U.P. LAW BOC SUCCESSION
Kinds of Probate
1. Post-mortem: after death
2. Ante-mortem: during the testator’s lifetime
Note: Probate of a will is mandatory.
Matters to be proved in probate:
1. Identity
2. Due Execution
3. Capacity of the Testator
SCOPE OF PROBATE PROCEEDINGS [Art.
839, CC]
General rule: The probate court cannot inquire into the
intrinsic validity of testamentary provisions. Only the
extrinsic validity of such wills may be examined.
Exceptions:
1. When practical considerations demand that the
intrinsic validity of the will be resolved: When the
will is intrinsically void on its face (e.g., when
there is clearly a preterition) such that to rule on
its formal validity would be a futile exercise [Acain
v. IAC, G.R. No. L-72706 (1987)].
2. Claimants are all heirs and they consent, either
expressly or impliedly, to the submission of the
question of intrinsic validity to the court [Valera
v. Inserto, G.R. No. L-56504 (1987)].
3. Probate court may pass upon the title to a
property, but such determination is provisional
and not conclusive, and is subject to the final
decision in a separate action to resolve title [Pastor
v.CA, G.R. No. L-56340 (1983)].
4. Probate court may decide on the ownership of a
property when the estate contains only one
property to be adjudicated upon [Portugal v.
Portugal-Beltran, G.R. No. 155555 (2005)].
Revocation vs. Disallowance
Revocation Disallowance
Voluntary act of the
Given by judicial decree
testator
Must always be for a
With or without cause
legal cause
Always total, except
when the ground is
fraud or influence
May be partial or total
which affects only
certain portions of the
will
Page 189 of 511
CIVIL LAW
Effect of Final Decree of Probate, Res Judicata
on Formal Validity
The probate of a will by the probate court having
jurisdiction thereof is usually considered as conclusive
as to its due execution and validity and is also
conclusive that the testator was of sound and
disposing mind at the time when he executed the will,
and was not acting under duress, menace, fraud, or
undue influence, and that the will is genuine and not
a forgery. [Mercado v. Santos, G.R. No. 45629 (1938)]
Grounds for Denying Probate
1. If the signature of the testator was procured by
fraud;
2. If it was procured by undue and improper
pressure and influence, on the part of the
beneficiary or some other person;
3. If the testator acted by mistake or did not intend
that the instrument he signed should be his will
at the time affixing his signature thereto;
4. If the testator was insane or otherwise mentally
incapable of making a will at the time of its
execution;
5. If the formalities required by law have not been
complied with; or
6. If it was executed through force or under duress,
or the influence of fear, or threats. [Art. 839, CC]
2. Institution of Heir
A will shall be valid even though it—
a. should not contain an institution of an heir; or
b. such institution should not comprise the entire
estate; or
c. the person so instituted should not accept the
inheritance or be incapacitated to succeed.
In such cases, the testamentary dispositions made in
accordance with law shall be complied with and the
remainder of the estate shall pass to the legal heirs.
[Art. 841, CC]
Extent of Grant [Art. 842, CC]
Freedom of disposition depends upon the existence,
kind and number of compulsory heirs.
a. No compulsory heirs – Testator has full power of
disposition
b. One with compulsory heirs cannot disregard the
rights of the latter; may only dispose of the free
portion of his estate
U.P. LAW BOC SUCCESSION CIVIL LAW

legitime – there is no preterition. [Reyes v. Barretto-

Effect of Predecease of Heir [Art. 856, CC] Datu, G.R. No. L-17817 (1967)]
Any heir who dies before the testator or is
incapacitated to succeed or renounces the inheritance If the heir is given a legacy or devise – there is no
transmits no rights of the testator to his own heirs. preterition. [Aznar v. Duncan, G.R. No. L-24365
This is without prejudice to the rights of (1966)]
representation [Tolentino].
If the heir had received a donation inter vivos from the
a. Manner of Distribution testator – the better view is that there is no preterition.
The donation inter vivos is treated as an advance
1. Heirs instituted without designation of shares on the legitime under Articles 906, 909, 910 and
shall inherit in equal parts [Art. 846, CC] 1062.
2. If the institution pertains to some heirs
individually and others collectively, the The remedy, if the value of inheritance, legacy or
presumption is that all are individually instituted devise, or donation inter vivos is only for completion of
[Art. 847, CC]. his legitime under Articles 906 and 907.
3. If siblings are instituted (whether full or half-
blood), the presumption is that the inheritance is Distinguished from Disinheritance
to be distributed equally [Art. 848, CC]. This is Preterition Disinheritance
different from the rules of distribution in • Tacit deprivation of
intestate succession. a compulsory heir of
his legitime • Express deprivation
4. If parents and children are instituted, they are
of a compulsory
presumed to have been instituted simultaneously • May be voluntary
heir of his legitime
and not successively [Art. 849, CC]. but the presumption
of law is that it is • Always voluntary
Note: By “unknown,” the Code actually means involuntary 
 • For some legal
persons who could not be ascertained; a disposition cause

• Law presumes there
in favor of a stranger is valid [Tolentino]. has been merely • If the disinheritance
oversight or mistake is valid, the
b. Preterition on the part of the compulsory heir
testator disinherited is
NOT NAMED ALTHOUGH NAMED • Since preterition totally excluded
annuls the from the
He is not named in the He is neither:
institution of heirs, inheritance. In case
will. 1. Instituted as an heir
the omitted heir gets of invalid
2. Expressly disinherited
not only his legitime disinheritance, the
3. Assigned any part of the
but also his share in compulsory heir is
estate
the free portion not merely restored to
Thus: tacitly deprived of his right to legitime. his legitime
disposed of by way
Concept [Art. 854, CC] of legacies and
1. There must be a total omission of one, some or devises 

all of the heir/s from the inheritance. [Seangio v.
Reyes, G.R. Nos. 140371-72 (2006)] Effects of Preterition [Art. 854, CC]
2. The omission must be that of a compulsory heir. 1. The institution of the heir is annulled.
3. The compulsory heir omitted must be of the 2. Devises and legacies shall remain valid as long as
direct line. they are not inofficious.
4. The omitted compulsory heir must be living at 3. If the omitted compulsory heir should die before
the time of the testator’s death or must at least the testator, the institution shall be effective,
have been conceived before the testator’s death. without prejudice to the right of representation.

If the heir in question is instituted in the will but the When there are no devises and legacies,
portion given to him by the will is less than his preterition will result in the annulment of the will and

Page 190 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

give rise to intestate succession [Neri v. Akutin, G.R. a. die before him (predecease),
No. L-47799 (1941)]. b. should not wish to accept the inheritance
(repudiation), or
3. Substitution of Heirs c. should be incapacitated to accept the
inheritance (incapacitated).
Substitution - the appointment of another heir, so
4. FIDEICOMMISSARY SUBSTITUTION
that he may enter into the inheritance in default of the
The testator institutes an heir with an obligation
heir originally instituted [Art. 857, CC]
to preserve and to deliver to another the property
so inherited. The heir instituted to such condition
The substitute shall be subject to the same charges
is called the First Heir or the Fiduciary Heir; the
and conditions imposed upon the instituted heir,
one to receive the property is the
unless the testator has expressly provided the
Fideicommissary or the Second Heir [Art. 863,
contrary, or the charges or conditions are personally
CC].
applicable only to the heir instituted [Art. 862, CC].
Requisites: [Arts. 863-865, CC]
a. Kinds [Art. 858, CC] a. A Fiduciary or first heir instituted is
entrusted with the obligation to preserve and
1. BRIEF OR COMPENDIOUS [Art. 860, CC] to transmit to a Fideicommissary Substitute
Brief – Two or more persons were designated by or second heir the whole or part of the
the testator to substitute for only one heir inheritance.
Compendious – One person is designated to b. The substitution must not go beyond one
take the place of two or more heirs degree from the heir originally instituted.
c. The Fiduciary Heir and the Fideicommissary
2. RECIPROCAL [Art. 861, CC] are living at the time of the death of the
If the heirs instituted in unequal shares should be testator.
reciprocally substituted, the substitute shall d. The fideicommissary substitution must be
acquire the share of the heir who dies, renounces, expressly made.
or is incapacitated, unless it clearly appears that e. The fideicommissary substitution is imposed
the intention of the testator was otherwise. If on the free portion of the estate and never
there is more than one substitute, they shall have on the legitime
the same share in the substitution as the
institution. In the absence of an obligation on the part
of the first heir to preserve the property for
Example (only 1 substitute): If two heirs are the second heir, there is no fideicommissary
reciprocally substituted, then if one of them dies substitution. [PCIB v. Escolin, G.R. Nos. L-
before the testator dies, renounces, or turns out 27860 and L-27896 (1974)]
to be incapacitated, the other will get his share,
regardless of whether or not their shares are Effects of predecease of the first
equal. heir/fiduciary or the second
heir/fideicommissary
Example (more than 1 substitute): A is
instituted to 1/3, B to 1/6, and C to ½. If C dies Situation 1: If the first heir dies followed by the
before the testator, renounces or turns out to be second heir, then the testator dies, who will
incapacitated, then the other two will get his inherit? The legal heirs. There is no
shares in the same proportion as in the fideicommissary substitution because first and
institution. A will get twice as much as B (because second heirs are not living at the time of the
his share of 1/3 in the institution is twice the size testator’s death [Art. 863, CC].
of B’s share of 1/6)
Situation 2: The testator dies first followed by
3. SIMPLE SUBSTITUTION [Art. 859, CC] the second heir. The first heir survived them but
The testator may designate one or more persons subsequently dies, who will inherit? The SH and
to substitute the heir/s instituted in case the heirs his heirs under Art. 866, CC. This is because the
should:

Page 191 of 511

U.P. LAW BOC SUCCESSION
SH passes his rights to his own heirs when he dies
before FH.
Situation 3: If the first heir dies, followed by the
testator, then the second heir, who will inherit?
No specific provision in law, but SH inherits
because the T intended him to inherit.
4. Testamentary Dispositions
with a Condition, a Term,
and a Mode
3 Kinds of Testamentary Disposition
a. Conditional [Art. 871, CC]
b. Dispositions with a term [Art. 885, CC]
c. Dispositions with a mode/modal dispositions
[Art. 882, CC]
a. Conditional Dispositions
Prohibited conditions: (considered as not imposed)
a. Any charge, condition or substitution whatsoever
upon the legitimes [Art. 872, CC]
b. Impossible and illegal conditions [Art. 873, CC]
c. Absolute condition not to contract a first
marriage [Art. 874, CC]
d. Absolute condition not to contract a subsequent
marriage unless imposed on the widow or
widower by the deceased spouse, or by the latter’s
ascendants or descendants [Art. 874, CC]
e. Scriptura captatoria or legacy-hunting dispositions -
dispositions made upon the condition that the
heir shall make some provision in his will in
favour of the testator or of any other person [Art.
875, CC]
Effect: Entire disposition is void
POTESTATIVE, CASUAL, AND MIXED
CONDITIONS
a. Potestative Conditions – Depends solely on the
will of the heir
General rule: Must be fulfilled as soon as the heir
learns of the testator’s death
Exception: If the condition was already complied
with at the time the heir learns of the testator’s
death; or if the condition is of such a nature that
it cannot be fulfilled again.
Constructive Compliance: deemed fulfilled
Page 192 of 511
CIVIL LAW
b. Casual or mixed
Casual condition – one whose fulfillment
depends on chance or the will of a third person.
Mixed condition – one whose fulfillment
depends partly on the will of the heir and partly
on chance or the will of a third person.
General rule: May be fulfilled at any time (before
or after testator’s death), unless testator provides
otherwise.
Exception: If already fulfilled at the time of
execution of will:
a. if testator unaware of the fact of fulfillment
– deemed fulfilled
b. if testator aware:
• can no longer be fulfilled again: deemed
fulfilled
• can be fulfilled again: must be fulfilled
again.
Constructive Compliance:
a. if casual – not applicable
b. if mixed – applicable only if dependent partly
on the will of a third party not interested.
b. Dispositions with a term
A term may either be suspensive or resolutory.
1. If the term is suspensive:
Before the arrival of the term, the property
should be delivered to the legal or intestate heirs.
A caución muciana has to be posted by the legal or
intestate heirs.
2. If the term is resolutory:
Before the arrival of the term, the property
should be delivered to the instituted heir.
No caución muciana required as the heir has a right
over the property during the period.
c. Modal Dispositions
Dispositions with an obligation imposed upon the
heir, without suspending the effectivity of the
institution, as a condition does.
A mode functions similarly to a resolutory condition.
In modal institutions, the testator states (1) the object
of the institution, (2) the purpose or application of the
property left by the testator, or (3) the charge imposed
U.P. LAW BOC SUCCESSION CIVIL LAW

by the testator upon the heir [Rabadilla v. CA, G.R. • Illegitimate Children and Illegitimate
No. 113725 (2000)]. Descendants

CAUCIÓN MUCIANA If the testator is a If the testator is an

A security to guarantee the return of the value of
property, fruits, and interests, in case of contravention
of condition, term or mode
Instances when it is needed:
1. Suspensive term [Art. 885,CC]
2. Negative potestative condition - when the condition
imposed upon the heir is negative, or consists in
not doing or not giving something [Art. 879, CC]
3. Mode [Art. 882, par. 2, CC]
5. Legitime
It is that part of the testator’s property which he
cannot dispose of because the law has reserved it for
his compulsory heirs. [Art. 886, CC]
Every renunciation or compromise as regards a future
legitime between the person owing it and his
compulsory heirs is void, and the latter may claim the
same upon the death of the former; but they must
bring to collation whatever they may have received by
virtue of the renunciation or compromise [Art. 905,
CC].
a. Compulsory Heirs and Various
Combinations
CLASSES OF COMPULSORY HEIRS [Art. 887,
CC]
1. Primary: Legitimate Children and Legitimate
Descendants with respect to their Legitimate
Parents and Ascendants
2. Secondary: Those who succeed only in the
absence of the primary compulsory heirs:
a. Legitimate Parents and Legitimate
Ascendants, with respect to their Legitimate
Children and Descendants. (They will inherit
only in default of legitimate children and
their descendants)
b. Illegitimate Parents with respect to their
Illegitimate Children. (They will inherit only
in default of the illegitimate and legitimate
children and their respective descendants).
Note that other illegitimate ascendants are
not included.
3. Concurring: Those who succeed together with
the primary or the secondary compulsory heirs:
• Surviving Spouse
legitimate child: illegitimate child:
1. LC and descendants 1. LC and descendants
2. In default of No. 1, 2. ILC and descendants
LP and ascendants 3. In default of No. 1
3. SS and 2, ILP only
4. IC and descendants 4. SS
b. Specific Rules on Legitime
1. Direct Descending Line
a. Rule of Preference between lines [Arts. 978
and 985, CC]
• Those in the direct descending line shall
exclude those in the direct ascending
and collateral lines; and
• Those in the direct ascending line shall,
in turn, exclude those in the collateral
line.
• Rule of Proximity [Art. 926, CC]: The
relative nearest in degree excludes the
farther one
b. Right of representation ad infinitum in case
of predecease, incapacity, or disinheritance
[Arts. 972 and 992, CC]
• For decedents who are Legitimate
Children, only the Legitimate
Descendants are entitled to right of
representation.
• For decedents who are Illegitimate
Children, both the Legitimate and the
Illegitimate Descendants can represent,
only with respect to the decedent’s
illegitimate parents.
c. If all the Legitimate Children repudiate their
legitime, the next generation of Legitimate
Descendants may succeed in their own right.
2. Direct Ascending Line
a. Rule of division between lines
• The father and the mother shall inherit
equally if both living. One parent
succeeds to the entire estate of the child
if the other parent is dead [Art. 986, CC].
• In default of the mother and the father,
the ascendants nearest in degree will
inherit [Art. 987, CC].
• If there is more than one relative of the
same degree but of different lines, one
half will go to the paternal ascendants

Page 193 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

and the other half to the maternal

ascendants [Art. 987, CC].
b. Rule of equal división
• The relatives who are in the same degree
shall inherit in equal shares [Art. 987,
CC].

SUMMARY OF LEGITIMES OF COMPULSORY HEIRS

Legend:
LC – legitimate children ILC – illegitimate SS – surviving spouses LP – legitimate parents ILP – illegitimate
children parents

Surviving LC and LP and

SS ILC ILP
Relatives Descendants Ascendants
½ of the estate
LC alone in equal
portions
¼ of the estate
1 LC, SS ½ of the estate taken from the
free portion
½ of the estate
2 or more LC, Same portion as
in equal
SS 1 LC
portions
½ of the estate
LC, ILC in equal ½ share of 1 LC
portions
½ share of 1 LC

N.B. May suffer

¼ (preferred reduction pro
1 LC, SS, ILC ½
over ILC) rata because
share of SS is
given
preference
½ of the estate
2 or more LC, Same as share
in equal ½ share of 1 LC
SS, ILC of 1 LC
portions
LP alone ½
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:
SS alone
marriage in
articulo mortis
and testator dies

Page 194 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

Surviving LC and LP and

SS ILC ILP
Relatives Descendants Ascendants
within 3 months
from
marriage – 1/3

Exception to the
exception:
Have been
living together
as husband and
wife for more
than 5 years –
½
ILP alone ½
ILP, SS ¼ ¼

c. Steps in Determining the

Legitimate of Compulsory Heirs e. Method of Reduction [Art. 911,
[Arts. 908-910, CC] CC]

1. Value of the Estate Order of priorities to be observed in the reduction

2. Less Taxes [Balane]:
3. Less Liabilities = NET ESTATE 1. Reduce pro rata the non-preferred legacies and
4. Add collationable donations = devises, and the testamentary dispositions to
THEORETICAL HEREDITARY ESTATE heirs
(“Theoretical” because this amount is what the 2. Reduce pro rata the preferred legacies and devises
legitime will be based on, but the actual amount 3. Reduce the donations inter vivos according to the
available for physical distribution is the net inverse order of their dates (oldest is the most
estate.) preferred)

How are Devises and Legacies with usufructs, life

d. Remedy of a Compulsory Heir in annuities and pensions reduced?
Case of Impairment of Legitime 1. If the value of these grants exceeds the free
portion, it impairs the legitimes and should be
Extent and Nature of reduced
Remedy
Impairment 2. The compulsory heir has 2 options:
Annulment of a. Delivering to the devisee or legatee the free
Total omission of a portion
institution and
compulsory heir who is b. Complying with the testamentary provision
reduction of legacies
a direct descendant or
and devises [Art. 854,
ascendant (preterition) Note:
CC]
Reduction of the If the devise subject to reduction should consist of
Testamentary real property, which cannot be conveniently divided,
disposition insofar as
dispositions impairing it shall go to the devisee if the reduction does not
they may be inofficious
or diminishing the absorb ½ of its value; and in a contrary case, to the
or excessive [Art. 907,
legitime compulsory heirs; but the former and the latter shall
CC]
Completion of the reimburse each other in cash for what respectively
Partial impairment belongs to them.
legitime [Art. 906, CC]
Collation – reduction
Impairment by The devisee who is entitled to a legitime may retain
of donations [Arts. 771
inofficious donations the entire property, provided its value does not
and 911, CC]

Page 195 of 511

U.P. LAW BOC SUCCESSION
exceed that of the disposable portion and of the share
pertaining to him as a legitime [Art. 912, CC].
If the heirs or devisees do not choose to avail
themselves of the right granted by the foregoing, any
heir or devisee who did not have such right may
exercise it; should the latter not make use of it, the
property shall be sold at public auction at the instance
of any one of the interested parties [Art. 913, CC].
Note: Rule on Reduction of Legitimes (Shares)
Legitimate Never reduced, they are primary
children and preferred
Surviving
Never reduced
spouse
Subject to reduction, pro rata,
without preference (you get the
Illegitimate
remaining portion, divide it by
children
the number of illegitimate
children)
2. The same property is inherited by another
ascendant (reservista) or is otherwise acquired by
him by operation of law from the said descendant
(prepositus)
3. The said ascendant (reservista) must reserve the
property for the benefit of the relatives of the
deceased descendant within the third civil degree
and who belong to the line from which the said
property came (reservatarios).
Parties: [Balane]
1. Origin or Mediate Source – either an ascendant
of any degree of ascent or a brother or sister of
the Prepositus; responsible for the 1st transfer
Page 196 of 511
CIVIL LAW
f. Reserva Troncal
The ascendant who inherits from his descendant any
property which the latter may have acquired by
gratuitous title from another ascendant, or a brother
or sister, is obliged to reserve such property as he may
have acquired by operation of law for the benefit of
relatives who are within the third degree and who
belong to the line from which said property came
[Art. 891, CC]
Concept of Reserva Troncal
1. A descendant (prepositus) inherits or acquires
property from an ascendant or from a brother or
sister (origin or mediate source) by gratuitous
title
.
2. Prepositus – the first transferee of the reserved
property
3. Reservista – an ascendant of the Prepositus
other than the Origin or Mediate Source; the one
obligated to reserve the property
4. Reservatarios – within the 3rd degree of
consanguinity from the Prepositus [Cabardo v.
Villanueva, G.R. No. L-19003 (1922)] belonging
to the line from which the property came
Requisites for Reserva Troncal [Chua v. CFI, G.R.
No. L-29901 (1977)]:
1. That the property was acquired by a descendant
(Prepositus) from an ascendant or from a brother
U.P. LAW BOC SUCCESSION
or sister (Origin or Mediate Source) by gratuitous
title,
2. That the Prepositus died without (legitimate*)
issue,
3. That the property is inherited by another
ascendant (Reservista) by operation of law, and
4. That there are relatives within the 3rd degree
(Reservatarios) belonging to the line from which
said property came.
Note: Only legitimate descendants will prevent the
property from being inherited by the legitimate
ascending line by operation of law [Balane]
Three transmissions involved: [Balane]
a. 1st transfer – by gratuitous title, from a person to
his descendant, brother or sister
b. 2nd transfer – by operation of law, from the
transferee in the 1st transfer to another ascendant.
This creates the reserva.
c. 3rd transfer – from the transferee in the second
transfer to the relatives
The 1st transfer from the origin does not make the
property reservable.
The 1st transferee owns the property he receives in
full and in fee simple. If he sells the property, then
there is no reserva that can be created. It is at this
point, however, that a reserva may ignite, because if
the 1st transferee has no legitimate descendants, the
property, by operation of law, will go back up to his
ascendant.
The 2nd transferee is the reservor.
The reservor can enjoy the property, but his title is
subject to a double resolutory condition. So, if he dies,
you need to ask 2 questions:
a. Does the prepositus have relatives?
b. Are these relatives qualified to inherit from the
prepositus?
If the answers are YES: then a reserva occurs.
Note: The reservatarios actually inherit, by delayed
intestacy, from the prepositus.
JURIDICAL NATURE OF RIGHTS
Nature of the reservista’s right: [Edroso v. Sablan,
G.R. No. 6878 (1913)]
1. The reservista’s right over the reserved property
is one of ownership
2. The right of ownership is subject to a resolutory
condition, i.e. the existence of reservatarios at the
time of the reservista's death
Page 197 of 511
CIVIL LAW
3. The right of ownership is alienable, but subject to
the same resolutory condition.
4. The reservista’s right of ownership is registrable.
Nature of reservatarios’ right: [Sienes v. Esparcia,
G.R. No. L-12957 (1961)]
1. The reservatarios have a right of expectancy over
the property.
2. The right is subject to a suspensive condition, i.e.
the expectancy ripens into ownership if the
reservatarios survive the reservistas.
3. The right is alienable but subject to the same
suspensive condition.
4. The right is registrable.
Reserva Minima vs. Reserva Maxima
1. The prepositus acquired property gratuitously from
an ascendant, a brother or sister
2. In his will, he institutes as his heir his ascendant
(who is also a compulsory heir) such that the
ascendant receives half of the estate by operation
of law as legitime and the other half by
testamentary disposition
Two Views
• Reserva Maxima: As much of the potentially
reservable property as possible must be deemed
included in the part that passes by operation of
law (maximizing the scope of the reserva)
• Reserva Minima: every single property in the
prepositus’s estate must be deemed to pass, partly
by will and partly by operation of law, in the same
proportion that the part given by will bears to the
part not so given [Balane]
Either view is defensible, but Reserva Minima finds
wider acceptance in the Philippines [Balane]
Extinguishment of the Reserva
1. Loss of the reservable property
2. Death of the reservista
3. Death of all the relatives within the third degree
belonging to the line from which the property
came
4. Renunciation by the reservatarios, but a future
reservatario is not bound by such renunciation →
a conditional extinguishment.
5. Prescription, when the reservista holds the
property adversely against the reservatarios, as free
from reservation
U.P. LAW BOC SUCCESSION CIVIL LAW

Either:
6. Disinheritance 1. written
pardon, or
A subsequent reconciliation
A compulsory heir may, in consequence of 2. subsequent
is enough
disinheritance, be deprived of his legitime, for causes will
expressly stated by law [Art. 915, CC]. reconciliation
is not enough
Effect of Disinheritance Overlap of Rules:
A disinherited heir is totally excluded from the Remedy
inheritance. This means the he forfeits not only his 1. If the offended party
legitime, but also his intestate portion (if any), and any does not make a will
testamentary disposition made in a prior will of the subsequent to the
disinheriting testator [Balane]. occurrence of the cause
• Unworthiness sets
Requisites of a Valid Disinheritance in
a. Heir disinherited must be designated by name or
• Written
in such a manner as to leave no room for doubt
condonation is
as to who is intended to be disinherited.
necessary to
b. It must be for a cause designated by law.
restore.
c. It must be made in a valid will.
2. If the offended party If he did not know
d. It must be made expressly, stating the cause in the
makes a will the cause
will itself.
subsequent to the • Unworthiness
e. The cause must be certain and true, and must be
occurrence of the stays
proved by the interested heir if the person should
cause
deny it.
f. It must be unconditional. • If he knew the
g. It must be total. cause
• If he disinherits -
Note: The burden of proving the truth of the cause for Art 922
disinheritance shall rest upon the other heirs of the • If he institutes or
testator, if the disinherited heir should deny it [Art. pardons the
917, CC]. offender
• Restored to
Causes Common to Disinheritance and capacity
Unworthiness • If will silent –
unworthiness stays
Article 1032 enumerates five acts of unworthiness
which likewise constitute grounds to disinherit a
compulsory heir. The effect of the concurring causes
of unworthiness and grounds for disinheritance is as
follows. If the testator failed to disinherit the
offender, the law nonetheless intervenes by excluding
the offender from the inheritance of the testator or
the decedent by reason of unworthiness.

How do you reconcile unworthiness and

disinheritance as regards Restoration to
Capacity?
Under the rules on Under the rules
Disinheritance on Unworthiness
– –
note: this is expressly note: this is by
made by testator operation of law

Page 198 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

Summary of Causes of Disinheritance

Children and Parents and Unworthiness
Spouse [Art.
Grounds for disinheritance Descendants Ascendants [Art. 1032,
921, CC]
[Art. 919, CC] [Art. 920, CC] CC]
Guilty or Convicted of Attempt Against
the Life of the Testator, Spouse, ✓ ✓ ✓ ✓
Ascendant or Descendant
Accused Testator or Decedent of
Crime Punishable by Imprisonment of
6 years or more, and Found ✓ ✓ ✓ ✓
Groundless or False
Causes testator or decedent to Make a
Will or Change one by Fraud, Violence, ✓ ✓ ✓ ✓
Intimidation, or Undue Influence
Unjustified Refusal to Support
Testator ✓ ✓ ✓
Convicted of Adultery or
Concubinage with Spouse of Testator ✓ ✓ ✓
or Decedent
Maltreatment of testator by Word and
Deed ✓
Leading a Dishonorable or Disgraceful
Life ✓
Conviction of Crime which carries the
penalty of Civil Interdiction ✓
Abandonment of Children or Inducing
Children to Live Corrupt and Immoral ✓ ✓
Life or Against Attempted Virtue
Loss of Parental Authority ✓ ✓
Attempt by One Parent Against the
Life of the Other Unless there is ✓
Reconciliation Between Parents
Spouse Has Given Cause for Legal
Separation ✓ ✓

Failure to Report Violent Death of

Decedent Within One Month Unless
Authorities Have Already Taken ✓
Action
Force, Violence, Intimidation, or
Undue Influence to Prevent Another
from Making a Will or Revoking One ✓
Already Made or Who Supplants or
Alters the Latter’s Will
Falsifies or Forges Supposed Will of
Decedent ✓

Page 199 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

Modes of Revocation of Disinheritance 7. Legacies and Devises

a. Reconciliation [Art. 922, CC]
b. Subsequent institution of the disinherited heir
c. Nullity of the will which contains the Legacy Devise
disinheritance. A gift of personal A gift of real property
property given in a will given in a will
Note: The moment that testator uses one of the acts It is bequeathed It is devised
of unworthiness as a cause for disinheritance; he
thereby submits it to the rules on disinheritance. Persons Charged with the Duty to Give Legacies
Thus, reconciliation renders the disinheritance and Devises in a Will
ineffective. a. Compulsory heir, provided, their legitimes are
not impaired [Art. 925, CC]
RECONCILIATION [ART. 922, CC] b. Voluntary heir
Effect of Reconciliation between Offender and c. Legatee or devisee can be charged with the duty
Offended Person: of giving a sub-legacy or sub-devise but only to
• If no disinheritance has been made yet, the the extent of the value of the legacy or devise
offended person will be deprived of his right to given him [Art. 925, CC]
disinherit. d. The estate represented by the executor or
• If disinheritance has been effected, it will be administrator, if no one is charged with this
rendered ineffectual. duty to pay or deliver the legacy or devise in the
will
Rights of Descendants of Person Disinherited
[Art. 923, CC] If there is an administration proceeding, it
Disinheritance gives rise to the right of representation constitutes a charge upon the estate. If there is
in favor of the children and descendants of the no administration proceeding, it is a charge upon
disinherited person with respect to his legitime. the heirs

INEFFECTIVE DISINHERITANCE [ART. Validity and Effect of Legacy or Devise

918, CC]
Instances of Ineffective disinheritance:
a. There is no specification of the cause.
b. The cause is not proved.
c. The cause is not among those specified in the
provisions.
Legacy or Devise of a owned in part by the
testator [Art. 929, CC]
The legacy or devise shall be understood to be
limited to such part or interest
If testator expressly declares that
Exception
he gives the thing in its entirety.

Effect of Ineffective Disinheritance: if the Legacy or Devise of a thing belonging to

disinheritance lacks one or other of the requisites another [Art. 930, CC]
mentioned in this article, the heir in question gets his Testator erroneously
legitime [Balane]. believed that the
Void
property belonged to
Ineffective him
Preterition
Disinheritance
The thing bequeathed
Person disinherited Person omitted must be a Afterwards becomes his Effective
may be any compulsory compulsory heir in the by whatever title
heir direct line
Only annuls the Valid – estate must try
institution in so far as it Annuls the entire Testator knew property to acquire property or
prejudices the person institution of heirs did not belong to him else give heir monetary
disinherited value.

Page 200 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

Legacy of devise of a thing belonging to the Legacy of devise of a thing belonging to the
legatee or devisee legatee or devisee
After alienating the thing,
The thing already belongs the legatee or devisee
to the legatee or devisee at Ineffective
Ineffective subsequently reacquires it
the time of the execution of gratuitously [Art. 933, CC]
the will [Art. 932, CC]
Legatee or devisee
After alienating the thing,
The thing is subject to an can demand
Valid only as to the the legatee or devisee
encumbrance or interest of reimbursement
interest or acquires it by onerous title
another person [Art. 932, from the heir or
encumbrance [Art. 933, CC]
CC] estate

Legatee or devisee
subsequently alienates the Ineffective
thing [Art. 933,CC]

Different Objects of Legacies and Devises [Art. 934-944, CC]

Objects of Legacy or Devise Effect
Thing pledged or mortgaged to • Estate is obliged to pay the debt
secure a debt • Other charges pass to the legatee or devisee
• Effective only as regards the credit or debt existing at the time of the testator’s
Credit or remission or release death
of a debt • Legacy lapses if the testator later brings action against the debtor
• If generic, comprises all credits/debts existing at time of execution of will
Thing pledged by debtor to a • Only the pledge is extinguished; the debt remain
creditor • Shall not be applied to his credit unless the testator so declares
• If testator does not really owe the debt, the disposition is void
Order of payment of a debt • If the order is to pay more than the debt, the excess is not due
• This is without prejudice to the payment of natural obligations
• The choice is with the heir, or the executor or administrator
Alternative legacies and
devises • If the heir, legatee or devisee dies, the right passes to their heirs
• Once made, the choice is irrevocable
• Legacy is valid even if there are no things of the same kind in the estate
Legacy of generic personal • Devise of indeterminate real property valid only if there are immovable
property or indeterminate property of the same kind in the estate
real property • The choice belongs to the heir, legatee or devisee or the executor or
administrator
• Lasts until the legatee is of age or beyond the age of majority in order that he
may finish some professional, vocational or general course provided he
Legacy of education pursues his course diligently
• If testator did not fix the amount, it is fixed in accordance with the social
standing and circumstances of the legatee and the value of the estate
• Lasts during lifetime of legatee
• If the testator used to give the legatee a sum of money for support, give the
Legacy of support same amount unless it is markedly disproportionate to the estate
• If testator did not fix the amount, it is fixed in accordance with the social
standing and circumstances of the legatee and the value of the estate

Order of Payment in Case the Estate Is Not Sufficient to Cover All the Legacies and Devises

Page 201 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

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 by • When there are compulsory heirs but their legitime
the testator himself there are donations inter vivos. has already been provided for by the 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.

Page 202 of 511

U.P. LAW BOC SUCCESSION
Delivery of Legacy/Devise [Art. 951, CC]
a. The very thing bequeathed shall be delivered and
not its value
b. With all its accessions and accessories
c. In the condition in which it may be upon the death
of the testator
d. Legacies of money must be paid in cash
Effect of ineffective legacies or devises [Art. 956,
CC]
In case of repudiation, revocation or incapacity of the
legatee or devisee, the legacy or devise shall be merged
with the mass of the hereditary estate, except in cases
of substitution or accretion.
Revocation of Legacies and Devises [Art. 957, CC]
a. Testator transforms the thing such that it does not
retain its original form or denomination
b. Testator alienates the thing by any title or for any
cause. Reacquisition of the thing by the testator
does not make the legacy or devise valid, unless it
is effected by right of repurchase.
c. Thing is totally lost during the lifetime or after the
death of the testator
d. Other causes: nullity of will, non-compliance with
suspensive condition, sale of the thing to pay the
debts of the deceased during the settlement of his
estate.
Page 203 of 511
CIVIL LAW
C. Legal or Intestate
Succession
1. General Provisions
Intestacy – that which takes place by operation of law
in default of compulsory and testamentary succession.
Not defined in the Civil Code.
Legal succession is a mode of transmission mortis causa
which takes place in the absence of the expressed will
of the decedent embodied in a testament [Tolentino].
Instances when Legal or Intestate Succession
operates [Art. 960, CC]
a. If a person dies without a will, or with a void will,
or one which has subsequently lost its validity
b. When the will does not institute an heir
c. Upon the expiration of term, or period of
institution of heir [Balane]
d. Upon fulfillment of a resolutory condition attached
to the institution of heir, rendering the will
ineffective [Balane]
e. When the will does not dispose of all the property
belonging to the testator. Legal succession shall
take place only with respect to the property which
the testator has not disposed (mixed succession)
f. If the suspensive condition attached to the
institution of the heir does not happen or is not
fulfilled
g. If the heir dies before the testator
h. If the heir repudiates the inheritance, there being
no substitution, and no right of accretion takes
place
i. When the heir instituted is incapable of succeeding,
except in cases provided in the Civil Code
j. Preterition – Intestacy may be total or partial
depending on whether or not there are legacies or
devises [Balane]
Note: In all cases where there has been an institution of
heirs, follow the ISRAI order:
a. If the Institution fails, Substitution occurs.
b. If there is no substitute, the right of Representation
applies in the direct descending line to the legitime
if the vacancy is caused by predecease, incapacity,
or disinheritance.
c. The right of Accretion applies to the free portion
when the requisites in Art. 1016 are present.
d. If there is no substitute, and the right of
representation or accretion is not proper, the rules
on Intestate succession shall apply.
U.P. LAW BOC SUCCESSION
FUNDAMENTAL PRINCIPLES IN
INTESTATE SUCCESSION
a. Rule of Preference between Lines
• Those in the direct descending line shall
exclude those in the direct ascending and
collateral lines;
• Those in the direct ascending line shall, in turn,
exclude those in the collateral line.
b. Rule of Proximity
The relative nearest in degree excludes the farther
one [Art. 962(1), CC], saving the right of
representation when it properly takes place.
c. Rule of Equal Division
The relatives who are in the same degree shall
inherit in equal shares [Arts. 962(2), 987 and 1006,
CC].
Exceptions: [Balane]
1. Rule of preference between Lines
2. Distinction between legitimate and illegitimate
filiation. The ratio under present law is 2:1
[Art. 983, in relation to Art. 895 as amended
by Art. 176, FC].
3. Rule of division by line in the ascending line
[Art. 987 (2), CC]
4. Distinction between full-blood and half-blood
relationship among brothers and sisters, as
well as nephews and nieces [Art. 1006 and
1008, CC]
5. Right of representation.
d. Rule of Barrier between the legitimate family
and the illegitimate family (the iron-curtain
rule)
The illegitimate family cannot inherit by intestate
succession from the legitimate family and vice-
versa [Art. 992, CC]
e. Rule of Double Share for full blood collaterals
When full and half-blood brothers or sisters,
nephews or nieces, survive, the full blood shall take
a portion in the inheritance double that of the half-
blood [Arts. 895 and 983, CC].
Note:
a. If one of the legitimate ascendants, illegitimate
parents, legitimate children or illegitimate children
survives, the brother, sisters, nephews, and nieces
(BSNN) are excluded.
b. If one of the legitimate ascendants, illegitimate
parents, legitimate children, illegitimate children or
Page 204 of 511
CIVIL LAW
surviving spouse survives, the other collateral
relatives and the state are excluded.
c. If any of the heirs concur in legitimes, then they
also concur in intestacy.
2. Relationship
The number of generations determines the proximity of
the relationship. Each generation forms one degree
[Art. 963, CC].
Note: It is important to distinguish between direct and
collateral, as the direct has preference over the
collateral.
In a line, as many degrees are counted as there are
generations [Art. 966, CC].
Note: Descending line is preferred over ascending.
Blood relationship is either full or half-blood [Art. 967,
CC].
Note: As among brothers and sisters and nephews and
nieces, there is a 2:1 ratio for full-blood and half-blood
relatives. Direct relatives are preferred. But this
distinction does not apply with respect to other
collateral relatives.
Incapacity [Art. 968, CC].
General rule: If there are several relatives of the same
degree, and one or some of them are unwilling or
incapacitated to succeed, his portion shall accrue to the
others of the same degree.
Exception: When the right of representation should take
place.
Note: This accretion in intestacy takes place in case of
predecease, incapacity, or renunciation among heirs of
the same degree. The relatives must be in the same
relationship because of the Rule of Preference of Lines.
REPUDIATION [Arts. 968-969, CC]
There is no right of representation in repudiation.
If the nearest relative/s repudiates the inheritance,
those of the following degree shall inherit in their own
right.
In case of repudiation by all in the same degree, the
right of succession passes on the heirs in succeeding
degrees: descending line first, ascending line next, and
collateral line next [Balane].
U.P. LAW BOC
Adoption [Art. 189, FC]
In adoption, the legal filiation is personal and exists only
between the adopter and the adopted. The adopted is
deemed a legitimate child of the adopter, but still
remains as an intestate heir of his natural parents and
other blood relatives.
Note: Section 16 of the Domestic Adoption Act (RA
8552) provides that all legal ties between the biological
parent(s) and the adoptee shall be severed and the same
shall then be vested on the adopter(s).”
3. Right of Representation
Representation – right created by fiction of law, by
virtue of which the representative is raised to the place
and the degree of the person represented, and acquires
the rights which the latter would have if he were living
or if he could have inherited [Art. 970, CC]
Effect of Representation
The representative heir acquires the rights which the
person represented would have if he were living or if he
could have inherited.
When it occurs
Representation is allowed with respect to inheritance
conferred by law (legitime and intestate based on Art.
923)
It occurs only in the following instances: (DIP)
a. Predecease of an heir
b. Incapacity or unworthiness
c. Disinheritance [Art. 923, CC]
Note: There is no representation to a devise or a legacy.
A renouncer can represent, but cannot be represented.
Rationale is found in Art. 971 which states that “The
representative does not succeed the person represented
but the one whom the person represented would have
succeeded.”
Representation in the Direct Descending Line
Representation takes place ad infinitum in the direct
descending line but never in the direct ascending line
[Art. 972, CC].
General rule: Grandchildren inherit from the
grandparents by right of representation, if proper.
Exception: Whenever all the children repudiate, the
grandchildren inherit in their own right because
representation is not proper [Art. 969, CC].
Page 205 of 511
SUCCESSION CIVIL LAW
Representation in Collateral Line
In the collateral line, representation takes place only 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.
If the children survive alone, they inherit in their own
right and share in equal proportions or per capita [Art.
975, CC].
Right of representation in the collateral line is only
possible in intestate succession. It cannot take place in
testamentary succession.
Per stirpes
Inheritance per stirpes means that the representative/s
shall receive only what the person represented would
have received, if he were living or could inherit [Art.975,
CC].
If there are more than one representative in the same
degree, then it shall be divided equally, without
prejudice to the distinction between legitimate and
illegitimate, if applicable.
The Double Heirship Test
In determining whether or not representation is proper,
it is necessary that the representative must be a legal
heir of both the person he is representing and the
decedent [Art. 973, CC].
But the representative need not be qualified to succeed
the person represented [Art. 971, CC]. In the same
manner, the person represented need not be qualified
to succeed the decedent, as it is his disqualification
which gives rise for representation to apply.
• Legitimate children may not be represented by
their illegitimate descendants (because of the bar in
Art. 992). In contrast, illegitimate children may
be represented by their legitimate and illegitimate
descendants [Art. 902].
• Illustration: A has legitimate son L and illegitimate
son I. L has an illegitimate son L-1 while I also has
an illegitimate son I-1. I-1 may inherit from A by
representation of I (under Art. 902, CC), but L-1
may not inherit from A (because of the barrier
under Art. 992, CC).
Representation in Adoption
If the adopting parent should die before the adopted
child, the latter cannot represent the former in the
U.P. LAW BOC SUCCESSION CIVIL LAW

inheritance of the parents or ascendants of the adopter. exclusively between the adopter and the adopted
The adopted child is not related to the deceased in that [Tolentino].
case, because filiation created by fiction of law is

4. Order of Intestate Succession

Decedent is a Legitimate Child
Legitimate children or descendants
(LCD)
Legitimate parents or ascendants
(LPA)
Illegitimate children or descendants
(ICD)
Surviving spouse (SS)
Brothers and sisters, nephews, nieces
(BS/NN)
Legitimate collateral relatives within
the 5th degree (C5)
State
Decedent is an Illegitimate Child
Legitimate children or descendants
(LCD)
Illegitimate children or descendants
(LPA)
Illegitimate parents (IP)
Surviving spouse (SS)
Illegitimate brothers and sisters,
nephews, nieces (IBS/NN)
State
Decedent is an Adopted Child
Legitimate children or descendants
(LCD)
Illegitimate children or descendants
(ICD)
Legitimate or illegitimate parents, or
legitimate ascendants, adoptive
parents
Surviving spouse (SS)
Brothers and sisters, nephews, nieces
(BS/NN)
State

RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE SHARES

Intestate Heirs Excludes Excluded By Concurs With
Ascendants, Collaterals and
LC + LD No one SS + ILC
State
ILC + D ILP, Collaterals and State No one SS, LC, LP
LP + LA Collaterals and State LC ILC + SS
ILP Collaterals and State LC and ILC SS
Collaterals other than
LC, ILC, LP, ILP, Siblings,
SS siblings, nephews and No one
Nephews, Nieces
nieces, State
All other collaterals and
Siblings, Nephews, Nieces LC, ILC, LP, ILP SS
State
Other collaterals within 5th Collateral more remote in Collaterals in the same
LC, ILC, LP, ILP and SS
degree degree and State degree
State No one Everyone No one

Note: In partial intestacy, the testamentary dispositions
can reduce the shares of intestate heirs, provided that
their legitimes, if they are also compulsory heirs, are not
impaired. More specifically:
a. The law of legitimes must be brought into
operation in partial intestacy.
b. If among the concurring intestate heirs there are
compulsory heirs whose legal or intestate portions
exceed their respective legitimes, the amount of the
testamentary disposition must be deducted from
the disposable portion, to be borne by all the
intestate heirs in the proportions that they are
entitled to receive from such disposable portion as
intestate heir.
c. If the legal or intestate share of a compulsory heir
is equal to his legitime, then the amount of the
testamentary disposition must be deducted only
from the legal or intestate shares of the others.

Page 206 of 511

U.P. LAW BOC SUCCESSION
d. If the testamentary dispositions consume the entire
disposable portion, then the intestate heirs who are
compulsory heirs will get only their legitimes, and
those who are not compulsory heirs will get
nothing [Tolentino].
OUTLINE OF INTESTATE SHARES
a. Legitimate children only
• Divide entire estate equally among all
legitimate children [Art. 979, CC]
• Legitimate children include an adopted child.
b. Legitimate children and Illegitimate children
• Divide entire estate such that each illegitimate
child gets ½ of what a legitimate child gets
[Art. 983, CC and Art. 176, FC]
• Ensure that the legitime of the legitimate
children are first satisfied.
c. Legitimate children and surviving spouse
• Divide entire estate equally between the
legitimate children and the surviving spouse,
the latter deemed as one child. The same rule
holds where there is only one child.
d. Legitimate children. Surviving spouse, and
Illegitimate children
• Divide the entire estate such that the surviving
spouse is deemed one legitimate child and each
illegitimate child getting ½ of what the
legitimate child gets. [Art. 996, CC and Art.
176, FC]
• Ensure that the legitime of the legitimate
children and the spouse are first satisfied.
e. Legitimate parents only
• Divide the entire estate equally [Art. 985].
f. Legitimate ascendants only (excluding
parents)
• Divide the entire estate equally but with the
observance of the rule of division by line [Art.
987].
g. Legitimate parents and illegitimate children
• Legitimate parents get ½ of the estate,
illegitimate children get the other ½ [Art. 991].
h. Legitimate parents and surviving spouse
• Legitimate parents get ½ of the estate; The
surviving spouse gets the other ½ [Art. 997].
Page 207 of 511
CIVIL LAW
i. Legitimate parents, surviving spouse and
illegitimate children
• Legitimate parents get ½ of the estate;
surviving spouse and the illegitimate child each
get ¼ each, the latter to share among
themselves if more than one [Art. 1000].
j. Illegitimate children only
• Divide the entire estate equally [Art. 988].
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
• Surviving spouse gets ½ of the estate, while
the rest gets the other ½ with the nephews and
nieces inheriting by representation if proper
[Art. 1001].
o. Surviving spouse and illegitimate brothers and
sisters, nephews and nieces
• Surviving spouse gets ½ of the estate while the
rest gets the other ½ with the nephews and
nieces inheriting by representation, if proper;
Note that all the other relatives should be
“illegitimate” because of the iron-curtain rule
[Art. 994, CC].
p. Illegitimate parents only
• Entire estate goes to the illegitimate parents
[Art. 993, CC].
q. Illegitimate parents and children of any kind
(whether legitimate or illegitimate child)
• Illegitimate parents are excluded and do not
inherit. For the rule on the respective shares of
the children, see numbers 1, 2 or 10, whichever
is applicable.
r. Legitimate brothers and sisters only
• Divide the entire estate such that full-blood
brothers/sisters gets a share double the
U.P. LAW BOC SUCCESSION CIVIL LAW

amount of a half-blood brother or sister [Art.

1004 and 1006, CC].
D. Provisions Common to
s. Legitimate brothers and sisters, nephews and
Testate and Intestate
nieces Succession
• Divide the entire estate observing the 2 is to 1
ratio for full and half-blood relationships with 1. Right of Accretion
respect to the brothers and sisters, with the
nephews and nieces inheriting by
Definition of Accretion [Art. 1015, CC]
representation, if proper [Art. 1005 & 1008,
It is a right by virtue of which, when two or more
CC].
persons are called to the same inheritance, devise or
legacy, the part assigned to one who renounces or
t. Nephews and nieces only
cannot receive his share or who died before the testator
• Divide the entire estate per capita, observing the is added or incorporated to that of his co-heirs, co-
2 is to 1 ratio [Arts. 975 and 1008, CC]. devisees, or co-legatees.
u. Other collaterals [Arts. 1009 and 1010] Basis
• Divide entire estate per capita. Collateral The right of accretion is based upon the presumed will
relatives must be with the 5th degree of of the decedent. Thus, the testator can expressly
consanguinity. provide that there shall be no accretion among persons
• Note: the nearer relative excludes the more who would otherwise be entitled thereto. Conversely,
remote relatives. the testator may validly provide for accretion in a case
where no accretion would take place under the
v. State provisions of the law [Tolentino].
• If there are no other intestate heirs, the State
inherits the entire estate through escheat Requisites [Tolentino]
proceedings [Art. 1011, CC]. a. Unity of object and plurality of subjects (two or
more persons are called to the same inheritance or
same portion thereof)
b. Vacancy of share (one of the heirs dies before the
testator, or renounces the inheritance, or is
incapacitated)

When does Accretion Occur?

Accretion happens when there is repudiation,
incapacity, or predecease of an heir.

It is the mechanism where the share of an heir is

increased by vacant shares vacated by heirs who cannot
inherit for various reasons.

(Rationale: the decedent intended to give the property

to nobody but the co-heirs.)

There can only be accretion if there is an institution of

heirs with respect to specific properties [Art. 1016, CC].
In other words, both heirs were called to inherit Plot A.

If there was “earmarking” – there can be no accretion.

• What is “earmarking?” – Heir #1 was called to inherit
the southern part of Plot A, and Heir #2 was called
to inherit the northern part of Plot A.

Page 208 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

Among compulsory heirs, there can only be accretion The heirs to whom the inheritance accrues shall succeed
with respect to the free portion. There can be no to all the rights and obligations which the heir who
accretion with respect to the legitimes [Arts. 1021 and renounced or could not receive it would have had [Art.
1018, CC]. 1020, CC].

The heirs to whom the portion goes by the right of
accretion take it in the same proportion that they inherit
[Art. 1019, CC].
Exceptions [Balane]
a. In testamentary succession, if the testator provides
otherwise
b. If the obligation is purely personal, and hence
intransmissible
In testamentary succession, when the right of accretion
does not take place, the vacant portion of the instituted
heirs, if no substitute has been designated, shall pass to
the legal heirs of the testator, who shall receive it with
the same charges and obligations [Art. 1022, CC].
Accretion shall also take place among devisees, legatees
and usufructuaries under the same conditions
established for heirs [Art. 1023, CC].

Effect of Predecease, Incapacity, Disinheritance or Repudiation

Testamentary Succession
Cause of Vacancy Intestate Succession
Legitime Free Portion
Representation
Representation Accretion
Predecease Intestate
Intestate Succession Intestate Succession
Succession
Representation Accretion Representation
Incapacity
Intestate Succession Intestate Succession Intestate Succession
Representation
Disinheritance - -
Intestate Succession
Repudiation Intestate Succession Accretion Accretion

2. Capacity to Succeed by Will c. Guardian with respect to testamentary

or Intestacy
Requisites for Capacity to Succeed by Will or by
Intestacy: [Art. 1024 – 1025, CC]
a. The heir, legatee or devisee must be living or in
existence at the moment the succession opens;
[Art. 1025, CC] and
b. He must not be incapacitated or disqualified by
law to succeed [Art. 1024, par.1, CC].
PERSONS INCAPABLE OF SUCCEEDING
[Arts. 1027, 739, 1032, CC]
Based on undue influence or interest [Art. 1027,
CC]
a. Priest who heard the last confession of the
testator during his last illness, or the minister of
the gospel who extended spiritual aid to him
during the same period;
b. Individuals, associations and corporations not
permitted by law to inherit;
dispositions given by a ward in his favor before
the final accounts of the guardianship have been
approved, even if the testator should die after the
approval thereof; except if the guardian is his
ascendant, descendant, brother, sister, or spouse;
d. Relatives of the priest or minister of the gospel
within the fourth degree, the church, order,
chapter, community, organization, or institution
to which such priest or minister may belong;
e. Attesting witness to the execution of a will, the
spouse, parents, or children, or any one claiming
under such witness, spouse, parents, or children;
f. Physician, surgeon, nurse, health officer or
druggist who took care of the testator during his
last illness.
Based on morality or public policy [Arts. 739 and
1028, CC]
a. Those made in favor of a person with whom the
testator was guilty of adultery or concubinage at
the time of the making of the will.

Page 209 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

b. Those made in consideration of a crime of which Effect of Pardon

both the testator and the beneficiary have been Once the act of unworthiness has been pardoned,
found guilty. whether expressly or tacitly, the heir is restored to full
c. Those made in favor of a public officer or his capacity to succeed the decedent, as if the cause of
spouse, descendants and ascendants, by reason unworthiness had never existed.
of his public office.
Unworthiness vs. Disinheritance
Based on acts of unworthiness [Art. 1032, CC] Unworthiness Disinheritance
The following are incapable of succeeding by reason
of unworthiness: Disinheritance is the act
Unworthiness renders a
a. Parents who have abandoned their children or by which a testator, for
person incapable of
induced their daughters to lead a corrupt or just cause, deprives a
succeeding to the
immoral life, or attempted against their virtue; compulsory heir of his
succession, whether
b. Any person who has been convicted of an right to the legitime [Art.
testate or intestate
attempt against the life of the testator, his or her 815, CC]
spouse, descendants, or ascendants;
c. Any person who has accused the testator of a Determination of Capacity [Tolentino]
crime for which the law prescribes imprisonment General Rule: At the death of the decedent [Art. 1034,
for six years or more, if the accusation has been CC]
found groundless;
d. Any heir of full age who, having knowledge of Exceptions:
the violent death of the testator, should fail to a. Those falling under 2, 3, and 5 of Art. 1032 –
report it to an officer of the law within a month, when the final judgment is rendered
unless the authorities have already taken action; b. Those falling under 4 of Art. 1032 – when the
this prohibition shall not apply to cases wherein, month allowed for the report expired
according to law, there is no obligation to make c. If the institution is conditional – when the
an accusation; condition is complied with
e. Any person convicted of adultery or
concubinage with the spouse of the testator; 3. Acceptance and Repudiation
f. Any person who by fraud, violence, intimidation,
or undue influence should cause the testator to of the Inheritance
make a will or to change one already made;
g. Any person who by the same means prevents Definition of Acceptance
another from making a will, or from revoking The act by which the person called to succeed by
one already made, or who supplants, conceals, or universal title either by the testator or by law
alters the latter's will; manifests his will of making his own the universality
h. Any person who falsifies or forges a supposed of the rights and obligations which are transmitted to
will of the decedent. him [Tolentino].

Pardon of Acts of Unworthiness Definition of Repudiation

Express Implied
Made by the execution of Effected when the
a document or any testator makes a will
writing in which the instituting the unworthy
decedent condones the heir with knowledge of
cause of incapacity the cause of incapacity
Revoked when the
Cannot be revoked testator revokes the will
or the institution
The manifestation by an heir of his desire not to
succeed to the rights and obligations transmitted to
him [Tolentino].
Requisites [Art. 1043, CC]
a. Certainty of death of the decedent
b. Certainty of the right to the inheritance
FORMS OF ACCEPTANCE [Arts. 1049 – 1050,
CC]
a. Express Acceptance – one made in a public or
private document [Art. 1049, par. 1, CC]
b. Tacit Acceptance – one resulting from acts by
which the intention to accept is necessarily

Page 210 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

implied or from acts which one would have no Irrevocability of Acceptance or Repudiation
right to do except in the capacity of an heir. General Rule: The acceptance or repudiation of an
c. Implied Acceptance - Within thirty days after inheritance, once made, is irrevocable and cannot be
the court has issued an order for the distribution impugned.
of the estate in accordance with the Rules of
Court, the heirs, devisees and legatees shall Exceptions:
signify to the court having jurisdiction whether a. When the acceptance or repudiation suffers
they accept or repudiate the inheritance; if they from any of the vices which annul consent; and
do not do so within that time, they are deemed b. When an unknown will appears [Art. 1056, CC]
to have accepted the inheritance [Art. 1057, CC].
4. Collation
An inheritance is deemed accepted:
a. If the heir sells, donates, or assigns his right to a
Concept of Collation
stranger, or to his co-heirs, or to any of them –
To collate is to bring back or to return to the
the heir must first accept the inheritance before
hereditary mass in fact or by fiction property which
he can dispose of it.
came from the estate of the decedent, during his
b. If the heir renounces the same, even though
lifetime by donation or other gratuitous title but
gratuitously, for the benefit of one or more of his
which the law considers as an advance from the
co-heirs – this is actually a donation. The heir
inheritance [Art. 1061, CC].
must first accept the inheritance before he can
donate it.
It is the act by virtue of which, the compulsory heir
c. If the heir renounces it for a price in favor of all
who concurs with other compulsory heirs in the
his co-heirs indiscriminately – this is actually an
inheritance brings back to the common hereditary
onerous disposition. The heir must first accept
mass the property which they may have received
the inheritance before he can dispose of it.
from the testator so that a division may be effected
according to law and the will of the testator.
Note: But if the renunciation should be gratuitous,
and in favor of all the co-heirs (to whom the portion
In reducing inofficious donations, the last to be
renounced should devolve by accretion), the
donated should be the first to be reduced.
inheritance shall not be deemed as accepted [Art.
1050, CC]. This is a true case of renunciation.
Rationale for collation: If donations inter vivos will
not be collated, then the rule on legitimes shall be
Forms of Repudiation [Art. 1051, CC]
circumvented or disregarded.
a. In a public instrument acknowledged before a
notary public; or
OPERATIONS RELATED TO COLLATION
b. In an authentic document – equivalent of an
[Tolentino]
indubitable writing or a writing whose
a. Collation – adding to the mass of the hereditary
authenticity is admitted or proved; or
estate the value of the donation or gratuitous
c. By petition presented to the court having
disposition.
jurisdiction over the testamentary or intestate
b. Imputing or Charging – crediting the donation
proceeding
as an advance on the legitime (if the donee is a
compulsory heir) or on the free portion (if the
Heirs in Two Capacities [Art. 1055, CC]
donee is a stranger, i.e., not a compulsory heir).
a. If a person is called to the same inheritance as an
[Balane at 522]
heir by will and by law and he repudiates the
c. Reduction – determining to what extent the
inheritance in his capacity as a testamentary heir,
donation will remain and to what extent it is
he will be considered to have also repudiated the
excessive or inofficious.
inheritance as a legal heir.
d. Restitution – returning or the act of payment of
b. If he repudiates it as a legal heir, without
the excess to the mass of hereditary estate.
knowledge of his being a testamentary heir, he
may still accept it in the latter capacity.
Persons Obliged to Collate
General rule: Compulsory heirs
Exceptions:

Page 211 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

a. When the testator should have so expressly a. Expenses incurred by parents in giving their
provided [Art. 1062, CC] – in which case you children professional, vocational or other career
collate against the disposable free portion unless the parents so provide, or unless they
because there MUST be collation. impair the legitime [Art. 1067, CC]
b. When the compulsory heir should have b. Wedding gifts by parents and ascendants,
repudiated his inheritance [Art. 1062, CC] consisting jewelry, clothing and outfit, except
c. When there is only ONE compulsory heir when they exceed 1/10 of the sum disposable by
will [Art. 1070, CC]
Grandchildren who survive with their uncles, aunts, c. Neither shall donations to the spouse of the child
or first cousins and inherit by right of representation be brought to collation; but if they have been
[Art. 1064, CC] given by the parent to the spouses jointly, the
child shall be obliged to bring to collation one-
Note: Grandchildren may inherit from their half of the thing donated [Art. 1066, CC]
grandparents in their own right, i.e., as heirs next in
degree, and not by right of representation if their Note: Parents are not obliged to bring to collation in
parent repudiates the inheritance of the grandparent, the inheritance of their ascendants any property
as no living person can be represented except in cases which may have been donated by the latter to their
of disinheritance and incapacity. In this case, the children [Art. 1065, CC].
grandchildren are not obliged to bring to collation
what their parent has received gratuitously from their Wedding Gifts:
grandparent. The wedding gift under Article 1070 of the Civil
Code may be compared to a donation propter nuptias
What to Collate as follows:
a. Any property or right received by gratuitous title
during the testator’s lifetime [Art. 1061, CC] Donation Propter
b. All that they may have received from the Wedding Gift
Nuptias
decedent during his lifetime [Art. 1061, CC]
The object is not specified.
c. Expenses incurred by the parents in giving their The object is jewelry,
It could be anything of
children a professional, vocational or other clothing or outfit.
value.
career shall not be brought to collation unless the
parents so provide, or unless they impair the The donor is not specified.
The donor must be a
legitime; but when their collation is required, the He or she could be anyone
parent or ascendant of
sum which the child would have spent if he had with capacity to dispose
the donee.
lived in the house and company of his parents property.
shall be deducted therefrom [Art. 1068, CC] If given by a parent, the
d. Any sums paid by a parent in satisfaction of the donee is either the child of
The donee is either a
debts of his children, election expenses, fines, the donor, or the future
child or a descendant of
and similar expenses shall be brought to collation spouse of the child of the
the donor.
[Art. 1069, CC] donor, or both of them
jointly.
Note: Only the value of the thing donated shall be The gift may be given at
brought to collation. The gift must be given
any time, either before or
before the celebration of the
after the celebration of
PROPERTIES NOT SUBJECT TO marriage.
the marriage.
COLLATION
The donation is governed
Absolutely no collation by the rules of ordinary The gift is non-
Expenses for support, education (only elementary donations, except as collationable to the
and secondary), medical attendance, even in modified by the provisions extent of one-tenth of
extraordinary illness, apprenticeship, ordinary of the Family Code. Thus, a the disposable free
equipment, or customary gifts [Art. 1067, CC] donation propter nuptias portion of the hereditary
given by a parent to a child estate of the donor.
Generally not imputable to legitime/ cannot be is collationable in full,
collated, subject to exceptions

Page 212 of 511

U.P. LAW BOC SUCCESSION
except if the donor declared
it to be non-collationable
5. Partition and Distribution of
Estate
a. In General
Separate, Divide, Assign. Partition is the
separation, division and assignment of a thing held in
common among those to whom it may belong. The
thing itself or its value may be divided [Art. 1079,
CC].
Owned in common. Before partition, the whole
estate of the decedent is owned in common by the
heirs [Art. 1078, CC].
Thing or value may be divided [Art. 1079, CC].
Acts deemed partition. Every act which is intended
to put an end to indivision among heirs and legatees
or devisees is deemed a partition, although it should
purport to be a sale, an exchange, a compromise, or
any other transaction [Art. 1082, CC].
A void partition may be valid if:
1. The will was in fact a partition
2. The beneficiaries of the void will were legal heirs
The titles of acquisition or ownership of each
property shall be delivered to the co-heir to whom
said property has been adjudicated [Art. 1089, CC].
JUDICIAL vs. EXTRAJUDICIAL PARTITION
Judicial – Partition done by Court pursuant to an
Order of Distribution which may or may not be
based on a project of partition.
Extra-judicial – partition made by the decedent
himself by an act inter vivos or by will or by a third
person entrusted by the decedent or by the heirs
themselves [Paras].
• Partition Inter Vivos: It is one that merely
allocates specific items or pieces of property on
the basis of the pro-indiviso shares fixed by law or
given under the will to heirs or successors [Art.
1080, CC].
Page 213 of 511
CIVIL LAW
Who May Effect Partition
1. The Decedent, during his lifetime by an act inter
vivos or by will [Art.1080, CC]
2. The decedent’s heirs [Art.1083, CC]
3. A competent court [Art. 1083, CC]
4. A third person not an heir designated by the
decedent [Art.1081, CC]
Who Can Demand Partition
1. Compulsory heir
2. Voluntary heir upon fulfillment of condition if
any [Art. 1084, CC]
3. Legatee or devisee
4. Any person who has acquired interest in the
estate
When Partition Cannot Be Demanded
1. When expressly prohibited by the testator for a
period not exceeding 20 years [Art. 1083, CC]
2. When the co-heirs agreed that the estate shall not
be divided for a period not exceeding 10 years,
renewable for another 10 years [Art. 494, CC]
3. When prohibited by law
4. When to partition the estate would render it
unserviceable for the use for which it is intended
Prohibition to Partition
1. The prohibition to partition for a period not
exceeding 20 years can be imposed even on the
legitime.
2. If the prohibition to the partition is for more
than 20 years, the excess is void.
3. Even if a prohibition is imposed, the heirs by
mutual agreement can still make the partition.
Effects of Inclusion of Intruder in Partition [Art.
1108, CC]
1. Between a true heir and several mistaken heirs –
partition is void.
2. Between several true heirs and a mistaken heir –
transmission to mistaken heir is void
3. Through error or mistake, share of true heir is
allotted to mistaken heir – partition shall not be
rescinded unless there is bad faith or fraud on the
part of the other persons interested, but the latter
shall be proportionately obliged to pay the true
heir of his share. The partition with respect to
the mistaken heir is void [Sempio-Dy].
Right of Redemption in Partition
Should any of the heirs sell his hereditary rights to a
stranger before the partition, any or all of the co-heirs
may be subrogated to the rights of the purchaser by
reimbursing him for the price of the sale, provided
U.P. LAW BOC SUCCESSION
they do so within the period of one month from the
time they were notified in writing of the sale by the
vendor [Art. 1088, CC].
Strangers – those who are not heirs on the
succession.
Legal Redemption by Co-Heir;
Requisites:
1. That there are several heirs of the common
inheritance;
2. That one of them sells his hereditary rights;
3. That the sale is made to a stranger, and before
the partition has been made;
4. That one or more of the co-heirs demand the
repurchase within a period of one month,
counted from the time he or they were notified
in writing of the sale; and
5. That the buyer is reimbursed the price of the sale
[Garcia v. Calaliman, G.R. No. L-26855 (1989)].
Note: The redemption can be exercised only by a co-
heir.
b. Effects of Partition
Effect
A partition legally made confers upon each heir the
exclusive ownership of the property adjudicated to
him [Art. 1091, CC].
No partition shall be construed so as to prejudice,
defeat, or destroy the right or title of any person
claiming the real estate involved in the action for
partition by title under any other person, or by title
paramount to the title of the parties among whom the
partition may have been made [Rule 69, Sec. 12,
ROC].
A judicial partition in probate proceedings does not
bind the heirs who were not parties thereto
[Tolentino].
Warranty
After the partition has been made, the co-heirs shall
be reciprocally bound to warrant the title to, and the
quality of, each property adjudicated [Art. 1092, CC].
The reciprocal obligation of warranty shall be
proportionate to the respective hereditary shares of
the co-heirs.
If any one of them should be insolvent, the other co-
heirs shall be liable for his part in the same
Page 214 of 511
CIVIL LAW
proportion, deducting the part corresponding to the
one who should be indemnified.
Those who pay for the insolvent heir shall have a
right of action against him for reimbursement, should
his financial condition improve [Art. 1093, CC].
An action to enforce the warranty among the co-heirs
must be brought within ten years from the date the
right of action accrues [Art. 1094, CC].
If a credit should be assigned as collectible, the co-
heirs shall not be liable for the subsequent insolvency
of the debtor of the estate, but only for his insolvency
at the time the partition is made [Art. 1095, CC].
The warranty of the solvency of the debtor can only
be enforced during the five years following the
partition.
Co-heirs do not warrant bad debts, if so known to,
and accepted by the distributee.
But if such debts are not assigned to a co-heir, and
should be collected, in whole or in part, the amount
collected shall be distributed proportionately among
the heirs [Art. 1095, CC].
End of Warranty
The obligation of warranty among co-heirs shall
cease in the following cases:
1. The testator himself has made the partition
Unless it appears, or it may be reasonably
presumed, that his intention was otherwise, but
the legitime shall always remain unimpaired.
2. When it has been so expressly stipulated in the
agreement of partition
Unless there has been bad faith
3. When the eviction is due to a cause subsequent
to the partition, or has been caused by the fault
of the distributee of the property [Art. 1096, CC].
c. Rescission and Nullification of
Partition
Causes for Rescission or Annulment
1. A partition may be rescinded or annulled for the
same causes as contracts [Art. 1097, CC].
2. A partition, judicial or extra-judicial, may also be
rescinded on account of lesion, when any one of
the co-heirs received things whose value is less
by at least one-fourth, than the share to which he
U.P. LAW BOC SUCCESSION CIVIL LAW

is entitled, considering the value of the things at

the time they were adjudicated [Art. 1098, CC].
• This article applies only to cases of partition
among-coheirs
• Lesion is the injury suffered in consequence
of inequality of situation by one party who
does not receive the full equivalent for what
she gives in a sale or any commutative
contract
3. The partition made by the testator cannot be
impugned on the ground of lesion, except when
the legitime of the compulsory heirs is thereby
prejudiced, or when it appears or may be
reasonably be presumed, that the intention of the
testator was otherwise [Art. 1099, CC].
4. Preterition of a compulsory heir in the
partition [Art. 1104, CC]:
• Partition shall not be rescinded unless bad
faith or fraud on the part of other heirs is
proved.
• The culpable heirs shall share in the damages
of the prejudiced compulsory heir
proportionately.
5. A partition which includes a person believed to
be an heir, but who is not, shall be void only with
respect to such person [Art. 1105, CC].
The action for rescission on account of lesion shall
prescribe after four years from the time the partition
was made [Art. 1100, CC].
Indemnity may be made:
1. By payment in cash or
2. By the delivery of a thing of the same kind and
quality as that awarded to the plaintiff.
If a new partition is made, it shall affect neither those
who have not been prejudiced nor those who have
not received more than their just share [Art. 1101,
CC].
An heir who has alienated the whole or a considerable
part of the real property adjudicated to him cannot
maintain an action for rescission on the ground of
lesion, but he shall have a right to be indemnified in
cash [Art. 1102, CC].
The omission of one or more objects or securities of
the inheritance shall not cause the rescission of the
partition on the ground of lesion, but the partition
shall be completed by the distribution of the objects
or securities which have been omitted [Art. 1103,
CC].
DIFFERENCE OF NULLITY FROM
RESCISSION
• Nullity – the act is supposed to never have
existed
• Rescission – the act is valid at the origin though
it afterwards became ineffective

The heir who is sued shall have the option of

indemnifying the plaintiff for the loss, or consenting
to a new partition

Important Periods in Partition

1 month or less before making a will
20 years
5 years from delivery to the State
1 month
5 years from the time disqualified
person took possession
30 days from issuance of order of
distribution
1 month form written notice of sale
10 years
Testator, if publicly known to be insane, burden of proof is on the one
claiming validity of the will
Maximum period testator can prohibit alienation of dispositions
To claim property escheated to the State
To report knowledge of violent death of decedent lest he be considered
unworthy
Action for declaration of incapacity & for recovery of the inheritance,
devise or legacy
Must signify acceptance/repudiation otherwise, deemed accepted
Right to repurchase hereditary rights sold to a stranger by a co-heir
To enforce warranty of title/quality of property adjudicated to co-heir
from the time right of action accrues

Page 215 of 511

U.P. LAW BOC SUCCESSION CIVIL LAW

To enforce warranty of solvency of debtor of the estate at the time

5 years from partition
partition is made
4 years from partition Action for rescission of partition on account of lesión

Page 216 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

OBLIGATIONS AND
CONTRACTS
Civil Law

Page 217 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

V. OBLIGATIONS 4. Classification of Obligations

A. Obligations, in General
1. Definition
Art. 1156, CC. An obligation is a juridical necessity
to give, to do or not to do.
An obligation is a juridical relation, whereby a person
(called the creditor) may demand from another (called
the debtor) the observance of a determinate conduct,
and in case of breach, may obtain satisfaction from
the assets of the latter. [Ramos]
a. As to Sanction
1. Civil Obligation (or perfect obligation) – give a
right of action to compel their performance; the
sanction is judicial process
2. Natural Obligation – midway between civil and
purely moral obligations; there is a juridical tie,
but performance is left to the will of the debtor;
after voluntary fulfillment by the obligor, the
sanction is the law
3. Moral Obligation (or imperfect obligation) –
the sanction is conscience or morality. These
obligations are not judicially demandable. Moral
duty is not a valid consideration.

2. Elements of an Obligation b. As to Subject Matter

a. Active Subject (Obligee/Creditor): The person 1. Real – obligation to give
(natural or juridical) who has the right or power 2. Personal – obligation to do or not to do
to demand the prestation.
b. Passive Subject (Obligor/Debtor): The person c. As to the Affirmativeness or
bound to perform the prestation.
c. Prestation (Object): The conduct required to be Negativeness of the Obligation
observed by the debtor/obligor (to give, to do, or
not to do). 1. Positive/Affirmative – obligation to give or to
d. Vinculum Juris (Juridical or Legal Tie; Efficient do
Cause): That which binds or connects the parties 2. Negative: obligation not to give or not to do
to the obligation. [de Leon]
d. As to Persons Obliged
It is established by:
a. law 1. Unilateral – only one of the parties is bound
b. bilateral acts (e.g. contracts giving rise to 2. Bilateral – both parties are bound
obligations stipulated therein) 3. Reciprocal – performance by one is dependent
c. unilateral acts (e.g. crimes and quasi-delicts) on the performance by the other
4. Non-reciprocal – performance by one is
3. Kinds of Prestations independent of the other [Paras]

a. To Give: real obligation; to deliver either (1) a 5. Sources of Obligation

specific or determinate thing, or (2) a generic or
indeterminate thing. Art. 1157, CC. Obligations arise from:
b. To Do: positive personal obligation; includes all 1. Law;
kinds of work or service. 2. Contracts;
c. Not To Do: negative personal obligation; to 3. Quasi-contracts;
abstain from doing an act; includes the obligation 4. Acts or omissions punished by law; and
not to give. 5. Quasi-delicts.
REQUISITES OF A PRESTATION:
a. Possible - physically and juridically; a. Law
b. Assessable - Must have a possible equivalent in
money. Obligations arise when imposed by the law itself
c. Determinate, or at least, determinable and cannot be presumed. [Art. 1158, CC] Examples

Page 218 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

include obligation to pay taxes and obligation to

support one’s family.
B. Nature and Effect of
b. Contracts Obligations
Obligations arise from the stipulation of the parties;
it has the force of law and should be complied with in
1. Obligation “To Give”
good faith. [Art. 1159, CC]
a. Type of Things
c. Quasi-Contracts
Limited
Generic
Obligations arise from lawful, voluntary and Specific Thing Generic
Thing
unilateral acts enforceable to the end that no one Thing
shall be unjustly enriched or benefited at the expense Particularly
of another. designated or
physically Object is When the
Kinds: segregated from designated generic objects
1. Negotiorum gestio (Officious management) – all others of the only by its are confined to
voluntary management of the property or affairs same class class/ genus/ a particular
of another without knowledge or consent of the [Art.1460, CC]; species. class.
latter; obligation is to continue the same until Identified by
termination of the affair and its incidents individuality.

Exceptions: Can be
Cannot be Can be
a. When property is not neglected substituted by
substituted substituted by
b. If manager is tacitly authorized [Art. 2144, any of the
against the any of the same
CC] same class and
obligee’s will. particular class.
same kind.
2. Solutio indebiti (Payment not due) – when
something is received when there is no right to b. Rights and Duties of Parties
demand it and unduly delivered through mistake;
obligation is to return the undue payment. [Art. Duties of the Debtor Rights of the Creditor
2154, CC] To Give a Specific Thing
1. To preserve or take 1. To compel delivery
d. Acts or Omissions Punishable by care of the thing due [Art. 1165, CC]
Law with the proper 2. To the fruits from
diligence of a good the time the
Responsibility for fault or negligence under a quasi- father of a family obligation to deliver
delict [Art. 2176, CC] is entirely separate and distinct [Art. 1163, CC] arises [Art. 1164, CC]
from the civil liability arising from negligence under 2. To deliver the thing 3. To the accessions
the penal code. But the plaintiff cannot recover itself [Art. 1165, CC] and accessories,
damages twice for the same act or omission of the 3. To deliver the fruits even if not
defendant. [Art. 2177, NCC] of the thing [Art. mentioned [Art.
1164, CC] 1166, CC]
4. Not to be
e. Quasi-Delicts 4. To deliver its
compelled to receive
accessions and
accessories [Art. a different one,
Obligations arise from damages caused to another although of the same
through an act or omission, there being fault or 1166, CC]
value as, or more
negligence but no contractual relations exist between • accessions – valuable than that
the parties. [Art. 2176, CC] everything which which is due [Art.
is produced by a 1244, CC]
A single act or omission may give rise to different thing, or which is 5. To recover damages
causes of action. incorporated or in case of breach,
attached thereto, exclusive or in
excluding fruits addition to specific

Page 219 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Duties of the Debtor Rights of the Creditor

• accessories – performance [Arts. 2. Obligation “To Do” or “Not
things designed 1165, 1170, CC]
for the To Do”
embellishment,
use or a. Rights and Duties of Parties
preservation of
another thing of Duties of the Debtor Rights of the Creditor
more importance To Do
5. To pay damages in
1. To have the
case of breach [Art.
obligation executed
1170, CC]
at the cost of the
To Give a Generic Thing
1. To do it [Art. 1167, debtor [Art. 1167,
1. To take care of the CC] CC]
1. To ask that the
thing [Art. 1163, CC] 2. To shoulder the 2. To recover damages
obligation be
2. To deliver a thing of cost of execution in case of breach
complied with [Art.
the quality intended should he fail to do [Art. 1170, CC]
1165, CC]
by the parties taking it [Art. 1167, CC]
2. To ask that the
into consideration 3. To undo what has Note: The debtor cannot
obligation be
the purpose of the been poorly done be compelled to perform
complied with by a
obligation and other [Art. 1167, CC] his obligation. The
third person at the
circumstances [Art. 4. To pay damages in ultimate sanction of civil
expense of the debtor
1246, CC] case of breach [Art. obligations is
3. To recover damages
3. Creditor cannot 1170, CC] indemnification of
in case of breach
demand a thing of damages. This would be
[Art. 1165, CC]
superior quality; tantamount to
4. Not to be compelled
neither can the involuntary servitude.
to receive a different
debtor deliver a thing
one, although of the Not To Do
of inferior quality.
same value as, or 1. To ask to undo what
4. To pay damages in
more valuable than should not be done,
case of breach [Art.
that which is due at the debtor’s
1170, CC]
[Art. 1244, CC] expense. [Art. 1168,
CC]
2. To recover damages,
where it would be
physically or legally
impossible to undo
1. Not to do what
what should not have
should not be done
been done, because
2. To shoulder cost of
of :
undoing what
a. the very nature of
should not have
the act itself;
been done [Art.
b. rights acquired by
1168, CC]
third persons who
3. To pay damages in
acted in good
case of breach [Art.
faith;
1170, CC]
c. when the effects
of the acts
prohibited are
definite in
character and will
not cease even if
the thing
prohibited be
undone.

Page 220 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
3. Breach
Those who in the performance of their obligations are
guilty of:
a. Fraud (dolo): The fraud contemplated by the
foregoing provision is the deliberate and
intentional evasion of the normal fulfillment of
obligations.
b. Negligence (culpa): Fault or negligence of the
debtor as an incident in the fulfillment of an
existing obligation.
c. Delay (mora): Delay in the fulfillment of the
obligation. The delay however must be imputable
to the debtor/obligor.
d. And those who in any manner contravene the
tenor thereof: Covers any illicit act which
impairs the strict and faithful fulfillment of the
obligation
Are liable for damages. [Art. 1170, CC]
a. Complete Failure to Perform
Slight or Casual
Substantial Breach
Breach
1. Partial breach
1. Total breach 2. There is partial/
2. Amounts to non- substantial
performance, basis performance in good
for rescission under faith
Art. 1191 and 3. Gives rise to liability
payment of damages for damages only
[Art. 1234, CC]
If the obligation has been substantially performed in
good faith, the obligor may recover as though there
had been a strict and complete fulfillment, less
damages suffered by the obligee. [Art. 1234, CC]
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
intentional departure therefrom. The deviation
from the obligation must be slight, and the omission
or defect must be technical and unimportant, and
must not pervade the whole or be so material that the
object which the parties intended to accomplish in a
particular manner is not attained. The non-
performance of a material part of a contract will
prevent the performance from amounting to a
substantial compliance. [International Hotel Corp v
Joaquin, G.R. No. 158361 (2013)]
The question of whether a breach of contract is
substantial depends upon the attending
Page 221 of 511
CIVIL LAW
circumstances and not merely on the percentage of the
amount not paid. [Cannu v Galang, G.R. No. 139523
(2005)]
b. Default, Delay, or Mora
Definition: Failure to perform an obligation on time
which constitutes a breach of the obligation. [de
Leon]
Rules on Default, Delay, or Mora
Reciprocal
Unilateral Obligations
Obligations
General Rule: “No
demand, No delay.”
Neither party incurs in
The mere expiration of delay if the other does
the period fixed by the not comply or is not
parties is not enough in ready to comply in a
order that the debtor proper manner with
may incur in delay. what is incumbent upon
him. From the moment
Those obliged to deliver one of the parties fulfills
or to do something incur his obligation, delay by
in delay from the time the other begins. [Art.
the obligee judicially or 1169 par. 3, CC]
extrajudicially demands
from them the No delay if neither
fulfillment of their performs.
obligation. [Art. 1169
par. 1, CC]
When demand is not necessary in order that delay
may exist [par. 2, Art. 1169, CC]
1. When demand would be useless, as when the
obligor has rendered it beyond his power to
perform; such as:
a. When the impossibility is caused by some act
or fault of the debtor (e.g. debtor absconded
or has destroyed the thing to be delivered);
b. When the impossibility is caused by a
fortuitous event, but the debtor has bound
himself to be liable in case of such event.
[Tolentino]
2. When from the nature and the circumstances of
the obligation it appears that the designation of
the time when the thing is to be delivered or
the service is to be rendered was a controlling
motive for the establishment of the contract
(time is of the essence);
3. When the law so provides; or
4. When the obligation expressly so declares;
Note: It is insufficient that the law or obligation fixes
a date for performance. It must further state expressly
that after the period lapses, default will commence.
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

prestations. Otherwise, the fulfillment must be

KINDS OF DELAY; REQUISITES AND simultaneous and reciprocal. Thus, one party cannot
EFFECTS demand performance by the other without offering to
1. Moral Solvendi; comply with his own prestation. [Tolentino]
2. Mora Accipiendi;
3. Compensatio Morae Effects:
1. Delay of the obligor cancels delay of obligee (and
MORA SOLVENDI vice versa) hence it is as if there is no default.
Delay on the part of the debtor to fulfil his obligation 2. The liability of the first infractor shall be
either to give (ex re) or to do (ex persona). equitably tempered by the courts. If it cannot be
determined which of the parties first violated the
Requisites: contract, the same shall be deemed extinguished,
1. Obligation must be liquidated, due and and each shall bear his own damages. [Art. 1192,
demandable CC]
2. Non-performance by the debtor within the
period agreed upon Equitable Tempering under Art. 1192 vs. Under
3. Demand, judicial or extra-judicial, by the Art. 2215 [Ong v Bognalbal, G.R. No. 149140,
creditor, unless demand is not necessary under (2006)]
the circumstances enumerated in Art 1169 par Art 1192 Art 2215
(2). “In contracts, quasi-
contracts, and quasi-
Effects: delicts, the court may
1. The debtor is liable for damages. [Art. 1170, CC] “In case both parties equitably mitigate the
2. For determinate objects, the debtor shall bear the have committed a damages under
risk of loss, even if the loss is due to fortuitous breach of the circumstances other than
events. [Art. 1165 par 3, CC] obligation, the liability the case referred to in the
of the first infractor preceding article, as in the
MORA ACCIPIENDI shall be equitably ff. instances:
Delay on the part of the creditor to accept the tempered by the
performance of the obligation. courts. xxx” (1) That the plaintiff
himself has contravened
Requisites: the terms of the contract
1. Debtor offers performance. xxx”
2. Offer must be in compliance with the prestation Second infractor not
as it should be performed. liable for damages at
3. Creditor refuses performance without just cause. Does not appear to
all; only the first
consider which infractor
infractor is liable, but
Effects: first committed the breach.
with his liability
1. The responsibility of the debtor is reduced to mitigated.
fraud and gross negligence.
2. The debtor is exempted from risk of loss of the
thing, which is borne by the creditor. c. Fraud (Dolo) in the Performance
3. The expenses incurred by the debtor for the of the Obligation
preservation of the thing after the mora shall be
chargeable to the creditor. Art. 1171, CC. Responsibility arising from fraud is
4. If the obligation bears interest, the debtor does demandable in all obligations. Any waiver of an
not have to pay from the time of delay. action for future fraud is void.
5. The creditor is liable for damages.
6. The debtor may relieve himself of the obligation
Definition: Fraud (dolo) is the deliberate or
by consigning the thing. [Tolentino]
intentional evasion of the normal fulfilment of an
obligation. [de Leon]
COMPENSATIO MORAE
Delay of both parties in reciprocal obligations.

The parties in a bilateral contract can regulate the

order in which they shall comply with their reciprocal

Page 222 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Distinguished from Causal Fraud Dolo Incidente – refers only to some particular or
Causal Fraud accident of the obligation
Fraud in the
(dolo causante and
Performance In order that fraud may vitiate consent, it must be the
dolo incidente)
[Art. 1170, CC] dolo causante and not merely the dolo incidente,
[Arts. 1338, 1344, CC]
inducement to the making of the contract. [Woodhouse
Definition vs. Halili, G.R. No. L-4811 (1953)]

The deliberate and Requisites for Fraud to Vitiate a Contract (Dolo

intentional evasion of Every kind of deception
the normal fulfilment of for the purpose of
obligations. [International leading another party
Corporate Bank v into error and execute a
Gueco,G.R. No. 141968 particular act.
(2001)]
When Present
During the performance During the time of birth
of a pre-existing or perfection of the
obligation obligation
Purpose
To secure consent of
another to enter the
contract(dolo causante)
To evade normal
To influence a party
fulfilment of obligation
regarding an incident to
the contract (dolo
incidente)
Result
Breach of the obligation Vitiation of consent
Remedy
Innocent party may
annul the contract(if
Obligee may recover dolo causante)
damages [Art. 1344, CC]
Damages (both dolo
causante or incidente)
Obligation Involved
Damages (both dolo
Damages
causante or incidente)
Voidable obligation (if
dolo causante)
Valid obligation
Valid obligation (if dolo
incidente)
Dolo Causante – that which determines or is the
essential cause of the contract
Causante)
1. It must have been employed by one contracting
party upon the other;
2. It must have induced the other party to enter into
the contract;
3. It must have been serious; and
4. It must have resulted in damage or injury to the
party seeking annulment. [Tolentino]
d. Negligence (Culpa) in the
Performance of the Obligation
Art. 1172, CC. Responsibility arising from
negligence in the performance of every kind of
obligation is also demandable, but such liability may
be regulated by the courts, according to the
circumstances.
Art. 1173, CC. The fault or negligence of the obligor
consists in the omission of that diligence which is
required by the nature of the obligation and
corresponds with the circumstances of the persons,
of the time and of the place.
Exceptions:
1. Common Carriers
They are bound to observe extraordinary diligence
in the vigilance over the goods and for the safety of
the passengers transported by them [Art. 1733, CC]
2. Hotel and inn-keepers
The keepers of hotels or inns shall be responsible for
the deposit of effects, made by travellers, as
depositaries, provided that notice was given to them,
or their employees of such effects and that they take
precautions relative to the care and vigilance of their
effects [Art. 1998, NCC]
This responsibility shall include the loss of, or injury
to the personal property of the guests caused by the
servants or employees of the keepers of hotels or inns
as well as strangers; but not that which may proceed
from any force majeure. [Art. 2000, NCC]

Page 223 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Test of Negligence
“Whether or not the defendant, in doing the alleged 4. Legal Excuse for Breach
negligent act, observed the reasonable care and
caution, which an ordinary and prudent person would
have used in the same situation” If not, then he is a. Fortuitous Events
guilty of negligence. [Mandarin Villa Inc. v. CA, G.R.
No. 119850 (1996)] Art. 1174, CC. Except in cases expressly specified by
the law, or when it is otherwise declared by
Kinds of Civil Negligence stipulation, or when the nature of the obligation
Culpa Contractual Culpa Aquiliana requires the assumption of risk, no person shall be
Negligence is merely responsible for those events which could not be
Negligence is direct, foreseen, or which, though foreseen, were inevitable.
incidental in the
substantive and
performance of an
independent. Definition: A happening independent of the will of
obligation.
There is always a pre- There may or may not the debtor and which makes the normal fulfillment of
existing contractual be a pre-existing the obligation impossible. [de Leon]
relation. contractual obligation.
Liability in case of Fortuitous Event
The source of the No person shall be responsible for fortuitous events,
obligation of the unless:
The source of obligation
defendant to pay 1. expressly specified by law [Arts. 552 (2); 1942,
is the defendant’s
damages is the breach or 2147, 2148, 2159, CC]
negligence itself.
non-fulfillment of the 2. liability specified by stipulation of the parties
contract. 3. the nature of the obligations requires assumption
Proof of the existence of risk [Art. 1174, CC]
of the contract and of 4. debtor is guilty of concurrent or contributory
The negligence of the negligence
its breach or non-
defendant must be 5. debtor has promised to deliver the same thing to
fulfillment is sufficient
proved. two or more persons who do not have the same
prima facie to warrant
recovery. interest [par. 3, Art. 1165, CC]
6. the thing is lost due to the obligor’s fraud,
negligence, delay or contravention of the tenor of
Extent of Damages to be Awarded [Art. 2201, CC] the obligation [Art. 1170, CC]
Good Faith Bad Faith 7. the obligation to deliver a specific thing arises
Obligor is liable for Obligor shall be from a crime [Art. 1268, CC]
those that are the natural responsible for all 8. the object is a generic thing, i.e. the genus never
and probable damages which may be perishes
consequences of the reasonably attributed to
breach of the obligation, the non-performance of Requisites of Exemption Based on Force
and which the parties the obligation. Majeure
have foreseen or could 1. The event must be independent of the debtor’s
have reasonably foreseen Any waiver or will (fraud or negligence).
at the time the obligation renunciation made in the 2. The event must be unforeseeable or inevitable.
was constituted. anticipation of such 3. The event renders it impossible for the debtor
liability is null and void. to fulfill his obligation in a normal manner.
4. The debtor must be free from any negligence
e. Contravention of the Tenor of or participation in the aggravation of the injury to
the Obligation the creditor [Tolentino; de Leon]
5. It must be the sole cause, not merely a
“In any manner contravenes the tenor” means any proximate cause.
illicit act, which impairs the strict and faithful
fulfillment of the obligation, or every kind of b. Act of Creditor
defective performance. [Tolentino]
The debtor is also released from liability when the
non-performance of the obligation is due to the act of
the creditor himself. [Tolentino]

Page 224 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
Note:
When there is contributory negligence by the debtor
that renders him liable despite the fortuitous event,
the court may equitably mitigate damages.
5. Remedies Available in Case
of Breach
a. Action for Specific Performance
(In Obligation to Give Specific
Thing)
The creditor has a right to compel the debtor to
perform the prestation.
When what is to be delivered is a determinate thing,
the creditor, in addition to the right granted him by
Art. 1170 (indemnification for damages), may compel the
debtor to make the delivery. [par 1, Art. 1165, Par. 1,
CC]
b. Action for Substituted
Performance (in Obligation to
Give Generic Thing and
Obligation to Do)
Par. 2, Art. 1165, CC. If the thing is indeterminate
or generic, he may ask that the obligation be
complied with at the expense of the debtor.
Art. 1167, CC. If a person obliged to do something
fails to do it, the same shall be executed at his cost.
This same rule shall be observed if he does it in
contravention of the tenor of the obligation.
Furthermore, it may be decreed that what has been
poorly done be undone.
A third person may perform another’s obligation to
deliver a generic thing or an obligation to do, unless it
is a purely personal act, at the expense of the debtor.
Debtor cannot avoid obligation by paying damages if
the creditor insists on performance.
c. Rescission (Resolution in
Reciprocal Obligations)
Art. 1191, CC. The power to rescind obligations is
implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent
upon him.
Page 225 of 511
CIVIL LAW
The injured party may choose between the
fulfillment and the rescission of the obligation, with
the payment of damages in either case. He may also
seek rescission, even after he has chosen fulfilment,
if the fulfillment of the obligation should become
impossible.
The court shall decree the rescission claimed, unless
there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the
rights of third persons who have acquired the thing,
in accordance with articles 1385 and 1388 and the
Mortgage Law.
Rescission
The unmaking of a contract, or its undoing from the
beginning, and not merely its termination [Pryce Corp v
Pagcor, G.R. No. 157480 (2005)]
Right to Rescind
The rescission on account of breach of stipulations is
not predicated on injury to economic interests of
the party plaintiff but on the breach of faith by the
defendant, that violates the reciprocity between the
parties. [Universal Food Corporation v. CA, G.R. No. L-
29155 (1970)]
Effect of Rescission under Art 1191
Extinguishes the obligatory relation as if it had never
been created, the extinction having a retroactive
effect. Both parties must surrender what they have
respectively received and return each other as far as
practicable to their original situation. [Tolentino]
Rescission may take place extrajudicially, by
declaration of the injured party. The party who
deems the contract violated may consider it
resolved or rescinded, and act accordingly,
without previous court action, but it proceeds at
its own risk. For it is only the final judgment of the
corresponding court that will conclusively and finally
settle whether the action taken was or was not correct
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 extrajudicial steps to protect its interest. [UP v
Delos Angeles, G.R. No. L-28602 (1970)]
Under Art 1191, the right to rescind an obligation is
predicated on the violation of the reciprocity between
parties, brought about by a breach of faith by one of
them. Rescission, however, is allowed only where the
breach is substantial and fundamental to the
fulfillment of the obligation. [Del Castillo Vda de
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Mistica v Naguiat,G.R. No. 137909 (2003); Cannu v

Galang, G.R. No. 139523 (2005)]. In order to satisfy their claims against the debtor,
creditors have the ff. successive rights:
It will not be permitted in casual or slight breach. [Song 1. To levy by attachment and execution upon all the
Fo v. Hawaiian Philippines, G.R. No. 23769, (1925)] property of the debtor, except those exempt
from execution;
Distinguished from Rescission under Art. 1380 2. To exercise all the rights and actions of the
Rescission / Resolution Rescission [Art. 1380, debtor, except such as are inherently personal to
[Art. 1191, CC] CC] him; and
Based on non- 3. To ask for rescission of the contracts made by the
Based on lesion or fraud debtor in fraud of their rights.
performance or non-
upon creditors.
fulfillment of obligation.
Requisites
Action is instituted by 1. The person to whom the right of action pertains
Action is instituted only by
either party or by a third must be indebted to the creditor
the injured party.
person. 2. The debt is due and demandable
Subsidiary action, in the 3. The creditor must be prejudiced by the failure of
Principal action, retaliatory absence of any other the debtor to collect his debts due him from third
in character. legal means to obtain persons, either through malice or negligence
reparation. 4. The debtors assets are insufficient (debtor is
insolvent)
Applies to either 5. The right of action is not purely personal to the
Applies only to reciprocal
unilateral or reciprocal debtor
obligations where one
obligations even when
party is guilty of non-
the contract has been Previous approval of the court is not necessary to
fulfillment
fully fulfilled exercise the accion subrogatoria.
Court cannot grant a
In some cases, court may
period or term within ACCION PAULIANA
grant a term for
which one must Creditors may also impugn the acts which the debtor
performance.
comply. may have done to defraud them. [Art. 1177, CC]
Non-performance by
Non-performance by the Par. 3, Art. 1381. The following contracts are
the other party is
other party is important. rescissible:
immaterial.

(3) Those undertaken in fraud of creditors when the

d. Damages, in Any Event
Art. 1170, CC. Those who in the performance of
their obligations are guilty of fraud, negligence, or
delay, and those who in any manner contravene the
tenor thereof, are liable for damages.
e. Subsidiary Remedies of Creditors
ACCION SUBROGATORIA
Art. 1177, CC. The creditors, after having pursued
the property in possession of the debtor to satisfy
their claims, may exercise all the rights and bring all
actions of the latter for the same purpose, save those
which are inherent in his person; they may also
impugn the acts which the debtor may have done to
defraud them.
Right of the creditor to exercise all of the rights and
bring all the actions which his debtor may have
against third persons.
latter cannot in any other manner collect the claims
due them.
Requisites [Cheng v. CA, G.R. No. 144169 (2001)]
1. There is a credit in favor of the plaintiff prior
to the alienation by the debtor
2. The debtor has performed a subsequent
contract conveying patrimonial benefit to third
person/s.
3. The debtor’s acts are fraudulent to the
prejudice of the creditor.
4. The creditor has no other legal remedy to
satisfy his claim
5. The third person who received the property is
an accomplice to the fraud.
An accion pauliana thus presupposes the following:
1. A judgment;
2. the issuance by the trial court of a writ of
execution for the satisfaction of the judgment,
and;

Page 226 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

3. the failure of the sheriff to enforce and satisfy the

judgment of the court.
C. Kinds of Civil
It requires that the creditor has exhausted the
Obligations
property of the debtor. The date of the decision of
the trial court is immaterial. What is important is 1. Pure Obligations
that the credit of the plaintiff antedates that of the
fraudulent alienation by the debtor of his Art. 1179, CC. Every obligation whose performance
property. After all, the decision of the trial court does not depend upon a future or uncertain event,
against the debtor will retroact to the time when the or upon a past event unknown to the parties, is
debtor became indebted to the creditor. [Cheng v CA, demandable at once.
supra] Every obligation which contains a resolutory
condition shall also be demandable, without
Accion Subrogatoria Accion Pauliana prejudice to the effects of the happening of the
Credit must exist before event.
the fraudulent act
[Tolentino] A pure obligation is IMMEDIATELY
Not necessary that DEMANDABLE, regardless of the presence of a
creditor’s claim is prior Note: Commentators condition or a term/period.
to the acquisition of the have conflicting views
right by the debtor on WoN new debts 2. Conditional Obligations
contracted by the debtor
fall under the scope of
accion pauliana. Art. 1181, CC. In conditional obligations, the
acquisition of rights, as well as the extinguishment or
Fraudulent intent is loss of those already acquired, shall depend upon the
No need for fraudulent
required if the contract happening of the event which constitutes the
intent
rescinded is onerous condition.
Prescribes in 4 years
No period for
from the discovery of A condition is a future AND uncertain event. This
prescription
the fraud includes acquisition of proof/knowledge of a past
event unknown to the parties.

a. Kinds of conditions
1. AS TO EFFECT

a. SUSPENSIVE – Obligation shall only be

effective upon the fulfillment of the condition
[Art. 1181, CC]. The obligee acquires a mere
hope or expectancy, protected by law, upon the
constitution of the obligation.

Before Fulfillment After Fulfillment

The demandability and
acquisition/ effectivity
of the rights arising from
the obligation is
suspended, but the
creditor may bring the
appropriate actions for
the preservation of his
right.
The obligation arises or
becomes effective.
The obligor can be
compelled to comply
with what is incumbent
upon him.

Page 227 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Doctrine of Constructive Fulfillment of To Give To Do/Not To Do

Suspensive Conditions convenience [Art. 1187, complied with [Art.
Art. 1186, CC. The condition shall be deemed par. 1] 1187, par. 2]
fulfilled when the obligor voluntarily prevents its If unilateral, the debtor
fulfillment. The power of the court
shall appropriate the
includes the
fruits and interests
Suspensive condition is deemed fulfilled when: determination of
received, unless from the
1. Obligor intends to prevent obligee from whether or not there will
nature and circumstance
complying with the condition be any retroactive effect.
it should be inferred that
2. Obligor actually prevents obligee from This rule shall likewise
the intention of the
complying with the condition apply in obligations with
persons constituting the
a resolutory condition.
same was different. [Art.
The two requisites must concur. Mere intention of [Art. 1190 par. 3]
1187 par 1]
the debtor to prevent the happening of the condition,
or to place ineffective obstacles to its compliance, b. RESOLUTORY – The obligation is
without actually preventing the fulfillment, is demandable at once, without prejudice to the
insufficient. [International Hotel Corporation v. Joaquin, effects of the happening of the event [par. 2, Art.
G.R. No. 158361 (2013)] 1179, CC].
Doctrine does not apply to: Before Fulfillment After Fulfillment
1. Resolutory conditions Whatever may have been
2. External contingency that is lawfully within the paid or delivered by one
control of the obligor [Taylor v Uy Tieng, G.R. No. or both of the parties
L-16109 (1922)] upon the constitution of
3. Obligor, in preventing the fulfilment of the the obligation shall have
condition, acts pursuant to a right Preservation of
to be returned upon the
creditor’s rights [par. 1,
fulfillment of the
Principle of Retroactivity in Suspensive Art. 1188, CC] also
condition [par. 1, Art.
Conditions applies to obligations
1190, CC]. There is no
Par. 1, Art. 1187, CC. The effects of a conditional with a resolutory
return to the status quo.
obligation to give, once the condition has been condition.
However, when the
fulfilled, shall retroact to the day of the constitution condition is not fulfilled,
of the obligation. Nevertheless, when the obligation rights are consolidated
imposes reciprocal prestations upon the parties, the and they become
fruits and interests during the pendency of the absolute in character.
condition shall be deemed to have been mutually
compensated. 2. AS TO CAUSE/ORIGIN
Rationale: Obligation is constituted when its essential a. POTESTATIVE – The fulfillment of the
elements concur. The condition imposed is only an condition depends on the sole act or decision of
accidental element. a party.
b. CASUAL – The fulfilment of the condition
Applicability: This applies to consensual contracts only. depends upon chance or upon the will of a third
person. [Art. 1182, CC]
Exception: This does not apply to real contracts which c. MIXED – The fulfilment of the condition
can only be perfected by delivery. depends partly upon the will of a party to the
contract and partly upon chance and/or will of a
Effects of the Happening of Suspensive third person.
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 shall Creditor’s Will
deemed to have been determine the
mutually compensated a retroactive effect of the
matter of justice and condition that has been

Page 228 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Exclusively Condition and obligation are void of the improvement, loss or deterioration of the
upon the because to allow such condition thing during the pendency of the condition [Art. 1189, CC]:
Debtor’s Will would be equivalent to a. If the thing is lost without the fault of the
in case of a sanctioning obligations which are debtor, the obligation shall be extinguished;
Suspensive illusory. It also constitutes a direct b. If the thing is lost through the fault of the
Condition contravention of the principle of debtor, he shall be obliged to pay damages; it is
[Art. 1182, CC] mutuality of contracts. understood that the thing is lost when it perishes,
or goes out of commerce, or disappears in such a
Exclusively way that its existence is unknown or it cannot be
upon the Condition and obligation are recovered;
Debtor’s Will valid because in such situation, c. When the thing deteriorates without the fault
in case of a the position of the debtor is of the debtor, the impairment is to be borne by
Resolutory exactly the same as the position of the creditor;
Condition the creditor when the condition is d. If it deteriorates through the fault of the
[par. 2, Art. suspensive. debtor, the creditor may choose between the
1179, CC] rescission of the obligation and its fulfillment,
with indemnity for damages in either case;
The condition that payment should be made by e. If the thing is improved by its nature, or by time,
Hermosa as soon as he receives funds from the sale the improvement shall inure to the benefit of the
of his property in Spain is a mixed condition. The creditor;
condition implies that the obligor already f. If it is improved at the expense of the debtor,
decided to sell the house and all that was needed he shall have no other right than that granted to
to make the obligation demandable is that the the usufructuary.
sale be consummated and the price thereof
remitted to the islands. There were still other Re: Obligations To Do and Not To Do
conditions that had to concur to effect the sale, mainly
Par. 3, Art. 1190, CC. As for the obligations to do
that of the presence of a buyer, ready, able and willing
and not to do, the provisions of the second
to purchase the property under the conditions set by
paragraph of article 1187 shall be observed as
the intestate. [Hermosa vs. Longara, G.R. No. L-5267
regards the effect of the extinguishment of the
(1953)]
obligation.
Loss, Deterioration, or Improvement of a Specific
Thing before Fulfillment of Suspensive Without Debtor’s With Debtor’s
Condition in Obligations to Give (Art. 1189) or of Fault/Act Fault/Act
Resolutory Condition in Obligations to Do or Loss
Not to Do [par. 2, Art. 1190, CC] Obligation is converted
Obligation is
A thing is deemed lost: into one of indemnity for
extinguished.
a. When it perishes; damages.
b. When it goes out of commerce Deterioration
Loss of a of man; or Creditor may choose
Thing c. When it disappears in such a between bringing an
manner that its existence is action for rescission of
unknown or it cannot be Impairment to be borne the obligation OR
recovered by the creditor. bringing an action for
Any reduction or impairment in specific performance,
Deterioration with damages in either
the substance or value of a thing
of a Thing case.
which does not amount to a loss
Anything added to, incorporated Improvement
Improvement
in, or attached to the thing that is Improvement at the Improvement by the
of a Thing
due. debtor’s expense, the thing’s nature or by time
debtor shall ONLY shall inure to the benefit
Re: Obligation to Deliver a Determinate Thing have usufructuary rights. of the creditor.
When the conditions have been imposed with the
intention of suspending the efficacy of an obligation Upon the happening of the resolutory condition, the
to give, the following rules shall be observed in case rules of Article 1189 shall be applied to the party who

Page 229 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

is bound to return (i.e. the creditor in the original A fortuitous event does not interrupt the running of
obligation). the period. It only relieves the contracting parties
from the fulfillment of their respective obligations
b. Impossible Conditions during the period. [Victoria’s Planters v. Victoria Milling
Co., G.R. No. L-6648 ]
1. Impossible conditions, those contrary to good
customs or public policy, and those prohibited by Term/Period and Condition Distinguished
law shall annul the obligation which depends Term/Period Condition
upon them. Interval of time which is Fact or event which is
2. The part of a divisible obligation which is not future and certain future and uncertain
affected by such condition shall be valid. [Art. Must necessarily come,
1183, CC] although it may not be May or may not happen
known when
c. Positive and Negative No effect on existence of Gives rise to an
the obligation, only its obligation or
Conditions demandability or extinguishes one already
performance existing
Positive [Art. 1184, Negative [Art. No retroactive effect
CC] 1185,CC] unless there is an
Has retroactive effect
The condition that some agreement to the
The condition that some
event will not happen at contrary
event happen at a
a determinate time shall When it is left
determinate time shall When it is left exclusively
render the obligation exclusively to the will of
extinguish the obligation to the will of the debtor,
effective from the the debtor, the very
1. as soon as the time the existence of the
moment existence of the
expires or obligation is not affected
1. the time indicated has obligation is affected
2. if it has become
elapsed, or
indubitable that the
2. if it has become
event will not take Kinds of Period [Art 1193]
evident that the event
place. a. Ex die – period with a suspensive effect.
cannot occur.
Obligation becomes demandable after the lapse
of the period.
Where no date of fulfilment is stipulated, the b. In diem – period with a resolutory effect.
condition must be fulfilled within a reasonable time Obligation becomes demandable at once but is
or the time probably contemplated according to the extinguished after the lapse of the period.
nature of the obligation [par. 2, Art. 1185, CC].
Effect of Advance Payment or Delivery
3. Obligations with a Period or Art. 1195, CC. Anything paid or delivered before the
arrival of the period, the obligor being unaware of
Term the period or believing that the obligation has
become due and demandable, may be recovered,
a. Obligations for whose fulfillment a day certain with the fruits and interests.
has been fixed ⎯ shall be demandable only when
that day comes. [Art. 1193, CC] Loss, Deterioration, or Improvement of the
b. Obligations with a resolutory period⎯ take effect Thing Before Period Expires
at once, but terminate upon arrival of the day Art. 1194, CC. In case of loss, deterioration or
certain. [Art. 1193, CC] improvement of the thing before the arrival of the
c. When the debtor binds himself to pay when his day certain, the rules in Article 1189 shall be
means permit him to do so, the obligation shall observed.
be deemed to be one with a period [Art. 1180,
CC] Benefit of the Period
Art. 1196, CC. Whenever in an obligation a period
Period or Term
is designated, it is presumed to have been established
Interval of time, which either suspends demandability
for the benefit of both the creditor and the debtor,
or produces extinguishment.
unless from the tenor of the same or other

Page 230 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

circumstances it should appear that the period has a. obligation does not fix a period, but from its
been established in favor of one or of the other. nature and circumstances, it can be inferred
that a period was intended
Period for the benefit of either creditor or debtor b. the period is void, such as when it depends upon
Creditor Debtor the will of the debtor
c. If the debtor binds himself when his means
Debtor may oppose any permit him to do so.
Creditor may demand
premature demand on
the fulfillment or
the part of the obligee Note: In every case, the courts shall determine such
performance of the
for the performance of period as may under the circumstances have been
obligation at any time
the obligation, or if he so probably contemplated by the parties.
but the obligor cannot
desires, he may renounce
compel him to accept
the benefit of the period Once fixed by the courts, the period cannot be
payment before the
by performing his changed by them. [Art. 1197, CC]
expiration of the period.
obligation in advance.
Exception: Art. 1197, CC does not apply to contract of
If the period is for the benefit of the debtor alone, services and to pure obligations. [Tolentino]
he shall lose every right to make use of it
a. When after the obligation has been The only action that can be maintained by the
contracted, he becomes insolvent, unless he gives creditor under Art. 1197, CC is the action to ask
a guaranty or security for the debt; the courts to fix the term within which the debtor
b. When he does not furnish to the creditor the must comply with his obligation. Art. 1197, CC
guaranties or securities which he has promised; applies to a situation in which the parties
c. When by his own acts he has impaired said intended a period. [Where] no period was intended
guaranties or securities after their by the parties… their mere failure to fix the duration
establishment, and when through a fortuitous of their agreement does not necessarily justify or
event they disappear, unless he immediately gives authorize the courts to do so. … When a change in
new ones equally satisfactory; the condition occurs, the agreement may be
d. When the debtor violates any undertaking, in deemed terminated. [Macasaet v Macasaet, G.R. Nos.
consideration of which the creditor agreed to the 154391-92 (2004)]
period;
e. When the debtor attempts to abscond [Art.
1198, CC]
4. Alternative or Facultative
f. When required by law or stipulation; Obligations
g. If parties stipulated an acceleration clause
[Tolentino] Alternative and Facultative Conditions
Distinguished
The obligation immediately becomes due and Alternative Facultative
demandable even if the period has not yet expired. Obligations Obligations
The obligation becomes a pure one. [Tolentino] Of the two or more
prestations, only one is
When Courts May Fix Period Of the two or more
due, while the other/s
General Rule: Courts may fix the period of an prestations, several are
may be performed in
obligation when: due.
substitution of the one
a. the obligation does not fix a period but from its due.
nature and the circumstances it can be inferred
May be complied with by
that a period was intended; May be complied with by
performance of another
b. the obligation depends upon the will of the performance of one of
prestation in
debtor. the prestations which are
substitution of that
alternatively due.
which is due.
Exceptions: If the Court determines that one of the 3
circumstances [below] are present, it must decide the Choice of prestation may
Choice of prestation
period “probably contemplated by the parties” pertain to debtor,
pertains only to the
[Araneta v. Phil. Sugar Estates, G.R. No. L-22558 creditor, or third
debtor.
(1967)] person.

