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CIVIL LAW REVIEWER

SUCCESSION

OBLIGATIONS

CONTRACTS

PROPERTY

SALES

AGENCY

PARTNERSHIP

TORTS & DAMAGES

PERSONS & FAMILYRELATIONS

LAND TITLES& DEEDS

CREDITTRANSACTIONS

PRIVATEINTERNATIONAL LAW

CIVIL LAW 2010

Copyright and all other relevant rights over this material areowned jointly by the University of the Philippines College ofLaw, the Faculty Editor and the Student Editorial Team.

The ownership of the work belongs to the University of thePhilippines College of Law. No part of this book shall bereproduced or distributed without the consent of the UPCollege of Law.

All rights are reserved.

CIVIL LAW REVIEWER

PERSONS & FAMILY RELATIONSTable of Contents

Chapter I. Civil Personality..............................3I. Concept and Classes of Persons..........3II. Capacity to Act and RestrictionsThereon..........................................................5

Chapter II. Citizenship and Domicile..............8I. Who are Filipinos ..................................8II. Domicile ................................................8

Chapter III. Marriage.........................................9I. Definition and Nature of Marriage .........9II. Requisites of Marriage ..........................9III. Marriages Solemnized Abroad............11IV. Presumption of Marriage.....................11

Chapter IV. Void Marriages ...........................13I. Grounds ..............................................13II. Period to File Action or Raise Defense

15III. Effects of Nullity ..................................16

Chapter V. Voidable Marriages .....................18I. Grounds for Annulment (Art. 45, FC) ..18II. Marriage When One Spouse Absent ..21III. Effects of Pending Actions/Decree(Art. 49, FC) .................................................22IV. Voidable v. Void Marriage...................23V. Voidable v. Legal Separation ..............23VI. Jurisdiction ..........................................23

Chapter VI. Legal Separation, Divorce and DeFacto Separation ............................................24

I. Grounds for Legal Separation.............24II. Defenses .............................................25III. When to File/Try Actions .....................25IV. Effects of Filing Petition for LegalSeparation....................................................25V. Effects of Decree for Legal Separation

25VI. Reconciliation......................................26VII. Divorce............................................26VIII. De Facto Separation.......................27

Chapter VII. Rights and Obligations BetweenHusband and Wife..........................................28

I. Obligations of Spouses (Arts. 68-71, FC)28

II. Rights of Spouses (Arts. 72-73, FC) ...28III. Use of Surname ..................................28

Chapter VIII. Property Relations BetweenSpouses ..........................................................29

I. General Provisions..............................29II. Donations by Reason of Marriage ......30

III. Absolute Community of Property ........31IV. Conjugal Partnership of Gains ............34V. Separation of Properties DuringMarriage.......................................................38VI. Property regime of unions withoutmarriage.......................................................39

Chapter IX. The Family and the Family Home.........................................................................41

I. Family..................................................41II. Family Home.......................................41

Chapter X. Paternity and Filiation ................43I. Kinds of Filiation..................................43II. Impugning Legitimacy (Art. 166) .........43III. Proof of Filiation (Arts. 172 and 175 (1))

44IV. Legitimation (Arts. 177 and 182).........45V. Rights of Legitimate and IllegitimateChildren (SSS).............................................45

Chapter XI. Adoption .....................................46I. RA 8552: Domestic Adoption Act of1998 46II. Adoption Procedure under RA 8552 IRR(Secs. 10-32) ...............................................47III. RA 8043: Inter-Country Adoption Act of1995 49

Chapter XII. Support ......................................51I. Support................................................51II. Who are Obliged to Support Each Other(Art. 195)......................................................51III. Properties Answerable for Support (Art.197-198) ......................................................52IV. Order of Support (SDAB) ....................52

Chapter XIII. Parental Authority....................53I. Parental Authority ...............................53II. Substitute and Special ParentalAuthority.......................................................54III. Suspension or Termination of ParentalAuthority.......................................................55IV. Rights and Duties of Children .............55

Chapter XIV. Funerals....................................56I. General Guidelines .............................56

CIVIL LAW REVIEWER

SUCCESSIONTable of Contents

Chapter I. Concept of Succession................59I. Definition of Succession (Art. 774, CC)

59II. Opening of Succession (Art. 777, CC) 59III. Kinds of Succession (Art. 778, CC) ....59IV. Heirs ....................................................60

Chapter II. Testamentary Succession ..........61I. Concept ...............................................61II. Testamentary Capacity .......................61III. Formalities of Wills ..............................61IV. Qualifications of Witnesses to a NotarialWill 62V. Qualifications of Witnesses to a NotarialWill 63VI. Institution of Heirs ...............................63VII. Applicable Principles of PrivateInternational Law .........................................63VIII. Codicils and Incorporation byReference ....................................................64IX. Revocation of Wills and TestamentaryDispositions..................................................64X. Allowance and Disallowance of Wills..65XI. Substitution of Heirs ............................66XII. Legitimes.........................................67XIII. Preterition........................................69XIV. Reserva Troncal .............................69XV. Disinheritance .................................70XVI. Legacies and Devises.....................71

Chapter III. Intestate Succession..................74I. Causes for Legal or IntestateSuccession...................................................74II. The Intestate or Legal Heirs................74III. Fundamental Underlying Principles inLegal or Intestate Succession......................74IV. Relationship (Arts. 963-969, CC) ........75V. The Right of Representation (Art. 970,CC) 75VI. Order of Legal or Intestate Succession

76VII. Concurrence in Legal or IntestateSuccession...................................................77VIII. Outline of Intestate Shares .............77IX. Order of Concurrence in the Case of anAdopted Child (Art, 190, FC) .......................78

Chapter IV. Provisions Common toTestamentary and Intestate Succession .....79

I. Accretion .............................................79II. Capacity to Succeed ...........................80III. Acceptance and Repudiation ofInheritance ...................................................81IV. Collation (Arts. 1061-1077, CC)..........81

Chapter V. Partition and Distribution ofEstate ..............................................................83

I. Concept of Partition ............................83II. Effects of Partition...............................84III. Nullification of Partition .......................84IV. Important Periods in Partition .............85

Chapter VI. Application of the ImportantConcepts through Sample ComputationalProblems.........................................................86

I. Institution of Heirs ...............................86II. Legitimes.............................................86III. Intestate Succession...........................87IV. Accretion .............................................87V. Collation ..............................................88

CIVIL LAW REVIEWER

OBLIGATIONSTable of Contents

Chapter I. General Provisions.......................91I. Obligations ..........................................91II. Sources of Obligations ........................91

Chapter II. Nature and Effect of Obligations93I. Kinds of Prestations ............................93II. Breach of Obligation............................94III. Fortuitous Event (Force Majeure) .......96IV. Remedies to Creditors ........................96V. Usurious Transactions and Rules onInterest .........................................................97

Chapter III. Different Kinds of Obligations ..98I. Pure and Conditional Obligations .......98II. Reciprocal Obligations ......................100III. Obligations with a Period ..................100IV. Alternative and Facultative Obligations

101V. Joint and Solidary Obligations ..........103Effects of Prejudicial and Beneficial Acts(Art.1212) ...................................................105VI. Divisible and Indivisible Obligations..106VII. Oblligations with a Penal Clause ..106

Chapter IV. Extinguishment of Obligations.......................................................................107

I. Payment or Performance ..................107II. Loss or Impossibility..........................109III. Condonation or Remission of the Debt

109IV. Confusion or Merger of Rights ..........110V. Compensation ...................................110VI. Novation ............................................111

Charts: Payment & Performance................114

CIVIL LAW REVIEWER

CONTRACTSTable of Contents

Chapter I. General Provisions.....................122I. Classification of Contracts.................122II. Elements of Contracts.......................123III. Stages of Contracts...........................123IV. Charactertics of Contracts (MARCO)123

Chapter II. Essential Requisites .................125I. Consent .............................................125II. Object ................................................127III. Cause................................................127

Chapter III. Forms of Contracts ..................129I. Rules .................................................129II. Kinds of Formalities...........................129

Chapter IV. Reformation of Contracts........130

Chapter V. Interpretation of Contracts.......130

Chapter VI. Defective Contracts .................131I. Rescissible Contracts (Arts. 1380-1389)

131II. Voidable Contracts (Arts. 1390-1402)

132III. Unenforceable Contracts (Arts. 1403-1408)..........................................................133IV. Void or Inexistent Contracts (Arts. 1409-1422)..........................................................134

CIVIL LAW REVIEWER

PROPERTYTable of Contents

Chapter I. Definition and Classification ofProperty.........................................................137

I. Definition ...........................................137II. Classification .....................................137

Chapter II. Ownership ..................................144I. Definition ...........................................144III. Specific Rights under the Civil Code.144IV. Limitations on Real Right of Ownership

146Chapter III. Accession..................................147

I. Definition ...........................................147II. General Principles of Accession .......147III. Kinds of Accession............................147IV. Principles Governing Each Kind ofAccession...................................................147

Chapter IV. Quieting of Title........................152I. In General .........................................152II. Purpose.............................................152III. Nature: Quasi in Rem........................152IV. Requisites .........................................152V. Prescription of Action ........................153

Chapter V. Co-Ownership............................154I. Definition ...........................................154II. Characteristics ..................................154III. Difference between Co-ownership andJoint Tenancy.............................................155IV. Difference between Co-ownership andPartnership.................................................155V. Sources of Co-Ownership .................155VI. Rights of Each Co-owner over the Thingor Property Owned in Common .................157VII. Implication of Co-owner’s Right overHis Ideal Share ..........................................161VIII. Rules on Co-Ownership NotApplicable to CPG or ACP.........................161IX. Special Rules on Ownership of DifferentStories of a House as Differentiated fromProvisions of the Condominium Act...........162X. Extinguishment of Co-Ownership .....166

Chapter VI. Possession ...............................168I. Definition ...........................................168II. Degrees of Possession .....................169III. Classes of Possession ......................169IV. Cases of Possession.........................169V. What Things May be Possessed ......170VI. What May Not Be Possessed by PrivatePersons......................................................171VII. Acquisition of Possession .............171VIII. Effects of Possession ...................173IX. Effects of Possession in the Concept ofOwner ........................................................177X. Presumption in Favor of thePossessor—for Acquisitive Prescription....178XI. Possesion May Be Lost By ...............179

Chapter VII. Usufruct ...................................181I. Concept.............................................181II. Characteristics ..................................181III. Usufruct Distiguished from Lease andServitude....................................................181IV. Classes of Usufruct...........................182V. Rights of Usufructuary ......................184VI. Rights of the Naked Owner...............186VII. Obligations of the Usufructuary ....187VIII. Special Cases of Usufruct ............190IX. Extinguishment of Usufruct...............192X. Conditions Not Affecting Usufruct.....194

Chapter VIII. Easement ................................196I. Concept.............................................196II. Essential Features ............................196III. Classification of Servitudes...............197IV. General Rules Relating to Servitudes

198V. Modes of Acquiring Easements ........198VI. Rights and Obligations of Owners ofDominant and Servient Estates .................199VII. Modes of Extinguishment ofEasements.................................................200VIII. Legal Easements..........................202

Chapter IX. Nuisance ...................................212I. Definition ...........................................212II. Classes .............................................212III. Liability in Case of Nuisance.............213IV. Regulation of Nuisances ...................214

Chapter X. Modes of Acquiring Ownership.......................................................................217

I. Mode v. Title .....................................217II. Mode .................................................217

Chapter XI. Donation ...................................222I. Nature ...............................................222II. Requisites .........................................222III. Kinds .................................................222IV. Who May Give or Receive Donations

223V. Who May Not Give or ReceiveDonations...................................................224VI. Acceptance .......................................225VII. Form .............................................225VIII. What May Be Donated .................225IX. Effect .................................................226X. Revocation and Reduction................227

Chapter XII. Lease........................................232I. General Characteristics ....................232II. Kinds .................................................232III. Lease of Things ................................232

CIVIL LAW REVIEWER

LAND TITLES and DEEDSTable of Contents

Chapter I: Background, Basic Concepts andGeneral Principles........................................239

I. Definitions and Basic Concepts ........239II. Nature and stages.............................240III. Purpose of Registration.....................240IV. Modes of Acquiring Land Titles.........240V. Jurisdiction ........................................240

Chapter 2: Torrens Certificate of Title .......241I. Original Certificate of Title or OCT....241II. Transfer Certificate of Title................241III. Patents ..............................................241

Chapter 3: Original Registration.................242I. Laws Governing Land Registration...242II. Effect of Registration.........................242III. Original Registration Proceeding ......242IV. Attributes of and Limitation In Certificateof Title and Registered Land (FIIC) ...........247V. Judicial Confirmation of Imperfect orIncomplete Titles............................249

Chapter 4: Cadastral RegistrationProceedings..................................................251

I. Steps in Cadastral RegistrationProceedings ...............................................252

Chapter 5: Subsequent Registration..........253I. Two Types of Dealings......................253II. Necessity and Effects of Registration

253III. Voluntary vs. Involuntary Dealings..253IV. Registration of Voluntary Instruments inGeneral ......................................................254V. Registration of Deeds of Sale andTransfers....................................................255VI. Mortgages and Leases......................256VII. Powers of Attorney; Trusts ...........257VIII. Involuntary Dealings .....................257

Chapter 6: System of Registration ofUnregistered Lands .....................................261

I. Key Points.........................................261II. Procedure .........................................261

Chapter 7: Registration of Public Lands ...262I. Classification of Land of the PublicDomain ......................................................262II. Nature of Title to Public LandsConveyed ..................................................262III. Procedure of Conveying Public Land toa Private Person ........................................262IV. Director of Lands: Quasi-judicial officer

263V. Modes of Alienating Public Lands:....263VI. Patents .........................................263

Chapter 8: Remedies of the Aggrieved Party.......................................................................264

Chapter 9: Reconstitution 0f Titles ...........266I. Grounds ............................................266II. Petitions for Reconstitution ...............266III. Duties of the Land Registration Authority

266IV. Effects of Fraud, Deceit andMachination in the Reconstitution of Titles 266

CIVIL LAW REVIEWER

SALESTable of Contents

Chapter I. The Contract of Sale ..................269I. Definition (Art 1458, CC) ...................269II. Elements ...........................................269III. Stages ...............................................274IV. Kinds of Sale .....................................275V. Form..................................................276VI. Sale Distinguished From OtherContracts....................................................276

Chapter II. Obligations of the Seller andBuyer .............................................................278

I. Obligations of the Seller ....................278II. Obligations of the Buyer....................284

Chapter III. Double Sales .............................286I. General Rule .....................................286II. Requisites .........................................286III. Rules Governing Sale of Movables,Immovables and Unregistered Lands........286

Chapter IV. Risk of Loss..............................288I. General Rule .....................................288II. Exceptions.........................................288

Chapter V. Documents of Title....................289I. In General .........................................289II. Negotiable Documents of Title..........289III. Non-Negotiable Documents of Title ..289

Chapter VI. Remedies of the Seller and Buyer.......................................................................291

I. General Remedies (Art. 1191, CC) ...291II. Remedies of the Seller......................291III. Remedies of the Buyer......................295

Chapter VII. Extinguishment of Sale ..........298I. In General .........................................298II. Conventional Redemption.................298III. Equitable Mortgage ...........................299IV. Legal Redemption .............................300

Chapter VIII. Philippine Bulk Sales Law (Act3952) ..............................................................303

I. Purpose.............................................303II. Coverage...........................................303III. Duty of Seller.....................................303IV. Effect of non-compliance...................304

CIVIL LAW REVIEWER

CREDIT TRANSACTIONSTable of Contents

Chapter I. General Principles......................307I. Types of Credit Transactions ............307II. Security .............................................307III. Bailment ............................................307

Chapter II. Loan (Arts. 1933-1961, CC).......309I. Definition ...........................................309II. Characteristics of a Loan ..................309III. Kinds of Loan: In General .................309IV. Commodatum....................................309V. Obligations of the Bailee inCommodatum ............................................310VI. Obligations of the Bailor inCommodatum ............................................311VII. Mutuum or Simple Loan................311VIII. Interests ........................................312IX. The Usury Law ..................................312

Chapter III. Deposit ......................................314I. Definition ...........................................314II. Kinds of Deposit ................................314III. Characteristics of Deposit .................314IV. Deposit Distinguished From Mutuumand Commodatum .....................................314V. Obligations of the Depositary............314VI. Obligations of the Depositor..............317VII. Extinguishment of Deposit (Art. 1995)

317VIII. Necessary Deposit........................317IX. Judicial Deposit .................................318

Chapter IV. Guaranty ...................................319I. Definition ...........................................319II. Characteristics ..................................319III. Classification .....................................319IV. Rules Governing Guaranty ...............319V. Guaranty Distinguished from Others.322VI. The Guarantor (Arts. 2056-2057)......322VII. Effects of Guaranty .......................322VIII. Extinguishment of Guaranty .........325

Chapter V. Legal and Judicial Bonds.........326

Chapter VI. Suretyship.................................327

Chapter VII. Pledge, Mortgage, Antichresis.......................................................................328

I. Essential Requisites Common to Pledgeand Mortgage (Art. 2085)...........................328II. Pledge ...............................................329III. Mortgage ...........................................332IV. Foreclosure of Mortgage (Art. 2085).334V. Antichresis.........................................336VI. Chattel Mortgage...............................336

Chapter VIII. Concurrence and Preference ofCredits...........................................................338

I. General Provisions............................338II. Classification of Credits ....................338III. Preference of Credits ........................338

CIVIL LAW REVIEWER

AGENCYTable of Contents

Chapter I. Nature, Form, and Kinds of Agency.......................................................................341

I. Definition [Art. 1868, CC] ..................341II. Purpose.............................................341III. Characteristics [CNPPBF].................342IV. Essential Elements............................342V. Determination of Existence of Agency

342VI. Agency v Similar Contracts ...............343VII. Kinds .............................................344

Chapter II. Obligations of the Agent...........348I. To Carry Out the Agency ..................348III. To Advance the Necessary Funds [Art.1886, CC] ...................................................349IV. To Act in Accordance with Principal’sInstructions.................................................349V. To Prefer Interest of Principal OverPersonal Interest........................................349VI. To Render Accounts and Deliver ThingsReceived by Virtue of the Agency..............349VII. To Be Responsible for Substitutes350VIII. To Pay Interest .............................350IX. To Answer for His Negligence or Fraud[Art. 1909, CC] ...........................................350X. Special Obligations of Factor/Commission Agents ...................................350

Chapter III. Liabilities of the Agent.............352I. Liability to Third Persons...................352II. Liability to the Principal .....................352III. Liability of Two or More Agents.........353

Chapter IV. Obligations of the Principal ...354I. To Comply with the obligationscontracted by the agent .............................354II. To Advance the Necessary Sums andReimburse the Agent .................................355III. To Indemnify the Agent for Damages355IV. To Pay the Agent’s Compensation ...356V. To Be Solidarily Liable ......................356

Chapter V. Extinguishment of Agency......357Extinguishment of Agency [EDWARD] ......357I. Expiration of the period for which it wasconstituted..................................................357II. Death, civil interdiction, insanity,insolvency ..................................................357III. Withdrawal of the agent ....................357IV. Accomplishment of the object of theagency .......................................................357V. Revocation ........................................357VI. Dissolution of the firm/corp. Whichentrusted/accepted the agency..................358

CIVIL LAW REVIEWER

PARTNERSHIPTable of Contents

Chapter I. Nature, Creation, Kinds ofPartnership ...................................................361

I. Essential Features ............................361II. Characteristics ..................................362III. Distinctions........................................362IV. Rules to Determine Existence...........363V. How Partnership is Formed ..............363VI. Partnership Term ..............................363VII. Kinds of Partnerships....................363

Chapter II. Obligations of thePartnership/Partners Among Themselves 366

CRRAMP-LS..............................................366I. Make Contributions as Promised ......366III. Manage the Partnership....................367IV. Render Full Information.....................368V. Account for benefits ..........................368VI. Reimburse expenses ........................368VII. Liable for Partnership Contracts ...368VIII. Solidarily Liable with Partnership.369

Chapter III. Obligations of thePartnership/Partners as to Third Persons.370

LANN .........................................................370I. Operate Under a Firm Name (Art. 1815,CC) 370II. Bound by Partnership Admission......370III. Bound by Notice Partner ...................370IV. Liable for Acts of the Partnership......370

Chapter IV. Rights of Partners...................371I. Share in Losses and Profits ..............371II. Associate Another in His Interest......371III. Access to Partnership Books ............371IV. Obtain Formal Account .....................371V. Property Rights .................................371VI. Convery Real Property (Art. 1819, CC)

372

Chapter V. Rights of the Partnership ........374I. Acquire Immovables..........................374II. Preference of Creditors .....................374

Chapter VI. Dissolution and Winding Up ..375I. Definitions .........................................375II. Causes for Dissolution ......................375III. Consequences of Dissolution ...........375IV. Partner’s Liability...............................376

Chapter VII. Rights of Partners UponDissolution....................................................377

I. Right to Wind Up ...............................377II. Right to Damages for or to ContinueBusiness on Wrongful Dissolution .............377

III. Right to Lien or Retention, to Stand inPlace of Creditor, to be Indemnified ..........377IV. Right of Retiring/Deceased Partner (Art.1841, CC) ..................................................377V. Right of Account (Art. 1842, CC) ......378

Chapter VIII. Rules on Settlement (Art. 1839,CC).................................................................379

Chapter IX. Limited Partnership ................380I. Definition ...........................................380II. Forming/Amending a LimitedPartnership (Art. 1844, CC) .......................381III. Limited Partner..................................382IV. General Partner ................................384V. Dissolution ........................................384VI. Settling Accounts for Dissolution ......385

CIVIL LAW REVIEWER

TORTS & DAMAGESTable of Contents

Chapter I. Introduction, Definitions............388A. Tort and Quasi-Delict ........................388B. Damages...........................................389

Chapter II. Concept of Quasi-Delict............390A. Elements ...........................................390B. Distinguished.....................................390

Chapter III. Negligence ................................392A. Concept of Negligence......................392B. Degrees of Negligence......................393C. Proof of Negligence...........................393D. Defenses ...........................................394

Chapter IV. Causation..................................396A. Proximate Cause...............................396

Chapter V. Persons Liable...........................399A. The Tortfeasor...................................399B. Vicarious Liability ..............................399C. Specific Liability.................................403D. Joint and Solidary Liability ................407E. Civil Liability Arising From Crime...........407F. Prescription .......................................408

Chapter VI. Tortious Interference WithContract.........................................................409

Chapter VII. Torts with Independent CivilAction ............................................................410

A. Violation of Civil and Political Rights.410B. Defamation, Fraud, Physical Injuries 410

Chapter VIII. Human Relations Provisions 413A. Abuse of Rights.................................413B. Acts Contra Bonus Mores .................413Other Torts ...............................................414C. Dereliction of Duty.............................414D. Illegal Acts .........................................414E. Unfair Competition ............................414F. Violation of Human Dignity................414

Chapter IX. Damages ...................................415A. Definition and Concept......................415B. Kinds of Damages.............................415

CIVIL LAW REVIEWER

PRIVATE INTERNATIONAL LAWTable of Contents

Chapter I. Introduction.................................427

Chapter II. Jurisdiction ................................429I. Bases of Exercise of Judicial Jurisdiction

429II. Exercise of Jurisdiction .....................429III. Ways of Dealing with Jurisdiction in aConflicts Problem.......................................430

Chapter III. Choice of Law ...........................431I. Approaches to Choice of Law ...........431

Chapter IV. Characterization.......................433I. Types of Characterization .................433II. Depecage..........................................433

Chapter V. Renvoi ........................................434I. Definition ...........................................434II. Ways of Dealing with Renvoi ............434

Chapter VI. Notice and Proof of Foreign Law.......................................................................435

I. Proof of Foreign Law.........................435II. Exceptions to the Application of ForeignLaw 435

Chapter VII. Nationality................................436I. Determination of Nationality ..............436II. Procedure for Naturalization .............436III. Loss of Philippine Citizenship ...........437IV. Problems in Applying the NationalityPrinciple .....................................................438

Chapter VIII. Domicile ..................................439I. Domicile ............................................439II. Comparative Merits and Demerits ofDomicile and Nationality ............................440

Chapter IX. Principles on Personal Statusand Capacity.................................................441

I. Definition ...........................................441II. Beginning and End of Personality.....441III. Absence ............................................441IV. Name.................................................442V. Age of Majority ..................................442VI. Capacity ............................................442

Chapter X. Family Relations........................443I. Marriage ............................................443II. Divorce and Separation.....................445III. Annulment and Declaration of Nullity445IV. Parental Relations.............................446V. Adoption ............................................446

Chapter XI. Property ....................................447I. Controlling Law—Lex Situs/Lex ReiSitae447II. Exceptions to Lex Situs.....................447III. Situs of Certain Properties ................447

Chapter XII. Contracts .................................449I. Extrinsic Validity of Contracts ...........449II. Extrinsic Validity of Contracts ...........449III. Capacity to Enter Into Contracts.......449IV. Choice of Law Issues in ConflictsContracts Cases ........................................449V. Limitation Choice of Law...................450VI. Applicable Law in the Absence ofEffective Choice.........................................450

Chapter XIII. Succession .............................451I. Extrinsic Validity (Arts. 17, 815-817, CC)

451II. Intrinsic Validity .................................451III. Interpretation of Wills ........................451IV. Revocation ........................................451V. Probate..............................................451VI. Administration of Estates ..................452VII. Trusts............................................452

Chapter XIV. Torts and Crimes...................453I. Torts ..................................................453II. Crimes...............................................454

Chapter XV. Torts and Crimes....................455I. Personal Law of Corporations ..........455II. Domicile/Residence of Corporations 455III. Jurisdiction Over Foreign Corporations

455IV. Right of Foreign Corporations to BringSuit 456

Chapter XVI. Foreign Judgments ...............457I. Recognition v. Enforcement..............457II. Bases of Recognition and Enforcement

457III. Policy of Preclusion UnderlyingRecognition and Enforcement ...................457IV. Requisites for Recognition orEnforcement ..............................................457V. Procedures for Enforcement .............457VI. Effect of Foreign Judgment in thePhilippines .................................................458

CIVIL LAW REVIEWER TABLE of CONTENTS

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PERSONS & FAMILY RELATIONSTable of Contents

Chapter I. Civil Personality..............................3I. Concept and Classes of Persons..........3II. Capacity to Act and RestrictionsThereon..........................................................5

Chapter II. Citizenship and Domicile..............8I. Who are Filipinos ..................................8II. Domicile ................................................8

Chapter III. Marriage.........................................9I. Definition and Nature of Marriage .........9II. Requisites of Marriage ..........................9III. Marriages Solemnized Abroad............11IV. Presumption of Marriage.....................11

Chapter IV. Void Marriages ...........................13I. Grounds ..............................................13II. Period to File Action or Raise Defense

15III. Effects of Nullity ..................................16

Chapter V. Voidable Marriages .....................18I. Grounds for Annulment (Art. 45, FC) ..18II. Marriage When One Spouse Absent ..21III. Effects of Pending Actions/Decree(Art. 49, FC) .................................................22IV. Voidable v. Void Marriage...................23V. Voidable v. Legal Separation ..............23VI. Jurisdiction ..........................................23

Chapter VI. Legal Separation, Divorce and DeFacto Separation ............................................24

I. Grounds for Legal Separation.............24II. Defenses .............................................25III. When to File/Try Actions .....................25IV. Effects of Filing Petition for LegalSeparation....................................................25V. Effects of Decree for Legal Separation

25VI. Reconciliation......................................26VII. Divorce............................................26VIII. De Facto Separation.......................27

Chapter VII. Rights and Obligations BetweenHusband and Wife..........................................28

I. Obligations of Spouses (Arts. 68-71, FC)28

II. Rights of Spouses (Arts. 72-73, FC) ...28III. Use of Surname ..................................28

Chapter VIII. Property Relations BetweenSpouses ..........................................................29

I. General Provisions..............................29II. Donations by Reason of Marriage ......30

III. Absolute Community of Property ........31IV. Conjugal Partnership of Gains ............34V. Separation of Properties DuringMarriage.......................................................38VI. Property regime of unions withoutmarriage.......................................................39

Chapter IX. The Family and the Family Home.........................................................................41

I. Family..................................................41II. Family Home.......................................41

Chapter X. Paternity and Filiation ................43I. Kinds of Filiation..................................43II. Impugning Legitimacy (Art. 166) .........43III. Proof of Filiation (Arts. 172 and 175 (1))

44IV. Legitimation (Arts. 177 and 182).........45V. Rights of Legitimate and IllegitimateChildren (SSS).............................................45

Chapter XI. Adoption .....................................46I. RA 8552: Domestic Adoption Act of1998 46II. Adoption Procedure under RA 8552 IRR(Secs. 10-32) ...............................................47III. RA 8043: Inter-Country Adoption Act of1995 49

Chapter XII. Support ......................................51I. Support................................................51II. Who are Obliged to Support Each Other(Art. 195)......................................................51III. Properties Answerable for Support (Art.197-198) ......................................................52IV. Order of Support (SDAB) ....................52

Chapter XIII. Parental Authority....................53I. Parental Authority ...............................53II. Substitute and Special ParentalAuthority.......................................................54III. Suspension or Termination of ParentalAuthority.......................................................55IV. Rights and Duties of Children .............55

Chapter XIV. Funerals....................................56I. General Guidelines .............................56

CIVIL LAW REVIEWER Chapter I. CIVIL PERSONALITY

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Chapter I. Civil Personality

I. CONCEPT AND CLASSES OF PERSONSA. NATURAL PERSONSB. JURIDICAL PERSONS

II. CAPACITY AND RESTRICTIONS THEREONA. PRESUMPTIONS OF CAPACITYB. RESTRICTIONS

1. MINORITY2. INSANITY3. BEING DEAF-MUTE4. PRODIGALITY5. CIVIL INTERDICTION6. FAMILY RELATIONS7. ABSENCE

I. Concept and Classes of Persons

Concept of Persons— Personality is the quality derived from

being a person; it is an attribute ofpersons.

Characteristics—1. It is not a being, but a quality of certain

beings.1. It is not a physical element, but a juridical

concept.2. It is not an object of contract, or of

possession, and cannot be impaired byagreement.

2. It is a matter of public interest.

Article 37, Civil Code. Juridical capacity, which isthe fitness to be the subject of legal relations, isinherent in every natural person and is lost onlythrough death. Capacity to act, which is the powerto do acts with legal effect, is acquired and may belost.

Kinds of Juridical Capacity—1. Juridical Capacity:

aka as Legal Capacity/Personality =Fitness of man to be the subject of legalrelations

It refers to the aptitude for the holdingand enjoyment of rights.

It is inherent in every natural personand is lost only through death. Thisattaches to man by the mere fact of hisbeing a man.

2. Capacity to Act: It refers to the power to do acts with

legal effect. It is conditional and variable. It is

acquired and may be lost. It requiresboth intelligence and will.

Note: Juridical capacity can exist evenwithout capacity to act; the existence ofP

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PERSONS & FAMILY RELATIONS TEAM

Prof. Carolina AustriaFaculty Editor

Anisah AzisKaren TorresLead Writer

Dana CrisostomoJaimmie Hans

Nathan PicoZharmai Garcia

Rowena YangMargie Lim

Jiselle CompuestoMickey Chatto

Eden MopiaFaye CelsoMark OyalesCamille UmaliJC PunongbayanMary BeleyAboy BayalanWelga CarrascoJoan Batimana

Writers

CIVIL LAW

Kristine BongcaronPatricia TobiasSubject Editor

ACADEMICS COMMITTEE

Kristine BongcaronMichelle Dy

Patrich LeccioEditors-in-Chief

PRINTING & DISTRIBUTION

Kae Guerrero

DESIGN & LAYOUT

Pat HernandezViktor FontanillaRusell Aragones

Romualdo Menzon Jr.Rania Joya

LECTURES COMMITTEE

Michelle AriasCamille MarananAngela Sandalo

Heads

Katz ManzanoSam Nuñez

Arianne Cerezo

Mary Rose BeleyKrizel MalabananMarcrese Banaag

Volunteers

MOCK BAR COMMITTEE

Lilibeth Perez

BAR CANDIDATES WELFARE

Dahlia Salamat

LOGISTICS

Charisse Mendoza

SECRETARIAT COMMITTEE

Jill HernandezHead

Loraine MendozaMary Mendoza

Faye CelsoJoie Bajo

Members


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the latter implies that of the former. Thecapacity or incapacity of persons dependsupon the law. Both juridical capacity andcapacity to act are not rights but qualities ofpersons; hence, they cannot be renounced.

A. Natural Persons (asked in ’99 bar exam)

General Rule: Birth determines personality (Art40). Death extinguishes civil personality (Art42).

Exception: a “conceived child shall beconsidered born for all purposes that areFAVORABLE to it, provided it be bornlater” (Art 40, 2nd clause) with the followingcircumstances:a. From the time it is completely delivered

from the mother's womb.b. But if the fetus had an intra-uterine life

of less than seven months, it shouldsurvive for at least 24 hours after itscomplete delivery. (Art. 41, CC)

Article 40, Civil Code. Birth determines personality;but the conceived child shall be considered born forall purposes that are favorable to it, provided it beborn later with the conditions specified in thefollowing article.

Birth = complete removal of the fetus from themother’s womb; before birth, a fetus is merelypart of the mother’s internal organs

Personality of Conceived Child—1. Limited = only for purposes FAVORABLE to

it2. Conditional = it depends upon the child

being born alive later

Period of Conception = the first 120 days ofthe 300 days preceding the birth of the child

A conceived child can acquire rights while still inthe mother’s womb. It can inherit by will or byintestacy.

Geluz v CA, (1961)—An aborted fetus had conditional personality butnever acquired legal rights/civil personalitybecause it was not alive at the time of deliveryfrom the mother’s womb. No damages can beclaimed in behalf of the unborn child.

Article 41, Civil Code For civil purposes, the fetusis considered born if it is alive at the time it iscompletely delivered from the mother's womb.However, if the fetus had an intra-uterine life of lessthan seven months, it is not deemed born if it dieswithin twenty-four hours after its complete deliveryfrom the maternal womb.

Complete respiration = test/sign ofindependent life

Note: For a fetus that had an intra-uterine lifeof less than seven months, it is necessarythat it lives for at least 24 hours, for it to beconsidered born.

Article 42, Civil Code. Civil personality isextinguished by death.

The effect of death upon the rights and obligations ofthe deceased is determined by law, by contract andby will.

People v. Tirol, (1981)—Criminal liability ends with death BUT civilliability may be charged against the estate.

Article 43, Civil Code. If there is a doubt, asbetween two or more persons who are called tosucceed 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 ispresumed that they died at the same time and thereshall be no transmission of rights from one to theother.

Note: Article 43 provides a statutorypresumption when there is doubt on theorder of death between persons who arecalled to succeed each other (only).

Joaquin v. Navarro, (1948)—The statutory presumption of Article 43 was notapplied due to the presence of a credibleeyewitness as to who died first.

Presumption in the Rules of Court (Rule 123,sec. 69, par. ii)—

Age Presumed Survivor1. Both under 15 Older2. Both above 60 Younger3. One under 15, the

other above 60One under 15

4. Both over 15 andunder 60; differentsexes

Male

5. Both over 15 andunder 60; same sex

Older

6. One under 15 orover 60, the otherbetween those ages

One between 15 and 60

Note: Applicable only to two or more personswho perish in the same calamity, and it isnot shown who died first, and there are noparticular circumstances from which it canbe inferred.


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B. Juridical Persons

Juridical Persons (Art 44, Civil Code)—1. The State and its Political subdivisions;2. Other Corporations, Institutions and Entities

for public interest or purpose, created bylaw;

3. Corporations, Partnerships, andAssociations for private interest or purposeto which the law grants a juridicalpersonality.

Governing Laws (Art 45, Civil Code)—Juridical Person Governed by1. State Constitution (defines its

organization and limits itsrights vis-à-vis citizens)

2. PoliticalSubdivision

Charter creating them

3. PublicCorporation

Charter creating them

4. PrivateCorporation

Corporation Code, Articles ofIncorporation and By-Laws

5. Partnerships Stipulations of the parties andsuppletorily by the generalprovisions on partnership ofthe Civil Code

Rules—1. Juridical persons may acquire and

possess property of all kinds, incurobligations, and bring civil or criminalactions (Art. 46, CC)

2. Upon dissolution of corporations orinstitutions and other entities for publicinterest, their property and assets shall bedisposed of in pursuance of the law orcharter creating them. (Art. 47, CC)

II. Capacity to Act and RestrictionsThereon

A. Presumption of Capacity

Standard Oil Co. v. Arenas, (1911)—Capacity to act is presumed until the contrary isproven, and that it be the reason for the specificact attributed. Proof of restriction: habituality,presence at the time, no other cause

B. RestrictionsArticle 38, Civil Code. Minority, insanity orimbecility, the state of being a deaf-mute, prodigalityand civil interdiction are mere restrictions oncapacity to act, and do not exempt the incapacitatedperson from certain obligations, as when the latterarise from his acts or from property relations, suchas easements.

Article 39, Civil Code. The following circumstances,among others, modify or limit capacity to act: age,insanity, imbecility, the state of being a deaf-mute,penalty, prodigality, family relations, alienage,absence, insolvency and trusteeship. Theconsequences of these circumstances are governedin this Code, other codes, the Rules of Court, and inspecial laws.

Capacity to act is not limited on account of religiousbelief or political opinion.

A married woman, twenty-one years of age or over,is qualified for all acts of civil life, except in casesspecified by law.

General Rule: Incapacitated persons are notexempt from certain obligations arising fromhis acts or property relations.

________________

1. Minority

RA 6809 (1989): An act lowering the age ofmajority from twenty-one to eighteen years.

Effects on Contracts—a. they cannot give consent to a contract

[Art 1327 (1), CC]b. a contract where one of the parties is a

minor is voidable [Art 1390(1),CC]c. a contract is unenforceable when both

of the parties are minors (incapable ofgiving consent) [Art 1403(3), CC]

d. minority cannot be asserted by theother party in an action for annulment(Art 1397, CC)

e. not obliged to make restitution exceptinsofar as he has been benefited (Art1399, CC)

f. minor has no right to demand thething/price voluntarily returned by him(Art 1426, CC)

g. minor has no right to recovervoluntarily paid sum or delivered thing, ifconsumed in good faith (Art 1427, CC)

h. must pay reasonable amount fornecessaries delivered to him (Art 1489,CC)

Mercado v. Espiritu, (1918)—Estoppel works against minors whomisrepresent their ages in a contractand are compelled to comply with itsterms.

Bambalan v. Maramba, (1928)—


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When a minor made no activemisrepresentation as to his minority andsuch minority is known to the otherparty, the contract is voidable (Art 1403)as to the minor.

Braganza v. Villa Abrille, (1959)—Minors are obliged to make restitutioninsofar as they have been benefited (Art1399)

Effects on Marriage—a. May not yet contract marriage (Art 5,

FC)b. marriages, where one of the parties is

below 18, even with the consent ofparents/guardians, are VOID (Art 35,FC)

2. Insanity

Insanity includes many forms of mentaldisease, either inherited or acquired. Aperson may not be insane but only mentallydeficient (idiocy, imbecility, feeble-mindedness).

Effect on Contracts—a. incapacity to give consent to a

contract [Art 1327(2), CC]b. contracts entered into during lucid

intervals are valid (Art. 1328, CC)c. restitution of benefits (Art 1399, CC)

Effect on Crimes—a. General rule: EXEMPTED from criminal

liabilityb. Exception: acted during lucid interval

Effect on Marriage—a. may be annulled if either party was of

unsound mind unless the such partyafter coming to reason, freely cohabitedwith the other [Art 45(2), FC]

b. action for annulment of marriage mustbe filed by the sane spouse who had noknowledge of the other’s insanity; or byany relative/guardian of the insane; orby the insane spouse during a lucidinterval or after regaining sanity [Art47(2), FC]

3. State of Being Deaf-Mutea. cannot give consent to a contract if

he/she also does not know how towrite [Art 1327(2), CC]

b. can make a valid WILL, provided: thecontents of the same have either been

read personally by him or communicatedto him by 2 persons (Art 807, CC)

c. cannot be a witness to the execution ofa will (Art 820, CC)

4. ProdigalityMartinez v. Martinez, (1902)—

A spendthrift or a prodigal is “a person,who, by excessive drinking, gambling,idleness or debauchery of any kind shallso spend, waste or lessen his estate asto expose himself or his family to wantor suffering.” The acts of prodigalitymust show a morbid state of mind.

Note: It is not the circumstance ofprodigality, but the fact of being underguardianship that restricts capacity toact.

5. Civil Interdictiona. It is an accessory penalty imposed

upon persons who are sentenced to aprincipal penalty not lower thanreclusion temporal (article 41, RevisedPenal Code).

b. offender is deprived of rights ofparental authority, or guardianship, ofmarital authority, of the right to managehis property and of the right to disposeof such (Art 34, RPC)

c. for the validity of marriage settlements,the participation of the guardian shallbe indispensible (Art 123, CC)

6. Family Relationsa. justifying circumstance if acted in

defense of person/rights of spouse,ascendants, descendants,brothers/sisters, and other relatives upto the 4

thcivil degree [Art 11(2), RPC]

b. mitigating circumstance if acted in theimmediate vindication of a graveoffense/felony committed against hisspouse, ascendants or relatives of thesame civil degree [Art 12(5), RPC]

c. incestuous and void marriages: between ascendants and

descendants of any degree; between brothers and sisters,

whether full or half-blood. (Art 37,FC)

d. donations/grants of gratuitousadvantage between spouses duringthe marriage shall be VOID, exceptmoderate gifts during family occasions(Art 87, FC)


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e. descendants cannot be compelled totestify in a criminal case, against hisparents and grandparents UNLESS: crime was against the

descendant OR by one parentagainst the other (Art 215, FC)

f. spouses cannot sell property to eachother, except: absolute separation is agreed upon

in the marriage settlements judicial separation of property (Art

1490, CC)

7. Absence

Article 390, Civil Code. After an absence of sevenyears, it being unknown whether or not theabsentee still lives, he shall be presumed dead forall purposes, except for those of succession.

The absentee shall not be presumed dead for thepurpose of opening his succession till after anabsence of ten years. If he disappeared after theage of seventy-five years, an absence of five yearsshall be sufficient in order that his succession maybe opened. (n)

Art. 391, Civil Code. The following shall bepresumed dead for all purposes, including thedivision of the estate among the heirs:

1. A person on board a vessel lost during asea voyage, or an aeroplane which ismissing, who has not been heard of forfour years since the loss of the vessel oraeroplane;

2. A person in the armed forces who hastaken part in war, and has been missingfor four years;

3. A person who has been in danger ofdeath under other circumstances and hisexistence has not been known for fouryears.

Article 124, FC—a. administration and enjoyment of the

CPG shall belong to both spousesjointly

b. in case of disagreement, husband’sdecision shall prevail, subject torecourse to the court by the wife forproper remedy

c. if one spouse is incapacitated/unableto administer, sole powers ofadministration may be assumed by theother spouse.

d. General Rule: This power does notinclude disposition/encumbrance. Exception: judicial authority or

written consent of other spouse

CIVIL LAW REVIEWER Chapter II. CITIZENSHIP AND DOMICILE

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Chapter II. Citizenship and Domicile

(asked in ’75, ’81, ’87, ’93, ’05 and ’08 barexams)

I. WHO ARE FILIPINO CITIZENSII. DOMICILE

A. REQUISITES OF DOMICILEB. KINDS OF DOMICILE

I. Who are Filipinos

1. Those who are citizens of the Philippines atthe time of the adoption of the 1987Constitution;

2. Those whose fathers or mothers arecitizens of the Philippines;

3. Those born before January 17, 1973, ofFilipino mothers, who elect Philippinecitizenship upon reaching the age ofmajority; and

4. Those who are naturalized in accordancewith law. (Art IV, §1, 1987 PhilippineConstitution)

Note: These have superseded the rules oncitizenship enumerated in the Civil Code.

Citizen = owes allegiance to the state and isentitled to its protection

II. Domicile

For Natural Persons—the place of their habitual residence (Art.50, CC).

For Natural Persons—the place where their legal representationis established, or where they exercise theirprimary functions, unless there is a law orother provision that fixes the domicile (Art.51, CC).

Domicile vs. Residence—While domicile is permanent (there is intentto remain), residence is temporary and maybe changed anytime (there is no necessaryintent to remain).

________________

A. Requisites of Domicile (Callejo v. Vera)

1. Physical Presence2. Intent to remain permanently (animus

manendi)

B. Kinds of Domicile

1. Domicile of Origin Domicile of parents of a person at the

time he was born.

2. Domicile of Choice Domicile chosen by a person, changing

his domicile of origin. A 3rd requisite is necessary – intention

not to return to one’s domicile as hispermanent place.

3. Domicile by Operation of Law (i.e., Article69, domicile of minor) Romualdez-Marcos vs. Comelec

(1995)— A married woman does notlose her domicile to her husband.

CIVIL LAW REVIEWER Chapter III. MARRIAGE

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Chapter III. Marriage

I. DEFINITION AND NATURE OF MARRIAGEII. REQUISITES OF MARRIAGE

A. ESSENTIAL REQUISITESB. FORMAL REQUISITES

III. MARRIAGES SOLEMNIZED ABROADIV. PRESUMPTION OF MARRIAGE

I. Definition and Nature of Marriage

(asked in ’91, ’92 and ’99 bar exams)

Definition of Marriage (Art 1 FC)—

What SPECIAL CONTRACT of permanentunion

Who Between a MAN and a WOMANHow Entered into in accordance with LAWPurpose Establishment of CONJUGAL and

FAMILY lifeSignificance FOUNDATION of the family and an

INVIOLABLE SOCIAL INSTITUTIONwhose nature, consequences andincidents are governed by law and notsubject to stipulations EXCEPT thatmarriage settlements may fix theproperty relations during the marriagewithin the limits provided by this code.

Breach of Promise to Marry —(asked in ’09 bar exam)1. As a general rule breach of promise to

marry is not an actionable wrong(Tanjanco v CA, Wassmer v Velez) andcannot give rise to liability for damagesin line with the principle of freedom ofconsent in marriage (Art 2(2) FamilyCode). (Reyes)

2. However damages may be claimed basedon the principles laid down in Art 19-21 &2176 of the CC

Art. 19, Civil Code. Every person must, in theexercise of his rights and in the performance of hisduties, act with justice, give everyone his due, andobserve honesty and good faith.

Art. 20, Civil Code. Every person who, contrary tolaw, wilfully or negligently causes damage to anothershall indemnify the latter for the same.

Art. 21, Civil Code. Any person who wilfully causesloss or injury to another in a manner that is contrary tomorals, good customs or public policy shallcompensate the latter for the damage.

Art. 2176, Civil Code. Whoever by act or omissioncauses damage to another, there being fault ornegligence, is obliged to pay for the damage done.Such fault or negligence, if there is no pre-existingcontractual relation between the parties, is called a

quasi-delict and is governed by the provisions of thisChapter.

EXPENSES or other incidents thatdirectly arose from the contract to marrycan be claimed IF the breach of promisewas done in a manner considered ascontrary to morals, good customs orpublic policy (cost of weddingpreparations). (Wassmer v Velez)

LOST WAGES arising from voluntarydismissal in anticipation of marriage canbe sued for. (Tanjanco v CA)

EXPENSES made for the renovation ofan anticipated conjugal home can besued for. (Piccininni v. Hajus-USJurisprudence)

II. Requisites of Marriage

(asked in ’76, ’82, ’89, ’90, ’99, ’02, ’04, ’07,and ‘09 bar exams)

A. Essential Requisites of Marriage

Essential Requisites [LC]—1. Legal Capacity of the contracting parties,

who must be a male and a female2. Consent (of the parties) freely given in the

presence of a solemnizing officer. (Art. 2FC)

Legal Capacity—Male or female>=18, not under anyimpediments mentioned in Art 37(incestuous marriage) & Art 38 (marriageagainst public policy), may contractmarriage. (Art 5)

Must be Male and Female—1. Jones v Hallahan, (1973): Application for

marriage license was denied since marriageis defined by law as a contract entered intobetween a man and a woman.

2. Silverio v Republic, (2007): Changing ofgender in one’s birth certificate was denied;otherwise, it would result in confusion andwould allow marriage between persons ofthe same sex which is in defiance of the law,as marriage is a union between a man and awoman.

Note: The best source for citing the requirement(of male/female) is still statutory, as providedexplicitly in the Family Code.

Consent Freely Given—People v Santiago, (51 Phil 68): A marriageentered into by a person whose real intent is


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to avoid prosecution for rape is void for totallack of consent. The accused did not intendto be married. He merely used suchmarriage to escape criminal liability.

Absence and Defect of EssentialRequisites—

Absence DefectEffect VOID VOIDABLEIllustration - marriage

entered into bya person <18(Art 35 (1))

- marriageentered into bypersons of thesame sex(Jones vHallahan)

- marriagecontractedthrough mistakeof onecontractingparty as to theidentity of theother(Art 35 (5))

- consent ofeither partywas obtainedthrough fraud,force,intimidation orundueinfluence(Art 45 (3)(4)FC)

B. Formal Requisites of Marriage

Formal Requisites [AVC]—1. Authority of Solemnizing Officer2. A Valid marriage License3. Marriage Ceremony (Art 4 FC)

Authority of Solemnizing Officer—1. Who may solemnize marriage: (JC-

SPAMM)a. Incumbent member of the Judiciary

within his jurisdiction. (Art 7 FC)b. Priest, Rabbi, Imam or Minister of any

Church or Religious Sect. Must be: Duly authorized by his church or

religious sect Registered with the civil registrar

general Acting within the limits of the written

authority granted to him by hischurch or religious sect.

At least one of the contractingparties belongs to the solemnizingofficer’s church or religious sect. (Art7 FC)

c. Ship Captain or Airplane Chief maysolemnize a marriage in articulo mortisbetween passengers or crew members(Art 7,31 FC)

d. A Military commander of a unit maysolemnize marriages in articulo mortisbetween persons within the zone ofmilitary operation. (Art 7,32 FC)

e. Consul-general, consul or vice-consulmay solemnize marriages betweenFilipino citizens abroad. (Art 7,10 FC)

f. Municipal and City Mayors (LGC sec444 and 455)

2. Marriage is void when solemnized by anyperson not legally authorized to performmarriages unless either or both partiesbelieved in good faith that the solemnizingofficer had legal authority to do so. (Art 35(2))

3. Absence & Irregularity of Authority of asolemnizing officer

Absence IrregularityEffect VOID No effect on

validity but partyresponsible willbe liable.

Illustration - Marriage isvoid whensolemnized by apriest not dulyauthorized by hisChurch tosolemnizemarriage.

(Art 7 FC)

- lack of validnotification ofboth partiesdesiring aceremony in aremote placewas held to beonly a mereIRREGULARITY(Navarro vs.Domagtoy 1996)

Marriage License—1. Marriages Exempt from marriage license

requirement (AREC)a. Marriage in Articulo mortis (Art. 27, FC)b. Marriage in Remote and inaccessible

places (Art. 28, FC)c. Marriages by Muslims and Ethnic

cultural minorities provided they aresolemnized in accordance with theircustoms, rites or practices. (Art. 33, FC)

d. Marriage by parties who have Cohabitedfor at least 5 years without any legalimpediment. (Art. 34, FC, Ninal vBadayog (2000))

2. Absence & Irregularity of Marriage License

Absence IrregularityEffect VOID No effect on

validity but partyresponsible will beliable.

Illustration - Issuanceof the CivilRegistrar of aCERTIFICATE

- mereIRREGULARITIESin the marriagelicense, such as a


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Absence IrregularityDUE SEARCHANDINABILITY TOFIND theapplication of amarriagelicense meansits absence,thus renderingthemarriageVOID.(Republic vCA)

- Before amarriage canbe solemnized,a validmarriagelicense MUSTFIRSTBEPRESENTED,otherwise themarriage isVOID. (Morenov Bernabe)

typographicalerror, do not affectthe validity of amarriage.(Alcantara vAlcantara)

3. Things to do at the local civil registrar:a. File an application of marriage license at

the proper local civil registrar. (Art. 11,FC)

b. Present birth or baptismal certificate.(Art. 12, FC)

c. If aged 18-21 years, present parentalconsent. (Art. 14, FC)

d. If aged 21-25, present parental advice.(Art. 15, FC)

e. If aged 18-25, present certificate ofmarriage counseling from your priest.(PD 965)

f. Pay the required fees. (Art 19, FC)g. If foreigner, present certificate of legal

capacity issued by diplomat or consularofficials. (Art. 21, FC)

Marriage Ceremony—1. 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 husbandand wife, signed by them before a judgeand two capable witnesses, even thoughit was independently made by them, stillcounts as a valid ceremony. (Martinez vTan, 12 Phil 731)

2. Minimum requirements prescribed by law:(AP-PMS)

a. Appearance of contracting partiespersonally before the solemnizing officer(Art 3 FC)

b. Personal declaration that they take eachother as husband and wife. (Art 3 FC)

c. Presence of at least two witnesses oflegal age. (Art 3 FC)

d. The declaration shall be contained in theMarriage certificate. (Art 6 FC)

e. Marriage certificate shall be Signed bythe contracting parties and theirwitnesses and attested by thesolemnizing officer. (Art. 6, FC)

Note: In a marriage in articulo mortis, whenone or both parties are unable to signthe marriage certificate, it shall besufficient for one of the witnesses towrite the name of said party, which shallbe attested by the solemnizing officer.(Art 6, par. 2)

3. Places where marriage SHALL besolemnized: (CCO)a. Chambers of Judge or an open courtb. Church, Chapel or Templec. Office of the consul general, consul or

vice consul (Art. 8, FC)Exception:a. Marriages in articulo mortisb. Marriages in remote placesc. Written request from both parties.

III. Marriages Solemnized Abroad

General Rule—Marriages solemnized abroad in accordancewith the laws in force in that country shall bevalid in the Philippines. (Art 26 FC)

Exceptions—1. Marriage between persons below 18 years

old – Art. 35(1)2. Bigamous or polygamous marriage – Art.

35(4)3. Mistake in identity – Art. 35 (5)4. Marriages void under Article 53 – Art. 35 (6)5. Psychological incapacity – Art. 366. Incestuous marriages – Art. 377. Marriage void for reasons of public policy –

Art. 38

IV. Presumption of Marriage

1. Presumption in favor of a valid marriage (Art 220 CC)


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2. The presumption that a man and a womandeporting themselves as husband and wifehave entered into a lawful contract ofmarriage is satisfactory if uncontradicted.(Sec. 3 (aa), Rule 131, ROC)

3. In marriages of exceptional character, theexistence of the marriage is presumed, evenin the TOTAL ABSENCE of a marriagelicense. (Vda. De Jacob v CA, 1999)

4. if a marriage certificate is missing, and allmeans HAVE NOT YET BEENEXHAUSTED to find it, then the marriage ispresumed to exist (Sevilla v Cardenas,2006)

5. Absence of a marriage certificate is notproof of absence of marriage. To prove thefact of marriage, the following wouldconstitute competent evidence: (1) thetestimony of witnesses to matrimony; (2) thecouple’s public cohabitation; and (3) birthand baptismal certificates of children bornduring the union. (Trinidad v CA, 1998)

CIVIL LAW REVIEWER Chapter IV. VOID MARRIAGES

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Chapter IV. Void Marriages

I. GROUNDSII. PERIOD TO FILE ACTION OR RAISE

DEFENSEIII. EFFECTS OF NULLITY

I. Grounds

Art. 4(1): The absence of any essential orformal requisites shall render the marriage voidab initio, except as stated in Article 35 (a).

VOID AB INITIO MARRIAGES:

A. Article 35 (Void from the Beginning)

1. Contracted by any party below eighteenyears of age even with the consent ofparents or guardians

2. Solemnized by any person not legallyauthorized to perform marriages unlesssuch marriages were contracted with eitheror both parties believing in good faith thatthe solemnizing officer had the legalauthority to do so.Note: One’s belief in good faith that thesolemnizing officer has the requiredauthority is a mistake of fact, and not of law.

3. Solemnized without license, except inmarriages under exceptional circumstances

4. Bigamous or polygamous marriages notfalling under Article 41 (Art. 41: subsequentmarriage by present spouse who obtained adeclaration of presumptive death for absentspouse prior to the subsequent marriage)

5. There is a mistake as to the identity of theother contracting party

6. Subsequent marriages that are voidunder Article 53 (Art 53: a subsequentmarriage is null and void if prior to itscelebration, it has not recorded in the civilregistry and registries of property the itemsin Art. 52)

B. Article 36 (Psychological Incapacity)

Contracted by any party who, at the time ofthe celebration, was psychologicallyincapacitated to comply with the essentialmarital obligations of marriage, even if suchincapacity becomes manifest only after itssolemnization

Republic v. Molina, (1997)a. The burden of proof to show the nullity

of the marriage belongs to the plaintiff.b. The root cause of the psychological

incapacity must be: (a) medically or

clinically identified, (b) alleged in thecomplaint, (c) sufficiently proven bythe experts, (d) clearly explained inthe decision.

Note: The new Supreme Court Rule onDeclaration of absolute nullity of VoidMarriages and annulment of VoidableMarriages (A.M. No. 02-11-10-SC,effective March 15, 2003 and Barcelonavs. CA (2003) provide that expertopinion is not a condition sine qua nonfor proof of psychological incapacity.The root cause may be proven by thetotality of evidence in actual trial.

c. The incapacity must be proven to beexisting at “the time of thecelebration” of the marriage.

d. Such incapacity must also be shown tobe medically or clinically permanentor incurable.

e. Such illness must be grave enough tobring about the disability of the party toassume the essential obligations ofmarriage.

f. The essential marital obligations mustbe those embraced by Articles 68 up to71 of the Family Code as regards thehusband and wife as well as Articles220, 221, and 225 of the same Code inregard to parents and their children.

g. Interpretations given by the NationalAppellate Matrimonial Tribunal of theCatholic Church in the Philippines,while not controlling or decisive, shouldbe given great respect by our courts.

h. The trial court must order theprosecuting attorney or fiscal and theSolicitor General to appear ascounsel for the state. No decision shallbe handed down unless the SolicitorGeneral issues a certification.

Note: The new Supreme Court Rule onDeclaration of absolute nullity of VoidMarriages and annulment of VoidableMarriages (A.M. No. 02-11-10-SC, effectiveMarch 15, 2003 provide that the appearanceof the prosecuting attorney or fiscal and theSolicitor-General is no longer mandatory.

Santos v. Bedia-Santos, (1995):Laid down 3 characteristics for determiningpsychological incapacity: gravity,antecedent, and incurability.

Tsoi v. CA, (1997)Refusal of husband to have sex wasinterpreted to be PI. “A man who can butwon’t is PI”


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Marcos vs. Marcos (2000)Psychological incapacity maybe establishedby the totality of the evidence presented.Personal medical examination could bedispensed with.

Republic vs. San Jose (2007)There is no requirement that the respondentbe medically examined first.

Antonio v. Reyes, (2006):“pathological liar”, Molina guidelines met.

C. Article 37 (Incestuous)

1. Between ascendants and descendants ofany degree, legitimate or illegitimate

2. Between brothers and sisters, whether ofthe full or half blood, legitimate or illegitimate

D. Article 38 (Against Public Policy)

1. Between collateral blood relatives,legitimate or illegitimate, up to the fourth civildegree.

2. Between step-parents and step-children.Note: Stepbrothers and stepsisters canmarry because marriages between them arenot among those enumerated in article 38.

3. Between parents-in-law and children-in-law.

4. Between adopting parent and adoptedchild.

5. Between the surviving spouse of theadopting parent and the adopted child.

6. Between the surviving spouse of theadopted child and the adopter.

7. Between an adopted child and alegitimate child of the adopter.

8. Between adopted children of the sameadopter.

9. Between parties where one, with theintention to marry the other, killed thatother person's spouse, or his or her ownspouse.

Relationships outside of Art. 37 and 38 whichare not impediments to marriage: brother-in-lawwith sister-in-law, stepbrother with stepsister,guardian with ward, adopted with illegitimatechild of the adopter, adopted son of the husbandwith adopted daughter of the wife, parties whohave been convicted of adultery.

E. Article 41 (Bigamous Marriages,Absentee Spouse and PresumptiveDeath)

General Rule—Marriage contracted by any person duringthe subsistence of a previous marriage isvoid.

Exceptions: The following subsequent marriageof the present spouse is valid:1. Subsequent marriage due to ordinary

absence where:a. the prior spouse had been absent for 4

consecutive years;b. the spouse present had a well-founded

belief that absent spouse is dead; andc. judicial declaration of presumptive

death was secured (no prejudice to theeffect of the reappearance of the absentspouse).