Page 231 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Loss/impossibility of all Loss/impossibility of The only possible exception is when the debtor has
prestations due to a the prestation due to a chosen a prestation which could not have been the
fortuitous event shall fortuitous event is object of the obligation; the creditor’s consent would
extinguish the sufficient to extinguish bring about a novation of the obligation [Ibid.]
obligation. the obligation.
Consent in obligations with various debtors and
Loss/impossibility of creditors
Loss/impossibility of the substitute/s does In a joint obligation w/ various debtors and creditors,
one of the prestations not extinguish the the consent of all is necessary to make the selection
does not extinguish the obligation, provided the effective. If the obligation is solidary, and there is no
obligation. obligation which is due stipulation to the contrary, the choice by one will be
subsists binding personally upon him but not as to the others
Culpable loss of the [Tolentino].
Culpable loss of any of object which the debtor
the objects alternatively may deliver in Debtor cannot make a choice, or delays selection
due before the choice is substitution before the If through the creditor's acts the debtor cannot make
made may give rise to substitution is effected a choice according to the terms of the obligation, the
liability on the part of does not give rise to latter may rescind the contract with damages.
the debtor. any liability on the part [Art 1203, CC]
of the debtor.
If the debtor does not select at the time when
performance should be effected, the choice can
a. Alternative Obligations: be made for him by the creditor by applying Art.
1167
Definition In obligations to do (debtor considered to have
Several prestations are due but the performance of waived his right, subject to equity considerations)
one is sufficient. [de Leon] [Tolentino].
Right of Choice [Art. 1200, CC] Effect of notice of choice
Belongs to the debtor, UNLESS— The effect of the notice is to limit the obligation
1. it is expressly granted to the creditor to the object or prestation selected. The obligation
2. it is expressly granted to a third person is converted into a simple obligation to perform the
prestation chosen. Once a selection has been
Limitations to the right of choice [Tolentino] communicated, it is irrevocable [Ibid.]
1. indivisible (cannot choose part of one prestation
and part of another; See par. 2, Art. 1199, CC) Instances when obligation is converted into a
2. impossible prestations simple obligation
3. unlawful prestations 1. The person with the right of choice has
4. those which could not have been the object of communicated his choice [Arts. 1201 and par. 1,
the obligation 1205, CC]
2. Only one prestation is practicable [Art. 1202, CC]
When choice shall produce effect
Choice shall produce no effect except from the time
it has been communicated. [Art. 1201, CC]

Form of notice
Notice of selection or choice may be in any form
provided it is sufficient to make the other party know
that the selection has been made. It can be:
1. oral
2. in writing
3. tacit
4. any other equivocal means [Tolentino]

Consent of other party

The law does not require the other party to consent
to the choice made by the party entitled to choose.

Page 232 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
Loss of Specific Things or Impossibility of
Performance of Prestations in an Alternative
Obligation
If Debtor’s Choice [Art. 1204, CC]
Fortuitous Event Debtor’s Fault
All prestations lost/imposible
Creditor shall have a
right to indemnity for
damages based on the
value of the last thing
Debtor is released from which disappeared or
the obligation. service which become
impossible, plus
damages other than the
value may also be
awarded
Some prestations lost/imposible
Debtor to perform that
Debtor to perform that
which the debtor shall
which he shall choose
choose from among the
from among the
remainder, without
remainder.
liability for damages.
One prestation remains
Debtor to perform that Debtor to perform that
which remains. which remains.
If Creditor’s Choice [Art. 1205, CC]
Fortuitous Event Debtor’s Fault
All prestations lost/impossible
Creditor may claim the
Debtor is released from price/value of any of
the obligation. them, with indemnity
for damages.
Some prestations lost/imposible
Creditor may claim any
of those subsisting
Debtor to deliver that
without a right to
which he shall choose
damages OR
from among the
price/value of the thing
remainder.
lost, with right to
damages.
One prestation remains
Creditor may claim the
remaining thing without
Debtor to perform that a right to damages OR
which remains. the price/value of the
thing lost with right to
damages.
Page 233 of 511
CIVIL LAW
b. Facultative Obligations
Definition
Only one prestation is agreed upon, but the obligor
may render another in substitution. [Art. 1206, CC]
Loss or deterioration of Substitute in Facultative
Obligations [Art. 1206, CC]
Before Substitution is After Substitution is
Made Made
If due to bad faith or The loss or deterioration
fraud of obligor: obligor of the substitute on
is liable. account of the obligor’s
delay, negligence, or
fraud, renders the
obligor liable because
once the substitution is
If due to the negligence made, the obligation is
of the obligor: obligor is converted into a simple
not liable. one with the substituted
thing as the object of the
obligation.
5. Divisible and Indivisible
Obligations
Divisible Obligations
Susceptible of partial performance, that is, the debtor
can legally perform the obligation by parts and the
creditor cannot demand a single performance of the
entire obligation [Tolentino]
Indivisible Obligations
Cannot be validly performed in parts [Tolentino]
Rules
a. Divisibility/indivisibility refers to the
performance of the prestation and not to the
thing which is the object thereof. The thing
may be divisible, yet the obligation may be
indivisible.
b. When the obligation has for its object the
execution of a certain number of days of
work, the accomplishment of work by
metrical units, or analogous things which by
their nature are susceptible of partial
performance, it shall be divisible [Art.1225, par.
2, CC].
c. Even though the object or service may be
physically divisible, an obligation is indivisible if
so provided by law or intended by the parties.
d. In obligations not to do, divisibility or
indivisibility shall be determined by the
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
character of the prestation in each particular
case.
e. A joint indivisible obligation gives rise to
indemnity for damages from the time any one
of the debtors does not comply with his
undertaking [Art. 1224, CC].
Effect
Creditor cannot be compelled to receive partially the
prestation in which the obligation consists; neither
may the debtor be required to make the partial
payment [Art. 1248, CC], UNLESS:
a. The obligation expressly stipulates the contrary.
b. The different prestations constituting the objects
of the obligation are subject to different terms
and conditions.
c. The obligation is in part liquidated and in part
unliquidated.
Cessation of Indivisibility
a. By conversion of the obligation into an
obligation to pay damages
b. By novation of the obligation
c. By death of creditor or the debtor (division
among heirs of the deceased)
6. Obligations with a Penal
Clause
Penal Clause
An accessory undertaking to assume greater liability
in case of breach. It is generally a sum of money, but
it can be any other thing like an act or abstention.
[Tolentino]
If the principal obligation is void, the penal clause
shall also be void. However, the nullity of the penal
clause does not carry with it the nullity of the principal
obligation [Art.1230, CC].
Purposes of Penalty
a. Funcion coercitiva de garantia - to insure the
performance of the obligation.
b. Funcion liquidatoria - to liquidate the amount
of damages to be awarded to the injured party in
case of breach of the principal obligation
(compensatory).
c. Funcion restrictamente penal - to punish the
obligor in case of breach of the principal
obligation (punitive).
Rules on Penalty
a. The penalty shall substitute the indemnity for
damages and payment of interest in case of non-
compliance [Art. 1226, CC], unless:
Page 234 of 511
CIVIL LAW
1. There is an express provision to that effect
2. The obligor refuses to pay the penalty
3. The obligor is guilty of fraud in non-
fulfillment
b. Debtor cannot exempt himself from the
performance of the principal obligation by paying
the stipulated penalty unless this right has been
expressly reserved for him [Art. 1227, CC].
c. Creditor cannot demand the fulfillment of the
principal obligation and demanding the
satisfaction of the penalty at the same time
unless the right has been clearly granted to him
[Art. 1227, CC]. A tacit or implied grant is
admissible.
1. If the creditor chooses to demand the
satisfaction of the penalty, he cannot
afterwards demand the fulfillment of the
obligation.
2. If there was fault on the part of the
debtor, creditor may demand not only the
satisfaction of the penalty but also the
payment of damages.
3. If the creditor has chosen to demand the
fulfillment of the principal obligation
and the performance thereof becomes
impossible without his fault, he may still
demand the satisfaction of the penalty.
Enforcement of the Penalty
The enforcement of the penalty can be demanded by
the creditor only when the non-performance is due to
the fault or fraud of the debtor. However, the creditor
does not have to prove fault or fraud, since the non-
performance gives rise to the presumption of fault.
[Tolentino]
Proof of Actual Damage
Proof of actual damage suffered by the creditor is not
necessary in order that the penalty may be enforced
[Art. 1228, CC]
When Penalty may be Reduced [Art. 1229, CC]:
a. If the principal obligation has been partly
complied with.
b. If the principal obligation has been irregularly
complied with.
c. If the penalty is iniquitous or unconscionable,
even if there has been no performance.
The question of whether a penalty is reasonable
or iniquitous can be partly subjective and partly
objective. Its resolution would depend on such
factors as, but not necessarily confined to, the type,
extent and purpose of the penalty, the nature of the
obligation, the mode of breach and its consequences,
the supervening realities, the standing and
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
relationship of the parties, and the like, the application
of which, by and large, is addressed to the sound
discretion of the court. [Ligutan v CA, G.R. No.
138677 (2002)]
7. Joint and Solidary
Obligations
a. Joint Obligations
The whole obligation, whether capable of division
into equal parts or not, is to be paid or performed by
several debtors (joint debtors) and/or demanded by
several creditors (joint creditors).
Each debtor is liable only for a proportionate part of
the debt, and each creditor is entitled only to a
proportionate part of the credit. [Tolentino]
Presumption of Joint Obligation
An obligation is presumed joint if there is a
concurrence of several creditors, or of several
debtors, or of several creditors and debtors in one and
the same obligation [Art. 1207, CC]
Exceptions:
1. When the obligation expressly states that there is
solidarity
2. When the law requires solidarity, i.e. quasi-delicts
[Art. 2194, CC], joint payees by mistake [Art.
2157, CC], acts under articles 19-22 if committed
by two or more persons acting jointly
3. When the nature of the obligation requires
solidarity
4. When a charge or condition imposed upon heirs
or legatees, and the testament expressly makes
the charge or condition in solidum
5. When the solidary responsibility is imputed by a
final judgment upon several defendants
Presumption of Divisibility in Joint Obligations
Credit or debt shall be presumed to be divided into as
many equal shares as there are creditors or debtors,
the credits or debts being considered distinct from
one another. [Art.1208, CC]
JOINT DIVISIBLE OBLIGATION
One where a concurrence of several creditors, or of
several debtors, or of several creditors and debtors, by
virtue of which, each of the creditors has a right to
demand, and each of the debtors is bound to render
compliance with his proportionate part of the
prestation which constitute the object of the
obligation.
Page 235 of 511
CIVIL LAW
JOINT INDIVISIBLE OBLIGATION
Art. 1209, CC. If the division is impossible, the
right of the creditors may be prejudiced only by
their collective acts, and the debt can be enforced
only by proceeding against all the debtors. If one
of the latter should be insolvent, the others shall
not be liable for his share.
When there are several debtors or creditors, but the
prestation is indivisible, the obligation is joint, unless
solidarity has been stipulated [Tolentino]
When Indivisible [Art. 1225, CC]
1. Obligations to give definite things
2. Obligations not susceptible of partial
performance
3. Indivisibility is provided by law or intended by
the parties, even though the object or service may
be physically divisible
4. In obligations not to do, when character of
prestation requires indivisibility
Plurality of Creditors in Joint Indivisible
If one or some of the creditors demands the
prestation, the debtor may legally refuse to deliver to
them. He can insist that all the creditors together
receive the thing, and if any of them refuses to join
the others, the debtor may deposit the thing in court
by way of consignation. [Tolentino]
Plurality of Debtors in Joint Indivisible
The obligation can be performed by them only by
acting together. Hence all must be sued. If any of the
debtors are not willing to perform, the prestation is
converted into an indemnification for damages.
[Tolentino]
Failure of one debtor to perform in a joint
indivisible obligation gives rise to indemnity for
damages
Art. 1224, CC. A joint indivisible obligation gives
rise to indemnity for damages from the time anyone
of the debtors does not comply with his undertaking.
The debtors who may have been ready to fulfill their
promises shall not contribute to the indemnity
beyond the corresponding portion of the price of the
thing or of the value of the service in which the
obligation consists.
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Summary: in case of breach debtor is bound to pay is not bound to pay

Joint Divisible Joint Indivisible the entire prestation more than his share
Obligations Obligations Effect of breach:
In case of breach where Effect of breach: Obligation is
one of the joint debtors Solidarity remains converted to
fails to comply with his indemnity for damages
undertaking, the All debtors are liable for Only the debtors guilty
obligation can no longer breach committed by a of breach of obligation
In case of breach of
be fulfilled or co-debtor liable for damages
obligation by one of the
performed. Thus, the
debtors, damages due All debtors are Other debtors are not
action must be
must be borne by him proportionately liable for liable if one debtor is
converted into one for
alone. insolvency of one debtor insolvent
indemnity for damages,
with each debtor liable
only for his part in the KINDS OF SOLIDARY OBLIGATIONS
price or value of the
prestation. As to Source
1. Legal – imposed by law
Joint Indivisible Obligations and Prescription 2. Conventional – agreed upon by parties
The act of one creditor alone is ineffective to interrupt 3. Real – imposed by the nature of the obligation
prescription since the indivisible character of the
obligation requires collective action of the creditors. As to Parties Bound
[Tolentino] 1. Active (solidarity among creditors) – Each
creditor has the authority to claim and enforce
the rights of all, with the resulting obligation of
b. Solidary Obligations paying everyone what belongs to him.
2. Passive (solidarity among debtors) – Each
An obligation where there is concurrence of several debtor can be made to answer for the others, with
creditors, or of several debtors, or of several creditors the right on the part of the debtor-payor to
and several debtors, by virtue of which, each of the recover from the others their respective shares.
creditors has the right to demand, and each of the 3. Mixed (solidarity among creditors and debtors)
debtors is bound to render, entire compliance with – The creditor can commence an action against
the prestation which constitutes the object of the anyone of the debtors for the compliance with
obligation. the entire obligation minus the portion or share
which corresponds to the debtor affected by the
The indivisibility of an obligation does not necessarily condition or period. [Art. 1211, CC]
give rise to solidarity. Nor does solidarity of itself
imply indivisibility. [Art. 1210, CC] As to Uniformity
1. Uniform – Parties are bound by the same
Solidarity may exist although the creditors and the conditions or terms
debtors may not be bound in the same manner and by 2. Non-uniform – Parties are bound by different
the same periods and conditions. [Art. 1211, CC] conditions or terms

Solidarity Indivisibility Active Solidary Obligation (among creditors)

Refers to the legal tie Art. 1214, CC. The debtor may pay any one of the
Refers to the
(vinculum juris), and solidary creditors; but if any demand, judicial or
prestation that is not
consequently to the extrajudicial, has been made by one of them,
capable of partial
subjects or parties of the payment should be made to him.
performance
obligation
More than one creditor Exists even if there is
or more than one debtor only one creditor
(plurality of subjects) and/or one debtor
Each creditor may Each creditor cannot
demand the entire demand more than his
prestation and each share and each debtor

Page 236 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
Effects of Active Solidarity [Tolentino]
1. Death of solidary creditor does not transmit
solidarity to his heirs but rather to all of them
taken together (joint)
2. Each represents the other in receiving payment
and all other advantageous acts (i.e. interrupt
prescription and render the debtor in default for
the benefit of all creditors)
3. Each one of the solidary creditors may do
whatever may be useful to the others, but not
anything which may be prejudicial to the latter.
[Art. 1212, CC]
4. One creditor does NOT represent all others in
acts such as novation (even if advantageous),
compensation and remission. In this case, even if
the debtor is released, the other creditors can still
enforce their rights against the creditor who
made the novation, compensation or remission
[par. 2, Art. 1215, CC]
5. The creditor who collects the debt, shall be liable
to the others for the share in the obligation
corresponding to them. [par. 2, Art. 1215, CC]
6. The credit and its benefits is divided equally
among them, unless agreement to the contrary.
7. Debtor may pay any one of the solidary creditors;
but if any demand, judicial or extrajudicial, has
been made by one of them, payment should be
made to him who demanded [Art. 1214, CC]
A solidary creditor cannot assign his rights without
the consent of the others [Art. 1213, CC]. Such an
assignment produces no effect whatsoever
PASSIVE SOLIDARY OBLIGATION
General Rules:
1. The creditor may proceed against any one of the
solidary debtors or some or all of them
simultaneously...so long as the debt has not been
fully collected [Art. 1216, CC]
2. Payment made by one of the solidary debtors
extinguishes the obligation. If two or more
solidary debtors offer to pay, the creditor may
choose which offer to accept. [Art. 1217, CC]
3. A solidary debtor may, in actions filed by the
creditor, avail himself of all defenses which are
derived from the nature of the obligation and of
those which are personal to him, or pertain to his
own share. For defenses which personally belong
to the others, such debtor may avail himself
thereof only as regards that part of the debt for
which the latter are responsible. [Art. 1222, CC]
Page 237 of 511
CIVIL LAW
Effects of Passive Solidarity [Tolentino]
1. Each debtor can be required to pay the entire
obligation, but after payment he can recover
from the co-debtors their respective shares
2. Each debtor may set up his own claims against
the creditor as payment of the obligation
3. Remission of the entire debt affects all debtors,
but when remission is limited to the share of one
debtor, the other debtors are still liable for the
balance of the obligation
a. The remission of the whole obligation,
obtained by one of the solidary debtors, does
not entitle him to reimbursement from his
co-debtors. [Art. 1220, CC]
b. The remission made by the creditor of the
share which affects one of the solidary
debtors does not release the latter from his
responsibility towards the co-debtors, in case
the debt had been totally paid by anyone of
them before the remission was effected. [Art.
1219, CC]
4. All debtors are liable for the loss of the thing due,
even if only one of them is at fault, or after
incurring delay it is lost by fortuitous event
5. Interruption of prescription as to one debtor
affects all others, but renunciation of prescription
already had does not prejudice the others.
(Reason: prescription extinguishes the mutual
representation among solidary debtors)
6. Interests due by delay of one is borne by all of
them
DEFENSES AVAILABLE TO A SOLIDARY
DEBTOR [Art. 1222, CC]
1. Those derived from the nature of the
obligation
Defenses inherent in an obligation include non-
existence of the obligation because of absolute
simulation or illicit object, nullity due to defect in
capacity or consent of all debtors,
unenforceability, non-performance of
suspension condition or non-arrival of period,
extinguishment of the obligation, res judicata,
and prescription.
2. Those personal to him
Personal defenses such as minority, insanity,
fraud, violence, or intimidation will serve as a
complete exemption of the defendant debtor
from liability to the creditor
3. Those pertaining to his own share
4. Those personally belonging to other co-
debtors but only as regards that part of the
debt for which the latter are responsible.
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Through a
Comparing demand upon Solidary Debtor and All debtors shall be responsible to the
fortuitous
Payment by a Solidary Debtor creditor, for the price and the
event after
Demand Upon a Payment by a Solidary payment of damages and interest,
one
Solidary Debtor Debtor without prejudice to their action
incurred in
against the guilty or negligent debtor.
The demand made delay
against one of them shall
not be an obstacle to Full payment made by
those which may one of the solidary D. Extinguishment of
subsequently be directed debtors extinguishes the
against the others so obligation [Art. 1217,
Obligations
long as the debt has not CC].
been fully collected [Art. MODES OF EXTINGUISHING
1216, CC]. OBLIGATIONS
The creditor may If two or more solidary Art. 1231, CC. Obligations are extinguished:
proceed against any one debtors offer to pay, the 1. By payment or performance;
of the solidary debtors or creditor may choose 2. By the loss of the thing due;
all simultaneously [Art. which offer to accept 3. By the condonation or remission of the
1216, CC]. [Art. 1217, CC]. debt;
4. By the confusion or merger of the rights of
The solidary debtor who creditor and debtor;
made the payment shall 5. By compensation;
A creditor’s right to
have the right to claim 6. By novation.
proceed against the
from his co-debtors the
surety exists
share which corresponds Other causes of extinguishment of obligations,
independently of his
to them with interest, such as annulment, rescission, fulfillment of a
right to proceed against
UNLESS barred by resolutory condition, and prescription, are
the principal
prescription or illegality governed elsewhere in this Code.
[Art. 1218, CC].

Art. 1217, CC recognizes the right of reimbursement 1. Payment or Performance

from a co-debtor in favor of the one who paid (i.e.,
the surety). [Diamond Builders v. Country Bankers, G.R. PAYMENT
No. 171820 (2007)] 1. The delivery of money OR
2. The performance of an obligation [Art.1232, CC]
In contrast, Art 1218 is definitive on when
reimbursement is unavailing, such that only those OBJECT OF PAYMENT
payments made after the obligation has prescribed or
has become illegal shall not entitle a solidary debtor
1. Integrity of Prestation
to reimbursement.
General Rule: A debt is understood to have been paid
Loss of the thing or impossibility of performance
when the thing or service in which the obligation
of the passive/mixed solidary obligation [Art.
consists has been completely delivered or rendered
1221, CC] [Art. 1233, CC]
Without
fault of the The obligation shall be extinguished. 2. Identity of Prestation
debtors
For obligations to give: The debtor of a thing cannot
All debtors shall be responsible to the
With fault compel the creditor to receive a different one,
creditor, for the price and the
of any of although the latter may be of the same value as, or
payment of damages and interest,
the more valuable than that which is due. [Art. 1244, CC]
without prejudice to their action
debtors
against the guilty or negligent debtor.
For obligations to do or not to do: an act or
forbearance cannot be substituted by another act or
forbearance against the obligee's will. [Art. 1244, CC]

Page 238 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
Exceptions to Art. 1244, CC:
a. If the obligation is facultative [Art. 1206, CC]
b. If the creditor agrees (Dation in payment) [Art.
1245, CC]
c. Substantial Performance by Debtor (Creditor
only has a right to damages) [Art 1234, CC]
If the obligation has been substantially
performed in good faith, the obligor may recover
as though there had been a strict and complete
fulfillment, less damages suffered by the obligee.
d. When the obligee accepts the performance,
knowing its incompleteness or irregularity, and
without expressing any protest or objection, the
obligation is deemed fully complied with. [Art.
1235, CC]
Necessity of Complete Performance
Art. 1248, CC. Unless there is an express stipulation
to that effect, the creditor cannot be compelled
partially to receive the prestations in which the
obligation consists. Neither may the debtor be
required to make partial payments.
However, when the debt is in part liquidated and in
part unliquidated, the creditor may demand and the
debtor may effect the payment of the former
without waiting for the liquidation of the latter.
BY WHOM
Payor must have free disposal of the thing due and
capacity to alienate it. [Art. 1239, CC]
Free disposal of the thing due means that the thing to
be delivered must not be subject to any claim or lien
or encumbrance of a third person.
Capacity to alienate means that the person is not
incapacitated to enter into contracts [Arts. 1327, 1329,
CC] and for that matter, to make a disposition of the
thing due. [de Leon]
1. The debtor or his duly authorized agent
2. The debtor’s heir or successor in interest
3. A third person interested in the fulfillment of the
obligation (i.e. co-debtor, guarantor) whether the
debtor consents to it or not, and even without
debtor’s knowledge [Art 1302, CC]. This includes
payment by a joint debtor [Monte de Piedad y Caja
de Ahorros de Manila v Rodrigo, G.R. No. L-42928
(1936]) but not a solidary co-debtor.
4. A third person not interested in the obligation;
but the creditor is not bound to accept payment
by him, unless there is a stipulation to the
contrary [Art 1236, CC].
Page 239 of 511
CIVIL LAW
Payment by a third person
General Rule: The creditor is not bound to accept
payment or performance by a third person who has
no interest in the fulfillment of the obligation [Art.
1236, CC]
Exception: Stipulation to the contrary [Art. 1236, NCC]
Note:
• Someone who pays for the debtor may demand
from the debtor what he has paid, EXCEPT, if
he paid without the knowledge or against the will
of the debtor, he can recover only insofar as the
payment has been beneficial to the debtor [Art.
1236, CC].
• Whoever pays on behalf of the debtor without
the knowledge or against the will of the latter,
cannot compel the creditor to subrogate him in
his rights, such as those arising from a mortgage,
guaranty, or penalty. [Art. 1237, CC]
Reimbursement & Subrogation Distinguished
Reimbursement Subrogation
Includes reimbursement,
but also the exercise of
Personal action to other rights attached to
recover amount paid the original obligation
(e.g. guaranties,
securities)
Art. 1238, CC. Payment made by a third person who
does not intend to be reimbursed by the debtor is
deemed to be a donation, which requires the debtor's
consent. But the payment is in any case valid as to
the creditor who has accepted it.
TO WHOM
1. The person in whose favor the obligation has
been constituted; or
2. His successor in interest; or
3. Any person authorized to receive it [Art. 1240,
CC]
Payment to a person who is incapacitated to
administer his property shall be valid:
• if he has kept the thing delivered, OR
• insofar as the payment has been beneficial to him.
[Art. 1241 par 1, CC]
Payment made in good faith to any person in
possession of the credit shall release the debtor. [Art.
1242, CC]
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
Examples of Art. 1242:
1. An heir who collects credits for an hereditary
estate but is later incapacitated to inherit;
2. An assignee of a credit who collects, but the
assignment is later revoked or annulled.
[Tolentino]
Payment made to the creditor by the debtor after the
latter has been judicially ordered to retain the debt
shall not be valid. [Art. 1243, CC]
Payment to a third person [par. 2, Art. 1241, CC]
Payment made to a third person shall also be valid
insofar as it has redounded to the benefit of the
creditor.
General Rule: Proof that such payment has redounded
to the benefit of the creditor is required.
Exceptions:
1. If after the payment, the third person acquires the
creditor's rights (SUBROGATION);
2. If the creditor ratifies the payment to the third
person (RATIFICATION);
3. If by the creditor's conduct, the debtor has been
led to believe that the third person had authority
to receive the payment (ESTOPPEL). [Art. 1241,
CC]
PLACE OF PAYMENT
1. In the place designated in the obligation.
2. In the absence of stipulation—
a. If obligation is to deliver a determinate thing:
wherever the thing might be at the moment
the obligation was constituted.
b. In any other case: domicile of debtor [Art.
1251]
TIME OF PAYMENT
Upon demand, EXCEPT-
1. When time is of the essence
2. When the debtor loses the benefit of the period
3. When the obligation is reciprocal
FORM OF PAYMENT
Art. 1249, CC. The payment of debts in money shall
be made in the currency stipulated, and if it is not
possible to deliver such currency, then in the
currency which is legal tender in the Philippines.
The delivery of promissory notes payable to order,
or bills of exchange or other mercantile documents
shall produce the effect of payment only when they
have been cashed, or when through the fault of the
creditor they have been impaired.
Page 240 of 511
CIVIL LAW
In the meantime, the action derived from the
original obligation shall be held in the abeyance.
Legal Tender:
Such currency which in a given jurisdiction can be
used in the payment of debts, and which cannot be
refused by the creditor.
When payment not in legal tender is accepted by the
creditor:
1. Demandability of obligation is suspended
2. Produces the effect of payment when:
a. It is encashed; or
b. It was impaired due to creditor’s fault.
[Tolentino]
A check is not legal tender. Since obligations must be
paid in money that is legal tender, the payment by
check may be validly refused by the creditor, even if
such check may be good. [Tolentino]
Extraordinary inflation or deflation
Art. 1250, CC. In case an extraordinary inflation or
deflation of the currency stipulated should
supervene, the value of the currency at the time of
the establishment of the obligation shall be the basis
of payment, unless there is an agreement to the
contrary.
For extraordinary inflation (or deflation) to affect an
obligation, the following requisites must be proven:
1. an official declaration of extraordinary inflation
or deflation from the BSP
2. obligation was contractual in nature; and
3. parties expressly agreed to consider the effects of
the extraordinary inflation or deflation [Equitable
PCI Bank v Ng Sheung, G.R. No. 171545 (2007)]
Note: the 3rd requisite does not follow the scheme of
Art. 1250. CC
a. Application of Payments
Designation of the debt to which should be applied a
payment made by a debtor who owes several debts to
the same creditor.
Requisites:
1. There is a plurality of debts
2. Debts are of the same kind
3. Debts are owed to the same creditor and by the
same debtor
4. All debts must be due, UNLESS parties so
stipulate, or when application is made by the
party for whose benefit the term has been
constituted
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

5. Payment made is not sufficient to cover all debts

[Art. 1252, CC] b. Dation in Payment
Rules on Application of Payments Delivery and transmission of ownership of a thing by
1. Preferential right of debtor - debtor has the right the debtor to the creditor as an accepted equivalent of
to select which of his debts he is paying. the performance of the obligation (dacion en pago).
[Tolentino]
2. The debtor makes the designation at the time he Requisites:
makes the payment. 1. Existence of a money obligation
3. If not, the creditor makes the application, by so 2. Alienation to the creditor of a property by the
stating in the receipt that he issues, unless there debtor with the creditor’s consent
is cause for invalidating the contract. 3. Satisfaction of the money obligation
4. If neither the creditor nor debtor exercises the
right to apply, or if the application is not valid,
the application is made by operation of law. c. Payment by Cession
5. If debt produces interest, the payment is not to
be applied to the principal unless the interests are Special form of payment where the debtor
covered. assigns/abandons ALL his property for the benefit of
6. When no application can be inferred from the his creditors in order that from the proceeds thereof,
circumstances of payment, it is applied: (a) to the the latter may obtain payment of their credits.
most onerous debt of the debtor; or (b) if debts
due are of the same nature and burden, to all the Requisites:
debts in proportion. [Art. 1254, CC] 1. There is a plurality of debts
7. Rules of application of payment may not be 2. There is a plurality of creditors
invoked by a surety or solidary guarantor. 3. Partial or relative insolvency of debtor
4. Acceptance of the cession by the creditors [Art.
Exceptions: 1255, CC]
1. Rules on application of payment cannot be made
applicable to a person whose obligation as a mere Debtor is released only for the net proceeds unless
surety is both contingent and singular. There there is a stipulation to the contrary.
must be full and faithful compliance with the
terms of the contract. [Reparations Commission v. Cession and Dation Distinguished
Universal Deep Sea Fishing Corp,G.R. Nos. L-21901 Cession Dacion en pago
and L-21996 (1978)] Plurality of creditors One creditor
2. The debtor’s right to apply payment can be Debtor not necessarily in
waived and even granted to the creditor if the Debtor must be partially
state of financial
debtor so agrees [Premiere Development v Central or relatively insolvent
difficulty
Surety, G.R. No. 176246 (2009)]
Thing delivered is
Universality of property
Limitations: equivalent of
is ceded
1. Right of creditor to refuse partial payment [Art. performance
1248, CC] Extinguishes obligation
2. Rule on satisfaction of interest before the Merely releases debtor to the extent of the
Principal. [Art. 1453, CC] for the net proceeds of value of the thing
3. Debtor cannot apply payment to a debt which is things ceded or assigned, delivered, as agreed
not yet liquidated unless there is contrary upon, proved or implied
4. He cannot choose a debt with a period intention from the conduct of the
(established for the creditor’s benefit) before the creditor
period has arrived.
5. Stipulation as to preference of payment. Involves all properties of Does not involve all
[Tolentino] debtor properties of debtor
Creditor does not
become owner of the Creditor becomes owner
ceded property

Page 241 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
d. Tender of Payment and
Consignation
Tender of payment: Manifestation made by the
debtor to the creditor of his desire to comply with his
obligation, with offer of immediate performance.
1. Preparatory act to consignation
2. Extrajudicial in character
Tender of payment must be made in the lawful
currency. The tender of a check to pay for an
obligation is not a valid tender of payment thereof.
[Soco v Militante, G.R. No. L-58961, (1983)]
Consignation: Deposit of the object of obligation in
a competent court in accordance with the rules
prescribed by law whenever the creditor unjustly
refuses payment or because of some circumstances
which render direct payment to the creditor
impossible or inadvisable.
1. Principal act which constitutes a form of
payment
2. Judicial in character
Requisites of consignation
1. There is a debt due
2. Consignation is made because of some legal
cause
a. There was tender of payment and creditor
refuses without just cause to accept it
b. Instances when consignation alone would
suffice as provided under Art. 1256
3. Previous notice of consignation was given to
those persons interested in the performance of
the obligation. Previous notice is essential to the
validity of the consignation and its lack
invalidates the same. [Soco v Militante, G.R. No. L-
58961, (1983)]
4. Amount or thing due was placed at the disposal
of the court
5. After the consignation has been made, the
persons interested were notified thereof
When tender and refusal not required [Art. 1256,
CC]
1. Creditor is absent or unknown, or does not
appear at the place of payment.
2. Creditor is incapacitated to receive the thing due
at the time of payment.
3. Without just cause, creditor refuses to give
receipt.
4. Two or more persons claim the same right to
collect (i.e. Interpleader)
5. Title of the obligation has been lost.
Page 242 of 511
CIVIL LAW
Unless there is an unjust refusal by a creditor to
accept payment from a debtor, Article 1256
cannot apply. [Llobrera v. Fernandez, G.R. No. 142882
(2006)].
What constitutes valid consignation
In order that the consignation of the thing due may
release the obligor, it must first be announced to the
persons interested in the fulfilment of the obligation.
The consignation shall be ineffectual if it is not made
strictly in consonance with the provisions which
regulate payment. [Art. 1257, CC]
Mere sending of letters without accompanying
payment is not a valid tender of payment. When the
tender of payment is not accompanied by the means
of payment, interest is not suspended.
How consignation is made
Consignation shall be made by depositing the things
due at the disposal of judicial authority, before whom
the tender of payment shall be proved, in a proper
case, and the announcement of the consignation in
other cases.
The consignation having been made, the interested
parties shall also be notified thereof.
Who bears the expenses
The expenses of consignation, when properly made,
shall be charged against the creditor. [Art. 1259, CC]
Withdrawal of Consigned Amount
Before the creditor has accepted the consignation, or
before a judicial declaration that the consignation has
been properly made, the debtor may withdraw the
thing or the sum deposited, allowing the obligation to
remain in force [par. 2, Art. 1260, CC].
After the consignation has been declared as properly
made, he can only withdraw if the creditor consents
to the withdrawal. [Tolentino]
The amount consigned with the trial court can no
longer be withdrawn by the debtor because creditor’s
prayer in his answer that the amount consigned be
awarded to him is equivalent to an acceptance of the
consignation, which has the effect of extinguishing
debtor’s obligation [Pabugais v Sahijwani, G.R. No.
156846 (2004)].
Effects of Consignation
If accepted by the creditor or declared properly made
by the Court:
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
1. Debtor is released in same manner as if he had
performed the obligation at the time of
consignation
2. Accrual of interest is suspended from the
moment of consignation.
3. Deterioration or loss of the thing or amount
consigned, occurring without the fault of debtor,
must be borne by creditor from the moment of
deposit
Any increment or increase in the value of the thing
after consignation inures to the benefit of the creditor
In a “Contract To Sell”, tender and consignation is
necessary to bring into effect the suspensive
condition of payment which gives rise to the
obligation on the part of the SELLER to enter into a
contract of sale. Tender of payment alone is NOT
enough [Adelfa Properties v. CA, G.R. No. 111238
(1995)]. On the other hand, in an “Option Contract”,
tender of payment is enough to perfect the contract
of sale.
Consignation has a retroactive effect. (Tolentino)
Effects of Withdrawal by Debtor [Arts. 1260- 1261,
CC]
1. Before approval of the court - Obligation
remains in force.
2. After approval of the court or acceptance by the
creditor, with the consent of the latter -
Obligation remains in force, but guarantors and
co-debtors are liberated. Preference of the
creditor over the thing is lost.
3. After approval of the court or acceptance by the
creditor, and without creditor’s consent -
Obligation subsists, without change in the
liability of guarantors and co-debtors, or the
creditor’s right of preference.
4. If the creditor authorizes the debtor to withdraw,
third persons who were benefited by the
consignation are not prejudiced by the revival of
the obligation.
Page 243 of 511
CIVIL LAW
2. Loss of the Thing Due or
Impossibility or Difficulty of
Performance
a. Loss
1. Loss of Determinate Things
When Obligation Extinguished [Par. 1, Art. 1262
CC].
a. An obligation which consists in the delivery of a
determinate thing
b. Thing is lost or destroyed
c. Debtor is without fault
d. Delay not incurred
Effect: Obligation is extinguished
When Obligor is still liable for damages [Par. 2,
Art. 1262 CC].
a. Obligor is liable by law or a stipulation for
fortuitous events or the nature of the obligation
requires an assumption of risk
b. The thing is lost
Effect: Obligor is still liable for damages
Exceptions (When the Loss Does Not Extinguish):
a. When the obligation to deliver a determinate
object arises from a criminal act. [Art. 1268, CC]
b. Acceptance of payments in bad faith. [Art. 2159,
CC]
Exceptions to Fortuitous Events:
a. When fortuitous event not applicable:
1. Delay or promise to deliver thing to two or
more persons. [Art. 1165 (3), CC]
2. Nature of the Obligation Requires
Assumption of Risk [Art. 1174, CC]
3. Liability of a Bailee in fortuitous events.
[Art. 1942 , CC]
4. Liability of a depositary in fortuitous events.
[Art. 1979, CC]
5. Liability of the officious manager in
fortuitous events. [Art. 2147, CC]
3. Loss of Generic Things
Obligation is NOT Extinguished: In an obligation
to deliver a generic thing, the loss or destruction of
anything of the same kind does not extinguish the
obligation. [Art. 1263 , CC]
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

4. Partial Losses
Effects of Loss [Arts. 1262-1263, CC]
Upon the Determination of the Court: The courts Obligation to Deliver Obligation to Deliver a
shall determine whether, under the circumstances, a Specific Thing Generic Thing
the partial loss of the object of the obligation is so Loss of a generic thing
important as to extinguish the obligation. [Art. 1264, Obligation is
does not extinguish an
CC] extinguished if the thing
obligation, EXCEPT in
was destroyed without
case of delimited generic
5. Presumption of Fault fault of the debtor and
things, where the kind or
before he has incurred
class is limited itself, and
delay.
When Presumption Applies [Art. 1265, CC]: the whole class perishes.
a. Thing is lost while in the possession of the
debtor Rules to remember:
b. No proof of fortuitous event a. The genus never perishes; genus nunquam
perit. [Gaisano v. Insurance Company of North
Effect: It is presumed that loss was due to his fault. America, G.R. No. 147839 (2006)].
b. The article is applicable only to obligations
Exceptions [Art. 1265, CC]: "to do," and not to obligations "to give."
a. There is proof to the contrary [Philippine National Construction Corporation v. CA
b. In case of earthquake, flood, storm or other and Raymundo-Abarra, G.R. No. 116896 (1997)]
natural calamity.
In Reciprocal Obligations
Exception to the exception: Extinguishment of the obligation due to loss of the
Debtor is still liable for fortuitous event if he delays thing or impossibility of performance affects both the
or promised to deliver the same thing to two or more creditor and debtor; the entire juridical relation is
persons who do no have the same interest. [Par. 3, Art extinguished.
1165, CC]
b. Impossibility or Difficulty of
6. Loss in Obligations to Give With
Resolutory Conditions
Performance

When the conditions have been imposed with the 1. Impossibility

intention of suspending the efficacy of an
obligation to give, the following rules shall be
observed in case of the improvement, loss or
deterioration of the thing during the pendency of the
condition:
a. If the thing is lost without the fault of the
debtor, the obligation shall be extinguished;
b. If the thing is lost through the fault of the
debtor, he shall be obliged to pay damages; it is
understood that the thing is lost when it
perishes, or goes out of commerce, or
disappears in such a way that its existence is
unknown or it cannot be recovered; [Art.
1189, CC]
The debtor in obligations to do shall also be released
when the prestation becomes legally or physically
impossible without the fault of the obligor. [Art.
1266, CC]
Scope of Art. 1266
It is applicable only to obligations "to do," and not to
obligations "to give." [PNCC v. CA G.R. No. 1116896
May 5, 1997]
TYPES OF IMPOSSIBILITY
a. Physical and Legal
Physical Impossibility
There is physical impossibility when the act, by
reason of its nature, cannot be accomplished.
[Tolentino]

Legal Impossibility
There is legal impossibility when, the act, by
subsequent law, is prohibited. [Tolentino]

Page 244 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
b. Subjective and Objective
Objective Impossibility
There is objective impossibility when the act or
service in itself, without considering the person
of the obligor, becomes impossible. [Tolentino]
Subjective Impossibility
There is subjective impossibility when the act or
service cannot be done by the debtor himself, but
it can be accomplished by others. [Tolentino]
c. Partial Impossibility
The rule in Art. 1264 (Partial Loss) may be
applied. Thus the Courts shall determine whether
it is so important as to extinguish the obligation.
• If debtor has performed part of the
obligation when impossibility occurred,
creditor must pay the part done as long as he
benefits from it.
• If debtor received full payment from
creditor, he must return excess amount
corresponding to part which was impossible
to perform. [Tolentino]
2. Unforeseen Difficulty
When the service has become so difficult as to be
manifestly beyond the contemplation of all the
parties, the obligor may also be released therefrom,
in whole or in part. [Art. 1267, CC].
Requisites:
a. The event or change in circumstances could not
have been foreseen at the time of the execution
of the contract;
b. It makes the performance of the contract
extremely difficult but not impossible;
c. The event must not be due to the act of any of
the parties; and
d. The contract is for a future prestation
[Tagaytay Realty Co, Inc. v. Gacutan G.R. No.
160033, July 01, 2015]
Doctrine of Unforeseen Events
The parties to the contract must be presumed to have
assumed the risks of unfavorable developments. It is
therefore only in absolutely exceptional changes
of circumstances that equity demands assistance for
the debtor. [PNCC v. CA G.R. No. 1116896 May 5,
1997.]
Scope of Power of the Court
The cited article does not grant the courts this
authority to remake, modify or revise the contract
or to fix the division of shares between the parties
Page 245 of 511
CIVIL LAW
as contractually stipulated with the force of law
between the parties, so as to substitute its own terms
for those covenanted by the parties themselves.
[Occena v. Jabson G.R. No. L-44349 October 29,
1976]
Creditors’ rights
Art. 1269, CC. The obligation having been
extinguished by the loss of the thing, the creditor
shall have all the rights of action which the debtor
may have against third persons by reason of the loss.
Requisites:
a. Obligation is extinguished
b. Extinguishment is due to the loss of the thing
Effect: Creditor shall have all rights of action which
the debtor may have against third persons by reason
of the loss
3. Condonation
a. Definition and General Rule
Condonation or remission is essentially gratuitous,
and requires the acceptance by the obligor. It may
be made expressly or impliedly.
One and the other kinds shall be subject to the rules
which govern inofficious donations. Express
condonation shall, furthermore, comply with the
forms of donation. [Art. 1270, CC]
Requisites [Tolentino]:
1. Debt must be existing and demandable
2. Renunciation must be gratuitous
3. Debtor must accept the remission
Effect: The obligation is extinguished
Definition
Remisson is an act of liberality, by virtue of which,
without receiving any equivalent, the creditor
renounces the enforcement of the obligation. The
obligation is extinguished either in whole or in such
part of the same to which remission refers.
[Tolentino]
If Requisite of Gratuitous Renunciation not Met
If the renunciation is not gratuitous, the nature of the
act changes and it may be:
1. Dation in payment – when the creditor receives
a thing different from that stipulated;
2. Novation – when the object or principal
conditions of the obligation have changed;
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
3. Compromise – when the matter renounced is in
litigation or dispute and in exchange of some
concession which the creditor receives.
[Tolentino]
b. Kinds of Remission
1. As to Form
a. Express Condonation
• Made formally: in accordance with forms of
ordinary donations. [Art. 1270, CC]
• An express remission must be accepted in
order to be effective.
• When the debt refers to movable or personal
property, Art 748 will govern; if it refers to
immovable or real property, Art 749 applies.
b. Implied Condonation
• Inferred from the acts of the parties.
2. As to Extent
a. Total - extinguishes the entire obligation
b. Partial - refers to only a particular aspect of the
obligation, i.e. amount of indebtedness or an
accessory obligation. [Tolentino]
3. As to Manner
a. Inter vivos - effective during the lifetime of the
creditor
b. Mortis Causa - effective upon the death of the
creditor
c. Rules and Form
1. Express Remission
Art. 1270 (2), CC: One and the other kinds shall be
subject to the rules which govern inofficious
donations. Express condonation shall, furthermore,
comply with the forms of donation.
The law subjects express remission to the same
formalities as donations.
Express Remission of Movable or Personal
Property
• The donation of a movable may be made orally
or in writing.
• An oral donation requires the simultaneous
delivery of the thing or of the document
representing the right donated.
Page 246 of 511
CIVIL LAW
• If the value of the personal property donated
exceeds five thousand pesos, the donation and
the acceptance shall be made in writing.
Otherwise, the donation shall be void. [Art. 748,
CC]
Express Remission of Immovable or Real
Property
• In order that the donation of an immovable
may be valid, it must be made in a public
document, specifying therein the property
donated and the value of the charges which the
donee must satisfy.
• The acceptance may be made in the same deed
of donation or in a separate public document, but
it shall not take effect unless it is done during
the lifetime of the donor.
• If the acceptance is made in a separate
instrument, the donor shall be notified thereof in
an authentic form, and this step shall be noted in
both instruments. [Art. 749, CC]
2. Implied Remission
Presumptions of Condonation:
a. Whenever the private document in which the
debt is found is in the possession of the debtor,
it shall be presumed that the creditor delivered it
voluntarily, unless the contrary is proved. [Art.
1272, CC]
b. Delivery of a private document evidencing credit
made voluntarily by the creditor to the debtor
implies the renunciation of the action of creditor
against the latter. [Art. 1272, CC]
c. Accessory obligation of pledge has been remitted
when thing after its delivery is found in the
possession of the debtor or third person. [Art.
1274, CC]
The delivery of a private document evidencing a
credit, made voluntarily by the creditor to the debtor,
implies the renunciation of the action which the
former had against the latter.
If in order to nullify this waiver it should be claimed
to be inofficious, the debtor and his heirs may
uphold it by proving that the delivery of the
document was made in virtue of payment of the debt.
[Art. 1271, CC]
Application of Presumption:
The presumption created by the Art. 1271 of the Civil
Code is not conclusive but merely prima facie. If
there be no evidence to the contrary, the presumption
stands. Conversely, the presumption loses its legal
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
efficacy in the face of proof or evidence to the
contrary.
It may not be amiss to add that Article 1271 of the
Civil Code raises a presumption, not of payment,
but of the renunciation of the credit where more
convincing evidence would be required than what
normally would be called for to prove payment.
(Trans-Pacific v. CA G.R. No. 109172, August 19,
1994.)
Presumption Of Delivery
Whenever the private document in which the debt
appears is found in the possession of the debtor, it
shall be presumed that the creditor delivered it
voluntarily, unless the contrary is proved. [Art. 1272,
CC]
d. Principal and Accessory
Obligations
Renunciation of the principal debt shall extinguish the
accessory obligation; but the waiver of the latter shall
leave the former in force. [Art. 1273, CC]
e. Other Rules on Donation
Applicable to Remission
Condonation or remission is essentially a donation of
the credit to the debtor. It is a bilateral act which
requires acceptance by the debtor. It is therefore
subject to the rule on donations with respect to
acceptance, amount and revocation; where donor
refers to the creditor, and donee to the debtor, and
donation to the remission. [Tolentino]
Provisions on Acceptance
1. The donee must accept the donation personally,
or through an authorized person with a special
power for the purpose, or with a general and
sufficient power; otherwise, the donation shall be
void. [Art. 745, CC]
2. Acceptance must be made during the lifetime of
the donor and of the donee. [Art. 746, CC]
Provisions on Amount
1. The donation may comprehend all the present
property of the donor, or part thereof, provided
he reserves, in full ownership or in usufruct,
sufficient means for the support of himself, and
of all relatives who, at the time of the acceptance
of the donation, are by law entitled to be
supported by the donor. Without such
reservation, the donation shall be reduced on
petition of any person affected. [Art. 750, CC]
Page 247 of 511
CIVIL LAW
2. The provisions of Art. 750 notwithstanding, no
person may give or receive, by way of donation,
more than he may give or receive by will. The
donation shall be inofficious in all that it may
exceed this limitation. [Art. 752, CC]
Provisions on Revocation
1. Every donation inter vivos, made by a person
having no children or descendants, legitimate or
legitimated by subsequent marriage, or
illegitimate, may be revoked or reduced as
provided in the next article, by the happening of
any of these events:
a. If the donor, after the donation, should have
legitimate or legitimated or illegitimate
children, even though they be posthumous;
b. If the child of the donor, whom the latter
believed to be dead when he made the
donation, should turn out to be living;
c. If the donor subsequently adopt a minor
child. (644a) [Art. 760, CC]
2. In the cases referred to in the preceding article,
the donation shall be revoked or reduced insofar
as it exceeds the portion that may be freely
disposed of by will, taking into account the whole
estate of the donor at the time of the birth,
appearance or adoption of a child. [Art. 761, CC]
3. The donation shall be revoked at the instance of
the donor, when the donee fails to comply with
any of the conditions which the former imposed
upon the latter.
In this case, the property donated shall be
returned to the donor, the alienations made by
the donee and the mortgages imposed thereon by
him being void, with the limitations established,
with regard to third persons, by the Mortgage
Law and the Land Registration laws.
This action shall prescribe after four years from
the noncompliance with the condition, may be
transmitted to the heirs of the donor, and may be
exercised against the donee's heirs. [Art. 764, CC]
4. The donation may also be revoked at the instance
of the donor, by reason of ingratitude in the
following cases:
a. If the donee should commit some offense
against the person, the honor or the property
of the donor, or of his wife or children under
his parental authority;
b. If the donee imputes to the donor any
criminal offense, or any act involving moral
turpitude, even though he should prove it,
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
unless the crime or the act has been
committed against the donee himself, his
wife or children under his authority;
c. If he unduly refuses him support when the
donee is legally or morally bound to give
support to the donor. [Art. 765, CC]
Presumptions of Condonation:
a. Whenever the private document in which the
debt is found is in the possession of the debtor,
it shall be presumed that the creditor delivered it
voluntarily, unless the contrary is proved. [Art.
1272, CC]
b. Delivery of a private document evidencing credit
made voluntarily by the creditor to the debtor
implies the renunciation of the action of creditor
against the latter. [Art. 1272, CC]
c. Accessory obligation of pledge has been remitted
when thing after its delivery is found in the
possession of the debtor or third person. [Art.
1274, CC]
Effect
Renunciation of the principal debt shall extinguish
the accessory obligations, but remission of the
latter leaves the principal obligation in force. [Art.
1273, CC]
4. Confusion or Merger of
Rights
Confusion: The meeting in one person of the
qualities of creditor and debtor of the same
obligation. [Tolentino]
Requisites
a. It should take place between principal debtor and
creditor.
b. The very same obligation must be involved;
c. The confusion must be total, i.e. as regards the
whole obligation.
(Valmonte v. CA, G.R. No. L-41621, February 18,
1999.)
EFFECTS
a. In general
The obligation is extinguished from the time the
characters of the debtor and creditor are merged in
the same person. [Art. 1275, CC]
b. Confusion among the Guarantors
Merger which takes place in the person of the
principal debtor or creditor benefits the guarantors.
Page 248 of 511
CIVIL LAW
Confusion which takes place in the person of any of
the latter does not extinguish the obligation.
c. In case of joint or solidary obligations
Confusion in Confusion in
Joint Obligation Solidary Obligation
Confusion DOES NOT
Extinguishes the entire
extinguish a joint
obligation, but the other
obligation EXCEPT as
debtors may be liable for
regards the share of the
reimbursement if
person in whom the two
payment was made prior
characters concur [Art.
to remission.
1277, CC]
Obligation is not extinguished when confusion takes
place in the person of subsidiary debtor (i.e.
guarantor), but merger in the person of the principal
debtor shall benefit the former.
Note: Where, however, the mortgagee acquires
ownership of the entire mortgaged property, the
mortgage is extinguished; but this does not necessarily
mean the extinguishment of the obligation secured
thereby, which may become an unsecured obligation.
5. Compensation
Definition [Art. 1278, CC]: Compensation shall take
place when two persons, in their own right, are
creditors and debtors of each other.
Requisites [Art. 1279, CC]
a. Each obligor is bound principally, and at the
same time a principal creditor of the other
b. Both debts must consist in a sum of money, or if
the things due are consumble, of the same kind &
quality
Note: The term ‘consumable’ is erroneously used
in Art 1279. The appropriate term is ‘fungible’.
[Tolentino]
c. Both debts are due
d. Debts are liquidated and demandable
e. There must be no retention or controversy over
either of the debts, commenced by third persons
and communicated in due time to the debtor
To warrant the application of set off under Article
1278 of the Civil Code, the debtor’s admission of
his obligation must be clear and categorical and
not one which merely arise by inference or
implication from the customary execution of official
documents in assuming the responsibilities of a
predecessor [Bangko Sentral v COA, G.R. No. 168964
(2006)].
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Compensation takes effect by operation of law and

extinguishes both debts to the corresponding Compensation Counterclaim
amounts, even though both parties are without Takes place by operation Must be pleaded to be
knowledge of the compensation. It operates even of law effectual
against the will of the interested parties and even
without their consent. [Figuera v. Ang, G.R. No.
204264, June 29, 2016.] b. Kinds of Compensation
a. Nature and Effects As to extent [Art. 1281, CC]
1. Total – when two debts are of the same amount
General Rule 2. Partial - when the two obligations are of different
When all requisites mentioned in Art. 1279 are amounts and a balance remain
present, compensation takes effect by operation of
law, and extinguishes both debts to the As to cause
concurrent amount, even though the creditors and 1. Legal
debtors are not aware of the compensation. [Art. 2. Voluntary
1290, CC] 3. Judicial
4. Facultative
By Operation of Law
Compensation takes place by operation of law, even LEGAL COMPENSATION – takes place by
though the debts may be payable at different places, operation of law from the moment all requisites are
but there shall be an indemnity for expenses of present.
exchange or transportation to the place of payment.
[Art. 1286 CC] Since it takes place ipso jure, when used as a defense, it
retroacts to the date when all its requisites are fulfilled.
Compensation takes effect by operation of law even
without the consent or knowledge of the parties Art. 1290, CC. When all the requisites mentioned in
concerned when all the requisites mentioned in article 1279 are present, compensation takes effect
Article 1279 of the Civil Code are present. (Trinidad by operation of law, and extinguishes both debts to
v. Acapulco, G.R. No. 147477, June 27, 2006.) the concurrent amount, even though the creditors
and debtors are not aware of the compensation.
Compensation Distinguished from Other Modes
of Extinguishment Legal compensation may apply to:
Compensation Confusion 1. Awards of attorney’s fees, against the litigant and
There must always be Involves only one not his lawyer [Gan Tion v. CA, G.R. No. L-22490
two obligations. obligation. (1969)]
There are two persons 2. Bank deposits, against the accounts of a
who are mutually depositor whose checks were dishonored [BPI v
There is only one person CA, G.R. No. 116792 (1996)]
debtors and creditors of
whom the characters of
each other in two
the creditor and debtor VOLUNTARY COMPENSATION – takes place
separate obligations,
meet. when parties who are mutually creditors and debtors
each arising from the
same cause. of each other agree to compensate their respective
obligations even though one of the requisites of
compensation may be lacking.
Compensation Payment
Capacity to dispose and
Art. 1282, CC. The parties may agree upon the
receive the thing is Requires capacity to
compensation of debts which are not yet due.
unnecessary since dispose of the thing paid
compensation operates and capacity to receive
by law The only requisites of conventional compensation are
(1) that each of the parties can dispose of the
Must be total credit he seeks to compensate, and (2) that they
May be partial
performance agree to the mutual extinguishment of their
credits [United Planters v CA, G.R. No. 126890
((2009)].

Page 249 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

JUDICIAL COMPENSATION – takes place by

judicial decree 6. Novation
Art. 1283, CC. If one of the parties to a suit over an Obligations may be modified by:
obligation has a claim for damages against the other, a. Changing their object or principal conditions;
the former may set it off by proving his right to said b. Substituting the person of the debtor;
damages and the amount thereof. c. Subrogating a third person in the rights of the
creditor. [Art. 1291, CC]
FACULTATIVE COMPENSATION - When it
can be claimed by one of the parties who, however, Extinguishment of an obligation by the substitution
has the right to object to it. or change of the obligation by a subsequent one
extinguishes or modifies the first either by changing
This Compensation which can only be set up at the the object or principal conditions, or by substituting
option of a creditor, when legal compensation cannot the person of the debtor, or by subrogating a third
take place because some legal requisites in favor of the person in the rights of the creditor.
creditor are lacking.
Unlike other modes of extinguishment, it is a juridical
Obligations which cannot be compensated [Arts. act of dual function—it extinguishes an obligation,
1287-1288, CC] and at the same time, it creates a new one in lieu of
1. Contracts of depositum the old. It operates as a relative, not an absolute,
2. Contracts of commodatum extinction.
3. Future support due by gratuitous title
4. Civil liability arising from a penal offense Requisites
5. Obligations due to the government a. A previous valid obligation
6. Damage caused to the partnership by a partner b. Agreement of all the parties to the new obligation
c. Animus novandi or intent to novate
Right of a Guarantor d. Substantial difference between old and new
A guarantor may set up compensation as regards what obligations and, consequently, extinguishment of
the creditor may owe the principal debtor. [Art. 1280, the old obligation
CC] e. Validity of the new obligation
Effect of Assignment of Rights by the Creditor to Effect
a Third Person [Art. 1285, CC] If Original If New
Debtor cannot set up against In General Obligation is Obligation is
assignee compensation pertaining Void Void
With debtor’s Novation is void
to him against assignor UNLESS New obligation
consent if the original
he reserved such right at the time is void, the old
he gave his consent obligation was
obligation
void, EXCEPT
With debtor’s Debtor may set up compensation subsists,
when annulment
knowledge of debts previous to the UNLESS the
may be claimed
but without assignment but not of subsequent parties intended
only by the
consent ones that the former
Old debtor, or when
relations shall be
Debtor may set up compensation obligation is ratification
Without extinguished in
of all credits prior and also later to extinguished validates acts that
debtor’s any event [Art.
the assignment until he had and replaced are voidable [Art.
knowledge 1297, CC]
knowledge of the assignment by the new 1298, CC]
one
a. New
stipulated. a. Original
Order of Compensation obligation
obligation is
If a person should have against him several debts void: No
void: No
which are susceptible of compensation, the rules on novation
novation.
application of payments shall apply to the order of the
compensation. [Art. 1289 CC] b. New
b. Original
obligation
obligation
voidable:
voidable:

Page 250 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Effective if Novation is Novation is not presumed

contract is effective In the absence of an unequivocal declaration of
ratified before extinguishment of the pre-existing obligation, only
novation. proof of incompatibility between the old and new
obligation would warrant a novation by implication.
Accessory Obligations [California Bus Line v. State Investment, G.R. No. 147950
Accessory obligations are also extinguished, but may (2003)]
subsist only insofar as they may benefit third persons
who did not give their consent to the novation [Art. Test of Incompatibility
1296, CC] The test of incompatibility is whether or not the two
obligations can stand together, each one having its
Accidental Modifications independent existence. If they cannot, they are
The extension or shortening of the period for the incompatible and the latter obligation novates the
performance of the obligation is generally considered first.
as merely accidental and does not bring about a
novation. [Tolentino] The incompatibility must take place in any of the
essential elements of the obligation, such as its object,
Original or new obligation with suspensive or cause or principal conditions thereof; otherwise, the
resolutory condition change would be merely modificatory in nature and
Art. 1299, CC. If the original obligation was subject insufficient to extinguish the original obligation
to a suspensive or resolutory condition, the new [Quinto v. People, G.R. No. 126712 (1999)]
obligation shall be under the same condition, unless
it is otherwise stipulated. AS TO ESSENCE OR OBJECT
1. Objective/Real
Compatible Incompatible 2. Subjective/Personal
Conditions Conditions
AS TO ESSENCE OR OBJECT
a. Fulfillment of both Objective/Real Subjective/Personal
conditions: new 1. Substitution of debtors
1. Change of the
obligation becomes a. Expromision
subject matter;
demandable b. Delegacion
2. Change of cause or
2. Subrogation of a third
a. Original obligation consideration; or
b. Fulfillment of person to the rights of
is extinguished, 3. Change of the
condition concerning the creditor
while new principal conditions
the original a. Conventional
obligation exists or terms
obligation: old b. Legal
obligation is revived;
b. Demandability shall
new obligation loses
be subject to a. SUBSTITUTION OF DEBTORS
forcé
fulfillment/ Expromision Delegacion
nonfulfillment of
c. Fulfillment of Debtor (delegante) offers
the condition
condition concerning Initiative for change does or initiates the change,
affecting it
the new obligation: no not emanate from the and the creditor
novation; requisite of debtor, and may even be (delegatorio) accepts a
a previous valid and made without his third person (delegado) as
effective obligation knowledge. consenting to the
lacking substitution.
Requisites
a. Kinds of Novation 1. Consent of the
creditor and the new Consent of
AS TO FORM debtor.
2. Knowledge or 1. old debtor,
1. Express – declared in unequivocal terms consent of the old 2. new debtor,
2. Implied – the old and new obligations are on debtor is not 3. and creditor.
every point incompatible with each other required.

Page 251 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Effects
1. Old debtor is released Effect
2. Insolvency of the new Total Partial
debtor does not revive A creditor, to whom
the old obligation in Transfers to the person partial payment has been
case the old debtor did subrogated, the credit made, may exercise his
1. Insolvency of the
not agree to with all the rights right for the remainder,
new debtor revives
expromision. thereto appertaining, and shall be preferred to
the obligation of the
3. If with knowledge and either against the debtor the person subrogated in
old debtor if it was
consent of the old or third persons. his place in virtue of the
anterior and public,
debtor, the new partial payment.
and known to the old
debtor can demand
debtor.
reimbursement of the 1. Conventional Subrogation – takes place by
2. New debtor can
entire amount paid agreement of parties
demand
and with subrogation
reimbursement of the
of creditor’s rights. Difference between Conventional
entire amount he has
4. If without knowledge Subrogation and Assignment of Credit
paid from the original
of the old debtor, the [Licaros v Gatmaitan, G.R. No. 142838
debtor. He may
new debtor can (2001)]
compel the creditor
demand Conventional Assignment of
to subrogate him to
reimbursement only subrogation credit
all of his rights.
up to the extent that
the latter has been Debtor’s consent is Debtor’s consent is
benefited without necessary. not required.
subrogation of Refers to the same
creditor’s rights. right which passes
Extinguishes an from one person to
For subjective novation, it is insufficient that the obligation and gives another, without
juridical relation between the parties to the rise to a new one. modifying or
original contract is extended to a third person. If extinguishing the
the old debtor is not released, no novation occurs and obligation.
the third person who has assumed the debtor’s Defects/vices in the Defects/vices in the
obligation becomes merely a co-debtor or surety or old obligation are old obligation are not
co-surety. [Conchinyan, Jr. v. R&B Surety and Insurance cured. cured.
Company, G.R. No. L-47369, (1987)]
2. Legal Subrogation – takes place by operation of
An accessory surety may not be released if he law
expressly waives his discharge from the obligation in
case of change or novation in the original agreement. Legal subrogation is not presumed, except in
[Molino v Security Diners International Corp, G.R. No. the following circumstances:
136780 (2001)]. a. When creditor pays another creditor who is
preferred, even without the debtor’s
b. SUBROGATION knowledge
Transfers to the person subrogated the credit with all b. When a third person not interested in the
the rights thereto appertaining, either against the obligation pays with the express or tacit
debtor or against third persons, be they guarantors or approval of the debtor
possessors of mortgages, subject to stipulation in a c. When, even without the knowledge of the
conventional subrogation. [Art. 1303, CC] debtor, a person interested in the fulfillment
of the obligation pays, without prejudice to
the effects of confusion as to the latter’s
share [Art. 1302, CC]

Page 252 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
VI. CONTRACTS
A. General Provisions
Contract - A contract is a meeting of the minds
between two persons whereby one binds himself,
with respect to the other, to give something or to
render some service [Art, 1305, CC]
1. Principal Characteristics of
Contracts [MARCO]
a. Mutuality
Art. 1308, CC. The contract must bind both
contracting parties; its validity or compliance cannot
be left to the will of one of them.
APPLICABILITY TO CONTRACT
MODIFICATIONS:
Contract changes must be made with the consent of
the contracting parties. The minds of all the parties
must meet as to the proposed modification, especially
when it affects an important aspect of the agreement.
Thus, any change must be mutually agreed upon;
otherwise, it produces no binding effect. [Philippine
Savings Bank v. Sps. Castillo, G.R. No. 193178 (2011)]
General rule: Any contract which appears to be heavily
weighed in favor of one of the parties so as to lead
to an unconscionable result is void. Any
stipulation regarding the validity or compliance of the
contract which is left solely to the will of one of the
parties is likewise invalid. [Floirendo v Metrobank, G.R.
No. 148325 (2007)].
Exception: The legality of contracts which is left to the
will of either of the parties may be upheld if there was
a finding of the presence of essential equality of
the parties to the contracts, thus preventing the
perpetration of injustice on the weaker party [GF
Equity v Valenzona, G.R. No. 156841 (2005)]
A contract may expressly confer upon one party
the right to cancel the contract because the exercise
of that right is a fulfillment of the provisions of the
contract itself [Taylor v Uy Tieng Piao, G.R. No. L-
16109 (1922)]
The determination of the performance may be left to
a third party as long as:
Page 253 of 511
CIVIL LAW
1. The decision has been made known to both
2.
contracting parties [Art. 1309, CC]
The determination is not evidently inequitable
[Art. 1310, CC]. If it is inequitable, the court shall
decide what is equitable under the circumstances.
b. Autonomy (also Freedom to
Contract)
Art. 1306, CC. The contracting parties may establish
such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not
contrary to law, morals, good customs, public order,
or public policy.
If the stipulation which violates the limitations set
forth in the foregoing provision constitute the cause,
object, or purpose of the contract, such contract is denied
legal existence, and thus, shall be deemed void from
the beginning. [Casis]
Contracting parties may establish any
agreement, term, and condition they may deem
advisable, provided they are not contrary to law,
morals or public policy. [Gateway Electronics
Corporation v Land Bank, G.R. Nos. 155217 and
156393 (2003)]
Parties may not contract away applicable
provisions of law especially peremptory provisions
dealing with matters heavily impressed with public
interest. [Pakistan International Airlines Corp. v. Ople,
G.R. No. 61954, September 28, 1990.]
It is necessary for the existence of a contract that two
distinct parties enter into it (auto-contracts).
The existence of a contract is not determined by the
number of persons who intervene in it, but by the
number of parties; not by the number of individual
wills but by the number of declarations of will.
As long as there are two distinct patrimonies, even if
they are represented by the same person, the contract
will be valid; e.g. an agent representing both the buyer
and the seller.
Special disqualifications in freedom to contract:
1. Donations or grants of gratuitous advantage,
direct or indirect, made between:
a. spouses during the marriage or;
b. persons living together as husband and wife
without valid marriage [Art. 87, FC]
Rule: VOID
Exception: Moderate gifts
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
2. Sale of property of husband and wife to each
other [Art. 1490, CC]
Rule: VOID
Exception: The sale is valid when:
a. A separation of property was agreed upon in
the marriage settlements; or
b. There has been a judicial separation of
property under Art. 191
3. Acquisition by purchase, even at a public or
judicial auction, either in person or through the
mediation of another: [Art. 1491, CC]
a. The guardian, the property of the person or
persons who may be under his guardianship;
b. Agents, the property whose administration
or sale may have been entrusted to them,
unless the consent of the principal has been
given;
c. Executors and administrators, the
property of the estate under administration;
d. Public officers and employees, the
property of the State or of any subdivision
thereof, or of any government-owned or
controlled corporation, or institution, the
administration of which has been entrusted
to them; this provision shall apply to judges
and government experts who, in any manner
whatsoever, take part in the sale;
e. Justices, judges, prosecuting attorneys,
clerks of superior and inferior courts, and
other officers and employees connected
with the administration of justice, the
property and rights in litigation or levied
upon an execution before the court within
whose jurisdiction or territory they exercise
their respective functions; this prohibition
includes the act of acquiring by assignment
and shall apply to lawyers, with respect to the
property and rights which may be the object
of any litigation in which they may take part
by virtue of their profession.
f. Any others specially disqualified by law.
Rule: PROHIBITED
4. Entering into a universal partnership by
persons who are prohibited from giving each
other any:
a. Donation; or
b. Advantage
Rule: PROHIBITED
Page 254 of 511
CIVIL LAW
Limitations to stipulations/what not to stipulate
1. Contrary to law
a. Pactum commisorium - The creditor cannot
appropriate or dispose of things given by
way of pledge or mortgage. Any stipulation
to the contrary is VOID. [Art. 2088, CC]
b. Pactum leonina - A stipulation is VOID if it
excludes a partner from a share in the profits.
[Art. 1799, CC]
c. Pactum de non alenundo – A stipulation is
VOID if it forbids an owner from alienating
immovables mortgaged. [Art. 2130, CC]
2. Contrary to morals
Morals deal with norms of good and right
conduct evolved in a community. These norms
may differ at different times and places and with
each group of people. [de Leon]
3. Contrary to good customs
Customs consist of habits and practices which
through long usage have been followed and
enforced by society or some part of it as binding
rules of conduct. It has the force of law when
recognized and enforced by law. [de Leon]
4. Contrary to public order
Public order refers principally to public safety
although it has been considered to mean also the
public weal. [de Leon]
5. Contrary to public policy
Public policy is the principle under which
freedom of contract or private dealing is
restricted by law for the good of the public. In
determining whether a contract is contrary to
public policy, the nature of the subject matter
determines the source from which such question
is to be solved [Ferrazzini v Gsell, G.R. No. L-
10712 (1916)]
A contract which is neither prohibited by law nor
condemned by judicial decision, nor contrary to
public morals, contravenes no public policy. In the
absence of express legislation or constitutional
prohibition, a court, in order to declare a contract
void as against public policy, must find that the
contract as to the consideration or thing to be done,
has a tendency to injure the public, is against the
public good, or contravenes some established
interests of society, or is inconsistent with sound
policy and good morals, or tends clearly to undermine
the security of individual rights, whether of personal
liability or of private property [Gabriel v Monte de
Piedad, G.R. No. L-47806 (1941)]
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
c. Relativity
Effect of Contracts
Contracts take effect ONLY between parties, their
assigns and heirs EXCEPT, when the rights and
obligations arising from the contract are not
transmissible by their:
1. Nature
2. By Stipulation, or
3. By Provision of Law [Art. 1311, par. 1 CC]
Contracting in the name of Another
Rule:
No one may contract in the name of another:
1. without being authorized by the latter, or
2. unless he has a right to represent him according
to law
Effect:
A contract entered into in the name of another by
one:
1. who has no authority, or
2. legal representation, or
3. who has acted beyond his powers,
shall be UNENFORCEABLE, UNLESS IT IS
RATIFIED expressly or impliedly by the person on
whose behalf it has been executed, before it is revoked
by the other contracting party. [Art. 1317, CC]
EXCEPTIONS TO RELATIVITY (Contracts
may bind and affect strangers in the ff. cases):
1. Stipulations Pour Autrui [Art. 1311, par.2,
CC]
If a contract should contain some stipulation in
favor of a third person, he may demand its
fulfillment, provided:
a. He communicated his acceptance to the
obligor before its revocation (by the original
parties).
b. The contracting parties must have clearly
and deliberately conferred a favor upon the
third person (A mere incidental benefit or
interest of a person is not sufficient).
c. The stipulation favoring the third person is
only a part of the contract.
d. No relation of agency exists between any of
the parties and the third person favored.
e. The favorable stipulation should not be
conditioned or compensated by any kind of
obligation whatsoever.
2. Accion directa – the creditor is authorized by
the statute to sue on his debtor’s contract
Examples:
Page 255 of 511
CIVIL LAW
a. Lessor against Sublessee [Art. 1651, 1652,
CC]
b. Laborers of Contractor against the Owner of
the work [Art. 1729, CC]
3. Third Person in Possession of Object of
Contract [Art. 1312, CC]
In contracts creating real rights, third persons
who come into possession of the object of the
contract are bound thereby, subject to the
provisions of the Mortgage Law and the Land
Registration Laws.
4. Fraud of Creditors by Contracting Parties
(Accion Pauliana) [Art. 1313, CC]
Creditors are protected in cases of contracts
intended to defraud them.
5. Tortious Interference [Art. 1314, CC]
Any third person who induces another to violate
his contract shall be liable for damages to the
other contracting party (even though the third
person is not bound by the stipulations).
Requisites:
a. Existence of a valid contract
b. The third person’s knowledge of the third
person of the existence of the contract
Note: Knowledge alone is not sufficient to
make a third person liable for tortuous
interference. To sustain a case for tortuous
interference, the defendant must have acted
with malice or must have been driven by
purely impious reasons to injure the plaintiff.
c. Interference by third person without legal
justification or excuse. [Lagon v CA, G.R.
No. 119107 (2005)]
d. Consensual
Rule: Contracts are perfected by mere consent [Art.
1315, CC]
Exceptions: Real contracts, such as deposit, pledge and
commodatum, are not perfected until the delivery of
the object of the obligation [Art. 1316, CC]. And
solemn contracts, which are perfected by
compliance with the formalities required by law.
e. Obligatory Force
1. Obligations arising from contracts have the force
of law between the parties and should be
complied with in good faith [Art. 1159, CC]
2. The contract must bind both parties [Art. 1308,
CC]
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
3. Upon perfection, the parties are bound NOT
ONLY to the fulfillment of what has been
expressly stipulated but also to all consequences
which according to their nature may be keeping
in good faith, usage and law [Art, 1315, CC]
2. Classification of Contracts
a. To their subject matter
• Things, e.g. sale, deposit, pledge
• Services, e.g. agency, lease of services
b. To formation or perfection
• Consensual – consent is sufficient to
perfect the contract [Art. 1315, CC]
• Real – delivery, actual or constructive, is
required in addition to consent [Art. 1316,
CC]
• Solemn or formal – where special
formalities are required for perfection [Art.
1356, CC]
c. To relation to other contracts
• Principal – may exist alone; e.g. lease
• Accessory – depends on another contract
for its existence, e.g. guaranty
• Preparatory – a preliminary step towards
the celebration of a subsequent contract; e.g.
agency
d. To form
• Common or informal – may be entered
into in whatever form as long as there is
consent, object and cause
• Special or formal – required by law to be in
certain specified form
e. To cause/by equivalence of
prestations
• Onerous – there is an exchange of
correlative values, e. g. sale
• Remuneratory – where the outstanding
prestation is premised upon services or
benefits already received
• Gratuitous – where no correlative
prestation is received by one party, e. g.
donation, commodatum
Page 256 of 511
CIVIL LAW
f. To purpose
• Transfer of ownership, e.g. sale
• Conveyance of Use, e.g. commodatum
• Rendition of Service, e.g. agency
g. To time of fulfillment
• Executed – where the obligations are
fulfilled at the time the contract is entered
into
• Executory – where fulfillment of
obligations does not take place at the time
the contract is made
h. To risk
• Commutative – fulfillment is
predetermined in advance
• Aleatory – fulfillment is dependent upon
chance
i. To the nature of the vinculum
produced
• Unilateral – only one party is bound by the
prestation, e.g. commodatum
• Bilateral – both parties are bound by
reciprocal prestations, e.g. sale
All contracts are bilateral in the consent, but
not all are bilateral in effects.
j. To their designation/name
• Nominate – where the law gives the
contract a special designation or particular
name; e.g. deposit
• Innominate – where the contract has no
special name
o Do ut des (I give so that you may give)
o Do ut facias (I give so that you may do)
o Facio ut facias (I do so that you may do)
o Facio ut des (I do so that you may give)
Art. 1307, CC. Innominate contracts shall be
regulated by the stipulations of the parties, by the
provisions of Titles I and II of this Book, by the rules
governing the most analogous nominate contracts,
and by the customs of the place
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

3. Stages of a Contract B. Essential Requisites

a. Preparation (conception or “generation”) – There is no contract unless the following requisites
when negotiations are in progress concur:
b. Perfection (or birth) – when the parties come to 1. Consent of the contracting parties;
an agreement 2. Object certain which is the subject matter of the
c. Consummation (or death) - when the contract contract;
is fully executed 3. Cause of the obligation which is established. [Art.
1318, CC]
Preparation Perfection Consummation
Exchanges of
offers and
Parties come to 1. Consent
an agreement. Parties perform
counter- their obligations
offers. All the essential The meeting of the minds of the parties on the subject
under the matter and cause of the contract.
requisites contract
No contract
concur
yet The facts that the signatures of the witnesses and the
The stage to notary public were forged does not negate the
look at to The stage to look existence of the contract for as long as the parties
determine the at to determine consented to it. The signatures of the witnesses and
status of the whether there the notary public are necessary simply to make the
contract (i.e., has been a contract binding on the third person. [Soriano v.
valid, voidable, breach of the Soriano, G.R. No. 130348 (2007)]
void, contract
unenforceable) Requisites
a. It must be manifested by the concurrence of the
offer and acceptance [Arts. 1319-1326, CC].
4. Elements of Contracts b. The contracting parties must possess the
necessary legal capacity [Arts. 1327-1329, CC].
a. Essential – those without which there is no c. It must be intelligent, free, spontaneous, and real
contract (not vitiated) [Arts. 1330-1346, CC]

Consensual Solemn A contract is perfected by mere consent. From the

Real
(ordinary) (formal) moment of a meeting of the offer and the
Essential acceptance upon the object and the cause that
Consent, Object, and Cause would constitute the contract, consent arises.
Elements
Delivery However, “the offer must be certain” and “the
of the Formality acceptance seasonable and absolute; if qualified,
Additional the acceptance would merely constitute a
- thing to prescribed
Elements counteroffer. [Insular Life v. Asset Builders Corp., G.R.
be by law
returned No. 147410 (2004)]

Offer
b. Natural – those which are derived from the
A unilateral proposition which one party makes to the
nature of the contract and ordinarily accompany
other for the celebration of the contract. [Tolentino]
the same; they are presumed to exist unless the
contrary is stipulated
INVITATION TO MAKE OFFERS
(ADVERTISEMENTS)
c. Accidental – those which exist only if stipulated
a. Business Advertisements of things for sale are
NOT definite offers, just invitations to make an
offer, UNLESS the contrary appears [Art. 1325,
CC].

b. Advertisement for bidders are invitations to

make proposals, the advertiser is NOT bound to

Page 257 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
accept the lowest or highest bid; UNLESS the
contrary appears. The bidder is the offeror [Art.
1326, CC].
The Terms and Conditions of the bidding
disseminated… constitutes the "advertisement"
to bid on the project. The bid proposals or
quotations submitted by the prospective
suppliers… are the offers. The reply…
constitutes the acceptance or rejection of the
respective offers. [Jardine Davies v. CA, G.R. No.
128066, (2000)]
c. Statements of intention: no contract results
even if accepted.
In a letter informing another that the sender was
“in a position and is willing to entertain” the
purchase of a yacht under some terms, the word
“entertain” applied to an act does not mean the
resolution to perform said act, but simply a
position to deliberate for deciding to perform or
not to perform said act. It was merely a position
to deliberate whether or not he would purchase
the yacht and invitation to a proposal being made
to him, which might be accepted by him or not.
[Rosenstock v. Burke, G.R. No. 20732, (1924)]
Offer terminates upon—
a. Rejection by the offeree
b. Incapacity (death, civil interdiction, insanity, or
insolvency) of the offeror or offeree before
acceptance is conveyed [Art. 1323, CC]
c. Submission of a counter-offer
d. Lapse of the time stated in the offer without
acceptance being conveyed
e. Revocation of the offer before learning of
acceptance
f. Supervening illegality before acceptance [Reyes
and Puno]
ACCEPTANCE
To produce a contract, the acceptance must not
qualify the terms of the offer. It is necessary that the
acceptance be unequivocal and unconditional,
and the acceptance and the proposition shall be
without any variation whatsoever; and any
modification or variation from the terms of the offer
annuls the latter and frees the offeror. [Tolentino]
“The offer must be certain” and “the acceptance
seasonable and absolute; if qualified, the
acceptance would merely constitute a
Page 258 of 511
CIVIL LAW
counteroffer. [Insular Life v. Asset Builders Corp., G.R.
No. 147410, (2004)]
Acceptance must be absolute, unconditional, and
without variance of any sort from the offer. It must
also be made known to the offeror. An acceptance
not made in the manner prescribed is not
effective but constitutes a counter-offer.
[Malbarosa v. CA, G.R. No. 125761, (2003)]
Requisites of acceptance:
a. Unqualified and unconditional, i.e. it must
conform with all the terms of the offer, otherwise
it is a counter-offer [Art. 1319, CC]
b. Directed and communicated to the offeror and
learned by him [Art. 1319, CC] If made through
an agent, the offer is accepted from the time the
acceptance is communicated to such agent. [Art.
1322, CC]
c. Made within the proper time
d. May be express/implied, but is not presumed
Cognition Theory
Acceptance made by letter or telegram does not bind
the offeror except from the time it came to his
knowledge. The contract, in such a case, is presumed
to have been entered into in the place where the offer
was made. [par. 2, Art. 1319, CC]
Option Contract
A preparatory contract in which one party grants to
the other, for a fixed period, the option to decide
whether or not to enter into a principal contract [Art.
1324, CC]
With consideration Without consideration
Offeror may withdraw by
Offeror cannot
communicating withdrawal
unilaterally withdraw
to the offeree before
his offer.
acceptance.
Art. 1324, CC provides the general rule regarding
offer and acceptance: when the offerer gives to the
offeree a certain period to accept, "the offer may be
withdrawn at any time before acceptance" except
when the option is founded upon consideration.
However, Art. 1479, CC modifies the general rule,
which applies to "a promise to buy and sell"
specifically. This rule requires that a promise to sell to
be valid must be supported by a consideration distinct
from the price. The option can still be withdrawn,
even if accepted, if the same is not supported by any
consideration. [Tuazon v. Del Rosario-Suarez, G.R. No.
168325, (2010)]
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Capacity to Contract
There are two types of void contracts: Prohibited Party Subject
a. Those where one of the essential requisites of Guardian Property of the ward
a valid contract as provided for by Article 1318
Agent Property of the Principal
of the Civil Code is totally wanting; and
b. Those declared to be so under Article 1409 of Executors and Property under
the Civil Code. By contrast, a voidable or Administrators administration
annullable contract is one in which the essential Property under their
Public Officers
requisites for validity under Article 1318 are administration
present, but vitiated by want of capacity, error, Justices, judges,
Property attached in
violence, intimidation, undue influence, or deceit. prosecutors, clerks of
litigation
[Francisco v. Pastor Herrera, G.R. No. 139982 court, lawyers
(2000)]
Incapacity to Give Consent vs. Disqualification
Persons incapacitated to give consent [Art. 1327, to Contract
CC] Incapacity to Give Disqualification to
a. Minors, EXCEPT Consent Contract
1. For necessaries [Art.1427, CC] Restrains the exercise Restrains the very right
2. Where the minor actively misrepresents his of the right to contract itself
age (estoppel)
3. When it involves a natural obligation and Based upon subjective
Based upon public
such obligation is fulfilled voluntarily by the circumstances of
policy and morality
minor [Art. 1425-27, CC] certain persons
4. Contracts enter into by guardians or legal Voidable Void
representatives
5. When upon reaching the age of majority they CONSENT
ratify the same
6. When a minor opens a savings account Requisites of Consent:
without the assistance of his parents, a. intelligent
provided that the minor is at least 7 years old b. free
and can read and write [PD 1734]. c. spontaneous
b. Insane or demented persons, UNLESS they d. real
contract during a lucid interval. [Art. 1328, CC]
c. Deaf-mutes who do not know how to read AND VICES OF CONSENT
write.
A contract where consent is given through
Minors were held in estoppel through active
misrepresentation. [Mercado v. Espiritu, G.R. No. L- a. Mistake
11872, (1917)] b. Intimidation
c. Violence
There is no estoppel if the minority was known by d. Undue influence
the other party, and there was no active e. Fraud
misrepresentation on the part of the minors. is voidable. [Art. 1330, CC]
[Bambalan v. Maramba, G.R. No. L-27710, (1928)]
MISTAKE
Persons disqualified to contract Inadvertent and excusable disregard of a
a. Those under civil interdiction for transactions circumstance material to the contract [Reyes and Puno]
inter vivos [Art. 34, RPC]
b. Undischarged insolvents [Sec. 24, Insolvency In order that mistake may invalidate consent, it should
Law] refer to the substance of the thing which is the object
c. Husband and wife cannot donate to each other of the contract, or to those conditions which have
[Art. 123, FC], nor sell to each other if the principally moved one or both parties to enter into
marriage is under the regime of Absolute the contract. [Art.1331, CC]
Community of Property [Art.1490, CC]
d. The ff. cannot purchase, whether in public or
private sale [Art. 1491, CC]:

Page 259 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

There is no mistake if the party alleging it knew the contract, when fraud or mistake is alleged, devolves
doubt, contingency or risk affecting the object of the on the party seeking to enforce it. [Art. 1332, CC]
contract. [Art. 1333, CC]
INTIMIDATION
Requisites: One of the contracting parties is compelled by a
a. The error must be substantial regarding: reasonable and well-grounded fear of an imminent
1. The object of the contract (error in re) which and grave evil upon his person or property, or upon
may be: the person or property of his spouse, descendants or
• Mistake as to the identity of the thing ascendants, to give his consent. [Art. 1335, CC]
(error in corpore)
• Mistake as to the substance of the To determine the degree of intimidation, the age, sex
thing (error in substantia) and condition of the person shall be borne in mind.
• Mistake as to the conditions of the [Art. 1335, CC]
thing provided, or
Requisites:
• Mistake as to the quantity of the thing
a. One party is compelled to give his consent by a
(error in quantitate)
reasonable and well-grounded fear of an evil;
2. The condition which primarily moved or
b. The evil must be imminent and grave;
induced one or both parties to enter the
c. The evil must be upon his person or property,
contract.
spouse, descendants or ascendants;
3. Identity or qualifications of one of the
d. The evil must be unjust.
parties (error in persona), but only if such
was the principal cause of the contract.
VIOLENCE
b. The error must be excusable
Serious or irresistible force used to extort consent
c. The error must be a mistake of fact and not of
[Art. 1335, CC]
law.
Violence Intimidation
Mistake which vitiates consent is an error of fact, and
not an error of law. Ignorance of the law excuses no Physical compulsión Moral compulsion
one from compliance therewith [Art. 3, CC]; but the External or prevents the Internal or induces the
modern tendency is to allow an excusable mistake of will to manifest itself performance of an act
law to be invoked as vitiating consent. [Tolentino]
Note: Violence or intimidation shall annul the
See also Art. 526, CC on Possession: Mistake upon a obligation, although it may have been employed by a
doubtful or difficult question of law may be the basis third person who did not take part in the contract.
of good faith. [Art. 1336, CC]
Ignorantia Facti Excusat vs. Ignorantia Legis UNDUE INFLUENCE
Neminem Excusat When a person takes improper advantage of his
Mistake of Fact Mistake of Law power over the will of another, depriving the latter of
One or both parties a reasonable freedom of choice. [Art, 1337, CC]
One or both contracting arrive at an erroneous
parties believe that a fact conclusion on the Requisites:
exists when in reality it interpretation of a a. Improper advantage
does not, or vice versa question of law or its b. Power over the will of another
legal effects c. Deprivation of the latter’s will of a reasonable
Does not vitiate consent freedom of choice
EXCEPT when it
involves mutual error as Circumstances to consider:
Vitiates consent a. Relationship of the parties (family, spiritual,
to the effect of an
agreement when the real confidential etc.)
purpose is frustrated. b. That the person unduly influenced was suffering
from infirmity (mental weakness, ignorance etc.)
[Art.1337, CC]
Note: The obligation to show that the terms of the
contract had been fully explained to the party who is Note: By analogy, undue influence employed by a third
unable to read or understand the language of the person may annul the contract.

Page 260 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Test of Undue Influence: Whether or not the Dolo Causante vs. Dolo Incidente
influence exerted has so overpowered or subjugates Dolo Causante Dolo Incidente
the mind of a contracting party as to destroy his Refers to those
free agency, making him express the will of another Refers to those
deceptions or
rather than his own. [Coso-Fernandez v. Deza, G.R. No. deceptions or
misrepresentations of a
L-16763 (1921)] misrepresentations
serious character
which are not serious in
employed by one party
FRAUD character and without
and without which the
When, through insidious words or machinations of which the other party
other party would not
one of the contracting parties, the other is induced to would have still entered
have entered into the
enter into a contract which, without them, he would into the contract
contract
not have agreed to. [Art. 1338, CC]
Renders the contract Renders the party liable
In order that fraud may make a contract voidable, it voidable for damages
should be serious and should not have been employed
by both contracting parties. [Art. 1344, CC] Dolo incidente (Incidental fraud) [Art. 1344, CC]
Those which are not serious in character and
Requisites: without which the other party would still have entered
a. It must be made in bad faith into the contract.
b. One party must have employed fraud or insidious
words or machinations Dolo causante (Causal fraud)
c. Damage or injury resulted to the other party Determines or is the essential cause of the
d. It must have been serious consent, while dolo incidente refers only to some
e. It induced the other party to enter into a contract particular or accident of the obligation.[Tankeh v.
f. It must have been employed by one contracting DBP, G.R. No. 171428 (2013)]
party upon the other and not employed by both
contracting parties nor by third persons. Fraud to vitiate consent must fulfill two
conditions
Determining the existence of Fraud a. The fraud must be dolo causante or it must be
a. Not Fraudulent fraud in obtaining the consent of the party.
1. Usual exaggerations in trade, when the other The deceit must be serious. The fraud is serious
party had an opportunity to know the facts when it is sufficient to impress, or to lead an
[Art. 1340, CC] ordinarily prudent person into error; that which
2. A mere expression of an opinion UNLESS cannot deceive a prudent person cannot be a
• made by an expert, and ground for nullity. The circumstances of each
• the other parts has relied on the former’s case should be considered, taking into account
special knowledge [Art. 1341, CC] the personal conditions of the victim.
3. Misrepresentation made in good faith [Art. b. The fraud must be proven by clear and
1343, CC] convincing evidence and not merely by a
Note: Not fraudulent, but this may constitute preponderance thereof. [ECE Realty v. Mandap,
error G.R. No. 196182, (2014)]

b. Fraudulent Note: However, fraud in its general sense (false

Failure to disclose facts, when there is a duty to
reveal them, as when the parties are bound by
confidential relations [Art. 1339, CC]
representation of a fact) coming about in the
consummation stage of the sale, as opposed to the
negotiation and perfection stages, entitles the
aggrieved party to the rescission of the sales contract.
[Sps. Tongson v. Emergency Pawnshop, GR. No. 167874
(2010)]

SIMULATION OF CONTRACTS

Takes place when the parties do not really want the

contract they have executed to produce the legal

Page 261 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

effects expressed by its wordings. It may be absolute c. In existence or capable of coming into existence
or relative. [Arts. 1345-1346, CC] [See Arts. 1461, 1493, 1495, CC]
d. Determinate or determinable, without the need
The primary consideration in determining the true of a new contract between the parties [Arts. 1349
nature of a contract is the intention of the and par. 2, 1460, CC]
parties. Such intention is determined not only from
the express terms of their agreement, but also from All things or services may be the object of contracts,
the contemporaneous and subsequent acts of the EXCEPT [Art. 1347, CC]:
parties. [Spouses Lopez v. Sps. Lopez, G.R. No. 161925
(2009)] a. Things which are outside the commerce of
men
Absolute Simulation Relative Simulation
(Simulados) (Disimulados) b. Intransmissible rights
The parties do not
The parties conceal their c. Future inheritance except in cases
intend to be bound at
true agreement. authorized by law
all.
Fictitious contract Disguised contract
Requisites:
Bound as to actual hidden 1. The succession has not yet been opened;
agreement, so long as it 2. The object of the contract forms part of the
does not prejudice a third inheritance; and
Void. (Because there is an
person and is not contrary 3. The promissor has an expectancy of a right
absolute lack of cause)
to law, morals, good which is purely hereditary in nature
customs, public order or
public policy. Exceptions to the Exception
1. In case of marriage settlements under Art.
If the parties merely state a false cause in the contract 130, CC
to conceal their real agreement, the contract is 2. In case of partition of properties inter vivos by
relatively simulated and the parties are still bound the deceased under Art. 1080, NCC [JLT
by their real agreement. Hence, where the essential Agro v. Balansag, G.R. No. 141882 (2005)]
requisites of a contract are present and the simulation
refers only to the content or terms of the contract, the d. Impossible things or services
agreement is absolutely binding and enforceable
between the parties and their successors in e. Objects which are indeterminable as to their
interest. [Valerio v. Refresca, G.R. No. 163687 (2006)] kind, the genus should be expressed

With respect to a third person acting in good faith,
the apparent contract must be considered as the
true contract. The declaration that the contract is
simulated does not prejudice him.
Note: Relative simulation is presumed by law in case
of Art. 1602, CC (Contracts presumed to be
Equitable Mortgages)
2. Object of Contracts
The subject matter; the thing, right or service which
is the subject matter of the obligation arising from the
contract. [Tolentino]
Requisites
a. Within the commerce of men [Art. 1347, CC]
b. Not legally or physically impossible [Art.1348,
CC]
In order that a thing, right, or service may be the
object of a contract, it should be in existence at
the moment of the celebration of the
contract, or at least, it can exist subsequently
or in the future.
A showing of mere inconvenience, unexpected
impediments, or increased expenses is not
enough to relieve a party of the obligation. [De
Castro v. Longa, G.R. No L-2152-53 (1951)]
A FUTURE THING may be the object of a
contract. Such contract may be interpreted as a:
a. Conditional contract, where its efficacy should
depend upon the future existence of the thing.
b. Aleatory contract, where one of the contracting
parties assumes the risk that the thing will never
come into existence, e.g. insurance. [Tolentino]

Page 262 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

In case of doubt about the nature of the contract, it

must be deemed conditional as doubt shall be Cause in contracts [Art. 1350]
resolved in favor of greatest reciprocity of interests. Onerous Remuneratory Pure
Contracts Contracts Beneficence
3. Cause of Contracts The undertaking
Mere
or the promise of The service or
liberality of
The essential and impelling reason why a party the thing or benefit which is
the
assumes an obligation. Motive, on the other hand, is service by the remunerated
benefactor
the particular reason for a contracting party which other party
does not affect the other. [Manresa]
Effect of Lack of Cause, Unlawful Cause, False
Requisites: Cause and Lesion (Arts. 1352 – 1355)
a. Exists at the time the contract is entered into Cause Effect
[Par. 3, 1409, CC]
VOID.
b. Lawful [Art. 1352, CC]
Lack of Cause – Note: Cause must exist at the
c. True or real [Art.1353, CC]
absence or total time of the perfection of the
lack of cause contract; it need not exist
Cause vs. Object
later.
Cause Object
VOID.
As to Remuneration If parts of a contract are illegal
The service or benefit The thing which is given but the rest are supported
which is remunerated in remuneration by lawful cause, claimant of
As to Donation such has the burden of
The liberality of the The thing which is given showing proof; otherwise, the
donor or benefactor or donated whole contract is VOID.
As to the Thing
Prestation or promise of Contrary to law, Contracts with illegal cause
The thing or service morals, good may still produce effect in
a thing or service by the
itself customs, public certain cases where parties are
other
policy and public not of equal guilt:
As to Contracting Parties
order (unlawful (1) innocent party cannot be
Different with respect May be the same for
cause) compelled to perform his
to each part both parties
obligation and he may
recover what has already
Distinguished from Motive been given;
Cause Motive (2) if both parties are guilty,
Proximate reason for Remote reason for the neither can sue the other,
contract contract the law leaving them as
Objective or juridical Psychological and purely they are (in pari delicto, Art.
reason personal reason 1411, CC).
Always the same for Differs for each REVOCABLE/VOIDABLE
each contracting party contracting party Falsity of cause – Parties are given a chance to
cause is stated show that a cause really exists,
Illegality affects Illegality does not affect but is untrue and that said cause is true and
existence or validity of existence or validity of lawful.
the contract contract General Rule: NO EFFECT.
Exception: Inadequacy of cause
Note: Motive becomes the cause when it Lesion or
shall invalidate the contract
predetermines the purpose of the contract. inadequacy of
when:
cause – cause is
(1) there is fraud, mistake,
not proportionate
undue influence
to object
(2) when parties intended a
donation

Note: Inadequacy of cause may be a badge of fraud.

Page 263 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Agency to sell land Authority of the agent must be

C. Form of Contracts or any interest
therein
in writing; otherwise, the sale
shall void [Art. 1874, CC]
General rule Stipulation to pay
No form necessary for contracts provided that all interest on loans, Must be expressly made in
the essential requisites for their validity are interest for the use writing [Art. 1956, CC]
present [Par. 1, Art. 1356, CC] of money
Must be (1) in writing, signed
Exception: Stipulation
by the shipper or owner; (2)
a. When the law requires that a contract be in some limiting common
supported by a valuable
form in order that it may be valid [par. 2, Art. carrier’s duty of
consideration; and (3)
1356, CC] extraordinary
reasonable, just, and not
b. When the law requires that a contract be proved diligence to
contrary to public policy [Art.
in a certain way to be enforceable (Statute of ordinary diligence
1744, CC]
Frauds) [par. 2, Art. 1356, CC]
c. When the law requires a contract to be in some Requires transfer of the
Transfer of large
form for convenience, or to be effective against certificate of registration [Sec.
cattle
third parties [Arts. 1357 and 1358, CC] 523, Administrative Code]

1. Kinds of Formalities b. For the Purpose of Proving the

Required by Law Existence of the Contract (Ad
Probationem/ Statute of Frauds)
a. For the Validity of Contracts (Ad
Esentia /Ad Solimnitatem/ The following contracts are UNENFORCEABLE,
UNLESS they are ratified
Solemn Contracts) 1. Those entered into in the name of another
person by one who has been:
Formal or Special Form Required by a. given no authority
Solemn Contract Law b. or legal representation,
Must be in a public instrument, c. or who has acted beyond his powers;
specifying therein the property 2. Those that do not comply with the Statute of
Donation of
donated and the value of the Frauds
Immovables
charges which the donee must 3. Those where both parties are incapable of
satisfy. [Art. 749, CC] giving consent to a contract. [Art. 1403, CC]
Donation of
movables when Statute of Frauds
Must be in writing; otherwise, An agreement as to the following shall be
the value of the
the donation is void. [Art. 748, unenforceable UNLESS:
personal property
CC] 1. The agreement, or some note or memorandum,
donated exceeds
P5,000 thereof, be in writing, and
2. Subscribed by the party charged, or by his agent;
An inventory of said property
evidence, therefore, of the agreement cannot be
Partnerships must be made, signed by the
received without the writing, or a secondary
where immovable parties and attached to the
evidence of its contents [Art. 1403, CC]
property is public instrument. Otherwise,
contributed the contract of partnership is
Agreements under the Statute of Frauds [Art.
void. [Art. 1773, CC]
1403, CC]
The amount of the principal 1. An agreement that by its terms is not to be
and the interest, if any, must be performed within a year from the making
Contract of
specified in writing; otherwise, thereof;
antichresis
the contract of antichresis shall 2. A special promise to answer for the debt,
be void [Art. 2134, CC] default, or miscarriage of another;
3. An agreement made in consideration of
marriage, other than a mutual promise to marry;

Page 264 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
4. An agreement for the sale of goods, chattels or
things in action, at a price not less than five
hundred pesos, unless the buyer accept and
receive part of such goods and chattels, or the
evidences, or some of them, of such things in
action or pay at the time some part of the
purchase money; but when a sale is made by
auction and entry is made by the auctioneer in his
sales book, at the time of the sale, of the amount
and kind of property sold, terms of sale, price,
names of the purchasers and person on whose
account the sale is made, it is a sufficient
memorandum;
5. An agreement of the leasing for a longer period
than one year, or for the sale of real property
or of an interest therein;
6. A representation as to the credit of a third
person.
This article speaks of contracts that cannot be proven
except by written note or memorandum, unless the
party charged waives the objection [Rule 123, Sec. 21,
Rules of Court]
This article applies to executory contracts only
[Almirol v Monserrat, G.R. No. 23717, (1925)]
c. For the Effectivity of the
Contract Against Third Persons
If the law requires a document or other special
form (Art. 1357, CC)
1. The contracting parties may compel each other
to observe that form, once the contract has been
perfected.
2. This right may be exercised simultaneously with
the action upon the contract.
Art. 1358, CC which requires the embodiment of
certain contacts in a public instrument, is only for
convenience, and registration of the instrument only
adversely affects third parties. Formal requirements
are, therefore, for the benefit of third parties.
Non-compliance therewith does not adversely affect
the validity of the contract nor the contractual rights
and obligations of the parties thereunder. [Fule vs CA,
G.R. No. 112212, (1998)]
Before the contracting parties may be compelled to
execute the needed form, the contract should be:
1. Perfected or valid
2. Enforceable under the Statute of Frauds
Page 265 of 511
CIVIL LAW
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
property; sales of real property or of an interest
therein as governed by Articles 1403, No. 2,
and 1405;
2. The cession, repudiation or renunciation of
hereditary rights or of those of the conjugal
partnership of gains;
3. The power to administer property, or any other
power which has for its object an act appearing
or which should appear in a public document,
or should prejudice a third person;
4. The cession of actions or rights proceeding
from an act appearing in a public document.
All other contracts where the amount involved
exceeds five hundred pesos must appear in writing,
even a private one. But sales of goods, chattels or
things in action are governed by Articles, 1403, No.
2 and 1405.
Enumerated contracts in Art. 1358, CC are valid even
when not reduced into writing, although parties may
have recourse under Art. 1357, CC to compel
execution of the writing, except in the following cases:
1. Solemn Contracts (action under Art. 1357, CC
is not available at all)
2. Real Contracts (action under Art. 1357, CC is
available if there is consent, subject matter, cause,
and delivery)
3. Contracts under the Statutes of Fraud
(remedy under Art. 1357, CC is applicable only if
the defense of the Statute is waived expressly or
impliedly by the party charged
Actions under Art. 1357, CC may be exercised
simultaneously with (i.e. need not be separate nor
need it precede) the action to enforce the contract,
although questions of form must be decided first.
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
D. Reformation of
Instruments
Reformation – remedy in equity by means of which
a written instrument is made or construed so as to
express or conform to the real intention of the parties
when some error or mistake has been committed
[Reyes and Puno]
Requisites [Art. 1359, CC]:
1. There must be a meeting of the minds of the
contracting parties
2. Their true intention is not expressed in the
instrument;
3. Such failure to express their true intention is due
to mistake, fraud, inequitable conduct, or
accident; and
4. There is clear and convincing proof of mistake,
fraud, inequitable conduct, or accident
The appellant’s complaint states no cause of action,
for it fails to allege that the instrument to be reformed
does not express the real agreement or intention of
the parties. Such allegation is essential since the object
sought in an action for reformation is to make an
instrument conform to the real agreement or
intention of the parties. Moreover, courts do not
reform instruments merely for the sake of reforming
them, but only to enable some party to assert right
under them as reformed. [Garcia vs. Bisaya, G.R. No.
L-8060, (1955)].
Note: If mistake, fraud, inequitable conduct, or
accident has prevented a meeting of the minds of the
parties, the proper remedy is not reformation of the
instrument but annulment of the contract [par. 2, Art.
1359, CC]
The action for reformation of instrument should not
be confused with the action for annulment of
contract. [Veluz v Veluz, G.R. No. L-23261, (1968)]
Reformation v. Annulment [Veluz vs. Veluz, supra]
Reformation of
Annulment
Instrument
Presupposes a valid,
existing contract, in
Presupposes a defective
which there had been a
contract in which the
meeting of the minds of
minds of the parties did
the parties but the
not meet, or the consent
instrument drawn up
of one was vitiated.
and signed by them does
not correctly express the
Page 266 of 511
CIVIL LAW
terms of their
agreement.
Equity of reformation is
ordinarily limited to
Intended to declare the
inefficiency which the
written agreements, and
contract already carries
its purpose is to
in itself and to render
establish and
the contract
perpetuate the true
inefficacious.
agreement.
Multi-Ventures Capital Management Corporation v Stalwart,
G.R. No. 157439 (2007)
1. The presumption is that an instrument sets out
the true agreement of the parties and that it was
executed for valuable consideration. Thus, when
there is some error or mistake in the contract, the
onus probandi is upon the party who insists that the
contract should be reformed.
2. While intentions involve a state of mind,
subsequent and contemporaneous acts of the
parties as well as the evidentiary facts as proved
and admitted can be reflective of one’s intention.
3. Expediency and convenience, which was the
purpose of the execution of “purchase and sale
agreement”, is not a ground for reformation of
instrument.
Rosello-Bentir v Leanda, G.R. No. 128991 (2000)
1. The right of reformation is necessarily an
invasion or limitation of the parol evidence rule
since, when a writing is reformed, the result is
that an oral agreement is by court decree made
legally effective.
2. The prescriptive period for actions based upon a
written contract and for reformation of an
instrument is ten (10) years under Article 1144 of
the Civil Code.
Quiros vs Arjona, G.R. No. 158901 (2004)
In granting reformation, the remedy in equity is not
making a new contract for the parties, but
establishing and perpetuating the real contract
between the parties which, under the technical rules
of law, could not be enforced but for such
reformation.
NIA vs. Gamit, G.R. No. 85869, (1992)
When the terms of an agreement have been reduced
to writing, it is considered as containing all the
terms agreed upon and there can be, between the
parties and their successors in interest, no
evidence of such terms other than the contents of the
written agreement, except when it fails to express the
true intent and agreement of the parties thereto, in
which case, one of the parties may bring an action for
U.P. LAW BOC OBLIGATIONS AND CONTRACTS
the reformation of the instrument to the end that such
true intention may be expressed.
1. Cases Where Reformation is
Proper
a. Mistake
The mistake should be of fact generally, and not of
law [BPI v Fidelity and Surety Co., G.R. No. L-26743
(1927)]
Mutual
Mutual mistake of parties that causes failure to
disclose real agreement [Art. 1361, CC]
Unilateral
1. One party was mistaken, while the other acted
fraudulently [Art. 1362, CC]
2. One party was mistaken, while the other knew
or believed that the instrument did not state their
real agreement, but concealed it from the former
[Art. 1363, CC]
b. Fraud
Active
If one party was mistaken and the other acted
fraudulently in such a way that the instrument does
not show their true intention [Art. 1362, CC]
Passive (concealment)
When one party was mistaken and the other knew or
believed that the instrument did not state their
real agreement [Art. 1363, CC]
c. Inequitable conduct
If one party was mistaken and the other acted
fraudulently or inequitably in such a way that the
instrument does not show their true intention [Art.
1362, CC]
d. Accident
When through the ignorance, lack of skill, negligence
or bad faith on the part of the person drafting the
instrument or of the clerk or typist, the instrument
does not express the true intention of the parties [Art.
1364, CC]
Page 267 of 511
CIVIL LAW
No fraud exists in the sense that neither of the parties
took part therein.
e. Severe Pacto de Retro / Relative
Simulation
Art. 1365, CC. If two parties agree upon the
mortgage or pledge of real or personal property, but
the instrument states that the property is sold
absolutely or with a right of repurchase, reformation
of the instrument is proper.
2. Who May Ask for
Reformation
When through mistake of the parties
a. Either party or his successors in interest, if the
mistake was mutual; otherwise,
b. Upon petition of the injured party, or his heirs
and assigns [Art. 1368, CC]
When through the ignorance, lack of skill,
negligence or bad faith on the part of the person
drafting the instrument or of the clerk or typist
• Courts may order that the instrument be
reformed [Art. 1364, CC]
3. Cases Where Reformation is
Not Proper
a. Simple donations inter vivos—wherein no
condition is imposed—because donation is an act
of liberality [Art. 725, CC] and cannot be
compelled);
b. Wills—no reformation before the testator dies
because the making of a will is strictly personal
[Art. 784, CC], a free act [Art. 839, CC], and
essentially revocable [Art. 828, CC];
c. When the real agreement is void—because
there is nothing to reform. The power of the
court to reform is not for accomplishing a vain
thing [Tolentino].
Implied Ratification/Estoppel: the party who has
brought an action to enforce the instrument cannot
subsequently ask for its reformation [Art. 1367, CC]
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

E.Interpretation of Contract

1. Primacy of Intention of the other, or by construction, relieve one of the

parties from the terms which he voluntarily consented
to, or impose on him those which he did not. [Bautista
a. If the terms of a contract are clear and leave no
v CA, G.R. No. 1263655 (2000)].
doubt upon the intention of the contracting
parties, the literal meaning of its stipulations
While ordinarily the literal sense of the words
shall control.
employed is to be followed, such is not the case where
b. If the words appear to be contrary to the
they "appear to be contrary to the evident
evident intention of the parties, the latter shall
intention of the contracting parties." Intention
prevail over the former. [Art 1370, CC]
shall prevail. [Borromeo v Reyes, G.R. L-22962 (1972)]
c. However general the terms of a contract may be,
they shall not be understood to comprehend
Nomenclature is not decisive of the character
things that are distinct and cases that are
A contract is what the law defines it to be, and not
different from those upon which the parties
what it is called by the contracting parties. The Title
intended to agree. [Art. 1372, CC]
of the contract does not necessarily determine its
nature [Tolentino]
Cardinal Test
Intention of the parties, to be derived from the
Separability Clause
terms/language of the contract.
Another fundamental rule in the interpretation of
contracts is that the terms, clauses and conditions
Where the language of a contract is plain and
contrary to law, morals and public order should
unambiguous, its meaning should be determined
be separated from the valid and legal contract
without reference to extrinsic facts or aids. The
and when such separation can be made because
intention of the parties must be gathered from that
they are independent of the valid contract. A lawful
language, and from that language alone. Courts
promise made for a lawful consideration is not invalid
cannot make for the parties better or more equitable
merely because an unlawful promise was made at the
agreements than they themselves have been satisfied
same time and for the same consideration. [Kasilag v
to make, or rewrite contracts because they operate
Rodriguez, G.R. No. 46623 (1939)]
harshly or inequitably as to one of the parties, or alter
them for the benefit of one party and to the detriment
Exception:

Page 268 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

a. Where the statute expressly or by necessary

implication declares the entire contract void 3. Rule 123, Rules of Court
b. Where the terms, clauses, and conditions, by an
established connection or by manifest intention
Note: This is now found in Secs. 10-19, Rule 130.
of the parties, is inseparable from the principal
obligation, and is a condition, juridically speaking,
of that the nullity of which it would also occasion Art. 1379, CC. The principles of interpretation
[Manresa] stated in Rule 123 of the Rules of Court shall likewise
be observed in the construction of contracts
Interpretation of Contracts of Adhesion
A contract of adhesion is just as binding as ordinary Summary of rules on interpretation [Rule 130,
contracts. Contracts of adhesion are not invalid ROC]
per se; they are not entirely prohibited.The one a. Writing is to be interpreted according to its legal
who adheres to the contract is in reality free to reject meaning UNLESS parties intended otherwise.
it entirely; if he adheres, he gives his consent. [Sec. 10]
b. Instrument must be construed to give effect to all
While ambiguities in a contract of adhesion are to be provisions. [Sec. 11]
construed against the party that prepared the same, c. Particular provisions are paramount to general
this rule applies only if the stipulations in such ones when they are inconsistent. [Sec. 12]
contract are obscure or ambiguous. If the terms d. The circumstances under which the instrument
thereof are clear and leave no doubt upon the was made must be considered. [Sec. 13]
intention of the contracting parties, the literal e. The terms of a writing are presumed to have been
meaning of its stipulations shall control. In the used in their primary and general acceptation
latter case, there would be no need for construction. unless contrary evidence is presented. [Sec. 14]
[RCBC vs CA G.R. No. 133107(1999)] f. Written words prevail over printed ones. [Sec. 15]
g. Experts and interpreters may be used in
explaining language not understood by the court.
2. Rules on Doubt [Art. 1378, [Sec. 16]
CC] h. When conflicting constructions of provisions are
equally proper that which is the most favorable
When it is absolutely impossible to settle doubts by to the party in whose favor the provision was
the rules established in the preceding articles: made shall be accepted. [Sec. 17]
i. When an instrument is equally susceptible of two
When doubts are cast interpretations, one in favor of natural right and
upon the principal the other against it, the former is to be adopted.
object/s of any contract [Sec. 18]
The contract shall
and it cannot be known j. An instrument may be construed according to
be null and void.
what may have been the usage, in order to determine its true character.
intention or will of the [Sec. 19]
parties
When doubts refer to the
incidental circumstances The least
of gratuitous contracts and transmission of
it is absolutely impossible rights and interests
to settle doubts by the shall prevail.
rules
When doubts refer to the The doubt shall be
incidental circumstances settled in favor of
of onerous contracts and it the greatest
is absolutely impossible to reciprocity of
settle doubts by the rules interests.