2. Subsequent marriage due to extraordinaryabsence where:a. the prior spouse had been missing for 2

consecutive years;b. there is danger of death attendant to

the disappearance;c. the spouse present had a well-founded

belief that the missing person is dead;and

d. judicial declaration of presumptivedeath was secured (no prejudice to theeffect of the reappearance of the absentspouse).

Note: Institution of a summary proceeding is not

sufficient. There must also be a summaryjudgment. (BALANE)

Only the deserted spouse can file or institutean action a summary proceeding for thedeclaration of presumptive death of theabsentee (Bienvenido case)

There must have been diligent efforts on thepart of the deserted spouse to locate theabsent spouse. These diligent effortscorrespond to the requirement of the law fora well-founded belief.

Exception to the exception—When both parties to the subsequent acted inbad faith (Art. 44)

Connected Provisions—

Art. 390, Civil Code. After an absence of 7 years, itbeing unknown whether or not the absentee still lives,he shall be presumed dead for all purposes, exceptfor those of succession.The absentee shall not be presumed dead for the


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purpose of opening his succession till after anabsence of 10 years. If he disappeared after the ageof 75 years, an absence of 5 years shall be sufficientin order that his succession may be opened.

Art. 391, Civil Code. The following shall be presumeddead for all purposes, including the division of theestate among the heirs: (SAAD)1. A person on board a vessel lost during a sea

voyage, or an aeroplane which is missing, whohas not been heard of for four years since theloss of the vessel or aeroplane;

2. A person in the armed forces who has taken partin war, and has been missing for four years;

3. A person who has been in danger of deathunder other circumstances and his existence hasnot been known for four years.

Note: Although seven years is required for the

presumption of death of an absentee in theCivil Code, Art. 41 of the Family Codemakes an exception for the purpose ofremarriage by limiting such requirement tofour years.

Art. 41 also limits the required four years inArt. 391 for absence under exceptionalcircumstances to only two years.

F. Article 44 (Present spouse whocontracts marriage in bad faith)

Both spouses of a subsequent marriageacted in bad faith in case where a previousspouse was an absentee

G. Article 53 (Non-Recording)

Subsequent marriage of spouses where therequirements of recording under Art. 52 forvoid marriages shall not have been compliedwith

H. Article 40 (Judicial Declaration ofNullity)

Art. 40, Civil Code. The absolute nullity of a previousmarriage may be invoked for purposes of remarriageon the basis solely of a final judgment declaringsuch previous marriage void.

Under the Civil Code (superseded by the FamilyCode), there was no need for a judicialdeclaration of nullity of a previous marriage for asubsequent marriage to be valid (People v.Mendoza). However, Article 40 of the FC nowrequires a final judgment to declare aprevious marriage void for a subsequentmarriage to be valid. (Terre v. Terre, Atienza v.Brillantes)

Terre v. Terre, (1998)A lawyer was disbarred for grossly immoralconduct by convincing the other party that ajudicial declaration of nullity was notrequired and subsequently contractinganother marriage while his first marriagewas subsisting.

Atienza v. Brillantes, (243 SCRA 32)A judge’s first marriage contracted in 1965was void for not having a marriage license,but the requirement for a judicial declarationof nullity in Art. 40 applies for hissubsequent marriage contracted in 1991.

Apiag v. Cantero, (1997)Where both marriages were contracted priorto the effectivity of the FC, the requirementof Art. 40 does not apply to the secondmarriage where a right is already vested andwhich the FC cannot have retroactive effect.

Judicial declaration of nullity of a marriage isnow an absolute requirement:a. For the validity of any subsequent

marriageb. For the subsequent marriage not to be

considered as bigamous

Domingo v. CA, (1993)The judicial declaration of nullity can beinvoked for purposes other than remarriage.Article 40 was interpreted as being arequirement for purposes of remarriage butnot limited for that purpose. Separation ofproperty is also a valid purpose for filing fora judicial declaration of nullity.

Borja-Manzano v. Sanchez, (2001)Legal separation does not severe maritalbonds. Cohabitation under Art. 34 merelyexempts the spouses from obtaining amarriage license, and is not met when thereexists legal impediment to marry during theperiod of cohabitation.

II. Period to File Action or RaiseDefense

Art. 39. The action or defense for the declarationof absolute nullity of a marriage shall notprescribe. (as amended by R.A. 8533)

The phrase "However, in case of marriagecelebrated before the effectivity of this Codeand falling under Article 36, such action ordefense shall prescribe in ten years after


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this Code shall taken effect" has beendeleted by Republic Act No. 8533 [ApprovedFebruary 23, 1998]).

It must be noted that under the newSupreme Court Rule on Declaration ofAbsolute Nullity of Void Marriages andAnnulment of Voidable Marriages (A.M. No.02-11-10-SC, effective March 15, 2003,nullity of the marriage can still be collaterallyattacked.

As to the parties allowed to file the action –Enrico v. Heirs of Sps. Medinaceli (2007):Only an aggrieved or injured spouse may filea petition for annulment of voidablemarriages or declaration of absolute nullityof void marriages. Such petition cannot befiled by compulsory or intestate heirs of thespouses or by the State. The Committee isof the belief that they do not have a legalright to file the petition. Compulsory orintestate heirs have only inchoate rightsprior to the death of their predecessor, and,hence, can only question the validity of themarriage of the spouses upon the death of aspouse in a proceeding for the settlement ofthe estate of the deceased spouse filed inthe regular courts. (also reiterated in Carlosvs. Sandoval, 2008)

III. Effects of Nullity

Effects of Termination of Bigamous Marriage(Art. 43 and 44)—1. Children – conceived prior to its termination

considered legitimate2. Property Regime – dissolved and liquidated

(party in bad faith shall forfeit his/her sharein favor of the common children or if thereare none, children of the guilty spouse by aprevious marriage, and in case there arenone, to the innocent spouse)

3. Donation propter nuptias – remains valid,(but if the donee contracted marriage in badfaith, donations will be revoked)

4. Insurance benefits – innocent spouse mayrevoke designation of guilty party asbeneficiary, even if such designation isstipulated as irrevocable

5. Succession Rights – Party in bad faithdisqualified to inherit from innocent spouse,whether testate or intestate

6. Donations - If both parties of subsequentmarriage acted in bad faith, any donationsand testamentary dispositions made by oneparty to the other by reason of marriage willbe revoked (Art. 44)

Effects of Other Void Marriages—1. The effects provided for by paragraphs (2),

(3), (4) and (5) of Article 43 and by Article44 shall also apply in the proper cases tomarriages which are declared ab initio orannulled by final judgment under Articles 40and 45 [Art. 50(1)]

2. Final judgment in such cases shall providefor the liquidation, partition, anddistribution of the:a. properties of the spousesb. custody and support of the common

childrenc. delivery of their presumptive legitimes unless such matters had been

adjudicated in previous judicialproceedings [Art. 50(2)]

all creditors (of the spouses/propertyregime) shall be notified of theproceedings for liquidation [Art. 50(2 and3)]

3. In the partition, the conjugal dwelling andlot shall be adjudicated to the spouse withwhom majority of the common childrenremain (Art. 102 and 129) [Art. 50(4)]

4. Presumptive legitimes, computed as of thedate of the final judgment, shall bedelivered in cash, property or soundsecuritiesa. unless the parties, by mutual agreement

judicially approved, had alreadyprovided for such [Art. 51(1)]

b. the children/guardian/trustee may askfor the enforcement of the judgment [Art.51(2)]

c. the delivery of the presumptive legitimesshall not prejudice the ultimatesuccessional rights, but the value of theproperties already received shall beconsidered as advances on theirlegitime [Art. 51(3)]

5. Either of the former spouses may marryagain AFTER compliance with therequirements of Article 52, otherwise, thesubsequent marriage is void (Art. 53)

Requirement (Art. 52)— recording in theappropriate civil registry AND registriesof property:a. judgment of annulment/absolute nullity

of marriageb. partition and distribution of the

properties of the spousesc. delivery of the children’s presumptive

legitimesotherwise, these shall not affect thirdpersons


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6. Generally, children born or conceived withinvoid marriages are illegitimate. Exception:

children conceived or born beforethe judgment under Article 36 hasbecome final and executory

children conceived or born ofsubsequent marriages under Article53

Niñal v. Badayog, (2000)Children of first marriage assailed thevalidity of the second marriagecontracted by their father without amarriage license and after the latter’sdeath.

Void marriages can be attackedcollaterally and do not prescribe

De Castro v. Assidao-de Castro, (2008)Validity of marriage was attackedcollaterally in an action for support fordetermining legitimacy of the child.

CIVIL LAW REVIEWER Chapter V. VOIDABLE MARRIAGES

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Chapter V. Voidable Marriages

(asked in ’75, ’76, ’78, ’83, ’86, ’90, ’91, ’93, ’94,’95, ’96, ’97, ’02, ’03, ’04, ’07, and ‘09 barexams)

I. GROUNDS FOR ANNULMENTA. EXPLANATIONB. WHO MAY FILE, PRESCRIPTION,

RATIFICATIONC. MARRIAGES NOT SUBJECT TO

RATIFICATIONII. WHEN ONE SPOUSE IS ABSENT

A. REQUIREMENTS FOR SUBSEQUENTMARRIAGE TO BE VALID WHEN PRIORSPOUSE IS ABSENT

B. EFFECT OF REAPPEARANCE OFABSENT SPOUSE

III. EFFECTS OF PENDING ACTION/DECREEIV. VOIDABLE VS. VOIDV. VOIDABLE VS. LEGAL SEPARATIONVI. JURISDICTION

I. Grounds for Annulment (Art. 45, FC)

Marriage may be annulled on the ff groundsexisting at time of marriage: P I F F I S

P 1. One of the parties is 18 or above butbelow 21, and there is no parentalconsent.

I 2. Either party was of unsound mind(insanity).

F 3. The consent of either party wasobtained through fraud (different frommistake in identity):a. through non-disclosure of a

previous conviction of a crimeinvolving moral turpitude;

b. through concealment by the wifeof the fact at the time of themarriage that she was pregnantby another man;

c. through concealment of asexually-transmitted disease,regardless of its nature, existingat the time of marriage;

d. through concealment of drugaddiction, habitual alcoholism orhomosexuality/lesbianism.(Art.46, FC)

F 4. The consent of either party wasobtained through force, intimidation,or undue influence.

I 5. Either party is physically incapable of

consummating the marriage(impotence; this is different fromsterility).

S 6. Either party has a serious andincurable sexually-transmissibledisease, even if not concealed.*

TOLENTINOAction to Annul: action in rem, concerns statusof parties; res is relation bet parties or marriagetie; jurisdiction depends on nationality ordomicile not the place of celebration

A. Grounds for Annulment explained:

1. Lack of parental consenta. 18<=x<21 w/o parental consentb. Ratified upon free cohabitation upon

reaching 21.c. TOLENTINO: parents whose consents

were wanting may ratify before 21; thisright can be waived; however, the CodeCommission believes that no suchratification can be made by the parent.

2. Insanitya. mental incapacity or insanity is a vice of

consent; insanity (1) of varying degrees,(2) curable being an illness, capable ofratification or convalidation, (3) has lucidintervals, (4) ground only for annulmentin many countries

b. can be ratified by cohabitation afterinsane is cured

c. mere mental weakness is not a groundfor annulment, but if found grave enoughmay amount to psychological incapacity.

d. intoxication, somnambulism where onehad no mental capacity to give consentis equivalent to insanity

e. must EXIST AT THE TIME of thecelebration of the marriage.

f. law presumes SANITY, burden of proofon party alleging insanity

3. Frauda. only those enumerated in Art. 46 FC

non-disclosure of previousCONVICTION by final judgment of acrime involving MORALTURPITUDE

concealment by wife at the time ofmarriage, that she was pregnant byanother man

concealment of STD regardless ofnature existing at time of marriage

concealment of drug addiction,habitual alcoholism, homosexuality,lesbianism existing at time ofmarriage


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b. No other misrepresentation or deceit ofCHARACTER, HEALTH, RANK,FORTUNE OR CHASTITY shallconstitute FRAUD

c. TOLENTINO: fraud must relate to factmaterial to the marital relation;PRINCIPLE OF ENUMERATION; noother cases of fraud can be ground forannulment; INCLUSIO UNIUS ESTEXCLUSIO ALTERIUS

d. Conviction of Crime: requisites are moral turpitude conviction

e. Concealment of Pregnancy fraud against very essence of

marriage; importance of procreationof children; an assault to theintegrity of the union by introducingALIEN BLOOD

If husband knew of pregnancy, themarriage cannot be annulled on theground of concealment. Three (3)months after the celebration of themarriage, a baby was born.Annulment was refused because ofadvanced stage of pregnancy,which must be patent to thehusband (Buccat v Mangonon)

If there was coitus before marriage& wife was pregnant at time ofmarriage although he may not bethe father, marriage cannot beannulled because man knows wifeis unchaste. Principle: one cannotgo to court with unclean hands.Prof. Balane: An isolated case andis not doctrinal.

f. Marriage cannot be annulled on groundthat wife concealed the fact that she hadbeen lewd & corrupt and had illegitimatechild (Shrady v Logan)

g. Maybe ratified upon cohabitation afterknowledge of fraud

Buccat v Buccat, 72 Phil. 19Wife gave birth 3 months after marriagecelebration. Husband filed forannulment. Ground: concealment ofnon-virginity. Court held that it wasunbelievable that wife could haveconcealed 6 months of pregnancy.

Aquino v Delizo, 109 Phil. 21The Supreme Court granted annulmentbecause the wife concealed the fact thatshe was 4 months pregnant during thetime of the marriage. It argued that sinceDelizo was “naturally plump,” Aquinocould hardly be expected to know, by

mere looking, whether or not she waspregnant at the time of the marriage.

Almelor v. RTC, (2008)It is the concealment of homosexuality,and not homosexuality per se, thatvitiates the consent of the innocentparty. Such concealment presupposesbad faith and intent to defraud the otherparty in giving consent to the marriage.

Corpuz v. Ochoterena, (2004)In a legal separation or annulment case,the prosecuting attorney must first ruleout collusion as a condition sine qua nonfor further proceedings. A certificationby the prosecutor that he was presentduring the hearing and even cross-examined the plaintiff does not suffice tocomply with the mandatory requirement.

STD: Art. 45 vs. Art. 46

Art. 45 STD Art. 46 STDGround for annulment The STD is a type of fraud

which is a ground forannulment

Does not have to beconcealed

Must be concealed

Must be serious andincurable

Need not be serious norincurable

The STD itself is theground for annulment

It is the concealment thatgives rise to the annulment

Effect of Cure to Fraud in Art. 46:Recovery or rehabilitation from STD,drug addiction, and habitual alcoholismwill NOT BAR ACTION for annulment;defect: not the disease, but the FRAUDwhich VITIATED CONSENT

4. Force, intimidation, undue influencea. FORCE must be one as to prevent party

from acting as a free agent; willdestroyed by fear/compulsion

b. INTIMIDATION must be one as tocompel the party by reasonable/well-grounded fear/evil imminent uponperson/properties

c. DEGREE OF INTIMIDATION: age, sex,condition of person borne in mind

d. A threat to enforce claim thru competentauthority, lawful or not, does not vitiateconsent

e. VIOLENCE or INTIMIDATION annulobligation even if by third person (Art.1336, CC)

f. UNDUE INFLUENCE when improperadvantage of his power over the will of


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another, depriving freedom of choice.(Art. 1337, CC) EXAMPLE: confidentiality, family

relations, suffering from mentalweakness, in financial distress

g. Threat to FILE A CASE OF immoralityon bar candidate where he does notmarry a girl who he has impregnateddoes not vitiate consent (Ruiz v Atienza)

h. Threat or intimidation as no to act asFREE AGENT; threatened of armeddemonstrations by brother isANNULLABLE (Tiongco v Matig-a)

i. Man rapes a girl, marries her & has nointention to live with the girl; marriage isannullable (People v Santiago)

j. Committee added “undue influence”,maybe compelled to enter out ofREVERENTIAL FEAR e.g., fear ofcausing distress to parents,grandparents, etc

5. Impotencya. should exist at the time of celebration

marriageb. should continue to the time of trying

annulment casec. should appear incurabled. should be unknown to the other partye. physical condition: sexual intercourse

with a person of the opposite sex isimpossible, not mere sterility

f. only potent spouse can file action(principle: one cannot come to court withunclean hands)

g. must exist at time of marriage, must becontinuous, must be incurable; thus ifremovable by operation, NOTANNULLABLE (Sarao v Guevarra, CA,40 O.G. 155 Supp. 263)

h. both spouses impotent, marriage cannotbe annulled because neither spouse isaggrieved

i. impotency due to old age, marriagecannot be annulled

j. POTENCY PRESUMED; party whoalleges impotency has burden of proof(Jimenez v Canizares)

k. Although potency is presumed, there isa doctrine in England called TRIENNIALCOHABITATION that if wife remainsvirgin after 3 yrs, husband presumedimpotent & has burden to proveotherwise (Tompkins v Tompkins)

l. REFUSAL of wife to be examined DOESNOT PRESUME impotency becauseFilipino women are inherently shy &bashful; TC must order physicalexamination because w/o proof of

impotency, she is presumed potent; toorder her to undergo physical examdoes not infringe constitutional rightsagainst self-incriminating (Jimenez vCanizares)

m. Villanueva vs. CA (2006): Absence ofcohabitation is not a ground forannulment.

n. NOTE: if wife continues to refuse toundergo physical exam, she can be heldfor CONTEMPT & ordered to beconfined in jail until she does so

o. RELATIVE IMPOTENCY: may now beinvoked because there are cases whereone is impotent with respect to hisspouse but not with other men orwomen.

p. EXAMPLE: penile erection to otherwomen possible; unusually large peniscan fit with abnormally large vagina

6. Sexually-transmissible disease serious andincurablea. should exist at the time of the marriageb. should be found seriousc. should appear to be incurabled. Should be unknown to other partye. reason: danger to the health of spouse

& offspring/sf. same as incurable impotencyg. Ratification or Convalidation of Voidable

Marriages: by cohabitation orprescription cannot be ratified orconvalidated: prior subsisting marriage; would

result in anomalous relationship vitiated by impotency remains as

long as afflicted vitiated by affliction of STD remains

as long as afflicted Affliction of STD is unknown to the

other spouse (BALANE) The other spouse must also be free

from a similar STD. (BALANE)h. 2 & 3 prescribe w/in 5 yrs by Art. 47(5)


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B. Who may File, Prescription, Ratification

Ground(Art. 45)

Who can file(Art. 47)

Prescription(Art. 47)

Ratification(Art. 45)

Lack of parental consent 1. Underage party 1. 5 years afterattaining 21.

Free cohabitation afterattaining age of 21.

2. Parent or guardian 2. Before child reaches21.

Insanity 1. Sane spouse withno knowledge of theother’s insanity2. Legal guardian ofinsane party

1. Any time before thedeath of either party

Free cohabitation ofinsane party afterinsane party comes toreason

3. Insane party 2. During lucid intervalor after regainingsanity, and beforedeath

Fraud Injured party(defrauded party)

Five years afterdiscovery of fraud

Free cohabitation afterhaving full knowledgeof fraud

Force, intimidation, undueinfluence

Injured party Five years afterdisappearance of forceor intimidation

Free cohabitation afterthe force has ceasedor disappeared

Impotence Healthy party Five years aftermarriage

Deemed ratified whenaction prescribes

STD Healthy party Five years aftermarriage

Deemed ratified whenaction prescribes

C. Marriages Not Subject toRatification/Convalidation

1. One spouse is incurably impotent (Art. 47 –prescription: 5 years)

2. One spouse has an incurable STD (Art. 47 –prescription: 5 years)

3. Sane spouse marries an insane spouse w/oknowledge of insanity

4. Prior subsisting marriage

II. Marriage When One Spouse Absent

A. Requirements for Subsequent Marriageto be Valid When Prior Spouse isAbsent (Art. 41, FC):

1. The prior spouse had been absent for 4consecutive years, or 2 years in casesunder Art. 391 CC.

2. The spouse present has a well-foundedbelief that the absent spouse was alreadydead.

3. The spouse present must institute asummary proceeding for the declarationof presumptive death of the absentee,without prejudice to the effect ofreappearance of the absent spouse.

__________

B. Effect of Reappearance of AbsentSpouse:

General Rule—The subsequent marriage remains valid.

Exception—It is automatically terminated by therecording of the affidavit of reappearance ofthe absent spouse.

Exception to the Exception—If there is a judgment annulling the previousmarriage or declaring it void ab initio. (Art.42, FC)

TOLENTINOStatus of Subsequent Marriage: generallyconsidered bigamous & void EXCEPT par. 2 ofthis article; good faith w/o falling under par. 2 willrender marriage VOID

When Voidable: must act in GOOD FAITH and1. absent spouse not heard from 7 consecutive

yrs2. although absent for less than 7 yrs,

generally considered dead3. presumed to be dead after 4 yrs when

occurrence of death in A391

Judicial Declaration Unnecessary: purpose ofvalidity of marriage, missing spouse need not bejudicially declared an absentee, enough required


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period elapsed from time the absentee was lastheard not from judicial declaration. After 7years, presumptive death arises w/o need forjudicial declaration

Prior Voidable Marriage: UNLESS finaljudgment or dissolved by death, subsequentmarriage NULL & VOID

Status of Subs Marriage: during subsistingmarriage, remarriage is BIGAMOUS & VOID.EXCEPT:1. absentee four years or for two under special

circumstances2. absence gives rise to presumption of death

w/c is required to be declared in SUMMARYPROCEEDING to enable to remarry

Period of Absence:1. GENERALLY, under CC, 7 years required

for declaration of presumptive death ForREMARRIAGE, reduced to 4 years by FC

2. EXCEPT in cases, CC 4 years & FC 2 yearsIFa. ON BOARD VESSEL lost at sea

voyage, airplaneb. ARMED FORCES in warc. DANGER OF DEATH under other

circumstances, existence not known

Good Faith: PERIOD of absence forPRESUMPTIVE DEATH is MANDATORY thuscannot be shortened by good faith and if bedone so will be VOID

Burden of Proof: two successive marriages,presumption on validity of 2

ndmarriage and

burden on party ATTACKING VALIDITY OF 2ND

MARR. PRESUMPTION in favor ofINNOCENCE prevails over PRESUMPTION ofCONTINUANCE OF LIFE OF 1

STSPOUSE &

MARITAL RELATIONS.

Meaning of “Absent” spouse1. Absent for 4 years having well-founded

belief of death

2. period of 4 years reduced to 2 years indanger of death in A391 CC where:a. on board vessel lost at sea or airplane

(includes all kinds of watercraft &aircraft)

b. armed forces in war(all military operations involving armedfighting; does not apply to nurses,doctors, reporters or cameramen)

c. danger of death

(includes earthquakes, fires,explosions, dangerous

expeditions, landslides, volcaniceruptions)

3. 2-year period counted from event of deathpresumed

4. Republic v. Bermudez-Lorino, (2005)The RTC rendered a decision declaring thepresumptive death of respondent’s absentspouse based on Art. 41, FC. The Republicappealed the decision to the CA. ApplyingArt. 247 FC, the SC ruled that the CA did nothave jurisdiction over the appeal becausesummary proceedings are immediately finaland executory, and therefore unappealable.

Difference between Absence in the CivilCode and Family Code—

Family Code Civil Code

As toperiod

4 years undernormalcircumstances; 2years under specialcircumstances

Absent for at least 7years; 4 yearsunder specialcircumstances

As toremarriage

In order to remarry,summaryproceeding isnecessary

Declaration ofpresumptive deathis not necessary

As to whocaninstitutethe action

Can be instituted bythe present spouse,any interestedparty, and thesubsequent spouse

The spousesthemselves

As toeffect onsubsequent marriage

Subsequentmarriage isautomaticallyterminated by therecording of anaffidavit ofreappearance of theabsent spouse

Uponreappearance,judicial proceedingis necessary todeclare marriagenull and void

As toground

Well founded beliefthat the absentspouse is dead

Generally believedto be dead

III. Effects of Pending Actions/Decree(Art. 49, FC)

1. The court shall provide for the support ofthe spouses,

2. The custody and support of the commonchildren, giving paramount consideration totheir moral and material welfare, their choiceof parent with whom they wish to remain.

3. The court shall also provide for visitationrights of other parent.


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Art. 363 (CC): No child under 7 years shall beseparated from the mother unless there is acompelling reason to do so.

Art. 48 (FC): To prevent collusion between theparties, fabrication or suppression of evidence,the prosecuting attorney or fiscal shall appear onbehalf of the State.

IV. Voidable v. Void Marriage

Voidable Marriage Void MarriageNature VALID until annulled by court INEXISTENT from the beginningConvalidation CAN be convalidated by

prescription or free cohabitationCANNOT be convalidated

Effect on property ACP exists unless anothersystem is instituted throughmarriage settlement

No Community Property, only Co-ownership

Legitimacy of children Children are LEGITIMATE ifconceived before decree ofannulment

General rule: Children areILLEGITIMATE (Art. 165, FC)Exception: In void marriages byreason of psychological incapacity(Art. 36) or non-partition ofproperties in a previous marriage(Art. 53), children are consideredLEGITIMATE

How to impugn Can only be attackedDIRECTLY (there must beAnnulment Decree)

May be attacked DIRECTLY orCOLLATERALLY, except forpurpose of remarriage (there mustbe Judicial Declaration of Nullity)

Effect of death of parties Can no longer be impugnedafter death of parties

May still be impugned after death ofparties

V. Voidable v. Legal Separation

Voidable Marriage Legal Separationground for annulmentat the time of marriage

causes after thecelebration of marriage

terminates maritalbond

does not terminatemarital bond

once final, cannot beset aside to restoremarital relation

marital relations canresume uponreconciliation

VI. Jurisdiction

Tamano v. Ortiz, (1998)—PD No. 1083 (Code of Muslim PersonalLaws of the Philippines) does not provide fora situation where the parties were marriedboth in civil and Muslim rites. Consequently,the shari'a courts are not vested with originaland exclusive jurisdiction when it comes tomarriages celebrated under both civil andMuslim laws. Hence, the Regional TrialCourts have jurisdiction over such cases.

CIVIL LAW REVIEWER Chapter VI. LEGAL SEPARATION, DIVORCE, and DE FACTO SEPARATION

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Chapter VI. Legal Separation, Divorceand De Facto Separation

I. GROUNDS FOR LEGAL SEPARATION

II. DEFENSES

III. WHEN TO FILE/TRY ACTIONSA. PRESCRIPTIONB. RECONCILIATION PERIODC. ATTEMPTS ON RECONCILIATIOND. CONFESSIONE. COLLUSION

IV. EFFECTS OF FILING PETITION FOR LEGALSEPARATION

V. EFFECTS OF DECREE FOR LEGALSEPARATION

VI. RECONCILIATIONA. HOW DONEB. EFFECTS OF RECONCILIATION

VII. DIVORCE

VIII.DE FACTO SEPARATION

I. Grounds for Legal Separation

(asked in ’75, ’76, ’79, ’80, ’82, ’89, ’94, ’96, ’97,’02, ’03, ’06, and ’07 bar exams)

(Art. 55, FC) [V A P I D H B I L A]Note: The grounds for legal separation areexclusive.

V 1. Repeated physical violence orgrossly abusive conduct directedagainst petitioner, a common child, or achild of the petitioner.

A 2. Physical violence or moral pressureto compel petitioner to change religiousor political affiliation.

P 3. Attempt of respondent to corrupt orinduce petitioner, a common child, orchild of petitioner, to engage inprostitution or connivance in suchcorruption or inducement.

I 4. Final judgment sentencingrespondent to imprisonment of morethan 6 years, even if pardoned(executive pardon, not pardon fromoffended party).

D 5. Drug addiction or habitual alcoholismof respondent.a. When it existed from the time of

celebration, and concealed frompetitioner, can be a ground forannulment of marriage.

b. When it occurred only after themarriage, it is only a ground for

legal separation, whetherconcealed or not.

c. Drug addiction or habitualalcoholism may be supervening.

H 6. Lesbianism or homosexuality ofrespondent. Same as rules on drug addiction

B 7. Contracting by respondent of asubsequent bigamous marriage,whether in the Philippines of abroad.

I 8. Sexual infidelity or perversion.a. No conviction is required.

L 9. Attempt on the life of petitioner byrespondent.a. There is no need for criminal

conviction. Only a preponderanceof evidence is required.

A 10. Abandonment of petitioner byrespondent without justifiable cause formore than one year.

People v. Zapata and Bondoc, 88 Phil 688(1951)—Adultery is not a continuing crime, but isconsummated and exhausted at the momentof carnal union. As such, every sexual act isa ground for legal separation.

Gandioco v Peñaranda, 155 SCRA 725(1989)—In sexual infidelity as a ground for legalseparation, there is no need for priorconviction for concubinage, because legalseparation only requires a preponderance ofevidence, as opposed to proof beyondreasonable doubt required in concubinage.

Lapuz Sy v. Eufemio, 43 SCRA 177(1972)—The death of one party in a legal separationcase abates the action. This is because thedeath of either spouse automaticallydissolves the marriage. An action for legalseparation is also purely personal betweenthe spouses.

Dela Cruz. v. Dela Cruz 22 SCRA 333—Abandonment is not mere physicalestrangement but also financial and moraldesertion. There must be an absolutecessation of marital relations, duties, andrights with the intention of perpetualseparation.


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II. Defenses

Grounds for denying legal separation (Art.56, FC) [4CMPRD]—1. Condonation by aggrieved party2. Consent by aggrieved party to the

commission of the offense3. Connivance between parties in the

commission of the offense4. Mutual guilt or Recrimination between

spouses in the commission of any groundfor legal separation

5. Collusion between parties to obtain decreeof legal separation

6. Prescription of action for legal separation(Art. 57: 5 years from occurrence of thecause of action)

7. Reconciliation of parties during pendencyof action (Art. 66 par.1)

8. Death of either party during pendency ofaction (Lapuz-Sy v Eufemio, supra)

Bugayong v. Ginez, 100 Phil. 616 (1956) —Continued cohabitation despite fullknowledge of the spouse’s infidelityconstitutes implied condonation.