Page 269 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

could have been known at the time of making of the

F. Defective Contracts contract. [Tolentino]
[Tolentino] Lesion does not invalidate a contract except only in
A contract that has caused a special cases provided by law [Art. 1355, CC]
particular damage to one of the
parties or to a third person and
Rescissible
which for EQUITABLE
b. Characteristics of Rescissible
REASONS may be set aside even Contracts
if valid
A contract in which CONSENT 1. The defect consists in injury or damage either to
of one of the parties is defective, one of the contracting parties or to third persons;
Annulable or 2. Before rescission, they are valid, and therefore,
either because of WANT OF
Voidable legally effective;
CAPACITY or because it is
(contrato 3. They can only be attacked directly only and not
VITIATED , but which contract
nulo) collaterally;
is VALID until JUDICIALLY set
aside 4. They can be attacked only by a contracting party
A contract that for some reason or a third person who is injured or defrauded; and
CANNOT BE ENFORCED, 5. They are susceptible of convalidation only by
Unenforceable prescription and not ratification
UNLESS RATIFIED in the
manner PROVIDED BY LAW 6. Rescission is not a principal remedy, but a
subsidiary one. It can only be availed of only if
A contract which is an the injured party proves that he has no other legal
ABSOLUTE NULLITY and means to obtain redress for the damage caused
Void or
produces NO EFFECT, as if it [Art. 1177, CC]
Inexistent
had never been executed or 7. The rescission shall only be to the extent
entered into necessary to cover the damages caused i.e. partial
rescission [Art. 1384, CC]
1. Rescissible Contracts 8. The action to claim rescission must be
commenced within four years [Art. 1389, CC]
Contracts which are valid until rescinded. All essential
requisites of a contract exist but there is injury or c. Distinguished from
damage to one of the parties or to third persons – Rescission/Resolution under
external or extrinsic defect consisting of an economic
damage or lesion. [Paras] Art. 1191
Art. 1191 – Rescission
a. Rescission or Resolution for
Art. 1381 – Rescission
by Reason of Lesion
Breach of Stipulation
Rescission is a remedy granted by law to the Applies only to
contracting parties and even to third persons, to reciprocal obligations,
secure reparation for damages caused to them by Applies whether
such that a party’s
a contract, even if this should be valid, by means of obligations are reciprocal
breach thereof partakes
the restoration of things to their condition at the or unilateral and whether
of a tacit resolutory
moment prior to the celebration of said contract. the contract has been
condition which entitles
[Tolentino] fully fulfilled
the injured party to
rescission.
Relief to protect one of the parties or a third person
from all injury and damages which the contract may Predicated on injury to
cause, to protect some preferential right [Aquino v. economic interests of the
Tañedo, G.R. No. L-12457 (1919)] Predicated on breach of party plaintiff/lesion.
faith. HOWEVER, not all
Lesion economic prejudices are
The injury which one of the parties suffers by virtue recognized by law.
of a contract which is disadvantageous for him. To Principal action that is
give rise to rescission, the lesion must be known or Subsidiary action.
retaliatory in character.

Page 270 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Art. 1191 – Rescission Requisites for Rescission under Art. 1381 (1) (2),
Art. 1381 – Rescission
or Resolution for CC
by Reason of Lesion
Breach of Stipulation 1. Contract was entered into by a guardian in behalf
The cause of action is of his ward or by a legal representative in behalf
subordinated to the of an absentee [Arts. 1381 (1) and (2) CC]
existence of an economic
The reparation of Note: A guardian is authorized only to manage the
prejudice. Hence, where
damages for the breach estate of the ward; should he dispose a portion
the defendant makes
is purely secondary. thereof without authority from the court by way
good the damages caused,
the action cannot be of a contract, the same is unenforceable under Art.
maintained or continued. 1403(1), CC, irrespective of whether there is
Mutual restitution when declared proper as lesion or not.
between the parties involved
May be demanded only May be demanded by a 2. It was entered into without judicial approval [Art.
by a party to the third party prejudiced in 1386, CC]
contract the contract
3. Ward or absentee suffered lesion of more than
May be denied by court one-fourth of the value of the property which is
Extension of time does
when there is sufficient the object of the contract. [Art. 1381 (1) and (2),
not affect the right to ask
reason to justify the CC]
for rescission
extension of time
4. There is no other legal means of obtaining
Non-performance is
Various reasons of equity reparation for the lesion. [Art. 1383, CC]
the only ground for the
are grounds for rescission
right to rescission
[Congregation of the Religious Virgin Mary v. Orola, G.R. 5. Person bringing the action must be able to return
No. 169790 (2008)] whatever he may be obliged to restore. [Art.
1385(1), CC]
d. Rescissible Contracts and Their 6. Object of the contract must not be legally in the
Requisites [Arts. 1381-1383, 1385, possession of a third person who did not act in
1389, CC] bad faith [Art. 1385(2), CC]

Note: for Art. 1381 (4), CC: Any disposition of the

Art. 1381, CC. The following contracts are thing subject of litigation or any act which tends to
rescissible:
render inutile the court’s impending disposition in
1. Those which are entered into by guardians
such case without the knowledge and approval of the
whenever the wards whom they represent suffer
litigants or of the court, is unmistakably and
lesion by more than one-fourth of the value of
irrefutably indicative of bad faith.
the things which are the object thereof;
2. Those agreed upon in representation of
However, even without knowledge or approval from
absentees, if the latter suffer the lesion stated in
the court, the conveyance of a property subject of
the preceding number;
litigation may still be valid but is susceptible for
3. Those undertaken in fraud of creditors when the
rescission under Art. 1381(4), CC.
latter cannot in any other manner collect the
claims due them;
A definitive judicial determination with respect to the
4. Those which refer to things under litigation if
thing subject of litigation is not a condition sine qua
they have been entered into by the defendant non before the rescissory action contemplated under
without the knowledge and approval of the
Article 1381(4) of the Civil Code may be instituted.
litigants or of competent judicial authority;
The primordial purpose of Article 1381(4) of the Civil
All other contracts specially declared by law to be
Code is to secure the possible effectivity of the
subject to rescission.
impending judgment by a court with respect to the
thing subject of litigation. [Ada v. Baylon, G.R. No.
182435 (2012)]

Page 271 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Requisites before a Contract Entered Into in Art. 1191 Art. 1381

Fraud of Creditors May Be Rescinded under Art. Rescission in
1381 (3): Reciprocal Rescission by Reason of
1. There is a credit existing prior to the celebration Obligations Lesion
of the contract, although not yet due or (Resolution)
demandable;
2. There is fraud, or at least, the intent to commit The action is based on a
fraud to the prejudice of the creditor seeking A resolutory party’s breach of obligation
rescission, which may be presumed or proved condition is and cannot be instituted
[Art 1387, CC]; implied upon except when the party
breach of one suffering damage has no other
3. Creditor cannot in any legal manner collect his
party. legal means to obtain
credit; insolvency of the debtor is not required;
reparation. [Art. 1383, CC]
and
4. Object of the contract must not be legally in the Creates the obligation to
possession of a third person who did not act in return the things which were
bad faith. the object of the contract,
together with their fruits, and
Grants the injured
Accion Pauliana the price with its interests
party the option to
The action to rescind contracts in fraud of creditors. pursue, either a
Consequently, accion pauliana presupposes a judgment This can only be carried out
rescission or
and unsatisfied execution which cannot exist when when he who demands
specific
the debt is not yet demandable at the time the rescission can return what he
performance of the
rescissory action is brought. [Tolentino] is obliged to restore, also
obligation, with
when there are none
payment of
Note: Even secured creditors are entitled to accion endangered third persons who
damages in either
pauliana. did not act in bad faith.
case
Otherwise, damages may be
Art. 1382, CC. Payments made in a state of demanded from the person
insolvency for obligations to whose fulfillment the causing the loss. [Art. 1385,
debtor could not be compelled at the time they were CC]
effected, are also rescissible. Prescribes in 10
Prescribes in 4 years
years
Requisites before payment made by Insolvent [Lalicon v. National Housing Authority, G.R. No. 185440,
can be rescinded: (2011)]
1. It was made in a state of insolvency;
2. Obligation must have been one which debtor For persons under guardianship and for absentees,
could not be compelled to pay at the time such the period of four years shall not begin until the
payment was effected. termination of the former's incapacity, or until the
domicile of the latter is known. [Art. 1389, CC]
Note: A debtor can be compelled to pay by the
creditor even before the expiration of the period since Do all creditors benefit from the rescission?
by his insolvency he has already lost his right to the As a rule, the rescission should benefit only the
benefit of such period. [Art. 1198(1), CC] creditor who obtained the rescission, because the
rescission is to repair the injury caused to him by the
Effects of Rescission [Art. 1385, CC] fraudulent alienation. If a balance is left after
It creates an obligation of mutual restitution or the satisfying the claim of the creditor who brought the
obligation to return the things which were the object action, other creditors who are qualified to bring an
of the contract, together with their fruits, and the accion pauliana should be given the benefit of
price with its interests. rescission, instead of requiring them to bring other
rescissory actions. However, creditors who only
However, if the object of the contract is in the became such after the fraudulent alienation, cannot
possession of third persons in good faith, rescission benefit from the rescission.
cannot take place and indemnity for damages may be
demanded from the person causing the loss [Art. Presumption of Fraud
1385, CC] When alienation of property presumed in fraud of
creditors:

Page 272 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

1. Alienation by gratuitous title if the debtor has not
reserved sufficient property to pay all of his debts
contracted before alienation [Art. 1387(1), CC]
2. Alienation by onerous title if made by a debtor
against whom some judgment has been rendered
in any instance or some writ of attachment has
been issued [Art. 1387(2), CC]
2. It is binding until it is annulled;
3. It is susceptible of convalidation by ratification or
prescription; once ratified, they become
absolutely valid and can no longer be annulled
[Art. 1392, CC]; and
4. Its defect or voidable character cannot be
invoked by third persons.

Badges of Fraud Note: Failure of an heir to obtain authority from his

A conveyance leaving no property for other creditors co-heirs does not result in his incapacity to give
to attach is an evidence of fraud. [China Banking v. CA, consent so as to render the contract voidable, but
G.R. No. 129644 (2000)]: rather, renders the contract valid but unenforceable
1. Consideration is fictitious or inadequate; against Conrado’s co-heirs for having been entered
2. Transfer was made while suit had begun or into without their authority. [Heirs of Ureta, Sr. v. Heirs
pending; of Ureta, G.R. No. 165748 (2011)]
3. Sale was upon credit by insolvent debtor;
4. There was large indebtedness or complete Rescission Annulment
insolvency; Merely produces the
5. Transfer consisted of all or nearly all property inefficacy of the Declares the inefficacy
especially when insolvent or greatly; contract, which did not which the contract already
6. The transfer was made between father and son essentially exist in the carries in itself
when other above circumstances present; and contract
7. There was failure of vendee to take exclusive Needs ratification to be Requires an act of
possession of all property embarrassed effective ratification to be cured
financially.
Private interest alone Direct influence of the
governs public interest is involved
2. Voidable Contracts May be compatible Based on a vice of the
with the perfect validity contract which invalidates
Voidable or annullable contracts are existent, valid of the contract it
and binding, although they can be annulled because A remedy A sanction
of want of capacity or vitiated consent of one of the Equity predominates The law predominates
parties. [Tolentino]
May be demanded by
Can be demanded only by
Art. 1390, CC. The following contracts are voidable third parties affected by
parties to the contract
or annullable, even though there may have been no the contract
damage to the contracting parties:
1. Those where one of the parties is incapable of Who may institute action for annulment
giving consent to a contract; General Rule: Action for annulment may be instituted
2. Those where the consent is vitiated by mistake, by all who are thereby obliged principally or
violence, intimidation, undue influence or fraud. subsidiarily. Persons capable of giving consent and
These contracts are binding, unless they are annulled guilty parties who have caused the vitiation of consent
by a proper action in court. They are susceptible of cannot allege the incapacity or want of consent of
ratification. those they contracted with. This rule is sustained by
the principle that he who comes to court must come
Note: Art. 1390 refers to a “proper action in court”. with clean hands [Art. 1397, CC].
The validity of a voidable contract may only be
attacked either by way of a direct action or by way of Requisites:
defense via a counterclaim, and not a special or 1. Plaintiff must have an interest in the contract;
affirmative defense. [Jurado] 2. The victim and not the party responsible for the
vice or defect must assert the same
a. Characteristics of Voidable Exception: If a third person is prejudiced in his rights
Contracts with respect to one of the contracting parties and can
show detriment which would postitively result to him
1. Its defect consists of the vitiation of consent of from the contract in which he has no intervention.
one of the contracting parties;

Page 273 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

[Teves v. People’s Homesite & housing Corp., G.R. No. L-

21498 (1968)] Prescription of the Action for Annulment
Grounds for being
Reckoning Point
Effects of Annulment voidable
If contract has not yet been consummated – parties Four years from the time
shall be released from the obligations arising Intimidation, violence,
the defect of the consent
therefrom. or undue influence
ceases
Four years from discovery
If contract has already been consummated - The Fraud or Mistake
thereof
contracting parties shall restore to each other the Minors and Four years from the time
things which have been the subject matter of the Incapacitated Persons the guardianship ceases.
contract, with their fruits, and the price with its
interest, except in cases provided by law. [Art. 1398- Constructive Notice
1402] Discovery or fraud must be reckoned from the time
the document was registered in the office of the
Obligation of Mutual Restitution register of deeds. Registration constitutes
General Rule: Upon annulment, the parties shall restore constructive notice to the whole world. [Carantes v.
to each other the subject matter of the contract with CA, G.R. No. L-33360 (1977)]
its fruits and the price thereof with legal interest. [Art.
1398, CC]
b. Ratification
Exception: When the defect of the contract consists in
The act or means by virtue of which efficacy is given
the incapacity of one of the parties, the incapacitated
to a contract which suffers from a vice of curable
person is not obliged to make any restitution except
nullity [Arts. 1392-1396, CC]. Ratification is either
insofar as he has been benefited by the thing or price
express or tacit.
received by him. [Art. 1399, CC]
1. EXPRESS or
2. TACIT – When the person who has the right to
Note: Art. 1399, CC cannot be applied to those cases
invoke it, with the knowledge of the reason which
where the incapacitated person can still return the
renders the contract voidable and such reason
thing which he has received.
having ceased, executes an act implying an
intention to waive his right [Art. 1393, CC]
Effects of Failure to Make Restitution
Loss of thing by Loss of thing by
Requisites of Ratification
Plaintiff Defendant
1. Contract is tainted with a vice susceptible of
If it is lost through the being cured;
If the loss of the object
defendant’s fault, he is 2. Confirmation is effected by the person who is
in his possession is due
liable for fruits received, entitled to do so under the law;
to his fault or fraud, he
value of the thing at the 3. It is effected with knowledge of the vice or defect
cannot ask for
time it was lost, with of the contract;
annulment. [Art. 1400,
interest from the same 4. Cause of the nullity or defect have already
CC]
date. disappeared.
If the loss of the thing in his possession was due to
a fortuitous event, the action for annulment is not The right to ratify may be transmitted to the heirs of
extinguished. [Tolentino] the party entitled to such right. It may likewise be
exercised by the guardian of the incapacitated person
having such right. [Art. 1394, CC]
Three Ways or Modes of Convalidating a
Voidable Contract Ratification does not require the conformity of the
1. By prescription of the action for annulment contracting party who has no right to bring an action
[Art.1391, CC] for annulment. [Art. 1385, 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]

Page 274 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

It cleanses the contract from all its defects from the

moment it was constituted. [Art. 1396, CC] a. Characteristics
3. Unenforceable Contracts 1. Cannot be enforced by a proper action in court
2. Susceptible of ratification
Unenforceable Contracts – contracts that by reason 3. Cannot be assailed by third persons [Art. 1408,
of statutory defects do not confer any action to CC]
enforce the same until and unless they are ratified in
the manner prescribed by law [Reyes]

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

Contract entered Contract where both

into without Contracts covered by Statute of Frauds parties are incapable
authority of giving consent
Effect on
No effect unless ratified. Cannot be enforced by a proper action in court
the Contract
• Not by direct action. • Not by direct action.
• As a defense, by • Not by direct action. • As a defense, by
How to motion to dismiss • As a defense, by motion to dismiss on the motion to dismiss the
assail the complaint on ground that the contract is unenforceable; complaint on the
the ground that the • Objection to the presentation of oral evidence ground that the
contract is to prove an oral contract [see Art. 1405] contract is
unenforceable unenforceable
Who can
assail - By the party against
cannot be By the person whose whom the contract is
assailed by name the contract was By the party against whom the contract is being being enforced; or his
third entered into / by enforced; or his privies privies; or parents or
persons owner of property guardians, as it is a
[Art. 1408, personal defense
CC]
When When a party asks the court to enforce the contract
Ratification by party against whom the contract
is being enforced Ratification of party
against whom the
Failure to object to the to the presentation of contract is being
Ratification by person oral evidence to prove the contract amounts to enforced; or his privies;
How to
whose name the waiver [Art. 1405, CC]; makes it as binding as if or parents or guardians
Cure
contract was entered written contract written form requirement is
Defectt
into evidentiary by acceptance of benefits under the The ratification by one
contracts contract is no longer executory based party converts the
on the principle that the one who has enjoyed the contract into a voidable
benefits of a transaction should not be allowed contract [Art. 1407, CC]
to repudiate its burdens

Page 275 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
STATUTE OF FRAUDS
Descriptive of statutes which requires certain classes
of contracts to be in writing. Merely regulates the
formalities of the contract necessary to render it
enforceable.
The Statute of Frauds simply provides the method by
which the contracts enumerated therein may be
proved but does not declare them invalid because they
are not reduced to writing. [Swedish Match v CA, G.R.
No. 128120 (2004)]
Unenforceable agreements unless in written
memorandum and subscribed by the parties
charged [par. 2, Art. 1403, CC]
1. Agreement not to be performed within 1 year
from the 
making 
 For a note or memorandum to satisfy the Statute,
2. Special promise to answer for the debt, default or

miscarriage of another 
 1.
3. Agreement made in consideration of marriage
other than 
“mutual” promise to marry
4. Sale of goods, chattels or things in action, priced
not less 
than P500
5. Leasing for period longer than one year OR sale
of real 
property or of an interest therein
6. Representation to the credit of a 3rd person
General rules of application of statute of frauds
1. The Statute of Frauds is a Rule of Exclusion, i.e.
oral evidence might be relevant to the agreements
enumerated therein and might therefore be
admissible were it not for the fact that the law
excludes said oral evidence.
2. The defense of the Statute of Frauds may be
waived [Art. 1405, CC]
3. Applies only to executory contracts and not those
which have been consummated either totally or
partially. Or else, the exclusion of parol evidence
would promote fraud or bad faith. [Carbonnel v.
Poncio, G.R. No. L-11231 (1958)]
4. The Statute of Frauds is exclusive that is, it
applies only to the agreements or contracts
enumerated therein [Quintos v Morata, G.R. No.
L-31732, (1930)]
5. The Statute of Frauds is a personal defense, that
is, a contract infringing it cannot be assailed by
third persons [Art. 1408, CC]
6. Contracts infringing the Statute of Frauds are not
void, they are merely unenforceable [Art. 1403,
CC]
Exceptions to application of statute of fraud
1. The Statute of Frauds cannot apply if the action
is neither for damages because of the violation of
an agreement nor for the specific performance of
said agreement
Page 276 of 511
CIVIL LAW
2. The Statute of Frauds does not determine the
credibility or weight of evidence. It merely
concerns itself with the admissibility thereof.
3. The Statute of Frauds does not apply if it is
claimed that the contract does not express the
true agreement of the parties. As long as the true
or real agreement is not covered by the Statute of
Frauds, it is provable by oral evidence [Cuyugan v.
Santos, G.R. No. L-10265 (1916)]
The Statute of Frauds simply provides the method by
which the contracts enumerated therein may be
proved but does not declare them invalid because they
are not reduced to writing. [Swedish Match v. CA, G.R.
No. 128120 (2004)]:
it:
Must be complete in itself. It must indicate at
what price the thing is being sold, and state the
mode of payment. It cannot rest partly in writing
and partly in parol. [Swedish Match v. CA, supra]
2. Must contain the names of the parties, the terms
and conditions of the contract, and a description
of the property sufficient to render it capable of
identification.
3. Must contain the essential elements of the
contract expressed with certainty that may be
ascertained from the note or memorandum itself,
or some other writing to which it refers or within
which it is connected, without resorting to parol
evidence.
The purpose of the Statute is to prevent fraud and
perjury in the enforcement of obligations depending
for their evidence on the unassisted memory of
witnesses, by requiring certain enumerated contracts
and transactions to be evidenced by a writing signed
by the party to be charged. [Asia Productions v. Pano,
G.R. No. L-51058 (1992)]
When unenforceable contracts become voidable
or valid [Art. 1407, CC]
Unenforceable contracts become voidable when
both parties are incapable of giving consent, if the
same is ratified by the parent or guardian of either
party, or by one of the parties, after attaining or
regaining capacity.
Unenforceable contracts become valid when
ratification is made by the parents or guardians of
both contracting parties or by the parties
themselves after attaining or regaining capacity.
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

may, under the conditions set forth in Article 1177 of

4. Void or Inexistent Contracts said Code, exercise the rights and actions of the latter,
EXCEPT only those which are inherent in his person,
including therefore, his right to the annulment of said
Contracts which have no effect at all and cannot be
contract, even though such creditors are not affected
ratified or validated [Paras]
by the same, except indirectly, in the manner indicated
in said legal provision. [Pascual v. Secretary of Public
Those which, because of certain defects, generally
Works, G.R. No. L-10405 (1960)]
produce no effect at all. They are considered as
inexistent from its inception or from the very
A contract which is the direct result of a previous
beginning [de Leon]
illegal contract is also void and inexistent. [Art. 1421,
CC]
Includes not only those contracts in which one of the
essential requisites is totally wanting, but also those
Void v. Inexistent Contracts
which are declared void by positive provision of law
Void Inexistent
or statute.
Those where all the
Art. 1409, CC. The following contracts are requisites of a contract
inexistent and void from the beginning: are present but the
1. Those whose cause, object or purpose is cause, object or Those where one or some
contrary to law, morals, good customs, public purpose is contrary to or all of the requisites
order or public policy; law, morals, good essential for the validity of
2. Those which are absolutely simulated or customs, public order a contract are absolutely
fictitious; or public policy, or the lacking
3. Those whose cause or object did not exist at the contract itself is
time of the transaction; prohibited or declared
4. Those whose object is outside the commerce of void by law
men; Principle of pari delicto is Principle of pari delicto is
5. Those which contemplate an impossible service; applicable inapplicable
6. Those where the intention of the parties relative
May produce legal Cannot produce any
to the principal object of the contract cannot be
effects effect
ascertained;
7. Those expressly prohibited or declared void by Covers Art. 1409 (1), Covers Art. 1409 (2) and
law (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 all the
Contract Those where one of the essential requisites are
essential requisites is present, but consent is
wanting, either in fact vitiated by want of
1. It does not produce any legal effect;
or in law, or is declared capacity, or by error,
2. It is not susceptible of ratification;
void by statute. violence, intimidation, or
3. The right to set up the defense of inexistence or
deceit
absolute nullity cannot be waived or renounced;
4. The action or defense for the declaration of their Void; no contract at all Valid until annulled
inexistence or nullity is imprescriptible; [Art. Must be assailed through
1410, CC] an action for that purpose
Note: This provision does not apply to wills. May be assailed
by a party to the contract,
[Gallanosa v. Arcangel, G.R. No. L-29300 (1978)] indirectly
and never by a third
and person (direct attack)
5. The inexistence or absolute nullity of a contract
cannot be invoked by a person whose interests Nullity may be set-up
are not directly affected. [Art. 1421, CC] against anyone who Nullity may only be set-up
asserts a right arising against a party thereto.
Note: Article 1421 is subject to exceptions. For from it.
instance, the creditors of a party to an illegal contract

Page 277 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Not susceptible to with his promise. The party at fault cannot

May be validly ratified recover what he has given by reason of the
ratification
Action to declare contract, nor ask for the fulfillment of what has
nullity does not Action for annulment been promised to him
prescribe [Art. 1410, prescribes
CC] Exceptions to the Principle of In Pari Delicto:
1. Payment of usurious interest Interest paid in
excess of the interest may be recovered by the
The law prohibits the spouses from selling property
debtor. [Art. 1413, CC]
to each other, subject to certain exceptions. [Art.
2. Payment of money or delivery of property for an
1490, CC] Similarly, donations between spouses
illegal purpose, where the party who paid or
during marriage are prohibited. The prohibitions
delivered repudiates the contract before the
apply to common law relations. [Ching v. Goyanko,
purpose has been accomplished, or before any
G.R. No. 165879 (2006)]
damage has been caused to a third person. May
allow the repudiating party to recover money or
See: Pactum commissorium, Pactum de non alienado, Pactum
property. [Art. 1414, CC] [See Hulst v. PR Builders
leonina discussed above.
Inc., G.R. No. 156364 (2007)]
3. Payment of money or delivery of property made
Divisibility of Contracts
by an incapacitated person. It is not necessary
In contracts with separate provisions, the invalidity of
that illegal purpose has not been accomplished,
one does not automatically render the other invalid.
or no damage has yet been caused. [Art. 1415,
Art. 1420 of the New Civil Code holds that "In case
CC]
of a divisible contract, if the illegal terms can be
4. Agreement or contract not illegal per se but merely
separated from the legal ones, the latter may be
prohibited by law, and the prohibition is designed
enforced." Contrary to the suppositions of
for the plaintiff’s protection. Plaintiff may
petitioners, the invalid stipulation is independent
recover as allowing recovery enhances public
from the rest of the terms of the agreement and
policy. [Art. 1416, CC]
can easily be separated therefrom without doing
Note: When the assailed contracts are void ab
violence to the manifest intention of the parties.
initio, Art. 1416 cannot be applied, as in the case
This being so, the legal terms of the contract can be
of aliens purchasing property despite knowing
enforced. [Spouses Litonjua v. L & R Corporation, March
fully well the constitutional prohibition against
27, 2000]
foreigners owning land in the Philippines at the
time of purchase. [Frenzel v. Catito, G.R. No.
In Pari Delicto Principle (in pari delicto, non
143958 (2003)]
oritur actio) [Art. 1411, CC]
5. Payment of any amount in excess of the
Parties to a void agreement cannot expect the aid of
maximum price of any article or commodity fixed
the law; the courts leave them as they are, because
by law [Art. 1417, CC]
they are deemed in pari delicto or "in equal fault."
6. Contract whereby a laborer undertakes to work
[Menchavez v. Tevez, G.R. No. 153201 (2005)]. This
longer than the maximum number of hours fixed
requires:
by law [Art. 1418, CC]
1. When the defect of a void contract consists in the
Example: PD 442 (as amended), or the Labor
illegality of the cause or object of the contract and
Code, sets forth that the normal hours of work
both parties are at fault or in pari delicto, the law
of any that the normal hours of work of any
refuses them any remedy and leaves them where
employee shall not exceed eight hours a day
they are. [Arts. 1411-1419, CC]
7. Contract whereby a laborer accepts a wage lower
2. If the act in which the unlawful or forbidden
than the minimum wage fixed by law. He may
cause consists does not constitute a criminal
recover the deficiency with legal interest, and the
offense. [Art. 1412, CC]
employer shall be criminally liable [Art. 1419,
CC]
RULES:
8. In case of divisible contracts, the legal
1. When both parties are at fault
portions/terms may be enforced separately
Neither party may recover what he has given by
from the illegal portions/terms [Art. 1420, CC];
virtue of the contract, nor demand the
and
performance of the other’s undertaking.
9. One who lost in gambling because of fraudulent
2. When only one is guilty
schemes practiced on him. He is allowed to
The innocent party may demand the return of
what he has given without obligation to comply

Page 278 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

recover his losses [Art. 315(3)(b)] even if

gambling is prohibited
The principle of in pari delicto admits of an
exception under Art. 1416 of the Civil Code
Under this article, recovery for what has been paid or
delivered pursuant to an inexistent contract is allowed
only when the following requisites are met:
1. the contract is not illegal per se but merely
prohibited;
2. the prohibition is for the protection of the
plaintiffs; and
3. if public policy is enhanced thereby. [Acabal v.
Acabal, G.R. No. 148376 (2005)]
See also Arts. 1345 and 1346
Non-Existing Cause or Object [Paras]
Art. 1409(3) speaks of contracts “whose object or
cause did not exist at the time of the transaction.”
This is not exactly correct because there can be valid
contracts involving future property; example, sale of
future or after-acquired property. Thus, Justice J. B.
L. Reyes notes: “did not exist at the time of the
transaction” should be “could not come into
existence because the object may legally be a future
thing.”
Void contract cannot be novated [Art 1422, CC]
A contact which is a direct result of a previous illegal
contract, is also void and inexistent. This is based on
requisites of a valid novation [Art 1298, CC].
G.Natural Obligations
Those based on equity and natural law, which do not
grant a right of action to enforce their performance,
but after voluntary fulfillment by the obligor,
authorize the retention of what has been delivered or
rendered by reason thereof [Art. 1423, CC]
Note: The binding tie is the conscience of man
In order that there may be a natural obligation there
must exist a juridical tie which is not prohibited by law
and which in itself could give a cause of action but
because of some special circumstances is actually
without legal sanction or means of enforcing
compliance by intervention of courts. [Tolentino]
1. Four Types of Obligations in
Juridical Science
a. Moral Obligations – duties of conscience
completely outside the field of law
b. Natural Obligations – duties not sanctioned by
any action but have a relative judicial effect
c. Civil Obligations – juridical obligations that are
in conformity with positive law but are contrary
to juridical principles and susceptible of being
annulled; enforceable by action
d. Mixed Obligations – full juridical effect; falls
under civil obligations

2. Two 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
As to the coercive
by good
enforceability power of public
conscience of
authority
debtor
Equity and
Positive law [Art.
As to basis natural
1157, CC]
justice

Natural Obligations Imperfect Obligations

Only the performance of
Existence of the
the obligation is left to
obligation depends
the will of the debtor

Page 279 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Natural Obligations Imperfect Obligations Examples of Natural Obligations

exclusively upon the Art. 1424. When a right to sue upon a civil obligation
judgment of debtor has lapsed by extinctive prescription, the obligor
who voluntarily performs the contract cannot
Natural Obligations Moral Obligations recover what he has delivered or the value of the
There is a juridical tie service he has rendered.
between the parties which No juridical tie
is not enforceable by whatsoever Requisites under Art. 1424 (Prescribed Civil
court action. Obligation – Obligor)
a. There is a civil obligation
Voluntary fulfillment b. The right to sue upon it has already lapsed by
Voluntary fulfillment of
of such does not extinctive prescription
such produces legal
produce any legal effect c. Obligor performs contract voluntarily
effects which the court
which the court will
will recognize and protect.
recognize and protect. Consequence: Obligor cannot recover what he has
Within the domain of delivered or value of the service he rendered.
Within the domain of law
morals
Art. 1425, CC. When without the knowledge or
Conversion to Civil Obligations against the will of the debtor, a third person pays a
General Rule: Partial payment of a natural obligation debt which the obligor is not legally bound to pay
does not make it civil; the part paid cannot be because the action thereon has prescribed, but the
recovered but the payment of the balance cannot be debtor later voluntarily reimburses the third person,
enforced. the obligor cannot recover what he has paid.

This is applicable only to natural obligations because
of prescription or lack of formalities (nullity due to
form e.g. Art. 1430) and not to natural obligations
subject to ratification or confirmation
Note: Payment by mistake is not voluntary and may
be recovered. Payment is voluntary when the debtor
knew that the obligation is a natural one. The debtor,
however, has the burden of proving the mistake.
a. By novation
b. By ratification or confirmation
Rules on Natural Obligation:
a. The promise to perform a natural obligation is as
effective as performance itself, and converts the
natural obligation to a civil obligation.
b. Partial payment of a natural obligation does not
make it civil; the part paid cannot be recovered,
but payment of the balance cannot be enforced.
The exception would be if the natural obligation
is susceptible of ratification.
c. Guaranties for the performance of a natural
obligation are valid.
d. Payment of a natural obligation is not subject to
reduction by reason of inofficiousness,
appearance of children or ingratitude.
Requisites under Art. 1425 (Prescribed Civil
Obligation – Payment to 3rd Person)
a. There is a debt
b. Action upon the debt has prescribed
c. A third person, without the knowledge or against
the will of the debtor, pays the debt
d. Debtor voluntarily reimburses the third person
Consequence: Obligor cannot recover what he has
paid.
Art. 1426, CC. When a minor between eighteen and
twenty-one years of age who has entered into a
contract without the consent of the parent or
guardian, after the annulment of the contract
voluntarily returns the whole thing or price received,
notwithstanding the fact that he has not been
benefited thereby, there is no right to demand the
thing or price thus returned.
Requisites under Art 1426 (Voluntary Return of
Payment – Minor between 18 and 21)
a. There is a civil obligation
b. Minor between 18 and 21 entered into the
contract without consent of parent or guardian
c. Obligation is annulled after minor has received
the price or whole thing
d. Minor returns whole thing or price received
voluntarily

Consequence: There is no right to demand the thing

or price returned.

Page 280 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

Art. 1429, CC. When a testate or intestate heir

Art. 1427. When a minor between eighteen and
twenty-one years of age, who has entered into a
contract without the consent of the parent or
guardian, voluntarily pays a sum of money or
delivers a fungible thing in fulfillment of the
obligation, there shall be no right to recover the
same from the obligee who has spent or consumed
it in good faith.
Requisites under Art 1427 (Voluntary Payment –
Minor between 18 and 21)
a. There is a civil obligation
b. Minor between 18 and 21 entered into the
contract without consent of parent or guardian
c. Minor pays a sum of money or delivers a fungible
thing voluntarily
d. Obligee spends the money or consumes the thing
in good faith
Consequence: There is no right to recover the
money paid or thing delivered.
It is not the voluntary payment that prevents
recovery, but the consumption or spending of the
thing or money in good faith.
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
voluntarily pays a debt of the decedent exceeding the
value of the property which he received by will or by
the law of intestacy from the estate of the deceased,
the payment is valid and cannot be rescinded by the
payer.
Requisites under Art 1429 (Payment made by Heir)
Decedent incurred in debt during his lifetime
a. Heir voluntarily pays debt
b. Value of debt exceeds value of heir’s inheritance
Consequence: Payment is valid and heir cannot
rescind it.
Art. 1430, CC. When a will is declared void because
it has not been executed in accordance with the
formalities required by law, but one of the intestate
heirs, after the settlement of the debts of the
deceased, pays a legacy in compliance with a clause
in the defective will, the payment is effective and
irrevocable.
Requisites under Art 1430 (Payment of legacy – Will
declared Void)
a. There is a will providing for a legacy
b. The will is declared void because it was not
executed in accordance with the formalities
required by law
c. Heir pays legacy
Consequence: Payment is effective and irrevocable.

Art. 1428, CC. When, after an action to enforce a

civil obligation has failed the defendant voluntarily
performs the obligation, he cannot demand the
return of what he has delivered or the payment of
the value of the service he has rendered.

Requisites under Art 1428 (Payment by Defendant

notwithstanding failed action)
a. There is a civil obligation
b. An action to enforce such has failed
c. Defendant voluntarily performs the obligation

Consequence: Defendant cannot demand return of

what he has delivered or the payment of the value of
the service.

Page 281 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS
H. Estoppel
1. Definition
A condition or state by virtue of which an admission
or representation is rendered conclusive upon the
person making it, and cannot be denied or disproved
as against the person relying thereon [Art. 1431, CC]
Estoppel is a bar which precludes a person from
asserting anything contrary to that which has been
established as the truth, either by the acts of judicial
or legislative officers or by his own deed or
representation, either express or implied. [Tolentino]
2. Kinds of Estoppel
a. Equitable Estoppel or Estoppel in pais or by
conduct [Art. 1433, CC]
1. Estoppel by silence [Art. 1437, CC]
2. Estoppel by acceptance of benefits
b. Technical Estoppels
1. Estoppel by Deed – a party to a deed is
precluded from asserting as against the other
party, material fact asserted therein; [Art.
1433, CC] and
2. Estoppel by Record – a party is precluded
from denying the truth of the matters set
forth in a record whether judicial or
legislative and also to deny the facts
adjudicated by a court of competent
jurisdiction.
c. Estoppel by Judgment – a party to a case is
precluded from denying the facts adjudicated by
a court of competent jurisdiction
d. Estoppel by laches
Persons bound
Estoppel is effective only as between the parties
thereto or their successors-in-interest. [Art 1439, CC]
The government is not estopped by mistake or error
on the part of its officials or agents. In Manila Lodge
No. 761 Benevolent and Protective Order of the Elks v. CA,
G.R. No. L-41001 (1976), the sale executed by the
City of Manila to Manila Lodge was certainly a
contract prohibited by law, and that estoppel cannot
be urged even if the City of Manila accepted the
benefits of such contract of sale and the Manila Lodge
No. 761 had performed its part of the agreement, for
to apply the doctrine of estoppel against the City of
Manila in this case would be tantamount to enabling
it to do indirectly what it could not do directly.
Page 282 of 511
CIVIL LAW
Cases where estoppel applies
a. When a person who is not the owner of a thing
sells or alienates and delivers it, and later the seller
or grantor acquires title thereto, such title passes
by operation of law to the buyer or grantee [Art.
1434, CC].
b. If a person in representation of another sells or
alienates a thing, the former cannot subsequently
set up his own title as against the buyer or grantee
[Art. 1435, CC].
c. A lessee or a bailee is estopped from asserting
title to the thing leased or received, as against the
lessor or bailor [Art. 1436, CC].
d. When in a contract between third persons
concerning immovable property, one of them is
misled by a person with respect to the ownership
or real right over the real estate, the latter is
precluded from asserting his legal title or interest
therein, provided all these requisites are present:
1. There must be fraudulent representation or
wrongful concealment of facts known to the
party estopped;
2. The party precluded must intend that the
other should act upon the facts as
misrepresented;
3. The party misled must have been unaware of
the true facts; and
4. The party defrauded must have acted in
accordance with the misrepresentation [Art.
1437, CC].
5. One who has allowed another to assume
apparent ownership of personal property for
the purpose of making any transfer of it,
cannot, if he received the sum for which a
pledge has been constituted, set up his own
title to defeat the pledge of the property,
made by the other to a pledgee who received
the same in good faith and for value [Art.
1438, CC].
3. Laches
Failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by
exercising due diligence, could or should have been
done earlier. It is negligence or omission to assert a
right within a reasonable time, warranting a
presumption that the party entitled to assert it either
has abandoned it or declined to assert it. [Miguel v.
Catalino, G.R. No. L-23072 (1968)]
Elements:
a. Conduct on the part of the defendant, or of one
under whom he claims, giving rise to the situation
of which complaint is made and for which the
complaint seeks a remedy;
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

b. Delay in asserting the complainant’s rights, the

complainant having had knowledge or notice of
I. Trusts
the defendant’s conduct and having been
afforded an opportunity to institute a suit; Definition
c. Lack of knowledge or notice on the part of the A fiduciary relationship with respect to property,
defendant that the complaint would assert the subjecting the person holding the same to the
right on which he bases his suit; and obligation of dealing with the property for the benefit
d. Injury or prejudice to the defendant in the event of another person [Reyes and Puno]
relief is accorded to the complainant, or the suit
is not held to be barred Characteristics of Trust:
1. It is a relationship
Prescription Laches 2. The relationship is of fiduciary character
3. The relationship is with respect to property, not
Concerned with the Concerned with the effect
one involving merely personal duties
fact of delay of delay
4. It involves the existence of equitable duties
Question of inequity of imposed upon the holder of the title to the
Question or matter of
permitting the claim to be property to deal with it for the benefit of another
time
enforced 5. It arises as a result of a manifestation of intention
Statutory Not statutory to create the relationship
Applies in law Applies in equity
TRUST AS DISTINGUISHED FROM OTHER
Cannot be availed of CONCEPTS
Being a defense in equity,
unless it is specifically Trust Stipulation pour autrui
it need not be specifically
pleaded as an
pleaded Refers to a specific Involves any stipulation
affirmative allegation
property in favor of a third person
Based on a fixed time Not based on a fixed time
Trust Condition
Performance or
Performance of trust is
accomplishment is not
enforceable
enforceable

Guardianship or
Trust
Executorship
Guardians or Executors
do not have legal title but
Trustees has legal title
mere actual possession
to the property
and limited powers over
the property

Trust Contract
Always involves A legal obligation based
ownership, embracing a on an undertaking
set of rights and duties supported by a
fiduciary in character, consideration, which
which may be created by obligation may or may
a declaration without not be fiduciary in
consideration character.

Trust
The beneficiary of a trust
has a beneficial interest in
the trust property.
There is a fiduciary
relationship between a
trustee and a beneficiary.
Debt
A creditor has merely a
personal claim against
the debtor.
There is no fiduciary
relationship between a
debtor and a creditor.

Page 283 of 511

U.P. LAW BOC
Trust
An express trust is not
perfected by mere
consent, but requires the
actual delivery of the
naked or legal title to the
trustee for the
relationship of legality to
arise.
Trustee in an express
trust only takes naked or
legal title and for the
benefit of another
person, the beneficiary.
Constituted merely as a
preparation,
arrangement, medium, by
which the trustee is
expected to pursue other
juridical acts for the
benefit of the beneficiary.
Trust
Naked title is transferred
to the trustee; full
beneficial ownership is
for the account of the
beneficiary.
Essence of the contract is
for the trustee to manage
the rust property as the
legal title holder for
benefit or interest of the
beneficiary.
Benefits enjoyed by the
beneficiary are usually of
a permanent nature.
Trust
An existing legal
relationship which
involves the separation of
legal and equitable title
The beneficiary of a trust
may demand
performance of the
obligation without having
formally accepted the
OBLIGATIONS AND CONTRACTS
Sale
Seller obliges himself to
transfer ownership and
deliver possession to
the buyer
Buyer takes full
ownership of the
subject matter for his
sole benefit.
Entered into for its own
end, the acquiring of
title of the subject
matter by the buyer.
Lease
Lessor retains naked
title.
Essence of the contract
is the enjoyment of the
possession and use of
the leased property.
Benefits enjoyed by the
essee are only for
limited contracted
period.
Donation
There is a transfer of
property as well as the
disposition of both legal
and equitable
ownership except in
cases of gifts in the
trust.
The done must comply
with the legal
requirements in
accepting donations.
Page 284 of 511
CIVIL LAW
benefit of the trust in
public document, upon
mere acquiescence in the
formation of the trust and
acceptance under the
second paragraph of Art.
1311.
1. Governing Rules
Art. 1442, CC. The principles of the general law of
trusts insofar as they are not in conflict with this
Code, the Code of Commerce, the Rules of Court
and special laws are hereby adopted.
2. Parties [Art. 1440, CC]
a. Trustor – the person who establishes the trust
b. Trustee – one in whom the confidence is
reposed as regards property for the benefit of
another person
c. Beneficiary or cestui que trust – person for
whose benefit the trust has been created
3. Kinds of Trust
a. Express Trust
Created by the intention of the trustor or of the
parties [Art. 1441, CC]
Elements:
1. Competent trustor or settlor
2. Trustee
3. Ascertainable trust res / Trust property
4. Sufficiently certain beneficiaries
Trust is created:
1. By declaration of the trustor or settlor that he
holds property in trust
2. By conveyance to the trustee:
3. Inter vivos, or
4. By testament
Proof Required:
1. No express trusts concerning an immovable or
any interest therein may be proved by parol
evidence [Art. 1443, CC]. Trusts over real
property are unenforceable unless in writing,
although writing is not required for validity, only
for proof.
2. Where the trust is over personal property, an oral
trust is sufficient between the parties.
U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

3. But to bind third persons the trust must be in a Proof required

public instrument [Art. 1358(1) and (3), CC] Art. 1457. An implied trust may be proved by oral
evidence.
Form of Express Trusts
Art. 1444, CC. No particular words are required for A trust must be proven by clear, satisfactory and
the creation of an express trust, it being sufficient convincing evidence. It cannot rest on vague and
that trust is clearly intended. uncertain evidence or on loose, equivocal or indefinite
declarations [de Leon v. Molo-Peckson, G.R. No. L-
Want of Trustee 17809 (1962)]
Art. 1445, CC. No trust shall fail because the trustee
appointed declines the designation, unless the Where a trust is to be established by oral proof, the
contrary should appear in the instrument testimony supporting it must be sufficiently strong to
constituting the trust. prove the right of the alleged beneficiary with as much
certainty as if a document proving the trust were
To permit the trust to fail for want of trustee is to shown [Suarez v. Tirambulo, G.R. No. L-37090 (1933)]
defeat the intention of the trustor in creating the trust.
Kinds of Implied Trusts
Acceptance by beneficiary 1. Resulting Trusts - a trust raised by implication
Acceptance by beneficiary is necessary [Art. 1446, of law and presumed to have been contemplated
CC]. It may be: by the parties, the intention as to which is to be
1. Express found in the nature of their transaction, but not
2. Implied expressed in the deed or instrument of
Acceptance by the beneficiary is not subject to conveyance [Salao v. Salao, G.R. No. L-26699
the formal rules of donations [Cristobal v. Gomez, (1976)]
G.R. No. L-27014 (1927)]
3. Presumed – if the trust imposes no onerous Rules on Resulting Trusts
condition upon the beneficiary a. There is an implied trust when property is
sold, and the legal estate is granted to one
Termination of Express Trusts party but the price is paid by another for the
1. Revocation or modification by the trustor under purpose of having the beneficial interest of
a reserved power the property. The former is the trustee, while
2. Rescission the latter is the beneficiary. However, if the
3. Expiration of the period or happening of the person to whom the title is conveyed is a
resolutory condition child, legitimate or illegitimate, of the one
4. Accomplishment of the purpose or its becoming paying the price of the sale, no trust is
impossible or illegal implied by law, it being disputably presumed
5. Dissolution by the Court if continuation will that there is a gift in favor of the child. [Art.
defeat the purpose of the trust 1448, CC].
6. Dissolution by the consent of all the beneficiaries
and/or the settlor b. There is also an implied trust when a
7. Merger donation is made to a person but it appears
that although the legal estate is transmitted
to the donee, he nevertheless is either to
b. Implied Trust have no beneficial interest or only a part
thereof. [Art. 1449, CC].
How established
Implied trusts come into being by operation of law
c. When land passes by succession to any
[Art. 1441, CC].
person and he causes the legal title to be put
in the name of another, a trust is established
The essential idea involves a certain antagonism
by implication of law for the benefit of the
between the cestui que trust and the trustee even where
true owner. [Art. 1451, CC].
the trust has not arisen out of fraud or an immoral
transaction [Reyes]
d. If two or more persons agree to purchase
property and by common consent the legal
title is taken in the name of one of them for
the benefit of all, a trust is created by force

Page 285 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

of law in favor of the others in proportion to Express Trust Implied Trust

the interest of each. [Art. 1452, CC].
An express In constructive
repudiation made trusts, even if
e. When property is conveyed to a person in
known to the there is no
reliance upon his declared intention to hold
beneficiary is repudiation,
it for, or transfer it to another or the grantor,
necessary in order laches may bar an
there is an implied trust in favor of the As to
that laches or action to enforce
person whose benefit is contemplated. [Art. Laches
acquisitive an implied trust
1453, CC].
prescription may
bar an action to Exception: If
Express and Implied Trust Distinguished
enforce an there is
Express Trust Implied Trust express trust. concealment.
Comes into being
Created by the by operation of Trustee can sue
intention of the law. and be sued alone
Trustee cannot
trustor or the As to [PAL, Inc. vs.
sure and be sued
parties. Those, without Suability Heald Lumber Co.,
alone.
being expressed, G.R. No. L-11497
Created by the are deductible (1957)]
As to direct and positive from the nature
Creation acts of the parties of the transaction 2. Constructive Trusts - a trust not created by any
by some writing by operation of words, either expressly or impliedly evincing a
or deed or will or law as matters of direct intension to create a trust, but by the
by words equity, construction of equity in order to satisfy the
evidencing an independently of demands of justice [Salao v Salao, supra]
intention to create the particular
a trust. intention of the Rules on Constructive Trusts
parties. a. If the price of a sale of property is loaned or
An express trust paid by one person for the benefit of another
over an and the conveyance is made to the lender or
immovable An implied trust payor to secure the payment of the debt, a
As to trust arises by operation of law in favor of
property or any may be proved by
Proof the person to whom the money is loaned or
interest therein oral evidence
cannot be proved for whom it is paid. The latter may redeem
by parol evidence the property and compel a conveyance
thereof to him. [Art. 1450, CC].
In resulting trust:
Action must be b. If an absolute conveyance of property is
made within 10 made in order to secure the performance of
years from an obligation of the grantor toward the
Action must be
knowledge of grantee, a trust by virtue of law is established.
made within 10
repudiation, If the fulfillment of the obligation is offered
As to years from
otherwise by the grantor when it becomes due, he may
Prescripti knowledge of the
prescribed. demand the reconveyance of the property to
on repudiation,
otherwise him. [Art. 1454, CC].
In constructive
prescribed.
trust: It must be c. When any trustee, guardian or other person
made within 10 holding a fiduciary relationship uses trust
years from date of funds for the purchase of property and
registration. causes the conveyance to be made to him or
to a third person, a trust is established by
operation of law in favor of the person to
whom the funds belong. [Art. 1455, CC].

d. If property is acquired through mistake or

fraud, the person obtaining it is, by force of

Page 286 of 511

U.P. LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW

law, considered a trustee of an implied trust

for the benefit of the person from whom the
property comes. [Art. 1456, CC].

Express Trust Constructive Trust

Express trust is a
In constructive trusts,
"continuing and
the rule is that laches
subsisting" trust, not
constitutes a bar to
subject to the statute of
actions to enforce the
limitations, at least, until
trust, and repudiation is
repudiated, in which
not required, unless
event the period of
there is a concealment of
prescription begins to
the facts giving rise to
run only from the time of
the trust. [Fabian v.
the repudiation. [Tamayo
Fabian, G.R. No. L-
v Callejo, G.R. No. L-
20449 (1968)]
25563 (1972)]

Resulting Trust Constructive Trust

The trust is created
irrespective of or even
The intent of the parties
contrary to the intention
to create a trust is
of the parties to
presumed or implied by
promote justice,
law from the nature of
frustrate fraud and to
their transaction.
prevent unjust
enrichment.
The 10-year prescriptive
The 10 year prescriptive
period shall be counted
period shall be counted
from the time
from the time that the
repudiation is made
constructive trust arises.
known to beneficiary.

Page 287 of 511

U.P. LAW BOC SALES CIVIL LAW

SALES
Civil Law

Page 288 of 511

U.P. LAW BOC
VII. SALES
A. Nature and Form
Definition
Article 1458, CC: By the contract of sale one of the
contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and the
other to pay therefor a price certain in money or its
equivalent.
1. Essential Requisites
a. Consent or Meeting of the Minds
b. Object or Subject Matter
c. Cause or Consideration
a. Consent
Consent refers to seller’s consent to transfer
ownership of, and deliver, a determinate thing, and to
buyer’s consent to pay the price certain.
Being a consensual contract, the contract of sale is
perfected at the moment there is a “meeting of the
minds” upon the thing which is the object of the
contract and upon the price. [Art. 1475, CC]
Can there be sales without consent?
1. Expropriation (Art. 1488, CC)
2. Ordinary Execution Sale (Rule 39, Sec. 15, Rules
of Court)
3. Judicial Foreclosure Sale (Rule 68, Rules of
Court), and
4. Extra-Judicial Foreclosure Sale (Act. 3135, as
amended)
Special Case:
If the sale involves the conjugal property of spouses,
consent must be given by both.
b. Object
Must be determinate or capable of being determinate,
licit and within the commerce of man, and possible
Requisites of a Valid Subject Matter [Arts. 1459-
1465, CC]
1. Must be licit
2. Existing, Future, Contingent
Page 289 of 511
SALES CIVIL LAW
3. Determinate or Determinable
1. Licit
• Within the commerce of man [Art. 1347, CC]
Examples of things outside the commerce of
man:
a. Those belonging to the State or its political
subdivisions intended for public use or
public service. [Art. 420, CC]
b. Church
c. Narcotics or dangerous drugs except upon
prescription (RA 6425, the dangerous drugs
act of 1972)
• When right is not intransmissible [Art 1347, CC]
• It does not contemplate a future inheritance,
unless expressly authorized by law
Example of illicit things:
a. Per Se – of its nature
Example:
o Sale of animals if the use or service for which
they are acquired has been stated in the
contract, and they are found to be unfit
therefor [Art. 1575, CC]
o Sale of animals suffering from contagious
diseases [Art. 1575, CC]
b. Per Accidens – due to provisions of law
Example:
o Sale of future inheritance is void [Art. 1347,
CC]
Art 1347, paragraph 2, characterizes a
contract entered into upon future
inheritance as void. Art. 1347 applies when
the following requisites concur:
1. Succession has not yet been opened;
2. The object of the contract forms part of
the inheritance; and
3. The promissor has, with respect to the
object, an expectancy of a right which is
purely hereditary in nature. [Vda. de
Cabatu v. Spouses Tabu, G.R. No. 188417
(2012)]
o Sale of land in violation of Constitutional
prohibition against the transfer of lands to
aliens. [Art. XII of Constitution]
2. Existing, Future, Contingent
• Existing goods owned or possessed by the seller;
U.P. LAW BOC SALES CIVIL LAW

• Goods to be manufactured, raised, OR acquired Sale of specific things

by the seller – “Future Goods”; [Art 1462, CC] a. Sale of things in litigation [Art 1381(4), CC]
• Sale of things under litigation entered into by
It is valid only as an executory contract to be defendant, without the approval of the
fulfilled by acquisition and delivery of goods litigants or the court, is rescissible.
specified. • But no rescission where the thing is legally in
the possession of 3rd persons who did not
• Things having potential existence may be the act in bad faith [Art 1385 (2), CC]
object of a contract of sale. [Art 1461, CC]
b. Sale of an undivided interest in a thing [Art 1463,
A sale may be made of a thing which, though not CC]
yet actually in existence is reasonably certain to • Sale of an undivided interest in a thing makes
come into existence as the natural increment or the buyer a co-owner in the thing sold
usual incident of something in existence already • The buyer acquires full ownership of his part
belonging to the seller, and the title will vest in and may sell his part even without consent
the buyer the moment the thing comes into of other co-owners, subject to reserva
existence. [Sibal vs Valdez, G.R. No. L-26278 truncal; pacto de retro sale,
(1927)]
c. Sale of undivided share of a specific mass [Art
Sale of Things Having Potential Existence 1464, CC]
Emptio Rei Emptio Rei Spei • The sale of an undivided share in a specific
Speratei Mere Hope Vain Hope mass of fungible goods makes the buyer a
Sale of a thing Sale of a Sale of a co-owner of the entire mass in proportion to
expected or MERE HOPE VAIN HOPE the amount he bought.
future thing or expectancy or expectancy • If later on it was discovered that the mass of
fungible goods contain less than what was
General rule: Exception: agreed upon, the buyer becomes owner of
Valid
Valid Void whole mass and seller must make up for the
Example: Sale difference. [De Leon]
Example: Sale Example: Sale
of the grain a
of a valid of a fake d. Sale of things subject to resolutory condition [Art
field may grow
lottery ticket lottery ticket 1465, CC]
in a given time
Deals with a Examples: Things acquired under legal or
future thing conventional right of redemption
Deals with a thing that currently
that is
exists – the hope or expectancy 3. Determinate or Determinable
currently not
in existence
Subject to the a. When is a thing determinate or determinable
Not subject to any condition; • DETERMINATE - when it is particularly
condition that
The contract comes into designated or physically segregated from all
the thing will
existence immediately others of the same class. [Art 1460, CC]
exist
• DETERMINABLE - when it is capable of
Future thing is
being made determinate at the time the
certain as to
contract was entered into without the
itself, but
necessity of a new or further agreement
incertain as to
between the parties. [Art 1460, CC]
quantity and
quality
b. Rights of the creditor when the obligation is to
In case of doubt, the presumption is in favor of deliver a determinate thing [Art 1165; Jurado]
emptio rei speratae since it is more in keeping with • right to compel specific performance
the commutative character of the contract. • recover damages for breach of the
obligation.

Page 290 of 511

U.P. LAW BOC
c. Failure to state the exact location of the land does
not make the subject matter indeterminate, so
long as it can be located. [Camacho v CA, G.R. No.
127520 (2007)]
d. The fact that the exact area of the land specified
in the contract of sale is subject to the result of a
survey does not render the subject matter
indeterminate. [Heirs of Juan San Andres v.
Rodriguez, G.R. No. 135634 (2000)]
c. Cause or Consideration
1. Meaning of Price [ARTS. 1469-1474,
CC]
Price signifies the sum stipulated as the equivalent of
the thing sold and also every incident taken into
consideration for the fixing of the price put to the
debit of the buyer and agreed to by him [Inchausti v.
Cromwell, G.R. No. L-6584 (1911)]
2. Requisites for a Valid Price
a. Certain or ascertainable at the time of perfection
b. In Money or its equivalent
• If price is partly in money and partly in
another thing: Determine manifest intention
of the parties to see whether it was barter or
sale. [Art 1468, CC]
• If intention does not clearly appear, it shall
be considered a barter if the value of the
thing exceed the amount of money or its
equivalent. [Art 1468, CC]
• [Example of equivalent: letter of credit]
c. Real
• When buyer has an intention to pay and the
seller has an expectation to receive the Price
o If simulated: Sale is VOID; BUT act
may be shown to have been a donation
or some other act or contract. [Art 1471,
CC]
o If Price is false – when the real
consideration is not the price stated in
the contract:
1. Sale is void
2. UNLESS proved to be founded on
another true and lawful price [Art
1353, CC]
Page 291 of 511
SALES CIVIL LAW
3. How Price is Determined / When
Certain
a. Fixed by agreement of the parties
• Fixing of price shall be agreed upon by both
parties and cannot be left to the discretion of
one of the parties
• BUT if such is accepted by the other, sale is
perfected. [Art. 1473, CC]
b. Determination is left to the judgment of a
specified person
General Rule: Price fixed by 3rd persons
designated by the parties is binding upon them
Exceptions:
• If 3rd person is unable or unwilling: Sale is
inefficacious unless parties subsequently
agree about the price.
• If 3rd person fixed the price in bad faith/by
mistake: Courts may fix price (but mere error
in judgment cannot serve as basis for
impugning price fixed)
• If 3rd person is prevented from fixing price
by fault of seller or buyer: Innocent party
may avail of remedies (rescission or
fulfillment of obligation, with damages)
• If 3rd person disregards specific
instructions/data/procedure, thereby fixing
an arbitrary price
• The price is made in reference to another
thing, or when the price fixed is the price of
the commodity on a definite day, or in a
particular exchange or market, or when the
amount fixed is above or below the price on
such day, exchange or market. [Art. 1472,
CC]
General Rule: When the price is not certain, the
contract is without effect and no obligation arises
from it.
Exception: When the thing is already delivered, the
buyer must pay a reasonable price therefor. This
exception only arises when the means contemplated
by the parties for fixing the price have become
ineffectual.
U.P. LAW BOC
4. Inadequacy of Price [ARTS. 1355,
1470, CC]
The stipulation in a contract of sale which states that
the consideration is “PhP1 and other valuable
considerations” does not make the contract void.
Gross inadequacy of price does not affect the contract
of sale except that it may indicate a defect in
consent. [Bagnas v. CA, G.R. No. L-38498 (1989)]
General Rule: Does not affect a contract of sale’s
validity. [Art. 1470, CC]
Exceptions:
a. In Voluntary sales
• Where low price indicates a vice of consent,
sale may be annulled.
• Where price is so low to be shocking to the
conscience (fraud, mistake, undue
influence), then sale may be set aside
• Where price is simulated such as when the
real intention was a donation or some other
contract.
• Where the parties did not intend to be bound
at all, sale is void.
b. In Involuntary sales
• A judicial or execution sale is one made by a
court with respect to the property of a debtor
for the satisfaction of his indebtedness.
o Where price is so low to be shocking to
the conscience, such that a reasonable
mind would not be likely to consent to
it, then judicial sale will be set aside.
o If in event of a resale, a better price can
be obtained.
• Rescissible contracts of sale - Inadequacy of
price is a ground for rescission of
conventional sale under Art. 1381 (a) and (b),
CC.
5. When No Price Agreed
a. Sale is inefficacious [Art. 1474, CC]
b. But if the thing or part thereof has been delivered
and appropriated by the buyer, he must pay a
reasonable price therefor
• What is a reasonable price is a question of
fact dependent on the circumstances of each
particular case. [Art. 1474, CC]
• The reasonableness of a price may be
determined on the basis of a company’s
Page 292 of 511
SALES CIVIL LAW
balance sheet showing the book value or fair
market value of its shares. [Philippine Free
Press v. CA, G.R. No. 132864 (2005)
c. Generally, the reasonable price is the market
price at the time and place fixed by the contract
or by law for delivery of goods.
6. False Price v Simulated Price
a. FALSE PRICE (RELATIVE SIMULATION) -
price stated in the contract is not the true price.
Parties intended to be bound.
Effect: Binds the parties to their real agreement
when it does not prejudice 3rd persons and is not
intended for any purpose contrary to law, morals,
public policy, etc
b. SIMULATED PRICE (ABSOLUTE
SIMULATION – price stated in the contract is
not intended to be paid. Parties never intended to
be bound.
Effect: Void for lack of cause/consideration, but
can be shown as a donation or some other
contract. Parties may recover from each other
what they may have given under the contract.
Disagreement on the manner of payment is
tantamount to a failure to agree on the price.
[Toyota Shaw v. CA, G.R. No. L-116650 (1995)]
7. Earnest Money v Option Money
Art. 1482, CC. Whenever earnest money is given in a
contract of sale, it shall be considered as part of the
price and as proof of the perfection of the contract.
Earnest Money – paid in advance of the purchase
price agreed upon by the parties in a contract of sale,
given by the buyer to the seller, to bind the latter to
the bargain
Comparison
Option Money Earnest Money
Separate and distinct
Part of purchase price
consideration from the
[Art 1482, CC]
purchase price
Given when sale is not yet Given only when there
perfected is already a sale
U.P. LAW BOC SALES CIVIL LAW

Option Money Earnest Money

When given, the would- a. Offer
be-buyer is not required When given, the buyer is
to buy, but may even bound to pay the 1. The offer must be certain and the acceptance
forfeit it depending on the balance absolute. [Art. 1319, CC]
terms of the option 2. The person making the offer may fix the time,
Grantee of option is still place, and manner of acceptance, all of which
Buyer manifests his must be complied with. [Art. 1321, CC]
undecided whether or not
earnest desire to buy the 3. An offer becomes ineffective upon the death,
to buy or sell the property
property civil interdiction, insanity, or insolvency of either
[Baviera]
party before acceptance is conveyed. [Art. 1323,
[Limson vs. CA, G.R. No. 135929 (2001)] CC]
4. When the offerer has allowed the offeree a
False Price Non-payment of Price certain period to accept, the offer may be
Failure of buyer to pay withdrawn at any time before acceptance by
Real price is not declared
the price communicating such withdrawal, except when
Contract is void if it the option is founded upon a consideration, as
Contract is not void but
should not be proved that something paid or promised. [Art. 1324, CC]
gives rise to a right to
it was founded upon 5. Unless it appears otherwise, business
demand fulfillment or
another cause which is advertisements of things for sale are not definite
cancellation of the
true and lawful [Art. offers, but mere invitations to make an offer.
obligation
1353, CC] [Art. 1325, CC]

General Rule: There can be sale even when no price is
agreed upon. When the price cannot be determined in
accordance with Arts. 1469-1473, the contract is
inefficious.
Exception: when the thing or part thereof has been
delivered to and appropriated by the buyer, in which
case the buyer has to pay a reasonable price therefor.
2. Non-Essential Elements of a
Contract of Sale
a. Natural – those deemed to exist in certain
contracts in the absence of any contrary
stipulations. (Ex. Warranty against eviction,
hidden defects)
b. Accidental – those which may be present or
absent depending on the stipulations of the
parties. (Ex. Conditions, interest, penalty)
3. Perfection
Meeting of the minds between the seller and buyer as
to the subject matter and the price.
b. Option contracts [Art. 1479 (2),
CC]
A preparatory contract, separate and distinct from the
main contract itself which the parties may enter into
upon the consummation of the option. [De Leon]
• Option - An accepted unilateral promise to buy
or to sell a determinate thing for a price certain is
binding upon the promissor if the promise is
supported by a consideration distinct from the
price. [Art. 1479(2), CC; de Leon]
The option is not the contract of sale itself. The
optionee has the right, but not the obligation, to
buy. Once the option is exercised timely, i.e., the
offer is accepted before a breach of the option, a
bilateral promise to sell and to buy ensues and
both parties are then reciprocally bound to
comply with their respective undertakings. [Ang
Yu v. CA, G.R. No. 109125 (1994)]
An option is a contract granting a privilege to buy
or sell within an agreed time and at a determined
price. It is a separate and distinct contract from
that which the parties may enter into upon the
consummation of the option. It must be
supported by consideration. [Equatorial Realty v.
Mayfair Theater, G.R. 106063 (1996)].

Page 293 of 511

U.P. LAW BOC
• Separate Consideration – A consideration for
an optional contract is just as important as the
consideration for any other kind of contract. If
there was no consideration for the contract of
option, then it cannot be enforced any more than
any other contract where no consideration exists.
[Enriquez dela Cavada v. Diaz, G.R. No. 11668
(1918)]
The general rule regarding offer and acceptance
is that, when the offerer has allowed the offeree
a certain period within which to accept the offer,
the offer may be withdrawn as a matter of right
at any time before acceptance. But if the option
is founded upon a separate consideration, the
offerer cannot withdraw his offer, even if the
same has not yet been accepted, before the
expiration of the stipulated period. [De Leon]
• Rules Re: Option Period [Ang Yu v. CA, G.R.
No. 109125 (1994); Villanueva]
Right to Withdraw
1. The offeror is still free and has the right to
withdraw the offer
a. If the period is not itself founded upon
or supported by a consideration and
withdrawn before its acceptance,
b. if an acceptance has been made, before
the offeror's coming to know of such
fact, by communicating that withdrawal
to the offeree.
2. The right to withdraw, however, must not be
exercised whimsically or arbitrarily;
otherwise, it could give rise to a damage
claim under Article 19 of the Civil Code
which ordains that "every person must, in
the exercise of his rights and in the
performance of his duties, act with justice,
give everyone his due, and observe honesty
and good faith."
3. BREACH OF CONTRACT – It will be a
breach of contract when the offer was
withdrawn during the agreed period if the
period has separate consideration since the
contract of “option is deemed perfected
The option, however, is an independent
contract by itself, and it is to be distinguished
from the projected main agreement (subject
matter of the option) which is obviously yet
to be concluded.
Page 294 of 511
SALES CIVIL LAW
Liability of the optioner-offeror
If he withdraws the offer before its acceptance
(exercise of the option) by the optionee-offeree
1. Optionee-offeree may not sue for specific
performance on the proposed contract
("object" of the option) -since it has failed to
reach its own stage of perfection.
2. Optioner-offerer renders himself liable for
damages for breach of the option.
• In these cases, care should be taken of
the real nature of the consideration
given, for if, in fact, it has been intended
to be part of the consideration for the
main contract with a right of withdrawal
on the part of the optionee, the main
contract could be deemed perfected; a
similar instance would be an "earnest
money" in a contract of sale that can
evidence its perfection [Art. 1482, CC]
c. Right Of First Refusal
While the object might be made determinate, the
exercise of the right, however, would be dependent
not only on the grantor's eventual intention to enter
into a binding juridical relation with another but also
on terms, including the price, that obviously are yet to
be later firmed up.
It can at best be so described as merely belonging to
a class of preparatory juridical relations governed not
by contracts (since the essential elements to establish
the vinculum juris would still be indefinite and
inconclusive) but by, among other laws of general
application, the pertinent scattered provisions of the
Civil Code on human conduct.
Even on the premise that such right of first refusal
has been decreed under a final judgment, like here, its
breach cannot justify correspondingly an issuance of
a writ of execution under a judgment that merely
recognizes its existence, nor would it sanction an
action for specific performance without thereby
negating the indispensable element of consensuality
in the perfection of contracts. [Ang Yu v. CA, G.R.
No. 109125 (1994)]
d. Mutual promise to buy and sell
A promise to buy and sell a determinate thing for a
price certain is reciprocally demandable. [Art. 1479,
CC]
U.P. LAW BOC SALES CIVIL LAW

consideration of the other’s promise to give another

The obligation is not to enter into a sale, but rather to thing [Art.1638, CC]
negotiate in good faith for the possibility of entering
into a sale; If consideration consists partly in money and partly in
another thing, the intention of the parties determines
When the promissor has in fact negotiated in good whether the contract is one of sale or barter.
faith, but the parties’ minds could not meet on the
price and the terms of payment, then promissor has If manifest intention is not clear: Barter when the
complied with his obligation [Villanueva]. value of thing is more than the amount of money or
its equivalent; otherwise, sale. [Art.1468, CC]
Such an arrangement would be the true contract to
sell, which embodies the main obligation of the seller Rules to determine whether contract is sale or
to enter into a contract of sale upon full compliance barter:
with the condition of the buyer fully paying the a. Manifest intention of the parties: Even if the
purchase price, wherein the main obligation is a acquisition of a thing is paid for by another object
person obligation “to do.” Such contracts to sell are of greater value than the money component, it
really within the policitacion stage for they do not may still be a sale and not a barter, when such was
represent a species of a sale defined under Article the intention of the parties
1458 of the Civil Code. [Villanueva] b. When intention does not appear and
consideration consists partly in money and partly
4. Contract of Sale in another thing:
• BARTER = where the value of the thing
Distinguished given as part of the consideration exceeds
the amount of money given or its equivalent
a. Donation • SALE = where the value of the thing given
as part of the consideration equals or is less
Sale Donation than the amount of money given
Onerous Gratuitous
Requires consent and c. Contract for a Piece of Work
must comply with the
Perfected by mere
formalities required by law Contract for a Piece of
consent Sale
for its validity. [Art. 745, Work
CC] Goods are manufactured
The property sold is Goods are manufactured
Requires that there be a or procured in the
replaced by the for customer upon his
diminution of the estate of ordinary course of
equivalent monetary special order
one party (donor) and the business
consideration; there is
enrichment of the other For the general market,
no diminution of the For a specific customer
party’s estate (donee) whether on hand or not
seller’s estate
Governed by Statute of Not within Statute of
When the price of the contract of sale is simulated, Frauds Frauds
the sale may be void but the act may be shown to have
been in reality a donation or some other contract.
The fact that the object was made by the seller only
[Art.1471, CC]
when customers placed their orders, does not alter the
nature of the contract of sale, for it only accepted such
b. Barter orders as called for the employment of such materials
as it ordinarily manufactured or was in a position
Sale Barter habitually to manufacture such. [Celestino Co & Co v.
Consideration is price in Consideration is Collector, G.R. No. L-8506 (1956)]
money or its equivalent another thing
When each product or system executed is always
DEFINITION OF BARTER - a contract where UNIQUE and could not mass-produce the product
one of the parties binds himself to give one thing in because of its very nature, such is a contract for a

Page 295 of 511

U.P. LAW BOC SALES CIVIL LAW

piece of work. [Commissioner vs. Engineering Equipment

and Supply Co., G.R. No. L-27044 (1975)] f. Agency to Sell
d. Dacion en Pago CONTRACT OF AGENCY: A contract whereby a
person binds himself to render some service or to do
Sale Dacion en pago something in representation or on behalf of the
No pre-existing debt Pre-existing debt principal, with the consent or authority of the latter
Extinguishes the
Creates an obligation obligation (mode of Sale Agency to sell
payment) Buyer receives the goods Agent receives good as
Price is more freely as owner goods of the principal
Price is the value of
agreed upon, fixed by the Agent delivers the price
the thing given
parties Buyer pays the price which he got from his
Payment is received principal
Buyer has to pay the price by the debtor before Buyer cannot return the
contract is perfected Agent can’t return the
object sold as a general
goods
rule
There is a novation of the contract of loan into a
Seller warrants the thing Agent makes no
contract of sale when the creditor agrees to accept a
sold warranty
thing in payment of the debt. Hence, if the thing given
in payment turns out to belong to another, the Not unilaterally revocable Essentially revocable
creditor’s remedy should be governed by the law on
sales, not loan. [Baviera]
g. Lease
e. Contract to Sell Sale Lease
Contract of Sale Contract to sell Ownership transferred
No transfer of ownership
by delivery
Ownership is Ownership is only
transferred upon transferred upon full Permanent Temporary
delivery payment of price Seller must be owner at
Lessor need not be owner
Full payment is a positive time of delivery
suspensive condition, hence
Non-payment is a
non-payment would not
resolutory condition
give rise to the obligation to
transfer ownership

Conditional Contract
Contract to sell
of Sale
Sale is already perfected No perfected sale yet
A subsequent buyer is A subsequent buyer is
presumed to be a buyer presumed to be a buyer
in bad faith in good faith

Page 296 of 511

U.P. LAW BOC
B. Capacity to Buy or Sell
Art. 1489, CC. All persons who have capacity to enter
into obligations may enter into a contract of sale
General Rule: Any person who has capacity to act may
enter into a contract of sale. [Villanueva]
Capacity to act, which is the power to do acts with
legal effect, is acquired and may be lost. [Art. 37, CC]
1. Kinds of Incapacity
a. Absolute Incapacity [Art. 1327, 1397, 139, CC]
b. Relative Incapacity: Married Persons
c. Special Disqualifications [Arts. 1491-1492,
CC]
a. Absolute Incapacity
1. Minors (Art. 1327, CC)
2. Insane or Demented (Art. 1327, CC)
3. Deaf-mutes who do not know how to write (Art.
1327, CC)
4. Civil Interdiction (Art. 38, CC)
5. Judicially-declared Incompetents [Art. 39, CC]
• Prodigal
• Imbeciles
• Absence & presumption of death
• 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
1. Husband and wife [Art. 1490, CC]
General Rule: Cannot sell property to each other
Exceptions:
• Separation of property in marriage
settlement, OR
• Judicial separation of property.
Sale by husband in favor of a concubine after he
had abandoned his family and left conjugal home
where his wife and children lived and from
whence they derived their support, is void. [Ching
v. Goyanko, Jr., G.R. No. 165879 (2006)]
Page 297 of 511
SALES CIVIL LAW
2. Alienage [Art. 39, CC]
General Rule: Aliens are disqualified from
purchasing or acquiring real property.
Exception: If acquisition is through hereditary
succession
3. Trusteeship [Art. 39, CC]
c. Special Disqualifications
Who are specially disqualified persons according
to law?
Under Art. 1491, CC, the following are specially
disqualified to enter into a contract of sale:
1. Agents - Cannot purchase or acquire property
whose administration or sale was entrusted to
them
Exception: Principal gives consent.
2. Guardian - Cannot purchase property of person
under his guardianship
Guardianship is a trust of the highest order, and
the trustee cannot be allowed to have any
inducement or neglect his ward’s interest. [Phil
Trust Co v Roldan, G.R. No. L-8477 (1956)]
Art. 1491(2) in relation to Art. 1409 does not
apply where the sale was under a special power
attached to the real estate mortgage, pursuant
law. Under Act No. 3135, a mortgagee-creditor is
allowed, as an exception, to participate in the
bidding under the same condition as any other
bidder. [Fiestan v. CA, G.R. No. 81552 (1990)]
3. Executors and Administrators - Cannot
acquire or purchase property of estate under their
administration.
Does not apply to purchase of hereditary rights,
as these are not under their administration.
The prohibition on executors and administrators
does not apply if the principal consents to the
sale. [Distajo v. CA, G.R. No. 112954 (2000)]
4. Public Officers and Employees - Cannot
acquire or purchase property of State/any of its
subdivisions, GOCC or administration, the
administration of which was entrusted to them.
U.P. LAW BOC
Includes judges and government experts who, in
any manner whatsoever take part in the sale.
Requisites:
a. Properties must belong to the State, any of
its subdivisions, or of any GOCC
b. Administration of these properties are
entrusted to the public officers/officials
5. Lawyers - Cannot acquire or purchase property
or rights in litigation in which they take part by
virtue of their profession
Rationale: Lawyers may have undue influence over
client; greed may get the better of the sentiments
of loyalty and disinterestedness. [Valencia v
Cabanting, A.M. Nos. 1302, 1391 and
1543 (1991)]
General Rule: Prohibition is definite and
permanent and cannot be cured by ratification.
[Rubias v Batiller, G.R. No. L-35702 (1973)]
Exceptions: An assignment to a lawyer by his client
of an interest in the property does not violate Art
1491, where:
a. A judgment has been rendered and has
become final; and
b. In case of contingency fee arrangements: the
interest of the lawyer may be annotated as an
adverse claim on the property awarded to his
client [Director of Lands v Ababa, G.R. No. L-
26096 (1979)]
6. Justices, Judges, prosecuting attorneys,
clerks and other officers and employees
connected with the administration of justice
- Cannot acquire or purchase property or rights
in litigation or levied upon on execution before
the court within whose jurisdiction or territory
they exercise their respective functions.
Rationale: to prevent fraud and to surround their
profession with prestige.
Prohibition applies only on sales or assignment
during the pendency of litigation involving the
property. [Macariola v Asuncion, A.M. No. 133-J
(1963)]
7. Others specially disqualified by law
a. Unpaid sellers with goods in transit from
buying the goods
Page 298 of 511
SALES CIVIL LAW
b. Officer conducting the execution sale of
deputies
Although Art. 1491, CC does not state the
legal consequences of having entered into
contracts in violation of such, the current
view, as held in Rubias v. Batiller, supra is that
such contracts are void, and not merely
voidable.
Effect of sale by specially disqualified persons
1. Sale entered into by agents, guardians, and
executors and administrators shall be
VOIDABLE, as it affects only private interests.
2. Sale entered into by public officers, lawyers,
justices and judges, and others specially
disqualified by law shall be VOID, as it affects
public interest.
Art. 1492, CC. The prohibitions in the two preceding
articles (Arts. 1490, 1491) are applicable to sales in
legal redemption, compromises and renunciations.
Art 1646, CC. The persons disqualified to buy
referred to in articles 1490 and 1491, are also
disqualified to become lessees of the things
mentioned therein.
Prohibition under Art. 1490 and 1491 are applicable
to sales in legal redemption, compromises and
renunciations. And aside from disqualification to buy,
the persons listed under Art. 1490 and 1491 are also
not allowed to become lessees of the things
mentioned.
2. Effects of Incapacity
a. Absolute Incapacity
• If both parties are incapacitated: unenforceable
[Art. 1403 (3), CC]
• If only 1 party is incapacitated: voidable
Exception: Where necessaries are sold and
delivered to a minor or to a person without
capacity to act, he must pay a reasonable price
therefor. [Art. 1489, par. 2, CC]
The resulting sale therefore described in the
foregoing article is valid and binding.
U.P. LAW BOC SALES CIVIL LAW

b. Relative Incapacity
C. Effects of the Contract
When the Thing Sold has
• Sale between spouses is void
Been Lost
Rationale:
1. To protect 3rd persons who may have 1. Res Perit domino [Arts. 1263,
contracted with the spouse
2. To avoid undue advantage of the dominant and 1189 CC]
spouse over the weaker spouse.
3. To avoid circumvention of the prohibition • Owner bears risk of loss and deterioration
against donations between spouses. [Medina • The ownership is transferred only upon delivery.
v CIR, G.R. No. L-15113 (1961)]
2. Prior to Perfection of
Such prohibition shall likewise apply to
common law spouses. [Calimlim-Canulas v Contract
Fortun, G.R. No. L-57499 (1984)]
• Seller bears risk of loss and deterioration.
But if already sold to a third person who • Basis: Res perit domino
relied on the title of his immediate seller,
reconveyance to the seller spouse is no
longer available [Cruz v CA, G.R. No. 3. At Time of Perfection [Arts.
120122 (1997)] 1493 and 1494, CC]
• Sale contracted by aliens is void [Art. XII of the • Seller bears risk of loss and deterioration.
Constitution]
• Basis: Res perit domino

c. Specific Incapacity/ Special Partial Loss (Or loss which

Disqualifications Total Loss results in substantial
change in character)
General rule: Contracts expressly prohibited by law are Contract is void Buyer may withdraw from the
VOID and CANNOTBERATIFIED. Neither can because the contract
the right to set-up the defense of illegality be waived. object did not or
[Art. 1409 (7), CC] exist at the time Buy the remainder at a
of the transaction. proportionate price
Those entered into by public officers/employees,
justices and judges, and lawyers in violation of Art.
1491 are inexistent and VOID from the beginning. 4. After Perfection but Before
[Rubias v Batiller, supra]. It is NOT subject to
RATIFICATION
Delivery
Exception: Sales entered into by guardians, a. Loss
administrators, and agents (specific incapacities) in
violation of Art. 1491 may be RATIFIED by means General Rule: Stipulations in the contract will govern.
of and in the form of a new contract when the cause Exception: In the absence of stipulation, there are two
of nullity has ceased to exist. Ratification is valid only conflicting views:
from date of execution of the new contract and does 1. Res perit creditori or the buyer bears the risk of
not retroact. loss.
• This is an exception to the rule of res perit
domino
• Basis: Art. 1504, CC only covers goods.
• Pursuant to Art. 1262, CC if the thing is
destroyed without the fault of the

Page 299 of 511

U.P. LAW BOC
debtor/seller, the obligation to pay shall
subsist.
2. Res perit domino or the seller bears the risk of
loss.
• Basis: The rul3e on loss is different from the
rule on deterioration for the loss would b3e
for the account of the seller, while the
deterioration would be for the account of the
buyer.
• In reciprocal obligations, the extinguishment
of the obligation due to loss of the thing
extinguishes the entire juridical relation.
b. Deterioration [Art. 1189 CC]
• Impairment is borne by the BUYER if the thing
deteriorates without the fault of the seller.
• If it deteriorates through the fault of the seller,
the buyer may choose between rescission of
obligation and fulfillment, either case with
indemnity for damages.
5. After Delivery
General Rule: Buyer bears risk of loss and deterioration.
Exceptions: [Art. 1504 (1) and (2), CC]
a. Where delivery has been made either to the buyer
or to the bailee for the buyer, but ownership in
the goods has been retained by the seller merely
to secure performance by the buyer of his
obligations under the contract; and
b. Where actual delivery has been delayed through
the fault of either the buyer or seller, the goods
are at the risk of the party in fault.
Page 300 of 511
SALES CIVIL LAW
D. Obligations of the
Vendor
1. Obligations of the Vendor in
General
a. To transfer ownership of the thing [Art. 1495,
CC]
b. To deliver the thing, with its accessions and
accessories, if any [Arts. 1164, 1166, CC]
c. To warrant against eviction and against hidden
defects [Arts. 1545-1581, CC]
d. To take care of the thing, pending delivery, with
proper diligence [Art. 1163, CC]
e. To pay for the expenses of the deed of sale [Art.
1487, CC]
a. To Transfer Ownership of the
Thing and To Deliver the Thing,
with its Accessions and
Accessories
1. When Seller is Not the Owner
General Rule: Ownership is not acquired by the buyer.
One cannot give what one does not have. [Art. 1505,
CC]
Exceptions:
a. Seller has a right to transfer ownership
Seller need not be the owner of the thing at the
time of perfection of the contract. It is sufficient
that seller has a right to transfer ownership
thereof at the time it is delivered. [Art. 1459, CC]
One who sells something he does not own yet is
bound by the sale when he acquires the thing
later. [Bucton v. Gabar, G.R. No. L-36359 (1974)]
b. Estoppel: Owner is, by his conduct, precluded
from denying the seller’s authority to sell. [Art.
1434, CC]
c. Registered land bought in good faith
General rule: Buyer need not go beyond the
Torrens Title
U.P. LAW BOC
Exception: When he has actual knowledge of facts
and circumstances that would impel a reasonably
cautious man to make further inquiry
d. Order of courts; Statutory Sale - In execution
sale, the buyer merely steps into the shoes of the
judgment debtor [Sec. 33, Rule 39, ROC]
e. When goods are purchased in Merchant’s store,
Fair, or Market [Art. 1505, CC]
2. Sale by Person having a Voidable Title
a. True owner may recover the thing when the ff.
requisites concur:
• Subject matter is movable
• Owner has either lost the thing or has been
unlawfully deprived. [Art. 559, CC]
b. Reimbursement is necessary before owner can
recover when:
• Buyer acted in good faith
• Acquired at a public auction [Art. 559, CC]
c. Recovery no longer possible when:
• Buyer in good faith
• Acquired it at a merchant’s store, fair or
market. [Art. 1506, CC]
3. Manner of Transfer [Arts. 1477, 1496-
150, CC]
General Rule: Ownership of the thing sold shall be
transferred to the vendee upon actual or constructive
delivery thereof [Art. 1477, CC]
Exceptions:
a. Contrary stipulation
b. Contract to sell
c. Contract of insurance
d. Sale on acceptance/Trial
e. When seller is not the owner or has voidable title
Obligation to transfer ownership and to deliver is
implied in every contract of sale [Arts. 1458-1459,
CC]
Transfer of ownership requires delivery [Art. 1495,
CC]
General Concepts - Under Article 1495, the seller
has twin obligations to (a) transfer the ownership and
(b) deliver the thing, which is the object of sale to the
Page 301 of 511
SALES CIVIL LAW
buyer. In Article 1164, this includes the obligation to
deliver the fruits and accessories from the time the
obligation to deliver it arises; however he shall acquire
no real right over them until the same has been
delivered to him.
Transfer of ownership is effected even if the purchase
has been made on credit. Payment of the purchase
price is not essential to transfer of ownership as long
as the property sold was delivered.
Intention to transfer ownership
• All forms of delivery shall be coupled with
intention of delivering the thing sold.
• Seller must be owner or authorized by owner of
the thing sold
When right to transfer ownership must exist: At
the time of delivery and not at the time of perfection
of contract of sale.
4. Concept of Delivery
Requisites
a. Identity – between what must be delivered and
what is actually delivered
b. Integrity – in a condition suitable for enjoyment
c. Intentional
What to Deliver
a. Thing sold [Art. 1495, CC]
b. Fruits [Art. 1164 & 1537, CC] – belong to the
vendee from day of perfection.
c. Accessions and accessories [Art. 1166 & 1537,
CC] – in the same condition they were in on day
of perfection
• Improvements by seller at his expense grants
him a usufructuary right [Art 1138, 1189,
CC]
• No indemnification
• But he may remove it to the extent that there
is no damage [Art. 1538, CC]
Where to Deliver
a. A hierarchy is followed:
1. Stipulation
2. Usage of trade
3. Seller’s place of business (office)
4. Seller’s residence
b. In case of specific goods, which the parties knew
to be at some other place when the contract was
perfected, that place is the place of delivery
U.P. LAW BOC SALES CIVIL LAW

c. If goods are at the time of sale are possessed by

a third person, then there is no delivery until he
acknowledges to the buyer that he holds the
goods for the buyer.
When to Deliver
Absent a stipulation as to time, delivery must be made
within a reasonable time; demand or tender of
delivery shall be made at a reasonable hour.
5. When Delivery Does Not Transfer
Title
Sale on Approval or Trial
• Title remains with the seller notwithstanding
delivery of the goods.
• Buyer becomes the owner when he
a. Signifies his approval or acceptance to the
seller
b. Does any other act adopting the transaction
(i.e. sale to a third person)
c. Retains the goods without giving notice of
rejection after the time fixed has expired; if
no time has been fixed, after the expiration
of a reasonable time [Art. 1502, CC]
Sale or Return
• Buyer becomes owner of the property on
delivery, BUT has the option to revest ownership
in the seller instead of paying the price by
returning the goods within the time fixed in the
contract, or, if no time is fixed, within a
reasonable time. Otherwise, the sale becomes
absolute.
• Loss or destruction of the property prior to
return falls upon the buyer and makes him
responsible for the purchase price.
Express Reservation
If it was stipulated that ownership in the thing shall
not pass to the purchaser until he has fully paid the
price, then ownership remains with seller even when
delivery is made [Art 1478, CC]
Implied Reservation
The following are instances when there is an implied
reservation of ownership:
a. Goods are shipped, but by the bill of lading
goods are deliverable to the seller or his agent, or
to the order of the seller or his agent
b. Bill of lading is retained by the seller or his agent.
When the seller of the goods draws on the buyer
for the price and transmits the bill of exchange
and bill of lading to the buyer, and the latter does
not honor the bill of exchange by returning the
bill of lading to the seller.
When Sale Not Valid
When the thing sold is a public property
Sale by Person Having a Voidable Title
a. True owner may recover the thing when the ff.
requisites concur:
• Subject matter is movable
• Owner has either lost the thing or has been
unlawfully deprived. [Art. 559, CC]
b. Reimbursement is necessary before owner can
recover when:
• Buyer acted in good faith
• Acquired at a public auction [Art. 559, CC]
c. Recovery no longer possible when:
• Buyer in good faith
• Acquired it at a merchant’s store, fair or
market. [Art. 1506, CC]

Sale on Approval v. Sale or Return 6. Kinds of Delivery

Sale on Approval Sale or Return
Ownership passes to Actual Delivery
Ownership does not pass Deemed made when the thing sold is placed in the
buyer on delivery and
upon delivery remaining control and possession of the vendee [Art. 1497, CC]
subsequent return
with the seller until buyer
revests ownership in the
signifies his approval. Not always essential to passing of title [Art. 147, CC]
seller.
Depends on the
Depends on the will of Parties may agree when and on what conditions the
character or quality of
the buyer ownership shall pass to the buyer [E.g.: Art 1478
goods
where ownership will only pass after full payment of
Subject to a suspensive Subject to a resolutory the price]
condition condition
Risk of loss remains with Risk of loss remains Constructive Delivery
the seller with the buyer

Page 302 of 511

U.P. LAW BOC
a. Execution of public instrument [par. 1, Art.
1498, CC]
General Rule: produces the same legal effects of
actual delivery.
Exceptions:
1. The parties intended otherwise.
2. At the time of execution, the subject matter
was not subject to the control of the seller,
which control must subsist for a reasonable
length of time after execution. [Pasagui v
Villablanca, G.R. No. L-21998 (1975)]
“Control” over thing sold must be such that seller
is capable of physically transferring it to buyer.
Although parties may stipulate that the execution
of a public instrument is equivalent to delivery,
this legal fiction holds true only when there is no
impediment that may prevent the passing of the
property from the vendor to the vendee. [Vda. de
Sarmiento v. Lesaca, G.R. No. L-15385 (1960)]
If, notwithstanding execution of the instrument,
the buyer cannot enjoy material tenancy and
make use of the object himself or through
another in his name, there is no delivery. [Power
Commercial v. CA, G.R. No. 119745 (1997)]
Execution of a public instrument gives rise only
to a prima facie presumption of delivery, negated
by failure of the buyer to take actual possession
of land sold. A person who does not have actual
possession cannot transfer constructive
possession by execution and delivery of public
instrument. [Spouses Santiago v. Villamor, G.R. No.
168499 (2012)]
b. Symbolic Delivery
Delivery of keys of the place or depositary where
the movable is stored or kept. [Art 1498, CC]
Unless otherwise agreed, when symbolic delivery
has been made, the seller is not obliged to remove
tenants to place the buyer in actual possession of
the property as he has already complied with his
obligation to transfer ownership of and deliver
the thing sold. [Power Commercial and Industrial
Corp. v. CA, G.R. No. 119745 (1997); Sabio v. The
International Corporate Bank, Inc., G.R. No. 132709
(2001)]
Page 303 of 511
SALES CIVIL LAW
c. Tradition Longa Manu (Long Hand)
Delivery of movable property by mere consent or
agreement, if the thing sold cannot be transferred
to the possession of the buyer at the time of sale.
[Art. 1499, CC]
Example: Seller points to the property without
actually transferring physical possession thereof.
Delivery by mere agreement; seller points out to
the buyer the property without need of actually
delivering (as when the thing sold cannot be
transferred to the possession of the vendee at the
time of sale). Delivery takes place when the thing
is placed in the sight of the purchaser so that he
can take possession of it at pleasure. With regard
to movable property, its delivery may also be
made by the delivery of the keys of the place or
depository where it is stored or kept.
When an employer assigned all its rights and title
to all surplus property salvaged by the contractor,
tradition longa manu takes place. Delivery is
upon the moment a thing is salvaged. [Board of
Liquidators v. Floro, , G.R. No. L-15155 (1960)]
d. Tradition Brevi Manu (Short Hand)
Delivery of movable property by mere consent or
agreement, if the buyer already had it in his
possession for any other reason. [Art. 1499, CC]
Happens when the already has possession of the
thing sold before the sale by virtue of another title
(as lessee, borrower, depositary, etc.)
e. Tradition Constitutum Possessorium
Seller continues to be in possession of the
property sold not as owner but in some other
capacity, like as tenant or lessee.
At the time of perfection, the seller held
possession of the subject matter in the concept
of owner, and pursuant to the contract, the seller
continues to hold physical possession thereof as
lessee or other form of possession other than the
concept of owner.
For example, a seller remains in possession of the
property sold, by virtue of a lease agreement with
the vendee, at the time of the perfection of the
contract of sale.
U.P. LAW BOC
Vendee became, as lessor, the legal possessor
while the vendor is in material possession of the
property in the name and representation of the
vendee.
Seller continues to be in possession of the
property sold
f. Quasi-traditio
Mode of delivery of incorporeal things or rights.
Delivery is effected:
• By execution of public instrument
• When such is not applicable, by placing the
titles of ownership in the possession of the
buyer
• By allowing the buyer to use his rights as new
owner with the consent of the seller
g. Delivery to a Common Carrier
General Rule: Delivery to the courier or carrier is
tantamount to delivery to buyer, whether carrier
is named by buyer or not. The buyer assumes the
risk of loss.
Exceptions:
1. Seller reserved title through the form of the
bill of lading, with intent to remain the
owner, not merely for the purpose of
securing payment, OR
2. Contrary intention appears in the contract
(i.e. seller is required to deliver goods to
buyer at the point of destination)
3. Delivery by the seller is in breach of the
contract
4. F.O.B. (Free on Board or Freight on Board)
- When seller bears the expenses of
transportation up to the F.O.B. point.
5. C.I.F. (Cost, Insurance, Freight) - Price
quoted includes the costs of the goods,
insurance, and freight charges on the goods
up to the point of destination.
6. F.A.S. (Free Alongside) – Seller bears the
expenses of transportation until he delivers
the goods alongside a vessel at a named port.
Page 304 of 511
SALES CIVIL LAW
7. Double Sales [Art. 1544, CC]
General Rule: Prior tempore, prior jure (“First in time,
priority in right”) applies.
Requisites:
a. 2 or more valid sales;
b. Same subject matter;
c. 2 or more buyers with conflicting interests over
the rightful ownership of the thing sold;
d. Same seller. [Cheng v Genato, G.R. No. 129760
(1998)]
Rules on Double Sale
There is no double sale when:
a. Not all the elements of a sale are present
b. The principle of prior tempore, prior jure (he
who is first in time is preferred in right) should
apply
c. The two different contracts of sale are made by
two different persons, one of them not being the
owner of the property sold.
d. The land sold is not yet registered under the
Torrens system
e. The first sale occurred when land was not yet
registered, and the second sale was done when
the land was already registered – prior tempore,
prior jure should apply
Rules on preference:
a. Personal property
b. First possessor in good faith
c. Real property
d. First registrant in good faith: second buyer must
register the document in good faith, otherwise, he
does not have a better right
e. First possessor in good faith
f. Person with oldest title in good faith
Caveat emptor: One who purchases real property
which is in actual possession of others should make
some inquiry concerning the rights of those in posses
Rules Governing Sale of Movables, Immovables
and Unregistered Lands
a. Sale of Movable: Ownership shall be transferred to
the person who may have first taken possession
in good faith.
b. Sale of Immovables: Registered Land – Ownership
belongs to the person who:
U.P. LAW BOC
• In good faith first recorded the sale in the
Registry of Property; or
• If there is no inscription of sale on the title,
ownership passes to the person who in good
faith was first in possession; or
• In the absence thereof, to the person who
presents the oldest title, provided there is
good faith.
Possession refers to any of the modes of
possession in Arts. 1497-1501, CC
Oldest Title as to any public document showing
acquisition of the land in good faith. To
constitute “title,” the transmission of ownership
must appear in a public document [Art. 1358 (1),
CC]
Registration includes any entry made in the
Primary Entry Book of the registry, including
both registration in its ordinary and strict sense
and cancellation, annotation, and even marginal
notes. [Cheng v. Genato, G.R. No. 129760 (1998)]
Pencilled entries on the title are not considered
registration. [AFPMBAI v. Court of Appeals, G.R.
No. 126745 (1999)]
c. Second Sale Made by Virtue of Execution
and Attachment – Art. 1544 does NOT apply in
cases where the first sale of an unregistered
immovable occurred prior to an execution sale
and the second sale occurred by virtue of an
execution sale. This is because a buyer of
unregistered land at an execution sale only steps
into the shoes of the judgment debtor (the person
who sold the property prior to the execution
sale). The second buyer merely acquires the
latter’s interest in the property sold as of the time
the property was levied upon. [Carumba v. CA,
G.R. No. L-27587 (1970)]
d. Sale of Immovables: Unregistered Land
Instrument or deeds establishing, transmitting,
acknowledging, modifying or extinguishing rights
with respect to lands not registered under the
Land Registration Act or the Spanish Mortgage
Law, are required to be registered in the Registry
of Property to prejudice 3rd persons, although
such registration is understood to be “without
prejudice to a third party with a better right”. [PD
1528 Sec 113]
Page 305 of 511
SALES CIVIL LAW
Art. 1544 applies to unregistered land subject to
a conventional sale (because of Art. 1358) but
NOT to unregistered land subject to judicial sale.
Unregistered by both buyers, the first buyer is
preferred.
If first buyer did not register but second buyer
registered property, second buyer is preferred.
8. Property Registration Decree [P.D.
1529]
REQUISITES FOR REGISTRATION OF
DEED OF SALE IN GOOD FAITH
a. Purchaser in Good Faith - One who buys the
property of another, without notice that some
other person has a right to or interest in such
property, and who pays a full and fair price for
the sale, at the time of the purchase or before he
has notice of the claim/interest of some other
person in the property. [Agricultural and Home
Extension Development Group v. CA, G.R. No.
92310 (1992)]
General Rule: As a rule, he who asserts the status
of a purchaser in good faith and for value has the
burden of proving such assertion. [Mathay v. CA,
G.R. No. 115788 (1998)]
When buyer is presumed to be in bad faith
• Annotation of adverse claim: Places any
subsequent buyer of the registered land in
bad faith. [Balatbat v. CA, G.R. No. 109410
(1996)]
• Annotation of Lis Pendens: Buyer cannot
be considered an innocent purchaser for
value where it ignored the lis pendens on the
title.
• A purchaser of a parcel of land cannot close
his eyes to facts which should put a
reasonable man upon his guard, such as
when the property *subject of the purchase
is in the possession of persons other than the
seller. A buyer who could not have failed to
know or discover that the land sold to him
was in the adverse possession of another is a
buyer in bad faith. [Heirs of Ramon Durano v.
Uy, G.R. No. 136456 (2000)]
U.P. LAW BOC SALES CIVIL LAW

misrepresentations. [Songco v. Sellner, G.R. No. L-

Annotation of 11513 (1917)]
Lis Pendens
Adverse Claim
May be cancelled even May be cancelled only Condition v. Warranty
before the action is in one instance, i.e., Condition Warranty
finally terminated for after the claim is Goes into the
Pertains to and affects
causes which may not adjudged invalid or performance of an
the existence of the
be attributable to the unmeritorious by the obligation and may, in
obligation
claimant Court itself, be an obligation
Non-happening does not Non-fulfillment
The two are not contradictory or repugnant to amount to breach of constitutes breach of
one another; nor does the existence of one contract contract
automatically nullify the other, and if any of the Stipulation or operation
registrations should be considered unnecessary Must be stipulated
of law
or superfluous, it would be the notice of lis
pendens [A. Doronila Resources Development Inc v. May attach either to the Always relates to the
CA, G.R. Nos. L-42956-571988] seller’s duty to deliver subject matter or the
thing or some other seller’s obligations as to
b. Accompanied by vendors duplicate circumstance the subject matter
certificate of title, payment of capital gains
tax, and documentary tax registration fees If seller has promised that the condition should
Must be accompanied by: happen or be performed, the buyer may treat the
• Vendor’s duplicate certificate of title nonperformance of the condition as a breach of
• Payment of capital gains tax – 6% of the warranty. [Art.1545, CC]
selling price or zonal value, whichever is
higher 1. Express Warranties
• Documentary tax registration fees – 1.5% of
the selling price or zonal value, whichever is For there to be express warranty, the following
higher requisites must concur:
a. An affirmation of fact or any promise relating to
9. Risk of Loss the thing sold;
b. The natural tendency of such affirmation or
See Effects of Contracts Where the Thing is Lost above. promise is to induce the buyer to buy;
c. The buyer buys the thing relying thereon. [Art.
1546, CC]
b. To Warrant Against Eviction and d. Made before the sale not upon delivery or any
Against Hidden Defects other point

Warranties - A statement or representation made by An express warranty can be made by and also be
the seller contemporaneously and as part of the binding on the seller even in the sale of a second hand
contract of sale, having reference to the character, article. [Moles v. IAC, G.R. No. 73913 (1989)]
quality, or title of the goods, and by which he
promises or undertakes to ensure that certain facts are Express Warranty v. Dealer’s/Trader’s Talk
or shall be as he then represents. Express
Dealer’s or Trader’s Talk
Warranty
Not every false representation voids the contract, only What is Affirmation of the value of the
those matters substantially affecting the buyer’s specifically thing or statement of only the
interest, not matters of opinion, judgment, represented seller’s opinion is not a warranty
probability, or expectation. When the buyer as true in said unless:
undertakes his own investigation, and the seller does document
nothing to prevent it from being as full as the buyer • The seller made it as an expert;
cannot be
chooses, the buyer cannot afterwards allege considered as • It was relied upon by the buyer.
mere dealer's [Art.1546, CC]

Page 306 of 511

U.P. LAW BOC
Express
Dealer’s or Trader’s Talk
Warranty
talk. [Moles v. • Ordinarily, what does not
IAC, supra] appear on the face of the
written instrument [Moles v.
IAC, supra]
Express Warranty v. False Representation
Express
False Representation
Warranty
When concealment of facts comes
with an active misstatement of fact
or a partial statement of fact such
that withholding of that unsaid
portion makes that which is stated
absolutely false
However, a buyer who fails to
Concealment of inspect the condition of property
facts does not despite ample opportunity to do so
necessarily when there is no opposition on the
amount to false part of seller to inspect cannot later
representation on allege false representation.
[Philippine Manufacturing Co. v. Go
Jocco, G.R. No. L-24256 (1926)]
Reason:
buyer’s duty to inspect remains
despite false representation by the
seller; he has the duty to exercise
due diligence.
2. Implied Warranties [Art. 1547, CC]
An implied warranty is derived by law by implication
or inference from the nature of the transaction or
relative situation, or circumstances of the parties,
irrespective of any intention of the seller to create it.
[de Leon]
Implied Warranty of Title
a. Implied Warranty against Encumbrance/Non-
Apparent Servitudes
b. Implied Warranty against Hidden Defects [Art.
1547, CC]
• Implied warranty as to Merchantable Quality
and Fitness of Goods
• Implied warranty against Redhibitory Defect
in the Sale of Animals [Art. 1572, CC]
• Quality and Fitness of Goods in Sale by
Sample or Description
c. Other Warranties
Page 307 of 511
SALES CIVIL LAW
IMPLIED WARRANTY OF TITLE
Implied warranty arises by operation of law and need
not be stipulated in the contract of sale.
Warranty of Seller’s Right to Sell: Seller warrants
his right to sell at the time the ownership is to pass.
Inapplicable to a sheriff, auctioneer, mortgagee,
pledgee, or other person professing to sell by virtue
of authority in fact or law. [Art. 1547, CC]
Warranty against Eviction: seller warrants that
buyer, from the time ownership passes, shall have and
enjoy legal and peaceful possession of the thing. Its
requisites are:
a. Buyer is deprived of the whole or a part of the
thing sold;
b. Eviction is by final judgment
c. Final judgment based on a right prior to the sale
or an act imputable to the vendor
d. Seller is summoned and made co-defendant in
the suit for eviction at the instance of the buyer.
[Power Commercial and Industrial Corp. v. CA, G.R.
No. 119745 (1997)]
IMPLIED WARRANTY AGAINST
ENCUMBRANCE/NON-APPARENT
SERVITUDES
Requisites for breach:
a. Thing sold is an immovable
b. Burden or servitude encumbering the thing sold
is:
1. Non-apparent to the naked eye
2. Not mentioned in the agreement
3. Of such nature that it must be presumed that
the buyer would not have bought it had he
been aware of it
4. Not recorded in the Registry of Property
unless there is an express warranty that the
thing is free from all burdens and
encumbrances [Art.1560, CC]
IMPLIED WARRANTY AGAINST HIDDEN
DEFECTS
Requisites for breach:
a. The defect renders the thing sold unfit for the use
for which it was intended OR diminishes its
fitness for such use to such an extent that had the
buyer been aware thereof, he would not have
bought it or would have paid a lower price;
b. The defect is not patent or visible;
U.P. LAW BOC
c. The buyer is not an expert who, by reason of his
trade or profession, should have known the
defect
d. The seller is aware of the hidden fault or defect,
OR even if he is not aware thereof, if there is no
stipulation to the contrary [Art.1566]
The buyer must also give notice of such redhibitory
defect within a reasonable time.
The use contemplated must be that which is
stipulated, and in the absence of stipulation, that
which is adopted to the nature of the thing, and to the
business of the buyer.
IMPLIED WARRANTY AS TO
MERCHANTABLE QUALITY AND FITNESS
OF GOODS
Merchantable Quality
a. Where the goods are brought by description from
a seller who deals in goods of that description
[Art. 1562, CC]
b. In a sale by sample, if the seller is a dealer in
goods of that kind and the defect is not apparent
on reasonable examination of the sample [Art.
1566, CC]
Warranty of merchantability is warranty that goods
are reasonably fit for the general purpose for which
the same are sold.
Warranty of fitness is warranty that goods are suitable
for the special purpose of the buyer which will not be
satisfied by mere fitness for general purposes.
In a sale by sample, there is implied warranty that
goods are free from defects not apparent on
reasonable examination of sample and which render
goods unmerchantable. [Mendoza v. David, G.R. No.
147575 (2004)]
“Fitness for a particular purpose”: Where the
buyer expressly or impliedly makes known to the
seller the particular purpose for which the goods are
acquired AND it appears that the buyer relied on the
seller’s skill or judgment [Art.1562(1), CC]
IMPLIED WARRANTY AGAINST
REDHIBITORY DEFECT IN THE SALE OF
ANIMALS [Art. 1572, CC]
Redhibitory defect – a hidden defect of animals of
such nature that expert knowledge is not sufficient to
Page 308 of 511
SALES CIVIL LAW
discover it, even in a case where a professional
inspection has been made
No warranty in case of [Art. 1574, CC]
a. Animals sold at fairs or public auctions
b. Livestock sold as condemned
The following sales are void [Art. 1575, CC]
a. Sale of animals suffering from contagious
diseases
b. Sale of animals unfit for the purpose for which
they are acquired as stated in the contract
Veterinarians are liable if they fail to discover or
disclose the hidden defect through ignorance or bad
faith. [Art. 1576, CC]
Seller liable if animal dies within 3 days after its
purchase due to a disease that existed at the time of
sale. [Art. 1578, CC]
3. Effects of Warranties
a. Natural tendency is to induce buyer to purchase
the subject matter
b. Buyer purchases subject matter relying thereon
c. Seller liable for damages in case of breach
4. Effects of Waivers
Only applicable to waiver of warranty against
eviction; parties may increase or decrease warranty
against eviction but the effect depends on good/bad
faith of the seller:
a. Seller in bad faith and there is warranty against
eviction – null and void
b. Buyer without knowledge of a particular risk and
made general renunciation of warranty – not
waiver but merely limits liability of seller in case
of eviction (pay value of subject matter at the
time of eviction)
c. Buyer with knowledge of risk of eviction
assumed its consequences and made a waiver –
vendor not liable
d. Waiver to a specific case of eviction – wipes out
warranty as to that specific risk but not as to
eviction caused by other reasons
One who purchases real estate with knowledge of
defect or lack of title cannot claim he acquired title
thereto in good faith, as against true owner of land or
of interest therein. [J.M. Tuason v. CA, G.R. No. L-
41233 (1979)]
U.P. LAW BOC SALES CIVIL LAW

The same rule must be applied to one who has

knowledge of facts which should have put him upon IMPLIED WARRANTY AGAINST EVICTION
such inquiry and investigation as might be necessary [Arts. 1555, 1556, CC]
to acquaint him with the defects in the title of his
vendor. A purchaser cannot close his eyes to facts Total Eviction Partial Eviction
which should put a reasonable man upon his guard Enforce liability for eviction Enforce liability
and then claim that he acted in good faith under the (demand VICED)
belief that there was no defect in the title of the Demand from seller: OR
vendor. (VICED) Rescind within 6
a. Value of thing sold at months from
5. Buyer’s Options in Case of Breach of time of eviction delivery
Warranty b. Income or fruits, if he has a. If he would not
been ordered to deliver have bought the
Remedies of buyer for breach of warranty, both them to the party who thing sold
implied and express: won the eviction suit without the part
• Accept goods + demand diminution/ extinction c. Costs of eviction suit and lost;
of price in a proper case, suit b. BUT he must
• Accept goods + damages against seller for warranty return the thing
• Refuse to accept goods + damages d. Expenses of the contract, without other
if buyer has paid them encumbrances
• Rescind (Refuse to accept or return or offer to
e. Damages and interests, than those
return) + recover price paid [Art. 1599, CC]
and ornamental which it had
expenses, IF sale was when he
EXPRESS WARRANTY
made in bad faith acquired it
Prescriptive period: Period specified in express
warranty OR 4 years, if no period is specified Rules:
(following the general rule on rescission of contracts) a. Buyer need not appeal from decision to hold
seller liable for eviction
Remedies b. When adverse possession commenced before
sale, but prescription period completed after
Rescission not available when buyer: transfer: seller is not liable
a. Knew of breach of warranty when he accepted c. If property sold for nonpayment of taxes due and
the goods without protest not made known to the buyer before the sale:
b. Fails to notify the seller about election to rescind seller liable
within a reasonable period of time d. Judgment debtor also responsible for eviction in
c. Fails to return or offer to return the goods to the judicial sales, unless it is otherwise decreed in the
seller in substantially a good condition as they judgment
were when delivered, unless deterioration was
due to breach of warranty If there is waiver of warranty:
a. Seller acted in bad faith: Waiver is void, seller
Measure of damages: Difference between value of liable for eviction
goods at the time of delivery and the value they would b. Buyer made waiver without knowledge of risks of
have had if they had answered to the warranty eviction: Seller liable only for the value of the
thing sold at time of eviction
Effects of rescission c. Buyer made waiver with knowledge of risks:
a. Buyer no longer liable for price: Entitled to the Seller not liable; buyer assumed the consequences
return of any part of price paid, concurrently with
or immediately after an offer to return the goods IMPLIED WARRANTY AGAINST
b. If seller refuses to accept offer to return goods: ENCUMBRANCES [Art. 1560, CC]
buyer deemed as bailee for seller and has right of
lien to secure payment of part of price paid • Rescission: Within 1 year from execution of deed
of sale OR

Page 309 of 511

U.P. LAW BOC SALES CIVIL LAW

• Damages: Within 1 year from execution of deed Express Warranty Implied Warranty
of sale or discovery of the burden or servitude a. Demand repair
within 30 days
IMPLIED WARRANTY AGAINST HIDDEN Extendible for
a. Retain the goods and
DEFECTS [Arts. 1567-1571, CC] causes beyond the
recover damages
control of the
OR
If thing is not lost: warrantor
b. Reject the goods,
• Withdraw from contract (accion redhibitoria) + cancel contract and
damages b. Demand refund of
recover from seller so
• Demand a proportionate reduction of the price price minus amount
much of the purchase
(accion quanti minoris) + damages directly attributable
price as has been paid
to the use of the
+ damages
If thing is lost: consumer prior to
Due to fortuitous the discovery of the
Due to hidden fault event or fault of non-conformity
buyer
Demand:
If seller aware of defect,
a. Price paid minus
buyer may demand:
value of thing when
a. Return of price
it was lost
b. Refund of expenses
b. Damages, if seller
c. Damages
acted in bad faith
If seller not aware of
defect:
Buyer may demand
price and expenses
BUT NOT damages

Prescriptive period: 6 mos. from delivery

IMPLIED WARRANTY AGAINST

REDHIBITORY DEFECTS OF ANIMALS

Remedies
• Withdraw from contract + damages
• Demand a proportionate reduction of the price
+ damages

If sale is rescinded:
a. Buyer must return animal in the condition in
which it was sold and delivered
b. Buyer shall be liable for injury due to his
negligence.

Prescriptive period: 40 days from delivery

6. Warranty in Sale of Consumer Goods

If implied warranty accompanies express warranty,

both will be of equal duration. [Sec. 68, RA 7394]

Page 310 of 511

U.P. LAW BOC
E.Obligations of the
Vendee
1. Obligation to Accept
Delivery
a. What is Acceptance
Acceptance is assent to become owner of the
specific goods when delivery of them is offered to the
vendee. [de Leon]
The buyer is deemed to have accepted the goods
when:
1. He intimates to the seller that he has accepted
them
2. The goods have been delivered to him and he
does any act in relation to them which is
inconsistent with the ownership of the seller
3. After the lapse of a reasonable time, he retains
the goods without intimating to the seller that he
has rejected them.
General rule: Exercise of acts of ownership over the
goods is a manifestation of acceptance, such as
making use of them as owner, making alterations in
the goods or subjecting it to the process of
manufacture.
Exception: Buyer’s right to make a test of goods, but
only if necessary, to enable him to determine whether
to accept or reject the goods.
MODES
a. Express acceptance (Buyer intimates to the
seller that the has accepted them)
b. Implied acceptance
• When the vendee, after delivery of goods,
does any act inconsistent with the vendor’s
ownership or makes alteration in them in a
manner proper only for an owner
Acts inconsistent with vendor’s
ownership:
o Use of property except if the single act
of use does not affect the condition or
value of the property
o Resale or mortgage
o Alteration
Page 311 of 511
SALES CIVIL LAW
Conduct after rejection – if the vendee
o
performs an act inconsistent with the
vendor’s ownership after rejection
• When the buyer, after the lapse of a
reasonable time, retains the goods without
intimating his rejection.
Vendee’s refusal
If vendee has the right to refuse and rightfully refused
upon delivery,
a. He has no obligation to return them UNLESS
otherwise agreed BUT he has to take reasonable
care of the goods
b. He is not a depositary thereof UNLESS he
voluntarily agrees to be one
If the vendee’s refusal to accept is wrongful
a. The title passes to the vendee from the moment
they are placed at his disposal
b. UNLESS there is a stipulation to the contrary [as
specified in Article 1523, par. 1, CC]
b. Buyer’s Right to Examine
The buyer is not deemed to have accepted the goods
delivered which he has not previously examined
unless and until he has had a reasonable opportunity
to examine them for the purpose of ascertaining
whether they are in conformity with the contract
Exception: If there is a stipulation to the contrary [par.
1, Art. 1584, CC]
The seller is bound, when he tenders delivery to the
buyer, on request, to afford the buyer a reasonable
opportunity to examine the goods for the purpose of
ascertaining whether they are in conformity with the
contract.
Exception: Unless otherwise agreed upon [par. 2, Art.
1584, CC]
Exception to the right to examine: C.O.D. Sales
Where goods are delivered to a carrier by the seller, in
accordance with an order from or agreement with the
buyer, upon the terms that the goods shall not be
delivered by the carrier to the buyer until he has paid
the price, whether such terms are indicated by
marking the goods with the words "collect on
delivery," or otherwise, the buyer is not entitled to
examine the goods before the payment of the price,
in the absence of:
a. agreement; or
U.P. LAW BOC SALES CIVIL LAW

b. usage of trade 1. If he is disturbed in the possession or ownership

c. permitting such examination. [par. 3, Art. 1584, of the thing bought; or
CC] 2. If he has reasonable grounds to fear such
disturbance, by a vindicatory action or a
c. Delivery of Goods in Installment foreclosure of mortgage [Art. 1590, CC]

General rule: The vendee is not bound to accept Except:

delivery of goods in installment 1. If the vendor gives security for the return of the
price in a proper case
Exception: Unless otherwise agreed upon [par. 1, Art. 2. If it has been stipulated
1583, CC] 3. If the vendor caused disturbance or danger to
cease
WHERE SEPARATE PRICE HAS BEEN 4. If the disturbance is a mere act of trespass
FIXED FOR EACH INSTALLMENT [par. 2, 5. If the vendee has already fully paid the price [de
Art. 1583, CC] Leon]

Where there is a contract of sale of goods c. Payment in installments

1. To be delivered by stated installments,
2. To be separately paid for, and General rule: The vendee has no right to pay in
3. The seller makes defective deliveries in respect of installments
one or more instalments, or the buyer neglects or
refuses without just cause to take delivery of or Exception: Unless otherwise agreed
pay for one or more instalments,
3. Obligation to Bear the
It depends in each case on the terms of the contract
and the circumstances of the case, Expenses for the Execution
1. Whether the breach of contract is so material as
to justify the injured party in refusing to proceed
and Registration of the Sale
further and suing for damages for breach of the and Putting the Goods in a
entire contract, or
2. Whether the breach is severable, giving rise to a
Deliverable State, if so
claim for compensation but not to a right to treat Stipulated
the whole contract as broken.
Art.1521, par. 5. Unless otherwise agreed, the
2. Obligation to pay the price expenses of and incidental to putting the goods into a
deliverable state must be borne by the seller.
a. Obligation to pay interest
The three instances when the vendee shall pay interest
for the period between delivery and payment of the
price:
1. If there was a stipulation
2. If the thing sold and delivered produces fruits or
income
3. If the vendee is in default, from the time of
judicial or extrajudicial demand for payment [Art.
1589, CC]

b. Right of Vendee to Suspend

Payment of Price
The vendee has the right to suspend in two instances:

Page 312 of 511

U.P. LAW BOC
F. Breach of Contract
1. General Remedies [Art. 1191,
CC]
The following remedies arise from the bilateral nature
of the contract of sale:
a. Specific performance
b. Rescission
c. Damages
General rule: Rescission of a contract will not be
permitted for a slight or casual breach, but only for
such substantial and fundamental breach as would
defeat the very object of the parties in making the
agreement. [Song Fo & Co. v. Hawaiian-Philippine Co.,
G.R. No. 23769 (1925)]
Prescriptive periods
a. 10 years if based on written contract
b. 6 years if based on oral contract
a. Remedies of the Seller
1. Sale of Goods
ACTION FOR PRICE [ART. 1595, CC]
a. When the ownership of the goods has passed to
the buyer and he wrongfully neglects or refuses
to pay for the price
b. When the price is payable on a certain day and
the buyer wrongfully neglects to pay such price,
whether or not ownership has passed
c. When the goods cannot readily be resold for a
reasonable price, and the buyer wrongfully
refuses to accept the goods, whether or not
ownership has passed.
In an action by the seller under (2), buyer can set up
the defense that seller, at any time before judgment in
such action, could not or did not intend to deliver the
goods.
Unless the contrary appears, payment and delivery are
presumed to be concurrent acts, and the obligation of
each party to perform the contract is dependent upon
the simultaneous performance by the other party [de
Leon]
If ownership has not yet passed to the buyer, the seller
cannot maintain an action for the price, unless it
involves (1) or (3).
Page 313 of 511
SALES CIVIL LAW
Title to goods passes from the moment the goods are
placed at the buyer’s disposal when refusal to accept
is without just cause. [de Leon citing Art. 1588, CC]
ACTION FOR DAMAGES [ART. 1596, CC]
When ownership has not yet passed and the buyer,
without lawful cause, neglects or refuses to ACCEPT
and PAY for the goods
General rule: Measure of damages is the ESTIMATED
LOSS directly and naturally resulting in the ordinary
course of events from the buyer’s breach.
Exceptions:
a. Where there is available market for goods:
Difference between the contract price and the
market price. The market price is fixed at the time
the goods ought to have been accepted, or if no
time was fixed, at the time of refusal to accept.
Note: When there are special circumstances
showing proximate damages of a greater amount
than the difference between the contract price
and market price, seller is entitled to such higher
amount of damages when such damages may be
reasonably attributed to the non-performance of
the obligation. [de Leon; par. 3, Art. 1596 read
with par. 2, Art. 2201, CC]
b. Where labor or expense of material amount is
necessary on the part of the seller to perform
the contract: Cost of labor performed or
expenses made before receiving notice of buyer’s
repudiation, and unrealized profit.
RESCISSION BY GIVING THE BUYER
NOTICE OF THE ELECTION TO RESCIND
[ART. 1597, CC]
When the goods have not yet been delivered to the
buyer, and the buyer repudiated the contract of sale,
or manifested his inability to perform his obligations,
or has committed a breach of the contract of sale.
Under this rule, rescission would bar an action on the
contract because it means cancellation of the
contractual obligations between the parties. [Baviera]
The unpaid seller’s right to rescind for non-
performance is not absolute. Not allowed to rescind
when:
a. There are 3rd persons possessing the objects of
the contract to whom no bad faith is imputable
[de Leon; Ocejo Perez & Co. v. International Bank,
G.R. No. L-10658 (1918)]
U.P. LAW BOC
b. Breach is on slight or casual [de Leon; Song Fo &
Co. vs. Hawaiian-Phil. Co., supra]
The seller cannot unilaterally and extrajudicially
rescind a contract absent express stipulation to do so,
except as provided in Art. 1597. [De Leon]
2. Special Remedies of The Unpaid Seller
[Arts. 1525-1535, Cc]
a. Possessory lien;
b. Stoppage in transitu;
c. Special right of resale; and
d. Special right to rescind,
Note: These special remedies have a hierarchical
application. The special rights to resell and to rescind
can be availed of by the unpaid seller only when either
of the two prior rights of possessory lien or stoppage
in transitu have been exercised by the unpaid seller.
[Villanueva]
Definition of an Unpaid Seller
Art. 1525. Seller is deemed to be unpaid seller:
1. When the whole of the price has not been paid
or tendered;
2. When a bill of exchange or other negotiable
instrument has been received as conditional
payment, and the condition on which it was
received has been broken by reason of the
dishonor of the instrument, the insolvency of the
buyer, or otherwise.
Unpaid Seller also includes:
a. The agent of the seller to whom the bill of lading
was endorsed,
b. The consignor or agent who had paid the price
or is responsible for the price
c. Any other person who is in the position of a seller
(i.e. buyer who paid the price and had a right to
return the goods). [Art. 1525, CC]
A seller is considered to be an unpaid seller if the
whole price has not been paid or tendered, or when
check received as a conditional payment was
dishonored by non-payment or insolvency of the
buyer [Baviera]
A seller is unpaid within such definition whether or
not title has been passed. Partial payment of the price
does not extinguish the unpaid seller’s lien. [de Leon]
POSSESSORY LIEN OVER THE GOODS
Page 314 of 511
SALES CIVIL LAW
Right to retain possession of goods until payment or
tender of the whole price, or unless he agrees to sell
on credit [Arts. 1526-1529, 1503, 1535, CC]
When lien available
a. The seller is unpaid
b. The unpaid seller has possession over the thing
c. Ownership of the thing has passed to the buyer
d. Any of the following: [Art 1527, CC]
• Goods are sold without stipulation as to
credit
• Goods are sold on credit, but term of credit
has expired
• Buyer becomes insolvent
The seller may exercise his right of lien
notwithstanding that he is in possession of the goods
as agent or bailee for the buyer [par. 2, Art. 1527, CC]
When unpaid seller loses his lien [Art. 1529, CC]
a. Seller delivers goods to carrier or other bailee for
transmission to the buyer without reserving
ownership or right of possession (i.e. under a
straight or non-negotiable bill of lading)
b. Buyer or his agent lawfully obtains possession of
goods
c. Seller waives the lien
• But it is not lost with respect to the
remainder of the goods when only partial
delivery is made (unless such is symbolic
delivery of the whole)
• It is not lost by the mere fact that seller
obtained a judgment for the price
When Lien May Be Revived After Delivery
a. If the buyer refuses to receive the goods after the
same are delivered to the carrier or other bailee
on his behalf, though the seller has parted with
both ownership and possession. Here, the seller
may reclaim the goods and revest the lien. [par. 1
(2). Art 1531, CC]
b. If the buyer returns the goods in wrongful
repudiation of the sale, and the seller, in accepting
the goods from the buyer, says he does not assent
to the rescission.
Possessory lien is lost after the seller loses possession
but his lien as an unpaid seller remains. His preference
can only be defeated by the government’s claim to the
specific tax on the goods. [Arts. 2241, 2247, CC]
RIGHT OF STOPPAGE IN TRANSITU
U.P. LAW BOC
An extension of the lien for the price; entitles unpaid
seller to resume possession of the goods while they
are in transit before the goods come in possession of
the vendee [Arts. 1530-1532, 1535, 1636(2). CC]
Note: This is an old common law remedy which is an
extension of the lien for the price and entitles the
unpaid seller to resume possession of the goods while
they are in transit before the goods come in
possession of the vendee if the latter is or becomes
insolvent.
Requisites for the exercise of stoppage in transitu
a. The seller is unpaid
b. The buyer is insolvent
c. The goods are in transit
d. The seller either takes actual possession, or gives
notice of claim to the carrier or other person
possessing the goods
e. The seller must surrender the negotiable
instrument or title, if any, issued by the
carrier/bailee
f. The seller must bear the expenses of the delivery
of the goods after exercise of such right.
When Goods Are In Transit [par. 1, Art 1531, CC]
a. From the time of delivery to the carrier or other
bailee by the seller, for the purpose of
transmission to the buyer, until the buyer or his
agent takes such delivery from the carrier.
b. Even when goods have reached their ultimate
destination, if buyer rejects them and carrier
retains possession
To terminate transit by delivery to a middleman,
delivery must be to keep, not to transport.
In case of misdelivery, the goods are still considered
in transit, hence, the seller may still exercise his right
pursuant to Article 1523.
When Goods are No Longer in Transit [par. 2, Art
1531, CC]
a. Buyer obtained delivery of the goods before they
have reached their appointed destination
b. Goods have arrived at the appointed destination,
and the carrier/bailee acknowledges to hold the
goods on behalf of the buyer
c. Goods have arrived at the appointed destination,
but carrier wrongfully refuses to deliver to
buyer/his agent
Note: If the goods are delivered to a ship, freight train,
truck, or airplane chartered by the buyer, it is a
Page 315 of 511
SALES CIVIL LAW
question depending on the circumstances of the
particular case, whether they are in the possession of
the carrier as such or as agent of the buyer.
How Right is Exercised [Art. 1532, CC]
a. By obtaining actual possession of the goods
b. By giving notice of his claim to the carrier/other
bailee who has possession of the goods
• Carrier must redeliver goods to seller, or
according to his instructions
• Carrier not obliged to redeliver until the
negotiable document of title, if any, has been
surrendered for cancellation
Effect When Buyer Has Sold the Goods [Art.
1535, CC]
General Rule: Seller’s right to stoppage in transitu is not
affected even if buyer has sold or disposed of the
goods unless the seller has given his assent thereto.
Exceptions:
a. When seller has given consent thereto
b. When a negotiable document of title has been
issued for the goods to a purchaser for value in
good faith
SPECIAL RIGHT OF RESALE
Available to unpaid seller who has a right of lien or
who has stopped the goods in transitu [Art. 1533, CC]
When available
When the unpaid seller has either a right of lien or has
stopped the goods in transitu and under any of the
following conditions:
a. The goods are perishable in nature
b. The right to resell is expressly reserved in case the
buyer should default
c. The buyer delays in paying the price for an
unreasonable time
The right to resell the goods is not mandatory, but
permissive.
How exercised
a. He must do so within a reasonable time and in
such manner as to obtain the best price possible.
b. The place of sale shall be at the place of delivery,
except if the seller cannot sell the thing at a fair
price at the place of delivery.
c. Resale is deemed to be a fair sale if it is
undertaken in accordance with established
business practices, with no attempt to take
advantage of the original buyer.
U.P. LAW BOC
d. Resale may be in a private or public sale, but seller
cannot buy directly or indirectly.
e. For resale to be valid, buyer need not be notified
of an intention to resell or the time and place of
the resale.
Exception: if the ground for resale is failure to pay for
an unreasonable amount of time
The seller must exercise reasonable judgment in
making the sale.
Effects of Resale
a. Seller is no longer liable to the original buyer
upon the contract of sale or for any profit made
by the resale
b. Buyer at resale acquires good title as against the
original owner
c. In case resale is at a loss, seller is entitled to
recover the difference from the original buyer
d. Seller may recover damages from original buyer
for breach of contract
SPECIAL RIGHT TO RESCIND
Return of the title over the undelivered goods to the
seller, and right to recover damages for breach of
contract [Art. 1534, CC]
When available
When the unpaid seller has either a right of lien or has
stopped the goods in transitu and under any of the
following conditions:
a. Seller expressly reserved his right to rescind in
case buyer defaults
b. Buyer has been in default in payment for an
unreasonable time
Transfer of title shall not be held to have been
rescinded by the unpaid seller until he manifests by
notice to the buyer or some other overt act an
intention to rescind.
Communication to buyer of rescission is not always
necessary (it can be an overt act). But giving/failure
to give notice is relevant in determining
reasonableness of time given to the buyer to make
good his obligation under contract. [de Leon]
Page 316 of 511
SALES CIVIL LAW
3. Recto Law: Sale of Movables on
Installment – Arts. 1484-1486. CC
WHEN APPLICABLE
Sale of movables in installment
The rule is intended to apply to sales of movables, the
price of which is payable in 2 or more installments,
but not to straight-term sales where the price is
payable in full, after making a down payment because
the law aims to protect improvident buyers who may
be tempted to buy beyond their means. [Levy Hermanos
v. Gervacio, G.R. No. l-46306 (1939)]
Lease of personal property with option to buy
When lessor has deprived the lessee of the possession
or enjoyment of the thing (i.e. lessor files a complaint
for replevin against lessee)
Also applies when seller assigns his credit to someone
else
ALTERNATIVE AND EXCLUSIVE
REMEDIES
The exercise of one remedy bars the exercise of the
others.
a. Specific Performance
General Rule: When the seller has chosen specific
performance, he can no longer seek for rescission
or foreclosure of the chattel mortgage
Exception: If specific performance has become
impossible, the seller may still choose rescission
[Art. 1191, CC]
b. Cancellation of sale if vendee fails to pay 2 or
more installments
When the seller cancels the sale by repossessing
the property sold, he is barred from exacting
payment for its price.
It can only be carried out when he who demands
rescission can return whatever he may be obliged
to restore [Art. 1385, CC]
c. Foreclosure of Chattel Mortgage if vendee
fails to pay 2 or more installments
U.P. LAW BOC
If seller chooses this remedy, he shall have no
further action to recover any unpaid balance, and
any stipulation to the contrary shall be void.
The purpose of the law is to remedy the abuses
committed in foreclosure of chattel
mortgages. It prevents mortgagees from seizing
the mortgaged property, buying it at foreclosure
sale for a low price and then bringing the suit
against the mortgagor for a deficiency
judgment. The almost invariable result of this
procedure was that the mortgagor found himself
minus the property and still owing practically the
full amount of his original indebtedness. [Bachrach
Motor Co., Inc. v. Millan, G.R. No. L-42256 (1935)]
4. Sale of Immovables
RESCISSION FOR ANTICIPATORY
BREACH [ART. 1591, CC]
This is applicable to both cash sales and sales in
installments.
Requisites:
a. There is delivery of immovable property
b. Vendee has not yet paid the price; and
c. Vendor has reasonable grounds to fear the loss
of property and the loss of price
If there is no such reasonable ground, Art. 1191
applies (specific performance or rescission with
damages).
Court has no discretion to compel the seller to wait
for the expiration of the period to pay, or to grant the
buyer more time to pay.
SPECIFIC PERFORMANCE + DAMAGES OR
RESCISSION + DAMAGES [ART. 1191, CC]
Seller may choose between specific performance and
rescission, with damages in either case.
Court has discretion, for a just cause, to give the buyer
more time to pay even if the seller chooses rescission.
If seller chose specific performance, and such
becomes impossible, he may still avail of rescission
If absolute sale, seller must make a demand for
rescission
a. Judicially, OR
b. By a notarial act
Page 317 of 511
SALES CIVIL LAW
Demand necessary even if automatic rescission is
stipulated
a. Effect of lack of demand: Buyer can still pay
b. Effect of demand: Court may not grant buyer a
new term
SECS. 23 AND 24, PD 957
Non-forfeiture of payments
No installment payment made by the buyer shall be
forfeited in favor of the owner or developer of the
condominium or subdivision project, after due notice,
when the buyer desists from paying due to the failure
of the developer or owner to develop the project
according to the approved plans or within the time
limit stated.
Buyer’s Remedy: At his option, he may reimburse the
total amount paid including amortization interest with
interest thereon at the legal rate
If the buyer fails to pay the installments for reasons
other than the failure of the owner or developer to
develop the project, his rights shall be governed by
RA 6552.
5. Maceda Law (RA 6552): Sale of
Immovables on Installment
RA 6552 does NOT apply to:
a. Industrial lots
b. Commercial buildings
c. Sale to tenants under Agricultural Reform Code
[RA 3844]
d. Sale of lands payable in straight terms
[Sec. 3, RA 6552]
Rights of the Buyer:
The law imposes additional requirements on the part
of the seller for a valid rescission
a. If buyer has paid at least 2 years of installments
then defaults:
• Buyer has right to a grace period of 1 month
per year of installment payment made BUT
the buyer may only avail of the grace period
once every 5 years
• Buyer has right to the refund of
CashSurrender Value (CSV): 50% of total
amount paid + 5% for every year after the
first 5 years of installments BUT total CSV
should not be greater than 90% of total
amount paid
U.P. LAW BOC SALES CIVIL LAW

• After the lapse of the grace period, buyer is

given a notice of cancellation or demand for 1. Sale of Movables
rescission by notarial act, effective 30 days
from the buyer’s receipt thereof AND only REMEDY FOR BREACH OF OBLIGATION
upon full payment of CSV TO PRESERVE

b. If buyer has paid less than 2 years of installments: If thing is lost

• Grace period of at least 60 days Without fault
Through fault of seller /
• After the lapse of the grace period, buyer is Through Fortuitous Event (if
of seller
given a notice of cancellation or demand for seller is liable)
rescission by notarial act, effective 30 days NO BREACH
upon receipt thereof Damages
Obligation is
c. During the grace period, the buyer shall also have extinguished.
the right:
• To sell or assign his rights, evidenced in a A thing is lost when it:
notarial instrument a. Perishes
• To update his account b. Goes out of commerce of man
c. Disappears in such a way that its existence is
• To pay in advance any installment, or the full
unknown or it cannot be recovered
unpaid balance of the price, without any
interest, and to have such full payment of the
If thing deteriorates -
purchase price annotated in the certificate of
Without fault of seller Through fault of seller
title covering the property.
Rescission + damages
NO BREACH.
Down payments, deposits, or options on the contract OR
Impairment shall be
shall be included in the total number of installments Specific performance +
borne by buyer
made. damages

The seller may go to court for judicial rescission in REMEDY FOR BREACH OF OBLIGATION
lieu of a notarial act of rescission. TO DELIVER

Cancellation pertains to extrajudicial cancellation. Delivery of wrong quantity [Art. 1522, CC]
Absence of notice does not bar the filing of an action Goods are MORE
Goods are LESS THAN
to cancel the contract. THAN what was
what was contracted
contracted
A decision in an ejectment case can operate as notice Reject the goods
of cancellation as required by RA 6552. However, OR
mere filing of an unlawful detainer suit by the seller Accept and pay
does not operate as such notice. [de Leon] a. At contract rate if buyer
Reject the excess
accepts knowing that
OR
seller won’t perform in full
b. Remedies of the Buyer b. At fair value if goods were
Reject the whole, if
indivisible
used before knowing that
General rule: Courts will refuse to decree specific OR
seller won’t be able to
performance with respect to chattels because Accept the whole
perform in full
damages are a sufficient remedy and pay at contract
rate
Buyer becomes the owner of
Exception: Buyer is entitled to the specific thing which the whole mass and the seller
to him has special value and which he cannot readily is bound to make good the
obtain in the market OR where damages would not deficiency [Art. 1464]
furnish a complete and adequate remedy [Baviera]

Page 318 of 511

U.P. LAW BOC
2. Sale of Immovables [Art 1539 – 1543,
CC]
IF AT THE RATE OF A CERTAIN PRICE
PER UNIT OF MEASURE OR NUMBER
Less (in area or quality)
than what was agreed
upon:
Proportional reduction of
price
OR
Rescission, if:
a. Lack in area is at least
1/10 of what is stated,
or inferior value of
thing sold exceeds
1/10 of price
b. Buyer would not have
bought the property
has he been aware of
the inferior quality or
smaller area
This rule also applies to judicial sales [Art. 1541, CC]
IF FOR A LUMP SUM
Everything is within
boundaries, even if
less or more than
stated area
No remedy
Where both the area and
the boundaries of the
immovable are declared,
the area covered within
the boundaries of the
immovable prevails over
the stated area. [Rudolf
Lietz, Inc. v. CA, G.R.
No. 122463 (2005)]
Prescriptive period: 6 months counted from date of
delivery
SALES CIVIL LAW
G. Extinguishment of Sales
1. Causes [Arts. 1600, 1231, CC]
Generally, extinguished by the same causes as all other
obligations [Arts.1600, 1231, CC]
More (in area or
quality) than what a. Payment/performance
was agreed upon: b. Prescription
c. Loss of thing due
d. Annulment
e. Novation
f. Condonation/remission
g. Confusion/merger
Reject the excess h. Compensation
OR i. Rescission
Accept the whole and j. Resolutory condition fulfilled
pay at contract rate k. Redemption (Conventional or Legal)
2. Conventional Redemption
(Pacto de Retro Sale)
a. Definition
Conventional Redemption exists when the vendor
reserves the right to repurchase the thing sold, with
the obligation to:
1. Return price of the sale
Not everything is
2. Expenses of the contract
within the
3. Any other legitimate payments by reason of the
boundaries
sale
4. Necessary and useful expenses [Art. 1601, CC]
Note: Redemption feature does not prevent the full
Proportional consummation of the contract of sale.
reduction in price
OR Available when the seller reserves the right to
Rescission repurchase the thing sold in the same instrument of
sale as one of the stipulations of the contract [Villarica
v. CA, G.R. No. L-19196 (1968)]
b. Period
General Rule: Follow period stipulated in contract, but
should not exceed 10 years.
Exceptions:
1. If no period stipulated but the parties intended a
period, then it shall be 10 years from the date of
the contract.
Page 319 of 511
U.P. LAW BOC
2. If no period stipulated, then it shall be four years
from the execution of the contract
3. But vendor may still exercise the right to
repurchase within thirty days from the time final
judgment was rendered in a civil action on the
basis that the contract was a true sale with right
to repurchase
c. By Whom Exercised
1. Vendor, after returning to vendee price of sale
plus expenses of the contract, other legitimate
payments made by reason of sale, and necessary
and useful expenses made on thing sold [Art.
1616, CC]
2. His heirs, assigns or agents
3. Creditor, after he has exhausted the property of
the vendor [Art. 1610, CC]
4. Co-owners of an immovable, if they sold their
interests to the same person, may only redeem
their respective shares [Art. 1612, CC]
• Vendee cannot be compelled to agree to a
partial redemption [Art. 1613, CC]
• If the co-owners sold their interest to the
same person who previously bought the
share of a co-owner subject to a right of
redemption, then the latter may be
compelled to redeem the whole property
d. From Whom to Redeem
1. Vendee a retro
2. His heirs, assigns or agents
3. Subsequent purchaser of property, even if the
right to redeem was not mentioned in the
subsequent contract; except if registered land,
where the right to redeem must be annotated on
the title
4. If several heirs, then the right of redemption can
be exercised against each heir for his share of the
property [Art. 1615, CC]
e. How Exercised
1. By returning the ff. to the buyer:
• Price of the sale
Except if the parties agreed on a redemption
price
• Expenses of the contract and other
legitimate payments made by reason of the
sale;
• Necessary and useful expenses made on the
thing sold
Page 320 of 511
SALES CIVIL LAW
2. Complying with any other stipulation agreed
upon, if any.
The general rule in redemption is that it is not
sufficient that a person offering to redeem manifests
his desire to do so. The statement of intention must
be accompanied by an actual and simultaneous tender
of payment for the full amount of the repurchase
price. [BPI Family Savings Bank, Inc. v. Sps. Veloso, G.R.
No. 141974 (2004)]
f. Effect of Redemption
1. The sale is extinguished
2. The seller shall receive the thing free from all
charges or mortgages constituted by the buyer
BUT he shall respect leases executed by the buyer
in good faith and in accordance with local
custom.
3. As to fruits:
• If parties agreed on a distribution, the fruits
shall be distributed according to the
agreement.
• If parties did not agree on a distribution,
o If there are growing fruits at the time of
sale and at the time of redemption:
a. Buyer receives reimbursement if the
buyer paid indemnity at the time of
the sale
b. Buyer receives no reimbursement
or prorating if the buyer did not pay
indemnity at the time of sale
o If there were no growing fruits at the
time of sale, but some exist at the time
of redemption: fruits prorated (buyer
entitled to part corresponding to time he
possessed the land in the last year,
counted from the anniversary of the
date of sale)
g. Effect of Non-Redemption
Ownership is consolidated in the buyer BUT the
consolidation shall not be recorded in the Registry of
property without a judicial order, after the vendor has
been duly heard.
U.P. LAW BOC SALES CIVIL LAW

A pactum commissorium is contrary to the nature of a

h. Right to Redeem v. Option to true pacto de retro sale since ownership of the
property sold is immediately transferred to the vendee
Purchase a retro upon execution of the sale, subject only to the
repurchase of a vendor a retro within the stipulated
Right to Redeem Option to Purchase period.
Not a separate contract
but part of a main
Generally a principal a. Presumption that a Contract is
contract of sale, and
cannot exist unless
contract and may be an Equitable Mortgage
created independent of
reserved at the time of
another contract Art. 1602. The contract shall be presumed to be an
the perfection of the
equitable mortgage, in any of the following cases:
main contract of sale
1. Price unusually inadequate;
Must have a 2. Possession retained by the seller as lessee or
consideration separate otherwise;
Does not need its
and distinct from the 3. Period of redemption extended (or granted anew)
separate consideration
purchase price to be upon or after the expiration of the right to
to be valid and effective
valid and effective [Arts. repurchase;
1324 and 1479, CC] 4. Part of the purchase price retained by the seller;
The maximum period 5. Payment of taxes on the thing sold borne by the
The period of the option seller;
for the exercise of the
contract may be beyond 6. Any other case where it may be fairly inferred that
right to repurchase
the 10-year period the Real intention of the parties is for the
cannot exceed 10 years
transaction to secure a debt or other obligation.
Requires in addition a
tender of payment of Note: A contract shall be construed as an equitable
the amount required by mortgage when any of the circumstances in Art. 1602
May be exercised by
law, including is present. When in doubt whether equitable
notice of its exercise to
consignment thereof if mortgage or sale, settle in favour or equitable
the offeror
tender of payment mortgage because it involves a lesser transmission of
cannot be made rights.
effectively on the buyer
By itself, no equitable mortgage under the ff.
3. Equitable Mortgage instances:
1. mere tolerated possession
An equitable mortgage is defined as one which, 2. mere delay in transferring title to the buyer
although lacking in some formality, or form or words,
or other requisites demanded by a statute, The provisions on equitable mortgage of Art.1602,
nevertheless reveals the intention of the parties to CC also applies to a contract purporting to be a deed
charge real property as security for a debt, and of absolute sale.
contains nothing impossible or contrary to law.
[Molina v. CA, G.R. No. 125755 (2003)] Remedy: Reformation of the instrument [must be
brought within 10 years]
A pactum commissorium is a stipulation enabling 1. If the agreement is construed to be an equitable
the mortgagee to acquire ownership of the mortgaged mortgage, any money or other benefit received as
properties without need of foreclosure proceedings “rents,” shall be considered as “interest” (and
which is a nullity being contrary to the provisions of subject to usury laws)
Article 2088 of the Civil Code. The inclusion of such 2. The court may decree that the vendor-debtor to
stipulation in the deed shows the intention to pay the outstanding loan to the vendee-creditor
mortgage rather than to sell. [Legaspi v. Sps. Ong, G.r. 3. Where the agreement is upheld as a pacto de retro
No. 141311 (2005)] sale, the vendor may still exercise the right within
30 days from the time the judgment becomes
final.

Page 321 of 511

U.P. LAW BOC
The right of repurchase is not a right granted to the
seller by the buyer in a subsequent instrument, but
one reserved by the seller in the same instrument as
the sale contract. Any right granted after the
execution of the sale instrument is not a right to
repurchase, but some other right like an option to
buy. [Roberts v. Papio, G.R. No. 166714 (2007)]
b. Requisites for Presumption of an
Equitable Mortgage
1. That the parties entered into a contract
denominated as a contract of sale, and
2. That their intention was to secure an existing
debt by way of a mortgage. [Molina v. CA, supra]
In case of doubt, a contract purporting to be a sale
with right to repurchase shall be construed as an
equitable mortgage [Art. 1603, CC]
c. Rationale behind Provision on
Equitable Mortgage
1. Circumvention of usury law
2. Circumvention of prohibition against pactum
commissorium – creditor cannot appropriate the
things given by way of pledge or mortgage since
remedy is foreclosure.
d. Remedies of Apparent Vendor
1. If the instrument does not reflect the true
agreement: remedy is reformation
2. If decreed to be an equitable mortgage: any
money, fruits or other benefit to be received by
the buyer as rent or otherwise considered as
interest.
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
expired.
e. Period of Redemption
• No stipulation: 4 years from the date of contract
[Art. 1606, CC]
• When there is agreement: Period not to exceed
10 years [Art. 1606, CC]
General Rule: Period starts to run from the date of
the execution of the contract
Page 322 of 511
SALES CIVIL LAW
Exception: When the efficacy of the sale is subject
to a suspensive condition, period should be
counted not from the date appearing on the
instrument, but from the date when the condition
is fulfilled, marking the consummation of the sale
[Tolentino citing Manresa].
Additional 30 days for Repurchase
The last paragraph of Art. 1606 giving the vendor the
right to repurchase within 30 days from the time of
the rendition of final judgment applies only where the
nature and the character of the transaction, whether
as a pacto de retro or an equitable mortgage, was put
in issue before the court [Gonzales v. de Leon, G.R. No.
L-14532 (1965)]
When an unrecorded pacto de retro sale was
construed as an equitable mortgage, the plaintiff had
the right to enforce his lien in a separate proceeding
notwithstanding the fact that he had failed to obtain
judgment declaring him the sole and absolute owner
of the land. [Heirs of Arches v. Diaz, G.R. No. L-27136
(1973)]
Where the petition of the buyer in a pacto de retro
sale is for a judicial orders pursuant Art. 1607, so that
there may be consolidation of ownership since there
was failure to redeem during the redemption period,
the right of action to foreclose or to collect the
indebtedness arises from the court judgment
declaring the contract an equitable mortgage.
f. Exercise of the Right to Redeem
[Art. 1616, CC]
The seller can avail himself of the right of repurchase
by returning to the buyer:
1. the price of the sale
2. the expenses of the contract and any other
legitimate payments made by reason of the sale
3. the necessary and useful expenses made on the
thing sold [Art.1616, CC].
g. How redemption is exercised
1. The vendor de retro must complete the
repurchase before the expiration of the
redemption period [Panganiban v. Cuevas, G.R.
No. 2001 (1907)]
2. A sincere or genuine tender of payment is
enough. The deposit of the amount of the
repurchase money with the Clerk of Court was
U.P. LAW BOC SALES CIVIL LAW

simply and additional security [Legaspi v. CA, reglementary period [Lee Chuy Realty vs. CA, G.R.
G.R. No. L-45519 (1986)] No. 104114 (1995)]
3. When tender of payment cannot be validly made
because the buyer cannot be located, it becomes c. Period to Redeem
imperative for the seller a retro to file a suit for
consignation with the courts of the redemption To whom
price [Catangcatang v. Legayada, G.R. L-26295 Period
granted
(1978)]. 30 days from notice
4. If the offer or tender of payment for repurchase
• In writing
is refused, it is not necessary for the vendor a
retro to consign in court or make judicial deposit • By the seller
of the repurchase price [Rosales v. Reyes, G.R. No. • Of the actual execution and
8162 (1913)]. Co-owner delivery of the deed of sale
[Art 1620, CC]
The seller a retro is given no option to require the Actual knowledge of the sale is
buyer a retro to remove the useful improvements on Adjoining immaterial, absent any showing
the land subject of the sale a retro, unlike that granted owner of Rural that the co-owner has been shown
the owner of a land under Arts. 546 and 547. Under Land a copy of the deed of sale through
Art. 1616, the seller a retro must pay for useful [Art 1621, CC] a written communication.
improvements introduced by the buyer a retro; [Doromal v. CA, G.R. No. L-36083
otherwise, the latter may retain possession of the land Adjoining (1975)]
until reimbursement is made. [Gargollo v. Duero, G.R. owner of
No. L-15973 (1961)] urban land The law did not provide for a
[Art. 1622, CC] particular mode of written notice,
thus any compliance with “written
4. Legal Redemption [Art. 1619, notice” should suffice, including
CC] the giving of a copy of the deed of
sale. [Conejero v. CA, G.R. No. L-
Rationale for the law: Public policy (to minimize co- 21812 (1966)]
ownership) and benefit of the redemptioner Debtor in case
a credit or
30 days from the date the
a. Definition incorporeal
assignee demands payment from
right in
debtor
1. Right to be subrogated: litigation is
• upon the same terms and conditions sold [Art.1634,
stipulated in the contract, CC]
• in the place of one who acquires a thing by
Taxpayer in
purchase or dation in payment, or by any
case of tax sale
other transaction whereby ownership is 1 year from date of forfeiture
[Sec. 215,
transmitted by onerous title [Art. 1619, CC]
NIRC]
2. Applies to transfers of ownership by onerous title
where subrogation is possible. Hence, it cannot
Judgment
apply to barter or to transfer by gratuitous title or
debtor,
hereditary succession.
successor–in-
3. Applies to sales with pacto de retro [Baviera
interest, or 1 year from the date of
citing Manresa]
creditor with registration of the certificate of
subsequent sale
b. Manner lien, in case of
execution sale
1. a formal offer to redeem or [Sec. 27, Rule
2. filing of an action in court together with the 39, ROC]
consignation of the redemption price within the

Page 323 of 511

U.P. LAW BOC SALES CIVIL LAW

To whom
Period
granted d. Instances of Legal Redemption
Debtor-
mortgagor, 1. Redemption by Co-owners [Art. 1621,
successors-in- CC]
interest,
judicial/judgm A co-owner of a thing may exercise the right of
ent creditor, redemption in case the shares of all the co-
any person owners or any of them are sold to a third person
having a lien 1 year from the date of the sale
on the Third person refers to all persons who are not
property, in heirs of the vendor, by will or intestate succession
case of
extrajudicial The right is available not only to original co-
foreclosure of owners, but to those who had later acquired the
mortgage [Sec. share of the co-owner
6, Act No.
3135] But the right of redemption may be exercised by
Debtor- a co-owner only when part of the community
mortgagor in property is sold to a stranger. When the portion
case of judicial is sold to another co-owner, the right does not
foreclosure of arise because a new participant is not added to
real estate the co-ownership [Fernandez v. Sps. Tarun, G.R.
mortgage IF No. 143868 (2002)]
90 days from finality of judgment
the mortgagee
is a bank or a If the price of the alienation is grossly excessive, the
banking redemptioner shall pay only a reasonable one.
institution.
[General Should two or more co-owners desire to exercise the
Banking Law right, they may also do so in proportion to the share
of 2000] they may respectively have in the thing owned in
common.
Agricultural
lessee w/o The ff. requisites must concur:
knowledge of a. Co-ownership of a thing
2 years from the registration of
sale of b. Alienation of shares of co-owners or all of the
the sale
landholding other co-owners
[Sec. 12, c. Sale must be to a third person or stranger
Agrarian Land d. Sale must be before partition
Reform Code] e. Right must be exercised within the period
specified in Article 1623
The notice required in Art. 1623 must be given by the f. Buyer must be reimbursed the price of the sale
seller because the seller is in a better position to
identify who his co-owners are. Said provision is clear. Rationale: Public Policy, since co-ownership is a
[Francisco v. Boiser, G.R. No. 137677 (2000)] hindrance to the development and administration of
the property. [Baviera]

2. Redemption by Adjoining Land-

owners of rural land [Art. 1621, CC]

The ff. requisites must concur:

a. All lands must be rural lands
b. Lands must be adjacent to each other

Page 324 of 511

U.P. LAW BOC SALES CIVIL LAW

c. A piece of rural land is alienated a. Price paid

d. Area does not exceed one hectare b. Judicial expenses incurred
e. Buyer must already own other rural lands c. Interest on the price from date of payment

When not applicable 5. Under the Public Land Act

a. The grantee does not own any rural land
b. Adjacent lands are separated by brooks, drains,
roads and other apparent servitudes for the
benefit of other estates
Order of preference if two or more wishes to
exercise the right:
a. Owner with smaller land area
b. If same land area, then the one who first
requested the redemption
Coverage:
a. Every conveyance of land acquired under a free
patent or homestead
b. The ownership of the land must have been
transferred to another. If the transaction is a mere
promise to sell, there is no right yet to redeem
c. This refers to conveyances made after the
prohibited 5 years from the issuance of the patent
or grant

3. Redemption by adjoining land-owners Period:

of urban land (applies only to small a. Within 5 years from the date of conveyance
portions of urban land) [Art. 1621, CC] b. If pacto de retro sale, the period to redeem
cannot be less than 5 years
Right of Pre-emption Right of Redemption
Who may redeem:
Owner of any adjoining General Rule: Applicant, widow, or heirs
If the resale has been
land has a right of pre-
perfected, the owner of
emption at a reasonable Exception: land is sold to another member of the
the adjoining land shall
price when: family of the applicant, or his direct descendant or
have a right of
a. Urban land is so small heir
redemption, also at a
and so situated that a
reasonable price
major portion of it From whom: Subsequent purchasers
cannot be used for any
Priority if 2 or more
practical purpose w/in The right to redeem can be exercised against any
adjoining owners want to
a reasonable time; subsequent purchaser even if the land is registered
redeem: owner whose
b. Was bought merely for under the Torrens System because the fact that it was
intended use of the land
speculation; acquired through a homestead or free patent can be
appears to be best justified
c. Was resold seen from the description of the property in the
Arises before sale Arises after sale certificate of title.
No rescission because no There can be rescission of
sale exists yet the original sale 6. Redemption in Foreclosure and
Execution Sales
The action is directed Action is directed against
against prospective seller buyer
Who may redeem
4. Redemption of Credit In extra judicial In execution sales
foreclosure • Judgment debtor
Available when it is sold while in litigation (From the • Debtor
time the complaint is answered) • Successor in interest
• Successor in interest • Creditor having a lien on
Not available when the assignment is in favor of: • Judicial or judgment the property sold by
a. Co-heir/co-owner of right assigned creditor of said attachment, judgment or
b. Creditor in payment of his credit debtor mortgage on the property
c. Possessor of a tenement or piece of land which is • Junior subsequent to the
subject to the right assigned encumbrancer judgment

How exercised: reimburse the assignee for the:

Page 325 of 511

U.P. LAW BOC SALES CIVIL LAW

Period to redeem
If land is H. Assignment of Credits
mortgaged in
Extra-judicial Execution
favor of a bank: An assignment of credits and other incorporeal rights
foreclosure: sale:
shall be perfected in accordance with the provisions
within 1 year after of article 1475. [Art. 1624, CC]
within 1 year within 12
the sale (not
from the date of months after
available in case
the sale the sale
of a corporate 1. Definition
mortgagor)
An assignment of credit is a contract by which the
Amount of redemption owner (assignor/creditor) of a credit and other
a. Amount of the purchase incorporeal rights transfers, either onerously or
b. Interest at 1% per month from the time of the sale gratuitously, to another (assignee) his rights and
up to the time of redemption actions against a third person (debtor). [de Leon]
c. Any assessment or taxes which the purchaser may
have paid 2. Nature
Note: Every conveyance of land acquired under a free It is a consensual, bilateral, generally onerous, and
patent or homestead, when proper, shall be subject to commutative or aleatory contract. [de Leon]
repurchase by the applicant, his widow or legal heirs
within 5 years from the date of conveyance. Where the assignment is on account of pure liberality
on the part of the assignor, the rules on donation
Sale within the 5-year prohibition is void even if the sale would be pertinent; where valuable consideration is
is in favor of the homesteader’s own son or daughter. involved, the assignment partakes of the nature of a
This right of repurchase by the homesteader cannot be contract of sale or purchase. [Nyco Sales Corporation v.
waived. BA Finance Corporation, G.R. No. 71694 (1991)]

7. Under the Agrarian Land Reform It merely effects the transfer of rights which the
Code assignor has at the time [of the assignment] to the
assignee. [Casabuena v. CA, G.R. No. 115410 (1998)]
Lessee’s right of pre-emption
The agricultural lessee shall have the preferential right The act of assignment cannot operate to erase liens or
to buy under the same reasonable terms and restrictions burdening the right assigned. [Gonzales v.
conditions, in case the lessor decides to hold the Land Bank of the Philippines, G.R. No. 76759 (1990)]
landholding
3. Perfection
Conditions:
a. The landholding must be pre-empted by the It is perfected from the moment the parties agree
DAR upon the credit or right assigned and upon the price
b. When two or more lessees, each shall have but the assignee will acquire ownership only upon
preferential right only to the extent of the area delivery. [de Leon]
cultivated by him

Period: 180 days from notice in writing 4. Assignment Distinguished

Lessee’s right of redemption
In case landholding is sold to 3rd person without the
knowledge of the lessee, the latter shall have the right
to redeem the same at a reasonable price and
consideration. [Sec. 12, RA 3844]
Period: within 180 days from notice in writing
from Other Terms
Renunciation is the abandonment of a right without
a transfer to another.
Agency involves representation, not transmission
wherein the agent acts for the principal.

Page 326 of 511

U.P. LAW BOC
Substitution is the change of the previous debtor by
a new debtor with the credit remaining in the same
creditor.
Subrogation is the change in the person of the
creditor with his credit being transferred to the new
creditor.
Dation in payment is the alienation of property to
the creditor in satisfaction of a debt of in money. It is
also governed by the law on sales. It may be legal or
conventional.
5. Binding Effect
General rule: An assignment of a credit, right or action
shall produce no effect as against third persons.
Note: No effect means no prejudice or damage
Exceptions:
a. If it appears in a public instrument
b. If it is recorded in the Registry of Property in case
the assignment involves real property.
The assignee cannot acquire greater rights than those
pertaining to the assignor. [Koa v. Court of Appeals, G.R.
No. 84847 (1993)]
The debtor who, before having knowledge of the
assignment, pays his creditor shall be released from
the obligation. [Art. 1626, CC]
6. Consent not Necessary
Consent of debtor is not necessary; merely notice to
him is necessary.
Hence, the duty to pay does not depend on the
consent of the debtor; otherwise, all creditors would
be prevented from assigning their credits because of
the possibility of the debtors’ refusal to give consent.
[Sison v. Yap Tico, G.R. No. L-11583 (1918)]
The purpose of the notice by the assignee is to inform
the debtor that from the date of the assignment he
should make payment to the assignee and not to the
original creditor.
Page 327 of 511
SALES CIVIL LAW
7. Effect of Payment by Debtor
after Assignment of Credit
a. Before notice
Payment to the original creditor is valid. The assignee
has a right of action against the assignor, the original
creditor. Burden of proving that the debtor had
knowledge of the assignment is on the assignee. [de
Leon citing Manresa]
b. After notice, or before notice but
debtor had knowledge of
assignment
Payment by the debto to the original creditor after the
former had received notice of the assignment,
whether or not he consented, is not valid as against
the assignee.
If he had knowledge even before the notice and still
paid to the original creditor, he will not be released
from his obligation. He acted in bad faith. He can be
made to pay again. [De Leon]
8. Extent of Assignment of
Credit
General rule: All the accessory rights (such as guaranty,
mortgage, pledge or preference) are included. [Art.
1627, CC]
Exception: The parties may stipulate otherwise. [de
Leon]
9. Warranties of the Assignor of
Credit
a. When a creditor assigns his credit
• Existence
• Legality of credit at the perfection of the
contract
UNLESS the credit had been sold as doubtful
b. No warranty as to the solvency of the debtor
• UNLESS it was expressly stipulated
U.P. LAW BOC
• UNLESS insolvency was already existing
PRIOR to the sale and of public knowledge
at the time of the assignment
a. Breach of Warranties
If there be any breach of the above warranties, the
assignor-vendor shall be held answerable therefor. [de
Leon]
b. Liabilities of the Assignor of
Credit
The liability of assignor in good faith: Limited to
the price received anid to the expenses of the
contract, and any other legitimate payments by reason
of the assignment.
The liability of assignor in bad faith: Price, all
expenses, and damages
c. Duration of Assignor’s Liability
Where Debtor’s Solvency
Guaranteed [Art. 1629, CC]
In case of express warranty by assignor of debtor’s
solvency
1. If there is a stipulation, for the term or period
fixed
2. If there is NO stipulation,
a. for 1 year from the assignment of the credit
when the period for payment of the credit
has expired
Example: Debtor owed OG Creditor 10k
payable on November 1, 2017. OG Creditor
assigns his credit to Newbie Creditor on
December 1, 2017. The liability of OG
Creditor will be for 1 year from December 1,
2017.
b. For 1 year after its maturity, when such
period for payment has not yet expired
Example: (Same premise as above) If OG
Creditor assigns his credit to Newbie
Creditor on October 1, 2017, the liability of
OG Creditor will be 1 year from the maturity
date or November 1, 2018.
Reasons for this rule:
1. To prevent fraud
Page 328 of 511
SALES CIVIL LAW
2. To oblige assignee to exert efforts in the recovery
of the credit [de Leon, citing Manresa]
10. Sale of Successional or
Hereditary Rights
There is no law which prohibits an heir from selling
his interests in an inheritance before partition except
that any such sale must be deemed subject to the
result of the administration proceedings and any
pending litigation. [Beltran v. Soriano, 97 Phil. 50
(1955)]
However, the law prohibits the sale of future
inheritance. [de Leon]
The subject of sale is hereditary right and not the
objects which make up the inheritance. [de Leon]
The seller of hereditary rights warrants only the fact
of his heirship but he does not warrant the objects
which make up his inheritance. The sale is only a sort
of an aleatory contract. [de Leon]
As distinguished form a waiver of hereditary
rights
The waiver is a mode of extinction of ownership
where there is an abdication or intentional
relinquishment of a known right with knowledge of
its existence and intention to relinquish it, in favor of
other persons who are co-heirs in the succession.
[Acap v. CA, G.R. No. 118114 (1995)]
11. Sale of Whole of Certain
Rights, Rents, or Products
In the sale of the whole of certain rights, rents, or
products for a lump sum, the subject matter is the
totality of such rights, rents, or products.
The vendor warrants only the legitimacy of the whole
and not the various parts of which it may be
composed. [de Leon]
General rule: Vendor is not liable for eviction of any of
the various parts of the whole
Exceptions: Eviction involves the whole or the part of
greater value [Art. 1631, CC]
U.P. LAW BOC SALES CIVIL LAW

12. Liability of Vendor of • The interest on the price from the date of
payment
Inheritance for Fruits
Received The reimbursement must be made by the debtor
within 30 days from the date the assignee demands,
General rule: Vendor shall pay the vendee if he profited whether judicially or extrajudicially, payment from
him. [de Leon]
by the fruits or received anything from the inheritance
sold
b. Purpose of Grant of Right to
Exception: If the contrary has been stipulated Debtor
13. Liability of Vendee for Debts It gives an advantage to the debtor because he will pay
less than the value of the credit assigned if he exercises
and Charges on Estate his right to redeem the same. [de Leon]

General rule: Vendee shall reimburse the vendor for all c. Exceptions to the Debtor’s Right
that the latter may have paid for the debts of and
charges on the estate and satisfy the credits he may of Legal Redemption
have against the same
Assignments or sales made
Exception: If there is an agreement to the contrary [Art. 1. To a co-heir or co-owner of the right assigned
1633, CC] 2. To a creditor in payment of his credit
3. To the possessor of a tenement or piece of land
which is subject to the right in litigation assigned.
14. Legal Redemption in Sale of [Art. 1635, CC]
Credit or Other Incorporeal
Right in Litigation
a. Requisites for the Exercise by
the Debtor of the Right of Legal
Redemption
1. There must be a sale or assignment of credit or
other incorporeal right.

2. The credit or other incorporeal right must be in

litigation

3. There must be a pending litigation at the time of

the assignment.

Note: The claim must be one which is actually

litigated (disputed or contested) – this happens
only after an answer is filed by the creditor
[Robinsons v. Garry, G.R. No. L-3488 (1907)]

4. The assignee must have demanded payment from

the debtor

5. The debtor must reimburse the assignee:

• The price paid by him
• The judicial costs

Page 329 of 511

U.P. LAW BOC PARTNERSHIP CIVIL LAW

PARTNERSHIP
Civil Law

Page 330 of 511

U.P. LAW BOC PARTNERSHIP
VIII. PARTNERSHIP
A. Contract of Partnership
By the contract of partnership:
1. Two or more persons bind themselves to
contribute to a common fund:
a. money;
b. property; or
c. industry
2. With the intention of dividing the profits among
themselves.
Two or more persons may also form a partnership
for the exercise of a profession. [Art. 1767, CC]
1. Elements
a. Two or more persons bind themselves to
contribute money, property, or industry to a
common fund,
b. With the intention of dividing the profits among
themselves
Common Fund
The CC requires the parties “bind themselves to
contribute” to a common fund. The partnership may
therefore exist even before the common fund is
created. The common fund may not even come from
the partners themselves but may be borrowed from
third persons. The form of the common fund may
not even be cash or property; it can be in the form of
credit or industry. [Lim Tong Lim v Philippine Fishing
Gear, G.R. No. 136448 (1999)]
Intention to Divide Profits
If the common fund’s work is “indispensable,
beneficial and economically useful to the business” of
the partners and the profit motive is the primordial
reason to establish the partnership, even if there are
no actual profits, then there is partnership. [AFISCO
v CA, G.R. No. 112675 (1999)]
a. Characteristics of a Partnership
a. Principal – does not depend on other contracts;
b. Preparatory – entered as a means to an end;
c. Commutative – undertaking of each one is
considered equal with others;
d. Consensual – perfected by mere consent;
e. Bilateral – entered by two or more persons;
Page 331 of 511
CIVIL LAW
f. Onerous – contributions have to be made, and
g. Nominate – has a special designation in law.
[de Leon]
b. Essential Attributes of a
Partnership
1. Informal/Consensual and Weak Juridical
Personality [Arts. 1771, 1785, 1830, CC]
a. Generally, a partnership may be constituted
in any form
b. The juridical personality of a partnership is
deemed weak since a partnership may be
dissolved without need of going through a
formal dissolution process
2. Mutual Agency [Arts. 1803, 1818, CC]
a. All partners shall be considered agents and
whatever any one of them may do alone
shall bind the partnership
b. Every partner is an agent of the partnership
for the purpose of its business, and the act
of every partner binds the partnership
3. Delectus Personae (Selection of Persons)
One selects his partners on the basis of their
personal qualifications and qualities … it is for
this reason that there is mutual representation
among the partners so that the act of one is
considered the act and responsibility of the
others as well. [Bautista]
4. Partners Burdened with Unlimited Liability
[Arts. 1816, 1817, CC]
[Villanueva]
2. Essential Features
a. There must be a valid contract;
1. The essential elements of a contract must be
present (cause, object, and consideration).
2. No required form is necessary but the
contract is subject to the provisions of Arts.
1771 and 1773, CC and to the Statute of
Frauds.
b. The parties must have legal capacity;
c. There must be a mutual contribution of money,
property, or industry to a common fund;
1. Money – must be in legal tender. Checks,
drafts, promissory notes, and other
mercantile documents are not money. There
is no contribution of money until they have
been cashed. [Art. 1249, CC]
U.P. LAW BOC PARTNERSHIP
2.Property – may be real, personal, corporeal,
or incorporeal property.
3. Industry – means the active cooperation, the
work of the party associated, which may be
either personal manual efforts or
intellectual, and for which he receives a
share in the profits (not salary) of the
business.
d. The object must be lawful;
e. The primary purpose must be to obtain profits
and to divide the same among the parties;
f. The partnership has a juridical personality
separate from individual partners [Art. 1768,
CC].
a. Lawful Purpose
A partnership:
1. Must have a lawful
a. Object; or
b. Purpose; and
2. Must be established for the common benefit or
interest of the partners. [Art. 1770 (1), CC]
Consequence if there is no lawful purpose: the
partnership agreement is void ab initio.
Basis: Contracts whose purpose is contrary to law
are void from the beginning. [Art. 1409 (1), CC].
When an unlawful partnership is dissolved by a
judicial decree, the profits shall be confiscated in favor of
the State, without prejudice to the provisions of the
Penal Code governing the confiscation of the
instruments and effects of a crime. [Art. 1770 (2),
CC]
Upon the dissolution of an unlawful partnership, the
profits are simply confiscated by the State. The
previous rule is to give such profits to a charitable
institution.
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
delicto, they may be able to recover their contribution
to the partnership instead of it being forfeited as well.
b. Common Benefit [Art. 1770, CC]
A partnership must be established for the common
benefit of the partners. This “common benefit” is
always pecuniary based on Art 1799, CC.
Page 332 of 511
CIVIL LAW
A stipulation which excludes one or more partners
from any share in the profits or losses is void. [Art.
1799, CC]
c. Juridical Personality
The partnership has a juridical personality separate and
distinct from that of each of the partners, even in
case of failure to comply with the requirements of
article 1772, first paragraph. [Art. 1768, CC]
3. Parties
General Rule: Any person capacitated to contract may
enter into a contract of partnership.
The following persons CANNOT enter into a
contract of partnership:
a. Those suffering from civil interdiction;
b. Minors;
c. Insane or demented persons;
d. Deaf-mutes who do not know how to write;
e. Incompetents who are under guardianship.
Exceptions : The capacity of the following persons to
enter into a contract of partnership, though
capacitated to contract generally, are limited:
a. Those who are prohibited from giving each
other any donation or advantage cannot enter
into a universal partnership [Article 1782];
Void donations :
1. Those made between persons who were
guilty of adultery or concubinage at the time
of the donation [Article 739, CC]
2. Those made between persons found guilty
of the same criminal offense, in
consideration thereof [Article 739, CC]
3. Those made to a public officer or his wife,
descendants and ascendants, by reason of
his office [Article 739, CC]
4. Every donation or grant of gratuitous
advantage, direct or indirect, between the
spouses during the marriage shall be void,
except moderate gifts, which the spouses
may give to each other on the occasion of
any family rejoicing. The prohibition shall
also apply to persons living together as
husband and wife without a valid marriage.
[Article 87, Family Code]
b. A corporation cannot enter into a partnership in
the absence of express authorization by statute
U.P. LAW BOC PARTNERSHIP
or charter. [Mendiola v. CA, G.R. No. 159333
(2006)]
Although a corporation cannot enter into a
partnership contract, it may, however, engage in a
joint venture with others [Aurbach vs. Sanitary Wares
Manufacturing Corp, G.R. No. 75875 (1989)]
Where the partnership agreement provides that the
two partners will manage the partnership so that the
management of corporate interest is not surrendered,
the partnership may be allowed. [SEC Opinion, Dec.
22, 1966.]
On the other hand, there is no prohibition against a
partnership being a partner in another partnership [de
Leon].
4. Object
a. Object of Universal Partnership
A universal partnership may refer to:
1. All present property :
a. The partners contribute all the property
which belongs to them to a common fund,
with the intention of dividing the same
among themselves, as well as the profits they
may acquire therewith [Art. 1778, CC].
b. The property contributed includes all those
belonging to the partners at the time of the
constitution of the partnership.
c. A stipulation for the common enjoyment of
any other profits may also be made.
However, the property which the partners
may acquire subsequently by inheritance,
legacy or donation cannot be included in
such stipulation, except the fruits thereof
[Art. 1779, CC].
2. All the profits:
a. It comprises all that the partners may
acquire by their industry or work during the
existence of the partnership.
b. Only the usufruct over the property of the
partners passes to the partnership [Art.
1780, CC].
When the articles of universal partnership do not
specify its nature (all present property or all the
profits), the partnership will be considered as one
only of all the profits [Art. 1781, CC].
Page 333 of 511
CIVIL LAW
Rule on After-Acquired Properties
Aside from the contributed properties, only the
profits of the contributed common property (no
other profits) are included. Thus, should a partner
subsquently acquire a property as remuneration for
his work, such property and its fruits are not to be
enjoyed by the universal partnership of all present
property. [Paras]
Properties subsequently acquired by inheritance,
legacy, or donation, cannot be included in the
stipulation but the fruits thereof can be included in
the stipulation.
b. Object of Particular Partnership
A particular partnership has for its object determinate
things, their use or fruits, or a specific undertaking, or
the exercise of a profession or vocation [Art. 1783,
CC].
c. Effect of Unlawful Object
If the partnership has an unlawful object or purpose:
1. The contract is void ab initio [Art. 1409(1), CC].
2. Once dissolved by judicial decree:
a. The profits shall be confiscated by favor of
the State;
b. The instruments or tools and proceeds of
the crime shall also be forfeited in favor of
the State [Art. 1770].
3. The contributions of partners shall not be
confiscated unless they are instruments or tools
of the crime [de Leon]
5. Form
General rule: The contract may be constituted in any
form [Art. 1771, CC].
Exceptions:
a. Where immovable property or real rights are
contributed:
1. The contract must appear in a public
instrument; and
2. Attached to such instrument must be an
inventory, signed by the parties, of the
property contributed [Arts. 1771 and 1773,
CC];
b. Where the capital is at least P3,000, in money or
property:
1. The contract must appear in a public
instrument; and
U.P. LAW BOC PARTNERSHIP
2. It must be recorded in the Office of the
Securities and Exchange Commission
(SEC).
As to the second, failure to comply with these
requirements, however, does NOT affect the liability
of the partnership and the partners to third persons
[Arts. 1768 and 1772, CC].
Failure to comply with the requirements under Arts.
1771 and 1772, CC affords the parties the remedy of
demanding that it be executed in a public instrument.
[Dauden-Hernaez v. De Los Angeles, G.R. L-27010
(1969); Art. 1357, CC]
6. Duration
a. Commencement
Art. 1784, CC. A partnership begins from the
moment of the execution of the contract, unless
otherwise stipulated.
b. Term
As to period, a partnership may either be:
1. For a fixed term or particular undertaking; or
2. At will, the formation and dissolution of which
depend on the mutual desire and consent of the
parties. Any one of the partners may, at his sole
pleasure, dictate the dissolution of the
partnership, even in bad faith, subject to liability
for damages [Ortega v. CA, G,R, No. 109248
(1995)].
c. Extension
A partnership term may be extended by:
1. Express renewal; or
2. Implied renewal, when these requisites concur:
a. The partnership is for a fixed term or
particular undertaking;
b. It is continued after the termination of the
fixed term or particular undertaking without
any express agreement [Art. 1785, CC].
Page 334 of 511
CIVIL LAW
7. Rules to Determine
Existence
When the intent of the parties is clear, such intent
shall govern. When it does not clearly appear, the
following rules apply:
a. Persons who are not partners to each other are
not partners as to third persons, subject to the
provisions on partnership by estoppel.
b. Co-ownership or co-possession does not of itself
establish a partnership, even when there is
sharing of profits in the use of the property.
Exception: The co-ownership of inherited
properties is automatically converted into an
unregistered partnership the moment said
common properties and/or the income derived
therefrom are used as a common fund with
intent to produce profits for the heirs in
proportion to their respective shares in the
inheritance as determined in a project partition.
[Ona v CIR, G.R. L-19342 (1972)]
c. Sharing of gross returns does not of itself
establish a partnership, even when the parties
have joint or common interest in any property
from which the returns are derived.
d. The receipt by a person of a share in the profits
of a business is prima facie evidence that he is a
partner.
As to the fourth, no such inference is drawn if the
profits are received in payment:
a. As a debt by installments or otherwise;
b. As wages of an employee or rent to a landlord;
c. As an annuity to a widow or representative of a
deceased partner;
d. As interest on a loan, though the amount of
payment vary with the profits of the business;
e. As the consideration for the sale of a goodwill of
a business or other property by installments or
otherwise [Art. 1769, CC].
8. Kinds of Partnerships
a. As to the Legality of its
Existence
1. Partnership de jure is one which has complied
with all the requisites for its lawful establishment;
U.P. LAW BOC PARTNERSHIP CIVIL LAW

2. Partnership de facto is one which failed to so

comply. 9. Kinds of Partners
b. As to its Object a. Capitalist partner, whose contribution is
money or property;
1. Universal partnership: b. Industrial partner, contribution is only his
a. Of all present property; industry;
b. Of profits; c. General partner, whose liability to third persons
2. Particular partnership. extends to his separate property;
d. Limited partner, whose liability to third persons
c. As to its Duration is limited to his capital contribution;
e. Managing partner, who was designated to
1. For a fixed term or particular undertaking; manage the affairs or business of the partnership;
2. At will. f. Liquidating partner, who takes charge of the
winding up of partnership affairs;
d. As to the Liability of the Partners g. Partner by estoppel, who is not really a partner
but is liable as such for the protection of
innocent third persons;
1. General partnership, consisting of general
h. Continuing partner, who continues the
partners only, who are liable pro rata for
business after dissolution of the partnership by
partnership obligations with all their property
admission of a new partner, or retirement, death
after exhaustion of partnership assets;
or expulsion of existing partners;
2. Limited partnership, includes, aside from
i. Surviving partner, who remains a partner after
general partner/s, limited partners, who are not
dissolution by death of any partner;
personally liable for partnership obligations.
j. Subpartner, who is not a member of the
partnership but contracts with a partner with
e. As to its Publicity regard to the share of the latter in the
partnership;
1. Secret partnership, where the existence of k. Ostensible partner, who takes active part in the
certain persons as partners is not made known business of the partnership and is known by the
by the partners; public;
2. Open or notorious partnership, the existence of l. Secret partner, who takes active part in the
which is made known to the public by the business, but is unknown to the third persons as
partners. a partner;
m. Silent partner, who does not take active part in
f. As to its Purpose the business, but may be known to be a partner
by third persons;
1. Commercial or trading partnership, for n. Dormant partner, who does not take active part
transaction of business; in the business and is not known or held out as a
2. Professional or non-trading partnership, for partner;
the exercise of profession. o. Original partner, who has been a partner since
the constitution of the partnership;
A profession has been defined as “a group of men p. Incoming partner, who is about to be taken as
pursuing a learned art as a common calling in the a member into an existing partnership;
spirit of public service – no less a public service q. Retiring partner, who is withdrawing from the
because it may incidentally be a means of livelihood” partnership.
[In the Matter of the Petition for Authority to Continue Use
of Firm name “Sycip, Salazar, etc.”/“Ozaeta, Romulo, etc.”, Industrial Capitalist
92 SCRA 1 (1979)]. Partner partner
Form of contribution
Industry Money or property

Page 335 of 511

U.P. LAW BOC PARTNERSHIP CIVIL LAW

Industrial Capitalist A joint venture is an agreement between two parties

Partner partner 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, in partnership and should thus be governed by the laws
Just and equitable share of partnership [Aurbach v. Sanitary Wares Manufacturing
proportion to
contribution Corp, G.R. No. 75875].

Share in losses Partnership Co-ownership

According to Generally created by
Exempted as to losses as Generally created by
agreement; if none, in law and may exist
between partners, but either express or implied
the same proportion even without a
liable to third persons, contract
as the agreed share in contract
without prejudice to
profits; if none, in
reimbursement from Has a separate juridical
proportion to Has no separate
capitalist partners personality (not true for
contribution juridical personality
GPPs)
Engagement in business The purpose is the
Generally, the purpose
Cannot engage in Cannot engage, for common enjoyment
is to obtain profits
business for himself, his own account, in of a thing or right
unless the partnership the same kind of
expressly permits him to business as that of Term depends upon the An agreement to keep
do so; should he do so the partnership, unless lifetime of the partners,; a thing undivided for
without permission, the there is a stipulation death of any of them more than ten years is
capitalist partners may: to the contrary; generally terminates a not allowed, but may
[1] exclude him from the should he do so, he partnership be extended
firm; or [2] avail shall bring to the
There is no mutual
themselves of the common fund any There is mutual agency
representation among
benefits obtained in profits accruing to between partners
co-owners
violation of the him from his
prohibition, with right to transactions and shall Death or incapacity
Death or incapacity of a
damages in either case personally bear all the of a co-owner does
partner dissolves the
[Art. 1789, CC] losses [Art. 1808, CC] not dissolve the co-
partnership
ownership
A partner cannot
10. Partnership, Distinguished dispose of his interest, A co-owner can
from Other Contracts so as to make the dispose of his share
assignee a partner, without consent of
Partnership Joint venture without consent of others
others
Operates with firm Operates without
name and legal firm name and legal
personality personality Partnership Corporation
Generally relates to a Has juridical personality separate and distinct
continuing business of Usually limited to a from its individual members (not true for GPPs)
various transactions of a single transaction
certain kind Distributes its profits to those who contributed
to the business
Corporations may
Corporations may not Taxable as in a corporation
enter into joint
enter into a partnership
ventures
Created by Created by law or by
agreement operation of law

Page 336 of 511

U.P. LAW BOC PARTNERSHIP CIVIL LAW

Partnership Corporation as such in an action for settlement of partnership

obligations; and
Except for corporation b. Parties who took no part except to subscribe to
Involves at least two
sole, requires at least 5 shares of stock in a proposed corporation, do not
persons
incorporators become partners with other subscribers who
Personality engaged in business under the name of the
Personality commences pretended corporation, and are not liable for
commences from the
from the issuance of action for settlement of the alleged partnership
moment of execution
certificate of contribution.
of the contract
incorporation
(except for GPPs)
Conjugal partnership
Can exercise only Partnership
of gains
powers conferred by the
Can exercise any Corporation Code or by its Created by voluntary
Arises in case the
power authorized by articles of incorporation, agreement of two or
spouses, of opposite sex,
partners and such as are necessary more partners of
agree before marriage
or incidental to the either sex
exercise of such powers Governed by
Governed by law
When management is agreement
Management is vested in
not agreed upon, Has juridical
the board of directors or Has no juridical
every partner may act personality (not true
trustees personality
for the partnership for GPPs)
Partners are generally Commencement is on
liable for partnership the date of the
debts (note Stockholders are liable Commencement date celebration of the
difference re: liability only to the extent of may be stipulated marriage and any
between general their shares stipulation to the
partnerships and contrary is void
limited partnerships) Share in profits may
A partner cannot be stipulated;
dispose of his A stockholder has the otherwise, in Share in profits is equal
interest, so as to right to transfer his proportion to
make the assignee a shares without consent contribution
partner, without of others Administration belongs
consent of others Management shared
to the spouses jointly,
by all partners, unless
Term depends upon but decision of husband
otherwise agreed
the lifetime of the prevails in case of
The term limit is 50 upon
partners,; death of disagreement
years, but may be
any of them generally Partner can dispose Spouse cannot dispose
extended
terminates a of interest even of interest during
partnership without consent of marriage, even with
May be dissolved at May only be dissolved others consent
any time by one or all with the consent of the
of the partners state Voluntary
Partnership
association
Effects when parties come together intending to Has juridical
form a corporation, but no corporation is formed Has no juridical
personality (except
due to legal cause: personality
GPPs)
a. Parties who had intended to participate or
actually participated in the business affairs of the Not always organized
Organized for profit
corporation would be considered as partners for profit
under a de facto partnership, and would be liable

Page 337 of 511

U.P. LAW BOC PARTNERSHIP CIVIL LAW

Partnership
Voluntary
association
B. Rights and Obligations
Capital is not of the Partnership
Capital is either
contributed, although
borrowed or
contributed
fees are collected from 1. Right to Contribution, Right
members
to Warranty
The partnership is The members are liable
primarily liable; the individually for debts Every partner is a debtor of the partnership for
partners are liable only which they authorized whatever he may have promised to contribute
subsidiarily or ratified thereto. [Art. 1786, CC]
Share in profits may be
stipulated; otherwise, Contribution Of Money Or Property
Share in profits is equal
in proportion to With respect to contribution of money or property, a
contribution partner is obliged to:
a. To contribute, at the beginning of the
partnership or at the stipulated time, the money,
property or industry which he undertook to
contribute;

Effect of failure to contribute: Makes the

partner ipso jure a debtor of the partnership even
in the absence of demand. The remedy is not
rescission but an action for specific performance
with damages and interest. [Sancho v. Lizarraga,
G.R. L-33580 (1931)]

Note: When contribution is in goods, the

amount thereof must be determined by proper
appraisal of the value thereof at the time of
contribution. [Art. 1787, CC]

b. In case a specific and determinate thing is to be

contributed:
1. To warrant against eviction in the same
manner as a vendor; and

2. To deliver to the partnership the fruits of the
property promised to be contributed, from
the time they should have been delivered,
without need of demand [Art. 1786, CC];

c. In case a sum of money is to be contributed, or

in case he took any amount from the partnership
coffers, to indemnify the partnership for:
1. Interest; and
2. Damages from the time he should have
complied with his obligation, or from the
time 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]

Page 338 of 511

U.P. LAW BOC PARTNERSHIP
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]
Amount of Contribution
General rule: Partners are to contribute equal shares to
the capital of the partnership.
Exception:
a. When there is an agreement to the contrary, the
contribution shall follow such agreement [Art.
1790, CC].
b. Industrial partners, unless he has contributed
capital pursuant to an agreement to that effect.
ADDITIONAL CAPITAL CONTRIBUTION
Requisites:
a. There is an imminent loss of the business of the
partnership;
b. The majority of the capitalist partners are of the
opinion that an additional contribution to the
common fund would save the business;
c. The capitalist partner refuses deliberately (not
because of financial inability) to contribute an
additional share to the capital; and 

d. There is no agreement that even in case of
imminent loss of the business, the partners are
not obliged to contribute. 
 Set-Off Of Liability
Any partner who refuses to contribute an additional
share to the capital, except an industrial partner, to
save the venture, shall be obliged to sell his interest
to the other partners, unless there is an agreement to
the contrary [Art. 1791, CC].
Contribution Of Industry
An industrial partner is obliged to contribute his
industry at the stipulated time.
2. Right to Have Sums Applied
Pro Rata
General rule:
A partner:
a. Authorized to manage
b. Who collects a demandable sum owed to him
1. In his own name
2. From a person who also owes the
partnership a demandable sum,
Page 339 of 511
CIVIL LAW
Is obliged to apply the sum collected to both credits
pro rata, even if he issued a receipt for his own credit
only.
Requisites:
a. There exist at least two debts, one where the
collecting partner is creditor, and the other,
where the partnership is the creditor;
b. Both debts are demandable ; and 

c. The partner who collects is authorized to manage
and actually manages the partnership.
Exceptions:
a. In case the receipt was issued for the account of
the partnership credit only, however, the sum
shall be applied to the partnership credit alone.
b. When the debtor declares, pursuant to Art. 1252,
CC at the time of making the payment, to which
debt the sum must be applied, and if the personal
credit of the partner is more onerous to him, it
shall be so applied [Art. 1792, CC].
3. Right to be Compensated
Every partner is responsible to the partnership for
damages suffered by it through his fault and he
cannot compensate them with the profits and
benefits which he may have earned for the
partnership by his industry. [Art. 1794, CC]
General rule: The liability for damages cannot be set-
off or compensated by profits or benefits which the
partner may have earned for the partnership by his
industry.
Rationale: The partner has the obligation to secure the
benefits for the partnership. As such, the requirement
for compensation, that the partner be both a creditor
and a debtor of the partnership at the same time, is
not complied with [Art. 1278, CC; de Leon].
Exception: The court may equitably lessen the liability
if, through his extraordinary efforts in other activities
of the partnership, unusual profits were realized [Art.
1794, CC]. Note, however, that there is still no
compensation in this case.
U.P. LAW BOC PARTNERSHIP
4. Right to Accounting of
Profits Received without the
Consent of the Other
Partners
Every partner must account to the partnership for
any benefit, and hold as trustee for it any profits
derived by him without the consent of the other
partners from any transaction connected with the
formation, conduct, or liquidation of the partnership,
or from any use by him of its property. [Art. 1807,
CC]
5. Obligation to Reimburse
Partners
The partnership shall be responsible to every partner
for the amounts he may have disbursed on behalf of
the partnership and for the corresponding interest,
from the time the expenses are mad; it shall also
answer to each partner for the obligations he may
have contracted in good faith in the interest of the
business, and for the risks in consequence of its
management. [Art. 1796, CC]
Page 340 of 511
CIVIL LAW
C. Rights and Obligations
of Partners Inter Se
1. Right to Associate Another
in Share
Every partner may associate another person with him
in his share. The admission of the associate to the
partnership, however, requires consent of all the
other partners even if the partner having an associate
is a managing partner [Art. 1804, CC].
This arrangement refers to a contract of
subpartnership, which is a partnership within a
partnership, distinct and separate from the main
partnership. It is considered a modification of the
original contract [de Leon].
2. Right 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.
Every partner shall, at any reasonable hour, have
access to and may inspect and copy any of them.
Any reasonable hour means reasonable hours on
business days throughout the year [Pardo v. Lumber
Co., G.R. No. L-22442 (1925)].
3. Right to Formal Account
General rule: The right to a formal account of
partnership affairs accrues only when the
partnership is dissolved.
Exceptions: In the special and unusual cases
mentioned in Article 1809, formal accounting may be
demanded by any partner even before dissolution:
a. If he is wrongfully excluded from the partnership
business or possession of its property by his co-
partners;
b. If the right exists under the terms of any
agreement; 

c. If, without his consent, a partner has derived
profits from any transaction connected with the
formation, conduct, or liquidation of the
U.P. LAW BOC PARTNERSHIP
partnership or from any use of partnership
property; 
 is necessary.
d. Whenever other circumstances render it just and
reasonable [Art. 1809, CC]. 
 1. Formal accounting [Art.1809, CC]; or
As long as the partnership exists, any of the partners
may demand an accounting of the partnership
business. Prescription of the said right starts to run
only upon the dissolution of the partnership when
the final accounting is done. [Emnace v. CA, G.R.
126334 (2001)]
4. Property Rights of Partners
In General
The property rights of a partner are:
a. Rights in specific partnership property;
b. Interest in the partnership; and
c. Right to participate in the management [Art.
1810, CC].
Property And Capital Distinguished
Partnership capital Partnership property
Value varies with market
With constant value
conditions
Includes the
Includes only actually
contributions and
contributed and
property acquired by the
promised capital
partnership
Ownership Of Certain Properties
a. The ownership of property used by the
partnership depends on the intention of the
parties, which may be drawn from an express
agreement or their conduct.
b. A partner may allow the property to be used by
the partnership without transfer of ownership,
contributing only the use or enjoyment thereof.
c. He may also hold title to partnership property,
without acquiring ownership thereof [Art. 1819,
CC].
d. Property acquired by a partner with partnership
funds is presumed to be partnership property. 
 1. Receive his assignor’s interest; and
e. The same presumption also arises when the
property is indicated in the partnership books as
partnership asset. 

f. Other factors may be considered to determine
ownership of the property. 
 participate in the affairs of the partnership and would
Rights In Specific Property
a. The partners have equal rights to possess
partnership property for partnership purposes.
Page 341 of 511
CIVIL LAW
b. For other purposes, the consent of his partners


c. If the partner is excluded, he may ask for:


2. Dissolution by judicial decree [Art.1831,
CC]. 

d. A partner’s right in such property is not
assignable, except when all the partners assign
their rights in the same property;
e. The right is not subject to attachment or
execution, except on claim against the
partnership.
In case of such attachment, the partners, or any
of them, or the representatives of a deceased
partner, cannot claim any right under the
homestead or exemption laws.
f. The right is not subject to legal support under
Article 291 [Art. 1811, CC].
g. Contemplates tangible property.
Interest In Partnership
A partner’s interest in the partnership is his share of
the profits and surplus [Art. 1812, CC].
Assignment Of Interest [Art. 1813, CC]
Assignment by a partner of his whole interest in the
partnership, of itself:
a. Does not dissolve the partnership; or

b. Does not entitle the assignee to:
1. Interfere in the management or
administration of the partnership business
or affairs;
2. Require information or account of
partnership; or 

3. Inspect the partnership books. 

It merely entitles the assignee to:
a. Receive the profits to which the assigning
partner was entitled;
b. In case of fraud in management, avail himself of
the usual remedies provided by law, such as
dissolution [Art. 1831, CC];
c. In case of dissolution:
2. Require an accounting from the date
only of the last account agreed to by all
the partners [Art. 1813, CC].
Reason: It would effectively allowed a third party to
basically have a stranger become a partner without
the consent of all other partners.
U.P. LAW BOC PARTNERSHIP
RISK OF LOSS OF THINGS CONTRIBUTED
a. Specific and determinate things which are
not fungible; only the usufruct is contributed –
borne by the partner because he remains the
owner of the things;
b. Specific and determinate things the
ownership of which is transferred to the
partnership – borne by the partnership as
owner;
c. Fungible things – partnership, because use is
impossible without the things being consumed
or impaired;
d. Things contributed to be sold – partnership
for there cannot be any doubt that the
partnership was intended to be the owner; and
e. Things brought and appraised in the
inventory – partnership because the intention of
the parties was to contribute to the partnership
the prince of the things contributed with an
appraisal in the inventory. There is thus an
implied sale.
Note: The list presupposes delivery. Without delivery,
the loss is borne by the partner.
5. Right to Participate in
Management
Management of the partnership is primarily governed
by the agreement of the partners in the articles of
partnership. It may be stipulated that the partnership
will be managed by:
a. All the partners; or
b. A number of partners appointed as managers,
which may be appointed:
1. In the articles of partnership; or
2. After constitution of the partnership.
Powers of A Managing Partner
General rule: The partner designated as manager in the
articles may execute all acts of administration despite
opposition by the other partners.
Exception: He cannot do so when he acts in bad faith.
Revocation Of Power By Managing Partner
General Rule: Power is irrevocable without just or
lawful cause.
The powers of the managing partner may be revoked:
a. If appointed in the articles of partnership, when:
1. There is just or lawful cause for revocation;
and
Page 342 of 511
CIVIL LAW
2.
The partners representing the controlling
interest revoke such power.
b. If appointed after the constitution of the
partnership, at any time and for any cause [Art.
1800, CC].
Reason: Such appointment is a mere delegation of
power, not founded on a change of will on the part
of the partners, the appointment not being a
condition of the contract. It is merely a simple
contract of agency, which may be revoked at any
time. Removal, however, should also be done by the
partners having the controlling interest. [de Leon]
Managing By Two or More Partners

When there are two or more managing partners
appointed,
a. without specification of their duties;or
b. without a stipulation on how each one will act:
1. Each one may separately execute all acts of
administration. 

2. If any of them opposes the acts of the
others, the decision of the majority prevails.
3. In case of a tie, the partners owning the
controlling interest will decide [Art. 1801,
CC].
Requisites:
a. Two or more partners have been
appointed as managers; 

b. There is no specification of their
respective duties; and
c. There is no stipulation that one of them 
shall
not act without the consent of all the others. The
right to oppose is not given to non-managers
because in appointing their other partners as
managers, they have stripped themselves of all
participation in the administration. [Paras]
The other managers, however, should make the
opposition before the acts produce legal effects
insofar as third persons are concerned.
IRRECONCILABLE DEADLOCK
Those who vote against the contract shall prevail, the
same having been entered into without authority. [de
Leon]
Stipulation of Unanimity
In case there is a stipulation that none of the
managing partners shall act without the consent of
others,
a. The concurrence of all is necessary for the
validity of the acts, and
U.P. LAW BOC PARTNERSHIP
b. The absence or disability of one cannot be
alleged,
unless there is imminent danger of grave or
irreparable injury to the partnership. [Art. 1802, CC]
Management When Manner Not Agreed Upon
When there is no agreement as to the manner of
management, the following rules apply:
a. All the partners are considered agents (mutual
agency). Whatever any one does alone binds the
partnership, unless there is a timely opposition to
the act, under Art. 1801, CC.
b. Any important alteration in the immovable
property of the partnership, even if useful to the
partnership, requires unanimity. If the alteration
is necessary for the preservation of the property,
however, consent of the others is not required
[de Leon].
If the refusal is manifestly prejudicial to the
partnership, court intervention may be sought [Art.
1803, CC].
The consent need not be express. It may be presumed
from the fact of knowledge of the alteration without
interposing any objection. [de Leon]
Mutual Agency
In addition to the Art. 1801, CC there is effectively a
mutual agency in the following cases:
a. Partners can dispose of partnership property
even when in partnership name [Art. 1819, CC].
b. An admission or representation made by 
any
partner concerning partnership affairs is
evidence against the partnership [Art. 1820, CC].
c. Notice to any partner of any matter relating to
partnership affairs is notice to the 
partnership
[Art. 1821, CC]. 
 Even without demand, honesty demands the giving
d. Wrongful act or omission of any partner acting
for partnership affairs makes the partnership
liable [Art. 1822, CC]. 

e. Partnership is bound to make good losses 
for
wrongful acts or misapplications of partners
[Art. 1823, CC]. 
 [de Leon]
6. Right to be Reimbursed by
the Partnership
The partnership shall be responsible to every partner
for the amounts he may have disbursed on behalf of
the partnership and for the corresponding interest,
from the time the expenses are mad; it shall also
Page 343 of 511
CIVIL LAW
answer to each partner for the obligations he may
have contracted in good faith in the interest of the
business, and for the risks in consequence of its
management. [Art. 1796, CC]
The provision is meant to grant to every partner the
right to demand from the partnership reimbursement
of advances made on behalf of the partnership
business. [Villanueva]
Article 1796 is not applicable insofar as it provides
that “the partnership shall be responsible to every
partner for the amounts he may have disbursed on
behalf of the partnership and for the corresponding
interest from the time the expenses are made,” for
the reason that no other money than that contributed
as capital is involved. [de Leon; Martinez v. Ong Pong
Co, G.R. No. 5236 (1910)]
7. Right to Ask for Dissolution
[Arts. 1830(2) and 1831, CC]
See Dissolution and Winding Up below.
8. Obligation to Render True
and Full Information
Partners shall render on demand true and full
information of all things affecting the partnership to:
a. Any partner;
b. The legal representative of any deceased partner;
or
c. The legal representative of any partner under
legal disability [Art. 1806, CC].
of vital information, the refraining from all kinds of
concealment. [Paras]
By “information”, it is meant that which can be used
for partnership purposes, it is in the sense of a
property which the partnership has a valuable right.
9. Obligation to Account and
Act as Trustee
Every partner must:
a. Account to the partnership for any benefit; and
b. Hold as trustee for it any profits derived by him
without the consent of the other partners:
U.P. LAW BOC PARTNERSHIP
1. From any transaction connected with the
formation, conduct, or liquidation of the
partnership; or
2. From any use by him of its property [Art.
1807, CC].
General Rule: The partner cannot use or apply
exclusively to his own benefit partnership assets or
results of the knowledge or information gained by
him as a partner to the detriment of the partnership.
[de Leon]
Exception: If the taking by the partner is with the
consent of all other partners. [Lim Tanhu v. Ramolete,
G.R. L-40098 (1975)]
The duty to account continues until the partnership
relation is terminated. [de Leon]
This obligation exists even when he issued a receipt
for his share only [Art. 1793, CC].
Rationale: In this case, the debt becomes a bad debt.
It would be unfair for the partner who already
collected not to share in the loss of the other partners.
Credit collected after dissolution: The collecting
partner need not bring the same to the partnership
capital. Art. 1793 presupposes that there exists
partnership capital. Upon dissolution of the
partnership and the return to each principal of what
he contributed, the community of interest between
them disappears altogether. [de Leon]
10. Obligation not to Engage in
Another Business
FOR INDUSTRIAL PARTNERS
General rule: An industrial partner cannot engage in
business for himself. Should he do so, the capitalist
partners, as well as industrial partners [de Leon] may
either:
a. Exclude him from the firm; or
b. Avail themselves of the benefit which he may
have obtained.
Exception: He may engage in business for himself
when the partnership expressly permits him to do so
[Art. 1789, CC].
Page 344 of 511
CIVIL LAW
Remedy of the other partners
The other partners have the remedy of either
excluding the erring partner from the firm or of
availing themselves of the benefits which he may
have obtained.
An action for specific performance to compel the
partner to perform the promised work is not available
as a remedy because this will amount to involuntary
servitude.
Reasons:
a. To prevent the industrial partner from exploiting
his services for his own personal benefit without
the permission of the firm.
b. To prevent conflict of interest and to ensure
compliance by said partner with his prestation.
For a CAPITALIST PARTNER, the prohibition
extends only to any operation which is of the same or
similar kind of business in which the partnership is
engaged, unless there is a stipulation to the contrary.
The test is the possibility of unfair competition.
A partner occupies a fiduciary position with respect
to his co-partners imposing duties of utmost good
faith and he may not carry on any other business in
rivalry with the business of the partnership whether
in his own name or for the account of another at the
expense of the partnership. [de Leon]
11. Obligation to Share in the
Profits/Losses
Rules For Distribution Of Profits And Losses
The distribution of profits and losses shall be in
accordance with the following rules:
a. They shall be distributed in conformity with the
agreement.
b. If only the share in profits has been stipulated,
the share in the losses shall be in the same
proportion. 