III. When to File/Try Actions

A. Prescription

Action prescribes after five years from theoccurrence of the cause (Art. 57, FC)

B. Reconciliation Period

Action cannot be tried before six months haveelapsed from the filing of the petition (Art. 58.FC)

Note: without prejudice to judicial determinationof custody of children, alimony, and supportpendente lite

C. Attempts on Reconciliation

Action cannot be tried unless the court hasattempted to reconcile the spouses, anddetermined that despite such efforts,reconciliation is highly improbable (Art. 59, FC)

D. Confession

No decree of legal separation shall be basedupon a stipulation of facts or a confession ofjudgment (Art. 60, par. 1. FC)

Note: Art. 60 par. 1 applies only if the judgmentwas based solely on the stipulation of facts.Thus, if other grounds were used, Art. 60par. 1 is not applicable. (BALANE)

E. Collusion

The court shall assign the prosecuting attorneyor fiscal to make sure that there is no collusionbetween the parties, and that evidence is notfabricated or suppressed (Art. 60, par. 2, FC)

IV. Effects of Filing Petition for LegalSeparation (LAC)

1. The spouses are entitled to Live separately,but the marital bond shall not be severed.(Art. 61, par. 1. FC).

2. Administration of Community or ConjugalProperty – If there is no written agreementbetween the parties, the court shalldesignate one of them or a third person toadminister the ACP or CPG. (Art. 61, par. 2,FC)

3. Custody of children – The court shall givecustody of children to one of them, if there isno written agreement between the spouses.It shall also provide for visitation rights of theother spouse. (Art. 62, cf. Art. 49. FC)

V. Effects of Decree for LegalSeparation (LACIDIMS)

1. The spouses can Live separately (Art. 63.FC)

2. The ACP or CPG shall be dissolved andliquidated, and the share of the guiltyspouse shall be forfeited in favor thecommon children, previous children, orinnocent spouse, in that order (Art. 63. cf.Art. 43, par. 2).

3. Custody of the minor children shall beawarded to the innocent spouse (Art. 63.FC, cf. Art 213)

4. Guilty spouse shall be disqualified fromInheriting from innocent spouse by intestatesuccession. The provisions in favor of theguilty party in the will of the innocent spouseshall also be revoked by operation of law.(Art. 63, FC)

5. Donations in favor of the guilty spouse maybe revoked (Art. 64. FC)

6. Innocent spouse may also revokedesignation of guilty spouse as beneficiary


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in an Insurance policy, even if suchstipulations are irrevocable (Art. 64. FC, cf.PD 612, sec. 11).

7. Obligation for Mutual support ceases, butthe court may order the guilty spouse tosupport the innocent spouse. (Art. 198, FC)

8. The wife shall continue to use the Surnameof the husband even after the decree forlegal separation. (Art. 372, CC)

VI. Reconciliation

A. How Done

Should the spouses reconcile, they should file acorresponding joint manifestation under oathof such reconciliation. (Art. 65, FC)

B. Effects of Reconciliation

1. Proceedings for legal separation shall beterminated at whatever stage. (Art. 66, FC)

2. If there is a final decree of legal separation,it shall be set aside. (Art. 66, FC)

3. The separation of property and forfeiture ofshare of guilty spouse shall subsist, unlessthe spouses agree to revive their formerproperty regime or to institute anotherproperty regime. ( Art. 66 cf. Art. 67, FC)

4. Joint custody of children is restored.5. The right to intestate succession by guilty

spouse from innocent spouse is restored.The right to testamentary successiondepends on the will of the innocent spouse.

VII.Divorce

(asked in ’87, ’90, ’96, ’97, ’99, ’02, ’06 barexams)

General Rule—Divorce is not allowed in the Philippines andeven for Filipinos abroad.

Exception—Foreign and Muslim divorces.

Foreign Divorces (asked in ’09 bar exam)—

Art. 15, Civil Code. Laws relating to family rights andduties, or to the status, condition and legal capacity ofthe persons are binding upon citizens of thePhilippines, even though living abroad.

The Nationality Theory of Jurisdiction /Nationality Principle applies to personalrights.

Effect: Filipinos living abroad could notobtain a valid divorce even in countrieswhere divorce is legally permissible.

Art. 26(2), Civil Code. Where a marriage between aFilipino citizen and a foreigner is validly celebratedand a divorce is thereafter validly obtained abroad bythe alien spouse capacitating him or her to remarry,the Filipino spouse shall have capacity to remarryunder Philippines law.

Valid Foreign Divorcea. valid marriage between a Filipino

citizen and a foreignerb. divorce is validly obtained by the alien

spousec. alien spouse becomes capacitated to

remarryResult: the Filipino spouse shall likewisehave the capacity to remarry underPhilippine law

Van Dorn v. Romillo, 139 SCRA 139 (1985)Before the effectivity of the FC, the SCapplied Article 15 of the CC, from theforeigner’s perspective, to decree the validityof a divorce with respect to the Filipinospouse to prevent the unjust result to theFilipino spouse as the alien spouse isalready capacitated to remarry.

Quita v. Dandan, 300 SCRA 406 (1998)The time of obtaining foreign citizenship isnecessary to determine the validity ofdivorce obtained by the spouse who appliedfor foreign citizenship. It must beascertained that when that spouse obtainedthe divorce, he/she was no longer bound byPhilippine domestic law

Llorente v. CA, 345 SCRA 592 (2000)A 2

ndmarriage obtained by a Filipino who is

already a US citizen at the time of thedivorce and the remarriage makes the 2

nd

marriage completely valid.

Garcia v. Recio, 366 SCRA 437 (2001)Philippine courts do not take cognizance offoreign laws. The foreign law grantingdivorce as well as the nature of the divorcegranted (w/n it was absolute) must beproven.

Republic vs. Orbecido, (2005)The period of reckoning to determinecitizenship for the purpose of the applicationof Art.26 par.2 is the time of securing adivorce.


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Muslim Divorces—Presidential Decree 1083 (Code of MuslimPersonal Laws)

7 forms of Muslim divorces (Art. 45) (TF-KILTZ)a. talaq- repudiation of the wife by the

husbandb. ila- vow of continence by the husbandc. zihar- injurious assimilation of the wife

by the husbandd. li’an- acts of imprecatione. khul’- redemption by the wifef. tafwid- exercise by the wife of the

delegated right to repudiateg. faskh- judicial decree

Grounds for faskh (Art. 52)a. The marriage bond shall be severed and

the spouses may contract anothermarriage

b. The spouses shall lose their mutualrights of inheritance

c. The custody of children shall bedetermined in accordance with Article 78of the code

d. The wife shall be entitled to recover fromthe husband her whole dower in casethe talaq has been affected after theconsummation of the marriage, or one-half thereof if effected before itsconsummation

e. The husband shall not be dischargedfrom his obligation to give support inaccordance with Article 67

f. The conjugal partnership, if stipulated inthe marriage settlements, shall bedissolved and liquidated.

Yasin v. Sharia District Ct, 241 SCRA 606(1995)A Muslim divorce dissolves the marital bondand therefore a woman may use her maidenname and surname without any specialproceeding in court.

VIII. De Facto Separation

Rules applicable to De Facto Separation—

Art. 100, Family Code. De Facto Separation shallnot affect the regime of absolute community,except that:

1. The spouse who abandons the conjugal homewithout just cause is not entitled to support,

2. Judicial authorization may be obtained when theconsent of one spouse is required by law for anytransaction of the other (subject to Art. 239), and

3. The separate property of both spouses shall besolidarily liable for the support of the family in theabsence of sufficient community property. The spousepresent shall be given judicial authority to administeror encumber any specific separate property of theabsent spouse and use the fruits thereof to satisfy thelatter’s share.

Art. 127. Same rules as above, but for ConjugalPartnership of Gains

Procedural Rules for Art. 100/127, par. 2:1. In the case of Art 100/127 par. 2, a verified petitionmay be filed in court, attaching the proposed deed ordescription of the transaction and the reason why theother spouse’s consent has not been secured. (Art.239)

2. Court shall issue a notice for the initial conferenceand shall notify the other spouse to show cause whypetition should not be granted. (Art. 242)

3. If the petition is not resolved at the initialconference, then the court shall decide in a summaryhearing. (Art. 246)

4. Its decision shall be final and executory. (Art. 247)

Perez v. CA, 255 SCRA 661 (1996)Applicability of the tender years presumptionof Art. 213 (No child under 7 years of ageshall be separated from the mother) to defacto separation, save for compellingreasons such as neglect, abandonment,unemployment and immorality, habitualdrunkenness, drug addiction, maltreatmentof child, insanity, communicable disease.


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Chapter VII. Rights and ObligationsBetween Husband and Wife

(asked in ’75, and ’84 bar exams)

I. OBLIGATION OF SPOUSESII. RIGHTS OF SPOUSESIII. USE OF SURNAME

I. Obligations of Spouses (Arts. 68-71,FC)

Live together (cohabitation – Art. 68) Exemption: One spouse living abroad

or there are valid and compellingreasons (Art. 69, Par 2)

Exemption to Exemption: Incompatibilitywith the solidarity of the family (Art. 69,Par. 2)

Observe mutual love, respect, and fidelityRender mutual help and support (Art. 68)Fix the family domicile. In case of disagreement, the court shall

decide. (Art. 69, Par. 1)Jointly support the family. (Art. 70) From the conjugal property/income of

the fruits of their separate properties In case of absence/insufficiency, from

their separate properties (liable inproportion to their properties)

Manage the household. (Art. 71)

II. Rights of Spouses (Arts. 72-73, FC)

In case the other spouse neglects his or herduties or commit acts which tend to bringdanger, dishonor or injury to the family, theaggrieved party may apply the court forrelief. (Art. 72) Injury contemplated is physical, moral,

emotional, or psychological, notfinancial.

Either spouse may exercise any legitimateprofession, without need for consent of theother. The other spouse may only object on

valid, serious, and moral grounds. In case of disagreement, the Court shall

decide whethero the objection is proper, ando benefit has accrued to the family

before OR after the objection.If BEFORE, enforce resulting obligationagainst the community property.obligation against the separate propertyof the spouse who has not obtained

consent (Art. 73 [Omission corrected onNov. 8, 1968])

III. Use of Surname

Married Women: (Art. 370, CC)A married woman may use:a. Her maiden first name and surname and

add her husband's surname, orb. Her maiden first name and her

husband's surname orc. Her husband's full name, but prefixing a

word indicating that she is his wife, suchas “Mrs.”

Yasin v. Shari’a District Court, (1995)—The woman only has an option and nota duty to use the surname of herhusband, as provided for in Art. 370,CC. Moreover, when her husband dies,the woman can revert to her old namewithout need for judicial declaration.

WidowsA widow may use the deceased husband’ssurname as though he were still living. (Art.373, CC)

MistressesThe Supreme Court allowed the mistress touse her live-in partner’s name, sinceeveryone already knew that she was amistress, so as to avoid confusion. (Legamiav. IAC (1984))

DivorceesThe Supreme Court allowed the mistress touse her live-in partner’s name, sinceeveryone already knew that she was amistress, so as to avoid confusion.(Tolentino v. CA (1988))

CIVIL LAW REVIEWER Chapter VIII. PROPERTY RELATIONS BETWEEN SPOUSES

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Chapter VIII. Property Relations BetweenSpouses

I. GENERAL PROVISIONSII. DONATIONS BY REASON OF MARRIAGEIII. ACP

A. IN GENERALB. WHAT CONSTITUTES COMMUNITY

PROPERTYC. CHARGES UPON THE ACPD. ADMINISTRATION, OWNERSHIP AND

DISPOSITION OF THE ACPE. DISSOLUTION OF THE ACPF. LIQUIDATION OF ASSETS AND

LIABILITIESIV. CPG

A. WHERE IT APPLIESB. HUSBAND AND WIFE PLACE IN

COMMON FUNDC. EXCLUSIVE PROPERTIES OF THE

SPOUSESD. WHAT CONSTITUTES THE CPGE. RULESF. CHARGES UPON CPGG. ADMINISTRATION OF THE CPGH. DISSOLUTION OF THE CPGI. LIQUIDATION OF ASSETS AND

LIABILITIESV. SEPARATION OF PROPERTIES DURING

MARRIAGEVI. PROPERTY REGIME OF UNIONS WITHOUT

MARRIAGE

I. General Provisions

(asked in ’76, ’86, ’91, ’92, ’94, ’95, ’96, ’97 and’05 bar exams)

Order to be followed (Arts. 74, 75, FC)—1. Marriage settlements before marriage –

spouses can agree to whatever regime theywant (ACP, CPG, complete separation orany other property regime to be agreedupon prior to the celebration of themarriage).

2. Family Code – If there are no marriagesettlements, or if the regime agreed upon isvoid, the Absolute Community of Propertywill be followed

3. Local Customs

General Rule (Art. 80, FC)—Property relations between Filipino spouses aregoverned by Philippine laws, regardless of theplace of marriage and their residence(Nationality Rule- Art 15, NCC).

Hence—The rule that ACP is the default mode ofproperty relations absent any marriage

settlement applies to all Filipinos, regardless ofthe place of the marriage and their residence.

Exceptions—1. Where both spouses are aliens2. As to the extrinsic validity of contracts3. Contrary stipulation

Requirements for Marriage Settlements (Art.77, FC) (WiSER)—1. Must be in writing (public or private)2. Signed by the parties3. Executed before the celebration of the

marriage4. Must be registered in local civil registry – to

affect third persons (If not registered, will notprejudice third persons, ACP will apply)

5. If party needs parental consent (age 18-21),parent/guardian must be a party to thesettlement (Art. 78)

6. If party is under civil interdiction or otherdisability (not including insanity), courtappointed guardian must be a party (Art. 79)

General Rule: All modifications to themarriage settlement must be madebefore the marriage is celebrated. (Art.76)

Exceptions: Legal Separation (Art. 63 (2), FC)

o The property regime isdissolved.

Revival of the former propertyregime upon reconciliation if thespouses agree (Art. 66 (2))

A spouse may petition the court for:o Receivershipo Judicial separation of property,

oro The authority to be the sole

administrator of the conjugalpartnership If the other spouse

abandons the other withoutjust cause or fails to complywith his or her obligations tothe family. (Art. 128)

Judicial Dissolution (Arts. 135 and136)

Furthermore: Marriage settlements areconsidered ACCESSORY to themarriage Stipulations in consideration of

future marriage and donations willbe void if the marriage does NOTtake place. (Art. 81, FC)


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II. Donations by Reason of Marriage

Requisites of donations propter nuptias: (Art.82, FC)—a) Made before the celebration of marriage.b) Made in consideration of the marriage.c) In favor of one or both spouses.d) The donor must be one of the betrothed or

any third person

Donations excluded—1. Ordinary wedding gifts given after the

celebration of the marriage2. Donations in favor of future spouses made

before marriage but not in considerationthereof

3. Donations made in favor of persons otherthan the spouses even if founded on theintended marriage

Who may donate—1. Spouses to each other2. Parents of one or both spouses3. 3

rdpersons to either or both spouses

Moreover, in donations propter nuptias, themarriage is really a consideration but not inthe sense of giving birth to the obligation.There can be a valid donation even if themarriage never took place. However, theabsence of marriage is a ground for therevocation of the donation. (Solis v. Barroso,(1928))

Donations propter nuptias are withoutonerous consideration, marriage beingmerely the occasion or motive for thedonation, not its cause. Being liberalities,they remain subject to reduction forinofficiousness upon the donor’s death, ifthey should infringe the legitime of a forcedheir. (Mateo v. Lagua, (1969))

Rules to Follow in Donation PropterNuptias—1. Family Code provisions (Arts. 82-87)2. Ordinary Donation provisions (Art. 83, FC;

Title III of Book III of the NCC)3. Provisions on testamentary succession and

the formalities of wills for donations on futureproperty (Art. 84, par. 2)

Distinguished from Ordinary Donations—

DONATIONS PROPTERNUPTIAS

ORDINARYDONATIONS

Does not require expressacceptance

Express acceptancenecessary

DONATIONS PROPTERNUPTIAS

ORDINARYDONATIONS

May be made by minors(Art. 78)

Cannot be made byminors

May include futureproperty

Cannot include futureproperty

If present property isdonated and property isnot absolute community,limited to 1/5 (Art. 84)

No limit to donation ofpresent property providedlegitimes are notimpaired

Grounds for revocation -In Art. 86

Grounds for revocation -in donation laws

Rules—1. Before Marriage

General Rule:Future spouses cannot donate to eachother more than 1/5 of their presentproperty (excess shall be consideredvoid) (Art. 84, FC)

Exception:If they are governed by ACP

2. During MarriageGeneral Rule:

Spouses cannot donate to each other,directly or indirectly (donations made byspouses to each other during themarriage are void) (Art. 87, FC)

Exception:Moderate gifts on the occasion of anyfamily rejoicing.

Matabuena v Cervantes, (1971)The donation between common-lawspouses falls within the provision prohibitingdonations between spouses duringmarriage.

Harding v. Commercial Union, (1918)The prohibition on donations can only beassailed by persons who bear such relationto the parties or the property itself, that theirrights are being interfered with. Here, theinsurance company of the donated carcannot assail the validity of the donation. Inaddition, the codal exception of “moderategifts” depends on the income class of thespouses and a car could be considered a“moderate gift” that does not infringe theprohibition of donation between spouses.

Sumbad v. CA, (1999)The donation made by a man to a womanwas held valid because no proof was shownthat they were still living in a common-lawrelationship at the time of the donation.

Donation of Property Subject toEncumbrances—


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1. Are considered valid.

2. In case of foreclosure

a. if property value < obligation, doneeshall not be liable

b. if property value > obligation, doneeshall be entitled to the excess (Art. 85,FC)

Grounds for Revocation of Donation PropterNuptias (Art. 86, FC) (CAVaLRI)—1. If the marriage is not celebrated or judicially

declared void ab initio, except donationsmade in settlements.

2. When the marriage takes place without theconsent of the parents or guardians, asrequired by law.

3. When the marriage is annulled, and thedonee acted in bad faith.

4. Upon legal separation, if the donee is theguilty spouse.

5. If there is a resolutory condition, and it is notcomplied with.

6. When donee has committed an act ofingratitude: (Art. 765, CC) (PCS)a. An offense against person or property of

donor, or his wife or children underparental authority.

b. An imputation to the donor of anycriminal offense, or any act involvingmoral turpitude, even if proven, unlessthe crime is committed against thedonee, his wife or children under hisauthority.

c. Refusing to support the donor, if he/sheis legally required to do so.

*The action for filing for revocation of donationprescribes.

III. Absolute Community of Property

A. In General

(Asked in ’98 and ’07 bar exams)

When it commences—At the precise moment of the celebration of themarriage (Art. 88, FC). However, if the marriageis celebrated before the Family Code took effect(1988), the default property regime is theConjugal Partnership of Gains (CPG).

Waiver of Rights (Art. 89, FC)— General Rule: NOT ALLOWED Exceptions

a. When there is judicial separation ofproperty

b. When there is legal separation

c. When the marriage is dissolved (bydeath of one of the spouses)

d. When the marriage is annulled

Supplementary Rules to Follow—Co-ownership (Art. 90, FC)

B. What Constitutes Community Property

What it consists—All the property owned by the spouses at thetime of the celebration of the marriage oracquired thereafter. (Art. 91, FC)

Under the ACP, spouses cannot exclude specificproperties from the regime.

What is Excluded (BGM) (Art. 92, FC)—1. Properties acquired by a gratuitous title, i.e.

donation, inheritance by testate andintestate succession, including the fruits ofsuch properties

EXCEPT: When it was expressly providedby the donor or testator that the propertyshall form part of the ACP

2. Properties for personal use

EXCEPT: Jewelry - they form part of theACP

3. Properties acquired before the marriage, forthose with legitimate descendants with aformer marriage (to protect rights of childrenby a former marriage)

Presumption—All properties acquired during the marriage formpart of the ACP, unless it be proven that they areexcluded. (Art. 93, FC)

C. Charges Upon the ACP (Art. 94, FC) (4debts, 2 taxes, 2 expenses, support,donation)

(asked in ’76 bar exam)

1. Support Spouses

Even if not living together exceptwhen a spouse leaves conjugalhome without just cause

Even during pendency of action forlegal separation or annulment ofmarriage

Common children Legitimate children of previous marriage


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Illegitimate children - follow theprovisions on Support and (9)

2. Debts and Obligations Contracted DuringMarriage Either by both spouses or one of them,

with the consent of the other. In (2) and (3), creditors need not prove

that the debts benefited the family.3. Debts Contracted by one Spouse Without

Consent of the other ACP liable only to the extent that the

debt benefited the family.4. Tax, Liens, Repairs on Community Property

Includes both major and minor repairs5. Taxes and Expenses for Mere preservation

of Separate properties Applies only to separate properties by

either spouse being used by the family,not those that do not benefit the family.

Expenses limited to minor repairs.6. Expenses for professional, Vocational, or

Self-Improvement Course of Spouses7. Ante-nuptial Debts that Benefited the Family

If the ante-nuptial debt did not benefitthe family, applicable rule is (9).

8. Donations by Both Spouses to CommonLegitimate Children Purpose: professional, vocational

courses or activities for self-improvement

9. Ante-Nuptial Debts not under (7), Support ofIllegitimate Children, Liabilities of EitherSpouse Arising from Crime or Quasi-Delict Only ff the debtor-spouse has no

exclusive property or his or her propertyis insufficient.

The payments by the ACP are deemedadvances to be deducted from the shareof the guilty spouse upon the liquidationof the absolute community.

10. Expenses of Litigation between Spouses Except when suit is groundless

If community property is insufficient except in(9), spouses are solidarily liable for the unpaidbalance from their separate properties.

Gambling losses shall be borne by the losingspouse’s separate property, winnings shallaccrue to the community property. (Art. 95, FC)

D. Administration, Ownership andDisposition of ACP

Administration of property—Belongs to both spouses jointly. If they disagreethe husband’s decision prevails. However, thewife has five years from the date of the decisionto go to court for recourse. Otherwise, it is

presumed that she agreed with the husband’sdecision. (Art. 96, FC)

Except—When the other spouse is incapacitated, orunable to participate in the administration (e.g.when abroad). The powers refer solely toadministration; disposition or encumbrancerequires consent of the absent or incapacitatedspouse.

Homeowners Savings & Loan Bank v. Dailo(2005)—

In the absence of (court) authority or writtenconsent of the other spouse, any dispositionor encumbrance of the conjugal propertyshall be void.

Disposition of Property—Either spouse may, through a will, disposehis/her interest in the community property. (Art.97, FC) However, the will should refer only tohis/her own share in the community property

Donation of Property— General Rule

Donation of one spouse without the consentof the other is not allowed (Art. 98, FC)

Exceptionsa. Moderate donations to charity due to

family rejoicing or distress;b. Moderate gifts by each spouse to the

other due to family rejoicing. (Note:What’s moderate depends on the socio-economic status of the family)

E. Dissolution of ACP

ACP terminates upon (Art. 99, FC)—1. Death of either spouse – follow rules in Art.

1032. Legal Separation – follow rules in Arts. 63

and 643. Annulment or judicial declaration of nullity –

follow rules in Arts. 50 to 524. Judicial separation of property during

marriage – follow rules in Arts. 134 to 138

Rules on De Facto Separation (ART. 100,FC)—De facto separation does not affect the ACP;EXCEPT that:1. Spouse who leaves the conjugal home

without just cause shall not be entitled tosupport. He/She, however, is still required tosupport the other spouse and the family.

2. If consent is necessary for transaction but iswithheld or otherwise unobtainable,


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authorization may be obtained from thecourt.

3. Support for family will be taken from theACP.

4. If ACP is insufficient, spouses shall besolidarily liable.

5. If it is necessary to administer or encumberseparate property of spouse who left,spouse present may ask for judicial authorityto do this.

6. If ACP is not enough and one spouse hasno separate property, spouse who hasproperty is liable for support, according toprovisions on support.

Abandonment (Art. 101, FC)—Present spouse may petition the court for:1. receivership;2. judicial separation of property; or3. authority to be the sole administrator of the

absolute community, subject toprecautionary conditions that the court mayimpose.

Spouse is prima facie considered to haveabandoned the other spouse and the family if:1. he/she has left for a period of three months,2. he/she has failed to inform his/her

whereabouts for a period of three months.

F. Liquidation of Assets and Liabilities

(asked in ’89 and ’99)

Process of liquidation of ACP (Art. 102, FC)—1. Inventory of assets of ACP and of spouses,

with market values.

2. Obligations are paid with communityproperty, and separate obligations notcharged to ACP paid by respective assets ofspouses.a. If obligations exceed the assets of the

ACP, nothing is divided. Creditors cango after the separate properties of thespouses, which are solidarily liable forthe deficiency.

3. Delivery of whatever remains in theirexclusive property.

4. Balance, or net remainder is divided equallybetween the spouses, irrespective of howmuch each brought into the community.

5. If personal obligations of a spouse exceedhis/her separate property, creditor can goafter the share of the spouse on the netremainder of the ACP, without prejudice to

the provisions of law on forfeitures anddelivery of presumptive legitimes.

6. After covering all community obligations andobligations of spouses, balance of separateproperties shall be delivered to respectivespouses or their heirs, and they will alsodivide into two equal shares whatever is leftof the community assets, without prejudiceto the provisions of law on forfeitures anddelivery of presumptive legitimes.

Rules in Case of Termination of Marriage byDeath of One of the Spouses (Art. 103, FC)—1. The community property shall be liquidated

in the same proceeding for the settlement ofthe estate of the deceased spouse.

2. If no such judicial settlement proceeding isinstituted, surviving spouse shall liquidatethe community property either judicially orextra-judicially within one year from thedeath of the deceased spouse.a. If no liquidation is made within the

period, any disposition or encumbranceinvolving community property of theterminated marriage shall be void.

b. Non-compliance with liquidationprocedures would mean that asubsequently contracted marriage willfollow a regime of complete separationof property.

Procedure for Liquidation of CommunityProperties of Two Marriages (Art. 104, FC)—1. Determine the capital, fruits, and income of

each community upon such proof as may beconsidered according to the rules ofevidence.

2. In case of doubt as to which community theexisting properties belong, they shall bedivided between two communities inproportion to the capital and duration ofeach.

Onas v. Javillo, (1934)Javillo contracted 2 marriages. SC ruled thateach absolute community should beconsidered owner of the parcels of landacquired during its existence. Deathdiscontinues ACP.

Vda. De Delizo v. Delizo, (1976In case of doubt as to which community theexisting properties belong, the same shall bedivided between the different communities inproportion to the capital and duration ofeach.


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IV. Conjugal Partnership of Gains

(Asked in ’79 bar exam)

CPG Ordinary partnership1. Existence Exists with the mere fact of marriage Comes into existence according to

agreement between parties2. Purpose,

duration, andrules

Predetermined by legislator, the lawfixing its conditions.

Determined by will of partners.

3. Profits Divided equally between spouses,irrespective of the amount of capital thatthey bring into marriage

Depends upon respective capitals ofpartners, or upon their agreement

4. Equality No equality between spouses in control,management, and disposition, becausethe law grants the husband somepredominance.

General rule is that all partners haveequal rights in administration,management, and control ofpartnership.

5. Personality No juridical personality Considered a juridical person6. Commencement At precise moment of celebration of

marriageAt the time agreed upon by partners

7. Regulation By law By agreement of parties; subsidiarily,by law

8. Purpose Not particularly for profit For profit9. Causes for

dissolutionDeath, legal separation, annulment,JDN, judicial separation of property

Death, insolvency, civil interdiction,termination of term, express will of anypartner, etc. (Arts 1830-1931)

10. Effect of deathof a partner

Dissolution of partnership Surviving partners may choose tocontinue partnership

11. Division ofproperties

Only upon dissolution There can be division of profits withoutdissolution

12. Management Joint; in case of disagreement, thehusband’s decision shall prevail, wifehas recourse to courts

Same as individual partners, exceptwhen one or more partners designatedas managers.

CPG ACP1. Property acquired

before marriage.Each spouse retains his/her property;only fruits part of conjugal property

Properties become part of communityproperty

2. Property acquiredduring marriage

Part of conjugal property Becomes community property

3. Upon dissolutionof marriage

Separate properties are returned; netprofits divided between spouses orheirs

Net remainder of ACP divided equallybetween spouses or heirs

4. Basis Capital and properties of spouses keptseparate and distinct from benefits;insurmountable obstacle topresumption of solidarity

Mutual trust and confidence betweenspouses; fosters oneness of spouses

5. Liquidation Exclusive properties will have to beidentified and returned, andsometimes, identification is difficult.

Easier to liquidate because netremainder of community properties aresimply divided between spouses orheirs.

A. Where It Applies (Art. 105)

1. For marriages before the implementation ofthe Family Code.

2. For marriages after the Family Code, ifagreed to by the parties through a marriagesettlement.

Note: CPG begins at the precise moment themarriage celebrated (Art 107)


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B. Husband and Wife Place in CommonFund (PIPF-EC) (Art. 106)

1. The proceeds, products, fruits, and incomeof their separate properties;

2. Everything acquired by them within marriagethrough their own efforts;

3. Everything acquired by them by chance

C. Exclusive Properties of the Spouses

1. Art 109 (OGRE)

Directlyacquired ororiginallyexclusive

(1) Property brought into marriage byeach spouse as his/her own(2) Property acquired by either spouseduring the marriage by gratuitous title

Propertybysubstitution

(3) Property acquired by right ofredemption, by barter, or by exchangewith property belonging to either spouse(4) Property purchased with exclusivemoney of either spouse

2. Other Separate Property: (CSI)a. Collection of credits belonging to one

spouse exclusively but the interestsshall belong to the CPG (Art 119)

b. Sale of separate property of a spousec. Indemnity paid in case of expropriation

of separate property or under aninsurance policy covering separateproperty.

Spouses retain the ownership,possession, administration andenjoyment of their exclusive properties(Art 110, par 1.)

Possession by one spouse of theseparate property the other spouse doesnot affect ownership

Transfer of administration of a spouse’sexclusive property to the other spousemust be made in a public instrumentrecorded in the registry of property ofthe place where the property is located(Art 110, FC) but ownership is notconferred to the administrator – spouse(Rodriguez v. de la Cruz, 1907).

D. What Constitutes the CPG (Art. 117)

(asked ’75, ’76, ’78, ‘85’, and ’87 bar exams)(OLF-N-HOLC)

1. Acquired by Onerous Title during theMarriage at Expense of Common Fund

2. Acquired through the Labor, Industry, Work,Profession of Either or both Spouses

3. Fruits from common property and netfruits of exclusive property of each spouse

4. Share of either spouse in hidden treasure,whether as finder or owner of propertywhere treasure is found

5. Acquired through occupation such asfishing or hunting

6. Livestock existing at dissolution ofpartnership in excess of what is brought byeither spouse to the marriage

7. Acquired by chance, such as winningsfrom gambling or betting

Moral damages arising from a contract paidfrom CPG are also awarded to the CPG(Zulueta v. Pan-Am, 1973).