c. In the absence of any stipulation:
1. The share in the profits of the capitalist
partners shall be in proportion to their
contributions.
2. The losses shall be borne by the capitalist
partners, also in proportion to the
contributions.
3. The share of the industrial partners in the
profits is that share as may be just and
equitable. If he also contributed capital, he
U.P. LAW BOC PARTNERSHIP
will receive a share of the profits in
proportion to his contribution; and
4. The industrial partner, who did not
contribute capital, is not liable for losses
[Art. 1797, CC].
Exclusion Of Partner From Share
General rule: A stipulation excluding one or more
partners from any share in the profits or losses is void
[Art. 1799, CC].
Exception: A stipulation exempting an industrial
partner from losses is valid, since, if the partnership
fails to realize profits, he can no longer withdraw his
work or labor [de Leon].
But this does not exempt the industrial partner from
liability insofar as third persons are concerned. He
may however, recover what he has given to third
persons from the other partners, for he is exempted
by law from losses.
Page 345 of 511
CIVIL LAW
D. Obligations of the
Partnership/Partners to
Third Persons
1. Operate Under a Firm
Name
Every partnership shall operate under a firm name,
which may or may not include the name of one or
more of the partners.
Those who, not being members of the partnership,
include their names in the firm name, shall be subject
to the liability of a partner. [Art. 1815, CC]
General rule: The partners may adopt any firm name
desired.
Exceptions:
a. They cannot use a name which is “identical or
deceptively or confusingly similar to an existing
or corporation [or partnership] or to any other
name already protected by law or is patently
deceptive, confusing or contrary to existing
laws” [Sec. 18, Corporation Code].
b. Use of names of deceased partner in law firms is
“permissible provided that the firm indicates in
all its communications that said partner is
deceased” [Rule 3.02, Code of Professional
Responsibility].
2. Liability for Partnership
Debts
Liability of Partners for Partnership Contracts
The partnership is primarily liable for contracts
entered into:
a. In its name and for its account;
b. Under its signature; and
c. By a person authorized to act for it.
Upon exhaustion of its assets, all partners are liable
pro rata with all their property. Any partner may enter
into a separate obligation to perform a partnership
contract [Art. 1816, CC].
Nature of Individual Liability Subsidiary
General rule: The partners are liable subsidiarily. It
only arises upon exhaustion of partnership assets
[Cia. Maritima v. Muñoz, G.R. No. L-24796 (1907)].
U.P. LAW BOC PARTNERSHIP
Exceptions:
a. A third person who transacted with the
partnership can hold the partners solidarily
(rather than subsidiarily) liable for the whole
obligation if the case falls under Articles 1822 or
1823 [Muñasque v. CA, G.R. L-39780 (1985)].
The provisions refer to wrongful acts or
omission and misapplication of money or
property by a partner in the ordinary course of
business.
b. A person admitted as a partner into an existing
partnership is liable for all the obligations of the
partnership arising before his admission, except
that his liability shall be satisfied only out of
partnership property, unless there is a stipulation
to the contrary [Art. 1826, CC]. In other words,
he is not personally liable.
Pro Rata
The partners are liable pro rata. This liability is not
increased even when a partner:
a. Has left the country and the payment of his share
of the liability cannot be enforced [Co-Pitco v.
Yulo, G.R. No. L-3146 (1907)]; or
b. His liability is condoned by the creditor [Island
Sales v. United Pioneers, G.R. No. L-22493 (1975)].
Basis for Pro-rating
Pro rata must be understood to mean equally or
jointly and not its literal meaning.
After all partnership assets have been exhausted, pro-
rating is based on the number of partners and not on
the amount of their contributions to the common
fund, subject to adjustment among the partners [de
Leon].
Liability of an Industrial Partner
An industrial partner, who is not liable for losses, is
not exempt from this liability. However, he can
recover the amount he has paid from the capitalist
partners, unless there is a stipulation to the contrary
[Cia. Maritima v. Muñoz, G.R. No. L-24796 (1907)].
Stipulation against Individual Liability
Any stipulation against this liability is:
a. Void against third persons; but
b. Valid among the partners [Art.1817, CC].
Art. 1799, CC. A stipulation which excludes one
or more partners from any share in the profits or
loses is void.
Page 346 of 511
CIVIL LAW
Art. 1817, CC. Any stipulation against the liability
laid down in the preceding article shall be void,
except as among partners
Reconciliation:
The exemption of the industrial partner to pay losses
relates exclusively to the settlement of the partnership
affairs among the partners themselves and has
nothing to do with the liabilities of the parties to third
persons. Art. 1816 refers to “liabilities” while Art.
1797 speaks of “losses”. There is therefore no
conflict between the two articles [Nachura].
3. Liability of Partners for
Partnership Contracts
a. Acts apparently for the carrying on of usual
business
General rule: Any act of a partner which is
apparently for the carrying on of the usual
business of the partnership binds the latter,
including the execution of any instrument in the
partnership name.
Exception: The partnership is not bound when the
following concur:
1. The partner has in fact no authority to act;
and
2. The person with whom he deals has
knowledge of such fact [par. 1, Art. 1818,
CC].
b. Acts not apparently for carrying on of the
usual business
General rule: Acts of a partner which is not
apparently for carrying on of the usual business
does not bind the partnership.
Exception: The partnership is bound if the other
partners authorized him to do the act [par. 2, Art.
1818, CC].
c. Acts of Strict Dominion
General Rule: One or some of the partners have
no authority to do the following acts of strict
dominion:
1. Assign the partnership property in trust for
creditors or on the assignee’s promise to pay
the debts of the partnership;
2. Dispose of the goodwill of the business;
U.P. LAW BOC PARTNERSHIP
3. Do any other act which makes it impossible
to carry on the ordinary business of the
partnership;
4. Confess a judgment;
5. Enter into a compromise concerning a
partnership claim or liability;
6. Submit a partnership claim or liability to
arbitration;
7. Renounce a claim of the partnership.
Exceptions: They may do so if:
a. Authorized by all the partners; or
b. The other partners have abandoned the
business [par. 3, Art. 1818, CC].
d. Acts In Contravention of a Restriction
Any act of a partner in contravention of a
restriction on authority does not bind the
partnership to persons having knowledge of the
restriction [par. 4, Art. 1818, CC].
The partnership is not liable to third persons
having actual or presumptive knowledge of the
restrictions, whether or not the acts are for
apparently carrying on in the usual business of
the partnership [de Leon].
Conveyance of Partnership Real Property
a. Title In Partnership Name
Any partner may convey the real property in the
name of the partnership. The partnership can
recover it, except when:
1. The act of the partner binds the partnership,
when he has authority to carry out the usual
business of the partnership, under par. 1,
Art. 1818, CC; or
2. If not so authorized, the property has been
conveyed by the grantee, or a person
claiming under him, to a holder for value
and without knowledge that the partner
exceeded his authority [par. 1, Art. 1819,
CC].
A partner authorized to carry out the usual
business may convey, in his own name, the
equitable interest of the partnership [par. 2, Art.
1819, CC].
b. Title In The Name Of Other Persons
Where the title is in the name of one or more but
not all the partners, and the record does not
disclose the right of the partnership:
1. The partners having title may convey title.
Page 347 of 511
CIVIL LAW
2. The partnership may recover it when the
partners conveying title have no authority to
carry on the usual business of the
partnership, unless the purchaser or his
assignee is:
• A holder for value; and
• Without knowledge that the act
exceeded authority [par. 4, Art. 1819,
CC].
Where the title is in the name of one or more or all
the partners, or in a third person in trust for the
partnership a partner authorized to carry on the usual
business may convey equitable title in the partnership
name or in his own name [par. 4, Art. 1819, CC].
Where the title is in the names of all the partners, a
conveyance executed by all of them passes all the
rights to the property [par. 5, Art. 1819, CC].
4. Liability for Admission by a
Partner
An admission or representation by any partner may
be used as evidence against the partnership when:
a. It concerns partnership affairs;
b. Such affairs are within the scope of his authority
[Art. 1820, CC].
Instances Where Knowledge of a Partner is
Considered Knowledge of the Partnership
a. Knowledge of the partner acting in the particular
matter
1. Acquired while a partner; or
2. Then present to his mind
b. Knowledge of any other partner who reasonably
could and should have communicated it to the
acting partner [Art. 1821, CC].
5. Liability for Wrongful Acts
of a Partner
The partnership is solidarily liable with the partner
who causes loss or injury to any person not a partner,
or incurs any penalty through any wrongful act or
omission:
a. In the ordinary course of the business of the
partnership; or
b. Not in such ordinary course of business, but with
the authority of his co-partners [Art. 1822, CC].
U.P. LAW BOC PARTNERSHIP
6. Liability for Misapplication
of Money or Property
The partnership is liable for losses suffered by a third
person whose money or property was:
a. Received by a partner:
1. Acting within the scope of his apparent
authority; and
2. Misapplied it;
b. Received by the partnership:
1. In the course of its business; and
2. Misapplied by any partner while it is in the
custody of the partnership [Art. 1823, CC].
LIABILITY OF THE OTHER PARTNERS
UNDER ARTS. 1822 AND 1823, CC
All partners are solidarily liable with the partnership
for its liabilities under Arts. 1822 and 1823 [Art. 1824,
CC].
This is without prejudice to the guilty partner being
liable to the other partners. However, as far as third
persons are concerned, the partnership is answerable
[de Leon].
Applicability of the Rule of Respondeat Superior
The rule of respondeat superior (also called the rule of
vicarious liability) applies to the law of partnership in
the same manner as other rules governing the agency
relationship [de Leon].
It is not only the partners who are liable in solidum; it
is also the partnership [Art 1824, CC].
The injured party may proceed against the
partnership or any partner [Paras].
The reason for the law’s imposition of wider liability
on the partnership with respect to torts and breach of
trust is based on public policy [de Leon].
Criminal Liability for Criminal Acts
A non-acting partner in a partnership engaged in a
lawful business is not criminally liable for the criminal
acts of another partner but he is criminally liable if
the partnership is involved in an unlawful enterprise
with his knowledge or consent.
Partnership Liability
a. Does Not Extend to criminal liability where
the wrongdoing is regarded as individual in
character, i.e. embezzlement.
Page 348 of 511
CIVIL LAW
b. Extends to criminal liability where the crime
is statutory, especially where it involves fine or
imprisonment [de Leon].
7. Liability in Case of
Partnership by Estoppel
Partner By Estoppel
Estoppel – a bar which precludes a person from
denying or asserting anything contrary to that which
has been established as the truth by his own deed or
representation, either express or implied [de Leon].
A partner by estoppel is a person who, by words
spoken or written or by conduct (1) represents
himself as a partner or (2) consents to another
representing him to anyone as a partner:
a. In an existing partnership; or
b. With one or more persons not actual partners
[par. 1, Art. 1825,CC].
LIABILITY OF A PARTNER BY ESTOPPEL
a. Personal Representation
A partner by estoppel is liable to any such
persons:
1. To whom such representation has been
made; and
2. Who has, on the faith of such
representation, given credit to the actual or
apparent partnership [par. 1, Art. 1825].
b. Public Representation
If he has made such representation or consented
to its being made in a public manner, whether the
representation has or has not been (personally)
made or communicated to such persons so
giving credit by or with his knowledge, and:
1. Partnership liability results, he is liable as
though he were an actual member of the
partnership.
2. No partnership liability results, he is liable
pro rata with the other persons, if any, so
consenting to the contract or representation.
3. When there are no such other persons, he is
separately liable [par. 1, Art. 1825, CC].
Effect on Existing Partnership or Other Persons
not Actual Partners
a. When a person has been represented to be a
partner (1) in an existing partnership, or (2) with
one or more persons not actual partners, he is an
agent of the persons consenting to such
representation to bind them to the same extent
U.P. LAW BOC PARTNERSHIP
and in the same manner as though he were a
partner in fact, with respect to persons who rely
upon the representation.
b. When all the members of the existing
partnership consent to the representation, a
partnership act or obligation results.
c. In all other cases, it is the joint act or obligation
of the person acting and the persons consenting
to the representation [par. 2, Art. 1825].
Nature of Liability
Summarizing Article 1825, a partner by estoppel is
liable in the following manner:
a. He is liable as though he were a partner when:
1. There is an existing partnership;
2. All the partners consented to the
representation; and
3. A partnership liability results.
b. He is liable jointly and pro rata (as though he
were a partner in fact) with those who consented
to the representation when:
1. There is an existing partnership but not all
the partners consented; or
2. There is no existing partnership and all those
represented as partners consented to the
representation.
c. He is liable separately when:
1. There is an existing partnership but none of
the partners consented; or
2. There is no existing partnership and not all
of those represented as partners consented
to the representation.
Note: Art 1825 does not create a partnership as
between the alleged partners. The law only considers
them as partners and the association as a partnership
insofar as it is favourable to third persons. However,
partnership liability is created only in favour of
persons who on the faith of such representation
given credit to the partnership [de Leon].
The case arising under Art. 1825, CC must be
distinguished from the situation covered by the last
par. Of Art 1834 which is not a situation where
partnership by estoppel results. It is rather a
partnership liability which continues for lack of
proper termination [de Leon].
Corporation by Estoppel
All persons who assume to act as a corporation
knowing it to be without authority to do so shall be
liable as general partners for all debts, liabilities and
damages incurred or arising as a result thereof [Sec.
21, Corporation Code].
Page 349 of 511
CIVIL LAW
8. Liability of an Incoming
Partner
A person admitted as a partner is liable:
a. For obligations incurred subsequent to his
admission as the other partners are liable;
b. For obligations incurred before his admission,
but will be satisfied only out of the partnership
property, unless otherwise stipulated that he fully
assumes such obligations.
Ratio:
a. The new partner partakes of the benefits of the
partnership property and an already established
business.
b. He has every means of obtaining full knowledge
of the debts of the partnership and remedies that
amply protect his interest [de Leon]
Notice To Or Knowledge Of The Partnership
The following operate as notice to or knowledge of
the partnership:
a. Notice to any partner of any matter relating to
partnership affairs;
b. Knowledge of the partner acting in the particular
matter acquired while a partner;
c. Knowledge of the partner acting in the particular
matter then present to his mind; or (4)
Knowledge of any other partner
who
reasonably could and should have
communicated it to the acting partner.
These do not apply in case of fraud on the
partnership committed by or with the consent of the
partner [Art. 1821, 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].
U.P. LAW BOC PARTNERSHIP
Remedy in Case of Insufficiency of Assets:
a. Partnership Creditor – After exhaustion of
partnership assets, the creditor may come after
the private property of the partners.
b. Partner’s Individual Creditor – Ask for
attachment and public sale of the share of the
partner in the partnership assets [de Leon].
9. Liability with Regard to
Personal Creditors of
Partners
Interest By Personal Creditors
General rule: Partnership creditors are preferred over
the personal creditors of the partners as regards
partnership property.
Exception: On due application by any judgment
creditor of a partner, a competent court may:
a. Charge the interest of the partner for the
satisfaction of the judgment debt;
b. Appoint a receiver of the share of the profits and
of any other money due or to fall due to the
partner; and
c. Make all other orders, directions, accounts 
and
inquiries, which the debtor partner might have
made, or which the circumstances may require.
The interest charged may be redeemed before
foreclosure or, in case of sale directed by the court,
may be purchased without causing dissolution:
a. With separate property, by one or more of the
partners; or
b. With partnership property, by one or more of the
partners, with consent of all, except the debtor
partner [par. 2, Art. 1814, CC].
Page 350 of 511
CIVIL LAW
E. Dissolution and Winding
Up
1. Concepts
Dissolution – the change in the relation of the
partners caused by any partner ceasing to be
associated in the carrying on of the business. It is
different from the winding-up of the business [Art.
1828, CC]. It does not terminate the partnership,
which continues until the winding up of partnership
affairs is completed [Art. 1829, CC].
Note: The dissolution of a partnership must not be
understood in the absolute and strict sense so that at
the termination of the object for which it was created
the partnership is extinguished [Testate Estate of Mota
v. Serra, G.R. No. L-22825 (1925)].
Partnership Still Exists
The partnership, although dissolved, continues to
exist until its termination, at which time the winding
up of its affairs should have been completed and the
net partnership assets are partitioned and distributed
to the partners [Emnace v. CA, G.R. No. 126334
(2001)].
Winding up – the actual process of settling the
partnership business or affairs after dissolution. It
involves collection and distribution of partnership
assets, payment of debts, and determination of the
value of the interest of the partners in the
partnership.
Termination – the point in time when all
partnership affairs are completely wound up and
finally settled. It signifies the end of the partnership
life [de Leon].
U.P. LAW BOC PARTNERSHIP
2. Causes of Dissolution
Art. 1830, CC. Dissolution is caused:
1. Without violation of the agreement between
the partners:
a. By the termination of the definite term or
particular undertaking specified in the
agreement;
b. By the express will of any partner, who
must act in good faith, when no definite
term or particular is specified;
c. By the express will of all the partners who
have not assigned their interests or
suffered them to be charged for their
separate debts, either before or after the
termination of any specified term or
particular undertaking;
d. By the expulsion of any partner from the
business bona fide in accordance with
such a power conferred by the agreement
between the partners;
2. In contravention of the agreement between
the partners, where the circumstances do not
permit a dissolution under any other provision
of this article, by the express will of any
partner at any time;
3. By any event which makes it unlawful for the
business of the partnership to be carried on or
for the members to carry it on in partnership;
4. When a specific thing which a partner had
promised to contribute to the partnership,
perishes before the delivery; in any case by the
loss of the thing, when the partner who
contributed it having reserved the ownership
thereof, has only transferred to the
partnership the use or enjoyment of the same;
but the partnership shall not be dissolved by
the loss of the thing when it occurs after the
partnership has acquired the ownership
thereof;
5. By the death of any partner;
6. By the insolvency of any partner or of the
partnership;
7. By the civil interdiction of any partner;
8. By decree of court under the following article.
a. Without Violation of the
Agreement
1. By the termination of the definite term or
particular undertaking specified in the
agreement;
Page 351 of 511
CIVIL LAW
2. By the express will of any partner, who must act
in good faith, when no definite term or particular
is specified.
3. By the express will of all the partners who have
not assigned their interests or suffered them to
be charged for their separate debts, either before
or after the termination of any specified term or
particular undertaking;
4. By the expulsion of any partner from the
business bona fide in accordance with such a
power conferred by the agreement between the
partners [Art. 1830(1), CC].
If, after the expiration of the definite term or
particular undertaking, the partners continue the
partnership without making a new agreement, the
firm becomes a partnership at will [Art. 1785, CC].
Any one of the partners may, at his sole pleasure,
dictate the dissolution of the partnership at will. He
must, however, act in good faith, not that the
attendance of bad faith can prevent the dissolution of
the partnership but that it can result in a liability for
damages [Ortega v. CA, G.R. No. 109248 (1995)].
b. In Contravention of the
Agreement
Where circumstances do not permit dissolution
under any other provision of Art. 1830, CC it may
also be dissolved by the express will of any partner at
any time.
Thus, even if there is a specified term, one partner
can cause its dissolution by expressly withdrawing
even before the expiration of the period, with or
without justifiable cause. If the cause is not justified
or no cause was given, the withdrawing partner is
liable for damages but in no case can he be compelled
to remain in the firm [Rojas v. Maglana, G.R. No.
30616 (1990)].
c. By operation of Law
1. By any event which makes it unlawful for the
business of the partnership to be carried on or
for the members to carry it on in partnership;
Note: If the business or object had been unlawful
from the very beginning, the firm never had
juridical personality [Paras].
U.P. LAW BOC PARTNERSHIP
2. When a specific thing which a partner had
promised to contribute, perishes before delivery,
or by the loss of the thing, only the use or
enjoyment of which has been contributed; the
loss of a specific thing, however, does not
dissolve the corporation after its ownership has
already been transferred to the partnership;
3. By the death of any partner;
4. By the insolvency of any partner or of the
partnership;
Note: The insolvency of the partner or of the
partnership must be adjudged by the court [de
Leon].
5. By the civil interdiction of any partner;
Civil interdiction deprives the offender during
the time of his sentence of the right to manage
his property and dispose such property by any
act or any conveyance inter vivos [Art. 34, RPC].
Ratio: One who is without capacity to manage his
own property should not be allowed to manage
partnership property [de Leon].
d. By Decree of Court
A partner may apply for dissolution in court when:
1. A partner has been declared insane in any judicial
proceeding or is shown to be of unsound mind;
Note: The partner may have been previously
declared insane in a judicial proceeding;
otherwise, his insanity must be duly proved. It
must materially affect the capacity of the partner
to perform his contractual duties as such [de
Leon].
2. A partner becomes in any other way incapable of
performing his part of the partnership contract;
Note: The incapacity must be lasting, from which
the prospect of recovery is remote [de Leon].
3. A partner has been guilty of such conduct as
tends to affect prejudicially the carrying on of the
business;
4. A partner willfully or persistently commits a
breach of the partnership agreement, or
otherwise so conducts himself in matters relating
Page 352 of 511
CIVIL LAW
to the partnership business that it is not
reasonably practicable to carry on the business in
partnership with him;
Ratio: They defeat and materially affect and
obstruct the purpose of the partnership [de
Leon].
5. The business of the partnership can only be
carried on at a loss;
Note: A court is authorized to decree dissolution
notwithstanding the partnership has been
making profits where it appears at the time of the
application that the business can only be carried
on at a loss [de Leon 233].
6. Other circumstances render a dissolution
equitable.
Reason for necessity of court decree: In the
instances mentioned in Art. 1831, the facts may
be so far open to dispute as to make necessary
judicial determination as to dissolution rather
than allow them to be the occasion for automatic
dissolution by operation of law [de Leon at 231].
A person who acquires the interest of a partner may
likewise apply:
1. After the termination of the specified term or
particular undertaking;
2. At any time if the partnership was a partnership
at will when the interest was assigned or when
the charging order was issued
e. Other Causes
1. When a new partner is admitted into an existing
partnership;
2. When any partner retires;
3. When the other partners assign their rights to the
sole remaining partner;
4. When all the partners assign their rights in the
partnership property to third persons [Art. 1840,
CC].
3. Effects of Dissolution
a. On Authority of the Partners
In general, upon dissolution, the authority of the
partners to represent the partnership is confined only
to acts necessary to:
U.P. LAW BOC PARTNERSHIP
1. Wind up partnership affairs; or
2. Complete transactions begun but not then
finished [par. 1, Art. 1832, CC].
With respect to partners
The authority of partners to act for the partnership is
terminated, with respect to partners:
1. When the dissolution is not by the act,
insolvency or death of a partner; or
2. When the dissolution is by such act, insolvency
or death, when the partner acting for the
partnership has knowledge or notice of the cause
[Art. 1832 and 1833, CC].
In other cases, each partner is still liable for his share
in the liability created by the partner acting for the
partnership [Art. 1833, CC].
With respect to third persons
With respect to persons not partners:
1. After dissolution, a partner can bind the
partnership by any act appropriate for:
a. Winding up partnership affairs; or
b. Completing transactions unfinished at
dissolution.
2. He can also bind it by any transaction which
would bind the partnership as if dissolution had
not taken place, provided the other party to the
transaction:
a. Had extended credit to the partnership prior
to dissolution and had no knowledge or
notice thereof; or
b. Had not so extended credit but had known
of the partnership prior to dissolution, and
having no knowledge or notice of
dissolution, the fact had not been advertised
in a newspaper of general circulation in the
place [or in each place if more than one] at
which the partnership business was regularly
carried on [par. 1, Art. 1834, CC].
Note the character of the notice required:
1. As to persons who extended credit to the
partnership prior to dissolution, notice must be
actual.
2. As to persons who merely knew of the existence
of the partnership, publication in a newspaper of
general circulation in the place of business of the
partnership is sufficient.
Page 353 of 511
CIVIL LAW
b. On Liability for Transactions
after Dissolution
The liability of a partner, in general, is the same as in
ordinary contracts (pro rata and subsidiary).
In the following cases, however, the liability shall be
satisfied out of the partnership assets alone (i.e., there
is no subsidiary liability):
1. When the partner had been, prior to the
dissolution, unknown as a partner to the person
with whom the contract is made;
2. When the partner had been, prior to the
dissolution, so far unknown or inactive in
partnership affairs that the business reputation
of the partnership could not be said to have been
in any degree due to his connection with it [Art.
1834, CC].
Any act of a partner after dissolution in no case binds
the partnership in the following cases:
1. Where the partnership is dissolved because it is
unlawful to carry on the business, unless the act
is appropriate for winding up partnership affairs;
2. Where the partner has become insolvent;
3. Or, where the partner has no authority to wind
up partnership affairs, except by a transaction
with one who:
a. Had extended credit to the partnership prior
to dissolution and had no knowledge or
notice of his want of authority; or
b. Had not extended credit to the partnership
prior to dissolution, and, having no
knowledge or notice of his want of
authority, the fact of his want of authority
has not been advertised [Art. 1834, CC].
Art. 1834, CC does not affect the liability under Art.
1825, CC of any person who, after dissolution,
represents himself or consents to another
representing him as a partner in a partnership
engaged in carrying on business [Art. 1834, CC].
c. On Liability for Contracts after
Dissolution by Specific Causes
General rule:
A contract:
1. Entered into by a partner acting for the
partnership
2. After dissolution by
a. act,
U.P. LAW BOC PARTNERSHIP
b. death or
c. insolvency of a partner
Binds the other partners.
Exceptions:
1. The dissolution being by act of any partner, the
partner acting for the partnership had knowledge
of the dissolution; or
2. The dissolution being by death or insolvency of
a partner, the partner acting for the partnership
had knowledge or notice of the death or
insolvency [Art. 1833, CC].
d. On Existing Liability of Partners
General rule: Dissolution does not of itself discharge
the existing liability of any partner.
Exception: A partner may be relieved when there is an
agreement to that effect between:
1. Himself;
2. The partnership creditor; and
3. The person or partnership continuing the
business.
Such agreement may be inferred from the course of
dealing between:
1. the creditor having knowledge of the dissolution
and
2. the person or partnership continuing the
business.
In case of dissolution by death, the individual
property of a deceased partner is liable for obligations
of the partnership incurred while he was a partner,
after payment of his separate debts [Art.1835, CC].
4. Winding Up Partners
a. Who May Wind Up
The following partners have the right to wind up the
partnership affairs:
1. Those designated in an agreement;
2. Those who have not wrongfully dissolved the
partnership; or
3. The legal representative of the last surviving
partner, who was not insolvent.
Any partner or his legal representative or assignee
may obtain winding up by the court, upon cause
shown [Art. 1836, CC].
Page 354 of 511
CIVIL LAW
b. Manner of Winding Up
1. Extrajudicial, by the partners themselves; or
2. Judicial, under the control and direction of the
proper court.
The action for liquidation of the partnership is
personal. The fact that sale of assets, including real
property, is involved does not change its character,
such sale being merely a necessary incident of the
liquidation of the partnership, which should precede
and/or is part of its process of dissolution [Claridades
v. Mercader, G.R. No. L-20341 (1966)].
5. Rights of Partners in Case of
Dissolution
a. Dissolution without Violation of
the Agreement
Each partner may have:
1. The partnership property applied to discharge
the partnership liabilities; and
2. The surplus applied in cash to the net amount
owing to the respective partners.
This is a right as against his co-partners and all
partners claiming through them in respect of their
interests in the partnership. It cannot be availed if
there is an agreement to the contrary [Art. 1837 (1),
CC].
Note: When dissolution is caused by expulsion,
expelled partner may be discharged from all
partnership liability in the same manner as above but
he shall receive in cash only the net amount due him
from the partnership [de Leon].
b. Dissolution in Contravention of
the Agreement
PARTNER WHO DID NOT CAUSE THE
DISSOLUTION
The partners who did not cause the dissolution
wrongfully has the following rights:
1. To demand the right under par. 1, Art. 1837, CC;
2. To be indemnified for damages for breach of the
agreement against the partner who caused the
dissolution wrongfully [Art. 1837(1), CC];
3. To continue the business:
a. In the same name;
U.P. LAW BOC PARTNERSHIP
b. By themselves or jointly with others;
c. During the agreed term for the partnership.
For the purpose of continuing the business, the said
partners may possess the partnership property
provided:
1. They secure the payment by bond approved by
the court; or
2. They pay any partner who has caused the
dissolution wrongfully the value of his interest in
the partnership, less any damages recoverable,
and indemnity against all present or future
partnership liabilities [Art. 1837(2), CC].
PARTNER WHO CAUSED THE
DISSOLUTION
The partner who caused the dissolution wrongfully
has the following rights:
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
his co-partners and all claiming through them, to:
a. Ascertainment, without considering the
value of the goodwill of the business, and
payment to him in cash the value of his
partnership interest, less any damage, or
have the payment secured by a bond
approved by the court; and
b. Be released from all existing liabilities of the
partnership [Art. 1837(3), CC].
The goodwill of a business may be defined to be
the advantage which it has from its establishment or
from the patronage of its customers, over and above
the 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
Leon].
6. Rights of Partners in Case of
Rescission
A partner, who is induced by fraud or
misrepresentation to become such partner, may
rescind the contract. Without prejudice to any other
right, he is entitled:
a. To a lien on, or right of retention of, the surplus
of the partnership property after satisfying the
partnership liabilities to third persons for any
sum of money paid by him for the purchase of
an interest in the partnership and for any capital
or advances contributed by him;
Page 355 of 511
CIVIL LAW
b. To stand, after all liabilities to third persons have
been satisfied, in the place of the creditors of the
partnership for any payments made by him in
respect of the partnership liabilities; and
c. To be indemnified by the person guilty of the
fraud or making the representation against all
debts and liabilities of the partnership [Art. 1838,
CC].
Nature of Fraud or Deceit
The fraud or deceit must be material or substantial.
Mere exaggerations of one partner of the prospects
of enterprises or of value of the property which he
has put into the firm as capital is not ground for
dissolution [Pineda].
-
7. Settling of Accounts
between Partners
Subject to any agreement to the contrary, the
following rules shall be observed in settling accounts
between partners after dissolution.
a. Composition of Partnership
Assets
1. The partnership property; and
2. The contributions of the partners necessary for
the payment of all the liabilities [Art. 1839(1),
CC].
In accordance with the subsidiary liability of the
partners, the partnership property shall be applied
first to satisfy any liability of the partnership [Art.
1839(3),CC].
b. Amount of Contribution for
Liabilities
The rules for distribution of losses shall determine
the contributions of the partners [Art. 1839(4), CC].
As such:
1. The contribution shall be in conformity with the
agreement.
2. If only the share in profits has been stipulated,
the contribution shall be in the same proportion.
3. In the absence of any stipulation, the
contribution shall be in proportion to the capital
contribution [Art. 1797, CC].
U.P. LAW BOC PARTNERSHIP
c. Enforcement of Contribution
The following persons have the right to enforce the
contributions:
1. An assignee for the benefit of creditors;
2. Any person appointed by the court; or
3. To the extent of the amount which he has paid
in excess of his share of the partnership liability,
any partner or his legal representative [Art.
1839(5) and (6), CC].
The individual property of a deceased partner shall be
liable for the contributions [Art. 1839(7), CC].
d. Order of Application of Assets
The partnership liabilities shall rank, in order of
payment, as follows:
1. Those owing to creditors other than partners;
2. Those owing to partners other than for capital
and profits;
3. Those owing to partners in respect of capital;
4. Those owing to partners in respect of profits
[Art. 1839(2), CC].
e. Doctrine of Marshaling of Assets
When partnership property and the individual
properties of the partners are in possession of a court
for distribution:
1. Partnership creditors have priority on
partnership 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].
f. Distribution of Property of
Insolvent Partner
Where a partner has:
1. become insolvent; or
2. his estate is insolvent, the claims against his
separate property
shall rank in the following order:
a. Those owing to separate creditors;
b. Those owing to partnership creditors;
c. Those owing to partners by way of
contribution [Art. 1839(9), CC].
Page 356 of 511
CIVIL LAW
8. Rights of Creditors of
Dissolved Partnership
a. As Creditors of the New
Partnership
In the following cases, creditors of the dissolved
partnership are also creditors of the person or
partnership continuing the business:
1. When the business is continued without
liquidation, and the cause of dissolution is:
a. Admission of a new partner into the existing
partnership;
b. Retirement or death of any partner, and his
rights to partnership property are assigned
to [1] two or more of the partners, or [2] one
or more of the partners and one or more
third persons;
c. Retirement of all but one partner, and their
rights to partnership property are assigned
to the remaining partner, who continues the
business, either alone or with others;
d. Wrongful dissolution by any partner, and
the remaining partners continue the
business, either alone or with others;
e. Expulsion of a partner, and the remaining
partners continue the business, either alone
or with others.
2. When the cause of dissolution is the retirement
or death of any partner, and business is
continued with the consent of the retired partner
or the representative of the deceased partner,
without assignment of their rights to partnership
property.
3. When the cause of dissolution is the assignment
by all the partners or their representatives of their
rights in partnership property to one or more
third persons who promise to pay the debts and
who continue the business of the partnership
[par. 1, Art. 1840, CC].
b. Liability of A New Partner
The liability to the creditors of the dissolved
partnership of a new partner in the partnership
continuing the business shall be satisfied out of the
partnership property alone. However, he may,
through agreement, assume individual liability [par. 2,
Art. 1840, CC].
U.P. LAW BOC PARTNERSHIP CIVIL LAW

c. Priority of Creditors of Dissolved c. The person or partnership continuing the

business [Art. 1842, CC].
Partnership
Creditors of the dissolved partnership have prior
right to any claim of the retired partner or the
representative of the deceased partner against the
person or partnership continuing the business [par. 3,
Art. 1840, CC].

This is without prejudice to the right of creditors to

set aside any assignment on the ground of fraud [par.
4, Art. 1840, CC].

Ratio: Business will be hampered if outside creditors

are not given superior right. It will be risky for them
to deal with partnerships. Moreover, if partners enjoy
priority right, in the natural order of things, they will
prefer their own interests to that of the outside
creditors. Such state will make it easy to defraud non-
partner creditors [Pineda].

9. Rights of a Retired Partner

or a Representative of
Deceased Partner
Unless otherwise agreed upon, when any partner retires or
dies, and the business is continued without any
settlement of accounts as between him or his estate
and the person or partnership continuing the
business, he or his legal representative, as against
such person or partnership, subject to the prior rights
of creditors of the dissolved partnership:
a. May have the value of his interest at the date of
dissolution ascertained; and
b. Shall receive as an ordinary creditor:
1. An amount equal to the value of his interest
in the dissolved partnership with interest; or
2. At his option or at the option of his legal
representative, in lieu of interest, the profits
attributable to the use of his right in the
property of the dissolved partnership [Art.
1841, CC].

10. Right to an account

In the absence of any agreement to the contrary, the
right to an account of his interest shall accrue to any
partner, or his legal representative at the date of
dissolution, as against:
a. The winding up partners;
b. The surviving partners; or

Page 357 of 511

U.P. LAW BOC PARTNERSHIP CIVIL LAW

F. Limited Partnership
3. General and Limited
1. Definition Partners Distinguished
a. A partnership; General partner Limited partner
b. Formed by two or more persons; Extent of liability
c. Having as members:
1. One or more general partners; and Personally, but Liable only to the extent
2. One or more limited partners. subsidiarily, liable of his capital
for obligations of the contributions [subject to
The limited partners as such shall not be bound by partnership exceptions]
the obligations of the partnership [Art. 1843, CC]
except to the extent of their capital contributions. Right to participate in management

Unless otherwise
2. Characteristics
agreed upon, all
a. A limited partnership is formed by compliance general partners No right to participate in
with the statutory requirements [Art. 1844, CC]. have an equal right management
b. The business is controlled or managed by one or to manage the
more general partners, who are personally liable partnership
to creditors [Arts. 1848 and 1850, CC].
c. One or more limited partners contribute to the Nature of contribution
capital and share in the profits but do not
manage the business and are not personally liable Cash, property or Cash or property only,
for partnership obligations beyond their capital industry not industry
contributions [Arts. 1845, 1848 and 1856, CC].
d. Obligations or debts are paid out of the Proper party in proceedings by or against
partnership assets and the individual property of
partnership
the general partners [Art. 1843, CC].
e. The limited partners may have their
contributions back subject to conditions Not proper party, unless
prescribed by law [Arts. 1844 and 1957, CC]. (1) he is also a general
partner; or (2) where the
A limited partnership has the following object of the
advantages: proceedings is to enforce
a. For general partners, to secure capital from his right against or
others while retaining control and supervision Proper party liability to the
for the business; partnership
b. For limited partners, to have a share in the
profits without risk of personal liability.
The limited partner is a
necessary but not
indispensable party

Firm name

Name must not appear

Name may appear in
in the firm name [subject
the firm name
to exceptions]

Page 358 of 511

U.P. LAW BOC
General partner Limited partner
Prohibition to engage in other business
Prohibited [subject
Not prohibited
to qualifications]
Effect of retirement, death, insanity or
insolvency
Does not dissolve
partnership; rights
Dissolves
transferred to executor
partnership
or administrator for
selling his estate
Assignability of interest
Not assignable Assignable
4. General and Limited
Partnership Distinguished
General Limited
partnership partnership
Creation
Partners must: [1] sign
and swear to a
May be constituted in certificate
any form, subject to compliance with Art.
exceptions 1844, CC; and [2] file
the certificate for
record in the SEC
Composition
One or more general,
Only general partners and one or more
limited partners
Page 359 of 511
PARTNERSHIP CIVIL LAW
General Limited
partnership partnership
Firm name
Must include the word
“Limited” [SEC Memo.
Circ. No. 14-00]
Must contain the word
“Company” [SEC
Must not include name
Memo Circ No. 14-00],
of limited partners,
except for professional
unless: [1] it is also the
partnerships
surname of a general
partner, or [2] prior to
May or may not
the time when the
include the name of
limited partner became
one or more of the
such, the business has
partners
been carried on under a
name in which his
surname appeared
Rules governing dissolution
Arts. 1828-1842, CC Arts. 1860-1863, CC
5. Formation
a. General Requirements
Two or more persons desiring to form a limited
partnership shall:
1. Sign and swear to a certificate stating the items
in Art. 1844, CC; and
2. File for record the certificate in the SEC [Art.
1844, CC].
in
A limited partnership is formed if there is substantial
compliance in good faith with the requirements [Art.
1844, CC]. When there is failure to substantially
comply with the requirements:
1. In relation to third persons, the partnership is
general, unless they recognized that the firm is a
limited partnership; and
2. As between the partners, the partnership remains
limited, since they are bound by their agreement
[de Leon].
b. Purpose of Filing
1. To give actual or constructive notice to potential
creditors or persons dealing with the partnership;
and
U.P. LAW BOC PARTNERSHIP
2. To acquaint them with its essential features,
including the limited liability of limited partners
[de Leon].
c. Firm Name
General rule: The surname of a limited partner shall not
appear in the partnership name.
Exceptions:
1. It is also the surname of a general partner; or
2. Prior to the time when the limited partner
became such, the business had been carried on
under a name in which his surname appeared.
A limited partner whose surname appears in a
partnership name contrary to this prohibition is
liable as a general partner to partnership creditors
who extend credit without actual knowledge that he
is not a general partner. [Art. 1846, CC]
d. False Statement in the
Certificate
If the certificate contains a false statement, one who
suffers loss by reliance thereon may hold liable any
party to the certificate who knew the statement to be
false:
1. At the time he signed the certificate; or
2. Subsequently, but within a sufficient time before
the statement was relied upon to enable him to
cancel or amend the certificate, or to file a
petition for its cancellation or amendment [Art.
1847, CC].
Requisites:
1. The partner knew the statement to be false:
a. At the time he signed the certificate; or
b. Subsequently, but having sufficient time to
cancel or amend it, or file a petition for its
cancellation or amendment, and he failed to
do so;
2. The person seeking to enforce liability has relied
upon the false statement in transacting business
with the partnership; and
3. The person suffered loss as a result of reliance
upon such false statement.
e. General and Limited Partner at
the Same Time
A person may be
Page 360 of 511
CIVIL LAW
1. a general; and
2. a limited partner in the same partnership
3. at the same time.
This fact must be stated in the certificate.
Such person shall have:
1. all the rights and powers, and
2. be subject to all the restrictions of a general
partner,
except that, in respect to his contribution as a
limited partner, he shall have the rights against the
other members which he would have had if he were
not also a general partner [Art. 1853, CC].
6. Management
General Rule: Only general partners have the right to
manage the partnership.
A general partner shall have the rights and powers
and be subject to all restrictions and liabilities of a
partner in a partnership without limited partners.
Thus, he has general authority over the business.
Thus, if a limited partner takes part in the control of
the business, he becomes liable as a general partner
[Art. 1848, CC].
However, written consent or ratification by all
limited partners is necessary to authorize the
general partners to:
a. Do any act in contravention of the certificate;
b. Do any act which would make it impossible to
carry on the ordinary business of the partnership;
c. Confess a judgment against the partnership;
d. Possess partnership property, or assign their
rights in specific property, for other than a
partnership purpose;
e. Admit a person as a general partner;
f. Admit a person as a limited partner, unless the
right to do so is given in the certificate;
g. Continue the business with partnership property
on the:
1. Death;
2. Retirement;
3. Insanity;
4. Civil interdiction; or
5. Insolvency of a general partner,
unless the right so to do is given in the certificate
[Art. 1850, CC]
U.P. LAW BOC PARTNERSHIP
7. Obligations of a Limited
Partner
a. Obligations Related to
Contribution
The contributions of a limited partner may be cash or
other property, but not services [Art. 1845, CC].
A limited partner is liable for partnership obligations
when he contributes services instead of only money or
property to the partnership [de Leon].
A limited partner is liable to the partnership:
1. For the difference between his actual
contribution and that stated in the certificate as
having been made; and
2. For any unpaid contribution which he agreed in
the certificate to make in the future at the time
and on the conditions stated in the certificate
[par. 1, Art. 1858, CC].
He holds as trustee for the partnership:
1. Specific property stated in the certificate as
contributed by him, but which was not
contributed or which has been wrongfully
returned; and
2. Money or other property wrongfully paid or
conveyed to him on account of his contribution
[par. 2, Art. 1858, CC].
These liabilities can be waived or compromised only
by the consent of all members. Such waiver or
compromise, however, shall not affect the right to
enforce said liabilities of a creditor:
1. Who extended credit; or
2. Whose claim arose, after the filing or before a
cancellation or amendment of the certificate, to
enforce such liabilities [par. 3, Art. 1858, CC].
Even after a limited partner has rightfully received the
return in whole or in part of his capital contribution,
he is still liable to the partnership for any sum, not in
excess of such return with interest, necessary to
discharge its liabilities to all creditors:
1. Who extended credit; or
2. Whose claims arose before such return [par. 4,
Art. 1858, CC].
A person
1. who has contributed capital to a partnership,
Page 361 of 511
CIVIL LAW
2. erroneously believing that he has become a
limited partner,
3. but his name appears in the certificate as a general partner
or he is not designated as a limited partner,
Is not personally liable as a general partner by reason
of his exercise of the rights of a limited partner,
provided:
a. On ascertaining the mistake, he promptly
renounces his interest in the profits of the
business or other compensation by way of
income [Art. 1852, CC];
b. He does not participate in the management
of the business [Art. 1848, CC]; and
c. His surname does not appear in the
partnership name [Art. 1846, CC].
b. Liability to Partnership Creditors
General rule: A limited partner is not liable as a general
partner. His liability is limited to the extent of his
contributions [Art. 1843, CC].
Exceptions: The limited partner is liable as a general
partner when:
1. His surname appears in the partnership name,
with certain exceptions [par. 2, Art. 1846, CC].
2. He takes part in the control of the business [Art.
1848, CC].
3. The certificate contains a false statement of
which he knows and which was relied upon,
resulting in loss [Art. 1847, CC].
In cases (1) and (2), the limited partner is entitled to
reimbursement by the general partner/s.
Ratio: The general partner/s may not have been aware
of such false statement.
c. Liability to Separate Creditors
On due application to a court of competent
jurisdiction by any separate creditor of a limited
partner, the court may:
1. Charge his interest with payment of the
unsatisfied amount of such claim;
2. Appoint a receiver; and
3. Make all other orders, directions and inquiries
which the circumstances of the case may require.
The interest so charged may be redeemed with the
separate property of any general partner, but may not
be redeemed with partnership property [Art. 1862,
CC].
U.P. LAW BOC
Note: In a general partnership, the interest may be
redeemed with partnership property with the consent
of all the partners whose interests are not charged
[Art. 1814, CC].
8. Rights of a Limited Partner
a. In General
A limited partner shall have the same rights as a
general partner to:
1. Require that the partnership books be kept at the
principal place of business of the partnership;
2. To inspect and copy any of them at a reasonable
hour;
3. To demand true and full information of all things
affecting the partnership;
4. To demand a formal account of partnership
affairs whenever circumstances render it just and
reasonable;
5. To ask for dissolution and winding up by decree
of court;
6. To receive a share of the profits or other
compensation by way of income; and
7. To receive the return of his contribution
provided the partnership assets are in excess of
all its liabilities [Art. 1851, CC].
b. Right to Transact Business with
the Partnership
A limited partner may:
1. Loan money to the partnership;
2. Transact other business with the partnership;
and
3. Receive a pro rata share of the partnership assets
with general creditors if he is not also a general
partner [par. 1, Art. 1854, CC].
Limitations: A limited partner, with respect to his
transactions with the partnership, cannot:
1. Receive or hold as collateral security any
partnership property; or
2. Receive any payment, conveyance, or release
from liability if it will prejudice the right of third
persons [par.1, Art. 1854]
Violation of the prohibition is considered a fraud on
the creditors of the partnership [par. 2, Art. 1854,
CC].
Page 362 of 511
PARTNERSHIP CIVIL LAW
c. Right to Share in Profits
A limited partner may receive from the partnership
the share of the profits or the compensation by way
of income stipulated for in the certificate.
This right is subject to the condition that partnership
assets will still be in excess of partnership liabilities
after such payment [Art. 1856, CC]. The partnership
liabilities being referred to exclude the liabilities to the
limited and general partners.
Ratio: Otherwise, he will receive a share to the
prejudice of third-party creditors.
d. Right to Return of Contribution
A limited partner may have his contributions
withdrawn or reduced when:
1. All the liabilities of the partnership, except
liabilities to general partners and to limited
partners on account of their contributions, have
been paid or there remains property of the
partnership sufficient to pay them;
2. The consent of all members is had, unless the
return may be demanded as a matter of right; and
3. The certificate is cancelled or so amended as to
set forth the withdrawal or reduction [par. 1, Art.
1857].
Note: Once withdrawal has been approved by the
SEC and registered, the partnership may no longer
recover the limited partner’s contributions.
The return of his contributions may be demanded, as
a matter of right [i.e., even when not all the other
partners consent]:
1. On the dissolution of the partnership;
2. Upon the arrival of the date specified in the
certificate for the return; or
3. After the expiration of a 6-month notice in
writing given by him to the other partners, if no
time is fixed in the certificate for:
a. The return of the contribution; or
b. The dissolution of the partnership [par. 2,
Art. 1857, CC].
General rule: A limited partner, irrespective of the
nature of his contribution has only the right to
demand and receive cash in return for his
contribution.
U.P. LAW BOC PARTNERSHIP
Exceptions: He may receive his contribution in a form
other than cash when:
1. There is a statement in the certificate to the
contrary; or
2. All the members of the partnership consent [par.
3, Art. 1857, CC].
e. Preference of Limited Partners
General rule: The limited partners stand on equal
footing.
Exception: By an agreement of all the partners [general
and limited] stated in the certificate, priority or
preference may be given to some limited partners
over others with respect to:
1. The return of contributions;
2. Their compensation by way of income; or
3. Any other matter [Art. 855, CC].
f. Right to Assign Interest
The interest of a limited partner is assignable. The
assignee may become:
1. A substituted limited partner; or
2. A mere assignee.
A substituted limited partner is a person admitted
to all the rights of a limited partner who has died or
has assigned his interest in a partnership. He has all
the rights and powers, and is subject to all the
restrictions and liabilities of his assignor, except
those liabilities which:
1. The assignee was ignorant of; and
2. Cannot be ascertained from the certificate [pars.
2 and 6, Art. 1859, CC]
An assignee is only entitled to receive the share of
the profits or other compensation by way of income,
or the return of contribution, to which the assignor
would otherwise be entitled. He has no right:
1. To require any information or account of the
partnership transactions;
2. To inspect the partnership books [par. 3, Art.
1859, CC].
An assignee has the right to become a substituted
limited partner if:
1. All the partners consent thereto; or
2. The assignor, being empowered to do so by the
certificate, gives him that right [par. 4, Art. 1859,
CC].
Page 363 of 511
CIVIL LAW
An assignee becomes a substituted limited partner
when the certificate is appropriately amended [par. 5,
Art. 1859, CC].
g. Right to Ask for Dissolution
A limited partner may have the partnership dissolved
and its affairs wound up when:
1. He rightfully but unsuccessfully demands the
return of his contribution; or
2. He has a right to contribution but his
contribution is not paid because the partnership
property is insufficient to pay its liabilities [par.
4, Art. 1857, CC].
9. Dissolution
A limited partnership is dissolved in much the same
way and causes as an ordinary partnership [de Leon]
General rule: The retirement, death, insolvency,
insanity or civil interdiction of a general partner
dissolves the partnership.
Exception: It is not so dissolved when the business is
continued by the remaining general partners:
a. Under a right to do so stated in the certificate; or
b. With the consent of all members [Art. 860, CC].
Upon the death of a limited partner, his executor or
administrator shall have:
a. All the rights of a limited partner for the purpose
of settling his estate; and
b. The power to constitute an assignee as a
substituted limited partner, if the deceased was
so empowered in the certificate.
The estate of a deceased limited partner shall be liable
for all his liabilities as a limited partner [Art. 1861,
CC].
10. Settlement of Accounts
a. Order of Payment
In settling accounts after dissolution, the liabilities of
the partnership shall be entitled to payment in the
following order:
1. Those to creditors, including limited partners
except those on account of their contributions,
in the order of priority as provided by law;
U.P. LAW BOC PARTNERSHIP
2. Those to limited partners in respect to their share
of the profits and other compensation by way of
income in their contributions;
3. Those to limited partners in respect to the capital
of their contributions;
4. Those to general partners other than for capital
and profits;
5. Those to general partners in respect to profits;
6. Those to general partners in respect to capital
[par. 1, Art. 1863, CC].
Note: In settling accounts of a general partnership,
those owing to partners in respect to capital enjoy
preference over those in respect to profits.
b. Share in the Partnership Assets
The share of limited partners in respect to their
claims for capital, profits, or for compensation by
way of income, is in proportion of their contribution,
unless:
1. There is a statement in the certificate as to their
share in the profits; or
2. There is a subsequent agreement fixing their
share [Art. 1863, CC].
11. Amendment or Cancellation
of Certificate
a. Cancellation of Certificate
The certificate shall be cancelled when:
1. The partnership is dissolved; or
2. All limited partners cease to be such limited
partners.
b. Amendment of Certificate
A certificate shall be amended when:
1. There is a change in the name of the partnership
or in the amount or character of the contribution
of any limited partner;
2. A person is substituted as a limited partner;
3. An additional limited partner is admitted;
4. A person is admitted as a general partner;
5. A general partner retires, dies, becomes insolvent
or insane, or is sentenced to civil interdiction and
the business is continued;
6. There is a change in the character of the business
of the partnership;
7. There is a false or erroneous statement in the
certificate;
Page 364 of 511
CIVIL LAW
8. There is a change in the time as stated in the
certificate for the dissolution of the partnership
or for the return of a contribution;
9. A time is fixed for the dissolution of the
partnership, or the return of a contribution, no
time having been specified in the certificate; or
10. The members desire to make a change in any
other statement in the certificate in order that it
shall accurately represent the agreement among
them [Art. 1864, CC].
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 limited partner in case of substitution
or addition of a limited or general partner; and
3. The writing to amend (with the certificate, as
amended) or to cancel must be filed for record
in the SEC.
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
court shall order the SEC to record the cancellation
or amendment if it finds that the petitioner has a right
to have the writing executed.
From the moment the amended certificate/writing or
a certified copy of a court order granting the petition
for amendment has been filed, such amended
certificate shall thereafter be the certificate of
partnership [Art. 1865, CC].
12. Limited Partnerships
Formed Prior to the CC
Limited partnerships formed under the law prior to
the CC may
a. continue to be governed by the provisions of the
old law
b. become a limited partnership under the CC by
compliance with Art. 1844, provided that the
certificate states:
1. the amount of the original contribution of
each limited partner and the time it was
made; AND
U.P. LAW BOC PARTNERSHIP CIVIL LAW

2. that the partnership assets exceeds its

liabilities to third persons by an amount
greater than the sum of all limited partners’
contributions [Art. 1867, CC]

Page 365 of 511

U.P. LAW BOC AGENCY CIVIL LAW

AGENCY
Civil Law

Page 366 of 511

U.P. LAW BOC
IX. Agency
A. Definition of Agency
1. As a Type of Contract
Art. 1868, CC. By the contract of agency, a
person binds himself to render some service or
to do something in representation or on behalf
of another, with the consent or authority of the
latter.
a. Statutory Elements
1. A person must bind himself to render some
service or to do something
2. in representation or on behalf of another person;
and
3. With the consent or authority of the latter
b. Jurisprudential Elements
1. There is consent, express or implied, of the
parties to establish the relationship;
2. The object is the execution of a juridical act in
relation to a third person;
3. The agent acts as a representative and not for
himself; and
4. The agent acts within the scope of his authority
On the part of the principal, there must be an actual
intention to appoint or an intention naturally inferable
from his words or actions; and on the part of the
agent there must be an intention to accept the
appointment and act on it, and in the absence of such
intent, there is generally no agency. [Victorias Milling v.
CA, G.R. No. 117356 (2000)]
2. As a Legal Relationship
It is possible for an agency to arise even without a
written contract. In such cases, an agency is more
properly described as a legal relationship.
It is (a relationship) whereby one party, called the
principal, authorizes another, called the agent, to act
for and in his behalf in transactions with third
persons. [Rallos v. Felix Go Chan, G.R. No. L-24332
(1978)]
Page 367 of 511
AGENCY CIVIL LAW
3. Effects of Agency
a. Integration (merger) of the personality of the
principal and the agent
b. Extension (reproduction) of the personality of
the principal through the agent
c. Consequences:
1. Merger: In an agency relationship, the agent,
by legal fiction, becomes the principal,
authorized to perform all acts which the
latter would have him do. [Orient Air Services
v. CA, G.R. No. 76931 (1991)]
2. Agent is not a real party in interest: The
agent is not a party to the contract between
the principal and the third person. He is not
a real party in interest and cannot therefore
sue in his own behalf on a contract for his
principal, except if he is an assignee of such
contract. [Uy and Roxas v. CA, G.R. No.
120465 (1999)]
3. Imputed Knowledge: Knowledge of facts
acquired or possessed by an officer or agent
of a corporation in the course of his
employment, and in relation to matters
within the scope of his authority, is notice to
the corporation, whether he communicates
such knowledge or not. [Francisco v. GSIS,
G.R. No. L-18287 (1963)]
The theory of imputed knowledge ascribes
knowledge of the agent to the principal,
not the other way around. [Sunace International
v. NLRC, G.R. No. 161757 (2006)]
General rule: Notice to the agent constitutes
notice to the principal [Air France v. CA
(1983)]. Thus, knowledge of the agent is
ascribed to the principal [Rovels Enterprises v.
Ocampo, G.R. No. 136821 (2002)].
Requisites:
a. Actual notice to the agent;
b. Notice must pertain to a matter of fact
and not of law;
c. The fact must be within the scope of the
agent’s authority.
U.P. LAW BOC AGENCY CIVIL LAW

Exceptions:
a. Where the agent’s interests are adverse
B. Kinds of Agency
to those of the principal;
b. Where the agent’s duty is not to disclose 1. In General
the information (e.g., he is informed by
way of confidential information);
c. Where the person claiming the benefit
a. As to manner of creation:
of the rule colludes with the agent to
defraud the principal [de Leon]. 1. Express;
2. Implied.
4. Bad faith of the Agent is Bad faith of the
Principal [Caram v. Laureta, G.R. No. 72194 b. As to cause or consideration:
(1990)]
1. Gratuitous;
2. Compensated or onerous.

Note: Agency is presumed to be for a compensation,

unless there is proof to the contrary [Art. 1875, CC].

c. As to the extent of business

covered:
1. General;
2. Special

To be a General Agent, it is sufficient that the listed

authorized transactions apparently cover all that is
required to run the business of the principal. It is not
necessary that the power granted actually says “all the
business of the principal.” [Dominion Insurance v. CA,
G.R. No. 129919 (2002)]

d. As to the authority conferred:

1. Couched in general terms;
2. Couched in specific terms.

e. As to nature and effect:

1. Ostensible or representative, where the agent acts
in the name and representation of the principal
[Art. 1868, CC];
2. Simple or commission, where the agent acting his
own name but for the account of the principal.

f. As to the kinds of principal:

1. With a disclosed principal, where, at the time
the transaction was contracted by the agent, the
other party thereto was known:
a. that the agent was acting for a principal; and
b. the principal’s identity;

Page 368 of 511

U.P. LAW BOC
2. Partially disclosed, where the other party
knows or has reason to know that the agent is or
may be acting for a principal but is unaware of
the principal’s identity;
3. Undisclosed, where the party has no notice of
the fact that the agent is acting as such for a
principal
2. As to Manner of Creation
Art. 1869, CC. Agency may be express, or
implied from the acts of the principal, from his
silence or lack of action, or his failure to repudiate
the agency, knowing that another person is acting
on his behalf without authority.
Agency may be oral, unless the law requires a
specific form.
a. Express Agency
An express agency is one where the agent has been
actually authorized by the principal, either:
1. Orally; or
2. In writing [Art.1869, CC].
b. Implied Agency
Art. 1870, CC. Acceptance by the agent may also
be express, or implied from his acts which carry
out the agency, or from his silence or inaction
according to the circumstances.
As a rule, agency is not presumed. A presumption of
agency may arise, however, in those few cases where
agency may arise by operation of law (i.e. Art. 1803,
CC) or to prevent unjust enrichment. [de Leon]
ACTS OF THE PRINCIPAL
The act of the principal which constitutes consent
may be in the form of silence, lack of action, or failure
to repudiate the agency knowing that another person
is acting on his behalf without authority. [See Art.
1869, CC]
Requisites:
1. The alleged principal should be aware of the acts
of the alleged agent
2. The alleged principal has had reasonable
opportunity under the circumstances to repudiate
the acts of the alleged agent
Page 369 of 511
AGENCY CIVIL LAW
3. A third party has transacted with the alleged agent
without being made aware of the alleged agent’s
lack of authority
4. There were no facts or circumstances which may
raise any suspicion on the part of the third person
that the agent was not authorized
Where no third party was prejudiced, and it was
emphasized in no uncertain terms to the alleged agent
that no agency exists (therefore both principal and
agent knew that the agent had no authority) then Art
1869 has no room for operation. [Uniland Resources v.
DBP, G.R. No. 95909 (1991)]
ACTS OF THE AGENT
Acceptance of the agent may be implied from
1. His acts which carry out the agency
2. His silence or inaction if the agent does not
inform the principal of his rejection of the agency
relationship:
a. Within a reasonable amount of time under
the circumstances
b. Prior to the principal suffering damage as a
result of the delay on the part of the agent in
informing the principal of his rejection of the
agency relationship [Casis]
Art. 1871, CC. Between persons who are
present, the acceptance of the agency may also
be implied if the principal delivers his power of
attorney to the agent and the latter receives it
without any objection.
Note: Art. 1871 describes the most ideal form
evidencing the perfection of the contract of agency
when the constitution of the agency is made with
both principal and agent being physically present
at the time of perfection of the contract of agency.
[Villanueva]
Conditions for Applicability of Art. 1871, CC
1. The principal delivers his power of attorney to
the agent
2. The agent personally receives it without any
objection, and
3. The agent must be aware of the contents of the
document containing the powers of attorney
[Casis]
Art. 1872, CC. Between persons who are absent,
the acceptance of the agency cannot be implied
from the silence of the agent, except:
U.P. LAW BOC
1. When the principal transmits his power of
attorney to the agent, who receives it without
any objection;
2. When the principal entrusts to him by letter
or telegram a power of attorney with respect
to the business in which he is habitually
engaged as an agent, and he did not reply to
the letter or telegram.
There is absence when both parties are not
physically present in one place. [Villanueva]
Conditions for Applicability of Art. 1872(1), CC
1. The principal transmits the power of attorney
2. It is received by the agent without any objection.
Conditions for Applicability of Art. 1872(2), CC
1. The principal entrusts the power of attorney by
letter or telegram
2. The power of attorney pertains to a business that
the agent is habitually engaged in, and
3. The agent did not reply
3. As to Extent of Business
Covered
a. General agency comprises all the business of
the principal.
Scope: All acts connected with the business or
employment in which agent is engaged
b. Special agency comprises one or more specific
transactions [Art. 1876, CC].
Scope: Only authorized acts or those necessarily
implied
4. As to Authority Conferred
a. Couched in General Terms
An agency couched in general terms is one created in
general terms and is deemed to comprise only acts of
administration, even if:
1. The principal should state that he withholds no
power;
2. He should state that the agent may execute such
acts as he may consider appropriate; or
3. Even though the agency should authorize a
general and unlimited management [Art. 1877,
CC].
Page 370 of 511
AGENCY CIVIL LAW
Acts of Administration
Acts of administration are those which do not imply
the authority to alienate. [de Leon]
b. Couched in Specific Terms
An agency couched in specific terms authorizes only
the performance of specific acts. Certain specific acts,
however, require special powers of attorney.
A special power of attorney is an instrument in writing
by which one person, as principal, appoints another
as his agent and confers upon him the authority to
perform certain specified acts or kinds of acts on
behalf of the principal.
EFFECT OF ABSENCE OF SPECIFIC
AUTHORITY
In General
If an agent performs a transaction under Art 1878
without specific authority therefor, the transaction is
unenforceable. However, the agent can still seek the
principal’s ratification. [Dungo v. Lopena, G.R. No. L-
18377 (1962)]
Sale of Land or Any Interest Therein
Art. 1874, CC. When a sale of a piece of land or
any interest therein is through an agent, the
authority of the latter shall be in writing;
otherwise, the sale shall be void.
Requirements:
The authorization must be:
1. Written, and
2. Specific
Only specific authorization is required (and it need
not be written):
1. If the contract is a sale of an immovable other
than land
2. If the contract transmits ownership over an
immovable other than land
3. If the contract transmits ownership over land
through a transaction other than a sale
EFFECT OF SPECIFIC AUTHORIZATION
Where an instrument specifies and defines powers
and duties, all such powers and duties are limited and
confined to those which are specified and defined,
and all other powers and duties are excluded. [BPI v.
De Coster, G.R. No. L-23181 (1925)]
U.P. LAW BOC
Art. 1878, CC. Special powers of attorney are
necessary in the following cases:
(1) To make such payments as are not usually
considered as acts of administration;
(2) To effect novations which put an end to
obligations already in existence at the time
the agency was constituted;
(3) To compromise, to submit questions to
arbitration, to renounce the right to
appeal from a judgment, to waive
objections to the venue of an action or to
abandon a prescription already acquired;
(4) To waive any obligation gratuitously;
(5) To enter into any contract by which the
ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable
consideration;
(6) To make gifts, except customary ones for
charity or those made to employees in the
business managed by the agent;
(7) To loan or borrow money, unless the latter
act be urgent and indispensable for the
preservation of the things which are under
administration;
(8) To lease any real property to another
person for more than one year;
(9) To bind the principal to render some service
without compensation;
(10) To bind the principal in a contract of
partnership;
(11) To obligate the principal as a guarantor or
surety;
(12) To create or convey real rights over
immovable property;
(13) To accept or repudiate an inheritance;
(14) To ratify or recognize obligations
contracted before the agency;
(15) Any other act of strict dominion.
The requirement of special power of attorney refers
to the nature of the authorization, not to its form.
Thus, even if a document is titled as a general power
of attorney, the requirement of a special power of
attorney is met if there is a clear mandate from the
principal specifically authorizing the performance of
the act [Bravo-Guerrero v. Bravo, G.R. No. 152658
(2005)].
A special power of attorney can be included in the
general power when it is specified therein the act or
transaction for which the special power is required
[Veloso v. CA, G.R. No. 102737 (1996)].
Page 371 of 511
AGENCY CIVIL LAW
A SPOA may be oral or written, but if it is oral, it must
be duly established by evidence. [Lim Pin v. Liao Tan,
G.R. No. L-47740 (1982)]
Art. 1879, CC. A special power to sell excludes
the power to mortgage; and a special power to
mortgage does not include the power to sell.
Art. 1880, CC. A special power to compromise
does not authorize the submission to arbitration.
5. Special Kinds of Agency
a. Agency by Estoppel
1. Based on statute
Par. 1, 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. [Art. 1873 par.1, CC]
TWO MODES
a. Specific Information: If a person specially
informs another that he has given a power of
attorney to a third person, then that third person
becomes his agent with respect to the person
who received the special information.
b. Public Advertisement: If a person states by
public advertisement that he has given a power
of attorney to a third person, then that third
person becomes his agent with respect to any
person.
How Rescinded
Par. 2, Art. 1873, CC. The power shall continue
to be in full force until the notice is rescinded in
the same manner in which it was given.
This is agency by estoppel because no acceptance by
the agent is required.
In an agency by estoppel, a real agency relationship
does not exist but one is established with respect to a
third person who relied on the representations of the
alleged principal or agent. This is different from an
implied agency wherein an actual agency exists. [Casis]
U.P. LAW BOC
2. Based on jurisprudence
Requisites:
a. The principal manifested a representation of the
agent’s authority or knowingly allowed the agent
to assume such authority
b. The third person, in good faith, relied upon such
representation
c. Relying upon such representation, such third
person has changed his position to his detriment.
Agency by estoppel is similar to the doctrine of
apparent authority. It requires proof of reliance upon
the representation and that the representation
predated the action which relied on the
representation. [Litonjua v. Eternit, G.R. No. 144805
(2006)]
As to liability, implied agency and agency by estoppel
are different in that, in the former, the principal is
liable, while in the latter, the person who acts in bad
faith is liable.
Art. 1911, CC states that: “Even when the agent has
exceeded his authority, the principal is solidarily liable
with the agent if the former allowed the latter to act
as though he had full powers.” In this case, there is a
duly formed agency and estoppel only applies to the
excess of authority. This is an application of the
doctrine of apparent authority.
The doctrine of apparent authority is to the effect
that: One who clothes another with apparent
authority as his agent, and holds him out to the public
as such, cannot be permitted to deny the authority of
such person to act as his agent, to the prejudice of
innocent third parties dealing with such person in
good faith.
Under the doctrine of apparent authority, the
question in every case is whether the principal has, by
his voluntary act, placed the agent in such a situation
that a person of ordinary prudence, conversant with
business usages and the nature of the particular
business, is justified in presuming that such agent has
authority to perform the particular act in question
[Professional Services v. Agana, G.R. No. 126297 (2008)].
Ratification Estoppel
Rests on intention Rests on prejudice
Retroacts as if originally Affects only relevant
authorized parts of the transaction
Page 372 of 511
AGENCY CIVIL LAW
b. Agency with Undisclosed
Principal
General Rule: If an agent acts in his own name (the
principal is undisclosed), the agent is directly bound
in favor of the person with whom he has contracted
as if the transaction were his own.
Ratio: There is no representation of the principal when
the agent acts in his own name. The third person
cannot allege that he was misled by any representation
since he did not know of the existence of the
undisclosed principal.
Exception: The principal is bound when the contract
involves things belonging to him [Art. 1883, CC]. In
this case, the contract is considered as one between
the principal and the third person.
Qualification: The exception only applies if the agent
contracts with the properties of the principal within
the scope of his authority [PNB v. Agudelo, G.R. No.
L-39037 (1933)].
c. Irrevocable Agency
Art. 1927, CC. An agency cannot be revoked if a
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 a partnership in the contract of partnership
and his removal from the management is
unjustifiable.
Art. 1927, CC (on agency coupled with an interest)
mentions three instances where the sole will of the
principal cannot terminate an agency:
1. A bilateral contract depends upon it: When an
agency is constituted as a clause in a bilateral
contract, that is, when the agency is inserted in
another agreement, the agency ceases to be
revocable at the pleasure of the principal as the
agency shall now follow the condition of the
bilateral agreement. [Republic v. Evangelista, G.R.
No. 156015 (2005)].
2. It is the means of fulfilling an obligation
already contracted: For example, P borrows
from B P50,000. As security for the debt, P gives
A a power of attorney to collect rents due from
tenants of P and authorizes A to apply the same
to the debt of P50,000. In this case, P cannot
revoke the agency, without any justifiable cause,
U.P. LAW BOC
for it is a means of fulfilling his obligation to B.
[De Leon]
3. A partner is appointed manager of a
partnership in the contract of partnership
and his removal from the management is
unjustifiable: The reason is that the
appointment is in effect one of the conditions of
the contract and it is only logical that such
appointment should not be revoked without the
consent of all the partners. [De Leon]
Qualifications:
1. Coupled with interest or not, the authority
certainly can be revoked for a just cause, such as
when the attorney-in-fact betrays the interest of
the principal. It is not open to serious doubt that
the irrevocability of the power of attorney may
not be used to shield the perpetration of acts in
bad faith, breach of confidence, or betrayal of
trust, by the agent for that would amount to
holding that a power coupled with an interest
authorizes the agent to commit frauds against the
principal [Manotok Brothers v. CA, G.R. No. 94753
(1993)]
2. A mere statement in the power of attorney that it
is coupled with an interest is not enough. In what
does such interest consist must be stated in the
power of attorney [Del Rosario v. Abad, G.R. No.
L-10881 (1958)].
3. An agency coupled with an interest cannot affect
third persons. They are obligatory only on the
principal who executed the agency [New Manila
Lumber v. Republic, G.R. No. L-14248 (1960)].
4. But unlike simple grants of a power of attorney,
the agency that we hereby declare to be
compatible with the intent of the parties, cannot
be revoked at will. The reason is that it is one
coupled with an interest, the agency having been
created for mutual interest, of the agent and the
principal. It appears that Lina Sevilla is a bona
fide travel agent herself, and as such, she had
acquired an interest in the business entrusted to
her. Moreover, she had assumed a personal
obligation for the operation thereof, holding
herself solidarily liable for the payment of rentals.
She continued the business, using her own name,
after Tourist World had stopped further
operations. Her interest, obviously, is not to the
commissions she earned as a result of her
business transactions, but one that extends to the
Page 373 of 511
AGENCY CIVIL LAW
very subject matter of the power of management
delegated to her. It is an agency that, as we said,
cannot be revoked at the pleasure of the
principal. [Sevilla v. CA, G.R. No. L-41182-3
(1988)]
6. Kinds of Agents
a. As to Nature and Extent of
Authority
According to the nature and extent of their authority,
agents have been classified into:
1. Universal agents are authorized to do all acts
for his principal which can lawfully be delegated
to an agent. So far as such a condition is possible,
such an agent may be said to have universal
authority.
2. General agents are authorized to do all acts
pertaining to a business of a certain kind or at a
particular place, or all acts pertaining to a
business of a particular class or series. He has
usually authority either expressly conferred in
general terms or in effect made general by the
usages, customs or nature of the business which
he is authorized to transact. An agent, therefore,
who is empowered to transact all the business of
his principal of a particular kind or in a particular
place, would, for this reason, be ordinarily
deemed a general agent.
3. Special agents are authorized to do some
particular act or to act upon some particular
occasion (i.e., acts usually in accordance with
specific instructions or under limitations
necessarily implied from the nature of the act to
be done) [Siasat v. IAC, G.R. No. L-67889
(1985)]. 

b. Attorney as Agent of Client
General Rule: The relation of attorney and client is one
of agency and the ordinary rules of agency apply. An
act performed within the scope of a “general or
implied authority” is regarded as an act of the client.
[de Leon]
Attorneys have authority to bind their clients in any
case by any agreement in relation thereto made in
writing, and in taking appeals, and in all matters of
ordinary judicial procedure. But they cannot, without
U.P. LAW BOC AGENCY CIVIL LAW

special authority, compromise their client’s litigation,

or receive anything in discharge of a client’s claim but
C. Rights and Obligations
the full amount in cash [Sec. 23, Rule 138, Rules of
Court].
of the Agent
1. Rights of Agents

a. Compensation
Art. 1875, CC. Agency is presumed to be for a
compensation, unless there is proof to the
contrary.

Note: Compensation is not an element of an agency

contract [Casis]. The principal must prove that the
agency is not for a fee if he contests it. But in itself,
compensation is not an element of an agency
contract.

The fact that the agency was for compensation or not,

shall be considered by the court in determining the
extent of liability of an agent for fraud or negligence.
[Art. 1909, CC]

Procuring Cause
A procuring cause starts a series of events, which,
without break in their continuity, result in the
accomplishment of the prime objective of the
employment of the broker – a sale. [Philippine Health
Care Providers v. Estrada, G.R. 171052 (2008)]

The agent must be the efficient procuring cause of

a sale in order to be entitled to commission. [Danon v.
Brimo & Co., G.R. No. 15823 (1921)].

The broker becomes entitled to the usual

commissions whenever he brings to his principal a
party who is able and willing to take the property and
enter into a valid contract upon the terms then named
by the principal, although the particulars may be
arranged and the matter negotiated and completed
between the principal and the purchaser directly.
[Macondray v. Sellner, G.R. No. L-9184 (1916)]

The agent is entitled to commission even if the

(transaction) is consummated 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

Page 374 of 511

U.P. LAW BOC
together again and finally consummating the
transaction.” [Prats v. CA, G.R. No. L-39822 (1978)]
When there is a close, proximate and causal
connection between the agent’s efforts and labor and
the principal’s sale of his property, the agent is entitled
to commission. [Manotok Brothers v. CA, G.R. No.
94753 (1993)]
Forfeiture of Right to Commission
An agent who takes a secret profit without revealing
the same to his principal is guilty of a breach of his
loyalty to the principal and forfeits his right to collect
the commission from his principal, even if the
principal does not suffer any injury, or he obtained
better results, or the agency is gratuitous, or that usage
or custom allows it. The rule is to prevent the
possibility of any wrong, not to remedy an actual
damage. [Domingo v. Domingo, G.R. No. L-30573
(1971)]
b. Lend Money To/Borrow Money
From the Agency
Art. 1890, CC. If the agent has been empowered
to borrow money, he may himself be the lender at
the current rate of interest. If he has been
authorized to lend money at interest, he cannot
borrow it without the consent of the principal.
1. Borrow Money From
Conditions:
a. The agent is empowered to borrow money
b. The agent must borrow at the current rate of
interest
2. Lend Money To
Conditions:
a. The agent is authorized to lend money at
interest
b. The principal consents to such arrangement.
c. Appoint a Substitute
Art. 1892, CC. The agent may appoint a
substitute if the principal has not prohibited him
from doing so; but he shall be responsible for the
acts of the substitute:
(1) When he was not given the power to appoint
one
(2) When he was given such power, but without
designating the person, and the person
Page 375 of 511
AGENCY CIVIL LAW
appointed was notoriously incompetent or
insolvent.
All acts of the substitute appointed against the
prohibition of the principal shall be void.
Art. 1893, CC. In the cases mentioned in Nos. 1
and 2 of the preceding article, the principal may
furthermore bring an action against the substitute
with respect to the obligations which the latter
has contracted under the substitution.
Agent’s Appointment of a Substitue
General Rule: An agent may appoint a substitute
Exceptions: [De Leon]
1. When prohibited by the principal; or
2. When the work entrusted to the agent to carry
out requires special knowledge, skill or
competence, unless he has been authorized to do
so by the principal
Responsibility for Acts of the Substitute
General Rule: If the Agent validly appoints a substitute,
the Principal is liable for the Substitute’s acts
Exception: [Art. 1892, CC]
1. If the agent appoints a substitute although he
was not given the power to appoint one
2. If the agent was given the power to appoint a
substitute, and the principal did not designate the
person he can appoint, but he appoints
someone who is notoriously incompetent or
insolvent (proven by history or record of failures
in similar business ventures in the past).
Note: In the two aforementioned situations, the agent,
not the principal, will be the one responsible for the
acts of the substitute. [Casis]
Validity of the Substitute’s Acts
If the principal prohibits the agent from appointing
a substitute, then all the acts of the substitute are void.
The acts will be valid if: The principal is aware that a
substitute is acting on his behalf without authority yet
he fails to repudiate the substitute’s acts. There may
be implied agency.
An agent cannot delegate to another the same agency.
Potestas delegate non delegare potest. Re-delegation is
U.P. LAW BOC
detrimental to the principal as the second agent has
no privity of contract with the principal... Article 1892
allows the agent to appoint a substitute (not a
delegate). [Baltazar v. Ombudsman, G.R. No. 136433
(2006)]
d. Retain in Pledge the Objects of
Agency
Art. 1912, CC. The principal must advance to the
agent, should the latter so request, the sums
necessary for the execution of the agency.
Should the agent have advanced them, the principal
must reimburse him therefore, even if the business
or undertaking was not successful, provided the
agent is free from fault.
The reimbursement shall include interest on the
sums advanced, from the day on which the advance
was made.
Art. 1913, CC. The principal must also indemnify the
agent for the damages which the execution of the
agency may have caused the latter, without fault or
negligence on his part.
Art. 1914, CC. The agent may retain in pledge the
things which are the object of the agency until the
principal effects the reimbursement and pays the
indemnity set forth in the two preceding articles.
Two scenarios under which the Agent may retain in
pledge the objects of the agency:
1. When the agent advances funds for the execution
of the agency, or
2. When the agent has suffered injury caused by the
execution of the agency
2. Obligations of Agents
a. In General
1. Act within scope of authority
Art. 1881, CC. The agent must act within the
scope of his authority. He may do such acts as
may be conducive to the accomplishment of the
purpose of the agency.
Page 376 of 511
AGENCY CIVIL LAW
An agent can bind his principal if he acts within the
scope of authority granted to him.
Powers of attorney are generally construed strictly.
The general rule is that the power of attorney must be
pursued within legal strictures, and the agent can
neither go beyond it; nor beside it. The act done must
be legally identical with that authorized to be done.
[Woodchild v. Roxas, G.R. No. 140667 (2004)]
Advantageous Acts
Art. 1882, CC. The limits of the agent's authority
shall not be considered exceeded should it have
been performed in a manner more advantageous
to the principal than that specified by him.
Collateral Acts
(The agent has the implied authority) to do all of the
collateral acts which are the natural and ordinary
incidents of the main act or business authorized.
[Guinhawa v. People, G.R. No. 162822 (2005)]
With Respect to Third Persons
Art. 1900, CC. So far as third persons are
concerned, an act is deemed to have been
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 in fact exceeded the limits of his authority
according to an understanding between the
principal and the agent.
The Situation: the principal provided limitations to
the authority of the agent orally or through a
document other than the written power of attorney.
General Rule: The third person can rely completely on
the written power of attorney to determine whether
the agent’s act is within the limits of his authority.
Exception: If the third person is aware of the secret
understanding between the principal and the agent.
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 agency but the nature and extent of the authority
of the agent. If he does not make such inquiry, he is
chargeable with knowledge of the agent’s authority,
and his ignorance of that authority will not be any
excuse. [Pineda v. CA, G.R. No. 105562 (1993)]
U.P. LAW BOC AGENCY CIVIL LAW

Art. 1885, CC. In case a person declines an

Authority of Corporate Officers
The general principles of agency govern the relation
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.
129459 (1998)]
A corporate officer entrusted with the general
management and control of its business, has implied
authority to make any contract or do any other act
which is necessary or appropriate to the conduct of
the ordinary business of the corporation. As such
officer, he may, without any special authority from the
Board of Directors, perform all acts of an ordinary
nature, which by usage or necessity are incident to his
office...
Where similar acts have been approved by the
directors as a matter of general practice, custom and
policy, the general manager may bind the company
without formal authorization of the board of
directors. [Board of Liquidators v. Kalaw, G.R. No. L-
18805 (1967)]
3. Act in accordance with instructions
Art. 1887, CC. In the execution of the agency,
the agent shall act in accordance with the
instructions of the principal.
In default thereof, he shall do all that a good
father of a family would do, as required by the
nature of the business.
agency, he is bound to observe the diligence of a
good father of a family in the custody and
preservation of the goods forwarded to him by
the owner until the latter should appoint an agent
or take charge of the goods.
The duty of care over goods given to his custody can
only cover a “reasonable period” because the law
provides that the owner shall, as soon as practicable,
either appoint an agent or take charge of the goods.
[Villanueva]
Art. 1899, CC. If a duly authorized agent acts in
accordance with the orders of the principal, the
latter cannot set up the ignorance of the agent as
to the circumstances whereof he himself was, or
ought to have been, aware.
4. Carry out the agency
In General
Par. 1, Art. 1884, CC. The agent is bound by his
acceptance to carry out the agency, and is liable
for the damages which, through his non-
performance, the principal may suffer.
An agent is also liable for its own negligent acts or
omission in the performance of its duties. Such
person is liable for damages caused to the principal by
such negligent acts. [British Airways v. CA, G.R. No.
121824 (1998)]

Authority v. Instructions [De Leon] Continuing Business

Authority Instructions Par. 2, Art. 1884, CC. He must also finish the
business already begun on the death of the
Sum total of the powers principal, should delay entail any danger.
Private rule of guidance
committed or permitted
to the agent
to the agent In case of Withdrawal
Refers to the manner or Art. 1929, CC. The agent, even if he should
Relates to the transaction
mode of agent’s action withdraw from the agency for a valid reason,
or business with which
with respect to matters must continue to act until the principal has had
the agent is empowered
within the permitted reasonable opportunity to take the necessary
to act
scope of authority steps to meet the situation.
Does not bind third
Binds the parties Agent Not Required to Carry Out Agency
parties
Art. 1888, CC. An agent shall not carry out an
agency if its execution would manifestly result in
loss or damage to the principal.

The article covers only acts that would “manifestly”

lead to losses; in other words, the agent cannot be a

Page 377 of 511

U.P. LAW BOC
guarantor that the principal would suffer no loss or
damage in the pursuit of the agency; the sustaining of
losses due to human error is part of the risk that every
owner or principal assumes. [Villanueva].
5. Advance funds
Art. 1886, CC. Should there be a stipulation that
the agent shall advance the necessary funds, he
shall be bound to do so except when the principal
is insolvent.
Conditions:
a. There is a stipulation stating that the agent shall
advance the necessary funds, and
b. The principal must be solvent
6. Prefer the principal’s interest over his
own
In General
Art. 1889, CC. The agent shall be liable for
damages if, there being a conflict between his
interests and those of the principal, he should
prefer his own.
Note: Agency is a fiduciary relationship. A breach of
that relationship will expose the agent to liability for
damages.
Art. 1889, CC does not declare the contract void, but
merely makes the agent liable for damages suffered by
the principal. [Villanueva]
Over Property Being Administered
Art. 1491, CC. The following persons cannot
acquire by purchase, even at a public or judicial
auction, either in person or through the
mediation of another:
(2) Agents, the property whose administration or
sale may have been intrusted to them, unless the
consent of the principal has been given.
The relations of an agent to his principal are fiduciary
and it is an elementary and very old rule that in regard
to property forming the subject matter of the agency,
he is estopped from acquiring or asserting a titled
adverse to that of the principal. His position is
analogous to that of a trustee and he cannot
consistently, with the principles of good faith, be
allowed to create in himself an interest in opposition
to that of his principal or cestui que trust. [Severino v.
Severino, G.R. No. L-18058 (1923)]
Page 378 of 511
AGENCY CIVIL LAW
The prohibition against agents purchasing property in
their hands for sale or management is clearly not
absolute. When so authorized by the principal, the
agent is not disqualified from purchasing the property
he holds under a contract of agency to sell. [Olaguer v.
Purugganan, Jr., G.R. No 158907 (2007)]
Double Sales
Art. 1916, CC. When two persons contract with
regard to the same thing, one of them with the
agent and the other with the principal, and the
two contracts are incompatible with each other,
that of prior date shall be preferred, without
prejudice to the provisions of article 1544.
Art. 1917, CC. in the case referred to in the
preceding article, if the agent has acted in good
faith, the principal shall be liable in damages to
the third person whose contract must be rejected.
If the agent acted in bad faith, he alone shall be
responsible.
Art. 1544, CC. If the same thing should have
been sold to different vendees, the ownership
shall be transferred to the person who may have
first taken possession thereof in good faith, if it
should be movable property.
Should it be immovable property, the ownership
shall belong to the person acquiring it who in
good faith first recorded it in the Registry of
Property.
Should there be no inscription, the ownership
shall pertain to the person who in good faith was
first in the possession; and, in the absence
thereof, to the person who presents the oldest
title, provided there is good faith.
The Situation: the principal and the agent each
contracts with different people for the same thing,
and the contracts are incompatible.
General Rule [Art. 1544, CC]:
a. The property is a movable, then the person who
takes first possession in good faith (PGF) prevails
b. The property is immovable, then the person who
first records it in good faith in the register of
deeds prevails. If there is no record, the PGF
prevails. If there is no PGF, then the person who
has the oldest title. (record > PGF > title)
U.P. LAW BOC
Exceptions: The contract “of a prior date” shall prevail
if:
a. None of the buyers had obtained possession over
the movable, or
b. None of the buyers had recorded, possessed or
has title over the immovable
Liability
a. If the Agent was in good faith, then the principal
is liable for damages to the third person whose
contract won’t be honored
b. If the Agent was in bad faith, then he is liable for
damages to the third person and to the principal
[see Art. 1889, CC]
RENDER ACCOUNT/DELIVER
Art. 1891, CC. Every agent is bound to render an
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 the principal.
Every stipulation exempting the agent from the
obligation to render an account shall be void.
If an agent receives a secret gift from a client, he must
report it and deliver it to the principal.
The law imposes upon the agent the absolute
obligation to make a full disclosure or complete
account to his principal of all his transactions and
other material facts relevant to the agency. If he
makes a secret profit, he is guilty of breach of his
loyalty, and he forfeits his right to his commission.
[Domingo v. Domingo, G.R. No. L-30573 (1971)]
Note: Report imports a statement of collections.
Accounting means settling of account of
administration or agency, which includes payment.
[de Leon].
PAY INTEREST
Art. 1896, CC. The agent owes interest on the
sums he has applied to his own use from the day
on which he did so, and on those which he still
owes after the extinguishment of the agency.
Art. 1896 contemplates two distinct cases:
1. Sums belonging to the principal which the
agent applied to his own use: The agent who
converted to his personal use the funds of the
principal is liable for interest by way of
compensation or indemnity which shall be
computed from the day on which he did so. [Casis]
Page 379 of 511
AGENCY CIVIL LAW
2. Sums which the agent still owes the principal
after the expiration of the agency: While there
is no liability for interest on sums which have not
been converted for the agent’s own use [De Borja
vs. De Borja, 58 Phil. 811 (1933)], the agent who is
found to owe the principal sums after the
extinguishment of the agency is liable for interest
from the date the agency is extinguished. [Casis]
Applicability: The agent may only borrow funds
from the agent if he has been authorized to lend
money at interest [Art 1890]. If he does borrow, then
he should pay interest for the amount he borrowed.
LIABILITY FOR
FRAUD/NEGLIGENCE
ART. 1909, CC. The agent is responsible not
only for fraud, but also for negligence, which
shall be judged with more or less rigor by the
courts, according to whether the agency was or
was not for a compensation.
The article has been applied against an agent for
negligence which caused damage against itself,
thereby preventing it from recovering from the
principal what it lost. [Metrobank v. CA, G.R. No.
88166 (1991)]
b. Factor or Commission Agent
A factor or commission agent is one whose business
is to receive and sell goods for a commission (also
called factorage) and who is entrusted by the principal
with the possession of goods to be sold, and usually
selling in his own name. He may act in his own name
or in that of the principal.
An ordinary agent need not have possession of the
goods of the principal, while the commission agent
must be in possession [de Leon].
Ordinary Agent Commission Agent
Acts for and in behalf of Private rule of guidance to
the principal the agent
Refers to the manner or
mode of agent’s action
Need not have
with respect to matters
possession of the goods
within the permitted
scope of authority
U.P. LAW BOC AGENCY
Broker Commission Agent
Has no custody of the
thing to be disposed Has custody or
of, only acts as possession of the things
intermediary between to be sold
seller and buyer
Maintains no relations Maintains relations with
with things to be the thing, the buyer and
sold/bought the seller
Responsibility for Goods Received
1. The commission agent shall be responsible for
goods received by him in the terms and
conditions and as described in the consignment,
unless upon receiving them he should make a
written statement of the damage and
deterioration suffered by the same [Art. 1903,
CC].
2. The commission agent who handles goods of the
same kind and mark, which belong to different
owners, shall:
a. Distinguish them by countermarks; and
b. Designate the merchandise respectively
belonging to each principal [Art. 1904].
Sale of Goods on Credit without Authority
General rule: The commission agent cannot sell on
credit. Should he do so, the principal may:
1. Demand from him payment in cash, in which
case the commission agent shall be entitled to any
interest or benefit, which may result from such
sale [Art. 1905, CC]; or
2. Ratify the sale on credit, in which case the
principal will have all the risks and advantages to
him [de Leon].
Exception: The commission agent can sell on credit
with the express or implied consent of the
principal.
Sale of Goods on Credit with Authority
If the commission agent was authorized to sell on
credit and should he so sell on credit, he shall inform
the principal of such sale, with a statement of the
names of the buyers. Should he fail to inform the
principal, the sale is deemed to have been made for
cash as far as the principal is concerned [Art. 1906,
CC].
The commission agent is obliged to collect the credits
of his principal when they become due and
demandable [Art. 1908, CC].
Page 380 of 511
CIVIL LAW
General rule: Failing to so collect, the agent shall be
liable for damages.
Exception: He is not liable if he proves that he
exercised due diligence for that purpose.
Should the commission agent receive a guarantee
commission (del credere commission) on a sale, in
addition to the ordinary commission, he shall:
1. Bear the risk of collection; and
2. Pay the principal the proceeds of the sale on the
terms agreed upon with the purchaser [Art.
1907].
3. Liability of Agents
a. When Solidary
Art. 1894, CC. The responsibility of two or more
agents, even though they have been appointed
simultaneously, is not solidary, if solidarity has
not been expressly stipulated.
General Rule: Two or more agents are jointly liable.
Each of the agents can be held solidarily liable for the
non-fulfilment of the agency or for injuries caused by
fault or negligence if:
1. The principal simultaneously appoints more than
one agent, and
2. There is an express stipulation that such agents
are solidarily liable
An agent will not be solidarily liable if the fellow
agents acted beyond the scope of authority. [Art.
1895, CC]
b. When Personal
1. Expressly Bound or In Excess of
Authority
General Rule: the agent who transacts as an agent is not
personally liable to the third person for the obligation
entered into
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:
U.P. LAW BOC
The person transacting with the agent is
1.
aware of the limits of the agent’s authority
2. The agent exceeded the scope of his
authority
3. The agent exceeded his or her authority, and
4. The principal did not ratify the contract
Note: In (c), the transaction will be considered void.
2. Acts in His Own Name
Art. 1883, CC. If an agent acts in his own name,
the principal has no right of action against the
persons with whom the agent has contracted;
neither have such persons against the principal.
In such case the agent is the one directly bound in
favor of the person with whom he has
contracted, 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 be without prejudice to the actions between
the principal and agent.
This is called an “Agency with an undisclosed
principal.”
General Rule: If the agent enters contract without
notice to the third party that he was acting as an agent,
the agent is directly bound as a party to the contract,
and the principal and the third person have no right
of action against one another.
Exception: When the contract involves things
belonging to the principal. The principal may seek
damages for such contract.
The exception under Art 1883 “does not say that (a
third party) does not have, and cannot bring an action
against the agent also.” [Beaumont v. Prieto, G.R. No. L-
8988 (1916)]
Page 381 of 511
AGENCY CIVIL LAW
D. Rights and Obligations
of the Principal
1. Obligations
a. Comply with the Obligations
Contracted by the Agent
Par. 1, Art. 1910, CC. The principal must comply
with all the obligations which the agent may have
contracted within the scope of his authority.
Doctrine of Representation
All contracts and transactions entered into by the
agent on behalf of the principal within the scope of
his authority are binding on the principal as though
he himself had entered into them directly. [Villanueva]
If the agent acts within the scope of his authority, then
the principal must comply. Otherwise, the principal is
bound to comply only if he ratifies the agent’s act that
was done beyond the scope of his authority.
Acts Within the Scope of Authority
1. Those expressly specified in the power of
attorney
2. Conducive acts
3. Advantageous acts
4. Collateral acts
Ratified Acts
Par. 2, Art. 1910, CC. As for any obligation
wherein the agent has exceeded his power, the
principal is not bound except when he ratifies it
expressly or tacitly.
The principal must have full knowledge at the time of
ratification of all the material facts and circumstances
relating to the unauthorized act of the person who
assumed to act as agent. If the material facts were
suppressed or unknown, there can be no ratification.
[Manila Memorial v. Linsangan, G.R. No. 151319
(2004)]
By benefitting from the unauthorized act of an agent,
the principal is said to have ratified the acts of the
agent and is estopped from denying said authority.
[Filipinas Life v. Pedroso, G.R. No. 159489 (2008)]
U.P. LAW BOC
However, in some cases, the mere acceptance of
benefits is not tantamount to ratification by the
principal.
Acts which are absolutely void cannot be ratified. [de
Leon]
When Estoppel Applies
Art. 1911, CC. Even when the agent has exceeded
his authority, the principal is solidarily liable with
the agent if the former allowed the latter to act as
though he had full powers.
This is termed as agency by estoppel. [Villanueva]
Even if there was no express authority, the principal
is still solidarily liable because he allowed the agent to
act as if he had authority.
Acts by the Agent in His Own Name but
Involving Things of the Principal [Art. 1883, par.
2, CC]
When the properties of the principal are involved, the
principal is bound even when the contract was
entered into in the name of the agent. The purpose of
this rule is to protect third persons against possible
collusion between the agent and the principal. [Gold
Star Mining Co. v. Lim-Jimena, G.R. No. L-25301
(1968); PNB v. Agudelo, G.R. No. 39037 (1933)]
b. Advance or Reimburse Sums
Necessary
Art. 1912, CC. The principal must advance to the
agent, should the latter so request, the sums
necessary for the execution of the agency.
Should the agent have advanced them, the
principal must reimburse him therefor, even if the
business or undertaking was not successful,
provided the agent is free from all fault.
The reimbursement shall include interest on the
sums advanced, from the day on which the
advance was made. [Article 1912, CC]
The principal is not liable for the expenses incurred
by the agent in the following cases [Art. 1918, CC]:
1. If the agent acted in contravention of the
principal's instructions, unless the latter should
wish to avail himself of the benefits derived from
the contract;
2. When the expenses were due to the fault of the
agent;
Page 382 of 511
AGENCY CIVIL LAW
3. When the agent incurred them with knowledge
that an unfavorable result would ensue, if the
principal was not aware thereof;
4. When it was stipulated that the expenses would
be borne by the agent, or that the latter would be
allowed only a certain sum.
General Rule: the principal must advance or reimburse
(with interest) the sums necessary to execute the
agency.
Exceptions:
1. Expenses incurred through acts which
contravene the principal’s instructions, and the
principal does not want to derive benefit
therefrom
2. Expenses due to the fault of the agent
3. Expenses incurred by the agent with the
knowledge that an unfavorable result would
ensue, and the principal was unaware
4. If there is a stipulation that expenses would be
borne by the agent or that he would be allowed
only a certain sum
5. Expenses incurred from acts outside the
authority of the agent.
Sums to be reimbursed include those from
unsuccessful undertakings as well as those initially in
contravention of the principal’s instructions but later
becomes a source of benefits.
Note: Compare the obligation of the principal with the
obligation of the agent, who is bound to advance the
sums necessary to carry out the agency only when he
so consents or it is stipulated in the agreement and if
the principal is not insolvent. (Art. 1912 vis-à-vis Art.
1886)
c. Indemnify the Agent for Injury
Art. 1913, CC. The principal must also indemnify
the agent for all the damages which the execution
of the agency may have caused the latter, without
fault or negligence on his part. [
General Rule: The principal must indemnify the agent
for damages in the execution of the agency.
Exception: When damage was caused due to the fault
or negligence of the agent.
U.P. LAW BOC AGENCY CIVIL LAW

contracted, as if the transaction were his own,

d. Compensate the Agent [Art. except when the contract involves things
belonging to the principal.
1875, CC] The provisions of this article shall be understood
to be without prejudice to the actions between
See Rights and Obligations of the Agent above.
the principal and agent.

2. Liability of the Principal
a. In General
The principal is bound and liable for the acts of the
agent done within the scope of his authority (express,
conducive, advantageous, and collateral acts), for
unauthorized acts which the principal has ratified and
for acts which is estopped from denying.
b. Be Solidarily Liable
Art. 1911, CC. Even when the agent has exceeded
his authority, the principal is solidarily liable with
the agent if the former allowed the latter to act as
though he had full powers.
Requisites:
1. Agency relationship exists
2. The agent acts in excess of his authority.
3. The principal allowed the agent to act as though
he had full powers.
General Rule: If the agent acts in his own name, then
the contract is between the agent and the third person.
Neither the third person nor the principal has a right
of action against the other.
Except: If the contract involves things belonging to
the principal, then the principal is also liable to the
third party. (Agency with an Undisclosed Principal).
However, it is not the case that the agent escapes
liability by simply contracting things belonging to the
principal.
There are two effects of the exception, according to
jurisprudence:
1. Principal and third persons now have a right of
action against each other. [Syjuco v. Syjuco, G.R.
No. 13471 (1920)]
2. The principal is not bound by the contract if the
act is beyond the scope of the agent’s authority.
[PNB v. Agudelo, G.R. No. L-39037 (1933)] This
operates as an exception to the exception.

Art. 1915, CC. If two or more persons have

appointed an agent for a common transaction or
undertaking, they shall be solidarily liable to the
agent for all the consequences of the agency.

Requisites:
1. There are two or more principals;
2. The principals have all concurred in the
appointment of the same agent; and
3. The agent is appointed for a common transaction
or undertaking

c. If the Contract Involves Things

Belonging to the Principal
Art. 1883, CC. If an agent acts in his own name,
the principal has no right of action against the
persons with whom the agent has contracted;
neither have such persons against the principal.

In such case the agent is the one directly bound in

favor of the person with whom he has

Page 383 of 511

U.P. LAW BOC AGENCY CIVIL LAW

E.Rights and Obligations of

Third Persons
1. Rights of Third Persons
a. Require the Presentation of
Authority/Instructions
Art. 1902, CC. A third person with whom the
agent wishes to contract on behalf of the
principal may require the presentation of the
power of attorney, or the instructions as regards
the agency. Private or secret orders and
instructions of the principal do not prejudice
third persons who have relied upon the power of
attorney or instructions shown them.
Also an obligation of the agent.
2. Obligations 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;
d. Even a general authority is not an unlimited one;
and
e. Every authority must find its ultimate source in
some act or omission of the principal.
The burden of proof to show that an agency
relationship exists is with the third person.

Every person dealing with an agent is put upon

Art. 1900, CC. So far as third persons are
inquiry and must discover upon his peril the authority
concerned, an act is deemed to have been
of the agent. If he does not make such inquiry, he is
performed within the scope of the agent's
chargeable with knowledge of the agent's authority,
authority, if such act is within the terms of the
and his ignorance of that authority will not be any
power of attorney, as written, even if the agent
excuse. [Bacaltos Coal Mines v. CA, G.R. No. 114091
has in fact exceeded the limits of his authority
(1995)]
according to an understanding between the
principal and the agent.
Persons dealing with an agent must ascertain not only
the fact of agency, but also the nature and extent of
Also an obligation of the principal. the agent’s authority. A third person with whom the
agent wishes to contract on behalf of the principal
b. Rely on Representations by the may require the presentation of the power of attorney,
Principal or the instructions as regards the agency. [Salvador v.
Rabaja, G.R. No. 199990 (2015)]
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.

Page 384 of 511

U.P. LAW BOC
F. Modes of
Extinguishment
1. In General
Agency is extinguished [Art. 1919, CC]:
a. By its revocation;
b. By the withdrawal of the agent;
c. By the death, civil interdiction, insanity or
insolvency of the principal or of the agent;
d. By the dissolution of the firm or corporation
which entrusted or accepted the agency;
e. By the accomplishment of the object or purpose
of the agency;
f. By the expiration of the period for which the
agency was constituted.
The provision enumerates only those which are
peculiar to agency and is, therefore, not exclusive.
Agency may also be extinguished by the modes of
extinguishment of obligations in general. [de Leon]
The modes of extinguishment may be classified into
three:
a. By agreement [(e) and (f)];
b. By subsequent acts of the parties:
1. By the act of both parties or by mutual
consent; or
2. By the unilateral act of one of them [(a) and
(b)]
c. By operation of law [(c) and (d)]
2. Revocation
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.
General Rule: The principal may revoke the agency at
will.
Exception: Agency cannot be revoked if it is coupled
with an interest, such that:
1. A bilateral contract depends upon it;
2. It is the means of fulfilling an obligation already
contracted; or
Page 385 of 511
AGENCY CIVIL LAW
3. A partner is appointed manager of a partnership
in the contract of partnership and his removal
from the management is unjustifiable.
The principal can revoke the agency even if the period
fixed in the contract has not yet expired. [CMS Logging
v. CA, G.R. No. L-41420 (1992)]
Art. 1925, CC. When two or more principals
have granted a power of attorney for a common
transaction, any one of them may revoke the
same without the consent of the others.
Note: The rule enunciated by Art. 1925, CC is
consistent with Art. 1915, CC which provides that, if
two or more persons have appointed an agent for a
common transaction or undertaking, they shall be
solidarily liable to the agent for all the consequences
of the agency.
Qualifications: The right of the principal to
terminate the authority of his agent is absolute and
unrestricted, except that he is liable for damages in
case:
1. He revokes the agency in bad faith [Danon v.
Brimo, G.R. No. 15823 (1921)]; or
2. He revokes the agency before the expiration of
the period stipulated in the agency contract.
b. When Revocation is Not Binding
on Third Persons
1. When Notice is Required
Art. 1921, CC. If the agency has been entrusted
for the purpose of contracting with specified
persons, its revocation shall not prejudice the
latter if they were not given notice thereof.
2. When a Third Person in Good Faith
Has No Knowledge of Revocation
Art. 1922, CC. If the agent had general powers,
revocation of the agency does not prejudice third
persons who acted in good faith and without
knowledge of the revocation. Notice of the
revocation in a newspaper of general circulation is
a sufficient warning to third persons.
An agent with general powers is most likely, an agent
authorized to transact with the general public in
U.P. LAW BOC AGENCY
contradistinction to the agent who contracts with
specified persons under Art. 1921, CC.
c. Appointment of New Agent
Art. 1923, CC. The appointment of a new agent
for the same business or transaction revokes the
previous agency from the day on which notice
thereof was given to the former agent, without
prejudice to the provisions of the two preceding
articles.
Revocation takes effect when notice is given to the
former agent, not when the new agent is appointed.
d. Direct Management by the
Principal
Art. 1924, CC. The agency is revoked if the
principal directly manages the business entrusted
to the agent, dealing directly with third persons.
If the principal believes that the agent is in breach of
the contract and thereby decides to deal with the
business directly, then the agency is said to be
revoked. [CMS Logging v. CA, supra] The mere act of
direct management by the principal is not enough to
revoke the agency without such intention.
e. Special Authority Revokes the
General Authority Where a
Special Matter is Involved
Art. 1926, CC. A general power of attorney is
revoked by a special one granted to another
agent, as regards the special matter involved in
the latter.
If Agent 1 is given a general agency, and Agent 2 is
later given a special agency, then Agent 1 can no
longer perform the powers granted to Agent 2 under
the special agency
f. When Agency Cannot be
Revoked
Art. 1927, CC. An agency cannot be revoked if a
bilateral contract depends upon it, or if it is the
means of fulfilling an obligation already
contracted, or if a partner is appointed manager
Page 386 of 511
CIVIL LAW
of a partnership in the contract of partnership
and his removal from the management is
unjustifiable.
Art. 1930, CC. The agency shall remain in full
force and effect even after the death of the
principal, if it has been constituted in the
common interest of the latter and of the agent, or
in the interest of a third person who has accepted
the stipulation in his favor.
Even if the agency is coupled with an interest (which
means that it is irrevocable), it may still be revoked if
there is just cause to terminate such agency
relationship.
3. Withdrawal by the Agent
Art. 1928, CC. The agent may withdraw from the
agency by giving due notice to the principal. If
the latter should suffer any damage by reason of
the withdrawal, the agent must indemnify him
therefor, unless the agent should base his
withdrawal upon the impossibility of continuing
the performance of the agency without grave
detriment to himself.
General Rule: The agent may withdraw so long as he
gives due notice to the principal. If the principal
suffers damage because of the withdrawal, then the
agent must indemnify him, except if the basis of his
withdrawal is because continuing the performance of
the agency is impossible without grave detriment to
the agent.
If the Agent files a complaint against his principal,
then he is understood to have renounced the agency
because his act was more expressive than words and
could not have caused any doubt. [Valera v. Velasco,
G.R. No. L-28050 (1928)]
4. Death, Civil Interdiction,
Insanity or Insolvency
a. In General
By reason of the very nature of the relationship
between the principal and agent, agency is
extinguished by the death of the principal or the
agent. Any act of an agent after the death of his
principal is void ab initio unless the same falls under
U.P. LAW BOC AGENCY CIVIL LAW

the exceptions provided for in the aforementioned
Art 1930 and 1931, CC.
b. Exceptions
1. Agency Coupled with an Interest.
Art. 1930, CC. The agency shall remain in full
force and effect even after the death of the
principal, if it has been constituted in the
common interest of the latter and of the agent, or
in the interest of a third person who has accepted
the stipulation in his favor.
2. Contract between Agent Without
Knowledge of Death and Third Person
in Good Faith
Art. 1931, CC. Anything done by the agent,
without knowledge of the death of the principal
or of any other cause which extinguishes the
agency, is valid and shall be fully effective with
respect to third persons who may have contracted
with him in good faith.
Dissolution: The dissolution of a partnership or
corporation which entrusted (principal) or accepted
(agent) the agency extinguishes its juridical existence,
except for the purpose of winding up its affairs. It is
equivalent to death.
Expiration
a. If created for fixed period, expiration of the
period extinguishes agency even if the purpose
was not accomplished.
b. If no time is specified, the courts may fix the
period as under the circumstances have been
probably contemplated by the parties [Art. 1197,
CC]. Otherwise, the agency terminates at the end
of a reasonable period of time. Either party can
terminate the relationship at will by giving notice
to the other [de Leon].
The period contemplated may be implied from terms
of agreement, purpose of agency, and the
circumstances of the parties.

3. Unfinished business

Par. 2, Art. 1884, CC. He must also finish the

business already begun on the death of the
principal, should delay entail any danger.

c. Death of Agent
If the agent dies, his heirs must:
1. Notify the principal thereof; and
2. In the meantime adopt such measures as the
circumstances may demand in the interest of the
latter [Art. 1932, CC].

5. Dissolution,
Accomplishment, Expiration
Accomplishment: The fulfillment of the purpose for
which agency was created ipso facto terminates agency
even though it was expressly made irrevocable. If the
purpose has not been accomplished, the agency
continues indefinitely for as long as the intent to
continue is manifested through words or actions of
the parties.

Page 387 of 511

U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

CREDIT
TRANSACTIONS
Civil Law

Page 388 of 511

U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

X. Credit transactions Commodatum Mutuum

CONSIDERA- May be
TION Essentially gratuitous or
A. Loan gratuitous onerous, i.e.
[Art.1933, CC] with stipulated
Contract of Loan vs. Contract to Loan interest
Contract of Loan Contract to Loan OBLIGA Borrower must
Consensual Contract: TION OF return the same
perfected by mere BORROWER thing loaned
consent. [Art.1933, CC]
Real Contract: perfected,
not by mere consent, but An accepted promise to GR: Bailor
by delivery of the object deliver something by way CANNOT
of the contract. of commodatum or demand the return
simple loan is binding of the thing until
upon the parties [Art. after the expiration
Borrower need
1934, CC] of the period
only pay an
stipulated or the
equal amount
Contracts of Loan accomplishment
of the same
1. Commodatum – a contract where one party of the use for
kind and
delivers to another something not consumable so which the contract
quality [Art.
that the latter may use the same for a certain time was constituted
1953, CC]
and return it. [Art. 1933, CC] [Art.1946, CC]
2. Mutuum (Simple Loan) – a contract where one GR: Lender
party delivers to another, money or other EX: Bailor may
may NOT
consumable thing, upon the condition that the demand the return
demand the
same amount of the same kind and quality shall be of the thing loaned
return of the
paid. [Art. 1933, CC] before the
thing loaned
expiration of the
nor payment
Commodatum vs. Mutuum term:
before the
1. In case of
Commodatum Mutuum lapse of the
urgent need
term agreed
OBJECT GR: Involves non- GR: Involves [Art.1946, CC]
upon
consumable money or 2. If the
movable or other commodatum
immovable consumable is a precarium
property movable [Art.1947, CC]
property 3. If the bailee
EX: Consumable commits any
goods may be the Consumable of the acts of
subject of - cannot be ingratitude in
commodatum if used in a Art. 765 [Art.
the purpose of the manner 1948]
contract is NOT appropriate to PURPOSE Loan for
consumption of their nature permissive or Loan for
the object [Art. without their temporary use consumption
1936, CC] (e.g., being [Art.1935, CC]
stamps for an consumed.
exhibition) [Art. 418, CC] LIABILITY Bailor suffers the Borrower
FOR LOSS loss of the subject suffers the loss
OWNERSHIP Retained by Transferred matter since he is even if caused
OF THING lender [Art.1933, to the the owner [Arts. exclusively by
LOANED CC] borrower 1942 and 1174, a fortuitous

Page 389 of 511

U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

Commodatum Mutuum
Exceptions to the exception:
CC] event and he is 1. If there is a stipulation to the contrary, or
not, therefore, 2. The nature of the thing forbids such use. [Art.
discharged 1939(2), CC]
from his duty
to pay Rules as to the use of fruits of the thing loaned
NATURE Purely personal in Not purely General rule: The bailee acquires the permissive use of
character [Art. personal in the thing loaned but NOT its fruits [Art. 1935, CC]
1939, CC] character Exception: Parties stipulate otherwise; such stipulation
Both are reciprocal obligations is considered valid [Art. 1940, CC]

c. Obligations of the Bailee

1. Commodatum (TUNR-PBS)

Commodatum – an essentially gratuitous contract
where one party (bailor) delivers to another (bailee)
something not consumable so that the latter may use
the same for a certain time and return it. [Art. 1933]
KINDS OF COMMODATUM
a. Ordinary commodatum – the use of the thing
by the bailee is for a certain period of time [Art.
1933]
b. Precarium – the bailor may demand the thing
loaned at will; if any one of the following is
present
1. The duration and purpose of the contract is
not stipulated, or
2. The use of the thing is merely tolerated by the
owner [Art. 1947]
a. Parties
1. Bailor: creditor
2. Bailee: debtor
Who may be a bailor in commodatum?
Anyone. The bailor in commodatum need not be the
owner of the thing loaned [Art. 1938], but as against
the bailee, the bailor retains ownership of the thing
loaned.
b. Use by the Bailee
Rules as to who may make use of the property
loaned
General rule: The bailee acquires permissive use of the
thing loaned only for himself. He may not lend nor
lease the thing loaned to him to a third person.
Exception: The members of the bailee’s household may
make use of the thing loaned
1. Take care of the thing loaned with the proper
diligence of a good father of a family. [Art. 1163,
CC]
2. Use the thing loaned only for the purpose for
which it was loaned and not for any other purpose.
[Art. 1935, 1939(2), 1942 [1], CC]
3. Not to lend the thing to a third person who is not
a member of his household. [Art. 1942 (4), CC]
4. Return the thing upon the expiration of the period
stipulated or after the accomplishment of the use
for which it has been constituted. [Art. 1944, 1946,
CC]
Exception:
Bailee has right of retention for damages when the
bailor who, knowing the flaws of the thing loaned,
does not advise the bailee of the same. [Arts. 1946,
1944, CC]
5. Pay for the ordinary expenses for the use and
preservation of the thing loaned. [Art. 1941, CC]
6. Bear equally (with the bailor) the extraordinary
expenses arising on the occasion of actual use of
the thing by the bailee even though bailee acted
without fault. [Art. 1949, CC]
Exception: Contrary stipulation
7. Solidarily liable when there are two or more
bailees to whom a thing is loaned in the same
contract. [Art. 1945, CC]
Note: If, for the purpose of making use of the thing
loaned, the bailee incurs ordinary or extraordinary
expenses which are neither for the use nor the
preservation of the thing, he is not entitled to
reimbursement. [Art. 1950, CC]

Page 390 of 511

U.P. LAW BOC CREDIT TRANSACTIONS
d. Obligations of the Bailor
(DR-BP)
1. Demand the return of the thing only upon the
expiration of the term or after the
accomplishment of the use [Art. 1946, CC]
Exceptions:
a. When bailor has urgent need of the thing, he
may demand its return (extinguish
commodatum) or its temporary use (suspend
commodatum) [Art. 1946, CC]
b. Precarium [Art. 1947, CC] or a contractual
relation where the bailor may demand the
property loaned at will
c. If bailee commits any acts of ingratitude in
Art. 765: [Art. 1948, CC]
• Bailee committed some offense against
the person, honor or property of the
bailor, or of his wife or children under his
parental authority;
• Bailee imputes to bailor any criminal
offense, or any act involving moral
turpitude, even though he should prove
it, unless the crime or act has been
committed against the bailee himself, his
wife or children under his authority; or
• Bailee unduly refuses bailor support
when bailee is legally or morally bound to
give support the bailor.
2. Refund the extraordinary expenses during the
contract for the preservation of the thing loaned.
[Art. 1949, CC]
Provided that: Bailee brings the same to the
knowledge of the bailor before incurring them,
except when they are so urgent that the reply
cannot be awaited without danger.
3. Bear equally (with the bailee) the extraordinary
expenses arising on the occasion of actual use of
the thing by the bailee. [Art. 1949, CC]
Exception: Contrary stipulation
4. Pay damages to the bailee for hidden flaws known
to the bailor. [Art. 1951, CC]
Note: Bailor has no right of abandonment; he cannot
exempt himself from payment of expenses or damages
to the bailee by abandoning the thing to the latter. [Art.
1952, CC]
Page 391 of 511
CIVIL LAW
e. Liability for Deterioration
General rule: The bailee is NOT liable for the
deterioration of the thing loaned when the
deterioration of the thing is due only to the use thereof
and without his fault. [Art. 1943, CC]
Exception: The bailee is liable only when the
deterioration of the thing is due to his fault. [Art. 1943,
CC]
f. Liability for Loss
General Rule: The bailee is NOT liable for loss of the
thing due to fortuitous event. [Art. 1174, CC]
Since the bailor retains ownership of the property
loaned, generally, it is the bailor who bears the liability
for loss of the property loaned due to fortuitous
events.
Exceptions: The bailee is liable for loss of the thing, even
if it is through a fortuitous event, if the bailee: (DDS-
KL)
1. Devoted the thing to any purpose different from
that for which it has been loaned;
2. Loaned thing has been Delivered with appraisal of
its value
Exception: Unless there is a stipulation exempting
the bailee from responsibility in case of a
fortuitous event;
3. Saved his own thing, being able to save either the
thing borrowed or his own thing
4. Kept the thing longer than the period stipulated,
or after the accomplishment of the use for which
the commodatum has been constituted;
5. Lent or leased the thing to a third person, who is
not a member of his household; [Art. 1942, CC]
g. Right of Retention
General Rule: The bailee has no right of retention of the
thing loaned on the ground that the bailor owes him
something, even though it may be by reason of
expenses. [Art. 1944, CC]
Exception: The bailee has the right of retention for
damages arising from hidden flaws. [Art. 1944, 1951,
CC]
U.P. LAW BOC CREDIT TRANSACTIONS
h. Extinguishment
(DEA-PU)
1. Death of either the bailor or the bailee [Art. 1939,
CC]
2. Expiration of term or accomplishment of purpose
[Art. 1946, CC]
3. Act/s of ingratitude has/have been committed by
the bailee, and the bailor demands the return
4. Upon demand in case of Precarium
5. Bailor has Urgent need of the thing loaned, and
he demands the return (and not just temporary
use)
2. Mutuum
Mutuum – a contract where one of the parties
(creditor) delivers to another (debtor/borrower)
money or other consumable thing upon the condition
that the same amount of the same kind and quality
shall be paid.
a. Obligations of the Borrower
(EVI)
1. Pay the creditor an Equal amount of the same
kind and quality. [Art. 1953, CC]
2. Pay Value at the time of perfection of loan, if
impossible, to deliver the same kind. [Art. 1955,
CC]
3. Pay Interest, if stipulated. [Art. 1956, CC]
b. Interest and Suspension of Usury
Law
A mutuum or simple loan may be gratuitous or
with a stipulation to pay interest. [Art. 1933, CC]
Interest– The compensation allowed by law or fixed
by the parties for the loan or forbearance of money,
goods or credits (conventional interest), or the amount
imposed by law or by courts as penalty or indemnity
for damages (compensatory interest)
1. Simple interest – Paid for the principal at a
certain rate fixed or stipulated by the parties.
2. Compound Interest – Interest which is imposed
when interest due and unpaid is capitalized or
added to the principal. [Art. 1959, CC]
Compound interest is allowed:
a. When there is an express written stipulation
to that effect [Art.1956, CC] OR
b. Upon judicial demand. However, debtor is
Page 392 of 511
CIVIL LAW
not liable to pay compound interest even after
judicial demand when there is no stipulation
for payment of interest. [Art. 2212, CC]
3. Legal Interest – That which the law directs to be
charged in the absence of any agreement as to the
rate between the parties.
4. Lawful Interest – That which the laws allow or
do not prohibit.
5. Unlawful or Usurious Interest – Paid or
stipulated to be paid beyond the maximum fixed
by law.
c. Requisites for Interest to be
Chargeable
(EWL)
1. Must be Expressly stipulated [Art. 1956, CC]
Exceptions:
a. The debtor in delay is liable to pay legal
interest (6% per annum) as indemnity for
damages [Art. 2209, CC]
b. Interest accruing from unpaid interest –
Interest demanded shall earn interest from
the time it is judicially demanded [Art. 2212,
CC] or where there is an express stipulation
[Art.1959, CC]
2. Agreement must be in Writing [Art.1956, CC]
3. Must be Lawful
Note: If the abovementioned requisites are not
met, and the borrower:
a. Paid interest by mistake, the creditor is
obliged to return what was delivered [Arts
1960 and 2154, CC]
b. Voluntarily paid interest (i.e., with
knowledge that the requisites have not been
met), the creditor is authorized to retain what
was paid [Art. 1423, CC]
Rules for award of interest in the concept of actual
and compensatory damages [Nacar v. Gallery Frames,
G.R. No. 189871 (2013) modifying Eastern Shipping
Lines vs. CA, G.R. No. 97412 (1994)] in light of BSP-
MB Circular No. 799]
1. When the obligation is breached, and it
consists in the payment of a sum of money,
i.e., a loan or forbearance of money,
a. The interest due should be that which may
have been stipulated in writing.
b. The interest due shall itself earn legal interest
from the time it is judicially demanded.
c. In the absence of stipulation, the rate of
interest shall be 6% per annum to be
computed from default, i.e., from judicial or
U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

extrajudicial demand under and subject to the 4. The Taking or agreeing to take for the use of the
provisions of Article 1169 of the CC. loan of something in excess of what is allowed by
law.
2. When an obligation, not constituting a loan or
forbearance of money, is breached Note: A usurious loan transaction is not a complete
a. An interest on the amount of damages nullity but defective only with respect to the agreed
awarded may be imposed at the discretion of interest, i.e., as if no interest was stipulated. [Carpo v.
the court at the rate of 6% per annum. Chua, G.R. Nos. 150773 and 153599 (2005)] Hence, if
b. No interest, however, shall be adjudged on the principal obligation is the payment of a sum of
unliquidated claims or damages, except when money, the debtor will be liable for the principal plus
or until the demand can be established with legal interest, following Article 2209.
reasonable certainty.
c. Where the demand is established with Although usury is legally inexistent, courts will not
reasonable certainty, the interest shall begin to hesitate to declare void “excessive, iniquitous,
run from the time the claim is made judicially unconscionable, exorbitant” interest. [Gomez-
or extrajudicially [Art. 1169, CC] Somera]
d. When such certainty cannot be so reasonably
established at the time the demand is made,
the interest shall begin to run only from the
date the judgment of the court is made [at
which time the quantification of damages may
be deemed to have been reasonably
ascertained].
e. The actual base for the computation of legal
interest shall, in any case, be on the amount
finally adjudged.

3. When the judgment of the court awarding a

sum of money becomes final and executory,
the rate of legal interest, whether the case falls
under paragraph 1 or paragraph 2, above, shall be
6% per annum from such finality until its
satisfaction, this interim period being deemed to
be by then an equivalent to a forbearance of credit.

The Usury Law [Act No.2566] – an act fixing rates

of interests upon loans and declaring the effect of
receiving or taking usurious rates and for other
purposes. [Arevalo v. Dimayuga, G.R. No. 26218 (1927)]

CB Circular No. 905 abolished interest rate ceilings.