Loans contracted during the marriage areconjugal, and so is any property acquiredtherefrom (Mendoza v. Reyes, 1983).

E. Rules

1. presumption that property is conjugal: allproperty acquired during the marriage,whether made, contracted, or registered inthe name of one spouse, are presumedconjugal unless the contrary is proven (Art.116, FC). As a condition sine qua non for the

operation of the presumption in favor ofthe conjugal partnership the party whoinvokes the presumption must first provethat the property was acquired duringthe marriage. (Acabal v. Acabal, 2005)

"X married to Y" as it appears in landtitles is not conclusive of the conjugalstatus of the property (Jocson v. CA,1989).

Exclusive property brought into asecond marriage remains exclusiveproperty of that spouse under CPGregime; ACP is not retroactive formarriages celebrated under the CivilCode (Francisco v. CA, 1998).

2. property purchased by installment (paidpartly with conjugal funds and partly withexclusive funds) – Art. 118: conjugal property if full ownership was

vested during the marriage – CPG shallreimburse the owner-spouse

exclusive property if full ownership wasvested before the marriage – owner-spouse shall reimburse the CPG

Exclusive property brought into a secondmarriage remains exclusive property underCPG regime. ACP is not retroactive formarriages celebrated under the Civil Code(Castillo v. Pasco, 1964).

Even if the installment is completed after themarriage, the property is exclusive if


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ownership was vested in one spouse beforethe marriage (Lorenzo v. Nicolas, 1952).

3. rules on improvement on exclusiveproperty: (Art. 120) accession - if original value is greater

than new value (value of land + value ofimprovements + net change in value),then land remains exclusive property ofthe owner-spouse; subject toreimbursement of the cost ofimprovement

reverse accession - if original value isless than new value, then land becomesconjugal property; subject to thereimbursement of the value of theproperty of the owner-spouse at thedissolution of the CPG.

Change of ownership takes place at the timewhen the improvements are made(Calimlim-Canullas v. Fortun, 1984).

4. If winning ticket is bought by conjugalfunds, prize is conjugal; otherwise, it isexclusive property of spouse who owns theticket.

5. Property belonging to one spouseconverted into another kind totally differentin nature from its original form duringmarriage becomes conjugal in the absenceof proof that the expenses of conversionwere exclusively for the account of theoriginal owner-spouse, subject toreimbursement of the value of the originalproperty from the conjugal partnership

6. Money received under the Social SecurityAct is not conjugal, although theemployee-spouse contributes to the SSSwith his salaries, but belongs to thedesignated beneficiary under the SocialSecurity Law.

7. Intellectual property, like copyright orpatent, should, according to Tolentino, citingPlaniol and Ripert, be considered separateproperty of the spouse who produces orinvents or discovers it.

8. Business property (e.g. trade-marks, tradenames, service marks, business goodwill)are merely accessories to some commercialestablishment or product, so that if suchestablishment or product is separateproperty of one spouse, then the businessproperty is separate property; but all benefitsor earnings derived from these differentkinds of property during the marriage shouldbelong to the conjugal property (Tolentino,id., citing the same authority).

F. Charges upon CPG

(asked in ’87 and ‘04 bar exams)

Art. 121, Family Code. The conjugal partnershipshall be liable for:(1) The support of the spouse, their common

children, and the legitimate children of eitherspouse; however, the support of illegitimatechildren shall be governed by the provisions ofthis Code on Support;*

(2) All debts and obligations contracted during themarriage by the designated administrator-spouse for the benefit of the conjugalpartnership of gains, or by both spouses or byone of them with the consent of the other; *

(3) Debts and obligations contracted by eitherspouse without the consent of the other to theextent that the family may have benefited;

(4) All taxes, liens, charges, and expenses,including major or minor repairs upon theconjugal partnership property; *

(5) All taxes and expenses for mere preservationmade during the marriage upon the separateproperty of either spouse;

(6) Expenses to enable either spouse to commenceor complete a professional, vocational, or otheractivity for self-improvement; *

(7) Ante-nuptial debts of either spouse insofar asthey have redounded to the benefit of the family;

(8) The value of what is donated or promised byboth spouses in favor of their commonlegitimate children for the exclusive purpose ofcommencing or completing a professional orvocational course or other activity for self-improvement;* and

(9) Expenses of litigation between the spousesunless the suit is found to groundless.:

If the conjugal partnership is insufficient to cover theforegoing liabilities, the spouses shall be solidarilyliable for the unpaid balance with their separateproperties.

* Same as the rule governing ACP

Categorization of CPG Charges—(Pangalangan notes)Debts &Obligations

Taxes &Expenses

Support

(2) Debts incurred:(a) byadministrator-spouse for thebenefit of thefamily;(b) by bothspouses;(c) by one spousewith the consent ofthe other

(4)maintenanceof CPGproperties

(1) support ofspouses andcommonchildren

(3) by one spousewithout the consentofthe other for the

(5) merepreservationof allexclusive

(6) educationof spouses,absolute


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benefit of thefamily

Properties

(7) antenuptialdebts for thebenefit of theFamily

(9) litigationexpenses,unless thesuit isgroundless

(8) educationof commonchildren, onlyforvalue ofdonation

Debts incurred in the exercise of a spouse’sprofession are charged on the CPG (Javierv. Osmeña, 34 PHIL 336).

Debts incurred during the marriage arepresumed to be conjugal and thus arecharged on the CPG (Cobb-Perez v. Lantin,23 SCRA 637)

Loan contracts signed by both spouses areconjugal, and they are jointly liable forpayment, even if only one spouse signs asubsequent promissory note (DBP v. Adil,161 SCRA 307).

Debts incurred for the benefit of thirdpersons are not charged on the CPG(Luzon Surety Co. v. De Garcia, 30 SCRA111).

G. Administration of the CPG

(asked in ’75, ’77, ’02 and ’06 bar exams)

1. The administration and enjoyment of theconjugal partnership shall belong to bothspouses jointly. In case of disagreement,the husband's decision shall prevail,subject to recourse to the court by the wifefor proper remedy, which must be availed ofwithin 5 years from the date of the contractimplementing such decision (Art. 124,par.1). Sale by the husband of property

belonging to the conjugal partnershipwithout the consent of the wife whenthere is no showing that the latter isincapacitated is void ab initio. (Abalos v.Macatangay, Jr, 2004)

2. Disposition or encumbrance of conjugalproperty requires: (Art. 124, par. 2)a. The consent or approval by both

spouses; ORb. Judicial authority secured in court

Donation of CPG must be with theconsent of the other spouse exceptmoderate donations for charity, onoccasions of family rejoicing, or familydistress (Art 125, cf. Art 98)

Mere awareness of a transaction is NOTconsent (Jader-Manalo v. Camaisa,2002)

Homeowners Savings & Loan Bank v.Dailo (2005)

In the absence of (court) authority orwritten consent of the other spouse,any disposition or encumbrance ofthe conjugal property shall be void.

H. Dissolution of the CPG

1. Termination of CPG Art. 126 (cf. Art. 99)(DLAJ)a. Deathb. Legal Separationc. Annulment or declaration of nullityd. Judicial separation of property

2. CPG not affected by de facto Separation Art.128 (cf. Art. 100)

3. Abandonment and Absence (cf. Art. 101) Ayala Investment v. Ching, (1998)

The Supreme Court ruled that indirectbenefits that might accrue to a husbandin signing as a surety or guaranteeagreement not in favor of the family butin favor of his employer corporation arenot benefits that can be considered asgiving a direct advantage accruing to thefamily. Hence, the creditors cannot goagainst the conjugal partnershipproperty of the husband in satisfying theobligation subject of the suretyagreement. A contrary view would put inperil the conjugal partnership byallowing it to be given gratuitously as incases of donation of conjugalpartnership property, which is prohibited.

I. Liquidation of Assets and Liabilities

(asked in ’87 and ’89 bar exams)

1. Procedure (Art. 129) IAR-DRIN-PCa. Prepare an inventory of all propertiesb. Amounts advanced by CPG in payment

of personal debts and obligations shallbe credited to CPG

c. Reimburse each spouse for the use ofhis/her exclusive funds in the acquisitionof property or for the value of his or herexclusive property, the ownership ofwhich has been vested by law in theconjugal partnership.

d. Debts and obligations of CPG shall bepaid out of the conjugal assets,otherwise both spouses are solidarilyliable with their exclusive property.

e. Remains of the exclusive propertiesshall be delivered to respective owner-spouses


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f. Indemnify loss or deterioration ofmovables belonging to either spouse,even due to fortuitous event, used forthe benefit of the family

g. Net remainder of CPG shall theconstitute the profits which shall bedivided equally between husband andwife except when:o A different proportion or division was

agreed upon in the marriagesettlements

o There has been a voluntary waiveror forfeiture of such share asprovided in the FC

h. Presumptive legitimes delivered tocommon children per Art. 51

i. Conjugal dwelling goes to:o Spouse with whom majority of

common children choose to remain(below 7yrs deemed to have chosenthe mother)

o Whoever the court chooses in caseof lack of majority

2. Rules Property must be recorded in the

registry of property in order to affectthird persons dealing with registeredproperty.

Spouses are not co-owners of CPGduring the marriage and cannot alienatethe supposed ½ interest of each in thesaid properties. The interest of thespouses in the CPG is only inchoate ora mere expectancy and does not ripeninto title until it appears after thedissolution and liquidation of thepartnership that there are net assets.(De Ansaldo v. Sheriff of Manila, 1937)

Rules on liquidation upon death andliquidation of CPG of 2 or moremarriages same as in ACP (Art. 103 &104)

Support to surviving spouse & childrenduring liquidation is charged against thefruits or income of their shares in theproperties. (Art. 133)

Personal debt acquired during marriageof either spouse is not chargeableagainst community property (Go v.Yamane, 2006)

V. Separation of Properties DuringMarriage

Art. 134, Family Code. In the absence of an expressdeclaration in the marriage settlements, theseparation of property between spouses during themarriage shall not take place except by judicial order.Such judicial separation of property may either bevoluntary or for sufficient cause.

Judicial separation of property may either be(1) voluntary or (2) for sufficient cause.

A. Sufficient Causes and Grounds forReturn to Previous Regime

Sufficient Causes forJudicial Separation ofProperty (Art. 135)(CALASA)

Grounds for Return toPrevious Regime(Art. 141)

(1) Spouse of petitionerhas been sentencedto a penalty whichcarries with it civilinterdiction

(1) Termination of the civilinterdiction

(2) Spouse of petitioneris judicially declaredan absentee

(2) Reappearance ofabsentee spouse

(3) Loss of parentalauthority of thespouse of petitionerhas been decreed bythe court

(5) Restoration of parentalauthority to the spousepreviously deprived ofit

(4) Spouse of petitionerhas abandoned thelatter or failed tocomply with his orher obligations to thefamily

(4) When the spouse wholeft the conjugal homewithout legalseparation resumescommon life with theother

(5) The spouse grantedthe power ofadministration in themarriage settlementshas abused thatpower

(3) When the court, beingsatisfied that thespouse granted thepower ofadministration in willnot again abuse thatpower, authorizes theresumption of saidadministration

(6) At the time of thepetition, the spouseshave been separatedin fact for at least 1year andreconciliation ishighly improbable.

(6) Reconciliation andresumption of commonlife of the spouse whohave separated infacts for at least 1 year

(7) When after voluntarydissolution of the ACPor CPG has beenjudicially decreed uponthe joint petition of thespouses, they agree tothe revival of theformer property


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regime. No voluntaryseparation of propertymay thereafter begranted.

B. Rules

1. Each spouse shall contribute to the familyexpenses, in proportion to their income. Incase of insufficiency, the market value oftheir separate properties. (Art. 146 par. 1)

2. Liability of spouses to the creditors of thefamily shall be SOLIDARY. (Art. 146, par. 2)

Abandonment is defined as the lack ofintention to return to the conjugal home,without justifiable cause (Dela Cruz v. DelaCruz)

C. Effects of separation of propertybetween spouses

1. ACP or CPG is dissolved and liquidated (Art.137)

2. Provisions on complete separation ofproperty applies after dissolution ofACP/CPG (Art. 138)a. Liability spouses to creditors shall be

solidary with their separate propertiesb. mutual obligation to support each

continues except when there is legalseparation

3. Petition and final judgment of separation ofproperty must be filed in the appropriateregistries (Art. 139)

4. rights previously acquired by creditors arenot prejudiced (Art. 140)

D. Transfer of Administration to the OtherSpouse (Art. 142) (GACA)

When one spouse.1. Becomes the guardian of the other.2. Is judicially declared an absentee.3. Is sentenced to a penalty which carries with

it civil interdiction.4. Becomes a fugitive from justice or is in

hiding as an accused in a criminal case.

If the other spouse is not qualified by reason ofincompetence, conflict of interest, or any otherjust cause, the court shall appoint a suitableperson to be the administrator.

In Re: voluntary dissolution of CPG of spousesBernas, 14 SCRA 237

A voluntary separation of properties is notperfected by mere consent but upon thedecree of the court approving the same. Thepetition for voluntary separation of propertywas denied because the children of the 1

st

and 2nd

marriages were not informed; theseparation of property may prejudice therights and shares of the children.

Maquilan v. Maquilan, (2007)A compromise agreement with judicialrecognition is valid, pending petition fordeclaration of nullity of marriage.

VI. Property regime of unions without marriage(asked in ’79, ’87, ’98, ’00 and ’09 bar exams)

Art. 147 Art. 148When a man and a woman who are capacitated to marry each other, liveexclusively with each other as husband and wife without the benefit ofmarriage or under a void marriage, their wages and salaries shall beowned by them in equal shares and the property acquired by both ofthem through their work or industry shall be governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquired while theylived together shall be presumed to have been obtained by their jointefforts, work or industry, and shall be owned by them in equal shares. Forpurposes of this Article, a party who did not participate in the acquisitionby the other party of any property shall be deemed to have contributedjointly in the acquisition thereof if the former's efforts consisted in the careand maintenance of the family and of the household.

Neither party can encumber or dispose by acts inter vivos of his or hershare in the property acquired during cohabitation and owned in common,without the consent of the other, until after the termination of theircohabitation.

When only one of the parties to a void marriage is in good faith, the shareof the party in bad faith in the co-ownership shall be forfeited in favor oftheir common children. In case of default of or waiver by any or all of thecommon children or their descendants, each vacant share shall belong tothe respective surviving descendants. In the absence of descendants,such share shall belong to the innocent party. In all cases, the forfeitureshall take place upon termination of the cohabitation. (144a)

In cases of cohabitation not falling under the precedingArticle, only the properties acquired by both of the partiesthrough their actual joint contribution of money, property,or industry shall be owned by them in common inproportion to their respective contributions. In theabsence of proof to the contrary, their contributions andcorresponding shares are presumed to be equal. Thesame rule and presumption shall apply to joint depositsof money and evidences of credit.

If one of the parties is validly married to another, his orher share in the co-ownership shall accrue to theabsolute community or conjugal partnership existing insuch valid marriage. If the party who acted in bad faith isnot validly married to another, his or her shall be forfeitedin the manner provided in the last paragraph of thepreceding Article.

The foregoing rules on forfeiture shall likewise applyeven if both parties are in bad faith.


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Art.147 Art.148

Applicability

1. man and woman2. living together as husband and wife3. with capacity to marry (Art.5 without any

legal impediment)a. at least 18 years oldb. not Art. 37 (incestuous void

marriage)c. not Art. 38 (void marriage by reason

of public policy)d. not bigamous

4. other void marriages due to absence offormal requisite

1. man and woman2. living together as husband and wife3. NOT capacitated to marry (Art.35(1)

under 18 years old)4. adulterous relationship (e.g.

concubinage)5. bigamous/polygamous marriage

(Art.35(4))6. incestuous marriages under Art.377. Void marriages by reason of public

policy under Art.38

Salaries and wages Owned in equal shares Separately owned by partiesProperties acquiredthrough exclusivefunds

Remains exclusive provided there is proof Remains exclusive

Properties acquiredby both throughwork or industry

Governed by rules on co-ownershipOwned in common in proportion torespective contribution

Properties acquiredwhile livingtogether

Owned in equal shares since it ispresumed to have been acquired throughjoint efforts

if one party did not participate inacquisition, presumed to have contributedthrough care and maintenance of familyand household

No presumption of joint acquisition. Whenthere is evidence of joint acquisition butnone as to the extent of actualcontribution, there is a presumption ofequal sharing

Forfeiture

When only one of the parties is in good faith,the share of the party in bad faith shall beforfeited:1. In favor of their common children2. In case of default of or waiver by any or all

of the common children or theirdescendants, each vacant share shallbelong to the respective survivingdescendants

3. In the absence of such descendants, suchshare belongs to the innocent party

If one party is validly married to anotherhis/her share in the co-owned propertieswill accrue to the ACP/CPG of his/herexisting valid marriage

If the party who acted in bad faith is notvalidly married to another, his/her shareshall be forfeited in the same manner asthat provided in Art 147

The same rules on forfeiture shall apply ifboth parties are in bad faith

Yaptinchay v. Torres, (1969)Application of Article 148; there was noproof of actual contribution, while there wasa subsisting marriage apart from the unionwithout marriage, therefore, the N. Forbeshouse goes to the CPG of subsistingmarriage

Juaniza v. Jose, (1979)Property acquired by a married party duringcohabitation with another not his spousebelongs to the CPG of the marriage, and theother party cannot be held jointly/severallyliable for it

Villanueva v. CA, (2004)Transfer of certificate and tax declarationsare not sufficient proof of joint contribution.

Joaquino v. Reyes (2004)Prohibitions against donations betweenspouses must likewise apply to donationsbetween persons living together in illicitrelations;

CIVIL LAW REVIEWER Chapter IX. The FAMILY and the FAMILY HOME

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Chapter IX. The Family and the FamilyHome

I. FAMILYA. FAMILY RELATIONSB. GENERAL RULEC. EXCEPTIONS

II. FAMILY HOMEA. GENERAL RULEB. EXCEPTIONSC. BENEFICIARIES OF THE FAMILY HOMED. REQUISITES FOR CREDITOR TO AVAIL

OF THE RIGHT UNDER ARTICLE 160

I. Family

(asked in ’91 bar exam)

Basic social institution which public policycherishes and protects hence, no suit betweenmembers of the family shall prosper unlesscompromise between parties has failed.

A. Family relations include:

1. Between husband and wife2. Between parents and children3. Among other ascendants and descendants4. Among brothers and sisters, full or half

blood.

B. General Rule

For a suit between members of the same familyto prosper, the following are required:1. Earnest efforts towards a compromise have

been made2. Such efforts have failed3. Such earnest efforts and the fact of failure

must be allegedNote: The case will be dismissed if it is shown

that no such efforts were made.

C. Exceptions to the general rule(VJLAFF)

1. Civil status of persons,2. Validity of marriage or a legal separation,3. Any ground for legal separation,4. Future support,5. Jurisdiction of courts,6. Future legitime

Hontiveros v. RTC, (1999)Whenever a stranger is a party in a caseinvolving family members, the requisiteshowing of earnest efforts to compromise isno longer mandatory, as such inclusion of a

stranger takes the case out of the ambit ofFC 151.

II. Family Home

(asked in ’94 and ’07 bar exam)

Dwelling place of a person and his family

Guidelines—1. It is deemed constituted from time of actual

occupation as a family residence2. It must be owned by person constituting it3. It must be permanent4. Rule applies to valid and voidable and even

to common-law marriages under Arts.147and 148

5. It continues despite death of one or morespouses or unmarried head of family for 10years or as long as there is a minorbeneficiary (Art.159)

6. Can only constitute one family home

A. General Rule

The family home is exempt from (EFA):1. Execution2. Forced sale3. Attachment

B. Exceptions in the exemption of thefamily home from execution (Art. 156)

1. Nonpayment of taxes.2. Debts incurred prior to the constitution of the

family home.3. Debts secured by mortgages on the

premises before or after such constitution.4. Debts due to laborers, mechanics,

architects, builders, materialmen and otherswho have rendered service or furnishedmaterial for the construction of the building.

C. Beneficiaries of the family home (Art.154)

1. Husband and wife, or an unmarried personwho is the head of the family

2. Parents (may include parent-in-laws),ascendants, descendants, brothers andsisters (legitimate/illegitimate), who are livingin the family home and who depend on thehead of the family for support

Requisites to be a beneficiary (RLD)—1. The relationship is within those

enumerated2. They live in the family home

CIVIL LAW REVIEWER Chapter IX. The FAMILY and the FAMILY HOME

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3. They are dependent for legal support on thehead of the family

Requirements for the sale, alienation,donation, assignment, or encumbrance ofthe family home—1. the written consent of the person

constituting it,2. his/her spouse, and3. majority of the beneficiaries of legal age

Note: If there is a conflict, the Court will decide.

In case of death (ART. 159)—- The family home shall continue despite the

death of one or both spouses or of theunmarried head of the family for a period often years, or as long as there is a minorbeneficiary.

- The heirs cannot partition the home unlessthe court finds compelling reasons therefor.

D. Requisites for creditor to avail of theright under Article 160

Requisites—1. He must be a judgment creditor;2. His claim is not among those excepted

under Article155, and3. He has reasonable grounds to believe that

the family home is worth more than themaximum amount fixed in Article 157

Procedure to avail of right under Article160—1. The creditor must file a motion in the court

proceeding where he obtained a favorablefor a writ of execution against the familyhome.

2. There will be a hearing on the motion wherethe creditor must prove that the actual valueof the family home exceeds the maximumamount fixed by the FC either at the time ofits constitution or as a result ofimprovements introduced thereafter itsconstitution.

3. If the creditor proves that the actual valueexceeds the maximum amount the court willorder its sale in execution.

4. If the family home is sold for more than thevalue allowed, the proceeds shall be appliedas follows:a. First, the obligation enumerated in

Article 155 must be paidb. Then the judgment in favor of the

creditor will be paid, plus all the costs ofexecution

c. The excess, if any, shall be delivered

Versola v. Mandolaria, (2006)The proof that the house is the family homemust be alleged against creditors; Appliedthe rule in Art. 160, FC.

Patricio v. Dario III, (2006)WON the grandson of the deceased is abeneficiary according to Art. 154 FC. Thebeneficiary should satisfy all requisites; hemust be dependent on the head of thefamily.

Arriola v. Arriola, (2008)This case involves half brothers and asecond wife; the family home includes theland it is built on. The rule in Art. 159 of theFC regarding the 10 year period is applied,the parties involved must wait.

CIVIL LAW REVIEWER Chapter X. PATERNITY and FILIATION

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Chapter X. Paternity and Filiation

I. KINDS OF FILIATIONII. IMPUGNING LEGITIMACYIII. PROOF OF FILIATIONIV. LEGITIMATIONV. RIGHTS OF LEGITIMATE OR ILLEGITIMATE

CHILDREN

I. Kinds of Filiation

(Arts. 163, 164, 165 FC)

1. Naturala. Legitimateb. Illegitimate

2. Legal Fiction (Adoption)

Legitimate Children—(asked in ’79, ’82, ’84, ’85, ’99 and ’03 barexams)Conceived or born during the marriage ofparents

May be thru natural means or by artificialinsemination.

1. Natural/BiologicalLiyao v. Liyao, (2002): A child conceived orborn during a valid marriage is presumed tobelong to that marriage, regardless of theexistence of extramarital relationships.

2. Artificial Insemination (Art. 164)Requisites for children conceived throughartificial insemination to be consideredlegitimate:a. Artificial insemination made on wifeb. Sperm comes any of the following:

Husband Donor husband and donor

c. In case of donor sperm, husband andwife must authorize/ratify insemination ina written instrument Executed & signed by husband and

wife before the birth of the child. Recorded in the civil registry

together with the birth certificate ofthe child.

Illegitimate Children—(asked in ’80, ’82, ’83, ’84, ’90, ’93, ’99, ’00, ’07,’08 and ’09 bar exams) General Rule: Those conceived and born

outside of a valid marriage. Exceptions:

a. Children of marriages void under Art.36(psychological incapacity).

b. And under Art. 53 (the second marriageof a widow or widower who has notdelivered to his or her children by his orher first marriage the legitime of saidchildren). (SEMPIO-DIY)

De Castro v. Assidao-De Castro, (2008)Common children born before theannulment are legitimate, and thereforeentitled to support from each of the spouses.

II. Impugning Legitimacy (Art. 166)

A. Grounds

Thus the grounds for impugning the legitimacy ofa child are:1. Physical impossibility for sexual

intercourse within the first 120 days of the300 days which immediately preceded thechild's birth due to:

2. Other biological or scientific reasons,except Artificial Insemination.

3. And in case of Artificial Insemination, theconsent of either parent was vitiatedthrough fraud, violence, mistake,intimidation, or undue influence.

Macadangdang v. CA, (1980)Only a proximate separation between thespouses is not sufficient physical separationas grounds for impugning legitimacy.

Andal v. Macaraig, (1951)Serious illness of the husband whichabsolutely prevented him from having sexualintercourse with his wife, like if the husbandwas already in comatose or a vegetable, orsick with syphilis in the tertiary stage so thatcopulation was not possible. Buttuberculosis, even in its most crucial stage,does not preclude copulation between thesick husband and his wife.

Jao v. CA, (1987)Blood-type matching is an acceptablemeans of impugning legitimacy, covered byArt. 166(2), under "biological or otherscientific reasons." But this is onlyconclusive of the fact of non-paternity.

B. Action for Impugning Legitimacy (Arts.170 and 171)

The action for impugning the legitimacy of achild may be brought within 1, 2, or 3 years fromthe knowledge of the birth, or the knowledgeof registration of birth.


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1. Within 1 year if husband or any heirsreside in the same city or municipality wherethe child was born or his birth was recorded.

2. Within 2 years if the husband or all heirslive in the Philippines but do not reside in thesame city or municipality where the child'sbirth took place or was recorded

3. Within 3 years if the husband or all heirslive outside the Philippines when the child'sbirth took place or was recorded in thePhilippines

If the birth of the child has been concealed orwas unknown to the husband, the above periodsshall be counted:1. from the discovery or knowledge of the

birth of the child, or2. from the discovery or knowledge of its

registration,3. whichever is earlier.

Sayson v. CA Legitimacy can only be attacked directly General Rule: Only the husband can

impugn the legitimacy of a child. If he doesnot bring action within the prescribedperiods, he cannot file such action anymorethereafter, and this is also true with his heirs.

Exception: That the heirs of the husbandmay file the action or continue the same if ithas already been fileda. If the husband died before the

expiration of the period fixed for bringinghis action

b. If he should die after the filing of thecomplaint without having desisted

c. If the child was born after the death ofthe husband.

III. Proof of Filiation (Arts. 172 and 175(1))

(asked in ’85, ’95, ’05 and ’06 bar exams)

A. Rules

Legitimate or illegitimate children may provetheir filiation in the same way and on the sameevidence.

General Rule: They may only prove their statususing the following pieces of evidence:1. Their record of birth appearing in the civil registry.2. An admission of his filiation (legitimate or

illegitimate) by his parent or parents in a publicdocument or a private handwritten instrument andsigned by said parent or parents. (SEMPIO-DIY)

3. Proof of open and continuous possession ofstatus as legitimate or illegitimate child

4. Any other means stated by the rules of court orspecial laws

Mendoza v. Melia, 17 SCRA 788Baptismal certificates are given probativevalue only for births before 1930. Birthcertificates must be signed by the parentsand sworn for it to be admitted as evidence.

Baluyut v. Baluyut, (1990)Unsigned birth certificates are not evidenceof recognized filiation.

Acebedo v. Arquero, (2003)Baptismal certificates are only conclusive ofthe sacrament administered, and cannot beused as proof of filiation.

Lim v. CA, (1975)Marriage certificates cannot be used asproof of filiation.

Jison v. CA, (1998)Rule 130, Sec. 40 is limited to objectscommonly known as family possessionsreflective of a family's reputation or traditionregarding pedigree like inscriptions ontombstones, monuments, or coffin plates.

Eceta v. Eceta (2004)Signature of the father on the birth certificateis considered as an acknowledgement ofpaternity and mere presentation of a dulyauthenticated copy of such certificate willsuccessfully establish filiations.

Heirs of Rodolfo Bañas v. Heirs of BibianoBañas, (1985)

"Su padre [Your father]" ending in a letter isonly proof of paternal solicitude and not ofactual paternity. Signature on a report cardunder the entry of "Parent/Guardian" islikewise inconclusive of open admission.

De Jesus v. Syquia, (1933)By "open and continuous possession of thestatus of a legitimate child" is meant theenjoyment by the child of the position andprivileges usually attached to the status of alegitimate child, like bearing the paternalsurname, treatment by the parents andfamily of the child as legitimate, constantattendance to the child's support andeducation, and giving the child thereputation of being a child of his parents.

Agustin v. CA, (2005)DNA evidence can be used as proof ofpaternity.

De Jesus v. Estate of Decedent Juan GamboaDizon (2001)

The due recognition of an illegitimate child ina record of birth, a will, a statement before acourt of record, or in any authentic writing, is


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in itself a consummated act ofacknowledgement of the child, and nofurther court action is required.

Gono-Javier vs. Court of Appeals, (1994)Mere possession of status as an illegitimatechild does not make a recognizedillegitimate child but is only a ground forbringing an action to compel judicialrecognition by the assumed parent.

Herrera v. Alba, (2005)In assessing the probative value of DNAevidence, therefore, courts should consider,among other things, the following data:a. How the samples were collected,

b. How they were handled,

c. The possibility of contamination of thesamples,

d. The procedure followed in analyzing thesamples,

e. Whether the proper standards andprocedures were followed in conducting thetests,

f. and the qualification of the analyst whoconducted the tests.

Estate of Rogelio Ong v. Diaz, (2007)DNA evidence can still be used even afterthe death of the parent.

B. Action for Claiming Filiation (Arts. 173and 175 (2))

The child can bring the action during his orher lifetime and even after the death of theparents. The action does not prescribe aslong as he lives.

If the child is a minor, or is incapacitated orinsane, his guardian can bring the action inhis behalf.

IV. Legitimation (Arts. 177 and 182)

(asked in ’82, ’90, ’92, ’04 ’08 and ’09 barexams)

"Legitimated" children are illegitimate childrenwho because of the subsequent marriage oftheir parents are, by legal fiction, consideredlegitimate.

Requisites for legitimation—1. The child was conceived and born outside of

wedlock.2. General rule: The parents, at the time of the

child's conception, were not disqualified by anyimpediment to marry each other.

Exception: RA 9858 - Children born toparents who were so disqualified only

because either or both of them were beloweighteen (18) years of age at the time ofchild’s conception may be legitimated.

Grounds for impugning legitimation—1. The subsequent marriage of the child's parents is

void.2. The child allegedly legitimated is not natural.3. The child is not really the child of the alleged

parents. (SEMPIO-DIY)

V. Rights of Legitimate and IllegitimateChildren (SSS)

1. Surnamea. Legitimate and legitimated: Surname of

father and motherb. Illegitimate: uses surname of mother but the

father’s surname may be used if father hasexplicitly recognized the child as his (RA9255, Revilla Law)

2. Succession (asked in ’09 bar exams)a. Legitimate and legitimated: those granted in

Civil Codeb. Illegitimate: ½ the share of a legitimate child

3. Supporta. Legitimate and legitimated: in accordance to

provisions in the family codeb. Illegitimate: entitle to support but support will

come from separate properties of parent.

Republic v. Vicencio, (1998)A legitimate child's use of the father'ssurname is mandatory.

De Asis v. CA, (1999)Obligation to support a legitimate childcannot be waived or compromised.

David v. CA, (1995)Parental authority over an illegitimate childbelongs to the mother.

Tonog v. CA, (2002)However, this may be temporarily denied tothe mother by reason of her incapacity.

Mossesgeld v. CA, (1998)The father cannot force the use of hissurname without first establishing legitimacy.

Under RA 9255, only an acknowledgmentby the father is necessary for the use of thefather's surname.

Capote v. CA, (2007)An illegitimate child already given thefather's surname without the latter'sacknowledgment, must revert to using themother's surname.

CIVIL LAW REVIEWER Chapter XI. ADOPTION

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Chapter XI. Adoption

I. R.A. 8552A. WHO MAY ADOPTB. WHO MAY BE ADOPTED

II. ADOPTION PROCEDURE UNDER RA 8552IRRA. PRE-ADOPTION SERVICESB. EFFECTS OF ADOPTIONC. RESCISSION OF ADOPTIOND. EFFECTS OF RESCISSIONE. RECTIFICATION OF SIMULATED BIRTHS

III. R.A. 8043: INTER-COUNTRY ADOPTION ACTOF 1995A. WHO MAY ADOPTB. WHO MAY BE ADOPTEDC. WHERE TO FILE APPLICATIOND. DOCUMENTS TO SUPPORT

APPLICATIONE. INTER-COUNTRY ADOPTION BOARDF. TRIAL CUSTODY

ADOPTION

(Asked in ‘76, ‘77, ‘85, ‘94, ‘95, ‘96, ‘00, ‘01, ‘03,‘04, ‘05, ‘07, ’08 bar exams)

LEGITIMATION ADOPTIONThe law merelymakes legal whatexists by nature

The law merelycreates byfiction arelation whichdid not in factexist

Personsaffected

Only naturalchildren

Generallyapplies tostrangers

Procedure Extrajudicial acts ofparents

Always byjudicial decree

Whoapplies

Only by bothparents

Husband andwife adoptjointly withexceptions(RA8552)

Effect Same status andrights with that of alegitimate child notonly in relation tothe legitimizingparents but also toother relatives

Creates a rel.only betweenthe child andthe adoptingparents

I. RA 8552: Domestic Adoption Act of1998

A. Who May Adopt (Sec.7)

1. Filipino Citizensa. Of legal ageb. In possession of full civil capacity and

legal rightsc. Of good moral character

d. Has not been convicted of any crimeinvolving moral turpitude

e. Emotionally and psychologically capableof caring for children

f. At least sixteen (16) years older thanadoptee, except when adopter isbiological parent of the adoptee or is thespouse of the adoptee’s parent

g. In a position to support and care forhis/her children in keeping with themeans of the family

2. Aliensa. Possession of the same as the

qualifications for Filipinosb. His/her country has diplomatic relations

with the Philippinesc. Has been living continuously for 3 years

(provided that absences not exceeding60 days per 1 year for professional,business, or emergency reasons areallowed) in RP prior to the filing ofapplication and maintains suchresidence until the decree is entered

d. Has been certified by his/her diplomaticor consular office or any appropriategovernment agency that he/she has thelegal capacity to adopt in his/her country

e. His/her government allows the adopteeto enter his/her country as his/heradoptee

f. Has submitted all the necessaryclearances and such certifications asmay be required

**Items numbers c, d and e may bewaived under the followingcircumstances:a. Adopter is a former Filipino Citizen who

seeks to adopt a relative within the 4th

degree of consanguinity or affinityb. One who seeks to adopt the legitimate

or illegitimate child of his/her Filipinospouse

c. One who is married to a Filipino Citizenand seeks to adopt jointly with his/herspouse a relative within the 4

thdegree of

consanguinity or affinity of the Filipinospouse

3. GuardiansWith respect to theirs ward after thetermination of the guardianship andclearance of his/her accountabilities.

Husband and wife shall adopt jointly;Except—1. if one spouse seeks to adopt the legitimate

child of the other


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2. if one of the spouse seeks to adopt his/herillegitimate child provided that other spousehas signified his/her consent

3. if spouses are legally separated from eachother

** if spouses jointly adopt, parental authorityshall be exercised jointly

B. Who May Be Adopted (Sec. 8)

1. Any person below 18 years old who hasbeen administratively or judicially declaredavailable for adoption

2. The legitimate child of one spouse by theother spouse

3. An illegitimate child by a qualified adopter toimprove the child’s status to that oflegitimacy

4. A person of legal age if, prior to theadoption, said person has been consistentlyconsidered and treated by the adopter(s) ashis/her child since minority

5. A child whose previous adoption has beenrescinded

6. A child whose biological or adoptiveparent(s) has died, provided that noproceedings shall be initiated within 6months from the time of death of saidparent(s)

Consent Necessary for Adoption (Sec. 9)—1. The prospective adoptee if 10 years or older2. The prospective adoptee’s biological

parents, legal guardian or the governmentinstrumentality or institution that has custodyof the child

3. The prospective adopters’ legitimate andadopted children who are ten years or overand, if any, illegitimate children living withthem

4. The spouse, if any, of the person adoptingor to be adopted.

Note: A decree of adoption shall be effectiveas of the date the original petition was filed.It also applies in case the petitioner diesbefore the issuance of the decree ofadoption to protect the interest of theadoptee.

Child to be Adopted AdopterBiological parent signs aDeed of VoluntaryCommitment (Rescissiblewithin 6 months)

Inquiry at DSWD

Voluntary Commitment:Declaration of Availabilityfor Adoption

Attendance of DSWDAdoption Fora andSeminars (includecounseling)Involuntary Commitment:

(1) Announcement of

Missing Child inTri-Media

(2) Declaration ofAbandonment

(3) Declaration ofAvailability forAdoption

Case Study Report Application for AdoptionCase Study ReportMatchingPlacementSupervised Trial CustodyHome Study ReportRecommendation andConsentPetition for AdoptionAdoption Decree

II. Adoption Procedure under RA 8552IRR (Secs. 10-32)

(as discussed in Prof. Elizabeth Pangalangan’sclass)

A. Pre-Adoption Services

The DSWD shall provide for the followingservices:1. Counseling services for the biological

parents, prospective parents, andprospective adoptee

2. Exhaust all efforts to locate the biologicalparents, if unknown

B. Effects of Adoption (Secs. 16-18)

1. Parental AuthorityAll legal ties between biological parents andadoptee are severed, and the same shall bevested on the adopter, except if thebiological parent is the spouse of theadopter.

2. LegitimacyThe adoptee shall be considered legitimateson/daughter of the adopter for all intentsand purposes and shall be entitled to all therights and obligations provided by law tolegitimate children born to them withoutdiscrimination of any kind.

3. SuccessionAdopter and adoptee shall have reciprocalrights of succession without distinction fromlegitimate filiation, in legal and intestatesuccession. If adoptee and his/her biologicalparents had left a will, the law ontestamentary succession shall govern.


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C. Rescission of Adoption (Sec. 19)

Adoption, being in the best interest of the child,shall not be subject to rescission by theadopter(s).

Adopted may request for rescission, with theassistance of DSWD, if a minor, or over 18 butincapacitated, based on the ff grounds:1. repeated physical and verbal maltreatment

despite having undergone counseling2. attempt on life of adoptee3. sexual assault or violence4. abandonment or failure to comply with

parental obligations

However, the adopter(s) may disinherit theadopted based on causes as enumerated in Art.919 of the NCC.

D. Effects of Rescission (Sec. 20)

1. The parental authority of the adoptee'sbiological parents, if known, OR the legalcustody of the DSWD shall be restored if theadoptee is still a minor or incapacitated.

2. The reciprocal rights and obligations of theadopters and the adoptee to each othershall be extinguished.

3. The court shall order the Civil Registrar tocancel the amended certificate of birth of theadoptee and restore his/her original birthcertificate.

4. Successional rights shall revert to its statusprior to adoption, but only as of the date ofjudgment of judicial rescission. Vested rightsacquired prior to judicial rescission shall berespected.

E. Rectification of Simulated Births (Sec.22)

A person who has, prior to the effectivity of thisAct, simulated the birth of a child shall not bepunished for such act: Provided,1. That the simulation of birth was made for the

best interest of the child and that he/she hasbeen consistently considered and treated bythat person as his/her own son/daughter:

2. That the application for correction of thebirth registration and petition for adoptionshall be filed within five (5) years from theeffectivity of this Act and completedthereafter:

3. That such person complies with theprocedure for Legal Adoption as specified inthis Act, which includes the Child and HomeStudy Report of DSWD to determine ifalleged conditions in the application for

rectification exist, and other requirements asdetermined by the Department.

Tamargo v. CA (1992)Where the petition for adoption was grantedafter the child had shot and killed a girl, theSupreme Court did not consider thatretroactive effect may be given to the decreeof adoption so as to impose a liability uponthe adopting parents accruing at a timewhen adopting parents had no actual orphysically custody over the adopted child.Retroactive effect may perhaps be given tothe granting of the petition for adoptionwhere such is essential to permit the accrualof some benefit or advantage in favor of theadopted child. In the instant case, however,to hold that parental authority had beenretroactively lodged in the adopting parentsso as to burden them with liability for atortuous act that they could not haveforeseen and which they could not haveprevented would be unfair andunconscionable.

Lazatin v. Campos, (1979)Adoption is a juridical Act, proceeding inrem. Because it is artificial, the statutoryrequirements in order to prove it must bestrictly carried out. Petition must beannounced in publications and only thoseproclaimed by the court are valid. Adoptionis never presumed.

Santos v. Aranzanso, (1966)Validity of facts behind a final adoptiondecree cannot be collaterally attackedwithout impinging on that court’s jurisdiction.

DSWD v. Belen, (1997)Participation of the appropriate governmentinstrumentality in performing the necessarystudies and precautions is important and isindispensable to assure the child’s welfare.

Landingin v. Republic, (2006)Consents for adoption must be written andnotarized.

Sayson v. CA. (1992)Adopted children have a right to representtheir adopters in successional interests. (Idon’t know the basis for this doctrine butaccording to SCRA and my notes, thedecision in this case was: “Although anadopted child shall be deemed to be alegitimate child and have the same rights asthe latter, these rights do not include theright of representation. The relationshipcreated by the adoption is between only the


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adopting parents and the adopted child. Itdoes not extend to the blood relatives ofeither party.”)

III. RA 8043: Inter-Country Adoption Actof 1995

INTER-COUNTRY ADOPTION refers to thesocio-legal process of adopting a Filipino childby a foreigner or a Filipino citizen permanentlyresiding abroad where the petition is filed, thesupervised trial custody is undertaken, and thedecree of adoption is issued outside thePhilippines.

A. Who May Adopt (Sec. 9)

Any foreign national or a Filipino citizenpermanently residing abroad who has thequalifications and none of the disqualificationsunder the Act may file an application if he/she:1. Is at least 27 years of age and at least 16

years older than the child to be adopted, atthe time of application unless the adopter isthe parent by nature of the child to beadopted or the spouse of such parent

2. If married, his/her spouse must jointly file forthe adoption

3. Has the capacity to act and assume allrights and responsibilities of parentalauthority under his national laws, and hasundergone the appropriate counseling froman accredited counselor in his/her country

4. Has not been convicted of a crime involvingmoral turpitude

5. Is eligible to adopt under his/her national law6. Is in a position to provide the proper care

and support and to give the necessary moralvalues and example to all his children,including the child to be adopted

7. Agrees to uphold the basic rights of the childas embodied under Philippine laws, the U.N.Convention on the Rights of the Child, andto abide by the rules and regulations issuedto implement the provisions of this Act

8. Comes from a country with whom thePhilippines has diplomatic relations andwhose government maintains a similarlyauthorized and accredited agency and thatadoption is allowed under his/her nationallaws

B. Who May Be Adopted (Sec. 8)

1. Only a legally-free child may be the subjectof inter-country adoption.

2. A legally-free child is one who has beenvoluntarily or involuntarily committed to theDSWD of the Philippines, in accordance withthe Child and Youth Welfare Code.

3. No child shall be matched to a foreignadoptive family unless it is satisfactorilyshown that the child cannot be adoptedlocally.

4. In order that such child may be consideredfor placement, the following documents mustbe submitted to the Board:a. Child studyb. Birth Certificate / Foundling Certificatec. Deed of Voluntary Commitment/ Decree

of Abandonment/ Death Certificate ofparents

d. Medical Evaluation / Historye. Psychological Evaluation, as necessaryf. Recent photo of the child

C. Where to File Application (Sec.10)

Application shall be filed with the PhilippineRegional Trial Court having jurisdiction over thechild, or with the Inter-Country Adoption Board,through an intermediate agency, whethergovernmental or an authorized and accreditedagency, in the country of the prospectiveadoptive parents.

D. Application Should Be Supported ByThe Following Documents Written AndOfficially Translated In English (Sec.10)

1. Birth Certificate of applicants2. Marriage Contract and Divorce decree, if

applicable3. Written consent of their biological or

adoptive children above 10 years of age inthe form of sworn statement,

4. Physical, medical and psychologicalevaluation by a duly licensed physician andpsychologist

5. Income Tax Returns or any documentshowing the financial capability of theapplicant

6. Police Clearance7. Character reference from the local

church/minister, applicant’s employer and amember of the immediate community whohave known the applicant for at least 5 years

8. Recent postcard-sized pictures of theapplicant and his immediate family


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E. Inter-Country Adoption Board

1. as the central authority in matters relating tointer-country adoption

2. Ensures that all possibilities for adoption ofthe child under the Family Code have beenexhausted and that inter-country adoption isin the best interest of the child

F. Trial Custody (Sec. 14)

1. The governmental agency or the authorizedand accredited agency in the country of theadoptive parents shall be responsible for thetrial custody and the care of the child. It shallalso provide for counseling and other relatedservices.

2. The trial custody shall be for a period of 6months from the time of placement.

3. It starts upon actual physical transfer of thechild to the applicant who, as actualcustodian, shall exercise substitute parentalauthority over the person of the child

4. The adopting parents shall submit to thegovernmental agency or the authorized andaccredited agency, which shall in turntransmit a copy to the Board, a progressreport of the child's adjustment. Theprogress report shall be taken intoconsideration in deciding whether or not toissue the decree of adoption.

CIVIL LAW REVIEWER Chapter XII. SUPPORT

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Chapter XII. Support

(asked in ‘84, ‘85, ‘05, ’08 bar exams)

I. GENERAL PROVISIONSA. KINDSB. CHARACTERISTICSC. HOW SUPPORT IS GIVEN

II. WHO ARE OBLIGED TO SUPPORT EACHOTHER

III. PROPERTIES ANSWERABLE FOR SUPPORTIV. ORDER OF SUPPORT

A. IF THERE ARE MULTIPLE OBLIGORSB. IF THERE ARE MULTIPLE RECIPIENTS

I. Support

Consists of everything indispensable forsustenance, dwelling, clothing, medicalattendance, education and transportation, inkeeping with the financial capacity of thefamily (Art. 194).

The right and duty to support, especially theright to education, subsists even beyond theage of majority (Art. 194).

The amount of support is in proportion to themeans of the provider and the needs of thereceiver, and can be reduced or increased ifsuch circumstances change (Arts. 201 -202).

The obligation to give support shall beDEMANDABLE from the time the personwho has a right to receive the same needs itfor maintenance, but it shall not bePAYABLE except from the date of judicial orextra-judicial demand (Art. 203).

When, WITHOUT THE KNOWLEDGE of theperson obliged to give support, it is given bya stranger, the stranger has the right toclaim the same from the person obliged,unless it appears that he gave it withoutintention of being reimbursed (Art. 206).

When the person obliged to give supportUNJUSTLY REFUSES OR FAILS to givesupport when urgently needed, any thirdperson may furnish support to the needyindividual, with right of reimbursement fromthe person obliged to give support. Thisparticularly applies when the father ormother of a minor child unjustly refuses tosupport or fails to give support to the childwhen urgently needed (Art. 207).

Future support cannot be the subject matterof a compromise; such are void (Art. 2035,CC).

Refusal to support children or descendantswithout justifiable cause is a sufficientcondition for the disinheritance of parents orascendants, whether legitimate orillegitimate (Art. 920, CC).

Unjustified refusal to support one’s childrenor spouse is a sufficient cause fordisinheriting a spouse (Art. 921, CC).

Spouses are jointly responsible for thefamily's support. Support expenses shall bepaid from the CP, or in absence thereof, theincome/fruits of their separate properties, orin insufficiency/absence of such, from theseparate properties (Art. 70).

___________

A. Kinds of Support

1. Legal – that which is required to be given bylaw

2. Judicial – that which is required to be givenby court order whether pendente lite or in afinal judgment

3. Voluntary or Conventional – by agreement

B. Characteristics of Support (PREVIEW)

1. Personal2. Intransmissible3. Not subject to waiver or compensation with

regard to future support4. Exempt from attachment or execution,

except if support is contractual or given bywill. In such cases, any excess legal supportcan be subject to levy on attachment orexecution.

5. Reciprocal on the part of those who are bylaw bound to support each other

6. Variable

C. How Support is Given (Art. 204)

1. Payment of the amount;2. Accepting the recipient in the home of the

provider, unless there is a legal or moralobstacle from doing so.

II. Who are Obliged to Support EachOther (Art. 195)

1. Spouses;2. Legitimate ascendants and descendants;3. Parents and their children (legitimate and

illegitimate) and the children of the latter(legitimate and illegitimate);

CIVIL LAW REVIEWER Chapter XII. SUPPORT

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4. Legitimate brothers and sisters, whether offull or half-blood;

5. Illegitimate brothers and sisters, EXCEPTwhen the need for support of one (of age) isdue to a cause imputable to his/her fault ornegligence (Art. 196).

[NOTE: Both legitimate and illegitimate childrenare entitled to support.]

III. Properties Answerable for Support(Art. 197-198)

1. From the separate property of the obligor. Ifno separate property, the ACP/CPG (iffinancially capable) shall advance thesupport, to be deducted from the obligor’sshare upon liquidation of such regime.

2. Pending legal separation or annulment,support (pendente lite) for spouses andchildren will come from the ACP/CPG. Afterfinal judgment granting the petition, mutualsupport obligation between spouses ceases.(But in legal separation court may orderguilty spouse to give support to innocentspouse.)

[NOTE: De facto separation does not affect theACP, except that the spouse who leaves theconjugal home without just cause shall not beentitled to support (Art. 100).]

IV. Order of Support (SDAB)

A. Order of support if there are multipleobligors (2 or more; Art. 199)

1. Spouses2. Descendants, nearest in degree3. Ascendants, nearest in degree4. Brothers and Sisters

When two or more are obliged to givesupport, the payment shall be dividedbetween them IN PROPORTION to theirresources;

Also, in case of URGENT NEED and byspecial circumstances, judge may order onlyone obligor to furnish support withoutprejudice to reimbursement from otherobligors of the share due from them (Art.200).

B. Order of priority if there are multiplerecipients (Sempio-Diy)

1. Observe order in Article 199 (SDAB);2. But if the concurrent obligees are the

spouse and a child subject to parentalauthority, the child shall be preferred.

[NOTE: Tolentino says that the abovepreference given to a child under parentalauthority over the spouse should prevail only ifthe person obliged to support pays it out of hisown separate property. So if the support comesfrom ACP or CPG, the above rule of preferencefor the child does not apply.]

Pelayo v. Lauron, (1909)Even if the parents-in-law were the oneswho called for the physician’s services forthe childbirth of their daughter-in-law, it isthe woman’s husband who is bound to paythe fees due to the physician.

Lacson v. Lacson, (1968)Man is still liable for support in arrears sincethe mother advanced it from a stranger (theuncle of the daughters).

Lacson v. Lacson, (2006)Acknowledgment of and commitment tocomply with support obligation through anote in his own handwriting is proof that ademand was made.

CIVIL LAW REVIEWER Chapter XIII. PARENTAL AUTHORITY

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Chapter XIII. Parental Authority

I. PARENTAL AUTHORITY – GENERALPROVISIONSA. CUSTODYB. OTHER RIGHTS AND DUTIES IN

EXERCISE OF PARENTAL AUTHORITYII. SUBSTITUTE AND SPECIAL PARENTAL

AUTHORITYIII. SUSPENSION OR TERMINATION OF

PARENTAL AUTHORITYIV. RIGHTS AND DUTIES OF CHILDREN

I. Parental Authority

(asked in ’94, ‘03 and ’05 bar exams)

(patria potestas):It’s the mass of rights and obligations whichparents have in relation to the person andproperty of their children until their emancipation,and even after this under certain circumstances(Manresa).

Parental authority includes (Art. 209 FC):1. The caring for and rearing of children for

civic consciousness and efficiency;2. The development of the moral, mental and

physical character and well-being of saidchildren

Rules as to the exercise of parentalauthority:1. The father and the mother shall jointly

exercise parental authority over the personsof their common children. In case ofdisagreement, the father's decision shallprevail, unless there is a judicial order to thecontrary (Art. 211 FC)

2. If the child is illegitimate, parental authorityis with the mother (Art.176 FC; see alsoChapter 10).

Cases when parental authority andresponsibility may be transferred orrenounced: Adoption; Guardianship; or Commitment of the child in an entity or

institution engaged in child care or in achildren’s home

Characteristics of parental authority:1. It is a natural right and duty of the parents

(Art. 209 FC)2. It cannot be renounced, transferred or

waived, except in cases authorized by law(Art 210 FC)

3. It is jointly exercised by the father and themother (Art. 211 FC)

4. It is purely personal and cannot beexercised through agents

5. It is temporary________________

A. Custody

Parental Preference Rule—The natural parents, who are of good characterand who can reasonably provide for the child,are ordinarily entitled to custody as against allpersons (Santos v CA, 1995).

Who exercises authority in cases of death,absence, remarriage, or separation ofparents— In case one parent is absent or already

dead, the present or surviving parent (Art.212 FC)

Remarriage shall not affect the parentalauthority over the children (Art. 212 FC)

In case of a void/annulled marriage, andthere is no agreement bet. spouses, theparent designated by the court (Art. 43 FCpar 1; Art. 49 FC).

Innocent spouse gets custody of minorchildren in legal separation (Art. 63 FC par3).

The court shall take into account all relevantconsiderations, especially the choice of thechild over seven years of age, unless theparent chosen is unfit (Art. 213 FC par 1).

Tender Years Presumption—NO child under 7 years of age shall beseparated from the mother, unless the courtfinds compelling reasons to order otherwise.(Art. 213 FC par 2; Gamboa v. CA, 2007)Examples of compelling reasons are: When the mother is insane; with a communicable disease that might

endanger the life or health of the child; is maltreating the child; or has another child by another man who lives

with her. (Cervantes v. Fajardo, 1989)[NOTE: Prostitution or infidelity to husband doesnot make a mother unfit as parent.]

B. Other Rights and Duties in Exercise ofParental Authority

Rights of Parents upon their children— To have them in their custody (Art. 220 FC

par 1) To represent them in all matters affecting

their interests (Art. 200 FC par 6) Demand respect and obedience and impose

discipline on them (Art. 200 FC par 7&8; seealso People v Silvano, 1999)


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Administer the property of a child for her/hissupport and education, unless title/transferprovides otherwise (Art. 226 FC par 1)

Administer the fruits and income (ONLY) ofthe children’s property primarily to supportthe child and secondarily to use for the dailyneeds of the family (Art. 226 FC par 2)

To give or withhold consent on marriage,pre-nuptial, donation propter nuptias,adoption, and employment

To disinherit them for just cause

Duties of Parents upon their children— Support and upbringing in accordance to

their means (Art. 220 par 1) Educate, instruct, and provide them with

moral and spiritual guidance, and love andunderstanding (Art. 220 par 3

Defend them against unlawful aggression Answer for damages caused by their fault or

negligence, and for civil liability for crimescommitted by them (Art. 221 FC)

Give their lawful inheritance

Liability of parents for torts committed bytheir minor children (Art. 221 FC; Art. 2180CC)— Parents and other persons exercising

parental authority are civilly liable for thetorts of their unemancipated children: Provided they are living in their

company, and Subject to the appropriate defenses

provided by law, like observing thediligence of a good father of a family toprevent the damage (Libi v. IAC, 1992)

If the minor child is, therefore, not living withthe parents but has been entrusted to thecare of other persons, or is an intern inschool, the liability does not apply.

This liability of the parents and thoseexercising parental authority over the child issolidary and primary and direct, notsubsidiary

II. Substitute and Special ParentalAuthority

(Asked in 2003 bar exam)

Substitute parental authority exercised by (inorder):1. The surviving grandparent (Art. 214 FC)2. Oldest brother or sister, over 21 years old,

unless unfit or unqualified (Art. 216 FC par2).

3. Child’s actual custodian, over 21 years old,unless unfit or unqualified (Art. 216 FC par3)

[NOTE: The same order applies to theappointment of judicial guardian]

Special parental authority exercised by (Art.218 FC)—1. School, its administrators and teachers, or2. The individual, entity or institution engaged

in child care.

SubstituteParentalAuthority

Special Parental Authority

It is exercised incase of death,absence, or incase ofunsuitability ofparents.

It is exercised concurrently with theparental authority of the parentsand rests on the theory that whilethe child is in the custody of theperson exercising special parentalauthority, the parents temporarilyrelinquish parental authority overthe child to the latter.

St. Mary’s Academy v. Carpitanos, (2002)The special parental authority andresponsibility applies to all authorizedactivities, whether inside or outside thepremises of the school, entity or institution.

Liability of those exercising special parentalauthority over the child (Art. 219 FC)—1. They are principally and solidarily liable

for damages caused by the acts or missionsof the minor child while under theirsupervision, instruction or custody.HOWEVER, this liability is subject to thedefense that the person exercising parentalauthority exercised proper diligence.

2. The parents and judicial guardians of theminor or those exercising substitute parentalauthority over the minor are subsidiarilyliable for said acts and omissions of theminor.

Effects of Parental Authority Upon theProperty of the Child (Art. 225 FC)— The Father and Mother shall jointly exercise

legal guardianship over the property of theminor child without court appointment

In case of disagreement, the father’sdecision shall prevail, unless there is judicialorder to the contrary

If the market value of the property or theannual income of the child exceedsP50,000, the parent is required to furnish abond of not less than 10% of the value of thechild’s property or income


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III. Suspension or Termination ofParental Authority

Grounds for Suspension of ParentalAuthority (CLEBC; Art. 230-31 FC)—1. Conviction of parent for crime punished w/

civil interdiction2. Treats child with excessive harassment and

cruelty3. Gives corrupting orders, counsel or example4. Compels child to beg5. Subjects or allows acts of lasciviousness

Parental Authority Permanently Terminates(Art. 228 FC)—1. Upon death of parents2. Upon death of child3. Upon emancipation of child4. If the parents exercising parental authority

has subjected the child or allowed him to besubjected to sexual abuse (Art. 232 FC)

Termination of parental authority which canbe revived by final judgment (Art. 229 FC)—1. Upon adoption of the child;2. Upon the appointment of a general guardian

for the child;3. Upon judicial declaration

IV. Rights and Duties of Children

Art. 356, NCC— parental care receive at least elementary education be given moral and civil training by parents

or guardian live in an atmosphere conducive to his

physical, moral, and intellectualdevelopment

Art. 3, PD603— to be born well right to a wholesome family life right to a well-rounded development right to a balanced diet, adequate clothing,

shelter, proper medical attention, and allbasic physical requirements of a healthy life

raised in an atmosphere of morality andrectitude

education commensurate to his abilities full opportunities for a safe and wholesome

recreation protection against exploitation and other bad

influences right to the care, assistance and protection

of the State right to an efficient and honest government

right to grow up as a free individual

Duties of Children:Art. 357, NCC— obey and honor his parents or guardian respect old relatives and persons holding

substitute parental authority exert his utmost for his education and

training cooperate with the family in matters for his

own good

Art. 4, PD603— strive to live an upright and virtuous life love, obey, respect his parents and

cooperate with them in strengthening thefamily

extend his love to his brothers and sisters exert his utmost to develop his potentials

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Chapter XIV. Funerals

I. General Guidelines

Art. 305, Civil Code. The duty and the right to makearrangements for the funeral of a relative shall be inaccordance with the order established for support,under Article 294. In case of descendants of the samedegree, or of brothers and sisters, the oldest shall bepreferred. In case of ascendants, the paternal shallhave a better right.

Art. 306, Civil Code. Every funeral shall be inkeeping with the social position of the deceased.

Art. 307, Civil Code. The funeral shall be inaccordance with the expressed wishes of thedeceased. In the absence of such expression, hisreligious beliefs or affiliation shall determine thefuneral rites. In case of doubt, the form of the funeralshall be decided upon by the person obliged to makearrangements for the same, after consulting the othermembers of the family.

Art. 308, Civil Code. No human remains shall beretained, interred, disposed of or exhumed without theconsent of the persons mentioned in articles 294 and305.

Art. 309, Civil Code. Any person who showsdisrespect to the dead, or wrongfully interferes with afuneral shall be liable to the family of the deceased fordamages, material and moral.

Art. 310, Civil Code. The construction of a tombstoneor mausoleum shall be deemed a part of the funeralexpenses, and shall be chargeable to the conjugalpartnership property, if the deceased is one of thespouses.

Duty and Right to make funeralarrangements (in relation to Art. 199 FC)—1. Spouse2. Descendants in nearest degree3. Ascendants in nearest degree4. Brothers and sisters5. Municipal authorities – if there are no

persons who are bound to support or if suchpersons are without means

Guidelines in making funeral arrangements— The persons who preferred in the right to

make funeral arrangements may waive theright expressly or impliedly in which case theright and duty immediately descend to theperson next in the order

It must be in keeping with the social positionof the deceased.