With the promulgation of such circular, usury has
become “legally inexistent” as the parties can now
legally agree on any interest that may be charged on the
loan.

d. Elements of Usury
(MR-IT)

1. A loan or forbearance of Money

2. An understanding between parties that the loan
shall and may be Returned
3. An unlawful Intent to take more than the legal rate
for the use of money or its equivalent

Page 393 of 511

U.P. LAW BOC CREDIT TRANSACTIONS
B. Deposit
A deposit is constituted from the moment a person
receives a thing belonging to another, with the
obligation of safely keeping it and of returning the
same. [Art. 1962, CC]
Object of Deposit
Art. 1966 provides that only movable things may be
the object of a deposit. However, Art. 2006 provides
that movable as well as immovable property may be
the object of sequestration or judicial deposit.
Principal Purpose
Safekeeping of the thing; if safekeeping is NOT the
principal purpose, or is only an accessory obligation,
there is NO DEPOSIT but some other contract. [Art.
1962, CC]
Consideration
A deposit is generally gratuitous, except:
1. If there is an agreement to the contrary
2. When the depositary is engaged in the business of
storing goods [Art. 1965, CC]
Parties
1. Depositor: the person who delivers, or formally
transfers, gives, or yields possession or control of
the movable property for purposes of
safekeeping
2. Depositary: the person who receives it
Kinds Of Deposit
1. Extrajudicial
a. Voluntary – obligation arises as a
consequence of contract;
b. Necessary – obligation arises as a
consequence of law or quasi-contract
2. Judicial – obligation arises as a consequence of a
law allowing the issuance of a judicial order
constituting a deposit
1. Voluntary Deposit
Voluntary deposit –the deposit itself is a real
contract, as it is not perfected until the delivery of the
thing. [Art. 1968, CC] A contract to deposit, or an
agreement to constitute a deposit, is consensual and
binding.
A deposit may be made by two or more persons (who
believe that they are entitled to the thing deposited
Page 394 of 511
CIVIL LAW
with a third person). The third person is to deliver the
thing to the one to whom it belongs. [Art. 1968, CC]
How Entered Into: Orally or in writing [Art. 1969,
CC]
How Perfected: The deposit is perfected upon
delivery, which is made by the will of the depositor.
[Arts. 1963 and 1968, CC]
a. Extinguishment
1. Loss or destruction of thing deposited, or
2. In case of a gratuitous deposit, upon the death of
either the depositor or depositary [Art. 1995]. The
depositary is not obliged to continue with the
contract of deposit
3. By other modes provided in the CC, e.g. novation,
merger, etc. [See Art.1231, CC]
b. Obligations of a Depositary
(KRB)
1. Keep the thing safely
2. Return the thing to the depositor, heirs,
successors or person designated in the contract,
when required [Art. 1972, CC], together with all
its products, accessories and accessions. [Art.
1983, CC] at the place designated when deposit
was made. Otherwise, where the thing may be
[Art. 1987, CC].
Exception to return on demand: there is no obligation
to return on demand when (a) the thing is
judicially attached while in the depositary’s
possession, or (b) when depositary is notified of
the opposition of a third person [Art. 1988, CC]
Note: The depositary must return the thing closed
and sealed if it is delivered in that condition [Art.
1981, CC]
3. Bear the expenses for preservation of the thing
deposited if the deposit is onerous [Art. 1992. CC]
Depositary NOT LIABLE FOR LOSS
General rule: The depositary is not liable in the event of
loss. The required degree of care however, is greater if
the deposit is for compensation.
U.P. LAW BOC CREDIT TRANSACTIONS
Exceptions: (NPC-FUTR)
1. Loss is through his fault or Negligence [Art. 1170,
CC] or the negligence of his employee [Art. 1973],
even if the thing was insured [Art. 2207, CC];
2. Loss while in his Possession, ordinarily raises
presumption of fault on his part. [See Art. 1265,
CC]
3. Loss arose from the Character of the thing
deposited, and the depositary was notified of, or
was aware of such character at the time of the
constitution of the deposit [Art. 1993, CC]
4. Loss is through a Fortuitous event, and if
a. It is stipulated that depositary will be liable;
b. Depositary uses the thing without
Depositor’s permission;
c. Depositary delays its return; or
d. Depositary allows others to use it. [Art. 1979,
CC]
5. Loss when depositary Uses the thing
Exception: use with permission or for preservation
6. Loss when depositary deposits the thing with a
Third person
Exception: if deposit with a third person is allowed
Exception to the exception: if such third person is
manifestly careless or unfit [Art. 1973, CC];
7. Loss occurs and the depositary Receives
money/replacement, he must deliver such to the
depositor [Art. 1990, CC]
c. Authority of Depositary
(CC-UR)
1. Depositary may Change way of deposit if he may
reasonably presume that the depositor would
consent if he knew the situation. He is to notify
the depositor thereof and wait for the latter’s
decision, unless delay would cause danger. [Art.
1974, CC]
2. Depositary is required to Collect on interest
earned by certificates, bonds, securities and
instruments when it becomes due. [Art 1975, CC]
3. Depositary cannot make Use of the thing
deposited unless with depositor’s consent or its
preservation requires its use. [Art 1977, CC]
4. Depositary may Return the thing to the depositor
even before the time designated, if there is
justifiable reason not to keep it.
Exception: when the deposit is for valuable
consideration [Art. 1989, CC]
Page 395 of 511
CIVIL LAW
d. Obligations of a Depositor
1. Depositor is obliged to reimburse the depositary
for expenses incurred for preservation in a
gratuitous deposit. [Art.1992, CC]
2. Depositor is obliged to pay losses incurred due to
character of thing deposited. [Art. 1993, CC]
Exceptions:
a. Depositor was not aware nor expected to
know of the dangerous character of the thing;
b. Depositor notified the depositary of such
dangerous character;
c. Depositary was aware of the danger without
advice from the depositor. [Ibid.]
e. Authority of Depositor
1. When there are two or more depositors and they
are not solidary and the thing admits of division,
one cannot demand more than his share [Art.
1985, CC].
2. If he should lose his capacity to contract after
having made the deposit, the thing cannot be
returned except to persons who may have
administration of his property and rights. [Art.
1986, CC].
f. Right of Retention
The depositary may retain the thing until the full
payment of what may be due him by reason of the
deposit [Art. 1994, CC]
2. Necessary Deposit
Made in compliance with a legal obligation, or on the
occasion of any calamity, or by travelers with common
carriers [Arts.1734-1735, CC], or by travelers in hotels
and inns [Arts.1996-2004, CC]
a. Kinds of Necessary Deposit
(LCCH)
1. Deposit made in compliance with a Legal
obligation, in which case it is governed by the law
establishing it, and in case of deficiency, the rules
on voluntary deposit, e.g., Arts. 538, 586 and 2104
2. Deposit taking place on the occasion of any
Calamity [Art. 2168, CC]
Note: There must be a causal relation between the
calamity and the constitution of the deposit. In
U.P. LAW BOC CREDIT TRANSACTIONS
this case the deposit is governed by the rules on
voluntary deposit.
3. Deposit made by passengers with Common
carriers. [Art.1754, CC]
4. Deposit made by travelers in Hotels or inns. [Art.
1998, CC]
b. Deposit by Travelers in Hotels
and Inns
Before keepers of hotels or inns may be held
responsible as depositaries with regard to the effects of
their guests, the following must concur:
1. Keepers or their employees have previously been
informed about the effects brought by the guests;
and
2. The latter have taken the precautions prescribed
regarding their safekeeping. [Art. 1998, CC]
c. Extent of Liability Under
Art.1998, CC
1. Those in hotel rooms which come under the term
“baggage” or articles such as clothing as are
ordinarily used by travelers
2. Those lost or damaged in hotel annexes such as
vehicles in the hotel’s garage.
d. When Hotel-Keeper Liable
Regardless of the amount of care exercised, the hotel-
keeper is liable when—
1. The loss or injury to personal property is caused
by his servants or employees as well as by
strangers [Art. 2000, CC].
2. The loss is caused by the act of a thief or robber
done without the use of arms and irresistible
force. [Art. 2001, CC]
e. When Hotel-Keeper not Liable
1. The loss or injury is caused by force majeure, like
flood, fire, [Art.2000, CC] theft or robbery by a
stranger—not the hotel-keeper’s servant or
employee—with the use of firearms or irresistible
force [Art.2001, CC]
Exception: Hotel-keeper is guilty of fault or
negligence in failing to provide against the loss or
injury from his cause. [Arts.1170 and 1174, CC]
2. The loss is due to the acts of the guests, his family,
servants, visitors [Art.2002, CC]
Page 396 of 511
CIVIL LAW
3. The loss arises from the character of the things
brought into the hotel [Art. 2002, CC]
The hotel-keeper cannot free himself from
responsibility by posting notices to the effect that he is
not liable for the articles brought by the guest. Such
kind of stipulation shall be void. [Art. 2003, CC]
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]
The right of retention recognized in this article is in the
nature of a pledge created by operation of law.
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. Nature and Purpose
It is auxiliary to a case pending in court. The purpose
is to maintain the status quo during pendency of the
litigation or to insure the right of the parties to the
property in case of a favorable judgment.
b. Depositary of Sequestered
Property
A person is appointed by the court [Art. 2007] with the
obligations—
1. To take care of the property with the diligence of
a good father of the family. [Art. 2008, CC]
2. To continue in his responsibility until the
controversy which give rise thereto is ended
unless the court so orders. [Art. 2007, CC]
U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

c. Applicable Law
Judicial deposit law is remedial or procedural. The
Rules of Court shall govern matters not provided for
in the CC. [Art. 2009, CC]
C. Guaranty and Suretyship
Guaranty – A contract whereby a person (guarantor)
binds himself to the creditor to fulfill the obligation of
the principal debtor in case the latter should fail to do
so. [Art. 2047, CC]

Suretyship – A relation which exists where one

person (surety) binds himself solidarily with the
principal debtor, such that the former undertakes a
direct and primary obligation or other duty to a third
person (creditor), who is entitled to but one
performance, and as between the two who are bound,
the latter rather than the former should perform.

While a surety undertakes to pay if the principal does

not pay, the guarantor only binds himself to pay if the
principal is unable to pay. [See benefit of excussion,
Art. 2058, CC]

Guaranty distinguished from Suretyship [Zobel, Inc.

vs. CA, G.R. No. 113931 (1998)]
Guaranty Surety
An accessory promise
A collateral undertaking
by which a person binds
to pay the debt of
himself for another
another in case the latter
already bound, and
is unable to pay the
agrees with the creditor
debt.
to satisfy the obligation
if the debtor does not
The contract of
guaranty is the
guarantor's own
separate undertaking, in A surety is usually
which the principal does bound with his principal
not join. It is usually by the same instrument,
entered into before or executed at the same
after that of the time, and on the same
principal, and is often consideration. He is an
supported on a separate original promissor and
consideration from that debtor from the
supporting the contract beginning, and is held,
of the principal. The ordinarily, to know
original contract of his every default of his
principal is not his principal.
contract, and he is not
bound to take notice of
its non-performance
A guarantor is often A surety will not be
discharged by the mere discharged, either by the
indulgence of the mere indulgence of the
creditor to the principal, creditor to the principal,
and is usually not liable or by want of notice of

Page 397 of 511

U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

Guaranty Surety directly to the guarantor or surety; a consideration

unless notified of the the default of the moving to the principal will suffice.
default of the principal principal, no matter how
much he may be injured General Rule: A married woman who is a guarantor
thereby binds only her separate property [Art. 2049, CC]
A guarantor is the
A surety is the insurer of Exceptions:
insurer of the solvency
the debt, and he a. With her husband’s consent, bind the community
of the debtor and thus
obligates himself to pay or conjugal partnership property
binds himself to pay if
if the principal does not b. Without husband’s consent, in cases provided by
the principal is unable to
pay law, such as when the guaranty has redounded to
pay
the benefit of the family.

1. Nature and Extent of A guaranty need not be undertaken with the

Guaranty
General rule: Guaranty is gratuitous
Exception: When there is a stipulation to the contrary
[Art. 2048, CC]
Parties to a Guaranty
a. Creditor
b. Debtor of the Principal Obligation
c. Guarantor [Gomez-Somera]
Qualifications of a guarantor [Art. 2056]
a. He possesses integrity;
b. He has capacity to bind himself;
c. He has sufficient property to answer for the
obligation which he guarantees.
General rule: Creditor has the right to demand another
guarantor with the qualifications in Art. 2056 if
previous guarantor has:
a. Been convicted in first instance of a crime
involving dishonesty; or
b. Become insolvent
Exception: Creditor has no right to demand a
replacement guarantor if he himself required and
stipulated that the specified person should be the
guarantor.
On the cause of a guaranty contract
A guarantor or surety is bound by the same
consideration that makes the contract effective
between the principal parties thereto. [Severino v.
Severino, et al., G.R. No. 34642 (1931)]
Guaranty or surety agreement is regarded valid despite
the absence of any direct consideration received by the
guarantor or surety, such consideration need not pass
knowledge of the debtor [Art. 2050, CC]
Guaranty is unilateral. It exists for the benefit of the
creditor and not for the benefit of the principal debtor
Creditor has every right to take all possible measures
to secure payment of his credit—guaranty can be
constituted even against the will of the principal debtor
However, as regards payment made by a third
person—
a. If payment is without the knowledge or against the
will of the debtor—
1. Guarantor can recover only insofar as the
payment has been beneficial to the debtor
[Art. 1236, CC]
2. Guarantor cannot compel the creditor to
subrogate him in his rights [Art. 1237, CC]
b. If payment is with knowledge or consent of the
debtor: Subrogated to all the rights which the
creditor had against the debtor
The guaranty must be founded on a valid
principal obligation [Art. 2052 (1), CC]
Guaranty is an accessory contract: It is an
indispensable condition for its existence that there
must be a principal obligation. Hence, if the principal
obligation is void, it is also void.
A guaranty may secure the performance of a
voidable, unenforceable, and natural obligation
[Art. 2052(2), CC]
A guaranty may secure the performance of a:
a. Voidable contract – such contract is binding,
unless it is annulled by a proper court action
b. Unenforceable contract – because such contract is
not void
c. Natural obligation – the creditor may proceed
against the guarantor although he has no right of
action against the principal debtor for the reason
that the latter’s obligation is not civilly

Page 398 of 511

U.P. LAW BOC CREDIT TRANSACTIONS
enforceable. When the debtor himself offers a
guaranty for his natural obligation, he impliedly
recognizes his liability, thereby transforming the
obligation from a natural into a civil one.
A guaranty may secure a future debt [Art. 2053, CC]
Continuing Guaranty
a. Not limited to a single transaction but which
contemplates a future course of dealings, covering
a series of transactions generally for an indefinite
time or until revoked.
b. It is prospective in its operation and is generally
intended to provide security with respect to future
transactions.
c. Future debts, even if the amount is not yet known,
may be guaranteed but there can be no claim
against the guarantor until the amount of the debt
is ascertained or fixed and demandable.
Rationale: A contract of guaranty is subsidiary
a. To secure the payment of a loan at maturity –
surety binds himself to guarantee the punctual
payment of a loan at maturity and all other
obligations of indebtedness which may become
due or owing to the principal by the borrower.
b. To secure payment of any debt to be subsequently
incurred – a guaranty shall be construed as
continuing when by the terms thereof it is evident
that the object is to give a standing credit to the
principal debtor to be used from time to time
either indefinitely or until a certain period,
especially if the right to recall the guaranty is
expressly reserved.
c. To secure existing unliquidated debts – refers to
debts existing at the time of the constitution of the
guaranty but the amount thereof is unknown and
not to debts not yet incurred and existing at that
time.
d. The surety agreement itself is valid and binding
even before the principal obligation intended to
be secured thereby is born; for example, those
securing obligations subject to a condition
precedent are valid and binding before the
occurrence of the condition precedent.
A guaranty may secure the performance of a
conditional obligation [Art. 2053, CC]
a. Principal obligation subject to a suspensive
condition – the guarantor is liable only after the
fulfillment of the condition.
b. Principal obligation subject to a resolutory
condition – the happening of the condition
extinguishes both the principal obligation and the
guaranty
Page 399 of 511
CIVIL LAW
A guarantor’s liability cannot exceed the principal
obligation [Art. 2054, CC]
General rule: Guaranty is a subsidiary and accessory
contract – Guarantor cannot bind himself for more
than the principal debtor and even if he does, his
liability shall be reduced to the limits of that of the
debtor. But the guarantor may bind himself for less
than that of the principal.
Exceptions:
a. Interest, judicial costs, and attorney’s fees as part
of damages may be recovered (under the term
accessories in Art. 2055 as held in Diño v. CA, G.R.
No. 89775, 1992) – creditors suing on a suretyship
bond may recover from the surety as part of their
damages, interest at the legal rate, judicial costs,
and attorney’s fees when appropriate, even
without stipulation and even if the surety would
thereby become liable to pay more than the total
amount stipulated in the bond.
Interest runs from:
1. Filing of the complaint (upon judicial
demand); or
2. The time demand was made upon the surety
until the principal obligation is fully paid
(upon extra-judicial demand)
Rationale: Surety is made to pay, not by reason of
the contract, but by reason of the debtor’s failure
to pay when demanded and for having compelled
the creditor to resort to the courts to obtain
payment.
b. Penalty may be provided – a surety may be held
liable for the penalty provided for in a bond for
violation of the condition therein.
Principal’s liability may exceed guarantor’s
obligations [Art. 2054, CC]
The amount specified in a surety bond as the surety’s
obligation does not limit the extent of the damages that
may be recovered from the principal, the latter’s
liability being governed by the obligations he assumed
under his contract
The existence of a guaranty is not presumed [Art.
2055, CC]
Guaranty requires the expression of consent on the
part of the guarantor to be bound. It cannot be
presumed because of the existence of a contract or
principal obligation.
U.P. LAW BOC CREDIT TRANSACTIONS
Rationale:
a. There be assurance that the guarantor had the true
intention to bind himself;
b. To make certain that on making it, the guarantor
proceeded with consciousness of what he was
doing.
Contract of guaranty is covered by the Statute of
Frauds [See Art. 1403 (2) (b), CC]
Guaranty must not only be expressed but must so be
reduced into writing. Hence, it shall be unenforceable
by action, unless the same or some note or
memorandum thereof be in writing, and subscribed by
the party charged, or by his agent; evidence, therefore,
of the agreement cannot be received without the
writing, or a secondary evidence of its contents.
However, it need not appear in a public document.
2. Nature and Extent of
Suretyship
Nature of Liability
Although contractual (limited by the terms of the
contract) and accessory (arises only if principal debtor
is held liable), a surety’s liability is direct, primary,
and absolute.
General Rules
a. In the absence of collusion, the surety is bound by
a judgment against the principal even though he
was not a party to the proceedings;
b. The creditor may sue, separately or together, the
principal debtor and the surety;
c. A demand or notice of default is not required to
fix the surety’s liability
Exception: Where required by the provisions of the
contract of suretyship
d. A surety bond is void where there is no principal
debtor because such an undertaking presupposes
that the obligation is to be enforceable against
someone else besides the surety, and the latter can
always claim that it was never his intention to be
the sole person obligated thereby.
Note: A surety is NOT entitled to the benefit of
excussion, but has the right of indemnification
and subrogation [Art. 2066 and 2067, CC].
Page 400 of 511
CIVIL LAW
The undertaking is to the creditor, not the debtor
The surety makes no covenant or agreement with the
principal debtor that it will fulfill the obligation
guaranteed for the benefit of the principal debtor. The
surety’s undertaking is that the principal debtor shall
fulfill his obligation and that the surety shall be relieved
of liability when the obligation secured is performed;
unless otherwise expressly provided.
The stipulation in the indemnity agreement allowing
the surety to recover even before it paid the creditor is
enforceable. In accordance therewith, the surety may
demand from the indemnitors even before paying the
creditors. [Mercantile Insurance Company v. Ysmael, G.R.
No. L-43862 (1989)]
Note: Prior demand by the creditor upon the principal
is not required. The surety is not exonerated by neglect
of the creditor to sue the principal.
Strictissimi juris rule, which states that a surety
agreement cannot be extended by implication beyond
the terms of the contract, is applicable ONLY to
accommodation surety and not applicable to
compensated sureties [Pastoral v. Mutual Security
Insurance Corp., G.R. No. L-20469 (1965)].
Rationale: An accommodation surety acts without
motive of pecuniary gain and hence, should be
protected against unjust pecuniary impoverishment by
imposing on the principal, duties akin to those of a
fiduciary.
3. Effect of Guaranty
a. Effects of Guaranty between the
Guarantor and the Creditor
The guarantor has the right to benefit from
excussion/exhaustion [Art. 2058, CC]
The guarantor cannot be compelled to pay the creditor
unless the latter has:
1. Exhausted all of the property of the debtor; and
2. Resorted to all the legal remedies against the
debtor.
Exceptions to benefit of excussion
1. As provided in Art. 2059, CC: (ESAP)
a. If the guarantor has Expressly renounced it.
b. If he has bound himself Solidarily with the
debtor - here, the liability assumed is that of a
surety.
c. In case of Insolvency of the debtor
U.P. LAW BOC CREDIT TRANSACTIONS
d. When the debtor has Absconded, or cannot
be sued within the Philippines
Exception: When the debtor has left a
manager or representative
e. If it may be Presumed that an execution on
the property of the principal debtor would
not result in the satisfaction of the obligation
2. If he does not comply with Art. 2060, CC:
In order that the guarantor may make use of the
benefit of excussion, he must:
a. Set it up against the creditor upon the latter’s
demand for payment from him;
b. Point out to the creditor:
• Available property of the debtor – the
guarantor should facilitate the realization
of the excussion since he is the most
interested in its benefit.
• Within the Philippine territory –
excussion of property located abroad
would be a lengthy and extremely
difficult proceeding and would not
conform with the purpose of the
guaranty to provide the creditor with the
means of obtaining the fulfillment of the
obligation.
• Sufficient to cover the amount of the
debt
3. If he is a judicial bondsman and sub- surety [Art.
2084, CC]
4. Where a pledge or mortgage has been given by
him as a special security [Southern Motors, Inc. v.
Barbosa, G.R. No. L-9306 (1956)]
5. If he fails to interpose it as a defense before
judgment is rendered against him.
The creditor has the right to secure a judgment
against the guarantor prior to the excussion
General rule: An ordinary personal guarantor (NOT a
pledgor/mortgagor), may demand exhaustion of all
the property of the debtor before he can be compelled
to pay.
Exception: The creditor may, prior thereto, secure a
judgment against the guarantor, who shall be entitled,
however, to a deferment of the execution of said
judgment against him, until after the properties of the
principal debtor shall have been exhausted, to satisfy
the latter’s obligation. [Tupaz v. CA, G.R. No. 145578
(2005)]
Page 401 of 511
CIVIL LAW
The creditor has the duty to make prior demand
for payment from the guarantor [Art. 2060, CC]
The demand is to be made only after judgment on the
debt.
The guarantor has the duty to set up the benefit of
excussion [Art. 2060, CC]
As soon as he is required to pay, guarantor must also
point out to the creditor available property (not in
litigation or encumbered) of the debtor within the
Philippines.
The creditor has the duty to resort to all legal
remedies [Arts. 2058 and 2061, CC]
After the guarantor has fulfilled the conditions
required for making use of the benefit of excussion, it
becomes the duty of the creditor to:
1. Exhaust all the property of the debtor pointed out
by the guarantor;
2. If he fails to do so, he shall suffer the loss for the
insolvency of the debtor, but only to the extent of
the value of the said property
The creditor has the duty to notify the guarantor
in the action against the debtor [Art. 2062, CC]
Notice to the guarantor is mandatory in the action
against the principal debtor. The guarantor, however,
is not duty bound to appear in the case, and his non-
appearance shall not constitute default, w/ its
consequential effects.
Rationale: To give the guarantor the opportunity to
allege and substantiate whatever defenses he may have
against the principal obligation, and chances to set up
such defenses as are afforded him by law
A compromise shall not prejudice a person not
party to it [Art. 2063, CC]
A compromise between creditor and principal debtor
benefits the guarantor but does not prejudice him.
A compromise between guarantor and the creditor
benefits but does not prejudice the principal debtor.
Co-guarantors are entitled to the benefit of
division [Art. 2065, CC]
General Rule: The benefit of division applies only when
there are several guarantors and one debtor for a single
debt. A co-guarantor is liable only to the extent of his
share in the obligation as divided among all the co-
guarantors.
Exception:
1. Liability will be solidary if it has been expressly
U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

stipulated. The guarantor may proceed against the debtor

2. Also, the circumstances enumerated in Art. 2059, even before payment has been made [Art. 2071,
CC will preclude application of the benefit of CC]
division. General rule: Guarantor has no cause of action against
the debtor until after the former has paid the
b. Effects of Guaranty between the obligation.
Debtor and the Guarantor Exceptions [Art. 2071, CC]: (SI-BETA)
1. When he is Sued for the payment;
The guarantor who pays has the right to be 2. In case of Insolvency of the principal debtor or if
subrogated to the rights of the creditor [Art. 2067, he is in imminent danger of becoming insolvent.
CC] 3. When the debtor has Bound himself to relieve
A guarantor who pays the debt is entitled to every him from the guaranty within a specified period,
remedy which the creditor has against the principal and this period has expired;
debtor, to enforce every security and all means of 4. When the period for payment has Expired
payments; to stand in the place of the creditor not only 5. After the lapse of Ten years, when the principal
through the medium of the contract, but even by obligation has no fixed period for its maturity,
means of the securities entered into without the unless it be of such nature that it cannot be
knowledge of the surety; having the right to have those extinguished except within a period longer than 10
securities transferred to him though there was no years;
stipulation for it, and to avail himself of all securities 6. If there are reasonable grounds to fear that the
against the debtor. principal debtor intends to Abscond;
However, if a guarantor has compromised with the When any of these grounds for exceptions are
creditor for the payment of the obligation, then the present, then the guarantor may (1) obtain release
guarantor cannot demand more than what he has really from the guaranty, or (2) demand a security that
paid. shall protect him from any proceedings by the
creditor and from the danger of insolvency of the
The guarantor has the duty to notify the debtor debtor.
before paying the creditor [Art. 2068; see also Arts.
1236 and 1237, CC] Rationale: To enable the guarantor to take
Should payment be made without notification or measures for the protection of his interest in view
against the debtor’s will, and supposing the debtor has of the probability that he would be called upon to
already made a prior payment, the debtor would be pay the debt. As such, he may, in the alternative,
justified in setting up the defense that the obligation obtain release from the guaranty; or demand
has already been extinguished by the time the security that shall protect him from any
guarantor made the payment. The guarantor will then proceeding by the creditor, and against the
lose the right of reimbursement and consequently the insolvency of the debtor.
right of subrogation.
Arts. 2066, CC vs. Art. 2071, CC
The guarantor cannot demand reimbursement for Art. 2066 Art. 2071
payment made by him before the obligation has
become due [Art. 2069, CC] Provides for the
Provides for the
General rule: Since a contract of guaranty is only protection before he
enforcement of the
subsidiary, the guarantor cannot be liable for the has paid but after he
guaranty/surety against
obligation before the period on which the debtor’s has become liable, but
the debtor after he has
liability will accrue. Any payment made by the before payment of the
paid the debt
guarantor before the obligation is due cannot be debt
indemnified by the debtor. The guarantor can only Gives a right of action Protective remedy
demand reimbursement upon expiration of the period. after payment before payment
Substantive Right Preliminary remedy
Exception: Prior consent or subsequent ratification by
the debtor

Page 402 of 511

U.P. LAW BOC CREDIT TRANSACTIONS
c. Effects of Guaranty as Between
Co-Guarantors
When the Debtor has two or more Guarantors for
the Same Debt
1. The one who pays may demand from each of the
others the share proportionally owing to him
(Right to Reimbursement) [Art. 2073, CC]
2. The obligation to answer for the same is divided
among all the guarantors, such that the creditor
cannot claim the entire amount from a single co-
guarantor (Benefit of Division) [Art. 2065]
However, the benefit of division will cease if any
of the exceptions to the benefit of excussion are
present [Gomez-Somera, Art. 2059, CC]
3. If any of the guarantors is insolvent, his share shall
be borne by the others, including the payor, in the
same proportion [Art. 2073, CC]
Requisites for the applicability of Art. 2073, CC
1. There are two or more guarantors of the same
debtor for the same debt
2. Payment has been made by one guarantor;
3. The payment was made because
a. Of the insolvency of the debtor, or
b. By judicial demand
4. The paying guarantor seeks to be indemnified only
to the extent of his proportionate share in the total
obligation.
For purposes of proportionate reimbursement, the
other guarantors may interpose such defenses against
the paying guarantor as are available to the debtor
against the creditor, except those that are personal to
the debtor [Art. 2074, CC]
4. Extinguishment of Guaranty
Once the obligation of the debtor is extinguished in
any manner provided in the CC, the obligation of the
guarantor is also extinguished [Art. 2076, CC].
However, there may be instances when, after the
extinguishment of the guarantor’s obligation (as in the
case of a release from the guaranty), the obligation of
the debtor still subsists.
Although the guarantor generally has to make payment
in money, any other thing of value, if accepted by the
creditor, is valid payment and therefore releases the
guarantor (dacion en pago) [Art. 2077, CC].
If one guarantor is released without the consent of the
Page 403 of 511
CIVIL LAW
others, the release would benefit the co-guarantors to
the extent of the proportionate share of the guarantor
released [Art. 2078, CC].
A guarantor is released if the creditor, without the
guarantor’s consent, extends the time within which the
debtor may perform his obligation [Art. 2079, CC].
This is to protect the interest of the guarantor should
the debtor be insolvent during the period of extension
and deprive the guarantor of his right to
reimbursement.
The guarantors are released if by some act of the
creditor they cannot be subrogated to the rights,
mortgages and preferences of the latter. [Art. 2080,
CC]
In order to constitute an extension discharging the
surety, it should appear that the extension was for:
a. a definite period,
b. pursuant to an enforceable agreement between the
principal and the creditor, and
c. that it was made without the consent of the surety
or with a reservation of rights with respect to him.
[Filipinas Textile Mills v. CA, G.R. No. 119800
(2003)]
5. Legal and Judicial Bonds
Bond – an undertaking that is sufficiently secured, and
not cash or currency.
Bondsman – a surety offered in virtue of a provision
of law or a judicial order.
Qualifications of personal bondsman [Art. 2082 in
relation to Art. 2056, CC]
a. He possesses integrity;
b. He has capacity to bind himself;
c. He has sufficient property to answer for the
obligation which he guarantees.
Pledge or mortgage in lieu of bond [Art. 2083, CC]
Guaranty or suretyship is a personal security.
Pledge or mortgage is a property or real security. If the
person required to give a legal or judicial bond should
not be able to do so, a pledge or mortgage sufficient to
cover the obligation shall be admitted in lieu thereof.
Bondsman not entitled to excussion [Art. 2084,
CC]
A judicial bondsman and the sub-surety are not
entitled to the benefit of excussion.
U.P. LAW BOC
Reason: They are not mere guarantors, but sureties
whose liability is primary and solidary.
Effect of negligence of creditor
Mere negligence on the part of the creditor in
collecting from the debtor will not relieve the surety
from liability.
CREDIT TRANSACTIONS CIVIL LAW
D. Pledge
Pledge – is a contract constituted to secure the
fulfillment of a principal obligation where the thing
pledged, which may be a movable, or an incorporeal
right evidenced by a document, is placed in the
possession of the creditor or a third person by
common agreement. [Art. 2093 in relation to Art.
2085, CC]
Essential Requisites:
1. Constituted to secure the fulfillment of a principal
obligation
2. The pledgor must be the absolute owner of the
thing pledged
3. The pledgor must have the free disposal of the
property, or is legally authorized for the purpose.
[Art. 2085, CC]
1. Characteristics
a. Real – perfected upon the delivery of the thing
pledged [Art. 1316, CC]
b. Accessory – cannot exist independently (i.e.,
without a principal obligation)
c. Unilateral – obligation on the part of the creditor
to return the thing pledged upon the fulfillment of
the principal obligation
d. Subsidiary– obligation incurred does not arise
until the fulfillment of the secured principal
obligation
2. Kinds
a. Voluntary or Conventional – created by
agreement of the parties.
b. Legal – created by operation of law.
Legal Pledge / Pledge By Operation Of Law
[Arts. 2121-2122, CC] (LAMN)
a. Laborer’s Wages – These shall be a lien on the
goods manufactured or the work done. [Art. 1707,
CC]
b. Agent’s Lien - The agent may retain the things
which are the objects of agency until the principal
effects reimbursement and pays the indemnity.
[Art. 1914, CC]
c. Mechanic’s lien - He who has executed work
upon a movable has a right to retain it by way of
pledge until he is paid. [Art. 1731, CC]
d. Necessary expenses and useful expenses -
Possessors in good faith who have paid such
Page 404 of 511
U.P. LAW BOC CREDIT TRANSACTIONS
expenses may retain the thing until they are
reimbursed or are paid the increase in value which
the thing may have acquired by reason of the
useful expenses [Art. 546, CC]
Note:
a. In legal pledges, the remainder of the price of the
sale shall be delivered to the obligor. [Art. 2121,
CC]
b. Public auction of legal pledges may only be
executed after demand of the amount for which
the thing is retained. It shall take place within one
month after the demand, otherwise the pledgor
may demand the return of the thing pledged,
provided s/he is able to show that the creditor did
not cause the public sale without justifiable
grounds. [Art. 2122, CC]
3. Essential Requisites
Provisions Common to Pledge and Mortgage [Art.
2085, CC]
a. Constituted to secure the fulfillment of a principal
obligation.
b. Pledgor or mortgagor must be the absolute owner
of the thing pledged or mortgaged.
c. The persons constituting the pledge or mortgage
have the free disposal of their property, and in the
absence thereof, that they be legally authorized for
the purpose.
Note: Third persons who are not parties to the
principal obligation may secure the latter by
pledging or mortgaging their own property. [Art.
2085, CC]
d. Cannot exist without a valid obligation, but may
be constituted to guarantee the performance of a
voidable or unenforceable contract. [Art. 2052,
CC]
e. Debtor retains the ownership of the thing given as
a security.
f. When the principal obligation becomes due, the
thing pledged or mortgaged may be alienated for
the payment to the creditor. [Art. 2087, CC]
Provisions Applicable Only to Pledge
a. Transfer of possession to the creditor or to third
person by common agreement is essential [Art.
Page 405 of 511
CIVIL LAW
2093, CC].
b. All movables within the commerce of man may be
pledged as long as they are susceptible of
possession [Art. 2094, CC].
c. Incorporeal rights may be pledged. The
instruments representing the pledged rights shall
be delivered to the creditor; if negotiable, must be
indorsed [Art. 2095, CC].
d. Pledge shall take effect against 3rd persons only if
the following appear in a public instrument:
1. Description of the thing pledged.
2. Date of the pledge [Art. 2096, CC].
e. The thing pledged may be alienated by the pledgor
or owner only with the consent of the pledgee.
Ownership of the thing pledged is transmitted to
the vendee or transferee as soon as the pledgee
consents to the alienation, but the latter shall
continue to have possession [Art. 2097, CC].
f. Creditor has the right to retain the thing in his
possession or in that of a third person to whom it
has been delivered, until the debt is paid [Art.
2098].
g. Special laws apply to pawnshops and
establishments engaged in making loans secured
by pledges. Provisions of the CC shall apply
subsidiarily to them. [Art. 2123, CC]
In case of doubt as to whether a transaction is a pledge
or a dation in payment, the presumption is in favor of
pledge, the latter being the lesser transmission of rights
and interests. [Manila Banking Corp. v. Teodoro, G.R. No.
53955 (1989)]
4. Requisites for Perfection
a. For the pledge to take effect between the parties,
the thing pledged is placed in the possession of the
creditor or a third person [Art. 2093, CC]
b. For the pledge to take effect as against third
persons, a description of the thing pledged and the
date of the pledge should appear in a public
instrument [Art. 2096, CC]
5. Obligations of Pledgee
a. The pledgee cannot deposit the thing pledged with
a 3rd person, unless there is a contrary stipulation
U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

[Art. 2100 (1), CC].
b. Pledgee is responsible for the acts of his agents or
employees with respect to the thing pledged [Art.
2100 (2), CC].
c. General Rule: Has no right to use the thing or to
appropriate its fruits without authority from the
owner. If he does so, or misuses it in any way, the
owner may ask that the thing be judicially or
extrajudicially deposited. [Art. 2104, CC]
Exception: When the preservation of the thing
pledged requires its use, it must be used by the
creditor only for that purpose.
d. May cause the public sale of the thing pledged if,
without fault on his part, there is danger of
destruction, impairment or diminution in value of
the thing. The proceeds of the auction shall be a
security for the principal obligation [Art. 2108,
CC].
6. Rights of Pledgor
a. Takes responsibility for the flaws of the thing
pledged [Art. 2101 in relation to Art. 1951, CC].
b. Cannot ask for the return of the thing against the
will of the creditor, unless and until he has paid
the debt and its interest, with expenses in a proper
case [Art. 2105, CC].
c. Subject to the right of the pledgee under Article
2108, pledgor is allowed to substitute the thing
which is in danger of destruction or impairment
without any fault on the part of the pledgee with
another thing of the same kind and quality [Art.
2107, CC].
d. May require that the thing be deposited with a 3rd
person, if through the negligence or willful act of
the pledgee the thing is in danger of being lost or
impaired [Art. 2106, CC].
owner of the thing pledged during the pendency of the
obligation, it stands to reason that in case of loss of the
property, the loss should be borne by the pledgor.
[PNB v. Atendido, G.R. No. L-6342 (1954)]
7. Foreclosure
a. Requirements in Sale of the
Thing Pledged by a Creditor, if
Credit is not Paid on Time [Art.
2112, CC]
1. Debt is due and unpaid.
2. Sale must be at a public auction.
3. Notice to the pledgor and owner, stating the
amount due.
4. Sale must be made with the intervention of a
notary public.
5. If at the first auction the thing is not sold, a second
one with the same formalities shall be held.
6. If at the second auction, there is no sale either, the
creditor may appropriate the thing pledged but he
shall give an acquittance (release) for his entire
claim.
b. Effects of the Sale of the Thing
Pledged [Art. 2115, CC]
1. Extinguishes the principal obligation, whether the
proceeds of the sale is more or less than the
amount due.
2. General Rule: If the price of sale is more than
amount due, the debtor is not entitled to the
excess
Exception: (1) Unless the contrary is provided. (2)
Legal pledge
3. If the price of sale is less, the creditor is not
entitled to recover the deficiency. A contrary
stipulation is void.

The pledgee can temporarily entrust the physical c. Pledge as Distinguished from
possession of the chattels pledged to the pledgor
without invalidating the pledge. The pledgor is Chattel Mortgage [Arts. 2140 and
regarded as holding the pledged property merely as 1484, CC]
trustee for the pledgee. The type of delivery will Pledge Chattel Mortgage
depend upon the nature and the peculiar Delivery of Personal Property
circumstances of each case. [Yuliongsiu v. PNB, G.R. Delivery is required for
No. L-19227 (1968)] Not required
validity
Registration in the Chattel Mortgage Register
A pledgee cannot become the owner of, nor Not necessary; Necessary for validity of
appropriate to himself, the thing given in pledge. If by Public document is the CM against third
the contract of pledge the pledgor continues to be the

Page 406 of 511

U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

Pledge Chattel Mortgage a. When the price of a sale with right to repurchase
enough to bind third persons is unusually inadequate;
persons b. When the vendor remains in possession as lessee
Right to Excess of Proceeds of Sale or otherwise;
The excess goes to the c. When upon or after the expiration of the right to
pledgee/creditor, repurchase another instrument extending the
unless otherwise period of redemption or granting a new period is
The excess goes to the executed;
stipulated
debtor/ mortgagor d. When the purchaser retains for himself a part of
Note: In legal pledge,
the excess goes to the the purchase price;
debtor [Art. 2121, CC] e. When the vendor binds himself to pay the taxes
Right to Recover Deficiency on the thing sold;
Creditor/ mortgagee is f. In any other case where it may be fairly inferred
not entitled to recover Creditor/ mortgagee can that the real intention of the parties is that the
any deficiency after the recover from the debtor/ transaction shall secure the payment of a debt or
property is sold, mortgagor, except if the performance of any other obligation [Art.
notwithstanding covered by Recto Law 1602, CC]
contrary stipulation

The provisions of the CC on pledge, insofar as they are

not in conflict with the Chattel Mortgage Law shall be
applicable to chattel mortgages [Art. 2141, CC]

8. Pactum Commissorium
Elements:
a. There is property pledged by way of security for
the payment of the principal obligation
b. There is a stipulation for automatic appropriation
by the creditor in case of non-payment of the
principal obligation within the stipulated period

Effect on Pledge
The nullity of the pactum commissorium does not affect
the validity of the contract of pledge. The creditor may
recover the credit from the proceeds of a foreclosure
sale effected in accordance with law [Gomez-Somera].

9. Equitable Mortgage
It is a contract that reveals the intention of the parties
to charge property as security for a debt, but contains
nothing impossible or contrary to law [Gomez-
Somera].

Essential Requisites
a. Parties entered into a contract denominated as a
contract of sale
b. The true intention is to secure an existing debt by
way of mortgage

Presumption that there is an equitable mortgage:

Page 407 of 511

U.P. LAW BOC CREDIT TRANSACTIONS
E. Chattel Mortgage
Chattel mortgage – a contract whereby personal
property is recorded in the Chattel Mortgage Register
as a security for the performance of an obligation. [Art.
2140, CC] The CC has repealed the definition in Act
1508 or the Chattel Mortgage Law. [Gomez-Somera]
1. Form of Chattel Mortgage
The Chattel Mortgage Law prescribes a specific format
for a chattel mortgage. It must be written and
subscribed to by the parties in the presence of 2
witnesses. The law also requires it to contain specific
terms.
a. Required Recording
General rule: the chattel mortgage shall not be valid
against any person unless the mortgage is recorded in
the office of the register of deeds
Exception: it shall be valid between the parties
Place of Recording
The mortgage must be recorded in the office of the
register of deeds:
1. If the mortgagor resides in the Philippines at
the time of making the mortgage - of the
province in which the mortgagor resides at the
time of making the same.
2. If the mortgagor resides outside the
Philippines – of the province in which the
property is situated
3. If the province in which the property is situated
and the province of the mortgagor’s place of
residence are different – it shall be recorded in
both provinces. [Sec. 5, Chattel Mortgage Law]
b. Contents of an Affidavit of Good
Faith
1. That chattel mortgage is made solely for the
purpose of securing the obligation specified
therein
2. That such principal obligation is just and valid,
not entered into for the purpose of fraud
Page 408 of 511
CIVIL LAW
c. Obligations Secured
A chattel mortgage cannot secure after-incurred
obligations or future debts. [Gomez-Somera]
An increase or an extension of the chattel mortgage
obligation becomes a new chattel mortgage in itself,
and will take effect only from the date the same are
made and not from the date of the original chattel
mortgage [Gomez-Somera]
2. Objects of Chattel Mortgage
General Rule: All personal property shall be subject to
mortgage, agreeably to the provisions of this Act, and
a mortgage executed in pursuance thereof shall be
termed chattel mortgage. [Sec. 2, Chattel Mortgage
Law]
Exception: Jurisprudence provides that
immovable/real properties may be the object of a
chattel mortgage when
1. parties validly agree/consent to treat them as
movable/personal properties, and
2. no third persons are prejudiced by such an
agreement [Makati Leasing and Finance Corp v.
Wearever Textile Mills, G.R.No. L-58469 (1983)
citing Tumalad v. Vicencio, G.R. No. L-30173
(1971)]
a. Reasonable Description Rule
The mortgaged property must be so described in the
document such as to enable the parties or any other
person, after reasonable inquiry and investigation,
to identify the mortgaged property. [Sec. 7, Chattel
Mortgage Law]
b. After Acquired Properties
General rule: after acquired properties cannot be
described in the chattel mortgage, so it cannot be
covered by the same
Exception: stocks in retail stores [Gomez-Somera citing
Torres v. Limjap, G.R. No. 34385 (1931)]
U.P. LAW BOC CREDIT TRANSACTIONS
3. Mortgagor’s Right to
Alienate the Collateral
The mortgagor must have the written consent of the
mortgagee to sell or pledge personal property already
pledged. [Art. 319, RPC]
4. Foreclosure
a. Equity in Redemption
A mortgagor in default may prevent the foreclosure
sale of the mortgaged property by paying the amount
due on the mortgage and the reasonable costs and
expenses before the sale. [Sec. 13, Chattel Mortgage
Law]
b. No Right of Redemption
There is no statute that vests the right of redemption
over personal property. [Gomez-Somera]
c. Right to Possession
A mortgagee, unlike a pledgee, is generally not in
possession of the collateral unless and until the
principal debtor defaults and the mortgagee seeks to
foreclose. [Gomez-Somera]
Rationale: right of possession of the collateral is
conditioned upon fact of actual default of debtor, and
this may be subject to controversy, hence foreclosure
cannot be the first recourse since the sheriff has no
duty or authority
d. Right to Surplus or Deficiency
Order Of Application Of Proceeds:
1. Costs and expenses of keeping and sale
2. Obligation secured
3. Subsequent mortgagees
SURPLUS
The surplus shall be paid to the mortgagor.
DEFICIENCY
Although the law is silent on the matter, there is a
corollary obligation for the mortgagor to pay the
deficiency. [Gomez-Somera citing PAMECA Wood
Page 409 of 511
CIVIL LAW
Treatment Plant, Inc. v. Court of Appeals, G.R. No. 106435
(1999)]
e. Procedure
1. File with the executive judge through the clerk of
court (but it is the sheriff who conducts the sale)
2. Notice requirement: 10 days before the sale (post
in 2 or more public places in the municipality
where the collateral is located or where the
mortgagor resides)
3. Second notice requirement: 10 days before sale,
sheriff must notify: a) mortgagor; b) person
holding under him (assignee of mortgagor); c)
persons holding subsequent mortgages personally
or by mail
4. Equity of redemption or grace period: Wait for 30
days from time of default
5. Public sale is conducted (where property
situated/mortgagor resides), then sheriff should
make a return
6. Payment of the proceeds (in order)
a. Costs and expenses of sale
b. Payment of demand/obligation secured by
mortgage (principal obligation)
c. Residue shall be paid to persons holding
subsequent mortgages
d. Balance: mortgagor/person holding under
him
7. Winning bidder acquires ownership
U.P. LAW BOC CREDIT TRANSACTIONS
F. Real Estate Mortgage
Real mortgage – a contract whereby the debtor
secures to the creditor the fulfillment of a principal
obligation (real security transaction), immediately
making immovable property or real rights answerable
to the principal obligation in case it is not complied
with at the time stipulated.
Requisites:
1. Must be constituted to secure the fulfillment of a
principal obligation;
2. Must be recorded in the Registry of Property;
3. Must be subjected to the condition that when the
principal obligation becomes due, the collateral
may be alienated for payment to the creditor;
4. Mortgagor must be the absolute owner of the
immovable or alienable real rights;
5. Mortgagor must have free disposal of the property
or is legally authorized for the purpose.
6. [Art. 2085, 2087, 2125]
1. Objects of Real Mortgage
[Art. 2124, CC]
a. Immovables
b. Alienable real rights over immovables.
Future property CANNOT be an object of mortgage;
however:
a. A stipulation subjecting to the mortgage
improvements which the mortgagor may
subsequently acquire, install or use in connection
with real property already mortgaged belonging to
the mortgagor is valid.
b. A stipulation in a registered (or recorded) real
estate mortgage that all property taken in
exchange or replacement by the mortgagor (after-
acquired property) shall become subject to the
mortgage is binding. [Gomez-Somera]
a. Obligations 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)]
Exception: A real estate mortgage may contain a dragnet
or blanket mortgage clause which subsumes all debts,
whether past or future. [Philippine Bank of
Communications v. CA, G.R. No. 118552 (1996)]
Page 410 of 511
CIVIL LAW
Note: This clause will be strictly construed and its
inclusion makes the mortgage a continuing security,
not to be discharged by repayment of the amount
named but by payment of the full amount of the
principal obligation. [Gomez-Somera]
Reliance on Security Test: when the mortgagor takes
another loan for which another security was given, it
could not be inferred that such loan was made in
reliance solely on the original security with the dragnet
clause, but rather, on the new security given [Prudential
Bank v. Alviar, G.R. No. 150197 (2005)]
2. Characteristics
a. Characteristics of the Collateral
As a general rule, the mortgagor retains possession of
the property. He may deliver said property to the
mortgagee without altering the nature of the contract
of mortgage.
Mortgage creates an encumbrance over the property,
but ownership of the property is not parted with. It
merely restricts the mortgagor’s jus disponendi over the
property. The mortgagor may still sell the property,
and any stipulation to the contrary (pactum de non
alienando) is void [Art. 2130, CC]
However, a stipulation prohibiting the mortgagor from
entering into second or subsequent mortgages is valid
since there is no law prohibiting it. [Litonjua et al. v.
L&R Corporation, et al., G.R. No. 130722 (1999), citing
Philippine Industrial Co. v. El Hogar & Vallejo, G.R. No.
L-20482 (1923)]
b. Characteristics of the Mortgage
A registered real estate mortgage is a right in rem, a lien
that a creditor has on the property; therefore, it is
inseparable from the collateral and until discharged, it
follows the property. [Gomez-Somera]
A real estate mortgage that is unregistered binds the
parties to the contract and it only gives the mortgagee
the right to demand the execution and recording of the
mortgage. To bind third parties, a real estate mortgage
must be recorded in the Registry of Property.
It is not an essential requisite that the principal of the
credit bears interest, or that the interest as
compensation for the use of the principal and the
U.P. LAW BOC CREDIT TRANSACTIONS
enjoyment of its fruits be in the form of a certain
percentage thereof.
Mortgage extends to the natural accessions, to the
improvements of growing fruits and the rents or
income not yet received when the obligation becomes
due, including indemnity from insurance, and/or
amount received from expropriation for public use
[Art. 2127, CC]
1. Applies only when the accessions and accessories
subsequently introduced belongs to the
mortgagor.
2. To exclude them, there must be an express
stipulation, or the fruits must be collected before
the obligation becomes due.
3. Third persons who introduce improvements upon
the mortgaged property may remove them at any
time
- Arts. 1365, 1450, 1454, 1602, 1603, 1604 and
The right to alienate the real estate mortgage credit is
the right of the mortgagee to assign its rights under the
principal obligation secured. Although the mortgagee
does not become the owner of the collateral, it owns
the real estate mortgage credit and may alienate the
same to a third person. [Art. 2128, CC; Gomez-
Somera]
Pactum de non alienando (Sp. pacto de non alienando) is
prohibited by Art. 2130
1. Stipulations forbidding the mortgagor from
selling the collateral
2. Stipulations forbidding the mortgagor from
selling the collateral without the consent of the
mortgagee
Alienation or assignment of mortgage credit is valid
even if it is not registered.
3. Kinds
a. Voluntary – constituted by the will of the owner
of the property on which it is created
b. Legal – required by law to be executed in favor of
certain persons:
1. Persons in whose favor the law establishes a
mortgage have no other right than to demand
the execution and recording of the document
in which the mortgage is formalized [Art.
2125, CC]
2. The bondsman who is to be offered in virtue
of a provision of law or of a judicial order
shall have the qualifications prescribed in Art
2056 [integrity, capacity to bind himself, and
Page 411 of 511
CIVIL LAW
sufficient property to answer for the
obligation], and in other laws [Art. 2082, CC]
3. If the person bound to give a bond should not
be able to do so, a pledge or mortgage
considered sufficient to recover his obligation
shall be admitted in lieu thereof [Art. 2083,
CC]
c. Equitable – One which, although lacking the
proper formalities of a mortgage, shows the
intention of the parties to make the property a
security for the debt.
1. Lien created by equitable mortgage ought not
to be defeated by requiring compliance with
formalities necessary to the validity of
voluntary real estate mortgage. Ex.: Pacto de
retro
2. Provisions governing equitable mortgage:
1607.
4. Principle of Indivisibility of
Pledge/Mortgage [Arts. 2089
to 2090, CC]
A pledge or mortgage is indivisible, even though the
debt may be divided among the successors in interest
of the debtor or of the creditor. [Art. 2089]
Note: The principle of indivisibility presupposes several
heirs of the debtor or creditor and DOES NOT
APPLY in the absence of such a situation [Gomez-
Somera]
Indivisibility applies only as to pledgors/mortgagors
who are themselves debtors in the principal obligation,
and NOT to accommodation pledgors/ mortgagors.
A mortgage directly and immediately subjects the
property upon which it is imposed. It is indivisible
even though the debt may be divided, and such
indivisibility is likewise unaffected by the fact that the
debtors are not solidarily liable. [Dayrit v. CA, G.R. No.
L-29388 (1970)]
Where only a portion of the loan is released, the
mortgage becomes enforceable only as to the
proportionate value of the loan. [Central Bank v. CA,
G.R. No. L-45710 (1985)]
The question is whether or not the written instrument
in controversy was a mortgage or a conditional sale.
U.P. LAW BOC CREDIT TRANSACTIONS
The correct test, where it can be applied, is the
continued existence of a debt or liability between the
parties. If such exists, the conveyance may be held to
be merely a security for the debt or an indemnity
against the liability. [Reyes v. Sierra, G.R. No. L-28658
(1979), citing Cuyugan v. Santos, G.R. No. L-10265
(1916)]
Exception to the Principle of Indivisibility:
When several things are pledged or mortgaged,
each thing for a determinate portion of the debt, the
pledges or mortgage, are considered separate from
each other. But when the several things are given to
secure the same debt in its entirety, all of them are
liable for the debt, and the creditor does not have to
divide his action by distributing the debt among the
various things pledged or mortgaged. Even when only
a part of the debt remains unpaid, all the things are still
liable for such balance. [Art. 2089 CC; Tolentino]
5. Recording Required
The real estate mortgage must be recorded in the
Registry of Property in order to be validly constituted.
[Art. 2125, CC]
Note: The mortgage would still be binding between the
parties even if the instrument is not recorded. [Art.
2125, CC]
6. Foreclosure of Mortgage
Foreclosure – is the remedy available to the
mortgagee by which he subjects the mortgaged
property to the satisfaction of the obligation secured
by the mortgage by causing its alienation in accordance
with the procedures allowed by law.
In general, an action for foreclosure of a mortgage is
limited to the amount mentioned in the mortgage,
except when the mortgage contract intends to secure
future loans or advancements.
Mortgage may be used as a “continuing security”
which secures future advancements and is not
discharged by the repayment of the amount in the
mortgage.
Acceleration clause allowed
Acceleration clause, or the stipulation stating that on
the occasion of the mortgagor’s default, the whole sum
remaining unpaid automatically becomes due and
demandable, is ALLOWED.
Page 412 of 511
CIVIL LAW
Kinds of foreclosure
a. Judicial Foreclosure
b. Extrajudicial Foreclosure
Judicial Foreclosure vs. Extrajudicial Foreclosure
Judicial Extrajudicial
Court intervenes No court intervention
There is equity of There is right of
redemption – period redemption – period
starts from the finality of start from date of
the judgment until order registration of
of confirmation certificate of sale
Decisions are appealable Not appealable
Special power of
No need for a special
attorney in favor of the
power of attorney in the
mortgagee is required
contract of mortgage
in the contract
a. Judicial Foreclosure [Rule 68,
Rules of Court]
1. May be availed of by bringing an action in the
proper court which has jurisdiction over the area
wherein the real property involved or a portion
thereof is situated [Rule 68, Sec.1, Rules of Court]
2. If the court finds the complaint to be well-
founded, it shall order the mortgagor to pay the
amount due with interest and other charges within
a period of not less than 90 days nor more than
120 days from the entry of judgment [Rule 68,
Sec.2, ROC]
Note: The mortgagor may exercise the equity of
redemption during this period of grace in order to
extinguish the mortgage and retain ownership of
the collateral by paying the mortgage obligation.
[Top Rate International Services, Inc. v. IAC, G.R. Nos.
L-67496 and L-68257 (1986)]
It is this equity of redemption that is conferred on
the mortgagor’s successors-in-interest or on third
persons acquiring rights over the collateral from
the mortgage subsequent.
Although these subsequent or junior lien-holders
acquire the equity of redemption, this right is
strictly subordinate to the superior lien of the first
mortgagee. [Gomez-Somera]
3. If the mortgagor fails to pay within the at time
directed, the court, upon motion, shall order the
U.P. LAW BOC CREDIT TRANSACTIONS
property to be sold to the highest bidder at a
public auction. [Rule 68, Sec.2, ROC]
4. Upon confirmation of the sale by the court, also
upon motion, it shall operate to divest the rights
of all parties to the action and to vest their rights
to the purchaser subject to such rights of
redemption as may be allowed by law. [Rule 68,
Sec.3, ROC]
Note: A foreclosure sale is not complete until it is
confirmed. Thus, after the foreclosure sale but
before its confirmation, the court may grant the
judgment debtor or mortgagor the equity of
redemption.
5. Before the confirmation, the court retains control
of the proceedings; Secs. 31, 32, and 34 of Rule 39
on the execution of judgments apply [Rule 68, Sec.
8, ROC]
6. A certified copy of the final order of the court
confirming the sale shall be registered in the
registry of deeds
If no right of redemption exists: The certificate of
title in the name of the mortgagor shall be
cancelled, and a new one issued in the name of the
purchaser
If a right of redemption exists: The certificate of
sale and the order confirming the sale shall be
registered [Rule 68, Sec. 7, ROC]
7. The proceeds of the sale shall be applied to the
payment of the:
a. costs of the sale;
b. amount due the mortgagee;
c. claims of junior encumbrancers or persons
holding subsequent mortgages in the order of
their priority; and
d. the balance, if any shall be paid to the
mortgagor [Rule 68, Sec. 4, ROC]
8. Sheriff’s certificate is executed, acknowledged and
recorded to complete the foreclosure
Nature of judicial foreclosure proceedings
1. Quasi in rem action. Hence, jurisdiction may be
acquired through publication.
2. Foreclosure is only the result or incident of the
failure to pay debt.
3. Survives death of mortgagor.
Page 413 of 511
CIVIL LAW
b. Extrajudicial Foreclosure
A real estate mortgage may be extrajudicially
foreclosed only if there is a special power inserted or
attached to the document in which the real estate
mortgage appears and only in accordance with the
provisions of Act No. 3135. [Gomez-Somera]
Act No. 3135
1. Applies to mortgages where the authority to
foreclose is granted to the mortgagee.
2. Authority is not extinguished by death of
mortgagor or mortgagee. This is an agency
coupled with interest.
3. Public sale should be made after proper notice to
the public; otherwise, it is a jurisdictional defect
which could render the sale voidable.
General Rule: Statutory provisions governing
posting of notice must be strictly complied with
and even slight deviations will invalidate the
notice.
Exception: If the objectives are attained, immaterial
errors and mistakes may not affect the sufficiency
of the notice. [Metropolitan Bank and Trust Company
v. Wong, G.R. No. 120859 (2001) discussing Olizon
v. CA, G.R. No. 107075 (1994)]
4. Republication of the notice of sale is necessary for
the validity of the postponed extrajudicial sale
5. There is no need to notify the mortgagor, where
there is no contractual stipulation therefor.
Proper notice consists of:
a. posting notice in three public places and/or
b. publication in newspaper of general
circulation
Purpose of notice is to obtain the best bid for the
foreclosed property, and to inform the public of:
(1) the nature and condition of the collateral, and
(2) the time, place, and terms of the sale
6. The foreclosure sale shall be made at public
auction through sealed bids, within the province
in which the property to be sold is situated
7. Surplus proceeds of foreclosure sale belong to the
mortgagor.
8. The Clerk of Court shall issue and sign the
U.P. LAW BOC CREDIT TRANSACTIONS
Certificate of Sale
9. Debtor (who must be a natural person), his
successors in interest, or any junior encumbrancer
has the right to redeem the property sold within
1 year from and after the date of sale.
a. If the mortgagee is a bank, quasi-bank or
trust entity and the debtor is a juridical
person, then there is no right of redemption.
However, juridical mortgagors may redeem
the property before the registration of the
TCT to the buyer, which is similar to the
equity of redemption. The TCT must be
registered within three months after the
foreclosure. [General Banking Law, Art. III.
Sec. 47]
b. The mortgagor can only legally transfer the
right to redeem and the use of the property
during the period of redemption because
ownership of the collateral is retained by the
mortgagor until the expiration of such period.
10. During the redemption period, the purchaser may
petition the land registration court to give him
possession of the property by furnishing a bond
in an amount equivalent to the use of the property
for a period of 12 months. Upon approval of the
bond, the Court shall issue a Writ of Possession.
11. Remedy of party aggrieved by foreclosure is a
petition to set aside sale and the cancellation of
Writ of Possession. However, if the mortgagee is
a bank, the mortgagor is required to post a bond
equal to the value of the mortgagee’s claim.
12. If no redemption is made within one year from the
date of registration of the Certificate of Sale, the
purchaser is entitled to a conveyance and
possession of the property (Consolidation of
Ownership)
General Rule: Upon Consolidation of Ownership,
possession of the property shall be given to the
purchaser or last redemptioner as a matter of right
Exceptions:
a. A third party is actually holding the property
(Rule 39, Sec. 33)
b. The mortgagor filed a separate action to
invalidate the auction sale because of the
unusually low price paid therein (Cometa v
IAC)
c. The mortgagee failed to deliver the surplus
from the proceeds of the foreclosure sale
(Sulit v CA)
Page 414 of 511
CIVIL LAW
c. Nature of Power of Foreclosure
by Extrajudicial Sale
1. Conferred for mortgagee’s protection.
2. An ancillary stipulation.
3. A prerogative of the mortgagee.
Note:
1. Both should be distinguished from execution sale
governed by Rule 39, ROC.
2. Foreclosure retroacts to the date of registration of
mortgage.
3. A stipulation of upset price, or the minimum price
at which the property shall be sold to become
operative in the event of a foreclosure sale at
public auction, is null and void.
d. Right to Surplus or Deficiency
Right of the Mortgagor
The mortgagor is entitled to the surplus, if any, after
payment of the proceeds of the sale.
Right of the Mortgagee
1. Mortgagee is entitled to recover deficiency. This
extends to judicial foreclosure of mortgage arising
out of the settlement of estate, but NOT to
extrajudicial foreclosure arising out of the same.
(Heirs of Sps. Maglasang v Manila Banking Corp.)
2. If the deficiency is embodied in a judgment, it is
referred to as deficiency judgment.
3. Action for recovery of deficiency may be filed
even during redemption period.
4. Action to recover prescribes after 10 years from
the time the right of action accrues.
e. Effect of Inadequacy of Price in
Foreclosure Sale
1. Where there is right to redeem, inadequacy of
price is immaterial because the judgment debtor
may redeem the property.
Exception: Where the price is so inadequate as to
shock the conscience of the court, taking into
consideration the peculiar circumstances.
2. Property may be sold for less than its fair market
value, upon the theory that the lesser the price the
easier it is for the owner to redeem.
3. The value of the mortgaged property has no
bearing on the bid price at the public auction,
provided that the public auction was regularly and
U.P. LAW BOC CREDIT TRANSACTIONS
honestly conducted.
A suit for the recovery of the deficiency after the
foreclosure of a mortgage is in the nature of a
mortgage action because its purpose is precisely to
enforce the mortgage contract. [Caltex v. IAC, G.R.
No. 74730 (1989)]
7. Waiver of Security by
Creditor
a. Mortgagee may waive the right to foreclose his
mortgage and maintain a personal action for
recovery of the indebtedness.
b. Mortgagee cannot have both remedies. This is
because he only has one cause of action, the non-
payment of the mortgage debt.
8. Redemption
It is a transaction by which the mortgagor reacquires
the property which may have passed under the
mortgage or divests the property of the lien which the
mortgage may have created.
a. Kinds
1. Equity of redemption – in judicial foreclosure of
real estate mortgage under the ROC, it is the right
of the mortgagor to redeem the mortgaged
property by paying the secured debt within the
120-day period from entry of judgment or after
the foreclosure sale, but before the sale of the
mortgaged property or confirmation of sale
A formal offer to redeem preserves the right of
redemption, e.g., by filing an action to enforce the
right to redeem
2. Right of redemption – in extrajudicial
foreclosure of real estate mortgage, the right of the
mortgagor to redeem the property within a
certain period after it was sold for the
satisfaction of the debt. (If the mortgagee is a
bank, the redemption period expires after
registration of the sale.)
a. For natural persons – one year from the
registration of the TCT
b. For juridical persons – until, but not later
than, the registration of the certificate of
foreclosure sale (no more than 3 months
after foreclosure)
Page 415 of 511
CIVIL LAW
c. Formal offer to redeem must be with tender
of redemption price to preserve right of
redemption
In a judicial foreclosure sale, the right of redemption
must be allowed by law.
The references in Rule 68 and Rule 39 to the right of
redemption are not grants of this statutory prerogative.
To claim a right of redemption in judicial foreclosure,
there must be a specific law that allows it.
Example: RA 8791 (General Banking Law of 2000)
Note: There is no right of redemption in pledge and
chattel mortgage.
Requisites for a Valid Redemption:
1. Redemption must be made within:
a. For natural persons: one year from the
registration of the TCT
b. For juridical persons: until, but not later than,
the registration of the certificate of
foreclosure sale (no more than 3 months after
foreclosure)
2. Payment of the purchase price of the collateral
involved, plus 1% interest per month, together
with the amount of any assessments or taxes if
any, paid by the purchaser after the sale
Note: Under RA 8791, the amount is the amount
due under the mortgage deed
3. Written notice of the redemption must be served
on the officer who made the sale and a duplicate
filed with the Register of Deeds of the province.
Equity of Redemption Right of Redemption
Sec. 3, Rule 68 Act No. 3135
Right to redeem the Right to redeem the
property after default in property within 1 year
the performance of the from the date or
obligation but before registration of the
the foreclosure sale certificate of sale
Applies to judicial
Applies to extrajudicial
foreclosure of real
foreclosure of real
estate and chattel
estate mortgage
mortgage
The rule up to now is that the right of a purchaser at
a foreclosure sale is merely inchoate until after the
period of redemption has expired without the right
being exercised. The title to land sold under mortgage
foreclosure remains in the mortgagor or his grantee
until the expiration of the redemption period and
U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

conveyance by the master's deed. [Medida v. CA, G.R.

No. 98334 (1992)]
G. Antichresis
Antichresis – a real security transaction that arises by
contract, where the antichretic creditor acquires the
right to receive the fruits of an immovable of the
antichretic debtor, with the obligation to apply them to
the payment of the interest, if owing, and thereafter to
the principal. [Art. 2132, CC]

1. Characteristics
a. Accessory contract – it secures the performance
of a principal obligation
b. Formal contract – it must be in a specified form,
otherwise, it is void [Art. 2134, CC]

Note: The obligation to pay interest is not the essence

of the contract of antichresis; antichresis is only
applicable to securing the payment of interest-bearing
loans. It is susceptible of guaranteeing all kinds of
obligations, pure or conditional.

2. Formal Requisites
a. Amount of the principal and interest specified in
writing [Art. 2134, CC]
b. Express agreement that:
1. The debtor will give possession of the
property to creditor;
2. The creditor will apply the fruits to the
interest, if any, then to the principal of his
credit.

3. Object of the Contract

An antichresis can cover only the fruits of an
immovable property.

Delivery of the immovable to the creditor is necessary

for the creditor to receive the fruits, not to make the
contract binding.

Note: The creditor does not acquire ownership of the

immovable for non-payment of the debt within the
period agreed upon. [Art. 2137, CC]

Page 416 of 511

U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

4. As Distinguished from Other 1. The parties, however, may agree on an

extrajudicial foreclosure in the same manner
Contracts as they are allowed in contracts of mortgage
and pledge [Tavera v. El Hogar Filipino, Inc.,
Antichresis Pledge G.R. 45963 (1939)]
Kind of property 2. A stipulation authorizing the antichretic
Real property Personal property creditor to appropriate the property upon the
Perfection non-payment of the debt within the agreed
Delivery of thing period is void [Art. 2088, CC]
Mere consent
pledged
There is a right of retention in favor of the creditor,
Antichresis Real mortgage which is used as a means of extinguishing the
Possession obligation. The debtor cannot reacquire enjoyment of
Delivered to creditor Retained by debtor the immovable until he pays what he owes to the
creditor. [Ortiz v. Kayanan, et al., G.R. No. L-32974
Right to the fruits
(1979)]
Creditor does not have
Creditor acquires only the right to receive
Because of the right of the creditor to judicially
the right to receive fruits, but a real right
foreclose, antichresis is generally viewed as a species of
fruits over the property is
real estate mortgage, in which the mortgagee retains
created
possession of the collateral and takes the fruits of the
Payment of taxes and charges property in lieu of interest on the debt. [Gomez-
Creditor is generally Creditor has no Somera]
obliged to pay obligation to pay
Application of fruits
First applied to the
Mortgagee has no such
payment of interest, and
obligation
then to principal

5. Obligations 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. 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. Remedies 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]

Page 417 of 511

U.P. LAW BOC CREDIT TRANSACTIONS
H. Quasi-Contracts
A quasi-contract is that juridical relation resulting from
a lawful, voluntary and unilateral act, and which has for
its purpose the payment of indemnity to the end that
no one shall be unjustly enriched or benefited at the
expense of another [Art. 2142, CC]
Based on presumed will or intent of the obligor
dictated by equity and by the principles of absolute
justice [Padcom vs. Ortigas Center, G.R. No. 146807
(2002)]
Unlike contracts, here there is absence of consent. It is
voluntary and unilateral [Casis]
1. Negotiorum Gestio
(Unauthorized
Management)
Negotiorum gestio – takes place when a person
voluntarily takes charge of another’s abandoned
business or property without the owner’s authority
[Art. 2144, CC]. As a rule, reimbursement must be
made to the gestor (i.e., one who carried out the
business) for necessary and useful expenses.
The obligation does not arise:
a. When the property or business is not neglected or
abandoned;
b. If in fact the manager has been tacitly authorized
by the owner.
In the first case, the provisions of Articles 1317, 1403,
No. 1, and 1404 regarding unauthorized contracts shall
govern.
In the second case, the rules on agency in Title X of
this Book shall be applicable. [Art. 2144, CC]
a. Obligations of a Gestor
1. Perform his duties with all the diligence of a good
father of a family
2. Pay the damages which through his fault and
negligence may be suffered by the owner of the
property/business under his management [Art.
2145, CC]
Page 418 of 511
CIVIL LAW
3. Be liable for the acts of the persons to whom he
delegated all or some of his duties. This is without
prejudice to the direct obligation of the delegate
to the owner of the business. [Art. 2146, CC]
4. Be liable for any fortuitous event under the
following conditions:
a. If he undertakes risky operations which the
owner was not accustomed to embark upon
b. If he has preferred his own interest to that of
the owner
c. If he fails to return the property or business
after demand of the owner
d. If he assumed management in bad faith [Art.
2147, CC]
e. If he is manifestly unfit to carry on the
management
f. If by his intervention he prevented a more
competent person from taking up the
management. [Art. 2148, CC]
Note: The gestor shall not be liable for (e) and (f)
if the management was assumed to save the
property or business from imminent danger.
5. Be personally liable for contracts which he entered
into with third persons, even though he acted in
the name of the owner, and there shall be no right
of action between the owner and third persons.
The gestor shall NOT be personally liable for such
contracts, provided:
a. The owner has expressly or tacitly ratified the
management, or
b. When the contract refers to things pertaining
to the owner of the business. [Art. 2152, CC]
Note: The responsibility of two or more gestors
shall be solidary, unless the management was
assumed to save the thing or business from
imminent danger.
b. Obligations of the Owner of the
Property or Business
Although the management was not expressly ratified,
the owner who enjoys the advantages of the same shall:
1. Be liable for the obligations incurred in his interest
2. Reimburse the gestor for the necessary and useful
expenses and for the damages the latter may have
suffered in the performance of his duties
The above obligations shall be incumbent upon the
owner if the management had for its purpose the
U.P. LAW BOC CREDIT TRANSACTIONS
prevention of an imminent and manifest loss, although
no benefit may have been derived. [Art. 2150, CC]
If the owner did not derive any benefit and there was
no imminent and manifest danger to the property or
business, the owner would still be liable for the
abovementioned obligations and expenses, provided:
1. The gestor has acted in good faith; and
2. The property or business is intact, ready to be
returned to the owner. [Art. 2151, CC]
c. Effect of Ratification
The ratification of the management by the owner of
the business produces the effects of an express agency,
even if the business may not have been successful.
[Art. 2149, CC]
d. Extinguishment of Management
1. When the owner repudiates or puts an end thereto
2. When the gestor withdraws from the
management, subject to Art. 2144
3. By the death, civil interdiction, insanity or
insolvency of the owner or the gestor. [Art. 2153,
CC]
2. Solutio Indebiti (Undue
Payment)
Solutio indebiti – takes place when something is
received when there is no right to demand it, and it was
unduly delivered through mistake. The recipient has
the duty to return it [Art. 2154, CC].
This situation my cover payment by reason of a
mistake in the construction or application of a
doubtful or difficult question of law [Art. 2155, CC]
The Government also comes within the scope of
solution indebiti. Tax refunds are based on such. [CIR
v. Acesite, G.R. No. 147295 (2007)]
a. When Debt Not Yet Due
If the payer was in doubt whether the debt was due, he
may recover if he proves that it was not due. [Art.
2156, CC]
Page 419 of 511
CIVIL LAW
b. Responsibility of Two or More
Payees
When there has been payment of what is not due, their
responsibility is solidary. [Art. 2157, CC]
c. When Money or Thing Delivered
is Owned by Third Person
The payee cannot demand that the payor prove his
ownership of the thing delivered.
Nevertheless, should he discover that the thing has
been stolen and who its true owner is, he must advise
the latter.
If the owner, in spite of such information, does not
claim it within the period of one month, the payee shall
be relieved of all responsibility by returning the thing
deposited to the payor.
If the payee has reasonable grounds to believe that the
thing has not been lawfully acquired by the payor, the
former may return the same. [Art. 2158]
d. Liability of Payee
If in bad faith, he shall be liable:
1. For legal interest if a sum of money is involved,
or
2. For the fruits received or which should have been
received if the thing produces fruits, and
3. For any loss or impairment of the thing for any
cause, and
4. For damages to the person who delivered the
thing, until it is recovered. [Art. 2159, CC]
If in good faith, he shall be liable:
1. For the impairment or loss of the thing certain and
determinate or its accessories and accessions
insofar as he has thereby been benefited.
2. For the return of the price or assign the action to
collect the sum if he has alienated the same. [Art.
2160, CC]
U.P. LAW BOC CREDIT TRANSACTIONS
- child under eighteen years of age unjustly refuses
e. Exemption from the Obligation
to Restore the Payment Unduly d.
Made
A person who, believing in good faith that the payment
was being made of a legitimate and subsisting claim,
1. destroyed the document, or
2. allowed the action to prescribe, or
3. gave up the pledges, or
4. cancelled the guaranties for his right shall be e.
exempt from the obligation to restore.
The person who paid unduly may proceed only against
the true debtor or the guarantors with regard to whom
the action is still effective. [Art. 2162, CC]
f. Presumption of Payment by
Mistake, Defense
f.
The presumption arises if something which had never
been due or had already been paid was delivered; but
he from whom the return is claimed may prove that
the delivery was made out of liberality or for any other
just cause. [Art. 2163, CC]
g.
3. Other Quasi-Contracts
a. When, without the knowledge of the person
obliged to give support, it is given by a stranger,
the latter shall have a right to claim the same from h.
the former, unless it appears that he gave it out of
piety and without intention of being repaid. [Art.
2164, CC]
i.
b. When funeral expenses are borne by a third
person, without the knowledge of those relatives
who were obliged to give support to the deceased,
said relatives shall reimburse the third person,
should the latter claim reimbursement. [Art. 2165,
CC]
j.
Note: Only necessary expenses. 3rd person must
claim [Casis].
c. When the person obliged to support an orphan,
or an insane or other indigent person unjustly
refuses to give support to the latter, any third
person may furnish support to the needy
individual, with right of reimbursement from the k.
person obliged to give support. The provisions of
this article apply when the father or mother of a
Page 420 of 511
CIVIL LAW
to support him. [Art. 2166, CC]
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]
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].
When the government, upon the failure of any
person to comply with health or safety regulations
concerning property, undertakes to do the
necessary work, even over his objection, he shall
be liable to pay the expenses. [Art. 2169, CC]
When by accident or other fortuitous event,
movables separately pertaining to two or more
persons are commingled or confused, the rules on
co-ownership shall be applicable. [Art. 2170, CC]
The rights and obligations of the finder of lost
personal property shall be governed by Articles
719 and 720. [Art. 2171, CC]
The right of every possessor in good faith to
reimbursement for necessary and useful expenses
is governed by Article 546. [Art. 2172, CC]
Note: Possessor in good faith may retain the thing
until he has been reimbursed [Casis].
When a third person, without the knowledge of
the debtor, pays the debt, the rights of the former
are governed by Articles 1236 and 1237. [Art.
2173, CC]
Note: Cannot compel creditor to subrogate him in
his rights [Art. 1237, CC].
When in a small community a nationality of the
inhabitants of age decide upon a measure for
protection against lawlessness, fire, flood, storm
U.P. LAW BOC CREDIT TRANSACTIONS
or other calamity, anyone who objects to the plan
and refuses to contribute to the expenses but is
benefited by the project as executed shall be liable
to pay his share of said expenses. [Art. 2174, CC]
l. Any person who is constrained to pay the taxes of
another shall be entitled to reimbursement from
the latter. [Art. 2175, CC]
Page 421 of 511
CIVIL LAW
I. Concurrence and
Preference of Credits
Concurrence of credits – implies possession by two
or more creditors of equal rights or privileges over the
same property or all of the property of the debtor, and
the value of such property is insufficient to pay in full
all the claims.
Preference of credits – is a method adopted to
determine and specify the order in which credits
should be paid in the final distribution of the proceeds
of the insolvent’s assets, as opposed to a lien, which
creates a charge on a particular property. [DBP v.
NLRC, G.R. No. 86932 (1990)]
Preference – is the right held by a creditor to be
preferred in the payment of his claim above others out
of the debtor’s assets.
The provisions on concurrence and preference of
credit does not apply when the situation does not
involve two or more creditors having separate and
distinct claims against the same debtor who has
insufficient property.
Consequently, concurrence and preference of credit
may only be ascertained in the context of some
proceeding, such as insolvency proceedings, where the
claims of the creditors may be bindingly adjudicated.
[Gomez-Somera]
1. When Rules on Preference
Applicable
a. There are two or more creditors
b. With separate and distinct claims
c. Against the same debtor
d. Who has insufficient property, and
e. Such debtor is insolvent
2. Classification of Credits
a. Special Preferred Credits
These are considered as mortgages or pledges of real
or personal property, or liens within the purview of
legal provisions governing insolvency. [Art. 2243, CC]
Taxes in Art. 2241 and 2242 shall first be satisfied. [Art.
2243, CC]
U.P. LAW BOC CREDIT TRANSACTIONS
Note: Only taxes in Arts. 2241 and 2242, CC enjoy a
preference; for all other claims, there is only a
concurrence of credits. [Gomez-Somera]
Special preferred credits exclude all other claims to the
extent of the value of the affected property.
These take precedence over ordinary preferred credits
insofar as the property, to which the liens attach, is
concerned. [Gomez-Somera]
Pro-rating – total amount to be paid is equal to:
Credit
------------------ x value of property
Total amount of
concurring
debts
N.B.: Sec. 136 of RA 10142 (FRIA) creates a special
preference of credit in favor of trade-related claims
upon trade-related assets. This special preferred credit
enjoys absolute priority over all other claims, including
taxes. [Gomez-Somera]
Article 2241 refers only to specific immovable
property. It does not cover claims for the payment of
money, which is generic property and not specific or
determinate. [Cordova v. Reyes Daway Lim Bernardo Lindo
Rosales Law Offices, G.R. No. 146555 (2007)]
b. Ordinary Preferred Credits
These enjoy a preference, excluding the credits that are
later in order, but only as against the value of the
property not otherwise subjected to any special
preferred credit.
Art. 2244, CC does not create a lien on specific
property; rather, it creates rights in favor of certain
creditors to have the free property of the debtor
applied in accordance with an order of preference.
[Gomez-Somera]
N.B. Sec. 133 of the FRIA reiterates jurisprudence to
the effect that Article 110 of the Labor Code does not
create a lien in favor of workers or employees for
unpaid wages upon the properties of the employer.
The first preference in Art. 110, Labor Code instead
modifies the order of preference in Art. 2244, CC by
removing the one-year limitation and by moving
claims for unpaid wages from second priority to first
Page 422 of 511
CIVIL LAW
priority in the order of preference in Art. 2244, C.
[Gomez-Somera]
For Arts. 2242 and 2249, CC to apply, there must be
first some proceedings where the claims of all the
preferred creditors may be bindingly adjudicated [De
Barretto v. Villanueva, G.R. No. L-14938 (1962)]. This
applies to cases involving either specific immovable or
specific movable property. [DBP v CA, G.R. No.
126200 (2001)]
Taxes and assessments in 2244 do not have the
overriding preference that 2241 and 2242 create.
[Gomez-Somera]
c. Common Credits
These enjoy no preference, as there is only a
concurrence of credits, which must be paid pro rata
regardless of dates [Arts. 2245, 2251, CC].
These are not liens and do not attach to any specific
property of the debtor. [Gomez-Somera]
d. Special Preferred Credits on
Specific Movable Property
Art. 2241, CC. With reference to specific
movable property of the debtor, the following
claims or liens shall be preferred:
(1) Duties, taxes and fees due thereon to the State
or any subdivision thereof;
(2) Claims arising from misappropriation, breach
of trust, or malfeasance by public officials
committed in the performance of their duties,
on the movables, money or securities obtained
by them;
(3) Claims for the unpaid price of movables sold,
on said movables, so long as they are in the
possession of the debtor, up to the value of
the same; and if the movable has been resold
by the debtor and the price is still unpaid, the
lien may be enforced on the price; this right is
not lost by the immobilization of the thing by
destination, provided it has not lost its form,
substance and identity; neither is the right lost
by the sale of the thing together with other
property for a lump sum, when the price
thereof can be determined proportionally;
(4) Credits guaranteed with a pledge so long as
the things pledged are in the hands of the
creditor, or those guaranteed by a chattel
U.P. LAW BOC CREDIT TRANSACTIONS
mortgage, upon the things pledged or
mortgaged, up to the value thereof;
(5) Credits for the making, repair, safekeeping or
preservation of personal property, on the
movable thus made, repaired, kept or
possessed;
(6) Claims for laborers' wages, on the goods
manufactured or the work done;
(7) For expenses of salvage, upon the goods
salvaged;
(8) Credits between the landlord and the tenant,
arising from the contract of tenancy on
shares, on the share of each in the fruits or
harvest;
(9) Credits for transportation, upon the goods
carried, for the price of the contract and
incidental expenses, until their delivery and
for thirty days thereafter;
(10) Credits for lodging and supplies usually
furnished to travellers by hotel keepers, on the
movables belonging to the guest as long as
such movables are in the hotel, but not for
money loaned to the guests;
(11) Credits for seeds and expenses for cultivation
and harvest advanced to the debtor, upon the
fruits harvested;
(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
same, but not on money or instruments of
credit;
(13) Claims in favor of the depositor if the
depositary has wrongfully sold the thing
deposited, upon the price of the sale.
In the foregoing cases, if the movables to which
the lien or preference attaches have been
wrongfully taken, the creditor may demand them
from any possessor, within thirty days from the
unlawful seizure.
Trade-related claim preference over trade-related
assets
Trade-related claims of clients or customers of a
securities market participant which, for purposes of
investor protection, are hereby deemed to have
absolute priority over all other claims of whatever
nature or kind insofar as trade-related assets are
concerned. [Sec 136, RA 10142]
Page 423 of 511
CIVIL LAW
e. Special Preferred Credits on
Specific Immovable Property and
Real Rights
Art. 2242, CC. With reference to specific
immovable property and real rights of the
debtor, the following claims, mortgages and liens
shall be preferred, and shall constitute an
encumbrance on the immovable or real right:
(1) Taxes due upon the land or building;
(2) For the unpaid price of real property sold,
upon the immovable sold;
(3) Claims of laborers, masons, mechanics and
other workmen, as well as of architects,
engineers and contractors, engaged in the
construction, reconstruction or repair of
buildings, canals or other works, upon said
buildings, canals or other works;
(4) Claims of furnishers of materials used in the
construction, reconstruction, or repair of
buildings, canals or other works, upon said
buildings, canals or other works;
(5) Mortgage credits recorded in the Registry of
Property, upon the real estate mortgaged;
(6) Expenses for the preservation or
improvement of real property when the law
authorizes reimbursement, upon the
immovable preserved or improved;
(7) Credits annotated in the Registry of Property,
in virtue of a judicial order, by attachments or
executions, upon the property affected, and
only as to later credits;
(8) Claims of co-heirs for warranty in the
partition of an immovable among them, upon
the real property thus divided;
(9) Claims of donors or real property for
pecuniary charges or other conditions
imposed upon the donee, upon the
immovable donated;
(10) Credits of insurers, upon the property insured,
for the insurance premium for two years.
f. Ordinary Preferred Credits
Art. 2244, CC. With reference to other property,
real and personal, of the debtor, the following
claims or credits shall be preferred in the order
named:
(1) Proper funeral expenses for the debtor, or
children under his or her parental authority
U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

who have no property of their own, when claims shall be paid in full before claims of the
approved by the court; government and other creditors may be paid. [Art. 110,
(2) Credits for services rendered the insolvent by Labor Code]
employees, laborers, or household helpers for
one year preceding the commencement of the g. Common Credits
proceedings in insolvency;
(3) Expenses during the last illness of the debtor Art. 2245, CC. Credits of any other kind or class,
or of his or her spouse and children under his or by any other right or title not comprised in the
or her parental authority, if they have no four preceding articles, shall enjoy no preference.
property of their own;
(4) Compensation due the laborers or their
dependents under laws providing for 3. Order of Preference of
indemnity for damages in cases of labor
accident, or illness resulting from the nature
Credits
of the employment;
a. Credits which enjoy preference with respect to
(5) Credits and advancements made to the debtor
specific movables exclude all others to the extent
for support of himself or herself, and family,
of the value of the personal property to which the
during the last year preceding the insolvency;
preference refers [Art. 2246, CC].
(6) Support during the insolvency proceedings,
and for three months thereafter;
b. If there are two or more credits with respect to the
(7) Fines and civil indemnification arising from a
same specific movable property, they shall be
criminal offense;
satisfied pro rata, after the payment of duties,
(8) Legal expenses, and expenses incurred in the
taxes and fees due the State or any subdivision
administration of the insolvent's estate for the
thereof [Art. 2247, CC]
common interest of the creditors, when
properly authorized and approved by the
c. Those credits which enjoy preference in relation
court;
to specific real property or real rights exclude all
(9) Taxes and assessments due the national
others to the extent of the value of the immovable
government, other than those mentioned in
or real right to which the preference refers
Articles 2241, No. 1, and 2242, No. 1;
[Art.2248, CC].
(10) Taxes and assessments due any province,
other than those referred to in Articles 2241,
d. If there are two or more credits with respect to the
No. 1, and 2242, No. 1;
same specific real property or real rights, they shall
(11) Taxes and assessments due any city or
be satisfied pro rata, after the payment of the taxes
municipality, other than those indicated in
and assessment of the taxes and assessments upon
Articles 2241, No. 1, and 2242, No. 1;
the immovable property or real right [Art. 2249,
(12) Damages for death or personal injuries caused
CC].
by a quasi-delict;
(13) Gifts due to public and private institutions of
e. The excess, if any, after the payment of the credits
charity or beneficence;
which enjoy preference with respect to specific
(14) Credits which, without special privilege,
property, real or personal, shall be added to the
appear in [a] a public instrument; or (b) in a
free property which the debtor may have, for the
final judgment, if they have been the subject
payment of other credits [Art. 2250, CC].
of litigation. These credits shall have
preference among themselves in the order of
f. Those credits which do not enjoy any preference
priority of the dates of the instruments and of
with respect to specific property, and those which
the judgments, respectively.
enjoy preference, as to the amount not paid, shall
be satisfied according to the following rules:
Worker preference in case of bankruptcy 1. Order established by Art. 2244, CC
In the event of bankruptcy or liquidation of an 2. Common credits referred to in Art. 2245, CC
employer’s business, his workers shall enjoy first shall be paid pro rata regardless of dates [Art.
preference as regards their wages and other monetary 2251, CC].
claims, any provisions of law to the contrary
notwithstanding. Such unpaid wages and monetary

Page 424 of 511

U.P. LAW BOC CREDIT TRANSACTIONS CIVIL LAW

Arts. 2241 and 2242, CC jointly with Arts. 2246 to

2249, CC establish a two-tier order of preference. The
first tier includes only taxes, duties and fees due on
specific movable or immovable property. All other
special preferred credits stand on the same second tier
to be satisfied pari passu and pro rata, out of any residual
value of the specific property to which such other
credits relate. [Republic v. Peralta, G.R. No. 56568
(1920)]

4. Exempt 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

Page 425 of 511

U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

LAND TITLES AND

DEEDS
Civil Law

Page 426 of 511

U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

XI. LAND TITLES upon a man and his heirs absolutely and
without any limitation imposed upon the
AND DEEDS 2.
estate
Fee Tail – One designed to pass title from
grantee to his heirs, in the intent of the
A. Torrens System grantor being to keep the property in the
grantee’s line of issue
3. Life Estate – One held for the duration of
1. General Principles the life of the grantee; In some cases, it may
terminate earlier as by forfeiture
Land Title
It is the evidence of the right of the owner or the b. Less-than-Freehold Estate – Signifies some
extent of his interest, by which he can maintain sort of right short of title
control, and as a rule, assert right to exclusive 1. Estate for Years – In the nature of a lease
possession and enjoyment of the property. [Peña] short of title; grantee or lessee takes over
possession of the land for a period agreed
Title and Certificate of Title Distinguished upon but the grantor retains the legal title to
Title Certificate of Title the property
Lawful cause or ground 2. Tenancy from period to period – Also in
of possessing that the nature of a lease which may run from
which is ours. It is a mere evidence of month to month or from year to year, with
ownership; it is not the the peculiarity of automatic renewal from
That which constitutes title to the land itself time to time, unless expressly terminated by
a just cause of exclusive [Castillo v. Escutin, G.R. either party
possession, or which is No. 171057 (2009). 3. Tenancy at will – Another form of lease
the foundation of agreement where a person is permitted to
ownership of property. occupy the land of another without any
stipulation as to period, but either party
The title is a conclusive evidence of ownership and reserves the right to terminate the
it cannot be attacked collaterally. occupation at will or at any time

Deed Land Registration

A written instrument executed in accordance with A judicial or administrative proceeding whereby a
law, wherein a person grants or conveys to another person’s claim of ownership over a particular land is
certain land, tenements or hereditaments. [Peña] determined and confirmed or recognized so that
such land and the ownership thereof may be recorded
Elements of A Deed: in a public registry.
a. Grantor
b. Grantee Note: Registration does not vest title. It is not a mode
c. Words of Grant of acquiring ownership but is merely evidence of such
d. Description of the property involved title over a particular property.
e. Signature of the grantor
f. At least two (2) witnesses Nature of Land Registration
g. Notarial acknowledgment Judicial proceedings for the registration of lands
throughout the Philippines shall be in rem and shall
ESTATE be based on the generally accepted principles
An estate, strictly speaking, represents the nature, underlying the Torrens system [Sec. 2, par. 1, PD
extent, degree, and quantity of a person’s interest 1529]
in land.
It is therefore binding on the whole world because
TYPES OF ESTATE: “by the description in the notice (of initial hearing of
a. Freehold Estate – Indicates title of ownership the application for registration) “To Whom It May
1. Fee Simple – An absolute title; Absolute Concern,” all the world are made parties defendant.”
estate in perpetuity; Title to land is conferred

Page 427 of 511

U.P. LAW BOC LAND TITLES AND DEEDS
[Aquino, citing Esconde v. Barlongay, G.R. No. L-67582
(1987)]
In a registration proceeding, the judgment of the
court confirming the title, and ordering its registration
in one’s name constitutes, when final, res judicata
against the whole world [Ting v. Heirs of Liro, G.R. No.
16891 (2007)]
There is no need to personally notify the owners or
claimants of the land sought to be registered if it is
involved in a land registration case since it is a
proceeding in rem. This gives automatic power and
authority to the court over the res. [Guido-Enriquez v.
Victorino, et al. G.R. No. 180427 (2013)]
Laws Implementing Land Registration
a. Public Land Act [CA 141, as amended]
b. Property Registration Decree [PD 1529, as
amended]
c. Cadastral Act [Act 2259, as amended]
d. Indigenous Peoples Rights Act of 1997 [RA
8371]
e. Emancipation Decree [PD 27, as amended]
f. Comprehensive Agrarian Reform Law of 1988
[RA 6657, as amended]
To simplify and streamline land registration
proceedings, Presidential Decree No. 1529 was
issued on June 11, 1978, otherwise known as the
Property Registration Decree, governing registration
of lands under the Torrens system as well as the
recording of transactions relating to unregistered
lands, including chattel mortgages. This Decree
consolidates, in effect, all pre-existing laws on
property registration with such appropriate
modifications as are called for by existing
circumstances. [Peña]
Purposes of Land Registration
Registration is merely a species of notice. The act of
registering a document is never necessary in order to
give it legal effect as between the parties. The system
maintains a permanent record of landholdings, in
order to prevent fraudulent claims to land by
concealment of transfers.
Another purpose is to notify and protect the
interests of strangers to a given transaction, who
may ignorant thereof. However, where a document so
registered is invalid or legally defective, registration
will not in any way render it valid or cure its defect.
Page 428 of 511
CIVIL LAW
Purposes
a. Constructive notice to the whole world. [Sec. 52,
PD 1529]
b. To notify and protect the interests of strangers to
a given transaction, who may be ignorant thereof
[Sapto, et al. v. Fabiana, G.R. No. L-11285 (1958)]
c. As held in Legarda v. Saleeby [G.R. No. L-8936
(1915)]
1. To quiet title to the land and to stop forever
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
to protect their indefeasibility once the claim
of ownership is established and recognized
4. To give every registered owner complete
peace of mind
5. To issue a certificate of title to the owner
which shall be the best evidence of his
ownership of the land
6. To avoid conflicts of title in and to real estate
and to facilitate transactions
d. As held in Capitol Subdivisions, Inc. v. Province of
Negros Occidental [G.R. No. L-16257 (1963)]
1. To avoid possible conflicts of title in and to
real property, and
2. To facilitate transactions relative thereto by
giving the public the right to rely upon the
face of the Torrens certificate of title and to
dispense with the need of inquiring further
Object of Registration
Only real property or real rights may be the object
of registration under the existing land registration
laws.
Classification of Lands: [Art. XII, Sec. 3, 1987
Constitution]
a. Agricultural
b. Forestland or timberland
c. Mineral Lands
d. National Parks
Classification of lands is an exclusive prerogative of
the executive department. In the absence of such
classification, the lands remain as unclassified until it
is released therefrom and rendered open to
disposition. The President, through a Presidential
Proclamation or Executive Order can classify or
reclassify land to be included or excluded from the
public domain. The DENR Secretary is also
empowered to approve a land classification and
declare such land as alienable and disposable.
[Agcaoili, citing Fortuna v. Republic, G.R. No. 173423
(2014)]
U.P. LAW BOC LAND TITLES AND DEEDS
Registrable lands are:
a. Alienable public agricultural lands,
If the land is in the public domain, the land must
be classified as alienable and disposable. It must
be classified as such at the time of filing the
application for registration. [Republic v. CA and
Naguit, G.R. No. 144057 (2005)]
b. Private lands
Non-registrable lands
Those found in the CC dealing with non-registrable
properties (e.g. property of public dominion)
2. Torrens System
Torrens System
A system for registration of land under which, upon
landowner’s application, the court may, after
appropriate proceedings, direct the issuance of a
certificate of title. [Black’s Law Dictionary]; those
systems of registration of transactions with interest in
land whose declared object is, under governmental
authority, to establish and certify to the ownership of
an absolute and indefeasible title to realty, and to
simplify its transfer. [Grey Alba v. De la Cruz, G.R. No.
L-5246 (1910)]
The boldest effort to grapple with the problem of
simplification of title to land was made by Mr.
(afterwards Sir Robert) Torrens, a layman, in South
Australia in 1857. . . In the Torrens system title by
registration takes the place of "title by deeds" of the
system under the "general" law. A sale of land, for
example, is effected by a registered transfer, upon
which a certificate of title is issued. The certificate is
guaranteed by statute, and, with certain exceptions,
constitutes indefeasible title to the land mentioned
therein. The object of the Torrens system, then, is to
do away with the delay, uncertainty, and expense of
the old conveyancing system.
The Torrens system was introduced in the Philippines
by Act No. 496, which took effect on Jan. 1, 1903. This
was later amended and superseded by PD 1529 which
took effect on June 11, 1978.
The underlying principle of the Torrens system is
security with facility in dealing with land. This is made
possible by defining the absolute status of a given
property in a certificate of title with a governmental
and universal guaranty. This certificate of title should
better be known as certificate of title and
encumbrances. In the words of Torrens himself the
Page 429 of 511
CIVIL LAW
main object is “to simplify, quicken, and cheapen the
transfer of real estate and to render title safe and
indefeasible.” [Ponce]
Advantages
a. Secures title
b. Protection against fraud
c. Simplified dealings
d. Restoration of the estates to its just value, whose
depreciation is caused by some blur, technical
defect
e. Barred the recurrence of faults in the title [Legarda
v. Saleeby, supra]
Nature: Judicial in nature.
Purpose: The real purpose of the Torrens system of
registration is to quiet title to land; to put a stop
forever to any question of the legality of the title,
except claims which may arise subsequent thereto.
[Agcaoili]
General Rule: A title once registered cannot be
impugned, altered, changed, modified, enlarged, or
diminished.
Exception: Direct proceeding permitted by law, usually
for the protection of innocent third persons
3. Administration of the
Torrens System
a. Land Registration Authority
Agency under the executive supervision of the DOJ
charged with the efficient execution of the laws
relative to the registration of lands
Composition:
1. Administrator
2. 2 Deputy Administrators (as assistants)
Functions of LRA:
1. Extend speedy and effective assistance to the
Department of Agrarian Reform, the Land Bank,
and other agencies in the implementation of land
reform program of the government
2. Extend assistance to courts in ordinary and
cadastral land registration proceedings; and
3. Be the central repository of records relative to
original registration of lands titled under the
Torrens system, including the subdivision and
consolidation plans of titled lands.
U.P. LAW BOC LAND TITLES AND DEEDS
b. Register of Deeds
Public repository of records of instruments
affecting registered or unregistered lands and chattel
mortgages in the province or city wherein such office
is situated.
Composition:
1. Register of Deeds
2. Deputy (as assistant)
Functions of Registers of Deeds:
1. Immediately register an instrument presented for
registration dealing with real or personal property
which complies with the requisites for
registration;
2. Shall see to it that said instrument bears the
proper documentary stamps and that the same
are properly cancelled;
3. If the instrument is not registerable, he shall deny
the registration thereof and inform the presentor
of such denial in writing, stating the ground or
reason therefore, and advising him of his right to
appeal by consulta in accordance with Sec. 117 of
PD 1529.
4. Prepare and keep and index system which
contains the names of all registered owners and
lands registered.
The function of the ROD with reference to
registration of deeds, encumbrances, instruments, and
the like is ministerial in nature, provided the
applicant complies with all the requisites. [Baranda v.
Gustilo, G.R. No. 81163 (1988)]
Instances when ROD may validly deny registration of
a voluntary instrument:
1. When there is more than 1 copy of the owner’s
duplicate certificate of title and not all such
copies are presented to the ROD;
2. Where the voluntary instrument bears on its face
an infirmity;
3. Where the validity of the instrument sought to be
registered is in issue in a pending court suit,
notice of which must be given to parties;
4. Where required certificates or documents such as
DAR clearance, copy of latest tax declaration, are
not submitted
[Balbin v. ROD, G.R. No. L-20611 (1969)]
Note: When the ROD is in doubt as to the proper
action to take on an instrument or deed presented to
him for registration, he should submit the question to
Page 430 of 511
CIVIL LAW
the Administrator of the LRA en consulta [P.D. 1529,
Sec 117]
4. Certificate of Title
The Torrens Title
Certificate of ownership issued by the Register of
Deeds naming and declaring the owner of the real
property described therein free from all liens and
encumbrances, except such as may be expressly
noted thereon or otherwise reserved by law
a. Original Certificate of Title (OCT) – It is the
first certificate of title issued in the name of the
registered owner by the Register of Deeds
covering a parcel of land which had been
registered under the Torrens System, by virtue of
judicial or administrative proceedings
b. Transfer Certificate of Title (TCT) – The
subsequent certificate of title pursuant to any
deed of transfer or conveyance to another
person. The Register of Deeds shall make a new
certificate of title and give the registrant an
owner’s duplicate certificate. The previous
certificate shall be stamped “cancelled.”
c. Patents – Whenever public land is by the
Government alienated, granted or conveyed to
any person, the same shall be brought forthwith
under the operation of this Decree [PD 1529,
Sec. 103, par. 1]
1. Patents only involve public lands which are
alienated by the Government pursuant to the
Public Land Act [CA 141, as amended]
2. The patent (even if denominated as deed of
conveyance) is not really a conveyance but a
contract between the grantee and the
Government and evidence of authority to
the Register of Deeds to make registration.
3. The act of registration is the operative act to
affect and convey the land.
Probative Value: A Torrens Certificate of Title is
valid and enforceable against the whole world. It
may be received in evidence in all courts of the
Philippines, and shall be conclusive as to all matters
contained therein, principally the identity of the
owner of the covered land thereby and identity of the
land.
A Torrens title, once registered, cannot be
defeated, even by adverse, open and notorious
possession. A registered title under the Torrens
U.P. LAW BOC LAND TITLES AND DEEDS
system cannot be defeated by prescription. The title,
once registered, is notice to the whole world. All
persons must take notice. No one can plead ignorance
of the registration. [Egao v. CA,G.R. No. L-79787
(1989)]
5. Effect of Registration under
the Torrens System
a. Land is placed under the operation of the
Torrens system
b. Claims and liens of whatever character existing
against the land prior to the issuance of the
certificate of title are cut off by such certificate
and the certificate so issued binds the whole
world, including the government
1. It is an elemental rule that a decree of
registration bars all claims and rights which
arose or may have existed prior to the decree
of registration. By the issuance of the decree,
the land is bound and title thereto quieted,
subject only to certain exceptions under the
property registration decree. [Heirs of
Alejandra Delfin, namely, Leopoldo Delfin, et al. v.
Avelina Rabadon, G.R. No. 165014 (2013)]
2. Exceptions:
• Those claims noted on the certificate
• Liens, claims, or rights arising or existing
under the laws and the Constitution,
which are not by law required to appear
on record in the Register in order to be
valid
• Unpaid real estate taxes levied and
assessed within 2 years immediately
preceding the acquisition of any right
over the land by an innocent purchaser
for value
c. Title to the land becomes non-prescriptible
1. Even adverse, notorious, and continuous
possession under claim of ownership for the
period fixed by law is ineffective against a
Torrens title [JM Tuason and Co. Inc. v. CA,
G.R. No. L-41233 (1979)]
2. The fact that the title to the land was lost
does not mean that the land ceased to be
registered land before the reconstitution of
its title. It cannot perforce be acquired by
prescription. [Ruiz v. CA, 1977]
d. Land becomes incontrovertible and indefeasible.
A decree of registration and registered title
Page 431 of 511
CIVIL LAW
cannot be impugned, enlarged, altered, modified,
or diminished either in collateral or direct
proceeding after the lapse of the 1-year period
prescribed by the law.
Exceptions:
1. If previous valid title of the same land exists
2. When the land covered is not capable of
registration
3. When acquisition of certificate is attended by
fraud
e. Torrens certificate is presumed valid and devoid
of flaws.
Note: Registration is not equivalent to legal title.
Under the Torrens system, registration only gives
validity to the transaction or creates a lien upon the
land. It merely confirms, but does not confer,
ownership [Lu v. Manipon, G.R. No. 147072 (2002)]
Effect of Non-Registration
If a purchaser, mortgagee or grantee should fail to
register his deed the conveyance, considering our
existing registration laws, it 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.
It is a settled rule that lands under a Torrens title
cannot be acquired by prescription or adverse
possession. Section 47 of P.D. No. 1529, the Property
Registration Decree, expressly provides that no title
to registered land in derogation of the title of the
registered owner shall be acquired by prescription or
adverse possession. [Dream Village Neighborhood
Association, Inc., represented by its Incumbent President Greg
Seriego v. Bases Conversion Development Authority, G.R.
No.192896 (2013)]
Dealings in Land before Issuance of Decree
With the filing of an application for registration, the
land described therein does not cease to become open
to any lawful transaction. If the transaction takes place
before the issuance of the decree of registration,
Section 22 of PD 1529 provides that the instrument is
to be presented to the RTC, together with a motion
praying that the same be considered in relation with
the pending application.
U.P. LAW BOC LAND TITLES AND DEEDS
However, if the motion is filed after the decision of
adjudication has become final but before the issuance
of the decree by the Administrator of Land
Registration Authority, the court shall require the
interested party to pay the fees prescribed as if such
instrument had been presented for registration in the
office of the Register of Deeds. [Peña]
Laches, When Applicable
Laches sets in if it would take 18 years for a person to
file an action to annul the land registration
proceedings, especially so if the registrant has already
subdivided the land and sold the same to innocent
third parties. A party’s long inaction or passivity in
asserting his rights over disputed property precludes
him from recovering the same. [Heirs of Teodoro dela
Cruz v. CA, G.R. No. 1117384 (1998); Aurora Ignacio
v. Valeriano Basilio, et al., G.R. No. 122824 (2001)]
Page 432 of 511
CIVIL LAW
B. The Regalian Doctrine
A western legal concept that was first introduced by
the Spaniards into the country through the laws of the
Indies and the Royal Cedulas whereby the Philippines
passed to Spain by virtue of “discovery” and
conquest. Consequently, all lands became the
exclusive patrimony and dominion of the Spanish
Crown. [Agcaoili]
Sec. 2, Art. XII, 1987 Constitution.
All lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces
of potential energy, fisheries, forests or timber,
wildlife, flora and fauna, and other natural
resources are owned by the State. With the
exception of agricultural lands, all other natural
resources shall not be alienated. The exploration,
development, and utilization of natural resources
shall be under the full control and supervision of
the State. The State may directly undertake such
activities, or it may enter into co-production, joint
venture, or production-sharing agreements with
Filipino citizens, or corporations or associations
at least 60 per centum of whose capital is owned
by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable
for not more than twenty-five years, and under
such terms and conditions as may be provided by
law. In cases of water rights for irrigation, water
supply, fisheries, or industrial uses other than the
development of waterpower, beneficial use may
be the measure and limit of the grant.
The State shall protect the nation’s marine wealth
in its archipelagic waters, territorial sea, and
exclusive economic zone, and reserve its use and
enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale
utilization of natural resources by Filipino
citizens, as well as cooperative fish farming, with
priority to subsistence fishermen and fish workers
in rivers, lakes, bays, and lagoons.
The President may enter into agreements with
foreign-owned corporations involving either
technical or financial assistance for large-scale
exploration, development, and utilization of
minerals, petroleum, and other mineral oils
according to the general terms and conditions
provided by law, based on real contributions to
the economic growth and general welfare of the
U.P. LAW BOC LAND TITLES AND DEEDS
country. In such agreements, the State shall
promote the development and use of local
scientific and technical resources.
The President shall notify the Congress of every
contract entered into in accordance with this
provision, within thirty days from its execution.
The principle of State ownership of lands and all other
natural resources had its roots in the 1935
Constitution, which expressed the overwhelming
sentiment in the Convention in favor of the principle
of State ownership of natural resources and the
adoption of the Regalian doctrine as articulated in Sec.
1, Art XIII.
The 1973 Constitution reiterated the Regalian
Doctrine in Sec. 8, Art. XIV.
The present Constitution provides that, except for
agricultural lands of the public domain which alone
may be alienated, forest or timber, and mineral
lands, as well as all other natural resources must
remain with the State, the exploration,
development, and utilization of which shall be subject
to its full control and supervision albeit allowing it to
enter into co-production, joint venture, or
production-sharing agreements, or into agreements
with foreign-owned corporations involving technical
or financial assistance for large-scale exploration,
development, and utilization. [Secs. 2 and 3, Art. XII;
La Bugal-B’laan Tribal Association, Inc. v. Ramos, G.R.
No. 127882 (2004)]
The Regalian Doctrine is enshrined in the 1987
Constitution [Art 12, Sec 2 & 3] which states that all
lands of public domain belong to the State, thus
private title to land must be traced to some grant,
express or implied, from the State, i.e. The Spanish
Crown or its successors, the American Colonial
government and thereafter the Philippine Republic
It does not negate native title to lands held in private
ownership since time immemorial. [Cruz v. Sec. of
Environment and Natural Resources, G.R. No. 135385
(2000)]
Native title recognizes ownership of land by Filipinos
independent of any grant from the Spanish crown on
the basis of possession since time immemorial [cf:
Cariño v. Insular Government, G.R. No. 2869 (1907)]
Lands embraced by native title are presumed to have
been held prior to the Spanish conquest and never to
have been public land.
Page 433 of 511
CIVIL LAW
1. Effects
a. All lands of public domain belong to the State,
and that the State is the source of any asserted
right to ownership in land and charged with the
conservation of such patrimony [Republic v. IAC,
G.R. No. 71285 (1987)]
b. Under the Regalian doctrine, all lands of
whatever classification and other natural
resources not otherwise appearing to be clearly
within private ownership are presumed to
belong to the State which is the source of any
asserted right to ownership of land. [Repubic v.
Remnan Enterprises, Inc. G.R. No. 199310 (2014)]
c. The burden of proof in overcoming the
presumption of State ownership of the lands of
the public domain is on the person applying for
registration (or claiming ownership), who must
prove that the land subject of the application is
alienable or disposable. To overcome this
presumption, incontrovertible evidence must be
established that the land subject of application (or
claim) is alienable or disposable. [Valiao v.
Republic, G.R. No. 170757 (2011)]
2. Concept of Native Title,
Time Immemorial
Possession
A recognized exception to the theory of jura regalia,
the ruling in Cariño v. Insular Government (supra)
institutionalized the recognition of the existence of
native title to land, or ownership of land by Filipinos
by virtue of possession under a claim of ownership
since time immemorial and independent of any grant
from the Spanish Crown [Agcaoili]
Lands under native title are not part of public
domain, “lands possessed by an occupant and his
predecessors since time immemorial, such possession
would justify the presumption that the land had never
been part of the public domain or that it had been
private property even before the Spanish conquest
[Republic v. CA, G.R. No. 130174 (2000)]
ANCESTRAL DOMAINS
Refer to all areas generally belonging to ICCs/IPs
comprising lands, inland waters, coastal areas, and
natural resources therein, held under a claim of
ownership, occupied or possessed by ICCs/IPs, by
U.P. LAW BOC LAND TITLES AND DEEDS
themselves or through their ancestors, communally
or individually since time immemorial,
continuously to the present except when interrupted
by war, force majeure or displacement by force,
deceit, stealth or as a consequence of government
projects or any other voluntary dealings entered into
by government and private individuals/corporations,
and which are necessary to ensure their economic,
social and cultural welfare.
It shall include ancestral lands, forests, pasture,
residential, agricultural, and other lands individually
owned whether alienable and disposable or otherwise,
hunting grounds, burial grounds, worship areas,
bodies of water, mineral and other natural resources,
and lands which may no longer be exclusively
occupied by ICCs/IPs but from which they
traditionally had access to for their subsistence and
traditional activities, particularly the home ranges of
ICCs/IPs who are still nomadic and/or shifting
cultivators
Certificate of Ancestral Domain Title (CADT)
refers to a title formally recognizing the rights of
possession and ownership of ICCs/IPs over their
ancestral domains identified and delineated in
accordance with this law [Sec. 3(c), IPRA]
Certificate of Ancestral Lands Title (CALT) refers
to a title formally recognizing the rights of ICCs/IPs
over their ancestral lands.
Individually-owned ancestral lands, which are
agricultural in character and actually used for
agricultural, residential, pasture, and tree farming
purposes, including those with a slope of eighteen
percent (18%) or more, are hereby classified as
alienable and disposable agricultural lands [Sec. 12,
IPRA]
Native title, however, is a right of private ownership
particularly granted to ICCs/IPs over their ancestral
lands and domains. The IPRA categorically declares
ancestral lands and domains held by native title as
never to have been public land. [Cruz v. Sec. of
Environment and Natural Resources, supra]
Page 434 of 511
CIVIL LAW
C. Citizenship Requirement
1. Individuals
Art. XII, Sec. 3, 1987 Constitution provides, in part:
Lands of the public domain are classified into
agricultural, forest or timber, mineral lands and
national parks. Agricultural lands of the public
domain may be further classified by law according to
the uses to which they may be devoted. Alienable
lands of the public domain shall be limited to
agricultural lands. Private corporations or associations
may not hold such alienable lands of the public
domain except by lease, for a period not exceeding
twenty-five years, renewable for not more than
twenty-five years, and not to exceed one thousand
hectares in area. Citizens of the Philippines may lease
not more than five hundred hectares, or acquire not
more than twelve hectares thereof, by purchase,
homestead, or grant.
The Krivenko Doctrine
The capacity to acquire private land is made
dependent upon the capacity to acquire or hold lands
of public domain. Private land may be transferred or
conveyed only to individuals or entities ‘qualified to
acquire lands of public domain. [Bernas]
The 1935 Constitution reserved the right for Filipino
citizens or corporations at least sixty percent of the
capital of which was owned by Filipinos. Aliens,
whether individuals or corporations, have been
disqualified from acquiring public lands; hence they
have also been disqualified from acquiring private
lands. [Krivenko v. Register of Deeds, G.R. No. L-630,
1947]
General Rule: Non-Filipinos cannot acquire or hold
title to private lands of public domain, except only by
way of legal succession [Halili v. CA, G.R. No. 113539
(1998); Secs. 2 and 5, Art. XII, 1987 Constitution]
Exceptions:
a. Aliens by way of hereditary succession [Sec. 7,
Art. XII, 1987 Constitution]
b. Natural born citizens who have lost their
citizenship:
For business use: limited to 5,000 sq. m. for
urban land and 3 hectares for rural land [RA No.
7042 as amended by RA No. 8179]
U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

But where a Filipino citizen naturalized as a 3. If engaged in agriculture, it is restricted to

citizen in a foreign country has “reacquired” his
Philippine citizenship under the terms of RA
9225 (2003) otherwise known as the “Citizenship
Retention and Re-acquisition Act of 2003,” the
area limitations may no longer apply since the law
expressly grants him the same right, as any
Filipino citizen, to “enjoy full civil and political
rights” upon the re-acquisition of his Filipino
citizenship [Agcaoili].
c. Aliens, although disqualified to acquire lands of
public domain, may lease private land for a
reasonable period provided, that such lease does
not amount to a virtual transfer of ownership.
They may also be given an option to buy property
on the condition that he is granted Philippine
citizenship. [Llantino v. Co liong Chong, G.R. No.
L-29663 (1990)]
d. Lands acquired by an American citizen prior the
proclamation of Philippine Independence on July
4, 1946 but after the passage of the 1935
Constitution may be registered, based on the
ordinance appended to the 1935 Constitution.
[Moss v. Director of Lands, G.R. No. L-27170
(1977)]
1,024 hectares
b. For patrimonial property of the State [Sec. 3, Art.
XII, 1987 Constitution]
1. Lease only for a limited period of 25 years
2. Limited to 1,000 hectares
3. Applies to both Filipino and Foreign
Corporations
4. This limitation does not apply where the
corporation acquired the land, the same was
already private land [Republic v. IAC and Acme
Plywood & Veneer co., Inc., G.R. No. 73002
(1986)]
A corporation sole may acquire and register private
agricultural land. It has no nationality, thus the
constitutional proscription against private
corporations acquiring public agricultural lands will
not apply. [RC Apostolic Administrator of Davao v. LRC,
G.R. No. L-8415 (1957)]: A corporation sole, which
consists of one person only, is vested with the right to
purchase and hold real estate and register the same in
trust for the faithful or members of the religious
society or church for which the corporation was
organized

e. Land sold to an alien which is now in the hands

of a naturalized citizen can no longer be annulled
[De Castro v. Tan, GR No. L-31956]. The litigated
property is now in the hands of a naturalized
Filipino. It is no longer owned by a disqualified
vendee. The purpose of the prohibition ceases to
be applicable. [Barsobia v. Cuenco, G.R. No. L-
33048 (1982)]

2. Corporations
Private corporations may not hold alienable lands of
the public domain except by lease for a period not
exceeding twenty-five years, renewable for not
more than twenty-five years, and not to exceed one
thousand hectares in area. [Sec. 3, Art. XII, 1987
Constitution]

Limitations to Ownership of Land by

Corporations:
a. For private lands:
1. At least 60% Filipino [Sec. 2, Art. XII, 1987
Constitution; Agcaoili]
2. Restricted as to extent reasonably necessary
to enable it to carry out the purpose for
which it was created

Page 435 of 511

U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

D. Original Registration
2. Who May Apply
ORIGINAL REGISTRATION
This is a proceeding brought before the land a. Under Sec. 14, PD 1529
registration court to determine title or ownership 1. Those who by themselves or through their
of land on the basis of an application for registration predecessors-in-interest, have been in open,
or answer by a claimant in a cadastral registration. continuous, exclusive and notorious
possession and occupation of alienable and
A decree of registration merely confirms, but does disposable lands of the public domain under
not confer ownership. [City Mayor of Parañaque City a bona fide claim of ownership since June 12,
v. Ebio, G.R. No. 178411, (2010)] Registration does 1945, or earlier.
not vest title or give title to the land, but merely 2. Those who have acquired ownership of
confirms and thereafter protects the title already private lands by prescription under the
possessed by the owner, making it imprescriptible by provisions of existing laws.
occupation of third parties. The registration does not 3. Those who have acquired ownership of
give the owner any better title than he has. He does private lands or abandoned river beds by
not obtain title by virtue of the certificate. He secures right or accession or accretion under the
his certificate by virtue of the fact that he has a fee existing laws.
simple title. [Legarda v. Saleeby, supra] 4. Those who have acquired ownership of land
in any other manner provided for by law
Original Distinguished From Subsequent (see: Republic represented by Mindanao Medical
Subsequent Center v CA, G.R. No. 40912 (1976)]
Original Registration • If land is owned in common, ALL co-
Registration
Any transaction owners shall file the application jointly
affecting such originally • If land has been sold under pacto de retro,
When right of
registered land, if in the vendor a retro may file an
ownership or title to
order, may be registered application for the original registration
land is for the first time
in the Office of the of the land, provided, however that
made of public record
Register of Deeds should the period for redemption expire
concerned during the pendency of the registration
proceedings and ownership to the
property consolidated in the vendee a
1. Kinds of Original retro, the latter shall be substituted for
Registration the applicant and may continue the
proceedings.
a. Voluntary – by filing with the proper court • A trustee on behalf of his principal may
under: apply for original registration of any
1. PD 1529, Property Registration Decree land held in trust by him, unless
2. CA 141, Public Land Act prohibited by the instrument creating
3. RA 8371, IPRA the trust.