Law shall prevail over the will of the personswho have the right to control the burial ofdeceased – exhumation, evidential purpose,disposition of corpse by deceased,mutilation of corpses and autopsies.

Corpses which are to be buried at publicexpenses may also be used for scientificpurposes under certain conditions.

Expressed wishes of the deceased is givenpriority provided that it is not contrary to lawand must not violate the legal andreglamentary provisions concerning funeralsand disposition of the remains (time,manner, place or ceremony)

In the absence of expressed wishes, hisreligious beliefs or affiliation shall determinethe funeral rights.

In case of doubt, the persons in Art. 199shall decide.

Any person who disrespects the dead orinterferes with the funeral shall be liable formaterial and moral damages.

- end of Persons and Family Relations -


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SUCCESSIONTable of Contents

Chapter I. Concept of Succession................59I. Definition of Succession (Art. 774, CC)

59II. Opening of Succession (Art. 777, CC) 59III. Kinds of Succession (Art. 778, CC) ....59IV. Heirs ....................................................60

Chapter II. Testamentary Succession ..........61I. Concept ...............................................61II. Testamentary Capacity .......................61III. Formalities of Wills ..............................61IV. Qualifications of Witnesses to a NotarialWill 62V. Qualifications of Witnesses to a NotarialWill 63VI. Institution of Heirs ...............................63VII. Applicable Principles of PrivateInternational Law .........................................63VIII. Codicils and Incorporation byReference ....................................................64IX. Revocation of Wills and TestamentaryDispositions..................................................64X. Allowance and Disallowance of Wills..65XI. Substitution of Heirs ............................66XII. Legitimes.........................................67XIII. Preterition........................................69XIV. Reserva Troncal .............................69XV. Disinheritance .................................70XVI. Legacies and Devises.....................71

Chapter III. Intestate Succession..................74I. Causes for Legal or IntestateSuccession...................................................74II. The Intestate or Legal Heirs................74III. Fundamental Underlying Principles inLegal or Intestate Succession......................74IV. Relationship (Arts. 963-969, CC) ........75V. The Right of Representation (Art. 970,CC) 75VI. Order of Legal or Intestate Succession

76VII. Concurrence in Legal or IntestateSuccession...................................................77VIII. Outline of Intestate Shares .............77IX. Order of Concurrence in the Case of anAdopted Child (Art, 190, FC) .......................78

Chapter IV. Provisions Common toTestamentary and Intestate Succession .....79

I. Accretion .............................................79II. Capacity to Succeed ...........................80III. Acceptance and Repudiation ofInheritance ...................................................81IV. Collation (Arts. 1061-1077, CC)..........81

Chapter V. Partition and Distribution ofEstate ..............................................................83

I. Concept of Partition ............................83II. Effects of Partition...............................84III. Nullification of Partition .......................84IV. Important Periods in Partition .............85

Chapter VI. Application of the ImportantConcepts through Sample ComputationalProblems.........................................................86

I. Institution of Heirs ...............................86II. Legitimes.............................................86III. Intestate Succession...........................87IV. Accretion .............................................87V. Collation ..............................................88

CIVIL LAW REVIEWER Chapter I. CONCEPT OF SUCCESSION

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Chapter I. Concept of Succession

I. DEFINITION OF SUCCESSIONII. OPENING OF SUCCESSIONIII. KINDS OF SUCCESSIONIV. KINDS OF HEIRS

I. Definition of Succession (Art. 774,CC)

It is a mode of acquisition by virtue of which the property, rights and

obligations to the extent of the value of the inheritance,

of a person are transmitted through his death to another

or others either by his will, or by operation of law a process of transmission of property,

rights, and obligations not extinguished bydeath (Balane)

II. Opening of Succession (Art. 777, CC)

The rights to succession are transmittedfrom the moment of the death of thedecedent.

However, a person may be “presumed”dead for the purpose of opening hissuccession (Rules on presumptive deathin Arts. 390-391, CC). In this case,succession is only of provisional characterbecause there is always a chance that theabsentee may still be alive.

III. Kinds of Succession (Art. 778, CC)

Testamentary (Art. 779, CC) - results fromthe designation of an heir made in a will

Legal or intestate (Art. 960, CC) - takesplace by operation of law in the absence of avalid will If a person dies without a will or with a

void will or one which has subsequentlylost its validity;

The suspensive condition attached tothe institution of heir does not happen oris not fulfilled or the heir dies before thetestator or repudiates the inheritance,there being no substitution and no rightof accretion takes place

When the heir instituted in incapable ofsucceeding, except in cases provided inthis Code.

Heir dies before the testator

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SUCCESSION TEAM

Kristine BongcaronEmil LunascoLead Writers

Alex LopezWriter

CIVIL LAW

Kristine BongcaronPatricia TobiasSubject Editors

ACADEMICS COMMITTEE




Kae Guerrero

DESIGN & LAYOUT



LECTURES COMMITTEE


Heads


Arianne Cerezo


Volunteers

MOCK BAR COMMITTEE

Lilibeth Perez


Dahlia Salamat

LOGISTICS

Charisse Mendoza


Jill HernandezHead


Faye CelsoJoie Bajo

Members

CIVIL LAW REVIEWER Chapter I. CONCEPT OF SUCCESSION

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Testator repudiates the inheritance

Mixed (Art. 780, CC) - effected partly by willand partly by operation of law

IV. Heirs

Those who are called to the whole or to analiquot portion of the inheritance either bywill or by operation of law

Compulsory Heirs – those who succeed byforce of law to some portion of theinheritance, in an amount predetermined bylaw known as the legitime, of which theycannot be deprived by the testator, exceptby a valid disinheritance. They succeedregardless of a will.

Voluntary or Testamentary Heirs – thosewho are instituted by the testator in his will,to succeed to the portion of the inheritanceof which the testator can freely dispose.They succeed by reason of a will.

Legal or Intestate Heirs – those whosucceed to the estate of the decedent whodies without a valid will, or to the portion ofsuch estate not disposed of by will. Theysucceed in the absence of a valid will,although this is not the only ground forintestacy, as can be seen in Chapter III.

CIVIL LAW REVIEWER Chapter II. TESTAMENTARY SUCCESSION

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Chapter II. Testamentary Succession

I. Concept of Testamentary SuccessionII. Testamentary CapacityIII. Formalities of WillsIV. Qualifications of Witnesses to a Notarial WillV. Amending a WillVI. Institution of HeirsVII. Applicable Principles of Private International

LawVIII. Codicils and Incorporation by ReferenceIX. Revocation of wills and Testamentary

dispositionX. Allowance and Disallowance of willsXI. Substitution of HeirsXII. LegitimesXIII. PreteritionXIV. Reserva TroncalXV. DisinheritanceXVI. Legacies and Devices

I. Concept

Governing Law on Validity with Respect tothe Time of Execution

Aspect of the

Will

Governing Law

Formal ValidityLaw in force at the time the will

was executed (Art. 795, CC)

Intrinsic

Validity

Law of decedent’s nationality at

the time of his death (Art. 16

and 2263, CC)

II. Testamentary Capacity

Requirements (SAP) Testator is of Sound mind at the time of

execution (Art. 798, CC) Not under 18 years of Age (Art. 797,

CC) Not expressly Prohibited by law to make

a will (Art. 796, CC)

Soundness of mind—Rules to remember: It is sufficient that the testator – (NPC)

o Knew the Nature of the estate tobe disposed of; (N)

o The Proper objects of his bounty;(P)

o Character of the testamentary act(C) (Art. 799, CC)

It is not necessary that the testator be infull possession of all his reasoningfaculties, or that his mind be whollyunbroken, unimpaired, or unshattered by

disease, injury or other cause. (Art. 799,CC)

Soundness of mind is presumed (Art.800, CC)

III. Formalities of Wills

Kinds of Wills—1. Notarial will- Ordinary or attested will (Arts.

804-808, CC)2. Holographic will (Arts. 804 and 810, CC)

Common Requirements for Both Kinds ofWills (Art. 804, CC) —1. Every will must be in writing; and2. Executed in the language known to the

testator._____________

Specific Requirements for Notarial Wills—(Asked in ’75, ’86, ’90, ’93, ’07 and ’08)

1. In writing (Art. 804, CC)

2. In the language known to the testator (Art.804, CC)

3. SUBSCRIPTION: Subscribed to, at theend (Art. 805, CC) -a. By the testator himself; orb. By the testator’s name written by a

representative in his presence andunder his express direction.

4. ATTESTATION: Attested and subscribedby 3 or more credible witnesses in thepresence of the testator and of oneanother (Art. 805, CC).

GENERAL RULE EXCEPTIONThe law presumes thatevery person is of soundmind

If within one monthbefore making a will thetestator is known to beinsane, the burden ofproof that he had a lucidinterval is on the onealleging the validity ofthe will.

Supervening incapacity will notinvalidate the will. Supervening capacitywill also not validate the will. (Art. 801,CC)

The attestation clause shall state the ff: Number of pages; The fact that the testator or his

representative under his expressdirection signed the will and every


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page in the presence of instrumentalwitnesses

That the witnesses signed the willand all its pages in the presence ofthe testator and of one another.

Test of Presence:Jaboneta vs. Gustilo, (1906): Notwhether they actually saw each othersign, but whether they might have seeneach other sign had they chosen to doso considering their mental and physicalcondition and position with relation toeach other at the moment of inscriptionof each signature.

5. MARGINAL SIGNATURES: Testator or hisrepresentative shall write his name, and thewitnesses shall sign each and every pageexcept the last page (Art. 805, CC)

Exceptions: When the will consists of only one

page Abangan vs. Abangan, (1919):

When the will consists of only twopages, the first of which contains alldispositions and is signed at thebottom by the testator and thewitnesses, and the second pagecontains only the attestation clauseduly signed at the bottom by thewitnesses.

In the case of Matias vs. Salud (1957),the use of thumbprint was allowed.

Icasiano vs. Icasiano, (1964): Theinadvertent failure of one witness to affixhis signature to one page of atestament, due to the simultaneouslifting of two pages in the course ofsigning, is not per se sufficient to justifydenial of probate.

6. PAGE NUMBERINGS: Numberedcorrelatively (Art. 805, CC), i.e., Page Oneof Five pages

7. Acknowledged before a notary public bythe testator and the witnesses (Art. 806, CC) In the case of Cruz vs. Villasor (1973)

the court ruled that the Notary publiccannot be considered a third witness.He cannot acknowledge before himselfhis having signed the will. To allow suchwould have the effect of having only twoattesting witnesses to the will which

would be in contravention of Arts. 805and 806.

_____________

Special Requirements for Notarial Wills—1. Deaf Mute (Art. 807, CC)

a. Testator must personally read the will; orb. Testator shall personally designate two

persons to read the contents andcommunicate it to him in somepracticable manner.

2. Blind (Art. 808, CC)a. The will shall be read to the testator

twice - By one of the subscribingwitnesses and by the notary publicacknowledging the will.

b. In the case of Garcia vs. Vasquez(1970), the court considered a testatorsuffering from Glaucoma as legallyblind.

_____________

Requisites for a Holographic Will—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)

IV. Qualifications of Witnesses to aNotarial Will

Qualifications (Art. 820, CC)—1. Of sound mind2. Aged 18 years or over3. Not blind, deaf or dumb4. Able to read and write

Disqualifications (Art. 821, CC)—1. Person not domiciled in the Philippines2. Those who have been convicted of

falsification, perjury, or false testimony.

Interested witness (Art. 823, CC)—

General Rule ExceptionDevises or legacies infavor of a spouse, parentor child who also atteststo the will as a witnessshall be void

If there are three othercompetent witnesses, thedevice or legacy shall bevalid and the interestedwitness shall be treatedas a mere surplasage

Creditors are not incompetent to bewitnesses (Art. 824, CC)

Supervening incompetency shall not preventthe allowance of the will (Art. 822, CC)


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V. Qualifications of Witnesses to aNotarial Will

Notarial Will v. Holographic Will—

Notarial Will Holographic WIllNOTARIAL codicil ONLY Notarial Codicil; or

Holographic Codicil; orAdditional dispositionsbelow the signature,dated and signed in thehand of the testator.

Codicil (Art. 825, CC)- it is a supplementor addition to a will, made AFTER theexecution and annexed to be taken aspart thereof, by which any dispositionmade in the original is explained,added to, or altered.

Effect of insertion written by another personon the validity of a holographic will)—

When made EffectAfter the execution,without consent oftestator

Insertion considered notwritten. Validity cannot bedefeated by the malice orcaprice of a third person

After execution, withconsent

Will is valid, insertion isvoid.

After execution, validatedby testator’s signature

Insertion becomes part ofthe will. Entire willbecomes void because itis not wholly written bythe testator.

Contemporaneous to theexecution of the will

Will is void because it isnot written entirely by thetestator

VI. Institution of Heirs

(Asked in ’94, ’05, ’06, and ’08)

Definition (Art. 841, CC) —It is an act by virtue of which a testatordesignates in his will the persons whoare to succeed him.

Requisites for a valid institution—1. Testator has capacity to make the

institution2. The institution is made in a will3. Institution is made personally by the

testator and is not left to a third person4. Persons instituted must be identified or

identifiable5. There must be no preterition of compulsory

heirs

6. Only the free portion can be disposed ofby institution.

A voluntary heir who dies before the testatoror proves to be incapacitated transmitsnothing to his heirs (Art. 851, CC)

Three principles in institution of heirs—1. Equality of heirs (Art. 846, CC)

a. Heirs instituted without designation ofshares shall inherit in equal parts

b. NOTE: This applies even to institution offull and half-blood siblings.

2. Individuality of institution (Art. 847, CC) Example: I designate A, B, and the

children of C. Unless otherwise stated, ifC has two children, the estate will bedistributed in four equal parts.

3. Simultaneity of institution (Art. 849, CC) Example: I designate my brother A and

his children. A and his children willinherit at the same time, unlessotherwise expressly stated that they willinherit successively.

Institution based on a false cause (Art. 850,CC)—

GENERAL RULE EXCEPTIONFalse cause isconsidered not writtenand the institution willtake effect

If the testator wouldnot have made theinstitution had heknown the false cause,the institution wouldNOT take effect

Example: I designate A to half of theestate ONLY because he is the husbandof my daughter. Note that the relianceon the false cause must be clear andunmistakable.

VII.Applicable Principles of PrivateInternational Law

Governing Law As to Time of Execution ofWill—

Aspect of the Will Governing LawFormal Validity Law in force at the time

the will was madeIntrinsic Validity Law of decedent’s

nationality at the time ofhis death (Art. 16, CC)


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Governing Law as to Place of Execution ofWill—

TestatorPlace of

Execution of Will Governing Law

Filipino

Philippines Philippine Law (Art.16, CC)

Outside of thePhilippines

1. Law of the countryin which it is executed(Art. 17, CC); or2. Philippine Law (Art.815, CC)

Alien Philippines 1. Philippine Law; or2. Law of the countryof which testator is acitizen or subject (Art.817, CC)

Outside of thePhilippines

1. Law of the placewhere the will isexecuted (Art. 17,CC); or2. Law of the placewhere the testatorresides; or3. Law of thetestator’s country; or4. Philippine Law (Art.816, CC)

Aspects of the Will Governed by the NationalLaw of the Decedent—1. Order of succession;2. Amount of successional rights;3. Intrinsic validity of testamentary

provisions; and4. Capacity to succeed.

Joint Will—1. A single testamentary instrument,2. Which contains the wills of two or more

persons,3. Jointly executed by them,4. Either for their reciprocal benefit or for the

benefit of a third person.

Mutual Wills—1. Executed pursuant to an agreement

between two or more persons,2. Jointly executed by them,3. Either for their reciprocal benefit or for the

benefit of a third person.

Reciprocal Wills—1. Testators name each other as beneficiaries

in their own wills,2. under similar testamentary plans

Note: A will that is both joint and mutual is oneexecuted jointly by two or more persons,the provisions of which are reciprocal andwhich shows on its face the devises are

made in consideration of each other.Such is prohibited under Art. 819, CC.Prohibition is applicable only to jointwills executed by Filipinos.

VIII. Codicils and Incorporation byReference

Codicil (Arts. 825-826, CC)—1. It is a supplement or addition to a will,2. made after the execution of a will,3. and annexed to be taken as a part of the

will,4. by which any disposition made in the original

will is explained, added to, or altered.5. in order that it may be effective, it shall be

executed as in the case of a will.

Incorporation by Reference; Requisites (Art,827, CC)—1. The document or paper referred to in the will

must be in existence at the time of theexecution of the will.

2. The will must clearly describe and identifythe same, stating among other things thenumber of pages thereof.

3. It must be identified by clear andsatisfactory proof as the document or paperreferred to therein; and

4. It must be signed by the testator and thewitnesses on each and every page,except in case of voluminous books ofaccount or inventories.

IX. Revocation of Wills andTestamentary Dispositions

Modes of Revocation (Art. 830, CC)—1. By implication of law; or2. By the execution of a will, codicil or other

writing executed as provided in the case ofwills; or

3. By burning, tearing, canceling, orobliterating the will with the intention ofrevoking it, by the testator himself, or bysome other person in his presence, andby his express direction.

Note: The act contemplating revocation must bedone at any time before the death of thetestator. The right of revocation cannot bewaived or restricted. (Art. 828, CC)


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Law Governing Revocation (Art. 829, CC)—

Place ofRevocation

Testator’sDomicile

GoverningLaw

PhilippinesPhilippines, orsome othercountry

Philippine Law

Outside thePhilippines

Philippines Philippine Law

ForeignCountry

1. Law of theplace wherethe will wasmade; or2. Law of theplace in whichthe testatorhad hisdomicile at thetime ofrevocation

Doctrine of Dependent Relative Revocation—Molo vs. Molo, (1951): The rule that wherethe act of destruction is connected with themaking of another will so as to fairly raisethe inference that the testator meant therevocation of the old to depend upon theefficacy of the new disposition intended tobe substituted, the revocation will beconditional and dependent upon theefficacy of the new disposition; and if forany reason, the new will intended to bemade as a substitute is inoperative, therevocation fails and the original willremain in full force.

X. Allowance and Disallowance of Wills

Probate— It is a Special Proceeding required to

establish the validity of a will and in order topass real or personal property (Art. 838, CC)

Mercado vs. Santos (1938): The probate ofa will by the probate court having jurisdictionthereof is usually considered as conclusiveas to its due execution and validity, and isalso conclusive that the testator was ofsound and disposing mind at the time whenhe executed the will, and was not actingunder duress, menace, fraud, or undueinfluence, and that the will is genuine andnot a forgery.

General Rule: In probate proceedings, theprobate court cannot inquire into the intrinsicvalidity of testamentary provisions. Only the

extrinsic validity of such wills may beexamined.

Exceptions:a. Acain vs Diongson (1987): When the will

is intrinsically void, on its face such thatto rule on its formal validity would be afutile exercise

b. Valera vs. Inserto, (1987): Claimants areall heirs, and they consent, either,expressly or impliedly, to the submissionof the question of intrinsic validity to thecourt.

c. Pastor vs. CA, (1983): Probate courtmay pass upon the title thereto, but suchdetermination is provisional and notconclusive, and is subject to the finaldecision in a separate action to resolvetitle.

Matters to be Proved in Probate—1. Whether the instrument which is offered for

probate is the last will and testament ofthe decedent

2. Whether the will has been executed inaccordance with the formalitiesprescribed by law

3. Whether the testator had testamentarycapacity at the time of execution of the will

Grounds for Disallowance of Will (Art. 839,CC; Rule 76, Sec 9) (SUM IFF)—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 thebeneficiary or some other person;

3. If the testator acted by Mistake or did notintend that the instrument he signed shouldbe his will at the time affixing his signaturethereto;

4. If the testator was Insane or otherwisementally incapable of making a will at thetime of its execution;

5. If the Formalities required by law have notbeen complied with; or

6. If it was executed through Force or underduress, or the influence of fear, or threats.

Note: This list on the grounds for disallowanceof will is exclusive.

Revocation v. Disallowance—

Revocation DisallowanceVoluntary Act of theTestator

Given by Judicial Decree

With or Without Cause Must always be for alegal cause


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May be partial or total Always total, exceptwhen the ground of fraudof influence for exampleaffects only certainportions of the will

XI. Substitution of Heirs

Definition of Substitution (Art. 857, CC)—1. It is the appointment of another heir,2. So that he may enter into the inheritance in

default of the heir originally instituted.

Classes of Substitution—1. Simple or Common: The testator may

designate one or more persons to substitutethe heir/s instituted in case the heirs should:a. die before him (predecease),b. should not wish to accept the

inheritance (repudiation), orc. should be incapacitated to accept the

inheritance (incapacitated). (Art. 859,CC)

2. Brief or Compendious (Art. 860, CC)a. Brief – Two or more persons were

designated by the testator to substitutefor only one heir

b. Compendious – One person isdesignated to take the place of two ormore heirs

3. Reciprocal If the heirs instituted in unequal shares

should be reciprocally substituted, thesubstitute shall acquire the share of theheir who dies, renounces, or isincapacitated, unless it clearly appearsthat the intention of the testator wasotherwise. If there is more than onesubstitute, they shall have the sameshare in the substitution as theinstitution.

Example (only 1 substitute): If two heirsare reciprocally substituted, then if oneof them dies before the testator dies,renounces, or turns out to beincapacitated, the other will get hisshare, regardless of whether or not theirshares are equal.

Example (more than 1 substitute): A isinstituted to 1/3, B to 1/6, and C to ½. IfC dies before the testator, renounces orturns out to be incapacitated, then theother two will get his shares in the sameproportion as in the institution. A will gettwice as much as B (because his shareof 1/3 in the institution is twice the sizeof B’s share of 1/6)

4. Fideicommissary If the testator institutes an heir with an

obligation to preserve and to deliver toanother the property so inherited. Theheir instituted to such condition is calledthe First Heir or the Fiduciary Heir; theone to receive the property is thefideicommissary of the second heir. (Art.863, CC)

Requisites of a Fideicommisary Substitution(Arts. 863-865, CC)—1. A Fiduciary or First Heir instituted is

entrusted with the obligation to preserveand to transmit to a FideicommissarySubstitute or Second Heir the whole or partof the inheritance.

2. The substitution must not go beyond onedegree from the heir originally instituted.

3. The Fiduciary Heir and theFideicommissary are living at the time ofthe death of the testator.

4. The fideicommissary substitution must beexpressly made.

5. The fideicommissary substitution is imposedon the free portion of the estate andnever on the legitime

Note:a. Palacios vs. Ramirez (1982): “Degree”

refers to degree of relationship.b. PCIB vs. Escolin (1974): In the absence

of an obligation on the part of the firstheir to preserve the property for thesecond heir, there is no fideicommissarysubstitution.

Effects of predecease of the firstheir/fiduciary or the secondheir/fideicommisary—

Legend: T – Testator FH – First Heir / Fiduciary SH – Second Heir / Fideicommissary

Substitute

Situation 1: If the following is the sequenceof death of the three parties: FH – SH – T,who will inherit? The legal heirs. There isno fideicommissary substitution because FHand SH are not living at the time of thetestator’s death. (Art 863, CC)

Situation 2: T – SH – FH, who will inherit?The SH and his heirs under Art. 866, CC.This is because the SH passes his rights tohis own heirs when he dies before FH.


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Situation 3: FH – T – SH, who will inherit?No specific provision in law, but SH inheritsbecause the T intended him to inherit.

XII. Legitimes

Definition of Legitime (Art. 886, CC)—1. It is that part of the testator’s property which

he cannot dispose of,2. Because the law has reserved it for his

compulsory heirs.

Classes of Compulsory Heirs (Art. 887, CC)—1. Primary: Those who have precedence

over and exclude other compulsory heirs: Legitimate Children and Legitimate

Descendants with respect to theirLegitimate Parents and Ascendants

2. Secondary: Those who succeed only inthe absence of the Primary compulsoryheirs:a. Legitimate Parents and Legitimate

Ascendants, with respect to theirLegitimate Children and Descendants.(They will inherit only in default oflegitimate children and theirdescendants)

b. Illegitimate Parents with respect to theirIllegitimate Children. (They will inheritonly in default of the illegitimate andlegitimate children and their respectivedescendants). Note that otherillegitimate ascendants are not included.

3. Concurring: Those who succeed togetherwith the primary or the secondarycompulsory heirs:a. Widow or Widower / Surviving Spouse

(Legitimate)b. Illegitimate Children and Illegitimate

Descendants

If the testator is aLEGITIMATE CHILD:

If the testator is anILLEGITIMATE CHILD:

1. LC and descendants 1. LC and descendants2. In default of No. 1, LPand ascendants

2. ILC and descendants

3. SS 3. In default of Nos. 1-2.ILP only

4. IC and descendants 4. SS

Legend:LC – Legitimate ChildrenILC – Illegitimate ChildrenSS – Surviving SpouseLP – Legitimate ParentsILP – Illegitimate Parents

Specific Rules on Legitimes—1. Direct Descending Line

a. Rule of Preference between lines (Art978 and 985, CC) Those in the direct descending line

shall exclude those in the directascending and collateral lines; and

Those in the direct ascending lineshall, in turn, exclude those in thecollateral line.

b. Rule of Proximity (Art 926, CC) The relative nearest in degree

excludes the farther onec. Right or representation ad infinitum in

case of predecease, incapacity, ordisinheritance (Art 972 and 992, CC) For decedents who are Legitimate

Children, only the LegitimateDescendants are entitled to right ofrepresentation.

For decedents who are IllegitimateChildren, both the Legitimate andthe Illegitimate Descendants canrepresent, only with respect to thedecedent’s illegitimate parents.

d. If all the Legitimate Childrenrepudiate their legitime, the nextgeneration of Legitimate Descendantsmay succeed in their own right.

2. Direct Ascending Linea. Rule of division between lines

The father and the mother shall

inherit equally if both living. One

succeeds to the entire estate of the

child if the other is dead. (Art. 986,

CC)

In default of the mother and the

father, the ascendants nearest in

degree will inherit. (Art. 987)

If there are more than one relative of

the same degree but of different

lines, one half will go to the paternal

ascendants and the other half to the

maternal ascendants. (Art. 987)

b. Rule of equal division The relatives who are in the same

degree shall inherit in equal shares.(Art 987)


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Summary of Legitimes of Compulsory Heirs—(Asked in ’82, ’85, ’86, ’97, ’99, ’03, and ’05)

SurvivingRelatives

LC &Descendants

SS ILC LP &Ascendants

ILP

1 LC alone ½ (divided by #of children)

2 1 LC, SS ½ ¼3 LC, SS ½ (divided by #

of children)Same asshare of 1

LC4 LC, ILC ½ ½ share of 1

LC5 1 LC, SS, ILC ½ ¼

(preferred)½ share of 1

LC6 2 or more LC, SS,

ILC½ (divided by #

of children)Same asshare of 1

LC

½ share of 1LC

7 LP alone ½8 LP, ILC ¼ ½9 LP, SS ¼ ½10 LP, SS, ILC

1/8¼ ½

11 ILC alone ½ (dividedby # of

children)12 ILC, SS

1/3 1/3(divided

by # ofchildren)

13 SS alone ½ or1/3

ifmarriage in

articulomortis

14 ILP alone ½15 ILP, SS ¼ ¼16 Adopter, ILC, SS

1/3 1/3 1/3(adopter)

Steps in Determining the Legitime ofCompulsory Heirs—1. Determine the gross value of the estate at

the time of the death of the testator.2. Determine all debts and charges which are

chargeable against the estate.3. Determine the net value of the estate by

deducting all the debts and charges from thegross value of the estate.

4. Collate or add the value of all donations intervivos to the net value of the estate.

5. Determine the amount of the legitime fromthe total thus found.

6. Impute the value of all donations inter vivosmade to strangers against the disposablefree portion and restore it to the estate if thedonation is inofficious.

7. Distribute the residue of the estate inaccordance with the will of the testator.

Note: Please see the Illustrative IntegrativeProblems in Chapter VI for the application ofthese steps.

Remedy of a Compulsory Heir in case ofImpairment of Legitime—

Extent and Nature ofImpairment

Remedy

Total omission of acompulsory heir who is adirect descendant orascendant (preterition)

Annulment of institutionand reduction of legaciesand devises (Art. 854, CC)

Testamentary dispositionsimpairing or diminishingthe legitime

Reduction of thedisposition insofar as theymay be inofficious orexcessive (Art. 907, CC)

Partial impairment Completion of the legitime(Art. 906, CC)

Impairment by inofficiousdonations

Collation – reduction ofdonations (Arts. 771 and911, CC)


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XIII. Preterition

(Asked in ’88, ’99, ’00, ’01 and ’08)

A. Concept of Preterition (Art. 854, CC)1. There must be a total omission of one,

some or all of the heir/s in the will.2. 2. The omission must be that of a

compulsory heir.3. 3. The compulsory heir omitted must be of

the direct line.4. The omitted compulsory heir must be living

at the time of the testator’s death or mustat least have been conceived before thetestator’s death.

B. Effects of Preterition (Art. 854, CC)1. The institution of the heir is annulled.2. Devises and legacies shall remain valid as

long as they are not inofficious.3. If the omitted compulsory heir should die

before the testator, the institution shall beeffective, without prejudice to the right ofrepresentation. Neri vs. Akutin (1941): When there are

no devises and legacies, preterition willresult in the annulment of the will andgive rise to intestate succession.

XIV. Reserva Troncal(Asked in ’79, ’82, ’85, and ’87)

A. Concept of Reserva Troncal (Art. 891,CC)

Situation—1. A descendant (prepositus) inherits or

acquires property from an ascendant(source) by gratiutious title or from a brotheror sister

2. The same property is inherited by anotherascendant (reservista) or is otherwiseacquired by him by operation of law from thesaid descendant (prepositus)

Then an obligation arises—The said ascendant (reservista) mustreserve the property for the benefit of therelatives of the deceased descendant withinthe third civil degree and who belong to theline from which the said property came(reservatorios).

___________

B. Requisites for Reserva Troncal(Chua vs. CFI and Gonzales vs. CFI)1. That the property was acquired by a

descendant (Prepositus) from an ascendant

or from a brother or sister (Source) bygratuitous title,

2. That the Prepositus died without an 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 fromwhich said property came.