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
b. Under Sec. 12, CA 141; Any person who:
1. Is a citizen of the Philippines over the age of
18, or the head of a family
2. Does not own more than 24 hectares of land
in the Philippines, or has not had the benefit
of any gratuitous allotment of more than 24
hectares of land since the occupation of the
Philippines by the United States

Note: they may enter a homestead of not

exceeding 24 hectares of agricultural land of
the public domain

Page 436 of 511

U.P. LAW BOC LAND TITLES AND DEEDS
c. Under RA 8371
1. Sec. 11 – Formal recognition of ancestral
domains by virtue of Native Title may be
solicited by ICCs/IPs concerned
2. Sec. 12 – Option to secure certificate of title
under CA 141 or Land Registration Act 496
• Individual members of cultural
communities with respect to
individually-owned ancestral lands who,
by themselves or through their
predecessors-in -interest, have been in
continuous possession and occupation
of the same in the concept of owner
since time immemorial or for a period of
not less than thirty (30) years
immediately preceding the approval of
this Act and uncontested by the
members of the same ICCs/IPs shall
have the option to secure title to their
ancestral lands
• Option granted shall be exercised within
20 years from the approval of RA 8371
JURISDICTION
Where to File: The court that should take cognizance
of a registration case is that which has territorial
jurisdiction over the property.
General Rule: RTC of the province, city, or
municipality where the property is situated.
The RTC shall have exclusive jurisdiction over all
applications original for registration of title, with
power to hear and determine all questions arising
upon such applications or petition. [Sec. 2, par. 2, P.D.
No. 1529]
Exception: Delegated jurisdiction to the MTC, MeTC,
and MCTC by the Supreme Court in cadastral and
land registration cases IF:
a. There is no controversy over the land, OR
b. Its value is less than P100,000 [Sec. 34, BP 129]
3. Procedure in Ordinary Land
Registration
STEP 1: Survey of the land by the Bureau of Lands
or a duly registered private surveyor
Note: No plan of such survey, whether it be original
or subdivision, may be admitted in land registration
Page 437 of 511
CIVIL LAW
proceedings until approved by the Director of Lands
[Sec. 1858, Administrative Code]
STEP 2: Filing of application for registration by the
applicant at the RTC of the province, city, or
municipality where the property is located;
a. Form of the application
1. In writing
2. Signed by the applicant/s or person duly
authorized in his behalf
3. Sworn before any officer authorized to
administer oath for the province or city
where the application was actually signed
4. Application is presented in duplicate
b. Contents of the application:
1. A description of the land
2. The citizenship and civil status of the
applicant, whether single or married, and, if
married, the name of the wife or husband,
and, if the marriage has been legally
dissolved, when and how the marriage
relation terminated. It shall also state:
3. The full names and addresses of all
occupants of the land and those of the
adjoining owners, if known, and, if not
known, it shall state the extent of the search
to find them.
4. Whether the property is conjugal,
paraphernal or exclusively owned by the
applicant.
c. Documents to accompany the application [from
Regulations in Ordinary Land Registration Cases]
1. Tracing-cloth plan duly approved by the
Director of Lands, together with two
blueprint or photographic copies thereof;
2. Three copies of the corresponding technical
descriptions;
3. Three copies of the surveyor’s certificate;
4. All original muniments of title in the
possession of the applicant which prove his
rights, to the title he prays for or to the land
he claims; and
5. Certificate in quadruplicate of the city or
provincial treasurer of the assessed value of
the land, at its last assessment for taxation,
or, in the absence thereof, that of the next
preceding year. However, in case the land
has not been assessed, the application may
be accompanied with an affidavit in
quadruplicate of the fair market value of the
land, signed by three disinterested persons.
U.P. LAW BOC LAND TITLES AND DEEDS
d. Amendments to the Application
1. Sec. 19, PD 1529 permits the applicants to
amend the application at any stage of the
proceedings upon such just and reasonable
terms as the court may order;
2. However, Sec. 23, PD 1529 mandates that
there is a need to comply with the required
publication and notice as in an original
application if the amendment is substantial
as in:
• A change in the boundaries
• An increase in the area of the land
applied for; or
• The inclusion of an additional land
e. Special Cases:
1. If the land is bounded by a road, the
applicant must state in his application if he
claims any portion of the land within the
limits of the road, or if he likes to have the
boundaries determined. [Sec. 20, PD 1529]
2. If the applicant is a non-resident, he shall
appoint an agent or representative who is a
Philippine resident. [Sec. 16, PD 1529]
3. Intestate Estate of Don Mariano San Pedro v. CA
G.R. No. 130727 (1996)]: A person claiming
ownership of real property must clearly
identify the land claimed by him.
4. In re: Application for Land Registration v. Republic
[G.R. No. 147359 (2008)] An applicant in a
land registration case must prove the facts
and circumstances evidencing the alleged
ownership of the land applied for. General
statements which are mere conclusions of
law and not factual proof of possession are
unavailing. The deeds in its favor only
proved possession of its predecessors-in-
interest as early as 1948. (The law now
stands that a mere showing of possession for
30 years is not sufficient. Open, continuous,
exclusive, and notorious (OCEN)
possession must be shown to have started on
June 12, 1945 or earlier.)
STEP 3: Setting of the date for the initial hearing of
the application by the Court;
a. The Court shall issue an order setting the date
and hour of the initial hearing within 5 days from
filing of the application
b. The initial hearing shall be 45 – 90 days from the
date of the order [Sec. 23, PD 1529]
Page 438 of 511
CIVIL LAW
STEP 4: Transmittal to the LRA
The application and the date of initial hearing together
with all the documents or other evidences attached
thereto are transmitted by the Clerk of Court to the
Land Registration Authority (LRA)
STEP 5: Publication of a Notice of the Filing of the
Application and date and place of hearing
a. Publication shall be sufficient to confer
jurisdiction upon the court. [Sec. 23, PD 1529]
b. Form and contents of the notice:
1. Addressed to all persons appearing to have
an interest in the land involved
2. Requires all persons concerned to appear in
court on the date and time indicated to show
cause why the application for registration
should not be granted
c. The public shall be given notice of the initial
hearing of the application by publication
1. The Commissioner of Land Registration
(CLR) shall cause it to be published once in
the Official gazette AND once in a
newspaper of general circulation
2. This is sufficient to confer jurisdiction to the
court
d. It is not necessary to give personal notice to the
owners or claimants of the land sought to be
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
(1997)]
e. Once the registration court had acquired
jurisdiction over a certain parcel, or parcels, of
land in the registration proceedings in virtue of
the publication of the application, that
jurisdiction attaches to the land or lands
mentioned and described in the application. If it
is later shown that the decree of registration had
included land or lands not included in the original
application as published, then the registration
proceedings and the decree of registration must
be declared null and void insofar — but only
insofar — as the land not included in the
publication is concerned. [Benin v. Tuason, G.R.
No. L-26127 (1974)]
U.P. LAW BOC LAND TITLES AND DEEDS
STEP 6: Service of notice upon contiguous owners,
occupants and those known to have interest in the
property by the Sheriff;
a. Mailing:
1. Within 7 days from publication, the CLR
shall mail a copy of the notice
2. Copies of the notice shall be mailed to:
• Every person named in the notice
whose address is known.
• the Secretary of Public Highways, to the
Provincial Governor, and to the Mayor
of the municipality or city, in which the
land lies, if the applicant requests to
have the line of a public way or road
determined
• Secretary of Agrarian Reform, the
Solicitor General, the Director of Lands,
the Director of Mines and/or the
Director of Fisheries and Aquatic
Resources, (as appropriate) if the land
borders on a river, navigable stream or
shore, or on an arm of the sea where a
river or harbor line has been established,
or on a lake, or if it otherwise appears
from the application or the proceedings
that a tenant-farmer or the national
government may have a claim adverse to
that of the applicant
b. Posting:
1. CLR shall cause the sheriff or his deputy to
post the notice at least 14 days before the
hearing:
2. In a conspicuous place on each parcel of land
included in the application and in a
conspicuous place on the bulletin board of
the municipal building of the municipality or
city in which the land or portion thereof is
situated.
3. The court may also cause notice to be served
to such other persons and in such manner as
it may deem proper.
c. Notice of application and initial hearing by
publication is sufficient and the mere fact that a
person purporting to have a legitimate claim in
the property did not receive personal notice is not
a sufficient ground to invalidate the proceedings
although he may ask for the review of the
judgment or the reopening of the decree of
registration, if he was made the victim of actual
fraud. [Republic v. Abadilla, CA, G.R. No. 6902-R
(1951)]
Page 439 of 511
CIVIL LAW
STEP 7: Filing of answer or opposition to the
application by any person whether named in the
notice or not;
a. Who may file? Any person claiming an interest,
whether named in the notice or not
b. When to file? On or before the date of initial
hearing, or within such further time as may be
allowed by the court.
c. What shall it contain? It shall state all the
objections and the interest claimed by the party
the remedy desired.
d. How shall it be made? It shall be signed and
sworn to by him or by some other duly
authorized person. Sec. 25, PD 1529 provides for
the requisites of an opposition:
1. It shall set forth “all the objections to the
application” and
2. It shall state the “interest claimed by the
party filing the same”
e. Effect of Failure to Answer:
1. If no one appears/files an answer, upon
motion, the court shall order a default to be
recorded.
2. By the description in the notice "To all
Whom It May Concern", all the world are
made parties defendant and shall be
concluded by the default order.
3. Where an appearance has been entered and
an answer filed, a default order shall be
entered against persons who did not appear
and answer.
4. Absence of opposition does not justify
outright registration. [Director of Lands vs.
Agustin, G.R. No. L-16173 (1921)]
f. Effects of Default:
1. With respect to the Applicant – he has the
right to present or adduce evidence ex parte
2. With respect to those covered by the default
order – they have no legal standing in court;
therefore, they are no longer allowed to
participate and no opportunity to present
evidence
g. For relief from an order of default, see Sec. 3, Rule
18, Rules of Court
U.P. LAW BOC LAND TITLES AND DEEDS
STEP 8: Hearing of the case by the court
a. Applicable procedural law:
1. Reception of evidence is governed by PD
1529
2. Rules of Court shall, insofar as not
inconsistent with the provisions of the
Decree, be applicable to land registration and
cadastral cases by analogy or in a suppletory
character and whenever practicable and
convenient [Sec. 34, PD 1529]
b. Sec. 27, PD 1529: Court may either:
1. Hear the parties and their evidence, or
2. Refer the case or any part thereof to a referee
• Referee shall hear the parties, receive
their evidence, and submit his report
thereon to the Court within 15 days after
termination of such hearing
• Hearing before a referee may be held at
any convenient place within the
province or city as may be fixed by him
and after reasonable notice thereof shall
have been served to the parties
concerned
• Upon receipt of the report the Court
may:
a. Adopt the same
b. Set aside the report
c. Modify the report
d. Refer back or recommit the case to
the referee for presentation of
evidence
STEP 9: Promulgation of judgment by the Court;
a. This is the adjudication, determination, and
resolution of the issue of ownership
b. Forms of Judgment:
1. Dismissal of the application – with
prejudice or without prejudice
2. Partial Judgment – in a case where only a
portion of the land subject of registration is
contested, the court may render partial
judgment provided that a subdivision plan
showing the contested and uncontested
portions approved by the Director of Land
is previously submitted to said court. [Sec.
28, PD 1529]
3. Judgment Confirming Title - Judgment
may be rendered confirming the title of the
applicant, or the oppositor as the case may
Page 440 of 511
CIVIL LAW
be, to the land or portions thereof upon
finding that the party concerned has
sufficient title proper for registration. [Sec.
29, PD 1529]
c. Finality of Judgment - Sec. 30, par. 1, PD 1529
provides that the judgment becomes final upon
the expiration of 30 days counted from receipt of
notice of judgment.
Note: This has been MODIFIED to the lapse of
15 days counted from receipt of notice of
judgment as per Sec. 39, BP 129
STEP 10: Issuance of the decree
a. If the court finds after hearing that the applicant
or adverse claimant has title as stated in his
application or adverse claim and proper for
registration, a decree of confirmation and
registration shall be entered
b. The Court declares the decision final and
instructs the LRA to issue a decree of
confirmation and registration within 15 days
from entry of judgment
Note: It is not the court that issues the decree,
but the LRA
c. One year after issuance of the decree, it becomes
incontrovertible and amendments of the same
will not be allowed except in cases of clerical
errors
Court retains jurisdiction over the case until after
the expiration of 1 year from the issuance of the
decree of registration. [Gomez v. CA, 1988]
Note: While a decision in land registration
proceeding becomes final after the expiration of
thirty days from the date of service of its notice,
the decree of registration does not become final
until after the lapse of one year from the date of
its issuance and entry.
STEP 11: Entry of the decree of registration
a. Decree is entered in the LRA
b. Every decree of registration shall:
1. Bear the day of the year, hour, and minute of
its entry,
2. Be signed by the Administrator of the Land
Registration Authority in his ex officio
capacity as Clerk of Court in land registration
matters
U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

3. State whether the owner is: as discussed in Santiago v. SBMA, G.R. No. 156888,
• Married or unmarried, and if married, (2006)]
the name of the husband or wife, b. Tax declaration and receipts are not conclusive
provided that if the land adjudicated is but have strong probative value when
conjugal property, it shall be issued in accompanied by proof of actual possession.
the names of both spouses. [Municipality of Santiago v. CA, G.R. No. L-49903
• If the owner is under disability, it shall (1983)]
state the nature of the disability, c. Other proofs such as testimonial evidence
• If the owner is a minor, his age
4. Contain a description of the land as finally
determined by the court,
5. Set forth the estate of the owner, and also, in
such manner as to show their relative
priority, all particular estates, mortgages,
easements, liens, attachments and other
encumbrances, including rights of tenant-
farmer, if any, to which the land or owner’s
estate is subject,
6. Contain any other matter properly to be
determined

STEP 12: Sending of copy of the decree of

registration to the corresponding Register of Deeds
(Registrar of Land Titles and Deeds)

STEP 13: Transcription of the decree of registration

a. It is transcribed in the registration book of the
Registrar of Land Titles and Deeds
b. Registrar issues owner’s duplicate OCT of the
applicant by the Registrar of Land Titles and
Deeds, upon payment of the prescribed fees.

4. Evidence Necessary
Proof necessary in land registration
a. Proof that land has been declassified from the
forest zone, is alienable or disposable, and is
registrable (e.g. Presidential proclamation,
legislative acts)
b. Identity of the land (e.g. survey plan)
c. Possession and occupation of the land for the
length of time and in the manner required by law
[Sec. 4, PD 1073 amending Sec. 48(b) and (c) of
Public Land Act]
d. If he claims private ownership not because of his
possession, he must prove the basis of such claim
by submitting muniments of title.

Proving Private Ownership

a. Spanish titles are inadmissible and ineffective
proof of ownership in land registration
proceedings filed AFTER Aug. 16, 1976 [PD 892

Page 441 of 511

U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

3. When purchaser is in bad faith; e.g. he had full

E. Subsequent Registration knowledge of a previous sale. [Jamoc v. CA, 200
SCRA 74 (1991)]
SUBSEQUENT REGISTRATION 4. When a person buys land from one whose rights
A proceeding where incidental matters after original over the land is evidenced only by a deed of sale
registration may be brought before the land and an annotation in the certificate of title but no
registration court by way of motion or petition filed TCT. [Quiniano v. CA, G.R. No. L-28466 (1971)]
by the registered owner or a party in interest
TWO TYPES OF DEALINGS
Necessity and Effects Of Registration 1. Voluntary Dealings – these are deeds,
[Sec. 51 and 52, PD 1529] instruments, documents which are the results of
The deed, mortgage, lease, or other voluntary free and voluntary acts of parties thereto.
instrument, except a will shall ONLY operate as: 2. Involuntary Dealings – these refer to writ,
1. A contract between the parties and order, or process issued by the court of record
2. Evidence of authority to the Register of Deeds to affecting registered land, also other instruments
make registration. which are not willful acts of the registered owner,
executed without his knowledge or consent
The act of registration shall be the operative act to
convey or affect the land insofar as third persons are Voluntary Dealings Compared to Involuntary
concerned. Dealings
Voluntary Dealings Involuntary Dealings
Also, by registration, it creates constructive notice to
the world. Presentation of the
owner’s duplicate
FORGED DEED certificate of title is
Entry in the day book of
General Rule: A forged deed is an absolute nullity and required to notify;
ROD is sufficient notice
conveys no title. mere entry in the day
to all persons
book of the Register
Exception: If there is good faith, a TCT has already of Deeds (ROD) is
been issued to the purchaser, the latter being an insufficient
innocent purchaser for value according to Sec. 39, PD An innocent
1529, then the title is good. purchaser for value
of registered land
RELIANCE ON TITLE becomes the
General Rule: A person dealing with registered property registered owner the
need not go beyond, but only has to rely on, the moment he presents Saberon v. Ventanilla, Jr.,
title. [Campillo v. PNB, G.R. No. L-19890 (1969)] and files a duly G.R. No. 192669 (2014):
notarized and valid Entry thereof in the day
He is charged with notice only of such burdens and deed of sale and the book of the ROD is
claims which are annotated on the title, for same is entered in the sufficient notice to all
registration is the operative act that binds the day book of the persons even if the
property. ROD and at the owner’s duplicate
same time he certificate of title is not
Exception: When should a purchaser investigate? surrenders or presented to the ROD.
1. Banks are required to exercise more care and presents the owner’s
prudence in dealing with registered lands for their duplicate certificate
business is one affected with public interest. The of title covering the
general rule does not apply. land sold and pays
2. When party concerned has actual knowledge of the registration fees.
facts and circumstances that would impel a
reasonably cautious man to make inquiry. [Leung
Yee v. Strong Machinery Company, G.R. No. L-11658
(1918)]

Page 442 of 511

U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

Voluntary Dealings Involuntary Dealings b. File instrument creating or transferring interest

Villasor v. Camon, R- and certificate of title with Register of Deeds
C.A. No. 8551 together with:
Director of Lands v. Reyes, 1. Owner’s duplicate - the issuance of a new
(1951): It is necessary
G.R. No. L-27594 (1976): transfer certificate without presentation of
to register the deed
Entry in the day book of an owner’s duplicate is unwarranted and
or instrument in the
the ROD is sufficient confers no right on the purchaser [PNB v.
entry book of the
notice to all persons of an Fernandez, 1935]
ROD and a
adverse claim without the 2. Payment of fees & documentary stamp tax
memorandum
same being annotated at 3. Evidence of full payment of real estate tax
thereof shall also be
the back of the certificate 4. Document of transfer – 1 copy additional for
made in the owner’s
of title city/provincial assessor
duplicate certificate
and its original
Sps. Labayen v. c. Payment of fees and DST
Serafica, G.R. No. Armed Forces and Police 1. After payment of entry fee the Register of
178443 (2008): At Mutual Benefit Association, Deeds shall enter the instruments in a
the time of the filing Inc. v. Santiago, G.R. No. primary entry book [Sec. 56, PD 1529]
of the petition for 147559 (2008): Entry of 2. The national, provincial and city
cancellation of the attachment in the governments are exempted from payment of
encumbrance, the books is sufficient notice entry fees
lease contract already to all persons. Hence, 3. RA 456 prohibits registration of documents
lost its efficacy. Thus, the fact that the deed of affecting real property which is delinquent in
there is no basis to sale was already the payment of real estate taxes. Further, if
save its annotation annotated is of no evidence of such payment is not presented
on defendant’s title. moment with regard to with 15 days from the date of entry of said
The fact that the third persons. The document in the primary entry book of the
cancellation of the preference created by the register of deeds the entry shall be deemed
lease contract was levy on attachment is not cancelled.
forged is of no diminished by the
moment, for there subsequent registration of d. Entry of the Instrument in the Primary Entry
was no violation of a the deed of sale. Book: Instruments are regarded as registered
right. from the time the Register of Deeds enters them
in the book

1. Voluntary Dealings e. TCT shall then be issued

Registration of Voluntary Instruments in General Registration of Dealings Less than Ownership

Process of Registration [Sec. 55, PD 1529]
a. The deed or other voluntary instrument must
contain:
1. The following details of the grantee or other
person acquiring or claiming interest:
• Full name
• Nationality
• Residence
• Postal address
• Civil status (if married, include name in
full of spouse)
2. If grantee is a corporation:
It must contain a recital showing that such
corporation or association is legally qualified
to acquire private lands
[Sec. 54, PD 1529]
If an instrument does not divest ownership or title
from owner or from transferee of the registered
owners, then NO NEW CERTIFICATE shall be
entered or issued.
Process of Registration for Dealings less than
Ownership
a. Filing of the instrument with the Register of
Deeds
b. A brief memorandum thereof is made:
1. On the certificate of title by the Register of
Deeds and signed by him, and
2. On the owner’s duplicate
Cancellation or extinguishment of such interests shall
be registered in the same manner.

Page 443 of 511

U.P. LAW BOC LAND TITLES AND DEEDS
Registration of Deeds of Sale and Transfers
a. If entire property is the subject [Sec. 57, PD
1529]
1. Owner executes and registers the deed which
must be sufficient in form.
2. A new certificate of title is issued and
Register of Deeds prepares and delivers to
grantee his owner's duplicate certificate
3. Register of Deeds notes upon the OCT and
the duplicate certificate the date of
transfer, the volume and page of the
registration book where the new certificate is
registered
4. The original and the owner's duplicate of the
grantor's certificate shall be stamped
"cancelled".
5. The deed of conveyance shall be filed and
indorsed with the number and the place of
registration of the certificate of title of the
land conveyed.
b. If only a portion of property is the subject [Sec.
58, PD 1529]
1. Include a plan which shows all the portions
already subdivided with verified and
approved technical description.
2. That plan with the certified copy of the
technical descriptions shall be filed with the
Register of Deeds for annotation in the TCT.
3. Register of Deeds shall issue a TCT and
cancel the grantor's certificate partially OR it
may be cancelled totally and a new one
issued describing therein the remaining
portion
c. If there are SUBSISTING encumbrances and
annotations: They shall be carried over in the
new certificate or certificates; except when they
have been simultaneously discharged.
Registration of Mortgages and Leases [Sec. 60,
PD 1529]
Sec. 60, PD 1529 provides that mortgages and leases
shall be registered in the manner provided in Sec. 54
(Dealings less than ownership)
The deed shall take effect upon the title only from the
time of registration.
When a deed of mortgage is presented, the Register
of Deeds will enter upon the OCT and upon the
Page 444 of 511
CIVIL LAW
owner’s duplicate a memorandum thereof and shall
sign said memorandum.
Registration of Powers of Attorneys [Sec. 64, PD
1529]
Powers of attorney and revocations shall be registered
with the Register of Deeds of the province or city
where the land lies.
Any instrument revoking such power shall be
registered in like manner.
Registration of Trusts
Registration is by memorandum:
a. A memorandum by the words “in trust” or
“upon condition” or other apt words is made if a
deed or other instrument is filed in order to:
1. Transfer registered land in trust, or upon any
equitable condition or limitation expressed
therein, or
2. Create or declare a trust or other equitable
interests in such land without transfer [Sec.
65, PD 1529]
b. A memorandum by the words “with power to
sell,” or “power to mortgage” or other apt words
is made when: The instrument creating or
declaring a trust or other equitable interest
contains an EXPRESS POWER to sell,
mortgage, or deal with the land in any manner
However, if an implied or constructive trust is
claimed, person claiming such must execute a sworn
statement thereof with the Register of Deeds,
containing a description of the land, the name of the
registered owner and a reference to the number of the
certificate of title. Such claim shall not affect the title
of a purchaser for value and in good faith before its
registration. [Sec. 68, PD 1529]
2. Involuntary Dealings
The following involuntary dealings affecting
registered land must be registered:
a. Attachments [Sec. 69, PD 1529]
b. Adverse claim [Sec. 70, PD 1529]
c. Sale on execution or for taxes or for any
assessment [Sec. 74, PD 1529]
d. Notice of lis pendens [Sec. 76, PD 1529]
Registration of Attachment
Attachment is a writ issued at the institution or during
progress of an action commanding the sheriff to
U.P. LAW BOC LAND TITLES AND DEEDS
attach the property, rights, credits or effects of the
defendant to satisfy demands of the plaintiff.
Kinds
a. Preliminary
b. Garnishment
c. Levy on execution
Process of Registration
a. Copy of writ in order to preserve any lien, right
or attachment upon registered land shall be filed
with the Register of Deeds where the land lies,
containing number of certificate of title of land
to be affected or description of land [PD 1529,
Sec 69]
b. Register of Deeds to index attachment in names
of both plaintiff & defendant or name of person
whom property is held or in whose name stands
in the records
1. If duplicate of certificate of title is not
presented:
• Register of Deeds shall within 36 hours
send notice to registered owner by mail
stating that there has been registration &
requesting him to produce duplicate so
that memorandum be made
• If owner neglects or refuses – Register
of Deeds shall report matter to court.
2. Court after notice shall enter an order to
owner to surrender certificate at time & place
to be named therein.
c. Although notice of attachment is not noted in
duplicate, notation in book of entry of Register
of Deeds produces effect of registration already
Effect of registration of attachment
a. Creates real right
b. Has priority over execution sale
c. But between 2 attachments – one that is earlier in
registration is preferred
Duty of Register of Deeds - Duty is ministerial but
may refuse registration in the following
circumstances:
a. Title to land is not in the name of defendant
Exception: If petitioner is an heir
b. No evidence is submitted to show that he has
present or possible future interest in land
Registration of Adverse Claim
A claim is adverse when: [Sec. 70, par. 1, PD 1529]
Page 445 of 511
CIVIL LAW
a. Claimant’s right or interest in registered land is
adverse to the registered owner, and
b. Such right arose subsequent to date of original
registration, and
c. No other provision is made in the Decree for the
registration of such right or claimant
Requisites for registration of an adverse claim:
a. The adverse claimant must give a statement of
the following in writing:
1. His alleged right or interest
2. How and under whom such alleged right or
interest is acquired
3. The description of the land in which the
right or interest is claimed and
4. The number of the certificate of title
b. The statement must be:
1. Signed by the adverse claimant
2. Sworn before a notary public
c. The statement must also state his residence or the
place to which all notices may be served upon
him. [Lozano v Ballesteros, G.R. No. 49470 (1991)]
Duration of an adverse claim
a. 30 days from the date of registration.
b. After that the annotation of adverse claim may be
cancelled upon filing of a verified petition by the
party in interest.
When cancelled, no second adverse claim based
on the same ground may be registered by the
same claimant.
Adverse claim is not ipso facto cancelled after 30 days,
hearing is necessary. [Sajonas v. CA, G.R. No. 102377
(1996)]
a. Registration of execution and tax
delinquency sales
Execution sale
1. To enforce a lien of any description on registered
land, any execution or affidavit to enforce such
lien shall be filed with Register of Deeds where
the land lies
2. Register in the registration book & memorandum
upon proper certificate of title as adverse claim
or as an encumbrance
3. To determine preferential rights between 2 liens:
priority of registration of attachment
Tax sale
1. Sale of land for collection of delinquent taxes and
penalties due the Government
U.P. LAW BOC LAND TITLES AND DEEDS
2. In personam (all persons interested shall be notified
so that they are given opportunity to be heard)
a. Notice to be given to delinquent tax payer at
last known address
b. Publication of notice must also be made in
English, Spanish & local dialect & posted in
a public & conspicuous place in place
wherein property is situated & at the main
entrance of the provincial building
3. Sale cannot affect rights of other lien holders
unless they are given the right to defend their
rights: due process must be strictly observed
4. Tax lien superior to attachment
Note: No need to register tax lien because it is
automatically registered once the tax accrues.
However, sale of registered land to foreclose a tax
lien needs to be registered.
Process of Registration
1. Officer’s return shall be submitted to Register of
Deeds together with duplicate title
2. Register in the registration book
3. Memorandum shall be entered in the certificate
as an adverse claim or encumbrance
4. After the period of redemption has expired & no
redemption (2 years from registration of auction
sale) is made: cancellation of title & issuance of a
new one
5. Before cancellation, notice shall be sent to
registered owner: to surrender title & show cause
why it shall not be cancelled
Note: Actual knowledge of a person is equivalent to
registration as against him
b. Lis Pendens
Registration of Notice Lis Pendens
Purpose of notice of lis pendens: To keep the subject
matter within the power of the court until the entry
of final judgment. It therefore creates merely a
contingency & not a lien.
When notice of lis pendens is proper:
1. To recover possession of real estate
2. To quiet title
3. To remove clouds upon the title thereof
4. For partition
5. Other proceedings of any kind in court directly
affecting the title to land or the use or occupation
thereof or the buildings thereon
Page 446 of 511
CIVIL LAW
When notice of lis pendens is NOT proper:
1. Proceedings for the recovery of money
judgments
2. Attachments
3. Proceedings on the probate of wills
4. Administration of the estate of deceased persons
5. Levies on execution
6. Foreclosure
Process of Registration: By Memorandum or
Notice stating
1. The institution of the action or proceeding
2. The court wherein the same is pending
3. The date of the institution of the action
4. Reference to the number of the certificate of title
5. Adequate description of the land affected and
registered owner thereof
Other parties who need to register
1. Assignee in involuntary proceeding for
insolvency
a. Duty of the officer serving notice to file a
copy of the notice to the Register of Deeds
where the property of debtor lies
b. Assignee elected or appointed by court shall
be entitled to entry of new certificate of
registered land upon presentment of copy of
assignment with bankrupt’s certificate of title
(duplicate)
c. New certificate shall note that it is entered to
him as assignee or trustee in insolvency
proceedings
2. Government in eminent domain
a. Copy of judgment shall be filed in the
Register of Deeds which states description
of property, certificate number, interest
expropriated, nature of public use
b. Memorandum shall be made or new
certificate of title shall be issued
Effect of registration
1. Impossibility of alienating the property in dispute
during the pendency of the suit – may be
alienated but purchaser is subject to final
outcome of pending suit
2. Register of Deeds is duty bound to carry over
notice of lis pendens on all new titles to be issued
Cancellation of lis pendens [Sec. 77, PD 1529]
1. Before final judgment – court may order
cancellation after showing that notice is only for
the purpose of molesting an adverse party or it is
U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

not necessary to protect the rights of the party

who caused it to be registered
2. Register of Deeds may also cancel upon verified
petition of the party who caused such registration
3. Deemed cancelled when certificate of clerk of
court stating manner of disposal of proceeding is
registered
F. Cadastral Registration
It is a proceeding in rem, initiated by the filing of a
petition for registration by the government, not by
the persons claiming ownership of the land subject
thereof, and the latter are, on the pain of losing their
claim thereto, in effect compelled to go to court to
make known their claim or interest therein, and to
substantiate such claim or interest.

Unlike other kinds of registration, this is compulsory

as it is initiated by the government.

The government does not seek the registration of land

in its name. The objective of the proceeding is the
adjudication of title to the lands or lots involved in
said proceeding.

Cadastral Distinguished from Ordinary

Registration
Ordinary Cadastral
Registration Registration
Voluntary Compulsory
Applicant is a person
Applicant is the
claiming title to the
Director of Lands
land
Usually involves
private land; it may
also refer to public
agricultural lands if the
All classes of land are
object of the action is
covered (private and
judicial confirmation
public alienable lands)
of imperfect or
incomplete title (in
which case CA 141
applies)
Applicant comes to
Government asks the
court to confirm his
court to settle and
title and seek
adjudicate the title of
registration of the land
the land
in his name
If the applicant fails to In cadastral registration,
prove his title, if the applicant cannot
application may be prove that he is entitled
dismissed without to the land, the land
prejudice. [Santiago v. becomes public land.
Santos, G.R. No.
31568, March 19, However, the cadastral
1930; Verzosa v. case decision does not
Nicolas, G.R. No. 9227, constitute res judicata as
February 10, 1915] to bar even the same

Page 447 of 511

U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

Ordinary Cadastral STEP 6: Interested persons should communicate

Registration Registration
claimant from
If the judgment subsequently filing an
determines ownership, application for judicial
then it is res judicata confirmation of title to
upon the parties. the same land, provided
the requisites are
complied with. [Director
of Lands v. CA & Pastor,
G.R. No. L-47847, July
31, 1981]
PROCEDURE IN CADASTRAL
REGISTRATION (Sec. 35 and 36, PD 1529)
STEP 1: Determination of the President that public
interest requires title to unregistered lands be settled
and adjudicated.
President then orders the Director of Lands to
conduct cadastral survey.
with the geodetic engineer if he requests for any
information about the land.
STEP 7: Actual survey and plotting of the land.
STEP 8: Director of Lands represented by Solicitor
General shall institute original registration
proceedings.
1. Petition is filed in the appropriate RTC where the
land is situated
2. Contents of the Petition:
a. That public interest requires that the title to
such lands be settled and adjudicated and
praying that such titles be so settled and
adjudicated
b. Description of the lands
c. Accompanied by a plan thereof
d. Such other data as may serve to furnish full
notice to the occupants of the lands and to
all persons who may claim any right or
interest therein

STEP 2: Director of lands shall make a cadastral
survey.
STEP 3: Director of Lands gives notice to interested
persons and to the general public.
Contents of the Notice:
1. Day on which the survey will begin
2. Full and accurate description of the lands to be
surveyed
STEP 4: Publication of notice
1. Published once in the Official Gazette
2. A copy of the notice in English or the national
language shall be posted in a conspicuous place
on the bulletin board of the municipal building of
the municipality in which the lands or any portion
thereof is situated
A copy of the notice shall also be sent to:
a. Mayor of the municipality
b. Barangay captain
c. Sangguniang Panlalawigan and Sangguniang
Bayan concerned
STEP 9: Publication, mailing posting
STEP 10: Hearing
Jurisdiction of the Cadastral Court:
1. Adjudicate title to any claimant thereto
2. Declare land as a public land
3. Order correction of technical description
4. Order the issuance of new title in place of the title
issued under voluntary registration proceedings
5. Determine the priority of overlapping title
6. Order the partition of the property
STEP 11: Decision
STEP 12: Issuance of the decree and certificate of
title
Note: Reopening of cadastral cases no longer allowed
RA 931, effective June 20, 1953 for five (5) years,
authorizing the reopening of cadastral cases under
certain conditions and which had been extended until
Dec. 31, 1968, is no longer in force.

STEP 5: Geodetic engineers or other Bureau of Land
employees in charge of the survey shall give notice
reasonably in advance of the date of the survey. They
shall also mark the boundaries of the lands with
monuments.
Courts are thus without jurisdiction or authority to
reopen a cadastral proceeding since Dec. 31, 1968.
[Aquino, citing Republic v. Estenzo, G.R. No. L-35512
(1988)]

Page 448 of 511

U.P. LAW BOC LAND TITLES AND DEEDS
G. Judicial Confirmation of
Imperfect Title
Applicable law: CA 141, as amended
No title or right to, or equity in, any lands of the
public domain may be acquired by prescription or by
adverse possession or occupancy except as expressly
provided by law. [Sec 57, CA 141]
The Public Land Act recognizes the concept of
ownership under the civil law. This ownership is
based on adverse possession and the right of
acquisition is governed by the Chapter on judicial
confirmation of imperfect or incomplete titles.
When applicable: This applies only to alienable and
disposable agricultural lands of the public domain.
Under Sec. 6 of CA 141, the President, shall classify the
lands of the public domain into:
1. Alienable or disposable;
2. Timber, and
3. Mineral lands,
The rule on confirmation of imperfect title does not
apply unless and until the land classified as, say, forest
land, is released in an official proclamation to that
effect so that if may form part of the disposable
agricultural lands of the public domain. [Bracewell v.
CA, G.R. No. 107427 (2000)]
The law, as presently phrased, requires that
possession of lands of the public domain must be
from June 12, 1945 or earlier, for the same to be
acquired through judicial confirmation of imperfect
title [Republic v. Doldol, G.R. No. 132963 (1998)]
WHO MAY APPLY:
1. Individuals:
a. Filipino citizens 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 public
domain under a bona fide claim of
acquisition since June 12, 1945 or prior
thereto since time immemorial [Sec. 48, CA
141, as amended by Sec. 4, PD 1073]
b. Filipino citizens who by themselves or their
predecessors-in-interest have been, prior to
effectivity of PD 1073 on Jan. 25, 1977, in
open, continuous, exclusive, and notorious
possession and occupation of agricultural
Page 449 of 511
CIVIL LAW
lands of the public domain, under a bona
fide claim of acquisition of ownership for at
least 30 years, or at least since Jan. 24, 1947
[RA 1942]
c. Natural born citizens of the Philippines who
have lost their citizenship and who has legal
capacity to enter into a contract under
Philippine laws may be a transferee of private
land up to a maximum area of 5,000sqm, in
case of urban land, or 3 hectares in case of
rural land to be used by him for business or
other purposes [Sec. 5, RA 8179]
d. Natural-born citizens of the Philippines,
who have lost their Philippine citizenship,
who have acquired disposable and alienable
lands of the public domain from Filipino
citizens who had possessed the same in the
same manner and for the length of time
indicated in numbers (1) and (2) above.
2. Corporations
Private domestic corporations or associations
which had acquired lands from Filipino citizens
who had possessed the same in the manner and
for the length of time indicated in numbers (1)
and (2) above.
Notwithstanding the prohibition in the 1973 and
1987 Constitutions against private corporations
holding lands of the public domain except by
lease not exceeding 1000 hectares, still a private
corporation may institute confirmation
proceedings under Sec. 48, (b) of the Public Land
Act if, at the time of institution of the registration
proceedings, the land was already private land.
On the other hand, if the land was still part of the
public domain, then a private corporation cannot
institute such proceedings. [Director of Lands v.
IAC and Acme Plywood & Veneer c., Inc., supra]
1. Filing of the Application:
Period of Filing is EXTENDED:
RA No. 9176 extended the period to file an
application for judicial confirmation of imperfect or
incomplete title to December 31, 2020. Prior to RA
9176 the deadline for filing was on Dec. 31, 1987.
Scope of the Application:
RA 9176 also limited the area subject of the
application to 12 hectares. Prior to RA 9176, the
maximum area applied for was 144 hectares.
U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

3. Technical description of the land

Applicant must Prove: 4. Tax declarations
a. The land is alienable and disposable land of 5. Boundaries and area
public domain at the time of filing of application);
and c. Possession and occupation of the land for the
b. S/he must have been in open, continuous, length of time and in the manner required by law
exclusive, and notorious (OCEN) possession and
occupation of the land for the length of time and
in the manner and concept provided by law
[Director of Lands v. Buyco, G.R. No. 91189 (1992)]

2. Procedure in Judicial
Confirmation
Sec. 48, par.1, of CA 141 as amended provides, “The
following-described citizens of the Philippines,
occupying lands of the public domain or claiming to
own any such lands or an interest therein, but whose
titles have not been perfected or completed, may
apply to the Court of First Instance of the province
where the land is located for confirmation of their
claims and the issuance of a certificate of title therefor
under the Land Registration Act…”

Hence, the procedure in original registration

discussed in the previous section is also followed in
judicial confirmation of imperfect or incomplete title.

3. Evidence Necessary to
Substantiate Application
The applicant must prove:
a. That the land applied for has been declassified
and is a public agricultural land, is alienable and
disposable, or otherwise capable of registration.
Specifically, the following may be presented:
1. Presidential proclamation
2. Executive Order
3. Administrative Order issued by the DENR
Secretary
4. Bureau of Forest Development Land
Classification Map
5. Certification by the Director of Forestry
6. Investigation reports of Bureau of Lands
Investigator
7. Legislative act or statute

b. The identity of the land; the following may be

submitted:
1. Survey plan
2. Tracing cloth plan and blue print copies of
plan

Page 450 of 511

U.P. LAW BOC LAND TITLES AND DEEDS
H. Remedies
It is important to take note of the following concepts
in studying remedies:
Innocent Purchaser for Value
One who buys the property of another without notice
that some other person has a right to or interest in it,
and who pays a full and fair price at the time of the
purchase or before receiving any notice of another
person’s claim [Rosales v. Burgos, G.R. No. 143573
(2009)]
Extrinsic or Actual Fraud
Any fraudulent act of the successful party in a
litigation which is committed outside the trial of a case
against the defeated party, or his agents, attorneys or
witnesses, whereby said defeated party is prevented
from presenting fully and fairly his side of the case.
[Sterling Investment Corporation v. Ruiz, G.R. No. L-
30694 (1969)]
An aggrieved party in a registration proceeding may
avail himself of the following remedies:
1. Motion for New Trial [see Rule 37, ROC] Relief
from Judgment [see Rule 38, ROC]
2. Appeal
3. Relief from Judgment
4. Petition for Review of Decree of Registration
5. Action for Reconveyance
6. Quieting of Title
7. Cancellation of Title
8. Action for Damages
9. Action for Compensation from the Assurance
Fund
10. Reversion
11. Criminal Suit
Annulment of Judgment [see Rule 47, ROC]
Appeal – Sec. 30, PD 1529 as amended by BP 129
provides that an appeal may be taken from the
judgment of the court as in ordinary civil cases.
Period in Sec. 30, PD 1529 has been modified to 15
days as per Sec. 39, BP 129
Unlike ordinary civil actions, the adjudication of land
in a cadastral or land registration proceeding does not
become final in the sense of incontrovertibility until
after the expiration of one (1) year after the entry of
the final decree of registration. As long as a final
decree has not been entered by the LRA and the
period of 1 year has not elapsed from date of such
Page 451 of 511
CIVIL LAW
decree, the title is not finally adjudicated and the
decision in the registration proceeding continues to
be under the control and sound discretion of the court
rendering it. [Gomez v. CA, G.R. No. 77770 (1988)]
PETITION TO REOPEN OR REVIEW
DECREE OF REGISTRATION
– Sec. 32, PD 1529
1. To whom available: Only to an aggrieved party
who has been deprived of land or any estate or
interest therein by decree of registration
2. When to file: Any time after the rendition of the
court’s decision and before the expiration of 1
year from entry of decree of registration
a. Upon expiration of the 1 year period, every
decree becomes incontrovertible
b. The Court held that the petition may be filed
at any time after rendition of the court’s
decision (no need to wait for actual entry in
the LRA) and before expiration of one year
from entry of the final decree of registration.
[Rivera v. Moran, G.R. No. L-24568 (1925);
Director of Lands v. Aba, G.R. No. L-45648
(1939)]
3. Sole and ONLY Ground: Actual Fraud
a. Actual fraud proceeds from an intentional
deception practiced by means of
misrepresentation or concealment of
material fact
b. The fraud must consist in an intentional
omission of fact required by law to be stated
in the application or a wilful statement of a
claim against the truth
4. Requisites for Petition to Reopen or Review
a. The petitioner has a real and dominical right;
b. That he has been deprived thereof (through
fraud);
c. That the action is filed within one year from
the issuance and entry of the decree of
registration; and
d. That the property has not been transferred
to an innocent purchaser for value; [Agcaoili,
citing Walstrom v. Mapa, G.R. No. 38387
(1990)]
Action for Reconveyance:
1. When to file:
a. Before issuance of decree, or within/after 1
year from entry
b. If based on implied trust, 10 years;
U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

c. If based on express trust and void contract,
or if the plaintiff is in possession of the land,
imprescriptible
d. If based on fraud, 4 years from the discovery
2. It does not reopen proceedings but a mere
transfer of the land from registered owner to the
rightful owner [Esconde v. Barlongay, supra]
3. Requisites:
a. The action must be brought in the name of
a person claiming ownership or dominical
right over the land registered in the name of
the defendant;
b. The registration of the land in the name of
the defendant was procured through fraud
or other illegal means;
c. The property has not yet passed to an
innocent purchaser for value; and
d. The action is filed after the certificate of title
had already become final and
incontrovertible but within 4 years from the
discovery of the fraud [Balbin v. Medalla, G.R.
No. L-46410 (1981)] or not later than 10
years in the case of an implied trust [New
Regent Sources, Inc. v. Tanjuatco, G.R. No.
168800 (2009)]
1. That a person sustains loss or damage, or is
deprived of any estate or interest in land;
2. On account of the bringing of land under the
operation of the Torrens System arising after
original registration;
3. Through fraud, error, omission, mistake or
misdescription in a certificate of title or entry or
memorandum in the registration book;
4. Without negligence on his part; and
5. Is barred or precluded from bringing an action
for the recovery of such land or estate or interest
therein. [Agcaoili]
Reversion - Instituted by the government, thru the
Solicitor General in all cases where lands of public
domain are held in violation of the Constitution or
were fraudulently conveyed.
Indefeasibility of title, prescription, laches, and
estoppel do not bar reversion suits.

Quieting of Title – remedy for the removal of any

cloud of doubt or uncertainty with respect to real
property
1. Who may file: See Sec. 1, Rule 63, ROC
2. Requisites:
a. Plaintiff or complainant has a legal or an
equitable title to or interest in the real
property subject of the action; and
b. The deed, claim, encumbrance or proceeding
claimed to be casting a cloud on his title must
be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity
or legal efficacy.

Cancellation of Title – It is initiated by a private

party usually in a case where there are two titles issued
to different persons for the same lot. [Agcaoili]

Action for Damages - It can be availed of when

reconveyance is no longer possible as when the land
has been transferred to an innocent purchaser for
value [Ching v. CA, G.R. No. L-59731 (1990)]

Action for Compensation from the Assurance

Fund
Requisites:

Page 452 of 511

U.P. LAW BOC LAND TITLES AND DEEDS
I. Petitions and Motions 4.
after Original
Registration
All petitions or motions after original registration
shall be filed and entitled in the original case in which
the decree of registration was entered [Sec 108, PD
1529]
1. Lost Duplicate Certificate
a. Person in interest must file a sworn
statement that the certificate is lost or
destroyed before the Register of Deeds
b. A petition will then be filed for the issuance
of new title
c. Court will order issuance of new title after
due notice and hearing, with memorandum
that it is issued in place of a lost certificate
2. Petition seeking surrender of duplicate title
a. In voluntary and involuntary conveyances;
when the duplicate cannot be produced, the
party must petition the court to compel
surrender of duplicate certificate of title to
Register of Deeds
b. After hearing, court may order issuance of a
new certificate and annul the old certificate
3. Amendment and alteration of certificate of title
a. A certificate of title cannot be altered or
amended except in a direct proceeding in
court which is summary in nature
b. No amendment or alteration of decree is
permitted except upon order of the court
c. No time limit to file petition
d. Grounds:
• New interest that does not appear on
the instrument have been created
• Interest have been terminated or ceased
• Omission or error was made in entering
certificate
• Name of person on certificate has been
changed
• Registered owner has married
• Marriage has terminated
• Corporation has dissolved and has not
conveyed the property within 3 years
after its dissolution
• Allowable corrections as long as the
rights or interest of persons are not
impaired
Page 453 of 511
CIVIL LAW
Reconstitution of Certificate of title
a. The restoration of the instrument which is
supposed to have been lost or destroyed in
its original form and condition, under the
custody of the Register of Deeds
b. To have the same reproduced after proper
proceedings in the same form they were
when the loss or destruction occurred [Heirs
of Pedro Pinote v. Dulay, 1990]
c. Kinds:
• Judicial
1. A petition is filed before the RTC
2. Petition is published in the Official
Gazette for 2 consecutive issues
and posted on main entrance of
municipality for at least 30 days
before hearing
3. Hearing is then conducted
4. Court may then order
reconstitution if meritorious
• Administrative, which may be availed
only in case of:
1. Substantial loss or destruction of
original land titles due to fire, flood,
or other force majeure as
determined by the LRA
2. Number of certificates of title lost
or damaged should be at least 10%
of the total number in possession of
the Register of Deeds
3. In no case shall the number of
certificates of title lost or damaged
be less than 500; AND
4. Petitioner must have the duplicate
copy of the certificate of title [RA
6732]
U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

J. Dealings with Recording made under this section shall be without

Unregistered Lands prejudice to a third party with a better right. [Sec. 113,
PD 1529]
No deed, conveyance, mortgage, lease, or other
voluntary instrument affecting land not registered Better right – refers to a right which must have been
under the Torrens system shall be valid, except as acquired by a third party independently of the
between the parties thereto, unless such instrument unregistered deed, such, for instance, as title by
shall have been recorded in the manner herein prescription, and that it has no reference to rights
prescribed in the office of the Register of Deeds for acquired under that unregistered deed itself. [Peña, p.
the province or city where the land lies. [Sec. 113, par. 600]
1, PD 1529]
Involuntary Dealings In Unregistered Lands
Effects of Transactions Covering Unregistered PD 1529 now permits the registration of involuntary
Land dealings in unregistered lands.
1. As between the parties – The contract is
binding and valid even if not registered Tax sale, attachment and levy, notice of lis pendens,
2. As among third persons – There must be adverse claim and other instruments in the nature of
registration for the transaction to be binding involuntary dealings with respect to unregistered
against third persons lands, if made in the form sufficient in law, shall
likewise be admissible to record under Sec. 113. [Sec.
Primary Entry Book And Registration Book 113 (d), PD 1529]
The Register of Deeds for each province or city shall
keep a Primary Entry Book and a Registration Book.
1. The Primary Entry Book shall contain, among
other particulars:
a. Entry number
b. Names of the parties
c. Nature of the document
d. Date, hour and minute it was presented and
received
2. The Registration Book – Provides spaces
whereon the annotation is made after the
instrument has been entered in the Primary Entry
Book

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

The latter may appeal the matter to the

Commissioner of Land Registration

Recording by the Register of Deeds is ministerial.

Page 454 of 511

U.P. LAW BOC LAND TITLES AND DEEDS
K. Non-Registrable
Properties
Sec. 2, Art. XII, 1987 Constitution. All lands of
the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber,
wildlife, flora and fauna, and other natural
resources are owned by the State.
Sec. 2, Art. XI, 1987 Constitution. With the
exception of agricultural lands, all other natural
resources shall not be alienated.
The classification of public lands is an exclusive
prerogative of the Executive Department of the
Government and not of the courts. In the absence of
such classification, the land remains as unclassified
land until it is released therefrom and rendered open
to disposition. [Aquino, citing Director Lands and Director
of Forest Development v. CA, G.R. No. L-58867 (1984)]
CC provisions dealing with non-registrable
properties
1. Properties of public dominion [Art. 420, CC]
a. Those intended for public use, such as roads,
canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores,
roadsteads, and others of similar character;
b. Those which belong to the State, without
being for public use, and are intended for
some public service or for the development
of the national wealth.
2. Waters under Art. 502, CC
a. Rivers and natural beds
b. Continuous or intermittent waters of springs
and brooks running in their natural beds and
the beds themselves
c. Waters rising continuously or intermittently
on lands of public dominion
d. Lakes and lagoons formed by Nature on
public lands, and their beds
e. Rain waters running through ravines or sand
beds, which are also part of public dominion;
f. Subterranean waters on public lands
g. Waters found within the zone of operation
of public works, even if constructed by a
contractor
h. Waters rising continuously or intermittently
on lands belonging to private persons, to the
State, to a province, or to a city or
Page 455 of 511
CIVIL LAW
municipality from the moment they leave
such lands
i. The waste waters of fountains, sewers, and
public establishments
Specific kinds of non-registrable properties or
lands
1. Forest or timberland, public forest, forest
reserves
2. National parks – Under the present
Constitution, national parks are declared part of
the public domain, and shall be conserved and
may not be increased nor diminished, except by
law [Rep. v AFP Retirement and Separation Benefits
System, G.R. No. 180463,(2013)]
3. Mangrove swamps - Mangrove swamps or
mangroves should be understood as comprised
within the public forests of the Philippines as
defined in Sec. 1820, Administrative Code of
1917. [Director of Forestry v. Villareal, G.R. No. L-
32266 (1980)]
4. Mineral lands - Both under the 1987
Constitution and Sec. 2 of the Public Land Act,
mineral lands are not alienable and disposable.
[Lepanto Consolidated Mining Co. v. Dumyung, G.R.
No. L-31666 (1979)]
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)]
U.P. LAW BOC LAND TITLES AND DEEDS CIVIL LAW

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
to registration. [Republic v. CA, G.R. No. L-61647
(1984)]
13. Reservations for public and semi-public
purposes – Sec. 14, Chapter 4, Book III of EO
No. 292 provides that the President shall have the
power to reserve for settlement or public use, and
for specific public purposes, any of the lands of
public domain, the use of which is not otherwise
directed by law.

The land registration court has no jurisdiction over

non-registrable property and cannot validly adjudge
the registration of title thereof in favor of a private
applicant. [Peña]

Thus, where it has so been adjudged, the river not

being capable of private appropriation or acquisition
by prescription, the title thereto may be attacked,
either directly or collaterally, by the State which is not
bound by any prescriptive period provided by the
Statute of Limitation. [Peña, citing Martinez v. CA, G.R.
No. L-31271 (1974)]

Page 456 of 511

U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

TORTS AND DAMAGES

Civil Law

Page 457 of 511

U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

XII. Torts/Quasi-Delicts Art. 2177, CC. Responsibility for fault or

negligence under the preceding article is entirely
separate and distinct from the civil liability arising
Preliminary from negligence under the Penal Code. But the
plaintiff cannot recover damages twice for the
Considerations same act or omission of the defendant.

1. Definition of Tort Art. 100, RPC. Every person criminally liable for
a felony is also civilly liable.
Tort
A private or civil wrong violating a right for which the An act or omission causing damage to another may
law provides a remedy in the form of damages give rise to two separate civil liabilities on the part of
the offender—for civil liability ex delicto, and
Elements independent civil liabilities. The choice is with the
a. Duty plaintiff who makes known his cause of action in his
b. Breach initiatory pleading or complaint [LG Foods v. Philadelfa,
c. Injury; and G.R. No. 158995 (2006)]
d. Proximate Causation [Garcia v. Salvador, G.R. No.
168512 (2007)] DELICT QUASI-DELICT
Affects public interest Only of private concern
2. Definition of Quasi-Delict The law merely repairs
The law punishes or
the damages through
Art. 2176, CC. Whoever by act or omission causes corrects the criminal act
indemnification
damage to another, there being fault or negligence,
is obliged to pay for the damage done. Such fault Covers only acts punished Any kind of fault or
or negligence, if there is no pre-existing contractual by the law negligence
relation between the parties, is called a quasi-delict
and is governed by the provisions of this Chapter. 4. Culpa Aquiliana vs. Culpa
Quasi-delict
Contractual
Also known as culpa aquiliana
a. As to Source
Elements
a. Act/omission committed through In culpa aquiliana, it is the wrongful or negligent act or
fault/negligence omission itself which creates the vinculum juris,
b. Damage/injury is caused by such act/omission whereas in contractual relations, the vinculum exists
c. Does not arise under a pre-existing contractual independently of the breach of voluntary duty
obligation assumed by the parties when entering into the
contractual relation [Cangco v. Manila Railroad, G.R.
Note: Jurisprudence replaces the third element with No. L-12191 (1918).
causal connection [PNR v. Brunty, G.R. No. 169891
(2006); Andamo v. IAC, G.R. No. 74761 (1990)]. b. As to Applicability of the
Doctrine of Proximate Cause
3. Quasi-Delict vs.Crime
The doctrine of proximate cause [to establish the fault
A quasi-delict is a separate source of obligation under or negligence of the defendant] is applicable only in
Art. 1157, CC. actions for quasi-delict, not in actions involving
breach of contract [Calalas v. CA, G.R. No. 122039
(2000)].

Page 458 of 511

U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

c. As to the Defense of an
Employer for the Negligence of CULPA CULPA
AQUILIANA CONTRACTUAL
an Employee
Negligence
As it is not necessary for the plaintiff in an action for becomes source
A breach in the
breach of contract to show that the breach was due to of obligation
Vinculum performance of an
the negligent conduct of the defendant or his between persons
juris obligation already
servants, proof on the part of the defendant that the not formerly
existing
negligence or omission of his servants or agents connected by a
caused the breach of contract would not constitute a legal tie
defense to the action [Cangco v. Manila Railroad, supra] Presence of It is the
Merely incidental
negligence vinculum juris
QUASI- A lack of the Existence of
EX DELICTU What must
DELICT diligence contract and breach
(Under Art. 100, be proven
(Under Art. required thereof
RPC)
2176, CC)
Diligence in
Cause of selection and Rebuttal of the
Delict Quasi-delict Defense
action supervision of breach
Deemed instituted Separate legal employee
Need for with criminal case; institution; no Direct and
Direct liability of
reservation must be reserved to need to be Liability immediate, as
the employer
proceed separately reserved contracting party
[Cangco v. Manila Railroad, supra]
Preponderance of evidence (only
Quantum of
criminal action needs proof beyond
evidence Presence of Contractual Relations
reasonable doubt)
The Supreme Court held there may instances where
During pendency Proceeds there can be a quasi-delict even when there is a
Suspension of prosecution of independent of contract between the parties. The test (whether a
criminal case criminal case quasi-delict can be deemed to underlie the breach of
a contract) can be stated thusly: Where, without a pre-
No effect, unless existing contract between two parties, an act or
acquittal is because omission can nonetheless amount to an actionable
Effect of the act does not tort by itself, the fact that the parties are contractually
No effect
acquittal exist or accused is
not the author of The fact that the parties are contractually bound is no
the act bar to the application of quasi-delict provisions to the
case. [Far East v. CA, G.R. No. 108164 (1995)].
Before
arraignment: May be
May still be recovered from
Effect of recovered from the estate of the
death of estate of the accused,
accused* accused regardless of the
After stage the case is
arraignment: in
Extinguished
*Sec. 4, Rule 111, Rules of Court

Page 459 of 511

U.P. LAW BOC TORTS AND DAMAGES
Negligence
1. Negligence
Art. 1173, CC. The fault or negligence of the
obligor consists in the omission of that diligence
which is required by the nature of the obligation
and corresponds with the circumstances of the
persons, of the time and of the place. When
negligence shows bad faith, the provisions of
Articles 1171 and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence
which is to be observed in the performance, that
which is expected of a good father of a family shall
be required.
Negligence
It is the omission to do something which a reasonable
man, guided by those considerations which ordinarily
regulate the conduct of human affairs, would do, or
the doing of something which a prudent and
reasonable man would not do [Layugan v. IAC, G.R.
No. 73998 (1988)].
The diligence with which the law requires the
individual to at all times govern his conduct varies
with the nature of the situation in which he is placed
and the importance of the act which he is to perform
[Jorge v. Sicam, G.R. No. 159617 (2007)].
To determine whether there has been negligence by
the defendant, this 2-step analysis may be used:
a. Determine the diligence required of the actor
under the circumstances, and
b. Determine whether the actor has performed the
diligence required. Failing the second step would
lead to the conclusion that the defendant has
been negligent.
By jumping into the sea, the employee failed to
exercise even slight care and diligence and displayed a
reckless disregard of the safety of his person. His
death was caused by his notorious negligence.
Notorious negligence has been held to be tantamount
to gross negligence which is want of even slight care
and diligence [Ameda v. Rio, G.R. No. L-6870 (1954)].
Page 460 of 511
CIVIL LAW
2. Default Standard of Care:
Good Father of a Family
Test: Did the defendant in doing the alleged negligent
act use that reasonable care and caution which an
ordinarily prudent man would have used in the same
situation? If not, then he is negligent. Negligence in a
given case is not determined by reference to the
personal judgment of the actor in the situation before
him, but is determined in the light of human
experience and the facts involved in the particular
case. Conduct is said to be negligent when a prudent
man in the position of the tortfeasor would have
foreseen that an effect harmful to another was
sufficiently probable to warrant his foregoing the
conduct or guarding against its consequences [Picart v.
Smith, G.R. No. L-12219 (1918)].
3. Standard of Care Needed in
Specific Circumstances
a. Operators of Motor Vehicles
In Relation to Cyclists
Because of inherent differences between
motorists and cyclists, the former being capable
of greater speed and destruction, operators of
motor vehicles have a higher standard in his duty
of care [Anonuevo v. CA, G.R. No. 130003 (2004)].
b. Banks
The law imposes on banks high standards in view
of the fiduciary nature of banking. Section 2 of
Republic Act No. 8791 (RA 8791), which took
effect on 13 June 2000, declares that the State
recognizes the ‘fiduciary nature of banking that
requires high standards of integrity and
performance.’ This fiduciary relationship means
that the bank’s obligation to observe high
standards of integrity and performance is deemed
written into every deposit agreement between a
bank and its depositor. The fiduciary nature of
banking requires banks to assume a degree of
diligence higher than that of a good father of a
family [Consolidated Bank v. CA, G.R. No. 138569
(2003)].
c. Experts (In General)
Those who undertake any work calling for special
skills are required not only to exercise reasonable
care in what they do but also possess a standard
minimum of special knowledge and ability. In all
employments where peculiar skill is requisite, one
U.P. LAW BOC TORTS AND DAMAGES
who offers his services is understood as holding
himself out to the public as possessing the degree
of skill commonly possessed by others in the
same employment [Far Eastern Shipping v. CA,
G.R. No. 130068 (1998)].
When a person holds himself out as being
competent to do things requiring professional
skill, he will be held liable for negligence if he fails
to exhibit the care and skill of one ordinarily
skilled in the particular work which he attempts
to do [Culion v. Philippine Motors, G.R. No 32611
(1930)].
d. Doctors
Whether or not a physician has committed an
‘inexcusable lack of precaution’ in the treatment
of his patient is to be determined according to the
standard of care observed by other members of
the profession in good standing under similar
circumstances bearing in mind the advanced state
of the profession at the time of treatment of
present state of medical science. It is in this
aspect of medical malpractice that expert
testimony is essential to establish not only the
standard of care of the profession but also that
the physician’s conduct in the treatment and care
falls below such standard [Cruz v. CA, GR. No.
122445 (1997)]
e. Pharmacists
The profession of pharmacy, it has been said
again and again, is one demanding care and skill.
Even under the first conservative expression,
"ordinary care" with reference to the business of
a druggist…must be held to signify "the highest
practicable degree of prudence, thoughtfulness,
and vigilance, and most exact and reliable
safeguards consistent with the reasonable
conduct of the business in order that human life
may not constantly be exposed to the danger
flowing from the substitution of deadly poisons
for harmless medicine [US v. Pineda, G.R. No. L-
12858 (1918)].”
Mistake is negligence and care is no defense
[Mercury Drug v. de Leon, G.R. No. 165622 (2008)].
f. Possessor of Extremely Dangerous
Instrumentalities
[A] higher degree of care is required of someone
who has in his possession or under his control an
instrumentality extremely dangerous in character,
such as dangerous weapons or substances. Such
Page 461 of 511
CIVIL LAW
person in possession or control of dangerous
instrumentalities has the duty to take exceptional
precautions to prevent any injury being done
thereby. Unlike the ordinary affairs of life or
business which involve little or no risk, a business
dealing with dangerous weapons requires the
exercise of a higher degree of care [Pacis v. Morales,
G.R. No. 169467 (2010)].
g. Children
The conduct of an infant of tender years is not to
be judged by the same rule, which governs that
of an adult. …The care and caution required of a
child is according to his maturity and capacity
only, and this is to be determined in each case by
the circumstances of the case [Taylor v. Manila
Railroad, G.R. No. 4977 (1910)].
No contributory negligence can be imputed to
children below 9 years old [Jarco Marketing v. CA,
G.R. No. 129792 (1999)].
The degree of care required to be exercised must
vary with the capacity of the person endangered
to care for himself. …The standard of conduct to
which a child must conform for his own
protection is that degree of care ordinarily
exercised by children of the same age, capacity,
discretion, knowledge and experience under the
same or similar circumstances [Ylarde v. Aquino,
G.R. No. L-33722 (1988)].
4. Presumptions of Negligence
a. In Motor Vehicle Mishaps
Liability of the owner
Art. 2184, CC. In motor vehicle mishaps, the
owner is solidarily liable with his driver, if the
former, who was in the vehicle, could have, by the
use of the due diligence, prevented the misfortune.
xxx
If the owner was not in the motor vehicle, the
provisions of article 2180 are applicable.
Art. 2186, CC. Every owner of a motor vehicle
shall file with the proper government office a bond
executed by a government-controlled corporation
or office, to answer for damages to third persons.
The amount of the bond and other terms shall be
fixed by the competent public official.
U.P. LAW BOC TORTS AND DAMAGES
The owner is solidarily liable with the driver for motor
vehicle mishaps when:
a. The owner was IN the vehicle at the time, AND
b. The owner could have, by the use of due
diligence, prevented the misfortune.
Note: If the owner was NOT inside the vehicle, Art.
2180 applies.
The presumption is against the owner of the motor
vehicle. He has the burden of proving due diligence.
Thus, once a driver is proven negligent in causing
damage, the law presumes the vehicle owner equally
negligent and imposes upon the latter the burden of
proving proper selection and supervision of employee
as a defense.
As held in Vargas v. Langcay [G.R. No. 17459 (1962)],
“the registered owner/operator of a passenger vehicle
is jointly and severally liable with the driver for
damages incurred by passengers or third persons as a
consequence of injuries or death sustained in the
operation of said vehicles. Regardless of who the
actual owner of a vehicle is, the operator of record
continues to be the operator of the vehicle as regards
the public and third persons and as such is directly
and primarily responsible for the consequences
incident to its operation, so that in contemplation of
law, such owner/operator of record is the employer
of the driver, the actual operator and employer being
considered merely as his agent.”
The registered owner of a motor vehicle is primarily
liable for the damage or injury caused to another, but
he has a right to be indemnified by the real owner of
the amount he was required to pay. This rule applies
both to private and to common carriers with respect
to their passengers [Tamayo v. Aquino, G.R. No. L-
12634 (1959)].
The law does not require that a person must possess
a certain measure of skill or proficiency either in the
mechanics of driving or in the observance of traffic
rules before he may own a motor vehicle. The test of
his negligence, within the meaning of Article 2184, is
his omission to do that which the evidence of his own
senses tells him he should do in order to avoid the
accident. And as far as perception is concerned,
absent a minimum level imposed by law, a maneuver
that appears to be fraught with danger to one
passenger may appear to be entirely safe and
commonplace to another. Were the law to require a
uniform standard of perceptiveness, employment of
Page 462 of 511
CIVIL LAW
professional drivers by car owners who, by their very
inadequacies, have real need of drivers' services,
would be effectively proscribed [Caedo v. Yu Khe Tai,
G.R. No. L-20392 (1968)].
The owner of the motor vehicle is not liable for the
misfortune unless the negligent acts of the driver are
continued for such a length of time as to give the
owner a reasonable opportunity to observe them and
to direct his driver to desist therefrom. The act
complained of must be continued in the presence of
the owner for such a length of time that the owner,
by his acquiescence, makes his driver’s act his own
[Chapman v. Underwood, G.R. No. L-9010 (1914)].
Liability of the driver
Art. 2184, CC. xxx It is disputably presumed that
a driver was negligent, if he had been found guilty
of reckless driving or violating traffic regulations at
least twice within the next preceding two months.
Art. 2185, CC. Unless there is proof to the
contrary, it is presumed that a person driving a
motor vehicle has been negligent if at the time of
the mishap, he was violating any traffic regulation.
Article 2184 establishes a presumption of negligence
on the part of the driver based on previous violations
of traffic regulations. Article 2185 establishes a
presumption of negligence on the basis of
simultaneous violations.
Despite the presumption of negligence arising from
the traffic regulation violation, the claimant must still
prove that such negligence was the proximate cause
in order to successfully claim for damages [Sanitary
Steam v CA, G.R. No. 119092 (1998)].
Article 2185 was not formulated to compel or ensure
obeisance by all to traffic rules and regulations. It does
not apply to non-motorized vehicles, in recognition
of the unequal footing of standards applicable to
motor vehicles as opposed to other types of vehicles
[Añonuevo v. CA, supra].
U.P. LAW BOC TORTS AND DAMAGES
b. Possession of Dangerous
Weapons or Substances
Art. 2188, CC. There is prima facie presumption
of negligence if the death or injury results from his
possession of dangerous weapons or substances,
such as firearms and poison, except when the use
or possession thereof is indispensable in his
occupation or business.
c. Common Carriers
Art. 1735, CC. In all cases other than those
mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding
article (calamity, act of public enemy in war, act of
owner of the goods, character of the goods, order
of competent public authority), if the goods are
lost destroyed or deteriorated, common carriers
are presumed to have been at fault or to have acted
negligently, unless they prove that they observed
extraordinary diligence as required under Art.
1733.
Art. 1752, CC. Even when there is an agreement
limiting the liability of the common carrier in the
vigilance over the goods, the common carrier is
disputably presumed to have been negligent in case
of their loss, destruction or deterioration.
d. Res Ipsa Loquitur
The rule of res ipsa loquitur (“the thing or the
transaction speaks for itself”) is a rule of evidence (not
of substantive law) peculiar to the law of negligence.
The rule states that where the thing which causes
injury is shown to be under the management of the
defendant (or his servants), and the accident is such
as in the ordinary course of things does not happen if
those who have the management (or control) used
proper care, it affords reasonable evidence, in the
absence of an explanation by the defendant, that the
accident arose from (or was caused by the defendants)
want of care [Tan v. JAM Transit, G.R. No. 183198
(2009)]
Elements: [Ramos v. CA, G.R. No. 124354 (1999)]
1. The accident is of a kind which ordinarily does
not occur in the absence of someone’s
negligence;
Page 463 of 511
CIVIL LAW
2. It is caused by an instrumentality within the
exclusive control of the defendant or defendants;
and
3. The possibility of contributing conduct, which
would make the plaintiff responsible, is
eliminated.
Note: Professional Services v. Agana, G.R. No. 126297
(2007) added the absence of an explanation by the
defendant as the fourth element.
Basis
The res ipsa loquitur doctrine is based in part upon the
theory that the defendant in charge of the
instrumentality which causes the injury either knows
the cause of the accident or has the best opportunity
of ascertaining it and that the plaintiff has no such
knowledge, and therefore is compelled to allege
negligence in general terms and to rely upon the proof
of the happening of the accident in order to establish
negligence [DM Consunji v. CA, G.R. No. 137873
(2001)].
Effect of the Rule
The fact of the occurrence of an injury, taken with the
surrounding circumstances, raise a presumption of
negligence, or make out a plaintiff’s prima facie case,
and present a question of fact for defendant to meet
with an explanation.
The rule does not dispense with the requirement of
proof of negligence but simply a step in the process
of such proof [Ramos v CA, supra].
Effect of Direct Evidence
It has generally been held that the presumption of
inference arising from the doctrine cannot be availed
of, or is overcome, where plaintiff has knowledge and
testifies or presents evidence as to the specific act of
negligence which is the cause of the injury complained
of or where there is direct evidence as to the precise
cause of the accident and all the facts and
circumstances attendant on the occurrence clearly
appear [Layugan v. IAC, G.R. No. 73998 (1988)]
Res Ipsa Loquitur vs. Expert Testimony in
Medical Negligence Cases
It is apparent that medical negligence cases are best
proved by opinions of expert witnesses belonging in
the same general neighborhood and in the same
general line of practice as defendant physician or
surgeon [Lucas v. Tuaño, G.R. No. 178763 (2009)].
U.P. LAW BOC TORTS AND DAMAGES
When the doctrine of res ipsa loquitur is availed by
the plaintiff, the need for expert medical testimony is
dispensed with because the injury itself provides the
proof of negligence. The reason is that the general
rule on the necessity of expert testimony applies only
to such matters clearly within the domain of medical
science, and not to matters that are within the
common knowledge of mankind which may be
testified to by anyone familiar with the facts [Ramos v.
CA, supra].
5. Defenses
a. Due Diligence to Prevent the
Damage under Art. 2180, CC
Art. 2180, CC. The obligation imposed by Article
2176 is demandable not only for one’s own acts or
omissions, but also for those of persons for whom
one is responsible.
xxx
(8) The responsibility treated of in this article shall
cease when the persons herein mentioned prove
that they observed all the diligence of a good father
of a family to prevent damage.
The presumption of negligence on the part of the
master or employer, either in the selection of
servant/employee or in the supervision, when an
injury is caused by the negligence of a
servant/employee may be rebutted if the employer
shows to the satisfaction of the court that in the
selection and supervision, he has exercised the care
and diligence of a good father of a family [Ramos v.
PEPSI, G.R. No. L-22533 (1967)].
b. Acts of Public Officers
A public officer is not liable for damages which a
person may suffer arising from the just performance
of his official duties and within the scope of his
assigned tasks. An officer who acts within his
authority to 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 Republic, which is not amenable to
judgment for monetary claims without its
consent. However, a public officer is by law not
immune from damages in his/her personal capacity
for acts done in bad faith which, being outside the
Page 464 of 511
CIVIL LAW
scope of his authority, are no longer protected by the
mantle of immunity for official actions. [Vinzons-
Chato v Fortun, G.R. No. 141309 (2008)].
c. Authority of Law
Art. 5, CC. Acts executed against the provisions
of mandatory or prohibitory laws shall be void,
except when the law itself authorizes their validity.
Art. 11, CC. The following do not incur any
criminal liability: xxx
(5) Any person who acts in the fulfillment of a
duty or in the lawful exercise of a right or
office
xxx
(8) Any person who acts in obedience to an order
issued by a superior for some lawful purpose
d. Damnum Absque Injuria
There can be damage without injury in those instances
in which the loss or harm was not the result of a
violation of a legal duty.
Right to recover damages does not arise from the
mere fact that the plaintiff suffered losses. To warrant
the recovery of damages, there must be both a right
of 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 constitute a cause of action, since damages
are merely part of the remedy allowed for the injury
caused by a breach or wrong [Custodio v. CA, G.R. No.
116100 (1996)].
INJURY DAMAGE DAMAGES
Loss, hurt, harm Recompense or
Illegal invasion
resulting from compensation
of a legal right
the injury awarded
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
damnum absque injuria. This principle, however, does
not apply when there is an abuse in the exercise of a
person’s right. [Amonoy v. Gutierrez, G.R. No. 140420
(2001)]
U.P. LAW BOC TORTS AND DAMAGES
e. Plaintiff’s Negligence is the
Proximate Cause
Art. 2179, CC. When the plaintiff’s own
negligence was the proximate cause of his injury,
he cannot recover damages. Xxx
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
Court did not allow recovery by Magno, ruling that
his death was primarily caused by his own negligence
and in some measure by the too close proximity of
the “media agua” to the electric wire.
If the plaintiff in a negligence action, by his own
carelessness contributed to the principal occurrence,
that is, to the accident, as one of the determining
causes thereof, he cannot recover [Bernardo v. Legaspi,
G.R. No. 9308 (1914)].
f. Contributory Negligence of the
Plaintiff
Art. 2179, CC. xxx But if his negligence was only
contributory, the immediate and proximate cause
of the injury being the defendant's lack of due care,
the plaintiff may recover damages, but the courts
shall mitigate the damages to be awarded.
Art. 2214, CC. In quasi-delicts, the contributory
negligence of the plaintiff shall reduce the damages
that he may recover.
Contributory negligence is defined as conduct on the
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 own protection [Valenzuela v. CA, GR. No.
115024 (1996)].
Contributory negligence does not defeat an action if
it can be shown that the defendant might, by the
exercise of reasonable care and prudence, have
avoided the consequences of the injured party's
negligence. Where the plaintiff contributes to the
principal occurrence as one of its determining factors,
he cannot recover. Where, in conjunction with the
occurrence, he contributes only to his own injury, he
may recover the amount that the defendant
responsible for the event should pay for such injury,
Page 465 of 511
CIVIL LAW
less a sum deemed a suitable equivalent for his own
imprudence [MH Rakes v. Atlantic, G.R. No. L-1719
(1907)].
The defense of contributory negligence does not
apply in criminal cases committed through reckless
imprudence, since one cannot allege the negligence of
another to evade the effects of his own negligence
[Genobiagon v. CA, G.R. No. 40452 (1989)].
g. Fortuitous Event
Art. 1174, CC. Except in cases expressly specified
by the law, or when it is otherwise declared by
stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be
responsible for those events which, could not be
foreseen, or which, though foreseen, were
inevitable.
Elements of caso fortuito [Juntilla v. Fontanar, G.R.
No. L-45637 (1985)]:
1. The cause of the unforeseen and unexpected
occurrence, or of the failure of the debtor to
comply with his obligation, must be independent
of the human will;
2. It must be impossible to foresee the event or if it
can be foreseen, it must be impossible to avoid;
3. The occurrence must be such as to render it
impossible for the debtor to fulfill his obligation
in a normal manner; and
4. The obligor must be free from any participation
in the aggravation of the injury resulting to the
creditor.
h. Plaintiff’s assumption of risk
/Volenti Non Fit Injuria
The doctrine of volenti non fit injuria (that to which a
person assents is not presumed in law as injury) refers
to self-inflicted injury or to the consent to injury
which precludes the recovery of damages by one who
has knowingly and voluntarily exposed himself to
danger, even if he is not negligent in doing so. This is
so because, in theory, the plaintiff’s acceptance of the
risk has wiped out the defendant’s duty, and as to the
plaintiff the defendant’s negligence is not a legal
wrong.
Requisites:
1. That the plaintiff had actual knowledge of the
danger;
U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

2. That he understood and appreciated the risk j. Waiver

from the danger; and
3. That he voluntarily exposed himself to such risk
Art. 6, CC. Rights may be waived, unless the
waiver is contrary to law, public order, public
The defense is not applicable in the following
policy, morals, or good customs or prejudicial to a
cases:
third person with a right recognized by law.
A person is excused from the force of the rule (volenti
non fit injuria), that when he voluntarily assents to a
known danger he must abide by the consequences, if Art. 1171, CC. Responsibility arising from fraud is
an emergency is found to exist or if the life or demandable in all obligations. Any waiver of an
property of another is in peril or when he seeks to action for future fraud is void.
rescue his endangered property [Ilocos Norte v. CA,
G.R. No. 53401 (1989)]. k. Emergency Rule or Sudden Peril
The doctrine does not find application to the case
Doctrine
because even if respondent Reyes assumed the risk of
An individual, who suddenly finds himself in a
being asked to leave the party, petitioners, under
situation of danger and is required to act without
Articles 19 and 21 of the CC, were still under the
much time to consider the best means that may be
obligation to treat him fairly in order not to expose
adopted to avoid the impending danger, is not guilty
him to unnecessary ridicule and shame [Nikko Hotel v.
of negligence if he fails to undertake what
Roberto Reyes, G.R. No. 154259 (2005)].
subsequently and upon reflection may appear to be a
better solution, unless the emergency was brought by
i. Prescription his own negligence [Gan v. CA, G.R. No. L-44264
(1988)].
Art. 1146, CC. The following actions must be
instituted within four years:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict;

However, when the action arises from or out of

any act, activity, or conduct of any public officer
involving the exercise of powers or authority
arising from Martial Law including the arrest,
detention and/or trial of the plaintiff, the same
must be brought within one (1) year.

Art. 1150, CC. The time for prescription for all

kinds of actions, when there is no special provision
which ordains otherwise, shall be counted from
the day they may be brought.

Prescription periods:
• 4 years for QD
• 1 year for defamation

It is clear that the prescriptive period must be counted

when the last element occurs or takes place, the time
of the commission of an act or omission violative of
the right of the plaintiff, which is the time when the
cause of action arises. Thus, the prescription period
begins from the day the quasi-delict is committed
[Kramer v. CA, G.R. No. 83524 (1989)].

Page 466 of 511

U.P. LAW BOC TORTS AND DAMAGES
Cause
1. Concept of Proximate Cause
In order that civil liability for negligence may arise,
there must be a direct causal connection between the
damage suffered by the plaintiff and the act or
omission of the defendant.
Where the particular harm sustained was reasonably
foreseeable at the time of the defendant’s misconduct,
his act or omission is the legal cause thereof.
Foreseeability is the fundamental basis of the law of
negligence. To be negligent, the defendant must have
acted or failed to act in such a way that an ordinary
reasonable man would have realized that certain
interests of certain persons were reasonably subjected
to a general but definite class of risks. [Jarencio]
Two definitions of proximate cause:
a. Proximate cause immediately resulting in
injury: defined as “that cause, which, in natural
and continuous sequence, unbroken by any
efficient intervening cause, produces the injury,
and without which the result would not have
occurred” [Bataclan v. Medina, G.R. No. 10126
(1957)].
b. Proximate cause not immediately resulting
in injury but sets in motion a chain of events,
also known as Proximate Legal Cause: that
acting first and producing the injury, either
immediately or by setting other events in motion,
all constituting a natural and continuous chain of
events, each having a close causal connection
with its immediate predecessor, the final event in
the chain immediately effecting the injury as a
natural and probable result of the cause which
first acted, under such circumstances that the
person responsible for the first event should, as
an ordinary prudent and intelligent person, have
reasonable ground to expect at the moment of his
act or default that an injury to some person might
probably result therefrom [Bataclan v. Medina,
supra].
Respondent was mistakenly given Dormicum, a
potent sleeping tablet, instead of medication for his
blood sugar. He took a pill for 3 consecutive days and
on the third day, he fell asleep on the wheel and
figured in a vehicular accident. The Court found that
the proximate cause of the accident was the Mercury
Drug employee’s mistake in reading the prescription
[Mercury Drug v. Baking, G.R. No. 156037 (2007)].
Page 467 of 511
CIVIL LAW
Note: Here, 3 days have elapsed from the time of the
negligent act determined by the Court as the
proximate cause; thus, the Court did not consider the
time element in determining proximate cause but the
nature and gravity of the injury.
Differentiated from:
a. Concurrent Cause – Several causes producing
the injury, and each is an efficient cause without
which the injury would not have happened. The
injury is attributed to any or all the causes, and
recovery may be had against any or all of those
responsible.
Note: They’re the same thing from the point of
view of solidarity.
As a general rule, that negligence in order to
render a person liable need not be the sole cause
of an injury. It is sufficient that his negligence,
concurring with one or more efficient causes
other than the plaintiff’s, is the proximate cause
of the injury.
b. Remote Cause – a cause which would have been
a proximate cause, had there been no efficient
intervening cause after it and prior to the injury.
A prior and remote cause cannot be made the
basis of an action if such remote cause did
nothing more than furnish the condition or give
rise to the occasion by which the injury was made
possible, if there intervened between such prior
or remote cause and the injury a distinct,
successive, unrelated, and efficient cause of the
injury, even though such injury would not have
happened but for such condition or occasion
[Manila Electric v. Remonquillo, G.R. No. L-8328
(1956)].
c. Intervening Cause
The test of determining whether or not the
intervening cause is sufficient to absolve a prior
cause of the injury is as follows: whether the
intervention of a later cause is a significant part
of the risk involved in the defendant’s conduct or
is so reasonable connected with it that the
responsibility should not be terminated. In the
affirmative, such foreseeable intervening forces
are within the scope of the original risk, and
hence of the defendant’s negligence. In the
negative, there exists an efficient intervening
cause that relieves the defendant of liability.
U.P. LAW BOC TORTS AND DAMAGES
If the intervening cause is one which in ordinary
human experience is reasonably to be anticipated,
or one which the defendant has reason to
anticipate under the particular circumstances, the
defendant may be negligent, among other
reasons, because of failure to guard against it.
There is an intervening cause combining with the f.
defendant’s conduct to produce the result, and
the defendant’s negligence consists in failure to
protect the plaintiff against that very risk [Phoenix
Construction v. IAC, G.R. No. L-65295 (1987)].
2. Tests to Determine
Proximate Cause
a. But for / Sine qua non rule
Whether such negligent conduct is a cause
without which the injury would not have
occurred or is the efficient cause which set in
motion the chain of circumstances leading to the
injury. [Bataclan v. Medina, supra]
b. Sufficient link
Plaintiff, however, must establish a sufficient link
between the act or omission and the damage or
injury. That link must not be remote or far-
fetched; otherwise, no liability will attach. The
damage or injury must be a natural and probable
result of the act or omission. [Dy Teban Trading,
Inc. v. Ching, G.R. No. 161803 (2008)]
c. Substantial factor
If the actor’s conduct is a substantial factor in
bringing about harm to another, the fact that the
actor neither foresaw nor should have foreseen
the extent of the harm or the manner in which it
occurred does not prevent him from being liable
[Philippine Rabbit v. IAC, G.R. No. 66102-04
(1990)]
d. Mixed considerations
There is no exact formula to determine probable
cause. It is based upon mixed considerations of
logic, common sense, policy and precedent [Dy
Teban v. Jose Ching, supra].
e. Cause v. condition
The distinction between cause and condition has
already been almost entirely discredited. So far as
it has any validity at all, it must refer to the type
of case where the forces set in operation by the
defendant have come to rest in a position of
Page 468 of 511
CIVIL LAW
apparent safety, and some new force intervenes.
But even in such cases, it is not the distinction
between “cause” and “condition” which is
important, but the nature of the risk and the
character of the intervening cause [Phoenix
Construction v. IAC, supra].
Last clear chance
The Doctrine of Last Clear Chance
Also known as: "doctrine of discovered peril” or
“doctrine of supervening negligence” or
“humanitarian doctrine”.
The antecedent negligence of the plaintiff does
not preclude him from recovering damages
caused by the supervening negligence of the
defendant, who had the last fair chance to
prevent the impending harm by the exercise of
due diligence [PNR v. Brunty, supra].
If both parties are found to be negligent; but,
their negligence are not contemporaneous, the
person who has the last fair chance to avoid the
impending harm and fails to do so is chargeable
with the consequences, without reference to the
prior negligence of the other party [Picart v. Smith,
supra].
The doctrine of last clear chance finds no
application in a case where the proximate cause
of the injury has been established [PNR v Brunty,
supra].
The doctrine of last clear chance does not apply
in a case of culpa contractual, where neither the
contributory negligence of the plaintiff nor his
last clear chance to avoid the loss, would
exonerate the defendant from liability. Such
contributory negligence or last clear chance by
the plaintiff merely serves to reduce the recovery
of damages by the plaintiff but does not
exculpate the defendant from his breach of
contract [Consolidated Bank v. CA, G.R. No.
138569 (2003)].
Last clear chance applies only if the person who
allegedly had the last opportunity to avert the
accident was aware of the existence of peril or
should, with exercise of due care, have been
aware of it. The doctrine can never apply where
the party charged is required to act
instantaneously, and if the injury cannot be
avoided by application of all means at hand after
U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

the peril is or should have been discovered control over the direct tortfeasor. The doctrine does
[Pantranco v. Baesa, G.R. No. 79051-51(1989)]. not apply where moral culpability can be imputed
directly, as when there is actual intent to cause harm
The doctrine of last clear chance, as enunciated to others.
in Anuran v. Buno, applies in a suit between the
owners and drivers of colliding vehicles. It does The liability of the vicarious obligor is primary and
not arise where a passenger demands direct (solidarily liable with the tortfesor), not
responsibility from the carrier to enforce its subsidiary. His responsibility is not conditioned upon
contractual obligations. It will be inequitable to the insolvency of or prior recourse against the
exempt the negligent driver of the jeepney and its negligent tortfeasor.
owners on the ground that the other driver was
likewise guilty of negligence [Bustamante v. CA, PERSONS
G.R. No. 89880 (1991)]. VICARIOUSLY ACTORS
LIABLE
Note:
Father and, in case
• If plaintiff is the proximate cause: no recovery
of his death or Minor children who live in
can be made.
incapacity, the their company
• If plaintiff is not the proximate cause: Recovery mother
can be made but such will be mitigated.
• If negligence of parties is equal in degree, then Minors or incapacitated
each bears his own loss. persons who are under their
Guardians
authority and live in their
company
3. Persons Liable
Owners and Employees in the service of
managers of an the branches in which the
a. The direct tortfeasor, for his own establishment or latter are employed or on the
acts enterprise occasion of their functions
Employees and household
Art. 2176, CC. Whoever by act or omission causes helpers acting within the
damage to another, there being fault or negligence, scope of their assigned tasks,
is obliged to pay for the damage done. xxx Employers
even though the former are
not engaged in any business or
The tortfeasor may be a natural or juridical person. industry
For natural persons, apply requisites of Art. 2176 and State Special agent
for juridical persons, apply vicarious liability
provisions. Teachers or heads Pupils and students or
of establishments apprentices, so long as they
b. Persons vicariously liable of arts and trades remain in their custody

Art. 2180, CC. The obligation imposed by Article
2176 is demandable not only for one’s own acts or
omissions, but also for those of persons for whom
one is responsible.
xxx
The responsibility treated of in this article shall
cease when the persons herein mentioned prove
that they observed all the diligence of a good father
of a family to prevent the damage.
The rationale is to extend liability by legal fiction to
those in a position to exercise absolute or limited
c. Persons exercising parental
authority
Art. 2180 (2), CC. The father and, in case of his
death or incapacity, the mother, are responsible for
the damages caused by the minor children who live
in their company.
Art. 211, FC Parents and other persons exercising
parental authority shall be civilly liable for the
injuries and damages caused by the acts or
omissions of their unemancipated children living
in their company and under their parental

Page 469 of 511

U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

authority subject to the appropriate defenses Parental liability is anchored upon parental authority
provided by law. coupled with presumed parental dereliction in the
discharge of the duties accompanying such authority.
Art. 216, FC. In default of parents or a judicially The parental dereliction is, of course, only presumed
appointed guardian, the following person shall and the presumption can be overturned under Article
exercise substitute parental authority over the child 2180 of the CC by proof that the parents had
in the order indicated: exercised all the diligence of a good father of a family
(1) The surviving grandparent, as provided in Art. to prevent the damage [Tamargo v. CA, G.R. No.
214; 85044 (1992)].
(2) The oldest brother or sister, over twenty-one
years of age, unless unfit or disqualified; and Meaning of “Minority”
(3) The child's actual custodian, over twenty-one Par. 2 and 3 of Art. 2180 speak of minors. Minors here
years of age, unless unfit or disqualified. refer to those who are below 21 years of age, not
Whenever the appointment or a judicial guardian below 18 years. The law reducing the majority age
over the property of the child becomes necessary, from 21 to 18 years old did not amend these
the same order of preference shall be observed. paragraphs. Basis is FC, Art. 236 (3), as amended by
RA 6809, provides, “Nothing in this Code shall be
construed to derogate from the duty or responsibility
Art. 217, FC. In case of foundlings, abandoned of parents and guardians for children and wards
neglected or abused children and other children below 21 years of age mentioned in the second and
similarly situated, parental authority shall be third paragraphs of 2180 of the CC.”
entrusted in summary judicial proceedings to
heads of children's homes, orphanages and similar
Art. 2180 (3), CC. Guardians are liable for
institutions duly accredited by the proper
damages caused by the minors or incapacitated
government agency.
persons who are under their authority and live in
their company.
Art. 221 FC provides that persons exercising
parental authority shall be civilly liable for the torts
The liability of guardians with respect to their wards
of the children in their care. Art. 211 FC then states
is governed by the same rule as in the liability of
that parental authority is exercised by both the father
parents with respect to their children below 21 years
and the mother. Thus, the distinction in Art. 2180
and who live with them
where the father is liable before the mother no longer
applies.
“Incompetent” includes (Rule 92, ROC):
1. Those suffering the penalty of civil interdiction,
Who are liable for minors?
2. Prodigals,
1. Parents/Adoptive parents
3. Deaf and dumb who are unable to read and write
2. Court-appointed guardians
4. Unsound mind, even though they have lucid
3. Substitute Parental Authorities
intervals
a. Grandparents
5. Being of sound mind, but by reason of age,
b. Oldest qualified sibling over 21 years old
disease, weak mind, and other similar causes,
c. Child’s actual custodian, provided he is
cannot take care of themselves or manage their
qualified and over 21 years old.
property
4. Special Parental Authorities
a. School
Liability of minor or insane tortfeasor without a
b. Administrators
parent or guardian
c. Teachers
He shall be answerable with his own property in an
d. Individual, entity, or institution engaged in
action against him where a guardian ad litem shall be
child care
appointed. [Art. 2182]
Illegitimate children
Responsibility is with the mother whom the law vests
with parental authority.

Basis of liability of parents and adopters

Page 470 of 511

U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

are not in close be liable for the

d. Teachers and schools proximity to tort by the
them. apprentice/student.
Art. 2180 (7), CC. Lastly, teachers or heads of Diligence of a good father of a family
establishments of arts and trades shall be liable for Defense
to prevent damage
damages caused by their pupils and students or
apprentices, so long as they remain in their
custody. RESPONSIBILITY FOR MINOR
CHILDREN IN SCHOOL (FC REGIME)
Art. 218, FC. The school, its administrators and SCHOOL,
PARENTS,
teachers, or the individual, entity or institution ADMINISTRATOR
GUARDIAN
engaged in child are shall have special parental S, TEACHERS,
S, ETC.
authority and responsibility over the minor child ETC.
while under their supervision, instruction or Provided
custody. Art. 218 Art. 219
by
Authority and responsibility shall apply to all Parental
authorized activities whether inside or outside the Kind of authority or
Special parental
premises of the school, entity or institution. authority substitute
authority
required parental
authority
Art. 219, FC. Those given the authority and
responsibility under the preceding Article shall be Liability
principally and solidarily liable for damages caused if tort is
by the acts or omissions of the unemancipated committe Principal and solidary Subsidiary
minor. The parents, judicial guardians or the d in
persons exercising substitute parental authority school
over said minor shall be subsidiarily liable.
Under Article 2180, the teacher is liable for the acts
The respective liabilities of those referred to in the or omissions of the pupils and students, and so is the
preceding paragraph shall not apply if it is proved head of establishment of arts and trades for the
that they exercised the proper diligence required apprentices, so long as they remain in custody,
under the particular circumstances. regardless of age. Under the Family Code, liability
attaches to the school, its administrators and teachers,
All other cases not covered by this and the or the individual or entity engaged in child care, so
preceding articles shall be governed by the long as the child is under their supervision,
provisions of the CC on quasi-delicts. instruction, or custody, and the child is below 18 years
old.
“TEACHERS” “HEADS”
Basis of liability of teachers and heads of
Academic Arts and trades, establishments of arts and trades
Institution
institutions establishments They stand, to a certain extent, in loco parentis and are
Teacher in called upon to exercise reasonable supervision over
Persons Head of the conduct of the child.
charge; not
liable establishment itself
administrator
“Custody” means the protective and supervisory
Custody Required custody that the school, its head and teachers exercise
Heads of Heads of over the pupils, for as long as they are in attendance
academic establishments of in school, which includes recess time [Palisoc v.
institutions arts and trades Brillantes, G.R. No. L-29025 (1971)].
Rationale exercise only have apprentices,
administrative who they are in As long as it is shown that the student is in the school
authority over close proximity to. premises pursuant to a legitimate student objective, in
the students, and Therefore they can the exercise of a legitimate right, or the enjoyment of

Page 471 of 511

U.P. LAW BOC TORTS AND DAMAGES
a legitimate student privilege, the responsibility of the
school authorities over the student continues
[Amadora v CA, G.R. No. L-47745 (1988)].
STUDENTS COVERED
ARTS. 218-219 ART. 2180
All students, even those no
longer minors, as long as they
Minor students only
remain in the custody of the
persons responsible
e. Owners/managers of
establishments/employers
Art. 2180 (4), FC. The owners and managers of
an establishment or enterprise are likewise
responsible for damages caused by their employees
in the service of the branches in which the latter
are employed or on the occasion of their functions.
Art. 2180 (5), FC. Employers shall be liable for the
damages caused by their employees and household
helpers acting within the scope of their assigned
tasks, even though the former are not engaged in
any business or industry.
NATURE OF EMPLOYERS’ LIABILITY
The basis of his liability is not his
employee’s negligence, but his own
Direct
negligence in hiring and supervising
the employee.
The amount for which he is liable
may be pursued without having to
Primary exhaust the employee’s assets, as
opposed to subsidiary liability under
the RPC.
He may recover the full amount of
the liability from his employee, as
Solidary per Art. 2181, and not merely a
prorated amount, unlike in Art.
2184, CC.
What must be established for vicarious liability
1. Existence of an employer-employee relationship
between company and tortfeasor
2. Tortious act had been committed while the
tortfeasor was acting in the normal course of
employment
Page 472 of 511
CIVIL LAW
BASIS OF LIABILITY: NOT RESPONDEAT
SUPERIOR, BUT PATER FAMILIAS
RESPONDEAT
PATER FAMILIAS
SUPERIOR
There is only a
Master is absolutely liable
presumption of
to servant’s act or
negligence on the part
omission
of the employer
Defense of negligence
No defense of negligence
available
Embodied in the
subsidiary liability under
Embodied in primary
liability under Art. 2180,
RPC – no defense of
where the defense of
diligence; only lack of
diligence is available
criminal liability
“Owners and managers of an establishment or
enterprise” does not include a manager of a
corporation. (Spanish term “directores” connotes
“employer.” But manager of a corporation is not an
employer, but rather merely an employee of the
owner.) [Philippine Rabbit v. Philam Forwarders, G.R. No.
L-25142 (1975)].
The liability imposed upon employers with respect to
damages occasioned by the negligence of their
employees to whom they are not bound by contract
is based on the employer’s own negligence, such as
when he places a powerful automobile in the hands of
a servant whom he knows to be ignorant of the
method of managing such vehicle [Cangco v. Manila
Railroad, supra].
This Court still employs the "control test" to
determine the existence of an employer-employee
relationship between hospital and doctor. Under the
"control test", an employment relationship exists
between a physician and a hospital if the hospital
controls both the means and the details of the process
by which the physician is to accomplish his task. The
Court earlier ruled that there was employer-employee
relationship between the doctor and employee but
reversed itself upon motion for reconsideration. They
still held the hospital liable on the basis of agency and
corporate responsibility [Professional Services v. CA and
Agana, G.R. No. 126297 (2010)].
“Within the scope of their assigned task” in Art. 2180
includes any act done by an employee in furtherance
of the interests, or for the account of the employer at
the time of the infliction of the injury or damage
[Filamer v. CA, G.R. No. 75112 (1990)].
U.P. LAW BOC TORTS AND DAMAGES
Basis of liability
Employer’s negligence in
1. The selection of their employees (culpa in eligiendo)
2. The supervision over their employees (culpa in
vigilando)
Presumption of Negligence
The presentation of proof of the negligence of its
employee gives rise to the presumption that the
defendant employer did not exercise the diligence of
a good father of a family in the selection and
supervision of its employees [Lampesa v. De Vera, G.R.
No. 155111 (2008)].
Distinction between the 4th and 5th paragraphs of
Article 2180
A distinction must be made between the two
provisions to determine what is applicable.
1. Both provisions apply to employers:
a. the fourth paragraph, to owners and managers
of an establishment or enterprise; and
b. the fifth paragraph, to employers in general,
whether or not engaged in any business or
industry.
2. The fourth paragraph covers negligent acts of
employees committed either in the service of the
branches or on the occasion of their functions,
while the fifth paragraph encompasses negligent
acts of employees acting within the scope of their
assigned task.
a. The latter is an expansion of the former in
both employer coverage and acts included.
b. Negligent acts of employees, whether or not
the employer is engaged in a business or
industry, are covered so long as they were
acting within the scope of their assigned task,
even though committed neither in the service
of the branches nor on the occasion of their
functions.
c. For, admittedly, employees oftentimes wear
different hats. They perform functions which
are beyond their office, title or designation but
which, nevertheless, are still within the call of
duty [Castilex Industrial Corp. v. Vasquez, G.R.
No. (1999)].
Defense of diligence in selection and supervision
Due diligence in the supervision of employees
includes the formulation of suitable rules and
regulations for the guidance of employees and the
issuance of proper instructions intended for the
protection of the public and persons with whom the
employer has relations through his or her employees
Page 473 of 511
CIVIL LAW
and the imposition of necessary disciplinary measures
upon employees in case of breach or as may be
warranted to ensure performance of acts as
indispensable to the business of and beneficial to their
employee [Metro Manila Transit v. CA, G.R. No.
104408 (1993)].
Due diligence in the selection of employees require
that the employer carefully examined the applicant for
employment as to his qualifications, his experience
and record of service.
Criminal Negligence
The vicarious liability of the employer for criminal
negligence of his employee is governed by RPC 103.
Conviction of the employee conclusively binds the
employer. Defense of due diligence in the selection
and supervision of the employee is not available. The
employer cannot appeal the conviction [Fernando v.
Franco (1971)].
Note: The liability of the employer under Art. 103 RPC
is subsidiary.
Registered Owner Rule
The registered owner of the vehicle is primarily
responsible to the public for whatever damage or
injury the vehicle may have caused, even if he had
already sold the same to someone else. The policy is
the easy identification of the owner who can be held
responsible so as not to inconvenience or prejudice
the third party injured [Cadiente v. Macas (2008)]. The
registered owner, however, has the right to be
indemnified by the real or actual owner of the amount
that he may be required to pay as damages for the
injury caused to the plaintiff [Orix Metro Leasing v.
Mangalinan (2012)]. This rule applies even if the
vehicle is leased to third persons. The liability of the
registered owner is subject to his right of recourse
against the transferee or buyer.
f. The State
Sec. 3, Art. XVI, 1987 Constitution. The State
may not be sued without its consent.
Art. 2180 (3), CC. The State is responsible in like
manner when it acts through a special agent; but
not when the damage has been caused by the
official to whom the task done properly pertains,
in which case what is provided in Article 2176 shall
be applicable.
U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

Who may be sued under the State g. Joint tortfeasors

1. A special agent under Art. 2180
2. Instrumentalities discharging proprietary
Art. 2194, FC. The responsibility of two or more
functions
persons who are liable for quasi-delict is solidary.
• The power to enter into contracts implies the
consent to be sued
Definition of “Joint Tortfeasors”
• The charter of the instrumentality may They are all persons who command, instigate,
expressly provide that it may be sued promote, encourage, advise, countenance, cooperate
3. Those that consent to be sued in, aid or abet in the commission of a tort, or who
approve of it after it is done, if done for their benefit
Instances where the State gives its consent to be [Filipinas Broadcasting Network v. AMEC-BCCM, G.R.
sued No. 141994 (2005)].
1. Art. 2180 (6) is an example of an express
legislative consent. Here, the State assumes a Applicability of the provision
limited liability for the acts of its special agents. Where the concurrent or successive negligent acts or
2. Art. 2189 provides for state liability for damages omissions of two or more persons, although acting
caused by defective condition of public works. independently, are in combination the direct and
3. Local Government Code provides for the liability proximate cause of a single injury to a third person, it
of local government units for wrongful exercise is impossible to determine in what proportion each
of its proprietary (as opposed to its contributed to the injury and either of them is
governmental) functions. The latter is the same responsible for the whole injury. Where their
as that of a private corporation or individual. concurring negligence resulted in injury or damage to
[Mendoza v. de Leon, G.R. No. L-9596 (1916)] a third party, they become joint tortfeasors and are
solidarily liable for the resulting damage [Far Eastern
Special Agent Shipping v. CA, supra].
One who receives a definite and fixed order or
commission, foreign to the exercise of the duties of
his office if he is a special official. This concept does
not apply to any executive agent who is an employee
of the active administration and who on his own
responsibility performs the functions which are
inherent in and naturally pertain to his office [Merritt
v. Government of the Philippine Islands, G.R. No. 11154
(1960)].

A corporate body performing non-governmental

functions becomes liable for the damage caused by
the accident resulting from the tortious act of its
driver-employee. Such corporate body assumes the
responsibility of an ordinary employer and as such,
becomes answerable for damages [Fontanilla v.
Maliaman, G.R. No. 55963 (1991)].

Why the State cannot be sued

1. Neither fault nor negligence can be presumed on
the part of the State in the organization of
branches of public service and in the
appointment of its agents.
2. Suing the State will divert its focus from the
delivery of necessary public services.

Page 474 of 511

U.P. LAW BOC TORTS AND DAMAGES
Liability Attached to
Specific Persons
1. Strict Liability
a. Possessor or User of Animals
Art. 2183, CC. The possessor of an animal or
whoever may make use of the same is responsible
for the damage which it may cause, although it may
escape or be lost. This responsibility shall cease
only in case the damage should come from force
majeure or from the fault of the person who has
suffered damage.
The law makes no distinction as to what kind of
animal is used or possessed. Hence, it may be
construed as applicable generally to all animals,
whether domestic, domesticated, or wild. It would
seem that birds are covered since they can also cause
damage. [de Leon]
Possession of the animal, not ownership, is
determinative of liability under Art. 2183. The
obligation imposed by said article is not based on the
negligence or on the presumed lack of vigilance of the
possessor or user of the animal causing damage. It is
based on natural equity and on the principle of social
interest that he who possesses animals for his utility,
pleasure, or service, must answer for any damage
which such animal may cause. The contention that the
defendant could not be expected to exercise remote
control of the animal is not acceptable. In fact, Art.
2183 holds the possessor liable even if the animal
should “escape or be lost” and so be removed from
his control. It is likewise immaterial that the animal
was tame and was merely provoked by the victim. The
law does not speak only of vicious animals but covers
even tame ones as long as they cause injury [Vestil v.
IAC, G.R. No. 74431 (1989)].
Possible defenses against this liability
1. Force Majeure
2. Fault of person suffering damage
3. Act of third persons
Page 475 of 511
CIVIL LAW
b. Provinces, Cities, and
Municipalities
Art. 2189, CC. Provinces, cities and municipalities
shall be liable for damages for the death of, or
injuries suffered by, any person by reason of the
defective condition of roads, streets, bridges,
public buildings, and other public works under
their control or supervision.
It is not even necessary that the defective roads or
streets belong to the province, city or municipality for
liability to attach. The article only requires that either
control or supervision be exercised over said street or
road [Guilatco v. Dagupan, G.R. No. 61516 (1989)].
c. Proprietor of Building or
Structure
Art. 2190, CC. The proprietor of a building or
structure is responsible for the damages resulting
from its total or partial collapse, if it should be due
to the lack of necessary repairs.
Art. 2191, CC. Proprietors shall also be
responsible for damages caused:
(1) By the explosion of machinery which has not
been taken care of with due diligence, and the
inflammation of explosive substances which
have not been kept in a safe and adequate
place;
(2) By excessive smoke, which may be harmful to
persons or property;
(3) By the falling of trees situated at or near
highways or lanes, if not caused by force
majeure;
(4) By emanations from tubes, canals, sewers or
deposits of infectious matter, constructed
without precautions suitable to the place.
Art. 2192, CC. If damage referred to in the two
preceding articles should be the result of any defect
in the construction mentioned in article 1723, the
third person suffering damages may proceed only
against the engineer or architect or contractor in
accordance with said article, within the period
therein fixed.
Ownership of a building imposes on the proprietor
thereof the duty to maintain it in good condition at all
U.P. LAW BOC TORTS AND DAMAGES
times to the end that it may not collapse either totally
or partially as to cause damage or injury to another’s
person or property. This duty obtains whether the
building is leased or held in usufruct. Considering,
however, that the lessee or usufructuary has direct and
immediate control of the building, the law imposes on
him the duty to notify the proprietor of such urgent
or extraordinary repairs. And where the proprietor’s
failure to make the necessary repairs was due to the
failure of the lessee or usufructuary to notify him, the
proprietor is entitled to indemnification for damages
he may have been required to pay to the parties.
Liability does not attach to the proprietor if the
damage was caused by any defect in the construction
mentioned in Article 1723, in which case the action
should be against the engineer or architect.
Under Article 2190, the plaintiff is required to prove:
1. The total or partial collapse of a building or
structure
2. That the defendant is the proprietor
3. That the collapse was due to the lack of necessary
repairs
Note: There is no requirement to prove negligence.
Under Article 2191, with the exception of No. 1,
negligence is also not an issue.
The owner or proprietor of a place of public
amusement impliedly warrants that the premises,
appliances and amusement devices are safe for the
purpose for which they are designed, the doctrine
being subject to no other exception or qualification
than that he does not contract against unknown
defects not discoverable by ordinary or reasonable
means [Gotesco Investment Corp. v. Chatto, G.R. No.
87584 (1992)].
d. Engineer or Architect of
Collapsed Building
Art. 1723, CC. The engineer or architect who drew
up the plans and specifications for a building is
liable for damages if within fifteen years from the
completion of the structure, the same should
collapse by reason of a defect in those plans and
specifications, or due to the defects in the ground.
The contractor is likewise responsible for the
damages if the edifice falls, within the same period,
on account of defects in the construction or the
use of materials of inferior quality furnished by
him, or due to any violation of the terms of the
Page 476 of 511
CIVIL LAW
contract. If the engineer or architect supervises the
construction, he shall be solidarily liable with the
contractor.
Acceptance of the building, after completion, does
not imply waiver of any of the cause of action by
reason of any defect mentioned in the preceding
paragraph.
The action must be brought within ten years
following the collapse of the building.
Engineer or architect who drew up the plans and
specifications is liable if the building collapses within
15 years due to:
1. A defect in those plans and specifications; or
2. Due to the defects in the ground.
Contractor is liable if the edifice falls within 15 years
due to:
1. Defects in the construction;
2. The use of materials of inferior quality furnished
by the contractor; or
3. Due to any violation of the terms of the contract.
Here, the plaintiff need only prove that such
conditions (defects) exist, and need not prove that
negligence of the defendant be the cause of the
conditions.
e. Owners of Enterprises or Other
Employers
Art. 1711, CC. Owners of enterprises and other
employers are obliged to pay compensation for the
death of or injuries to their laborers, workmen,
mechanics or other employees, even though the
event may have been purely accidental or entirely
due to a fortuitous cause, if the death or personal
injury arose out of and in the course of the
employment. The employer is also liable for
compensation if the employee contracts any illness
or disease caused by such employment or as the
result of the nature of the employment. If the
mishap was due to the employee's own notorious
negligence, or voluntary act, or drunkenness, the
employer shall not be liable for compensation.
When the employee's lack of due care contributed
to his death or injury, the compensation shall be
equitably reduced.
U.P. LAW BOC TORTS AND DAMAGES
Art. 1712, CC. If the death or injury is due to the
negligence of a fellow worker, the latter and the
employer shall be solidarily liable for
compensation. If a fellow worker's intentional
malicious act is the only cause of the death or
injury, the employer shall not be answerable, unless
it should be shown that the latter did not exercise
due diligence in the selection or supervision of the
plaintiff's fellow worker.
Alarcon, a teacher, hired Urzino and Azaña to dig a
well on his land; in the course of which Urzino died
of asphyxia. The Court found that under the principle
of ejusdem generis, said “other employers” mentioned in
Article 1711 must be construed to refer to persons
who belong to a class analogous to “owners of
enterprises”, such as those operating a business or
engaged in a particular industry or trade, requiring its
managers to contract the services of laborers, workers
and/or employees. Alarcon, not owning any
enterprise, did not fall under the category of “other
employers” [Alarcon v. Alarcon, G.R. No. L-15692
(1961)].
Situations covered:
1. Death or injury arising out of or in the course
of employment – here, the employer is liable
even if the event which caused the death or injury
was purely accidental or due to a fortuitous event
2. Illness or disease caused by their
employment or as the result of the nature of
the employment
Defenses available to the employer:
1. When death or injury is not caused by a fellow
worker
The mishap due to the employee’s own notorious
negligence or voluntary act, or drunkenness
2. When death or injury is caused by a fellow worker
General rule: The employer is solidarily liable with
the fellow worker causing the death or injury
Exception: If the only cause of the death or injury
was the fellow worker’s intentional or malicious
act
Exception to the exception: If it is shown that the
employer did not exercise due diligence in the
selection and supervision of the fellow worker
causing the death or injury
Page 477 of 511
CIVIL LAW
f. Head of a Family for Things
Thrown or Falling
Art 2193, CC. The head of a family that lives in a
building or a part thereof, is responsible for
damages caused by things thrown or falling from
the same.
The purpose of the law is to relieve the injured party
of the difficulty of determining and proving who
threw the thing or what caused it to fall, or that either
was due to the fault or negligence of any particular
individual.
Lessee is considered as the head of the family. It is
enough that he lives in and has control over it
[Dingcong v. Kanaan, G.R. No. L-47033 (1941)].
2. Products Liability
a. Manufacturers/Processors of
Foodstuffs
Art. 2187, CC. Manufacturers and processors of
foodstuffs, drinks, toilet articles and similar goods
shall be liable for death or injuries caused by any
noxious or harmful substances used, although no
contractual relation exists between them and the
consumers.
Under the foregoing provision, liability is not made to
depend upon fault or negligence of the manufacturer
or processor. The provision likewise dispensed with
any contractual relation between the manufacturer
and the consumer, thereby clearly implying that
liability is imposed by law as a matter of public policy.
Proof of negligence under this provision is not
necessary; as such, traditional contract and warranty
defenses as (1) lack of privity; (2) lack of reliance on a
warranty; (3) lack of notice to the defendant of the
breach of warranty; and (4) disclaimer of implied
warranties are inapplicable.
Requisites of liability
1. Defendant is a manufacturer or possessor of
foodstuff, drinks, toilet articles and similar goods;
2. He used noxious or harmful substances in the
manufacture or processing of the foodstuff,
drinks or toilet articles consumed or used by the
plaintiff;
U.P. LAW BOC TORTS AND DAMAGES
3. Plaintiff’s death or injury was caused by the
product so consumed or used; and
4. The damages sustained and claimed by the
plaintiff and the amount thereof.
Burden of proof
The burden of proof that the product was in a
defective condition at the time it left the hands of the
manufacturer and particular seller is upon the injured
plaintiff.
Who may recover
Although the article used the term “consumer”, such
term includes a “user” and “purchaser” of the
injuriously defective food product or toilet article.
The person who may recover need not be the
purchaser of the foodstuff or toilet article.
CONSUMER ACT
RA 7394, Secs. 92-107 (Ch. 1)
Article 4. Definition of Terms.
(n) "Consumer" means a natural person who is a
purchaser, lessee, recipient or prospective
purchaser, lessor or recipient of consumer
products, services or credit.
(as) "Manufacturer" means any person who
manufactures, assembles or processes consumer
products, except that if the goods are
manufactured, assembled or processed for another
person who attaches his own brand name to the
consumer products, the latter shall be deemed the
manufacturer. In case of imported products, the
manufacturer's representatives or, in his absence,
the importer, shall be deemed the manufacturer.
Article 92. Exemptions. – If the concerned
department finds that for good or sufficient
reasons, full compliance with the labeling
requirements otherwise applicable under this Act
is impracticable or is not necessary for the
adequate protection of public health and safety, it
shall promulgate regulations exempting such
substances from these requirements to the extent
it deems consistent with the objective of
adequately safeguarding public health and safety,
and any hazardous substance which does not bear
a label in accordance with such regulations shall be
deemed mislabeled hazardous substance.
Article 97. Liability for the Defective Products. –
Any Filipino or foreign manufacturer,
Page 478 of 511
CIVIL LAW
producer, and any importer, shall be liable for
redress, independently of fault, for damages caused
to consumers by defects resulting from design,
manufacture, construction, assembly and erection,
formulas and handling and making up,
presentation or packing of their products, as well
as for the insufficient or inadequate information
on the use and hazards thereof.
A product is defective when it does not offer the
safety rightfully expected of it, taking relevant
circumstances into consideration, including but not
limited to:
(a) presentation of product
(b) use and hazards reasonably expected of it;
(c) the time it was put into circulation.
A product is not considered defective because
another better quality product has been placed in the
market. The manufacturer, builder, producer or
importer shall not be held liable when it
evidences:
(a) that it did not place the product on the market;
(b) that although it did place the product on the
market such product has no defect;
(c) that the consumer or a third party is solely at
fault.
Article 98. Liability of Tradesman or Seller. – The
tradesman/seller is likewise liable, pursuant to
the preceding article when:
(a) it is not possible to identify the manufacturer,
builder, producer or importer;
(b) the product is supplied, without clear
identification of the manufacturer, producer,
builder or importer;
(c) he does not adequately preserve perishable
goods. The party making payment to the
damaged party may exercise the right to
recover a part of the whole of the payment
made against the other responsible parties, in
accordance with their part or responsibility in
the cause of the damage effected.
Article 99. Liability for Defective Services. – The
service supplier is liable for redress,
independently of fault, for damages caused to
consumers by defects relating to the rendering
of the services, as well as for insufficient or
inadequate information on the fruition and
hazards thereof.
U.P. LAW BOC TORTS AND DAMAGES
The service is defective when it does not
provide the safety the consumer may rightfully
expect of it, taking the relevant circumstances into
consideration, including but not limited to:
4. the manner in which it is provided;
5. the result of hazards which may reasonably be
expected of it;
6. the time when it was provided.
A service is not considered defective because of the use or
introduction of new techniques.
The supplier of the services shall not be held liable
when it is proven:
(a) that there is no defect in the service rendered;
that the consumer or third party is solely at fault.
Article 100. Liability for Product and Service
Imperfection. – The suppliers of durable or
nondurable consumer products are jointly liable
for imperfections in quality that render the
products unfit or inadequate for consumption for
which they are designed or decrease their value,
and for those resulting from inconsistency with the
information provided on the container, packaging,
labels or publicity messages/advertisement, with
due regard to the variations resulting from their
nature, the consumer being able to demand
replacement to the imperfect parts.
If the imperfection is not corrected within
thirty (30) days, the consumer may alternatively
demand at his option:
(a) the replacement of the product by another of
the same kind, in a perfect state of use;
(b) the immediate reimbursement of the amount
paid, with monetary updating, without
prejudice to any losses and damages;
(c) a proportionate price reduction.
The parties may agree to reduce or increase the
term specified in the immediately preceding
paragraph; but such shall not be less than seven (7)
nor more than one hundred and eighty (180) days.
The consumer may make immediate use of the
alternatives under the second paragraph of this
Article when by virtue of the extent of the
imperfection, the replacement of the imperfect
parts may jeopardize the product quality or
characteristics, thus decreasing its value.
Page 479 of 511
CIVIL LAW
If the consumer opts for the alternative under sub-
paragraph (a) of the second paragraph of this
Article, and replacement of the product is not
possible, it may be replaced by another of a
different kind, mark or model: Provided, That any
difference in price may result thereof shall be
supplemented or reimbursed by the party which
caused the damage, without prejudice to the
provisions of the second, third and fourth
paragraphs of this Article.
Article 101. Liability for Product Quantity
Imperfection. – Suppliers are jointly liable for
imperfections in the quantity of the product when,
in due regard for variations inherent thereto, their
net content is less than that indicated on the
container, packaging, labeling or advertisement,
the consumer having powers to demand,
alternatively, at his own option:
(a) the proportionate price
(b) the supplementing of weight or measure
differential;
(c) the replacement of the product by another of
the same kind, mark or model, without said
imperfections;
(d) the immediate reimbursement of the amount
paid, with monetary updating without
prejudice to losses and damages if any.
The provisions of the fifth paragraph of Article 99
shall apply to this Article.
The immediate supplier shall be liable if the
instrument used for weighing or measuring is not
gauged in accordance with official standards.
Article 102. Liability for Service Quality
Imperfection. – The service supplier is liable for
any quality imperfections that render the services
improper for consumption or decrease their value,
and for those resulting from inconsistency with the
information contained in the offer or
advertisement, the consumer being entitled to
demand alternatively at his option:
(a) the performance of the services, without any
additional cost and when applicable;
(b) the immediate reimbursement of the amount
paid, with monetary updating without
prejudice to losses and damages, if any;
(c) a proportionate price reduction.
U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

Reperformance of services may be entrusted to

duly qualified third parties, at the supplier's risk and
cost.
Improper services are those which prove to be
inadequate for purposes reasonably expected of
them and those that fail to meet the provisions of
this Act regulating service rendering.
Article 103. Repair Service Obligation. – When
services are provided for the repair of any product,
the supplier shall be considered implicitly bound
to use adequate, new, original replacement parts,
or those that maintain the manufacturer's technical
specifications unless, otherwise authorized, as
regards to the latter by the consumer.
Article 104. Ignorance of Quality Imperfection. –
The supplier's ignorance of the quality
imperfections due to inadequacy of the products
and services does not exempt him from any
liability.
Article 105. Legal Guarantee of Adequacy. – The
legal guarantee of product or service adequacy
does not require an express instrument or
contractual exoneration of the supplier being
forbidden.
Article 106. Prohibition in Contractual Stipulation.
– The stipulation in a contract of a clause
preventing, exonerating or reducing the obligation to
indemnify for damages effected, as provided for in this
and in the preceding Articles, is hereby
prohibited, if there is more than one person
responsible for the cause of the damage, they shall
be jointly liable for the redress established in the
pertinent provisions of this Act. However, if the
damage is caused by a component or part
incorporated in the product or service, its
manufacturer, builder or importer and the person
who incorporated the component or part are
jointly liable.

SUMMARY OF STRICT LIABILITY

PERSON STRICTLY
FOR WHAT DEFENSES OR EXCEPTIONS
LIABLE
Possessor of an animal or
• Force majeure
whoever makes use of them
For the damage the animal may cause • Fault of the person who suffered
even if the animal is lost or
escaped damage

• Solidary liability only if the owner

Owner of Motor Vehicle
Manufacturers and
processors of foodstuffs,
drinks, toilet articles and
similar goods
Defendant in possession of
dangerous weapons/ Death or injury results from such
substances such as firearms possession
and poison
Provinces, Cities and
Municipalities
Proprietor of building/
structure
was in the vehicle and if he could
Motor vehicle mishaps have prevented it thru due diligence
• If not in vehicle, apply Art. 2180 for
his liability as employer
Death and injuries caused by any noxious Absence of contractual relation not a
or harmful substances used defense
Possession or use thereof is
indispensable in his occupation or
business
The death or injuries suffered by any
person by reason of the defective condition The defective public work is not under
of roads, streets, bridges, public buildings, the LGU’s control or supervision
and other public works
a. Total or partial collapse of building or
Responsibility for collapse should be
structure if due to lack of necessary
due to the lack of necessary repairs
repairs

Page 480 of 511

U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

PERSON STRICTLY
FOR WHAT DEFENSES OR EXCEPTIONS
LIABLE
b. Explosion of machinery which has not
been taken cared of with due diligence,
and the inflammation of explosive
substances which have not been kept in
a safe and adequate place
c. By excessive smoke, which may be
harmful to persons or property
d. By falling of trees situated at or near
highways or lanes, if not caused by
force majeure
e. By emanations from tubes, canals,
sewers or deposits of infectious matter,
constructed without precautions
suitable to the place
If within 15 years from completion of the
structure, the same should collapse by
reason of:
a. Defects in the plans or specifications;
or
b. Defects in the ground.
Action not brought within 10 years
Engineer or Architect
If within the same period, the edifice falls from collapse
on account of:
a. Defects in the construction;
b. Used of materials of inferior quality
furnished by him; or
c. Violation of the terms of the contract
and he supervised the construction.
If within 15 years from the completion of
the structure, the edifice falls on account
of:
Action not brought within 10 years
Contractor a. Defects in the construction;
from collapse
b. Used of materials of inferior quality
furnished by him; or
c. Violation of the terms of the contract
Head of the Family that
Liable for damages caused by things
lives in a building or any
thrown or falling from the same
part thereof

Page 481 of 511

U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

Intentional Torts CASE

LEGAL RIGHT
AND INJURY
DOCTRINE

Liability for personal acts or omission is founded on Right to transfer

that indisputable principle of justice recognized by all credit.
legislators that when a person by his act or omission The transfer of
causes damage or prejudice to another, a juridical credit from Shell
relation is created by virtue of which the injured Philippines to
person acquires a right to be indemnified and the Shell USA was The standards in
person causing the damage is charged with the Velayo v.
deemed a violation NCC 19 are
corresponding duty of repairing the damage. The Shell
implemented by
reason for this is found in the obvious truth that man (1959) of NCC 21 as it
allowed Shell to NCC 21.
should subordinate his acts to the precepts of attach properties
prudence and if he fails to observe them and cause of their creditor
damage to another, he must repair the damage CALI to the
[Manresa]. prejudice of its
other creditors.
INTENTIONAL NEGLIGENT
Right to dismiss an When a right is
TORTS TORTS
employee. exercised in a
The act or omission manner which
merely creates a The dismissal itself does not conform
Harmful consequences are
foreseeable risk or was not illegal but with the norms in
substantially certain to
harm, which may or it was the manner NCC 19, and
occur or are intended
may not actually be Globe v. of dismissal which results in damage
realized CA was deemed in to another, a legal
(1989) violation of Article wrong is thereby
1. Human Relations Torts 19, as such was committed. The
based on law, therefore,
unfounded recognizes a
a. Abuse of Right accusations of primordial
dishonesty. limitation on all
Art. 19, CC. Every person must, in the exercise of rights.
his rights and in the performance of his duties, act The conscious The conscious
with justice, give everyone his due, and observe indifference of the indifference of a
honesty and good faith. school in not person to the
University
informing its rights or welfare
Generally, the exercise of any right must be in of the East
student that he of the others who
accordance with the purpose for which it was v. Jader
could not graduate may be affected by
established. It must not be excessive or unduly harsh; (2000)
formed the basis his act or omission
there must be no intention to injure another. for the award of can support a
damages. claim for damages.
There is abuse of right when:
1. The right is exercised for the only purpose of Right to demolish The principle of
prejudicing or injuring another another’s house on damnum absque
2. The objective of the act is illegitimate his own property. injuria does not
3. There is an absence of good faith apply when the
Amonoy v. Amonoy obtained exercise of the
Elements [Albenson v. CA, G.R. No. 88694 (1993)]: Gutierrez a judgment in his legal right is
1. There is a legal right or duty; (2001) favor for suspended or
Gutierrez to extinguished
2. Which is exercised in bad faith; vacate. A pursuant to a
3. For the sole intent of prejudicing or injuring demolition order court order. The
another. was issued but the exercise of a right

Page 482 of 511

U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

court suspended it ends when the Philippine Medical Technology Act of 1969. The
with a TRO. right disappears, Court held that violation of a statutory duty is
Amonoy and it disappears negligence, and that Article 20 provides the legal basis
proceeded with when it is abused, for award of damages to a party who suffers damage
the demolition. In especially to the whenever one commits an act in violation of some
a complaint for prejudice of legal provision [Garcia v. Salvador, G.R. No. 168512
damages, he claims others. (2007)].
the principle of
damnum absque c. Acts Contrary to Morals
injuria.
Right to forbid Article 19, known Art. 21, CC. Any person who willfully causes loss
uninvited guests to contain what is or injury to another in a manner that is contrary to
from entering the commonly morals, good customs or public policy shall
party. referred to as the compensate the latter for the damage.
principle of abuse
Ruby Lim’s of rights, is not a This article is designed “to expand the concept of
throwing out of panacea for all torts and quasi-delict in this jurisdiction by granting
Nikko complainant Reyes,
human hurts and adequate legal remedy for the untold number of
Hotel as a gatecrasher in a
social grievances. moral wrongs which is impossible for human
Manila private party, was
The object of this foresight to specifically enumerate and punish in
Garden v. merely in exercise
article is to set statute books” [Baksh v. CA, supra].
Reyes of her duties as
certain standards
(2005) Executive
which must be Elements: [Albenson v. CA, supra].
Secretary of the observed not only 1. There is an act which is legal;
hotel where the in the exercise of 2. But which is contrary to morals, good customs,
party was held, and one’s rights but and public policy; and
did not constitute a also in the 3. It is done with intent to injure.
violation of Article performance of
19. one’s duties. Examples of acts contrary to morals:
1. Breach of Promise to Marry and Moral
Seduction
b. Acts Contrary to Law Mere breach of promise to marry is not an
actionable wrong. But to formally set a wedding
Art. 20, CC. Every person who, contrary to law, and go through all the above-described
willfully or negligently causes damage to another, preparation and publicity, only to walk out of it
shall indemnify the latter for the same. when the matrimony is about to be solemnized,
is quite different. This is palpably and
The provision is intended to provide a remedy in unjustifiably contrary to good customs xxx
cases where the law declares an act illegal but fails to [Wassmer v. Velez, G.R. No. L-20089 (1964)].
provide for a relief to the party injured. [Jarencio]
Where a man's promise to marry is in fact the
Art. 20 does not distinguish, and the act may be done proximate cause of the acceptance of his love by
willfully or negligently. a woman and his representation to fulfill that
promise thereafter becomes the proximate cause
Requisites of the giving of herself unto him in a sexual
1. The act must be willful or negligent; congress, proof that he had, in reality, no
2. It must be contrary to law; and intention of marrying her and that the promise
3. Damages must be suffered by the injured party. was only a subtle scheme or deceptive device to
entice or inveigle her to accept him and to obtain
Salvador was misdiagnosed with Hepatitis, as a result her consent to the sexual act, could justify the
of which she lost her job. During trial, it was proven award of damages pursuant to Article 21 not
that the clinic was operating under substandard because of such promise to marry but because of
conditions, in violation of the Clinical Laboratory the fraud and deceit behind it and the willful
Law, DOH Administrative Order No. 49-B, and the injury to her honor and reputation. It is essential,

Page 483 of 511

U.P. LAW BOC TORTS AND DAMAGES
however, that such injury should have been
committed in a manner contrary to morals, good
customs or public policy [Baksh v. CA, supra].
However, when for one whole year, the plaintiff,
a woman of legal age, maintained sexual relations
with the defendant, with repeated acts of
intercourse, there is here voluntariness. No case
under Article 21 is made [Tanjanco v. CA, G.R.
No. L-18630 (1966)].
2. Malicious Prosecution
Malicious prosecution is the institution of any
action or proceeding, either civil or criminal,
maliciously and without probable cause.
Elements: [Magbanua v. Junsay, G.R. No.132659
(2007)]
a. The fact of the prosecution or that the
prosecution did occur and that the
defendant was himself the prosecutor or
that he instigated its commencement;
b. That the action finally terminated with an
acquittal;
c. That in bringing the action, the prosecutor
acted without probable cause
d. That the prosecutor was actuated or
impelled by legal malice, that is, by improper
or sinister motive.
The mere dismissal of the criminal complaint by
the fiscal’s office did not create a cause of action
for malicious prosecution, because the
proceedings therein did not involve an
exhaustive examination of the elements of
malicious prosecution. To constitute such, there
must be proof that the prosecution was
prompted by a sinister design to vex and
humiliate a person and that it was initiated
deliberately by the defendant knowing that his
charges were false and groundless [Que v. IAC,
G.R. No. 66865 (1989)].
Malicious prosecution involves not only criminal
but civil and administrative suits as well
[Magbanua v. Junsay, supra].
3. Public Humiliation
Lolita’s family filed a case against Alfonse Pe, a
married man, for allegedly seducing Lolita and
causing great damage to the name of her parents,
brothers, and sisters. The Court sustained the
claim, finding an injury to Lolita’s family in a
manner contrary to morals, good customs and
Page 484 of 511
CIVIL LAW
public policy as contemplated in Article 21 of the
new CC [Pe v. Pe, G.R. No. L-17396 (1962)].
It is against morals, good customs and public
policy to humiliate, embarrass and degrade the
dignity of a person. Everyone must respect the
dignity, personality, privacy and peace of mind of
his neighbors and other persons (Article 26, CC)
[Grand Union v. Espino, G.R. No. L-48250 (1979)].
4. Oppressive Dismissal
The right of an employer to dismiss an employee
is not to be confused with the manner in which
this right is to be exercised and the effects
flowing therefrom. If the dismissal was done
antisocially or oppressively, then there is a
violation of Article 1701, which prohibits acts of
oppression by either capital or labor against the
other, and Article 21, which makes a person
liable for damages if he willfully causes loss or
injury to another in a manner that is contrary to
morals, good customs, or public policy. When
the manner in which the company exercised its
right to dismiss was abusive, oppressive and
malicious, it is liable for damages [Quisaba v. Sta.
Ines, G.R. No. L-38000 (1974)].
d. Unjust Enrichment
Art. 22, CC. Every person who through an act of
performance by another, or any other means,
acquires or comes into possession of something at
the expense of the latter without just or legal
ground, shall return the same to him.
Art. 23, CC. Even when an act or event causing
damage to another’s property was not due to the
fault or negligence of the defendant, the latter shall
be liable for indemnity if through the act or event
he was benefited.
Art. 2142, CC. Certain lawful, voluntary and
unilateral acts give rise to the juridical relation of
quasi-contract to the end that no one shall be
unjustly enriched or benefited at the expense of
another.
Art. 2143, CC. The provisions for quasi contracts
in this Chapter do not exclude other quasi-
contracts which may come within the purview of
the preceding article.
U.P. LAW BOC TORTS AND DAMAGES
One person should not be permitted to unjustly
enrich himself at the expense of another, but should
be required to make restitution of, or for property or
benefits received, retained, or appropriated where it
is just and equitable that such restitution be made,
and where such action involves no violation or
frustration of law or opposition to public policy,
either directly or indirectly.
Enrichment at the expense of another is not per se
forbidden. It is such enrichment without just or legal
cause that is contemplated here. Just and legal cause
is always presumed, and the plaintiff has the burden
of proving its absence.
The restitution must cover the loss suffered by the
plaintiff but it can never exceed the amount of unjust
enrichment of the defendant if it is less than the loss
of the plaintiff.
Requisites:
1. That the defendant has been enriched;
2. That the plaintiff has suffered a loss;
3. That the enrichment of the defendant is without
just or legal ground; and
4. That the plaintiff has no other action based on
contract, crime or quasi-delict.
e. Violation of Human Dignity
Art. 26, CC. Every person shall respect the
dignity, personality, privacy and peace of mind of
his neighbors and other persons. The following
and similar acts, though they may not constitute a
criminal offense, shall produce a cause of action
for damages, prevention and other relief:
(1) Prying into the privacy of another’s residence;
(2) Meddling with or disturbing the private life or
family relations of another;
(3) Intriguing to cause another to be alienated
from his friends;
(4) Vexing or humiliating another on account of
his religious beliefs, lowly station in life, place
of birth, physical defect, or other personal
condition.
Article 26 specifically applies to intentional acts
which fall short of being criminal offenses. It itself
expressly refers to tortious conduct which "may not
constitute criminal offenses." The purpose is
precisely to fill a gap or lacuna in the law where a
person who suffers injury because of a wrongful act
not constituting a crime is left without any redress.
Page 485 of 511
CIVIL LAW
Under Article 26, the person 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 community, Article 26 seeks to
eliminate cases of damnum absque injuria in human
relations [MVRS Publications v. Islamic Da'wah Council,
G.R. No. 135306 (2003)].
The principal rights protected under this provision
are the following:
1. The right to personal dignity
2. The right to personal security
3. The right to family relations
4. The right to social intercourse
5. The right to privacy
6. The right to peace of mind
Note: Coverage of Art. 26 is not limited to those
enumerated therein, the enumeration being merely
examples of acts violative of a person’s rights to
dignity, personality, privacy and peace of mind. Other
“similar acts” are also covered within the scope of the
article.
Violation of personal dignity
In order to be actionable it is not necessary that the
act constitutes a criminal offense. The remedy
afforded by the law is not only the recovery of
damages. “Prevention and other relief” is also
available. In other words, injunction and other
appropriate reliefs may also be obtained by the
aggrieved party.
Violation of privacy
Privacy is the right to be let alone, or to be free from
unwarranted publicity, or to live without unwarranted
interference by the public in matters in which the
public is not necessarily concerned. This right is
purely personal in nature, such that it can be invoked
only by the person actually injured, it is subject to a
proper waiver, and it ceases upon death. However,
the privilege may be given to heirs of a deceased to
protect his memory, to protect the feelings of the
living heirs.
Reasonableness of Expectation of Privacy Test:
[Ople v. Torres, G.R. No. 127685 (1998)]
a. Whether by one’s conduct, the individual has
exhibited an expectation of privacy
b. Whether this expectation is one that society
recognizes and accepts as reasonable
U.P. LAW BOC TORTS AND DAMAGES
The general rule is that the right to privacy may only
be invoked by natural persons. Juridical persons
cannot invoke this because the basis to this right is an
injury to the feelings and sensibilities of the injured
party, and a corporation has none of those. The
exception is where the right to privacy is invoked
along with the right against unreasonable searches
and seizures. “An individual’s right to privacy under
Article 26(1) of the CC should not be confined to his
house or residence as it may extend to places where
he has the right to exclude the public or deny them
access” [Sps. Hing v. Choachuy, G.R. No. 179736
(2013)].
Interference with relations
An interference with the continuance of unimpaired
interests founded upon the relation in which the
plaintiff stands toward one or more third persons
[Prosser and Keeton].
Kinds
a. Family relations
b. Social relations
c. Economic relations
d. Political relations
a. Family Relations
Alienation of affection
This is a cause of action in favor of a husband
against one who wrongfully alienates the
affection of his wife, depriving him of his
conjugal rights to her consortium, that is, her
society, affection, and assistance.
Note: This cause of action was mentioned in the
case of Tenchavez v. Escaño, G.R. No. L-19671
(1965).
Elements:
1. Wrongful conduct of the defendant:
intentional and malicious enticing of a
spouse away from the other spouse
2. Loss of affection or consortium
Note: Complete absence of affection
between the spouses is not a defense.
3. Causal connection between such conduct
and loss
There is no evidence that the parents of Vicenta,
out of improper motives, aided and abetted her
original suit for annulment, or her subsequent
divorce; she appears to have acted
independently, and being of age, she was entitled
to judge what was best for her and ask that her
Page 486 of 511
CIVIL LAW
decisions be respected. Her parents, in so doing,
certainly cannot be charged with alienation of
affections in the absence of malice or unworthy
motives, which have not been shown, good faith
being always presumed until the contrary is
proved [Tenchavez v. Escaño, G.R. No. L-19671
(1965)].
Liability of Parents, Guardians or Kin
The law distinguishes between the right of a
parent to interest himself in the marital affairs of
his child and the absence of rights in a stranger
to intermeddle in such affairs.
a. Such distinction between the liability of
parents and that of strangers is only in
regard to what will justify interference.
b. A parent is liable for alienation of
affections resulting from his own malicious
conduct, as where he wrongfully entices his
son or daughter to leave his or her spouse,
but he is not liable unless he acts maliciously,
without justification and from unworthy
motives.
c. He is not liable where he acts and advises
his child in good faith with respect to his
child's marital relations in the interest of
his child as he sees it…
d. He may in good faith take his child into his
home and afford him or her protection and
support, so long as he has not maliciously
enticed his child away, or does not
maliciously entice or cause him or her to stay
away, from his or her spouse. This rule has
more frequently been applied in the case of
advice given to a married daughter, but it is
equally applicable in the case of advice given
to a son. [Tenchavez v. Escaño, G.R. No. L-
19671 (1965)].
b. Social Relations
Meddling with or disturbing family relations
Art. 26, CC. Every person shall respect the
dignity, personality, privacy and peace of mind of
his neighbors and other persons. The following
and similar acts, though they may not constitute
a criminal offense, shall produce a cause of action
for damages, prevention and other relief;
xxx
(2) Meddling with or disturbing the private life or
family relations of another;
U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

c. Economic Relations Dereliction of Duty

1. Interference with contractual relations
Art. 1314, CC. Any person who induces
another to violate his contract with another
person shall be liable for damages to the other
contracting party.
Elements of tort interference: [So Ping Bun v.
CA, G.R. No. 120554 (1999)]
a. Existence of a valid contract
b. Knowledge on the part of the third person
of the existence of contract; and
c. Interference of the third person is without
legal justification or excuse.
Art. 27, CC. Any person suffering material or
moral loss because a public servant or employee
refuses or neglects, without just cause, to perform
his official duty may file an action for damages and
other relief against the latter, without prejudice to
any disciplinary administrative action that may be
taken.
This applies only to acts of nonfeasance or the
nonperformance of some acts which a person is
obliged or has responsibility to perform. The duty of
the public servant must be ministerial in character. If
the duty is discretionary, he is not liable unless he
acted in a notoriously arbitrary manner.

Everyone has a right to enjoy the fruits and
advantages of his own enterprise, industry, skill
and credit. He has no right to be protected
against competition; but he has a right to be free
from malicious and wanton interference,
disturbance or annoyance. If disturbance or loss
comes as a 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 interfered with. Thus, a plaintiff
loses his cause of action if the defendant
provides a sufficient justification for such
interference, which must be an equal or superior
right in themselves. The defendant may not
legally excuse himself on the ground that he
acted on a wrong understanding of his own
rights, or without malice, or bona fide, or in the
best interests of himself [Gilchrist v. Cuddy, G.R.
No. 9356 (1915)].
The defense of good faith is not available because an
officer is under constant obligation to discharge the
duties of his office, and it is not necessary to show
that his failure to act was due to malice or willfulness.
Requisites: [Amaro v. Sumanguit, G.R. No. L-14986
(1962)]
a. Defendant is a public officer charged with a
performance of a duty in favor of the plaintiff;
b. He refused or neglected without just cause to
perform the duty;
c. Plaintiff sustained material or moral loss as a
consequence of such non-performance;
d. The amount of such damages, if material.

Bad faith/Malice is required to make the

defendant liable for damages in cases of tortuous
interference [So Ping Bun v. CA, supra].

2. Unfair Competition

Art. 28, CC. Unfair competition in

agricultural, commercial or industrial
enterprises or in labor through the use of
force, intimidation, deceit, machination or any
other unjust, oppressive or highhanded
method shall give rise to a right of action by
the person who thereby suffers damage.

Page 487 of 511

U.P. LAW BOC TORTS AND DAMAGES
Independent Civil
Actions
Sec. 3, Rule 111, ROC. In the cases provided for
in Articles 32, 33, 34 and 2176 of the CC of the
Philippines, the independent civil action may be
brought by the offended party. It shall proceed
independently of the criminal action and shall
require only a preponderance of evidence. In no
case, however, may the offended party recover
damages twice for the same act or omission
charged in the criminal action.
1. Violation of Civil and
Political Rights
Art. 32, CC. Any public officer or employee, or
any private individual, who directly or indirectly
obstructs, defeats, violates or in any manner
impedes or impairs any of the following rights and
liberties of another person shall be liable to the
latter for damages:
1. Freedom of religion
2. Freedom of speech
3. Freedom to write for the press or to maintain
a periodical publication
4. Freedom from arbitrary or illegal detention
5. Freedom of suffrage
6. The right against deprivation of property
without due process of law
7. The right to just compensation when
property is taken for public use
8. The right to equal protection of the laws
9. The right to be secure in one’s person, house,
papers and effects against unreasonable
searches and seizures
10. The liberty of abode and of changing the
same
11. The right to privacy of communication and
correspondence
12. The right to become a member of
associations and societies for purposes not
contrary to law
13. The right to take part in a peaceable assembly
and petition the government for redress of
grievances
14. The right to be free from involuntary
servitude in any form
15. The right of the accused against excessive bail
Page 488 of 511
CIVIL LAW
16. The right of the accused to be heard by
himself and counsel, to be informed of the
nature and the cause of the accusation against
him, to have a speedy and public trial, to meet
the witnesses face to face, to have compulsory
process to secure the attendance of witnesses
on is behalf;
17. Freedom from being compelled to be a
witness against one’s self, or from being
forced to confess his guilt, or from being
induced by a promise of immunity or reward
to make such confession, except when the
person confessing becomes a State witness.
18. Freedom from excessive fines, or cruel and
unusual punishment, unless the same is
imposed or inflicted in accordance with a
statute which has not been judicially declared
unconstitutional;
19. Freedom of access to the courts
In any of the cases referred to in this article,
whether or not the defendant’s act or omission
constitutes a criminal offense, the aggrieved party
has a right to commence an entirely separate and
distinct civil action for damages, and for other
relief. Such civil action shall proceed
independently of any criminal prosecution (if the
latter be instituted) and may be proved by a
preponderance of evidence.
The indemnity shall include moral damages.
Exemplary damages may also be adjudicated.
The responsibility herein set forth is not
demandable from a judge unless his act or
omission constitutes a violation of the Penal code
or any other penal statute.
Art.32, CC
a. Speaks of a particular specie of an “act” that may
give rise to an action for damages against a public
officer, and that is, a tort for impairment of rights
and liberties. [Vinzons-Chato v. Fortune, supra]
b. Not only public officers but also private
individuals can incur civil liability for violation of
rights enumerated therein. Because the provision
speaks of an officer, employee or person
“directly or indirectly” responsible for the
violation of the constitutional rights and liberties
of another, it is not the actor alone who must
answer for damages under Article 32. It is not
even necessary that the defendant should have
acted with malice or bad faith, otherwise, it
U.P. LAW BOC TORTS AND DAMAGES
would defeat its main purpose, which is the
effective protection of individual rights. [Silahis v.
Soluta, G.R. No. 163087 (2006)]
c. It is obvious that the purpose of Art. 32 is to
provide a sanction to the deeply cherished rights
and freedoms enshrined in the Constitution.
Its message is clear; no man may seek to
violate those sacred rights with impunity. In
times of great upheaval or of social and
political stress, when the temptation is
strongest to yield. [Aberca, et al. v. Ver, et al.,
G.R. No. 69866(1988)].
2. Defamation, Fraud, Physical
Injuries
Art. 33, CC. In cases of defamation, fraud, and
physical injuries, a civil action for damages,
entirely separate and distinct from the criminal
action, may be brought by the injured party. Such
civil action shall proceed independently of the
criminal prosecution, and shall require only a
preponderance of evidence.
b.
The civil action for damages that Article 33 allows to
be instituted is ex-delicto. This is manifest from the
provision which uses the expressions “criminal c.
action” and “criminal prosecution”. Quoting
Tolentino, the Court ruled that this provision is an
exception to the general rule that the civil action for
recovery of civil liability arising from the offense
charged is impliedly instituted with the criminal
action. Where the offense is defamation, fraud, or
physical injuries, a civil action may be filed
independently of the criminal action, even though no
reservation is made [Madeja v. Caro, G.R. No. 51183
(1983)].
a. Defamation – the offense of injuring a person’s
character, fame or reputation through false or
malicious statements. Defamation is an invasion
of a relational interest since it involves the
opinion which others in the community may
have, or tend to have, of the plaintiff.
Elements of libel pursuant to Art. 353, RPC:
1. An allegation or imputation of a
discreditable act or condition concerning
another
2. Publication of the imputation
3. Identity of the person defamed
Page 489 of 511
CIVIL LAW
4. Existence of malice
Where the defamation is alleged to have been
directed at a group or class, it is essential that the
statement must be so sweeping or all-embracing
as to apply to every individual in that group or
class, or sufficiently specific so that each
individual in the class or group can prove that the
defamatory statement was specifically pointed to
him [MVRS Publications, Inc. v. Islamic, supra].
In determining whether certain utterances are
defamatory, the words used are to be construed
in their entirety and taken in their plain, natural
and ordinary meaning, as they would naturally be
understood by persons hearing or reading them,
unless it appears that they were used and
understood in another sense. When malice in
fact is proven, assertions and proofs that the
libelous articles are qualifiedly privileged
communications are futile, since being
qualifiedly privileged communications merely
prevents the presumption of malice from
attaching in a defamatory imputation [Yuchengco
v. Manila Chronicle, G.R. No. 184315 (2009)].
Fraud – Estafa under Art. 315, RPC; violations
of B.P. 22 are not covered
Physical Injuries
Defamation and fraud (in Art. 33) are used in
their ordinary sense because there are no specific
provisions in the Revised Penal Code using these
terms as names of offenses defined therein, so
that these two terms defamation and fraud must
have been used not to impart to them any
technical meaning in the laws of the Philippines,
but in their generic sense. With these apparent
circumstances in mind, it is evident that the
term “physical injuries” could not have been
used in its specific sense as a crime defined
in the Revised Penal Code, for it is difficult to
believe that the Code Commission would have
used terms in same article—some in this general
and others in its technical sense. In other words,
the term “physical injuries” should be
understood to mean bodily injury, not the crime
of physical injuries, because the terms used with
the latter are general terms [Carandang v. Santiago
and Valenton, G.R. No. L-8238 (1955)].
Paje was acquitted of the charge of homicide and
double serious physical injuries through reckless
imprudence on the ground that the collision was
U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

a pure accident and the negligence charged
against him did not exist. In a separate civil
action to enforce civil liability filed by the heirs
of the deceased, the Court ruled that criminal
negligence is not one of the three crimes
mentioned in Article 33, which authorizes the
institution of an independent civil action.
Although in the case of Dyogi v. Yatco, the Court
held that the term “physical injuries” includes
homicide, it is borne in mind that the charge
against Paje was for reckless imprudence
resulting in homicide, and the law penalizes the
negligent or careless act, not the result thereof
[Corpus v. Paje, G.R. No. L-26737 (1969)].
3. Neglect of Duty
justice of the peace finds no reasonable grounds
to believe that a crime has been committed, or the
prosecuting attorney refuses or fails to institute
criminal proceedings, the complaint may bring a
civil action for damages against the alleged
offender. Such civil action may be supported by a
preponderance of evidence. Upon the defendant's
motion, the court may require the plaintiff to file
a bond to indemnify the defendant in case the
complaint should be found to be malicious.
If during the pendency of the civil action, an
information should be presented by the
prosecuting attorney, the civil action shall be
suspended until the termination of the criminal
proceedings.

Art. 34, CC. When a member of a city or

municipal police force refuses or fails to render aid
or protection to any person in case of danger to
life or property, such peace officer shall be
primarily liable for damages, and the city or
municipality shall be subsidiarily responsible
therefor. The civil action herein recognized shall
be independent of any criminal proceedings, and
a preponderance of evidence shall suffice to
support such action.

Art. 34 covers a situation where:

a. There is danger to the life or property of a
person;
b. A member of a city or municipal police force
who is present in the scene refused or failed to
render aid or protection to the person; and
c. Damages are caused whether to the person
and/or property of the victim.

Nature of liability
a. Of the police officer – Primary
b. City or municipality – Subsidiary

The defense of having observed the diligence of a

good father of a family to prevent the damage is not
available to the city/municipality.

4. Catch-All Independent Civil

Action
Art. 35, CC. When a person, claiming to be
injured by a criminal offense, charges another with
the same, for which no independent civil action is
granted in this Code or any special law, but the

Page 490 of 511

U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

c. Nominal;
DAMAGES d.
e.
Temperate or moderate;
Liquidated; or
f. Exemplary or corrective.
1. Definition
According to Purpose
Damages may be defined as the pecuniary
compensation, recompense, or satisfaction for an a. For adequate reparation of the injury
injury sustained, or as otherwise expressed, the 1. Compensatory damages
pecuniary consequences, which the law imposes for (reparation of pecuniary losses)
the breach of some duty or the violation of some 2. Moral (reparation for non-pecuniary losses:
right [People v. Ballesteros, G.R. No. 120921 (1998)]. injury to feelings; physical suffering, etc.)
b. For vindication of the right violated:
It is the recompense or compensation awarded for 1. Nominal damages
the damage suffered [Custodio v. CA, G.R. No. 116100 c. For less than adequate reparation:
(1996)]. 1. Moderate
d. For deterring future violations:
a. When Allowed 1. Exemplary or corrective

The obligation to repair the damages exists whether
done intentionally or negligently and whether or
not punishable by law [Occena v. Icamina, G.R. No.
82146 (1990)]
The mere fact that the plaintiff suffered losses does
not give rise to a right to recover damages. To
warrant the recovery of damages, there must be both
a right of 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 constitute a cause of action,
since damages are merely part of the remedy allowed
for the injury caused by a breach or wrong [Custodio
v. CA, supra].
Injury vs. Damage vs. Damages [from Custodio]
INJURY DAMAGE DAMAGES
The loss, hurt, The recompense
The illegal
or harm, which or compensation
invasion of a
results from the awarded for the
legal right
injury damage suffered
According to Manner of Determination
a. Conventional (or liquidated)
b. Non-conventional, which may either be:
1. Statutory (fixed by law, as in moratory
interest)
2. Judicial (determined by the courts)
General Damages
Those which are the natural and necessary result of
the wrongful act or omission asserted as the
foundation of liability, and include those which
follow as a conclusion of law from the statement of
the facts of the injury.
Special Damages
Damages that arise from the special circumstance of
the case, which, if properly pleaded, may be added to
the general damages which the law presumes or
implies from the mere invasion of the plaintiff’s
rights. Special damages are the natural, but NOT the
necessary result of an injury. These are not implied by
law.

Elements for recovery of damages a. Actual and Compensatory

1. Right of action
2. For a wrong inflicted by the defendant Damages
3. Damage resulting to the plaintiff
Compensatory damages
Damages in satisfaction of, or in recompense for, loss
2. Types of Damages or injury sustained. The phrase “actual damages” is
sometimes used as synonymous with compensatory
Art. 2197, CC. Damages may be: damages.
a. Actual or compensatory;
b. Moral;

Page 491 of 511

U.P. LAW BOC TORTS AND DAMAGES
Requisites
To seek recovery of actual damages, it is necessary to
prove the actual amount of loss with a reasonable
degree of certainty, premised upon competent proof
and on the best evidence obtainable [Asilo, Jr. v. People
and Sps. Bombasi, G.R. No. 159017-18 (2011)].
When is a person entitled? [PeLo-Re-PLS]
1. When there is a pecuniary loss suffered by him;
2. When he has alleged and prayed for such relief
[Manchester Dev’t Corp v. CA, G.R. No. L-75919
(1987)];
3. When he has duly proved it;
4. When provided by law or by stipulation.
No proof of pecuniary loss is necessary for:
moral, nominal, temperate, liquidated or
exemplary damages. The assessment of such
damages is discretionary upon the court, except
liquidated ones. [Art. 2216, CC]
Alleged and proved with certainty
Art. 2199, CC. Except as provided by law or by
stipulation, one is entitled to an adequate
compensation only for such pecuniary loss
suffered by him as he has duly proved. Such
compensation is referred to as actual or
compensatory damages.
The damages must be proven by competent evidence
(admissible or probative).
There must be pleading and proof of actual damages
suffered for the same to be recovered. In addition to
the fact that the amount of loss must be capable of
proof, it must also be actually proven with a
reasonable degree of certainty, premised upon
competent proof or the best evidence obtainable.
The burden of proof of the damage suffered is,
consequently, imposed on the party claiming the
same, who should adduce the best evidence available
in support thereof… In the absence of corroborative
evidence, it has been held that self-serving statements
of account are not sufficient basis for an award of
actual damages [Oceaneering Contractors v Baretto, G.R.
No. 184215 (2011)].
Actual or compensatory damages cannot be
presumed, but must be proven with a reasonable
degree of certainty [MCC Industrial Sales Corp. v
Ssangyong Corp., G.R. No. 170633 (2007)].
Page 492 of 511
CIVIL LAW
Damages must be proved with reasonable accuracy,
even when not denied [Valencia vs. Tantoco, G.R. No.
L-7267 (1956)].
Components
Actual damage covers the following: [LIPA]
1. Value of loss; unrealized profit
2. Attorney’s fees and expenses of litigation
3. Interest
Loss Covered
IN GENERAL
Art. 2200, CC. Indemnification for damages shall
comprehend not only the value of the loss
suffered, but also that of the profits which the
obligee failed to obtain.
Indemnification for damages is not limited to damnum
emergens (actual loss) but extends to lucrum cessans (a
cession of gain or amount of profit lost). This rule is
important when the thing lost or damaged either
earns income or is used for business.
The award of damages for loss of earning capacity is
concerned with the determination of losses or
damages sustained by the [plaintiffs], as dependents
and intestate heirs of the deceased, and that said
damages consist, not of the full amount of his
earnings, but of the support they received or would
have received from him had he not died in
consequence of negligence of [defendant’s] agent…
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 income and less living and other incidental
expenses [Candano Shipping Lines, Inc. v. Sugata-on, G.R.
No. 163212 (2007)].
Extent or scope of actual damages
EXTENT OF
SOURCE
LIABILITY
• If the obligor acted in
GOOD FAITH, he shall
be liable for natural and
Contracts probable consequences of
Art.
and Quasi- the breach, which the
2201
contracts parties have foreseen or could
have reasonably foreseen at the
time the obligation was
constituted.
U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

EXTENT OF 5. That since the filing of the action, the

SOURCE
LIABILITY defendant has done his best to lessen the
• If the obligor acted with plaintiff's loss or injury.
FRAUD, BAD FAITH,
MALICE or WANTON The damages recoverable upon breach of contract
ATTITUDE, he shall be are, primarily, the ordinary, natural and in a sense the
responsible for all damages necessary damages resulting from the breach. Other
which may be reasonably damages, known as special damages, are recoverable
attributed to the breach or where it appears that the particular conditions which
non-performance. made such damages a probable consequence of the
• Liability extends to all breach were known to the delinquent party at the
damages which are the time the contract was made [Daywalt vs. Recoletos et al.,
natural and probable G.R. No. L-13505 (1919)].
consequence of the act or
Art. Crimes and omission complained of Bad faith does not simply connote bad judgment or
2202 Quasi-delicts • WON the damage was negligence; it imports a dishonest purpose or some
foreseen or could have moral obliquity and conscious doing of wrong; it
been reasonably foreseen partakes of the nature of fraud…BPI-FB acted out of
by the defendant is the impetus of self-protection and not out of
irrelevant malevolence or ill will. BPI-FB was not in the corrupt
state of mind contemplated in Article 2201 and
IN CONTRACTS AND QUASI- should not be held liable for all damages now being
CONTRACTS imputed to it for its breach of obligation [BPI Family
Bank v. Franco, G.R. No. 123498 (2007)].
Art. 2201, CC. In contracts and quasi-contracts,
the damages for which the obligor who acted in
That there was fraud or bad faith on the part of
good faith is liable shall be those that are the
respondent airline when it did not allow petitioners
natural and probable consequences of the breach
to board their flight in spite of confirmed tickets
of the obligation, and which the parties have
cannot be disputed. Overbooking amounts to bad
foreseen or could have reasonably foreseen at the
faith, entitling the passengers concerned to an award
time the obligation was constituted.
of moral damages [Spouses Zalamea v. CA, G.R. No.
104235 (1993)].
In case of fraud, bad faith, malice or wanton
attitude, the obligor shall be responsible for all
IN CRIMES AND QUASI-DELICTS
damages which may be reasonably attributed to
the non-performance of the obligation. Art. 2202, CC. In crimes and quasi delicts, the
defendant shall be liable for all damages which are
the natural and probable consequences of the act
Art. 2214, CC. In quasi-delicts, the contributory or omission complained of. It is not necessary that
negligence of the plaintiff shall reduce the such damages have been foreseen or could have
damages that he may recover. reasonably been foreseen by the defendant.

Art. 2215, CC. In contracts, quasi-contracts, and
quasi-delicts, the court may equitably mitigate the
damages under circumstances other than the case
referred to in the preceding article, as in the
following instances:
1. That the plaintiff himself has contravened the
terms of the contract;
2. That the plaintiff has derived some benefit as
a result of the contract;
3. In cases where exemplary damages are to be
awarded, that the defendant acted upon the
advice of counsel;
4. That the loss would have resulted in any event;
In case of crimes, damages are to be increased or
decreased according to aggravating or mitigating
circumstances present.
Interest, as part of damages, may be adjudicated in a
proper case, in the Court’s discretion.
Contributory negligence of the plaintiff, in case of
quasi-delicts, shall reduce the damages to which he
may be entitled. However, in case of crimes, there is
no mitigation for contributory negligence of the
plaintiff.

Page 493 of 511

U.P. LAW BOC TORTS AND DAMAGES
The principal consideration for the award of damages
is the penalty provided by law or imposable for the
offense because of its heinousness, not the public
penalty actually imposed on the offender… The fact
of minority of the offender at the time of the
commission of the offense has no bearing on the
gravity and extent of injury caused to the victim and
her family… Hence, notwithstanding the fact that the
imposable public penalty against the offender should
be lowered due to his minority, there is no justifiable
ground to depart from the jurisprudential trend in the
award of damages in the case of qualified rape,
considering the compensatory nature of the award of
civil indemnity and moral damages. [People v. Sarcia,
G.R. No. 169641 (2009)].
Earning capacity, business standing
Art. 2205, CC. Damages may be recovered:
1. For loss or impairment of earning capacity in
cases of temporary or permanent personal
injury;
2. For injury to the plaintiff's business standing
or commercial credit.
Loss or impairment of earning capacity
The Court did not award actual damages because it
was found that plaintiff’s employment was lost even
before the injury upon which she was suing. The
Court equated loss of employment with loss of
earning capacity [Gatchalian v. Delim, G.R. No. 56487
(1991)].
The plaintiff need not be actually engaged in gainful
employment to recover damages due to loss or
impairment of earning capacity. In determining the
amount of damages to be awarded, the Supreme
Court considered the plaintiff’s age, probable life
expectancy, the state of his health, and his mental and
physical condition before the accident… Taking into
account [the plaintiff’s] outstanding abilities, he
would have enjoyed a successful professional career
in banking [Mercury Drug v Huang, G.R. No. 172122
(2007)].
Injury to business standing or commercial credit
Loss of goodwill should be proven with the same
standard of proof as other compensatory damages
[Tanay Recreation Center v. Fausto, G.R. No. 140182
(2005)].
Page 494 of 511
CIVIL LAW
Formula for the net earning capacity
Net earning capacity = Life Expectancy × (Gross
annual income –Reasonable living expenses)
[People vs. Aringue, G.R. No. 116487 (1997)].
Where:
Life expectancy = 2⁄3 × (80 – age of victim at the
time of death)
As a rule, documentary evidence should be presented
to substantiate the claim for loss of earning capacity
[Tan, et al. vs. OMC Carriers, Inc., G.R. No. 190521
(2011)].
By way of exception, damages for loss of earning
capacity may be awarded despite the absence of
documentary evidence when: (1) the deceased is self-
employed and earning less than the minimum wage
under current labor laws, in which case, judicial
notice may be taken of the fact that in the deceased's
line of work, no documentary evidence is available;
or (2) the deceased is employed as a daily wage
worker earning less than the minimum wage under
current labor laws.
Death by Crime or Quasi-Delict
Art. 2206, CC. The amount of damages for death
caused by a crime or quasi-delict shall be at least
three thousand pesos, even though there may have
been mitigating circumstances.
In addition:
1. The defendant shall be liable for the loss of
the earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the
latter; such indemnity shall in every case be
assessed and awarded by the court, unless the
deceased on account of permanent physical
disability not caused by the defendant, had no
earning capacity at the time of his death;
2. If the deceased was obliged to give support
according to the provisions of article 291, the
recipient who is not an heir called to the
decedent's inheritance by the law of testate or
intestate succession, may demand support
from the person causing the death, for a
period not exceeding five years, the exact
duration to be fixed by the court;
3. The spouse, legitimate and illegitimate
descendants and ascendants of the deceased
may demand moral damages for mental
U.P. LAW BOC TORTS AND DAMAGES
anguish by reason of the death of the
deceased.
Civil/death indemnity
Mere commission of the crime shall entitle the heirs
of the deceased to such damages.
But there has been inconsistency as to whether
indemnity is 50,000 or 75,000. The Court awarded
75,000 if the imposable penalty for the crime should
have been death, and 50,000 if reclusion perpetua. In
cases of robbery with homicide, 50,000 is granted
automatically in the absence of any qualifying
aggravating circumstances. [Casis.]
As to the loss of earning capacity
General Rule: Shall be awarded in every case, and that
claimant shall present documentary evidence to
substantiate claim for damages. [See formula for net
earning capacity.]
Exceptions:
1. If the deceased was self-employed and earning
less than the minimum wage; or
2. The deceased was a daily wage worker earning
less than the minimum wage under current labor
laws. [Philippine Hawk v. Lee, G.R. No. 166869
(2010)].
Additional Exception: Testimonial evidence suffices to
establish a basis for which the court can make a fair
and reasonable estimate of the loss of earning
capacity [Pleyto v. Lomboy, G.R. No. 148737 (2004)]
Note: Such an exception to documentary proof
requirement only exists as to the loss of earning
capacity.
In Rape Cases
No statutory basis but in several cases the court
awards compensatory damages to victims of rape.
Civil indemnity, in the nature of actual and
compensatory damages, is mandatory upon the
finding of the fact of rape. Awarded Php. 50,000 for
simple rape [People v. Astrologo, G.R. No. 169873
(2007)].
When imposable penalty is death, then the civil
indemnity must be Php. 75,000 [People vs. Apattad,
G.R. No. 193188 (2011)].
Page 495 of 511
CIVIL LAW
The SC held that it could not be proven that the age
of the victim was such that it would support a penalty
of death. Thus, it imposed reclusion perpetua instead.
But SC said that this should not affect the civil
liability to be imposed, and maintained the same at
Php. 75,000 [People v. Bartolini, G.R. No. 179498
(2010)].
In cases of rape with homicide, civil indemnity in the
amount of Php. 100,000 should be awarded to the
heirs of the victim [People vs. Pascual, G.R. No. 172326
(2009)].
Attorney’s fees and expenses of
litigation
Art. 2208, CC. In the absence of stipulation,
attorney's fees and expenses of litigation, other
than judicial costs, cannot be recovered, except:
[ExLiMpUca-BF-LeWaComSeDO]
1. When exemplary damages are awarded;
2. When the defendant's act or omission has
compelled the plaintiff to litigate with third
persons or to incur expenses to protect his
interest;
3. In criminal cases of malicious prosecution
against the plaintiff;
4. In case of a clearly unfounded civil action or
proceeding against the plaintiff;
5. Where the defendant acted in gross and
evident bad faith in refusing to satisfy the
plaintiff's plainly valid, just and demandable
claim;
6. In actions for legal support;
7. In actions for the recovery of wages of
household helpers, laborers and skilled
workers;
8. In actions for indemnity under workmen's
compensation and employer's liability laws;
9. In a separate civil action to recover civil
liability arising from a crime;
10. When at least double judicial costs are
awarded;
11. In any other case where the court deems it
just and equitable that attorney's fees and
expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of
litigation must be reasonable.
General Rule: Attorney’s fees and costs of litigation are
recoverable IF stipulated.
U.P. LAW BOC TORTS AND DAMAGES
Exceptions:
If there is no stipulation, they are recoverable only in
the following cases:
1. By reason of malice or bad faith
a. When exemplary damages are awarded
b. In case of a clearly unfounded civil action
c. Where defendant acted in gross and evident
bad faith
d. When at least double judicial costs are
awarded
2. By reason of plaintiff’s indigence in
a. Actions for legal support
b. Actions for recovery of wages of laborers,
etc.
c. Actions for workmen’s compensation
3. By reason of crimes in
a. Criminal cases of malicious prosecution
b. Separate actions to recover civil liability
arising from crime
4. By reason of equity
a. Where the defendant’s act compelled
plaintiff to litigate with third persons
b. Where the Court deems it just and
equitable
Note: In all cases, attorney’s fees and costs of litigation
must be reasonable.
Even if expressly stipulated, attorney’s fees are
subject to control by the Courts.
Attorney’s fees in CC 2208 is an award made in favor
of the litigant, not of his counsel, and the litigant, not
his counsel, is the judgment creditor who may
enforce the judgment for attorney's fees by execution
[Quirante v. IAC, G.R. No. 73886 (1989)].
Attorney's fees cannot be recovered except in cases
provided for in CC 2208 [MERALCO v. Ramoy, G.R.
No. 158911 (2008)].
Attorney’s fees and expenses of litigation are
recoverable only in the concept of actual damages,
not as moral damages nor judicial costs. Hence, such
must be specifically prayed for…and may not be
deemed incorporated within a general prayer for
"such other relief and remedy as this court may deem
just and equitable [Briones v Macabagdal, G.R. No.
150666 (2010)].
For Art. 2208 (2), an adverse decision does not ipso
facto justify an award of attorney’s fees to the winning
party. Even when a claimant is compelled to litigate
with third persons or to incur expenses to protect his
Page 496 of 511
CIVIL LAW
rights, still attorney’s fees may not be awarded where
no sufficient showing of bad faith could be reflected
in a party’s persistence in a case other than an
erroneous conviction of the righteousness of his
cause [Bank of America v. Philippine Racing Club, G.R.
No. 150228 (2009)].
Interest
Art. 2209, CC. If the obligation consists in the
payment of a sum of money, and the debtor incurs
in delay, the indemnity for damages, there being
no stipulation to the contrary, shall be the
payment of the interest agreed upon, and in the
absence of stipulation, the legal interest, which is
six per cent per annum.
Art. 2210, CC. Interest may, in the discretion of
the court, be allowed upon damages awarded for
breach of contract.
Art. 2211, CC. In crimes and quasi-delicts, interest
as a part of the damages may, in a proper case, be
adjudicated in the discretion of the court.
Art. 2212, CC. Interest due shall earn legal interest
from the time it is judicially demanded, although
the obligation may be silent upon this point.
Art. 2213, CC. Interest cannot be recovered upon
unliquidated claims or damages, except when the
demand can be established with reasonable
certainty.
Interest accrues in the concept of damages
when:
1. The obligation consists in the payment of a sum
of money;
2. Debtor incurs in delay; and
3. There being no stipulation to the contrary
No interest may be recovered on unliquidated (not
fixed in amount) claims or damages, except when the
demand can be established with reasonable certainty
at the Court’s discretion.
Compounding of interest
Interest due shall earn legal interest from the time it
is judicially demanded, although the obligation may
be silent on the point.
Note that interest due can earn only at 6%, whether
the rate of interest of the principal is greater than 6%.
U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

computation interest shall

Determination of legal interest of legal begin to run
1. When an obligation, regardless of its source (i.e., interest shall only FROM
law, contracts, quasi-contracts, delicts or quasi- be on the THE DATE
delicts) is breached, the contravenor can be held amount finally THE
liable for damages. adjudged. JUDGMENT
2. With regard particularly to an AWARD OF OF THE
INTEREST in the concept of actual and COURT IS
compensatory damages, the RATE of interest, as MADE (at
well as the ACCRUAL thereof, is imposed, as which time the
follows [Eastern Shipping Lines v. CA, G.R. No. quantification
97412 (1994) as modified by Nacar v. Gallery of damages
Frames, G.R. No. 189871 (2013)]: may be deemed
to have been
BASE RATE ACCRUAL reasonably
a. That ascertained).
When the which may When the
To be From
obligation is have been JUDGMENT
computed FINALITY
breached, and stipulated of the court
from default, UNTIL ITS
it consists in in writing. awarding a
i.e., from SATISFACTI
the b. In the sum of money
JUDICIAL or ON, this
PAYMENT absence of becomes final 6% per
EXTRAJUDI period being
OF A SUM stipulation, and executory, annum
CIAL demand deemed to be
OF MONEY, the rate of whether or not
under and an equivalent
i.e., a loan or interest the case
subject to the to a
forbearance of shall be consists in the
provisions of forbearance of
money, the 6% per payment of a
Article 1169 of credit.
interest due annum sum of money
the CC.
should be- (legal
interest) Note: The new rate of legal interest (6%) in Nacar does
Furthermore, not apply to judgments that have become final and
From the time
the executory prior to July 1, 2013.
it is
INTEREST Legal interest
JUDICIALLY
DUE shall Start of Delay
demanded.
itself earn 1. Extrajudicial: Demand letter
When an If claim or 2. Judicial: Filing of complaint
obligation, damages are 3. Award
NOT LIQUIDATE
constituting a D, from Duty to Minimize
loan or default, i.e., Art. 2203, CC. The party suffering loss or injury
forbearance of from judicial or must exercise the diligence of a good father of a
money, is extrajudicial family to minimize the damages resulting from the
breached, an demand. (Art. act or omission in question.
interest on the 1169, CC)
6% per
AMOUNT Article 2203 of the CC exhorts parties suffering from
annum
OF If loss or injury to exercise the diligence of a good father
DAMAGES UNLIQUIDA of a family to minimize the damages resulting from
awarded may TED, from the the act or omission in question. One who is injured
be imposed at time the then by the wrongful or negligent act of another
the discretion demand can be should exercise reasonable care and diligence to
of the court. established minimize the resulting damage. Anyway, he can
with reasonable recover from the wrongdoer money lost in
The actual certainty. reasonable efforts to preserve the property injured
base for the Hence, the and for injuries incurred in attempting to prevent

Page 497 of 511

U.P. LAW BOC TORTS AND DAMAGES
damage to it [Lim and Gunnaban vs. CA, G.R. No.
125817 (2002)].
Burden of Proof
The DEFENDANT has the burden of proof to
establish that the victim, by the exercise of the
diligence of a good father of a family, could have
mitigated the damages. In the absence of such proof,
the amount of damages cannot be reduced.
Note:
The victim is required only to take such steps as an
ordinary prudent man would reasonably adopt for his
own interest.
b. Moral Damages
Art. 2217, CC. Moral damages include physical
suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury.
Though incapable of pecuniary computation,
moral damages may be recovered if they are the
proximate result of the defendant's wrongful act
or omission.
Art. 2218, CC. In the adjudication of moral
damages, the sentimental value of property, real or
personal, may be considered.
Moral damages are emphatically not intended to
enrich a complainant at the expense of the defendant.
Its award is aimed at the restoration, within the limits
of the possible, of the spiritual status quo ante, and it
must be proportional to the suffering inflicted
[Visayan Sawmill v. CA, G.R. No. 83851 (1993)].
Mental suffering means distress or serious pain as
distinguished from annoyance, regret or vexation
[Bagumbayan Corp. v. IAC, G.R. No. L-66274 (1984)].
Mental anguish is intense mental suffering. Generally,
damages for mental anguish are limited to cases in
which there has been a personal physical injury or
where the defendant willfully, wantonly, recklessly, or
intentionally caused the mental anguish.
When awarded
Awarded when injury consists of:
1. Physical suffering
2. Besmirched reputation
3. Mental anguish
Page 498 of 511
CIVIL LAW
4. Fright
5. Moral shock
6. Wounded feelings
7. Social humiliation
8. Serious anxiety
9. Similar injury
Requisites for awarding moral damages
The conditions for awarding moral damages are
[Sulpicio Lines v. Curso, G.R. No. 157009 (2010)]:
[InAoProx-2219]
1. There must be an injury, whether physical,
mental, or psychological, clearly substantiated by
the claimant;
2. There must be a culpable act or omission
factually established;
3. The wrongful act or omission of the defendant
must be the proximate cause of the injury
sustained by the claimant; and
4. The award of damages is predicated on any of
the cases stated in Article 2219 of the CC.
General Principles of Recovery:
1. Moral damages must somehow be proportional
to the suffering inflicted.
2. In culpa contractual or breach of contract, moral
damages may be recovered when the defendant
acted in bad faith or was guilty of gross
negligence (amounting to bad faith) or in wanton
disregard of his contractual obligation and,
exceptionally, when the act of breach of contract
itself is constitutive of tort resulting in physical
injuries.
3. By special rule in Article 1764, in relation to
Article 2206, moral damages may also be
awarded in case the death of a passenger results
from a breach of carriage.
4. In culpa aquiliana or quasi-delict,
a. when an act or omission causes physical
injuries, or
b. where the defendant is guilty of intentional
tort, moral damages may aptly be recovered.
This rule also applies to contracts when
breached by tort.
5. In culpa criminal, moral damages could be
lawfully due when the accused is found guilty of
physical injuries, lascivious acts, adultery or
concubinage, illegal or arbitrary detention, illegal
arrest, illegal search, or defamation.
U.P. LAW BOC TORTS AND DAMAGES
6. Malicious prosecution can also give rise to a
claim for moral damages. The term "analogous
cases," referred to in Article 2219, following the
ejusdem generis rule, must be held similar to
those expressly enumerated by the law.
7. Although the institution of a clearly unfounded
civil suit can at times be a legal justification for
an award of attorney's fees, such filing, however,
has almost invariably been held not to be a
ground for an award of moral damages.
[Expertravel & Tours vs. CA., G.R. No. 130030
(1999)].
8. The burden rests on the person claiming moral
damages to show convincing evidence for good
faith is presumed. In a case involving simple
negligence, moral damages cannot be recovered.
[Villanueva v. Salvador, G.R. No. 139436 (2006)].
9. Failure to use the precise legal terms or
"sacramental phrases" of "mental anguish, fright,
serious anxiety, wounded feelings or moral
shock" does not justify the denial of the claim for
damages. It is sufficient that these exact terms
have been pleaded in the complaint and evidence
has been adduced [Miranda-Ribaya v. Bautista,
G.R. No. L-49390 (1980)].
10. Even if the allegations regarding the amount of
damages in the complaint are not specifically
denied in the answer, such damages are not
deemed admitted. [Raagas, et al. v. Traya et al, G.R.
No. L-20081 (1968)].
11. An appeal in a criminal case opens the whole
case for review and this 'includes the review of
the penalty, indemnity and damages’. Even if the
offended party had not appealed from said
award, and the only party who sought a review
of the decision of said court was the accused, the
court can increase damages awarded. [Sumalpong
v. CA, G.R. No. 123404 (1997)].
12. It can only be awarded to natural persons. The
award of moral damages cannot be granted in
favor of a corporation because, being an artificial
person and having existence only in legal
contemplation, it has no feelings, no emotions,
no senses, It cannot, therefore, experience
physical suffering and mental anguish, which can
be experienced only by one having a nervous
system. The statement in People vs. Manero and
Mambulao Lumber Co. vs. PNB that a corporation
Page 499 of 511
CIVIL LAW
may recover moral damages if it "has a good
reputation that is debased, resulting in social
humiliation" is an obiter dictum [ABS-CBN v. CA,
G.R. No. 128690 (1999)].
While it is true that besmirched reputation is included
in moral damages, it cannot cause mental anguish to
a corporation, unlike in the case of a natural person,
for a corporation has no reputation in the sense that
an individual has, and besides, it is inherently
impossible for a corporation to suffer mental anguish
[NAPOCOR v. Philipp Brothers, G.R. Ni, 126204
(2001)].
When Recoverable
Art. 2219, CC. Moral damages may be recovered
in the following and analogous cases: [PiQ-SarA-
DeSe-LiMp]
1. A criminal offense resulting in physical
injuries;
2. Quasi-delicts causing physical injuries;
3. Seduction, abduction, rape, or other
lascivious acts;
4. Adultery or concubinage;
5. Illegal or arbitrary detention or arrest;
6. Illegal search;
7. Libel, slander or any other form of
defamation;
8. Malicious prosecution;
9. Acts mentioned in article 309;
10. Acts and actions referred to in articles 21, 26,
27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted,
raped, or abused, referred to in No. 3 of this
article, may also recover moral damages.
The spouse, descendants, ascendants, and
brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order
named.
IN CRIMINAL OFFENSE RESULTING IN
PHYSICAL INJURIES
Under paragraph (1), Article 2219 of the CC, moral
damages may be recovered in a criminal offense
resulting in physical injuries. In its generic sense,
"physical injuries" includes death [People v. Villaver,
G.R. No. 133381 (2001)].
In a case where the father of a family was stabbed to
death, the SC said that “a violent death invariably and
necessarily brings about emotional pain and anguish
U.P. LAW BOC TORTS AND DAMAGES
on the part of the victim’s family… For this reason,
moral damages must be awarded even in the absence
of any allegation and proof of the heirs’ emotional
suffering [Arcona v CA, G.R. No. 134784 (2002)].”
IN QUASI-DELICTS CAUSING PHYSICAL
INJURIES
In culpa aquiliana, or quasi-delict, moral damages may
be recovered (a) when an act or omission causes
physical injuries, or (b) where the defendant is guilty
of intentional tort. The SC held that an employer that
is vicariously liable with its employee-driver may also
be held liable for moral damages to the injured
plaintiff [B.F. Metal v. Lomotan, G.R. No. 170813
(2008)].
IN SEDUCTION, ABDUCTION, RAPE
AND OTHER LASCIVIOUS ACTS
Anent the award of damages, civil indemnity ex
delicto is mandatory upon finding of the fact of rape
while moral damages is awarded upon such finding
without need of further proof because it is assumed
that a rape victim has actually suffered moral injuries
entitling the victim to such award. If without factual
and legal bases, no award of exemplary damages
should be allowed [People v. Calongui, G.R. No.
170566(2006)].
In a case where the offender-father was convicted of
simple rape instead of qualified rape due to the
prosecution’s failure to specifically allege the age and
minority of the victim-daughter, but such was
nonetheless established during the trial, the award of
civil indemnity and moral damages in a conviction for
simple rape should equal the award of civil indemnity
and moral damages in convictions for qualified rape.
Truly, [the victim’s] moral suffering is just as great as
when her father who raped her is convicted for
qualified rape as when he is convicted only for simple
rape due to a technicality [People v. Bartolini, supra].
Where there are multiple counts of rape and other
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
also by her parents.
IN ILLEGAL OR ARBITRARY
DETENTION OR ARREST
Since the crime committed in this case is kidnapping
and failure to return a minor under Article 270 of the
Revised Penal Code, the same is clearly analogous to
Page 500 of 511
CIVIL LAW
illegal and arbitrary detention or arrest, thereby
justifying the award of moral damages [People v.
Bernardo, G.R. No. 144316 (2002)].
IN CASE OF MALICIOUS PROSECUTION
As a rule, no moral damages is imposed for litigation,
because the law could not have meant to impose a
penalty on the right to litigate. A person's right to
litigate, as a rule, should not be penalized. This right,
however, must be exercised in good faith. Absence
of good faith in the present case is shown by the fact
that petitioner clearly has no cause of action against
respondents but it recklessly filed suit anyway and
wantonly pursued pointless appeals, thereby causing
the latter to spend valuable time, money and effort in
unnecessarily defending themselves, incurring
damages in the process [Industrial Insurance v. Bondad,
G.R. No. 136722 (2000)].
Moral damages cannot be recovered from a person
who has filed a complaint against another in good
faith, or without malice or bad faith. If damage results
from the filing of the complaint, it is damnum absque
injuria [Mijares v. CA, G.R. No. 113558(1997)].
The adverse result of an action does not per se make
the act wrongful and subject the actor to the payment
of moral damages. The law could not have meant to
impose a penalty on the right to litigate; such right is
so precious that moral damages may not be charged
on those who may exercise it erroneously [Barreto v.
Arevalo, G.R. No. L-7748 (1956)].
IN ACTS REFERRED TO IN ARTS. 21, 26,
27, 28, 29, 32, 34 AND 35, CC
Art. 21, CC. Any person who wilfully causes loss
or injury to another in a manner that is contrary to
morals, good customs or public policy shall
compensate the latter for the damage.
Art. 26, CC. Every person shall respect the
dignity, personality, privacy and peace of mind of
his neighbors and other persons. The following
and similar acts, though they may not constitute a
criminal offense, shall produce a cause of action
for damages, prevention and other relief:
1. Prying into the privacy of another's residence:
2. Meddling with or disturbing the private life or
family relations of another;
3. Intriguing to cause another to be alienated
from his friends;
4. Vexing or humiliating another on account of
his religious beliefs, lowly station in life, place
U.P. LAW BOC TORTS AND DAMAGES
of birth, physical defect, or other personal
condition.
Violation of Human Dignity
The law seeks to protect a person from being unjustly
humiliated. Using this provision, the SC awarded
moral damages to the plaintiff, a married man, against
the defendant, who confronted the plaintiff face-to-
face, invading the latter’s privacy, to hurl defamatory
words at him in the presence of his wife and children,
neighbors and friends, accusing him of having an
adulterous relationship with another woman
[Concepcion v. CA, G.R. No. 120706 (2000)].
Art. 27, CC. Any person suffering material or
moral loss because a public servant or employee
refuses or neglects, without just cause, to perform
his official duty may file an action for damages and
other relief against the latter, without prejudice to
any disciplinary administrative action that may be
taken.
Refusal or Neglect of Duty
Under Art. 27, in relation to Arts. 2219 and 2217, a
public officer may be liable for moral damages for as
long as the moral damages suffered by [the plaintiff]
were the proximate result of [defendant’s] refusal to
perform an official duty or neglect in the
performance thereof. In fact, under Articles 19 and
27 of the CC, a public official may be made to pay
damages for performing a perfectly legal act, albeit
with bad faith or in violation of the "abuse of right"
doctrine [Concepcion v. CA, supra].
Art. 28, CC. Unfair competition in agricultural,
commercial or industrial enterprises or in labor
through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or
highhanded method shall give rise to a right of
action by the person who thereby suffers damage.
Page 501 of 511
CIVIL LAW
Art. 29, CC. When the accused in a criminal
prosecution is acquitted on the ground that his
guilt has not been proved beyond reasonable
doubt, a civil action for damages for the same act
or omission may be instituted. Such action
requires only a preponderance of evidence. Upon
motion of the defendant, the court may require
the plaintiff to file a bond to answer for damages
in case the complaint should be found to be
malicious.
If in a criminal case the judgment of acquittal is
based upon reasonable doubt, the court shall so
declare. In the absence of any declaration to that
effect, it may be inferred from the text of the
decision whether or not the acquittal is due to that
ground.
Art. 32, CC. Any public officer or employee, or
any private individual, who directly or indirectly
obstructs, defeats, violates or in any manner
impedes or impairs any of the following rights and
liberties of another person shall be liable to the
latter for damages:
1. Freedom of religion;
2. Freedom of speech;
3. Freedom to write for the press or to maintain
a periodical publication;
4. Freedom from arbitrary or illegal detention;
5. Freedom of suffrage;
6. The right against deprivation of property
without due process of law;
7. The right to a just compensation when
private property is taken for public use;
8. The right to the equal protection of the laws;
9. The right to be secure in one's person, house,
papers, and effects against unreasonable
searches and seizures;
10. The liberty of abode and of changing the
same;
11. The privacy of communication and
correspondence;
12. The right to become a member of
associations or societies for purposes not
contrary to law;
13. The right to take part in a peaceable assembly
to petition the government for redress of
grievances;
14. The right to be free from involuntary
servitude in any form;
15. The right of the accused against excessive
bail;
16. The right of the accused to be heard by
himself and counsel, to be informed of the
U.P. LAW BOC TORTS AND DAMAGES
nature and cause of the accusation against
him, to have a speedy and public trial, to meet
the witnesses face to face, and to have
compulsory process to secure the attendance
of witness in his behalf;
17. Freedom from being compelled to be a
witness against one's self, or from being
forced to confess guilt, or from being induced
by a promise of immunity or reward to make
such confession, except when the person
confessing becomes a State witness;
18. Freedom from excessive fines, or cruel and
unusual punishment, unless the same is
imposed or inflicted in accordance with a
statute which has not been judicially declared
unconstitutional; and
19. Freedom of access to the courts.
In any of the cases referred to in this article,
whether or not the defendant's act or omission
constitutes a criminal offense, the aggrieved party
has a right to commence an entirely separate and
distinct civil action for damages, and for other
relief. Such civil action shall proceed
independently of any criminal prosecution (if the
latter be instituted), and mat be proved by a
preponderance of evidence.
The indemnity shall include moral damages.
Exemplary damages may also be adjudicated.
The responsibility herein set forth is not
demandable from a judge unless his act or
omission constitutes a violation of the Penal Code
or other penal statute.
Violation of Civil and Political Rights
The purpose of [CC 32] is to provide a sanction to
the deeply cherished rights and freedoms enshrined
in the Constitution. Under [CC 32], it is not necessary
that the public officer acted with malice or bad
faith. To be liable, it is enough that there was a
violation of the constitutional rights of petitioner,
even on the pretext of justifiable motives or good
faith in the performance of one's duties [Cojuangco v.
CA, G.R. No. 119398 (1999)].
Article 32 of the CC provides that moral damages are
proper when the rights of individuals, including the
right against deprivation of property without due
process of law, are violated [Meralco v Spouses Chua,
G.R. No. 160422 (2010)].
Page 502 of 511
CIVIL LAW
Art. 34, CC. When a member of a city or
municipal police force refuses or fails to render aid
or protection to any person in case of danger to
life or property, such peace officer shall be
primarily liable for damages, and the city or
municipality shall be subsidiarily responsible
therefor. The civil action herein recognized shall
be independent of any criminal proceedings, and
a preponderance of evidence shall suffice to
support such action.
Art. 35, CC. When a person, claiming to be
injured by a criminal offense, charges another with
the same, for which no independent civil action is
granted in this Code or any special law, but the
justice of the peace finds no reasonable grounds
to believe that a crime has been committed, or the
prosecuting attorney refuses or fails to institute
criminal proceedings, the complaint may bring a
civil action for damages against the alleged
offender. Such civil action may be supported by a
preponderance of evidence. Upon the defendant's
motion, the court may require the plaintiff to file
a bond to indemnify the defendant in case the
complaint should be found to be malicious.
If during the pendency of the civil action, an
information should be presented by the
prosecuting attorney, the civil action shall be
suspended until the termination of the criminal
proceedings.
Art. 2220, CC. Willful injury to property may be a
legal ground for awarding moral damages if the
court should find that, under the circumstances,
such damages are justly due. The same rule applies
to breaches of contract where the defendant acted
fraudulently or in bad faith.
In Willful Injury to Property
To sustain an award of damages, the damage inflicted
upon [plaintiff’s] property must be malicious or
willful, an element crucial to merit an award of
moral damages under Article 2220 of the CC [Regala
v. Carin, G.R. No. 188715 (2011)].
In Breach of Contract in Bad Faith
Moral damages may be recovered in culpa
contractual where the defendant acted in bad faith or
with malice in the breach of the contract. However, a
conscious or intentional design need not always be
present since negligence may occasionally be so gross
as to amount to malice or bad faith. Bad faith, in the
U.P. LAW BOC TORTS AND DAMAGES
context of Art. 2220 of the CC,
includes gross negligence. Thus, we have held in a
number of cases that moral damages may be awarded
in culpa contractual or breach of contract when the
defendant acted fraudulently or in bad faith, or is
guilty of gross negligence amounting to bad faith, or
in wanton disregard of his contractual obligations
[Bankard, Inc. v. Feliciano, G.R. No 141761 (2006)].
As an exception [to the requirement of bad faith],
moral damages may be awarded in case of breach of
contract of carriage that results in the death of a
passenger [Sulpicio Lines v. Curso, supra].
Who may Recover Moral Damages
Art. 2219, CC. Moral damages may be recovered
in the following and analogous cases: [PiQ-SarA-
DeSe-LiMp]
1. A criminal offense resulting in physical
injuries;
2. Quasi-delicts causing physical injuries;
3. Seduction, abduction, rape, or other
lascivious acts;
4. Adultery or concubinage;
5. Illegal or arbitrary detention or arrest;
6. Illegal search;
7. Libel, slander or any other form of
defamation;
8. Malicious prosecution;
9. Acts mentioned in article 309;
10. Acts and actions referred to in articles 21, 26,
27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted,
raped, or abused, referred to in No. 3 of this
article, may also recover moral damages.
The spouse, descendants, ascendants, and
brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order
named.
Relatives of Injured Persons
Article 2219 circumscribes the instances in which
moral damages may be awarded. The provision does
not include succession in the collateral line as a source
of the right to recover moral damages. The usage of
the phrase analogous cases in the provision means
simply that the situation must be held similar to those
expressly enumerated in the law in question [Sulpicio
Lines v Curso, supra].
Page 503 of 511
CIVIL LAW
Juridical Persons
The award of moral damages cannot be granted in
favor of a corporation because, being an artificial
person and having existence only in legal
contemplation, it has no feelings, no emotions, no
senses, It cannot, therefore, experience physical
suffering and mental anguish, which can be
experienced only by one having a nervous system.
The statement in People vs. Manero and Mambulao
Lumber Co. vs. PNB that a corporation may recover
moral damages if it "has a good reputation that is
debased, resulting in social humiliation" is an obiter
dictum [ABS-CBN v. CA, supra].
Factors Considered in Determining Amount
The amount of damages awarded in this appeal has
been determined by adequately considering the
official, political, social, and financial standing of the
offended parties on one hand, and the business and
financial position of the offender on the other. The
SC further considered the present rate of exchange
and the terms at which the amount of damages
awarded would approximately be in U.S. dollars, the
defendant being an international airline [Lopez v. Pan
American, G.R. No. L-22415 (1966)].
c. Nominal Damages
Nominal damages consist in damages awarded, not
for purposes of indemnifying the plaintiff for any loss
suffered, but for the vindication or recognition of a
right violated by the defendant.
Requisites and characteristics
1. Invasion or violation of any legal or property
right.
2. No proof of loss is required.
3. The award is to vindicate the right violated.
When awarded
Art. 2221, CC. Nominal damages are adjudicated
in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose
of indemnifying the plaintiff for any loss suffered
by him.
Art. 2222, CC. The court may award nominal
damages in every obligation arising from any
source enumerated in article 1157, or in every case
where any property right has been invaded.
U.P. LAW BOC TORTS AND DAMAGES
Art. 2223, CC. The adjudication of nominal
damages shall preclude further contest upon the
right involved and all accessory questions, as
between the parties to the suit, or their respective
heirs and assigns.
One does not ask for nominal damages, and it is in
lieu of the actual, moral, temperate, or liquidated
damages.
Nominal damages are incompatible with actual,
temperate and exemplary damages.
Nominal damages cannot co-exist with actual or
compensatory damages [Armovit v. CA, G.R. No.
88561 (1990)].
No moral or exemplary damages was awarded.
Nevertheless, when confronted with their failure to
deliver on the wedding day the wedding cake ordered
and paid for, petitioners gave the lame excuse that
delivery was probably delayed because of the traffic,
when in truth, no cake could be delivered because the
order slip got lost. For such prevarication, petitioners
must be held liable for nominal damages for
insensitivity, inadvertence or inattention to their
customer's anxiety and need of the hour [Francisco v.
Ferrer, supra].
Nominal damages "are recoverable where a legal right
is technically violated and must be vindicated against
an invasion that has produced no actual present loss
of any kind.” Its award is thus not for the purpose of
indemnification for a loss but for the recognition and
vindication of a right. When granted by the courts,
they are not treated as an equivalent of a wrong
inflicted but simply a recognition of the existence of
a technical injury. A violation of the plaintiff’s right,
even if only technical, is sufficient to support an
award of nominal damages. Conversely, so long as
there is a showing of a violation of the right of the
plaintiff, an award of nominal damages is proper
[Gonzales v. PCIB, G.R. No. 180257 (2011)].
The plaintiffs sought to recover damages from the
hotel due to its breach of contract as regards food
service for the plaintiff’s guests. The SC did not
award actual and moral damages because it found
that the plaintiff’s failure to inform the hotel
regarding the increase of guests (from 350 expected
guests, at maximum capacity of 380, the number of
guests reached 470) was the proximate cause of the
plaintiff’s injury. Nevertheless, the SC awarded
nominal damages under considerations of equity, for
Page 504 of 511
CIVIL LAW
the discomfiture that the plaintiffs were subjected to
during the event, averring that the hotel could have
managed the "situation" better, it being held in high
esteem in the hotel and service industry. Given
respondent’s vast experience, it is safe to presume
that this is not its first encounter with booked events
exceeding the guaranteed cover [Spouses Guanio v.
Makati Shangri-la, G.R. No. 190601 (2011)].
Nature and determination of amount
The assessment of nominal damages is left to the
discretion of the trial court according to the
circumstances of the case. Generally, nominal
damages by their nature are small sums fixed by the
court without regard to the extent of the harm done
to the injured party. However, it is generally held that
a nominal damage is a substantial claim, if based upon
the violation of a legal right; in such a case, the law
presumes damage although actual or compensatory
damages are not proven [Gonzales v. People, G.R. No.
159950 (2007)].
d. Temperate Damages
Art. 2224, CC. Temperate or moderate damages,
which are more than nominal but less than
compensatory damages, may be recovered when
the court finds that some pecuniary loss has been
suffered but its amount cannot, from the nature of
the case, be provided with certainty.
Art. 2225, CC. Temperate damages must be
reasonable under the circumstances.
These damages are awarded for pecuniary loss, in an
amount that, from the nature of the case, cannot be
proved with certainty.
Requisites [PL-Ex-MoNLeC-CoRe]
1. Actual existence of pecuniary loss
2. The nature and circumstances of the loss
prevents proof of the exact amount
3. They are more than nominal and less than
compensatory.
4. Causal connection between the loss and the
defendant’s act or omission.
5. Amount must be reasonable.
In cases where the resulting injury might be
continuing and possible future complications directly
arising from the injury, while certain to occur are
difficult to predict, temperate damages can and
should be awarded on top of actual or compensatory
U.P. LAW BOC TORTS AND DAMAGES
damages; in such cases there is no incompatibility
between actual and temperate damages as they cover
two distinct phases [Ramos v. CA, supra].
Temperate damages are incompatible with nominal
damages hence, cannot be granted concurrently
[Citytrust Bank v. IAC , G.R. No. 84281(1994)].
Temperate damages are included within the context
of compensatory damages. [Tan v. OMC Carriers,
supra].
The SC awarded temperate damages in lieu of actual
damages for loss of earning capacity where earning
capacity is plainly established but no evidence was
presented to support the allegation of the injured
party’s actual income [Pleno v. CA, G.R. No. 56505
(1988)].
Courts are authorized to award temperate damages
even in cases where the amount of pecuniary loss
could have been proven with certainty, if no such
adequate proof was presented. The allowance of
temperate damages when actual damages were not
adequately proven is ultimately a rule drawn from
equity, the principle affording relief to those
definitely injured who are unable to prove how
definite the injury [Republic v. Tuvera, G.R. No. 148246
(2007)].
There are cases where from the nature of the case, definite
proof of pecuniary loss cannot be offered, although the court is
convinced that there has been such loss. For instance, injury
to one's commercial credit or to the goodwill of a
business firm is often hard to show certainty in terms
of money. Note: In this case actual and temperate
damages were awarded. It is postulated that the actual
damages is for the car while the temperate damages
is for the lost actual income not sufficiently proved.)
Factors in determining amount
The SC awarded temperate damages where from the
nature of the case, definite proof of pecuniary loss
cannot be adduced, although the court is convinced
that the plaintiff suffered some pecuniary loss. The
SC also increased the award of temperate damages
from P100,000 to P150,000, taking into account the
cost of rebuilding the damaged portions of the
perimeter fence [De Guzman v. Tumolva, G.R. No.
188072 (2011)].
Page 505 of 511
CIVIL LAW
Where there are receipts provided amounting to
less than P25,000
Anent the actual damages, we note that the CA
awarded P3,000.00 representing the amount spent
for the embalming as shown by the receipt. However,
the prosecution also presented a list of expenses such
as those spent for the coffin, etc., which were not
duly covered by receipt. If the actual damages,
proven by receipts during the trial, amount to less
than P25,000.00, the victim shall be entitled to
temperate damages in the amount of P25,000.00, in
lieu of actual damages. In this case, the victim is
entitled to the award ofP25,000.00 as temperate
damages considering that the amount of actual
damages is only P3,858.50. The amount of actual
damages shall be deleted [People v. Lucero, G.R. No.
179044 (2010)].
Where no receipts were provided
The award of P25,000.00 as temperate damages in
homicide or murder cases is proper when no
evidence of burial and funeral expenses is presented
in the trial court [People v. Gidoc, G.R. No. 185162
(2009)].
Where the amount of actual damages cannot be
determined because no receipts were presented to
prove the same but it is shown that the heirs are
entitled thereto, temperate damages may be awarded,
fixed at P25,000. Considering that funeral expenses
were obviously incurred by the victim’s heirs, an
award of P25,000 as temperate damages is proper
[People v. Surongon, G.R. No. 173478 (2007)].
e. Liquidated Damages
Art. 2226, CC. Liquidated damages are those
agreed upon by the parties to a contract, to be paid
in case of breach thereof.
Art. 2227, CC. Liquidated damages, whether
intended as an indemnity or a penalty, shall be
equitably reduced if they are iniquitous or
unconscionable.
Liquidated damages are those damages agreed upon
by the parties to a contract to be paid in case of
breach thereof.
It differs from a penal clause in that in the latter case
the amount agreed to be paid may bear no relation to
the probable damages resulting from the breach.
U.P. LAW BOC TORTS AND DAMAGES
Basically, a penalty is “ad terrorem,” while liquidated
damages are “ad reparationem.”
Requisites and characteristics
1. Liquidated damages must be validly stipulated.
2. There is no need to prove the amount of actual
damages.
3. Breach of the principal contract must be proved.
Rules Governing Breach of Contract
Art. 2228, CC. When the breach of the contract
committed by the defendant is not the one
contemplated by the parties in agreeing upon the
liquidated damages, the law shall determine the
measure of damages, and not the stipulation.
Liquidated damages are those agreed upon by the
parties to a contract to be paid in case of breach
thereof. The stipulation on attorney’s fees contained
in the said Promissory Note constitutes what is
known as a penal clause. A penalty clause, expressly
recognized by law, is an accessory undertaking to
assume greater liability on the part of the obligor in
case of breach of an obligation. It functions to
strengthen the coercive force of obligation and to
provide, in effect, for what could be the liquidated
damages resulting from such a breach. The obligor
would then be bound to pay the stipulated indemnity
without the necessity of proof on the existence and
on the measure of damages caused by the breach
[Suatengco v. Reyes, G.R. No. 162729 (2008)].
General Rule: The penalty shall substitute the
indemnity for damages and the payment of the
interests in case of breach.
Exceptions
1. When there is a stipulation to the contrary.
2. When the obligor is sued for refusal to pay the
agreed penalty.
3. When the obligor is guilty of fraud.
The amount can be reduced if:
1. it is unconscionable as determined by the court
2. there is partial or irregular performance.
f. Exemplary or Corrective
Damages
Art. 2229, CC. Exemplary or corrective damages
are imposed, by way of example or correction for
Page 506 of 511
CIVIL LAW
the public good, in addition to the moral,
temperate, liquidated or compensatory damages.
In common law, these damages were termed
“punitive.”
The grant of temperate damages paves the way for
the award of exemplary damages. Under Article 2234
of the CC, a showing that the plaintiff is entitled to
temperate damages allows the award of exemplary
damages [Canada v All Commodities Marketing (2008)].
However, the award of P1,000,000 exemplary
damages is also far too excessive and should likewise
be reduced to an equitable level. Exemplary damages
are imposed not to enrich one party or impoverish
another but to serve as a deterrent against or as a
negative incentive to curb socially deleterious actions
[PNB v. CA, G.R. No. 116181 (1996)].
When Recoverable
In criminal offenses
Art. 2230, CC. In criminal offenses, exemplary
damages as a part of the civil liability may be
imposed when the crime was committed with one
or more aggravating circumstances. Such damages
are separate and distinct from fines and shall be
paid to the offended party.
Award of exemplary damages is part of the civil
liability, not of the penalty.
Damages are paid to the offended party separately
from the fines.
Although an aggravating circumstance not
specifically alleged in the information, albeit
established at trial, cannot be appreciated to increase
the criminal liability of the accused, the established
presence of one or two aggravating circumstances of
any kind or nature entitles the offended party to
exemplary damages under Article 2230 of the CC
because the requirement of specificity in the
information affected only the criminal liability of the
accused, not his civil liability [People v. Dadulla, G.R.
No. 172321 (2011)].
Being corrective in nature, exemplary damages,
therefore, can be awarded, not only in the presence
of an aggravating circumstance, but also where the
circumstances of the case show the highly
reprehensible or outrageous conduct of the
U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

offender. As in this case, where the offender sexually exemplary damages should be awarded. In case
assaulted a pregnant married woman, the offender liquidated damages have been agreed upon,
has shown moral corruption, perversity, and although no proof of loss is necessary in order that
wickedness. He has grievously wronged the such liquidated damages may be recovered,
institution of marriage. The imposition then of nevertheless, before the court may consider the
exemplary damages by way of example to deter question of granting exemplary in addition to the
others from committing similar acts or for correction liquidated damages, the plaintiff must show that
for the public good is warranted in quasi-delicts he would be entitled to moral, temperate or
[People v. Alfredo, G.R. No. 188560 (2010)]. compensatory damages were it not for the
stipulation for liquidated damages.
Art. 2231, CC. In quasi-delicts, exemplary
damages may be granted if the defendant acted Art. 2235, CC. A stipulation whereby exemplary
with gross negligence. damages are renounced in advance shall be null
and void.
In this case, the defendant, the previous employer of
the plaintiff, wrote a letter to the company where the Requisites to recover exemplary damages and
plaintiff subsequently applied for employment, liquidated damages agreed upon
stating that the plaintiff was dismissed by the The plaintiff must show that he/she is entitled to
defendant from work due to dishonesty, accusing moral, temperate or compensatory damages:
plaintiff of malversation of defendant’s funds.
Previous police investigations revealed that the IF WHEN EXEMPLARY
defendant’s accusations against the plaintiff were ARISING DAMAGES ARE
unfounded, and cleared the plaintiff of such FROM GRANTED
‘anomalies’. Here, the lower court awarded exemplary The crime was committed
damages to the plaintiff, which the defendant Art.
Crimes with an aggravating
questioned, averring that CC 2231 may be awarded 2230
circumstance/s
only for grossly negligent acts, not for willful or Art. Defendant acted with
intentional acts. The SC upheld the grant of Quasi-delicts
2231 gross negligence
exemplary damages, stating that while CC 2231 Defendant acted in a
provides that for quasi-delicts, exemplary damages Contracts and
Art. wanton, fraudulent,
may be granted if the defendant acted with gross Quasi-
2232 reckless, oppressive, or
negligence, with more reason is its imposition contracts
malevolent manner
justified when the act performed is deliberate,
malicious and tainted with bad faith [Globe Mackay v.
General Principles
CA, G.R. No. 81262 (1989)].
1. Exemplary damages cannot be awarded alone:
they must be awarded IN ADDITION to moral,
In contracts and quasi-contracts temperate, liquidated or compensatory damages.
Art. 2232, CC. In contracts and quasi-contracts, 2. The purpose of the award is to deter the
the court may award exemplary damages if the defendant (and others in a similar condition)
defendant acted in a wanton, fraudulent, reckless, from a repetition of the acts for which exemplary
oppressive, or malevolent manner. damages were awarded; hence, they are not
recoverable as a matter of right.
Requisites 3. The defendant must be guilty of other malice or
else negligence above the ordinary.
Art. 2233, CC. Exemplary damages cannot be 4. Plaintiff is not required to prove the amount of
recovered as a matter of right; the court will decide exemplary damages.
whether or not they should be adjudicated. a. But plaintiff must show that he is entitled to
moral, temperate, or compensatory damage;
Art. 2234, CC. While the amount of the that is, substantial damages, not purely
exemplary damages need not be proved, the nominal ones. This requirement applies
plaintiff must show that he is entitled to moral, even if the contract stipulates liquidated
temperate or compensatory damages before the damages.
court may consider the question of whether or not

Page 507 of 511

U.P. LAW BOC TORTS AND DAMAGES
b. The amount of exemplary damage need not
be pleaded in the complaint because the
same cannot be proved. It is merely
incidental or dependent upon what the court
may award as compensatory damages.
3. Damages in Case of Death
Re. Crimes and quasi-delicts
Art. 2206, CC. The amount of damages for death
caused by a crime or quasi-delict shall be at least
three thousand pesos, even though there may have
been mitigating circumstances. In addition:
1. The defendant shall be liable for the loss of
the earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the
latter; such indemnity shall in every case be
assessed and awarded by the court, unless the
deceased on account of permanent physical
disability not caused by the defendant, had no
earning capacity at the time of his death;
2. If the deceased was obliged to give support
according to the provisions of article 291, the
recipient who is not an heir called to the
decedent's inheritance by the law of testate or
intestate succession, may demand support
from the person causing the death, for a
period not exceeding five years, the exact
duration to be fixed by the court;
3. The spouse, legitimate and illegitimate
descendants and ascendants of the deceased
may demand moral damages for mental
anguish by reason of the death of the
deceased.
In death caused by breach of conduct by a
common crime
When death occurs as a result of a crime, the heirs of
the deceased are entitled to the following items of
damages:
a. As indemnity for the death of the victim of the
offense — P12,000.00, without the need of any
evidence or proof of damages, and even though
there may have been mitigating circumstances
attending the commission of the offense.
b. As indemnity for loss of earning capacity of the
deceased — an amount to be fixed by the Court
according to the circumstances of the deceased
related to his actual income at the time of death
and his probable life expectancy, the said
indemnity to be assessed and awarded by the
court as a matter of duty, unless the deceased had
no earning capacity at said time on account of
Page 508 of 511
CIVIL LAW
permanent disability not caused by the accused.
If the deceased was obliged to give support,
under Art. 291, CC, the recipient who is not an
heir, may demand support from the accused for
not more than five years, the exact duration to
be fixed by the court.
c. As moral damages for mental anguish, — an
amount to be fixed by the court. This may be
recovered even by the illegitimate descendants
and ascendants of the deceased.
d. As exemplary damages, when the crime is
attended by one or more aggravating
circumstances, — an amount to be fixed in the
discretion of the court, the same to be
considered separate from fines.
e. As attorney's fees and expresses of litigation, —
the actual amount thereof, (but only when a
separate civil action to recover civil liability has
been filed or when exemplary damages are
awarded).
f. Interests in the proper cases.
g. It must be emphasized that the indemnities for
loss of earning capacity of the deceased and for
moral damages are recoverable separately from
and in addition to the fixed sum of P12,000.00
corresponding to the indemnity for the sole fact
of death, and that these damages may, however,
be respectively increased or lessened according
to the mitigating or aggravating circumstances,
except items 1 and 4 above, for obvious reasons
[Heirs of Raymundo Castro v. Bustos, G.R. No. L-
25913 (1969)].
At present, the SC allows civil indemnity of P50,000
in cases of homicide [De Villa v. People, G.R. No.
151258 (2012)] and P75,000 in cases of murder [People
v. Camat, G.R. No. 188612 (2012)].
The omission from Article 2206 (3) of the brothers
and sisters of the deceased passenger reveals the
legislative intent to exclude them from the recovery
of moral damages for mental anguish by reason of the
death of the deceased. Inclusio unius est exclusio alterius
[Sulpicio Lines v. Curso, supra].
4. Graduation of Damages
In crimes
Art. 2204, CC. In crimes, the damages to be
adjudicated may be respectively increased or
lessened according to the aggravating or mitigating
circumstances.
U.P. LAW BOC TORTS AND DAMAGES
In quasi-delicts
Art. 2214, CC. In quasi-delicts, the contributory
negligence of the plaintiff shall reduce the
damages that he may recover.
Contributory negligence
The alleged contributory negligence of the victim, if
any, does not exonerate the accused in criminal cases
committed through reckless imprudence, since one
cannot allege the negligence of another to evade the
effects of his own negligence [Genobiagon v. CA,
supra].
If so, the disobedience of the plaintiff in placing
himself in danger contributed in some degree to the
injury as a proximate, although not as its primary
cause [Rakes v. Atlantic, G.R. No. L-1719 (1907)].
(Supreme Court in this case cited numerous foreign
precedents, mostly leaning towards the doctrine that
contributory negligence on the part of the plaintiff
did not exonerate defendant from liability, but it led
to the reduction of damages awarded to the plaintiff.)
In determining the question of contributory
negligence in performing such act — that is to say,
whether the passenger acted prudently or recklessly
— the age, sex, and physical condition of the
passenger are circumstances necessarily affecting the
safety of the passenger, and should be considered
[Cangco vs. Manila Railroad Co., supra].
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].
Both of the parties contributed to the proximate
cause; hence, they cannot recover from one another
[Bernardo v. Legaspi, supra].
In contracts, quasi-contracts and quasi-delicts
Art. 2215, CC. In contracts, quasi-contracts, and
quasi-delicts, the court may equitably mitigate the
damages under circumstances other than the case
referred to in the preceding article, as in the
following instances:
1. That the plaintiff himself has contravened
the terms of the contract;
2. That the plaintiff has derived some benefit as
a result of the contract;
Page 509 of 511
CIVIL LAW
3. In cases where exemplary damages are to be
awarded, that the defendant acted upon the
advice of counsel;
4. That the loss would have resulted in any
event;
5. That since the filing of the action, the
defendant has done his best to lessen the
plaintiff's loss or injury.
Grounds for mitigation of damages
For contracts:
1. Violation of terms of the contract by the plaintiff
himself;
2. Obtention or enjoyment of benefit under the
contract by the plaintiff himself;
3. Defendant acted upon advice of counsel in cases
where exemplary damages are to be awarded
such as under Articles 2230, 2231, and 2232;
4. Defendant has done his best to lessen the
plaintiff’s injury or loss.
For quasi-contracts:
1. In cases where exemplary damages are to be
awarded such as in Art. 2232;
2. Defendant has done his best to lessen the
plaintiff’s injury or loss.
For quasi-delicts:
1. That the loss would have resulted in any event
because of the negligence or omission of
another, and where such negligence or omission
is the immediate and proximate cause of the
damage or injury;
2. Defendant has done his best to lessen the
plaintiff’s injury or loss.
The SC deemed CC 2215(2) inapplicable where the
harm done to private respondents outweighs any
benefits the plaintiffs may have derived from being
transported to Tacloban instead of being taken to
Catbalogan, their destination and the vessel's first
port of call, pursuant to its normal schedule [Sweet
Lines v. CA, G.R. No. L-46340(1983)].
Rule when contracting parties are in pari delicto
Generally, parties to a void agreement cannot expect
the aid of the law; the courts leave them as they are,
because they are deemed in pari delicto or "in equal
fault." In pari delicto is "a universal doctrine which
holds that no action arises, in equity or at law, from
an illegal contract; no suit can be maintained for its
specific performance, or to recover the property
agreed to be sold or delivered, or the money agreed
U.P. LAW BOC TORTS AND DAMAGES
to be paid, or damages for its violation; and where the
parties are in pari delicto, no affirmative relief of any
kind will be given to one against the other."
This rule, however, is subject to exceptions that
permit the return of that which may have been given
under a void contract to:
1. the innocent party (Arts. 1411-1412, CC);
2. the debtor who pays usurious interest (Art. 1413,
CC);
3. the party repudiating the void contract before the
illegal purpose is accomplished or before damage
is caused to a third person and if public interest
is subserved by allowing recovery (Art. 1414,
CC);
4. the incapacitated party if the interest of justice so
demands (Art. 1415, CC);
5. the party for whose protection the prohibition by
law is intended if the agreement is not illegal per
se but merely prohibited and if public policy
would be enhanced by permitting recovery (Art.
1416, CC); and
6. the party for whose benefit the law has been
intended such as in price ceiling laws (Art. 1417,
CC) and labor laws (Arts. 1418-1419, CC).
Liquidated damages
Art. 2227, CC. Liquidated damages, whether
intended as an indemnity or a penalty, shall be
equitably reduced if they are iniquitous or
unconscionable.
Compromise
Art. 2031, CC. The courts may mitigate the
damages to be paid by the losing party who has
shown a sincere desire for a compromise.
5. Miscellaneous Rules
a. Damages that cannot co-exist
Nominal with other damages
Art. 2223, CC. The adjudication of nominal
damages shall preclude further contest upon the
right involved and all accessory questions, as
between the parties to the suit, or their respective
heirs and assigns.
The propriety of the damages awarded has not been
questioned, Nevertheless, it is patent upon the record
that the award of P10,000 by way of nominal
Page 510 of 511
CIVIL LAW
damages is untenable as a matter of law, since
nominal damages cannot co-exist with compensatory
damages [Vda. De Medina v. Cresencia, G.R. No. L-
8194 (1956)].
The purpose of nominal damages is to vindicate or
recognize a right that has been violated, in order to
preclude further contest thereon; “and not for the
purpose of indemnifying the Plaintiff for any loss
suffered by him” (Arts 2221 and 2223, CC)
Since the court below has already awarded
compensatory and exemplary damages that are in
themselves a judicial recognition that Plaintiff’s right
was violated, the award of nominal damages is
unnecessary and improper. Anyway, ten thousand
pesos cannot, in common sense, be deemed
“nominal”.
Actual and liquidated
Art. 2226, CC. Liquidated damages are those
agreed upon by the parties to a contract, to be paid
in case of breach thereof.
b. Damages that must co-exist:
Exemplary with moral, temperate,
liquidated or compensatory
There is no basis for awarding exemplary damages
either, because this species of damages is only
allowed in addition to moral, temperate, liquidated,
or compensatory damages, none of which have been
allowed in this case, for reasons herein before
discussed [Francisco v. GSIS, G.R. Nos. L-18287 and
18155 (1963)].
There was, therefore, no legal basis for the award of
exemplary damages since the private respondent was
not entitled to moral, temperate, or compensatory
damages and there was no agreement on stipulated
damages [Scott Consultants & Resource Development Corp.
v. CA, G.R. No. 112916 (1995)].
c. Damages that must stand alone:
Nominal damages
Art. 2223, CC. The adjudication of nominal
damages shall preclude further contest upon the
right involved and all accessory questions, as
U.P. LAW BOC TORTS AND DAMAGES CIVIL LAW

between the parties to the suit, or their respective

heirs and assigns.

Page 511 of 511