___________

C. Reserva Minima v. Reserva Maxima

Situation—1. The prepositus acquired property

gratuitously from an ascendant or 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

Problem—

Will the property acquired gratuitiously by

the prepositus from the source be treated as

acquired by the ascendant-heir by operation

of law (legitime) and therefore reservable or

by testamentary disposition?

Two Views—

1. Reserva Maxima: The entire property will be

considered acquired as legitime and

therefore wholly reservable

2. Reserva Minima: One half is reservable, the

other half is not subject to reserva troncal

(Tolentino, p. 284)

___________

D. Extinguishment of the Reserva(Tolentino, p. 300-305) (LDD-RRP)

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 reservatorios

5. Registration of the reservable property

under the Torrens system as free

6. Prescription, when the reservista holds the

property adversely against the reservatorios,

as free from reservation


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XV. Disinheritance

(Asked in ’82, ’84, ’99, ’00, and ’08)

A. Definition of Disinheritance (Art. 915, CC)1. It is the act by which the testator2. For just cause3. Deprives a compulsory heir of his right to the

legitime.

B. Requisites of a Valid Disinheritance1. Heir disinherited must be designated by

name or in such a manner as to leave no

room for doubt as to who is intended to bedisinherited.

2. It must be for a cause designated by law.3. It must be made in a valid will.4. It must be made expressly, stating the cause

in the will itself.5. The cause must be certain and true, and

must be proved by the interested heir if theperson should deny it.

6. It must be unconditional.7. It must be total.

_________________________________________________________________________________

C. Summary of Causes of Disinheritance

Grounds for Disinheritance 919 920 921 10321 Guilty or Convicted of Attempt Against the Life of the Testator, Spouse,

Ascendant or Descendant* * * *

2 Accused Testator or Decedent of Crime Punishable by Imprisonment of6 years or more, and Found Groundless or False

* * * *

3 Causes testator or decedent to Make a Will or Change one by Fraud,Violence, Intimidation, or Undue Influence

* * * *

4 Unjustified Refusal to Support Testator * * *5 Convicted of Adultery or Concubinage with Spouse of Testator or

Decedent* * *

6 Maltreatment of testator by Word and Deed *7 Leading a Dishonorable or Disgraceful Life *8 Conviction of Crime which carries the penalty of Civil Interdiction *9 Abandonment of Children or Inducing Children to Live Corrupt and

Immoral Life or Against Attempted Virtue* *

10 Loss of Parental Authority * *11 Attempt by One Parent Against the Life of the Other UNLESS there is

Reconciliation Between Parents*

12 Spouse Has Given Cause for Legal Separation *13 Failure to Report Violent Death of Decedent Within One Month UNLESS

Authorities Have Already Taken Action*

14 Force, Violence, Intimidation, or Undue Influence to Prevent Anotherfrom Making a Will or Revoking One Already Made or Who Supplants orAlters the Latter’s Will

*

15 Falsifies or Forges Supposed Will of the Decedent *

Art, 919, CC: Children and Descendants Art. 920, CC: Parents and Ascendants Art. 921, CC: Spouse Art. 1032, CC: Unworthiness

D. Modes of Revocation1. Reconciliation (Art 922, CC)2. Subsequent institution of the disinherited

heir3. Nullity of the will which contains the

disinheritance.

Note: The moment that testator uses one of theacts of unworthiness as a cause for

disinheritance, he thereby submits it to therules on disinheritance. Thus,reconciliation renders the disinheritanceineffective.


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XVI. Legacies and Devises

Legacy and Devise Distinguished—

LEGACY DEVISEA gift of personalproperty given in a will

A gift of real propertygiven in a will

It is bequeathed It is devised

Persons Charged With the Duty to GiveLegacies and Devises in a Will—1. Compulsory heir, provided, their legitimes

are not impaired (Art. 925, CC)2. Voluntary heir3. Legatee or devisee can be charged with

the duty of giving a sub-legacy or sub-devisee but only to the extent of the value ofthe legacy or devise given him (Art. 925,CC)

4. The estate represented by the executoror administrator, if no one is charged withthis duty to pay or deliver the legacy ordevise in the willa. If there is an administration proceeding,

it constitutes a charge upon the estate.b. If there is no administration proceeding,

it is a charge upon the heirs.

Validity and Effect of Legacy or Devise— Legacy or devise of a thing belonging to

another (Art. 930, CC)

STATUS OF PROPERTYGIVEN BY

LEGACY/DEVISE

EFFECT ONTHE LEGACY/

DEVISETestator erroneouslybelieved that the property

Void

belonged to himThe thing bequeathedafterwards becomes his bywhatever title

Effective

Legacy or devise of thing already belongingto the legatee or devisee

STATUS OFPROPERTY GIVEN

BY LEGACY/DEVISE

EFFECT ON THELEGACY/DEVISE

The thing alreadybelongs to the legateeor devisee at the timeof the execution of thewill (Art. 932, CC)

Ineffective

The thing is subject toan encumbrance orinterest of anotherperson (Art. 932, CC)

Valid only as to theinterest orencumbrance

Legatee or deviseesubsequently alienatesthe thing (Art. 933,CC)

Ineffective

After alienating thething, the legatee ordevisee subsequentlyreacquires itgratuitously (Art. 933,CC)

Ineffective

After alienating thething, the legatee ordevisee acquires it byonerous title (Art. 933,CC)

Legatee or deviseecan demandreimbursement fromthe heir or estate


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Different Objects of Legacies and Devises (Art. 934-944,CC)—1. Legacy of a thing pledged or mortgaged to secure a debt (Art 934, CC)2. Legacy of credit, or remission or release of a debt (Art 935 CC)3. Legacy to the debtor of thing pledged by him (Art 936, CC)4. Legacy or devise to a creditor if the testator orders the payment of a debt (Art 939, CC)5. Alternative legacies and devises (Art 940, CC)6. Legacy of generic personal property or indeterminate real property (Art 941, CC)7. Legacy of education (Art 944, CC)8. Legacy of support (Art 944, CC)

OBJECTS OF LEGACY ORDEVISE

EFFECT

Thing pledged or mortgaged tosecure a debt

Estate is obliged to pay the debt Other charges pass to the legatee or devisee

Credit or remission or release of adebt

Effective only as regards the credit or debt existing at thetime of the testator’s death

Legacy lapses if the testator later brings action against thedebtor

If generic, comprises all credits/debts existing at time ofexecution of will

Thing pledged by debtor Only the pledge is extinguished; the debt remains

To a creditor Shall not be applied to his credit unless the testator sodeclares

Order of payment of a debt If testator does not really owe the debt, the disposition isvoid

If the order is to pay more that the debt, the excess is notdue

This is without prejudice to the payment of naturalobligations

Alternative legacies and devises The choice is with the heir, or the executor or administrator If the heir, legatee or devisee dies the right passes to their

heirs Once made, the choice is irrevocable

Legacy of generic personal propertyor indeterminate real property

Legacy is valid even if there are no things of the same kindin the estate

Devise of indeterminate real property valid only if there areimmovable property of the same kind in the estate

The choice belongs to the heir, legatee or devisee or theexecutor or administrator

Legacy of education Lasts until the legatee is of age or beyond the age ofmajority in order that he may finish some professional,vocational or general course provided he pursues hiscourse diligently

If testator did not fix the amount it is fixed in accordancewith the social standing and circumstances of the legateeand the value of the estate

Legacy of support Lasts during lifetime of legatee If the testator used to give the legatee a sum of money for

support, give the same amount unless it is markedlydisproportionate to the estate

If testator did not fix the amount it is fixed in accordancewith the social standing and circumstances of the legateeand the value of the estate


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

ART. 911 ART. 950Order of Preference

(LIPO)Order of Preference

(RPSESO)

Legitime of compulsory heirs Donations Inter vivos Preferential legacies or devises All Other legacies or devises pro rata

Remuneratory legacy/devise Preferential legacy/devise Legacy for Support Legacy for Education Legacy/devise of Specific, determinate thing

which forms a part of the estate All Others pro rata

Application: Application:

When the reduction is necessary topreserve the legitime of compulsoryheirs from impairment whether there aredonations inter vivos or not; or

When, although, the legitime has beenpreserved by the testator himself there aredonations inter vivos.

NOTE:Art. 911, CC governs when there is a conflictbetween compulsory heirs and the deviseesand legatees.

When there are no compulsory heirs and theentire estate is distributed by the testator aslegacies or devises; or

When there are compulsory heirs but theirlegitime has already been provided for by thetestator and there are no donations intervivos.

NOTE:Art. 950, CC governs when the question ofreduction is exclusively among legatees anddevisees themselves.

How Legacy or Devise Delivered (Art. 951,CC)—1. The very thing bequeathed shall be

delivered and not its value2. With all its accessions and accessories3. In the condition in which it may be upon

the death of the testator4. Legacies of money must be paid in cash

Ground for Revocation of Legacies andDevises (Art. 957, CC) (TALO)—1. Testator Transforms the thing such that it

does not retain its original form ordenomination

2. Testator Alienates the thing by any title orfor any cause. Reacquisition of the thing bythe testator does not make the legacy ordevise valid, unless it is effected by rightof repurchase.

3. Thing is totally Lost during the lifetime orafter the death of the testator

4. Other causes: nullity of will, non-compliancewith suspensive condition, sale of the thingto pay the debts of the deceased during thesettlement of his estate.

CIVIL LAW REVIEWER Chapter III. INTESTATE SUCCESSION

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Chapter III. Intestate Succession

I. Causes for Legal or Intestate SuccessionII. The Intestate or Legal HeirsIII. Fundamental Underlying Principles in Legal

or Intestate SuccessionIV. RelationshipV. The right of RepresentationVI. Order of Legal or Intestate SuccessionVII. Concurrence in Legal or Intestate SuccessionVIII. Outline of Intestate SharesIX. Order of Concurrence in the case of an

Adopted Child

The Civil Code does not state a definition oflegal or intestate succession. Art. 960 onlyenumerates the instances when legalsuccession takes place. This enumeration is notexclusive, as there are other instances whereintestacy may occur, as listed below.

I. Causes for Legal or IntestateSuccession

1. If a person dies without a will (Art 960[1])2. If a person dies with a void will (Art 960[1])3. If a person dies with a will which has

subsequently lost its validity (Art 960[1])4. When the will does not institute an heir (Art

960[2])5. When the will does not dispose of all the

property belonging to the testator. Legalsuccession shall take place only withrespect to the property which the testatorhas not disposed (Art 960[2])

6. If the suspensive condition attached to theinstitution of the heir does not happen or isnot fulfilled (Art 960[3])

7. If the heir dies before the testator (Art960[3])

8. If the heir repudiates the inheritance, therebeing no substitution, and no right ofaccretion takes place (Art 960[3])

9. When the heir instituted is incapable ofsucceeding, except in cases provided inthe Civil Code (Art 960[4])

10. Preterition – Intestacy may be total or partialdepending on whether or not there arelegacies or devises (Balane, p.426)

11. Upon the expiration of a resolutory termattached to the institution of heir (Balane,p.426)

12. Upon fulfillment if a resolutory conditionattached to the institution of heir, renderingthe will ineffective (Balane, p.426)

Note: In all cases where there has been aninstitution of heirs, follow the I.S.R.A.I order:a. If the Institution fails, Substitution

occurs.b. If there is no substitute, the right of

Representation applies in the directdescending line to the legitime if thevacancy is caused by predecease,incapacity, or disinheritance.

c. The right of Accretion applies to thefree portion when the requisites in Art.1016 are present.

d. If there is no substitute, and the right ofRepresentation or Accretion are notproper, the rules on Intestatesuccession shall apply.

II. The Intestate or Legal Heirs

1. Relativesa. Legitimate ascendantsb. Illegitimate parentsc. Legitimate childrend. Illegitimate childrene. Surviving Spousef. Brothers, sisters, nephews and nieces

(BSNN)g. Other collateral relatives

2. Surviving spouse3. State (through escheat proceedings)

III. Fundamental Underlying Principles inLegal or Intestate Succession

Rule of Preference between Lines—1. Those in the direct descending line shall

exclude those in the direct ascending andcollateral lines;

2. Those in the direct ascending line shall, inturn, exclude those in the collateral line.

Rule of Proximity—The relative nearest in degree excludes thefarther one. (Art. 962, par.1 CC), saving the rightof representation when it properly takes place.

Rule of Equal Division—1. The relatives who are in the same degree

shall inherit in equal shares. (Arts. 962par.2, 987 and 1006, CC)

2. Exceptions: (Balane pp.427-428)a. the rule of preference of linesb. the distinction between legitimate and

illegitimate filiation (the ratio underpresent law is 2:1) (Art 983, in relation toArticle 895 as amended by Article 176FC)


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c. the rule of division by line in theascending line Article 987 par.2)

d. the distinction between full-blood andhalf-blood relationship among brothersand sisters, as well as nephews andnieces. (Art 1006 and 1008)

e. representation

Rule of Barrier between the legitimate familyand the illegitimate family (the iron-curtainrule)—The illegitimate family cannot inherit by intestatesuccession from the legitimate family and vice-versa. (Art. 992, CC)

Rule of Double Share for full bloodcollaterals—When full and half-blood brothers or sisters,nephews or nieces, survive, the full blood shalltake a portion in the inheritance double that ofthe half-blood. (Arts. 895 and 983, CC)

Note:1. If one of the legitimate ascendants,

illegitimate parents, legitimate children orillegitimate children survives, the brother,sisters, nephews, and nieces (BSNN) areexcluded

2. If one of the legitimate ascendants,illegitimate parents, legitimate children,illegitimate children or surviving spousesurvives, the other collateral relatives andthe state are excluded.

3. If any of the heirs concur in legitimes, thenthey also concur in intestacy.

IV. Relationship (Arts. 963-969, CC)

Number of generations determinesproximity. (Art 963)

Each generation forms a degree. (Art 963) A series of degrees forms a line. (Art 964

par.1) A line may either be direct or collateral. (Art

964 par.1) A direct line is that constituted by the series

of degrees among ascendants anddescendants (ascending and descending).(Art 964 par.2)

A collateral line is that constituted by theseries of degrees among persons who arenot ascendants or descendants, but whocome from a common ancestor. (Art 964par.3)

Full blood – same father and mother. (Art967 par.1)

Half-blood – only one of either parent is thesame. (Art 967 par.2)

In adoption, the legal filiation is personal andexists only between the adopter and theadopted. The adopted is deemed alegitimate child of the adopter, but stillremains as an intestate heir of his naturalparents and other blood relatives. (Art. 189,FC)

V. The Right of Representation (Art. 970,CC)

(Asked in ’77, ’82, ’85, ’88, ’92, ’97, and ’07)

It is a right created by fiction of law; By virtue of which the representative is

raised to the place and degree of the personrepresented;

And acquires the rights which the latterwould have if he were living or if he wouldhave inherited.

Important Concepts— Representation is only allowed with respect

to inheritance conferred by law (i.e., as tolegitimes and intestate shares [ Art 923,CC]), in cases of incapacity,disinheritance, and predecease of anheir.

There is no representation in voluntarysuccession (by will). (Art 856, CC)

There is also no representation inrepudiation. Note, however that arenouncer can represent, but cannot berepresented.

Representation takes place ad infinitum inthe direct descending line but never in thedirect ascending line. ( Art 972, CC)

In the collateral line, representation takesplace only in favor of the children of thebrothers or sisters (i.e., nephews andnieces) whether of the full or half-blood (Art.972, CC) and only if they concur with atleast one uncle or aunt. In this case, theyshare in the inheritance per stirpes. If thechildren survive alone, they inherit in theirown right and share in equal proportions orper capita. (Art. 975)

Inheritance per stirpes means that therepresentative/s shall not inherit more thanwhat the person they represent wouldinherit, if he were living or could inherit.(Art.975, CC)


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The representative is called to thesuccession by the law and not by the personrepresented. The representative does notsucceed the person represented but the onewhom the person represented would havesucceeded. (Art. 971, CC)

General Rule—Grandchildren inherit from thegrandparents by right ofrepresentation, if proper.

Exception—Whenever all the children repudiate,the grandchildren inherit in their ownright because representation is notproper. (Art 969, CC)

Right of representation in the collateral lineis only possible in INTESTATE succession.It cannot take place in testamentarysuccession.

In determining whether or not representationis proper, apply the DOUBLE HEIRSHIPTEST (Art. 973, CC): the representative

must be a legal heir of both the person he isrepresenting and the decedent.

Thus, illegitimate children can representillegitimate children parents in inheritancefrom illegitimate grandparents. (*Rationale:Iron-curtain rule under Art. 992, CC)

On the other hand, a legitimate child mayrepresent either a legitimate or illegitimateparent in the inheritance of either alegitimate or illegitimate grandparents. (Arts.902, 989,990)

Representation in Adoption (Asked in ’94,’04, and ’07)—

If the adopting parent should die beforethe adopted child, the later cannotrepresent the former in the inheritanceof the parents or ascendants of theadopter. The adopted child is not relatedto the deceased in that case, becausefiliation created by fiction of law isexclusively between the adopter and theadopted. (TOLENTINO pp. 448-449)

VI. Order of Legal or Intestate Succession(Asked in ’77, ’78, ’97, ’98, ’99, ’00, ’06, and ’08)

Decedent is a Legitimate Child Decedent is an Illegitimate Child Decedent is an Adopted Child

1 LC andLegitimate descendants

LC andLegitimate descendants

LC andLegitimate descendants

2 LP andLegitimate ascendants

ILC andIllegitimate descendants

ILC and Illegitimate descendants

3 ILC andIllegitimate descendants

ILP LP or ILP andLegitimate ascendants,

Adoptive parents4 SS SS SS5 Legitimate siblings,

Nephews,Nieces

Illegitimate siblings,Nephews,

Nieces

Siblings,Nephews,

Nieces

6 Legitimate collateral relatives withinthe 5

thdegree

State State

7 State


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VII.Concurrence in Legal or Intestate Succession

INTESTATE HEIRS Excludes Excluded By Concurs WithLC and

Legitimate descendantsAscendants,

Collaterals andState

No one SS andILC

ILCand Descendants

ILP,Collaterals and

State

No one SSLC and

LPLP and

Legitimate ascendantsCollaterals and

StateLC ILC and

SSILP Collaterals and

StateLC and ILC SS

SS Collaterals other thansiblings, nephews and nieces

No one LC, ILC, LP, ILPSiblings

NephewsNieces

Siblings,Nephews

Nieces

All other collaterals andState

LC, ILC, LP, ILP SS

Other collaterals within 5th

degreeCollateral more remote in

degree andState

LC, ILC, LP, ILP andSS

Collaterals in the samedegree

State No one Everyone No one

VIII. Outline of Intestate Shares

(Asked in ’76, ’79, ’92, ’03, ’04, ’06, and ’08)

1. Legitimate children onlya. Divide entire estate equally among all

legitimate children (Art. 979, CC)b. Legitimate children include an adopted

child.2. Legitimate children and Illegitimate

childrenDivide entire estate such that eachillegitimate child gets ½ of what a legitimatechild gets (Art. 983, CC and Art. 176, FC)

3. Legitimate children and surviving spousea. Divide entire estate equally between the

legitimate children and the survivingspouse, the latter deemed as one child.The same rule holds where there is onlyone child.

b. “Children” as used in Art. 996 isinterpreted to include a situation wherethere is only one child.

4. Legitimate children. Surviving spouse,and Illegitimate childrenDivide the entire estate such that thesurviving spouse is deemed one legitimatechild and each illegitimate child getting ½ ofwhat the legitimate child gets (Art. 996, CCand Art. 176, FC)

5. Legitimate parents onlyDivide the entire estate equally. (Art. 985,CC)

6. Legitimate ascendants only (excludingparents)Divide the entire estate equally but with theobservance of the rule of division by line(Art. 987, CC)

7. Legitimate parents and illegitimatechildrenLegitimate parents get ½ of the estate,illegitimate children get the other ½ (Art.991,CC)

8. Legitimate parents and surviving spouseLegitimate parents get ½ of the estate; Thesurviving spouse gets the other ½ (Art.997,CC)

9. Legitimate parents, surviving spouse andillegitimate childrenLegitimate parents get ½ of the estate;surviving spouse and the illegitimate childeach get ¼ each, the latter to share amongthemselves if more than one. (Art. 1000,CC)

10. Illegitimate children onlyDivide the entire estate equally. (Art. 988,CC)


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11. Illegitimate children and survivingspouseIllegitimate children get ½ of the estate; thesurviving spouse gets the other ½. (Art. 998,CC)

12. Surviving spouse onlyEntire estate goes to the surviving spouse.(Art. 994/995, CC)

13. Surviving spouse and illegitimate parentsIllegitimate parents get ½ and the spousegets the other ½ (by analogy with Art. 997,CC)

14. Surviving spouse and legitimate brothersand sisters, nephews and niecesSurviving spouse gets ½ of the estate, whilethe rest gets the other ½ with the nephewsand nieces inheriting by representation ifproper. (Art. 1001, CC)

15. Surviving spouse and illegitimatebrothers and sisters, nephews andniecesSurviving spouse gets ½ of the estate whilethe rest gets the other ½ with the nephewsand nieces inheriting by representation, ifproper; Note that all the other relativesshould be “illegitimate” because of the iron-curtain rule. (Art. 994,CC)

16. Illegitimate parents onlyEntire estate goes to the illegitimate parents.(Art 993, CC)

17. Illegitimate parents and children of anykind (whether legitimate or illegitimatechild)Illegitimate parents are excluded and do notinherit; For the rule on the respective sharesof the children, see numbers 1, 2 or 10,whichever is applicable.

18. Legitimate brothers and sisters onlyDivide the entire estate such that full-bloodbrothers/sisters gets a share double theamount of a half-blood brother or sister. (Art.1004 and 1006, CC)

19. Legitimate brothers and sisters, nephewsand niecesDivide the entire estate observing the 2 is to1 ratio for full and half blood relationshipswith respect to the brothers and sisters, withthe nephews and nieces inheriting byrepresentation, if proper. (Art. 1005 & 1008,CC)

20. Nephews and nieces only

Divide the entire estate per capita, observingthe 2 is to 1 ratio. (Arts. 975 and 1008, CC)

21. Other collaterals (Arts. 1009 and 1010)a. Divide entire estate per capita.b. Collateral relatives must be with the 5

th

degree of consanguinity.c. Note: the nearer relative excludes the

more remote relatives.

22. StateIf there are no other intestate heirs, theState inherits the entire estate throughescheat proceedings. (Art. 1011, CC)

IX. Order of Concurrence in the Case ofan Adopted Child (Art, 190, FC)

(Asked in ’79, ’86, ’04 and ’07)

SURVIVORS SHARELC, ILC, SS As in the case of ordinary

intestate successionLP or ascendants or ILPAdopter

½½

LP or ascendants or ILPor AdopterSS

½

½LP or ascendantsAdopterILC or descendants

½

½LP or ascendantsAdopterSSILC or descendants

1/3

1/31/3

Adopter alone Entire estateCollateral blood relatives As in the case of ordinary

intestate succession

CIVIL LAW REVIEWER Chapter IV. PROVISIONS common to TESTAMENTARY and INTESTATE SUCCESSION

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Chapter IV. Provisions Common toTestamentary and Intestate Succession

I. AccretionII. Capacity to SucceedIII. Acceptance or Repudiation of InheritanceIV. Collation

I. Accretion

A. Definition of Accretion (Art. 1015, CC)

It is a right by virtue of which, when two or morepersons are called to the same inheritance,devise or legacy, the part assigned to one whorenounces or cannot receive his share or whodied before the testator is added or incorporatedto that of his co-heirs, co-devisees, or co-legatees.

Accretion happens when there isrepudiation, incapacity, or predecease ofan heir.

It is the mechanism where the share of anheir is increased by vacant shares vacatedby heirs who cannot inherit for variousreasons. (RATIONALE: the decedentintended to give the property to nobody butthe co-heirs.)

There can only be accretion if there is aninstitution of heirs with respect to specificproperties. (Art 1016, CC)

Among compulsory heirs, there can only beaccretion with respect to the free portion.There can be no accretion with respect tothe legitimes. (Arts. 1021 and 1018, CC)

The heirs to whom the portion goes by theright of accretion take it in the sameproportion that they inherit. (Art. 1019, CC)

The heirs to whom the inheritance accruesshall succeed to all the rights andobligations which the heir who renounced orcould not receive it would have had. (Art.1020, CC)

In testamentary succession, when the rightof accretion does not take place, the vacantportion of the instituted heirs, if no substitutehas been designated, shall pass to the legalheirs of the testator, who shall receive it withthe same charges and obligations. (Art1022, CC)

Accretion shall also take place amongdevisees, legatees and usufructuaries underthe same conditions established for heirs.(Art 1023, CC)

____________________________________________________________________________________

Effect of Predecease, Incapacity, Disinheritance or Repudiation in Testamentary and IntestateSuccession—

CAUSE OF VACANCY TESTAMENTARY SUCCESSION INTESTATESUCCESSIONLEGITIME FREE PORTION

Predecease Representa-tionIntestate Succession

AccretionIntestate Succession

RepresentationIntestate

SuccessionIncapacity Representa-tion

Intestate SuccessionAccretion

Intestate SuccessionRepresentation

IntestateSuccession

Disinheritance Representa-tionIntestate Succession

- -

Repudiation Intestate Succession Accretion Accretion


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II. Capacity to Succeed

A. Requisites for Capacity to Succeed byWill or by Intestacy (Art. 1024 – 1025,CC)

The heir, legatee or devisee must be livingor in existence at the moment thesuccession opens; (Art 1025) and

He must not be incapacitated or disqualifiedby law to succeed. (Art 1024, par.1)

B. Who Are Incapable of Succeeding

BASED ON UNDUE INFLUENCE ORINTEREST (Art. 1027, CC) – PIGRAP Priest who heard the last confession of

the testator during his last illness, or theminister of the gospel who extendedspiritual aid to him during the sameperiod;

Individuals, associations andcorporations not permitted by law toinherit;

Guardian with respect to testamentarydispositions given by a ward in his favorbefore the final accounts of theguardianship have been approved, evenif the testator should die after theapproval thereof; except if the guardianis his ascendant, descendant, brother,sister, or spouse;

Relatives of the priest or minister of thegospel within the fourth degree, thechurch, order, chapter, community,organization, or institution to which suchpriest or minister may belong;

Attesting witness to the execution of awill, the spouse, parents, or children, orany one claiming under such witness,spouse, parents, or children;

Physician, surgeon, nurse, health officeror druggist who took care of the testatorduring his last illness.

BASED ON MORALITY OR PUBLICPOLICY (Arts. 739 and 1028, CC) Those made in favor of a person with

whom the testator was guilty of adulteryor concubinage at the time of themaking of the will.

Those made in consideration of a crimeof which both the testator and thebeneficiary have been found guilty.

Those made in favor of a public officeror his spouse, descendants andascendants, by reason of his publicoffice.

BASED ON ACTS OF UNWORTHINESS(Art. 1032, CC) –The following are incapable of succeedingby reason of unworthiness:a. Parents who have abandoned their

children or induced their daughters tolead a corrupt or immoral life, orattempted against their virtue;

b. Any person who has been convicted ofan attempt against the life of thetestator, his or her spouse,descendants, or ascendants;

c. Any person who has accused thetestator of a crime for which the lawprescribes imprisonment for six years ormore, if the accusation has been foundgroundless;

d. Any heir of full age who, havingknowledge of the violent death of thetestator, should fail to report it to anofficer of the law within a month, unlessthe authorities have already takenaction; this prohibition shall not apply tocases wherein, according to law, there isno obligation to make an accusation;

e. Any person convicted of adultery orconcubinage with the spouse of thetestator;

f. Any person who by fraud, violence,intimidation, or undue influence shouldcause the testator to make a will or tochange one already made;

g. Any person who by the same meansprevents another from making a will, orfrom revoking one already made, or whosupplants, conceals, or alters the latter'swill;

h. Any person who falsifies or forges asupposed will of the decedent.

C. Pardon of Acts of Unworthiness

EXPRESS IMPLIEDMade by the execution ofa document or anywriting in which thedecedent condones thecause of incapacity

Effected when thetestator makes a willinstituting the unworthyheir with knowledge ofthe cause of incapacity

Cannot be revoked Revoked when thetestator revokes the willor the institution


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III. Acceptance and Repudiation ofInheritance

Characteristics (VIR) (Arts. 1041 – 1042, 1056,CC)—1. Voluntary and free (Art 1041, CC)2. Irrevocable except if there is vitiation of

consent or an unknown will appears (Art1056, CC)

3. Retroactive (Art 1042, CC)

Requisites (Art. 1043, CC)—1. Certainty of death of the decedent2. Certainty of the right to the inheritance

Acceptance vs. Repudiation—1. Acceptance involves the confirmation of

transmission of successional rights, whilerepudiation renders such transmissionineffective.

2. Repudiation is equivalent to an act ofdisposition and alienation.

3. The publicity required for repudiation isnecessary for the protection of other heirsand also of creditors.

Forms of Acceptance (Arts. 1049 – 1050,CC)—1. Express Acceptance – one made in a

public or private document. (Art. 1049 par.1)

2. Tacit Acceptance – one resulting from actsby which the intention to accept isnecessarily implied or from acts which onewould have no right to do except in thecapacity of an heir.

Examples: (Art. 1050, CC)a. when the heir sells, donates or assigns

his rightb. when the heir demands partition of the

inheritancec. when the heir alienates some objects of

the inheritance, etc.3. Implied acceptance - Within thirty days

after the court has issued an order for thedistribution of the estate in accordance withthe Rules of Court, the heirs, devisees andlegatees shall signify to the court havingjurisdiction whether they accept or repudiatethe inheritance; if they do not do so withinthat time, they are deemed to have acceptedthe inheritance. (Art 1057, CC)

Forms of Repudiation (Art. 1051, CC)—1. in a public instrument acknowledged before

a notary public; or

2. in an authentic document – equivalent of anindubitable writing or a writing whoseauthenticity is admitted or proved; or

3. by petition presented to the court havingjurisdiction over the testamentary orintestate proceeding

Heirs in Two Capacities (Art. 1055, CC)—1. If a person is called to the same inheritance

as an heir by will and by law and herepudiates the inheritance in his capacity asa testamentary heir, he will be considered tohave also repudiated the inheritance as alegal heir.

2. If he repudiates it as a legal heir, without hisbeing a testamentary heir, he may stillaccept it in the latter capacity.

IV. Collation (Arts. 1061-1077, CC)

(Asked in ’77, ’78, ’79, and ’93)

A. Concept of Collation To collate is to bring back or to return to the

hereditary mass in fact or by fiction propertywhich came from the estate of the decedent,during his lifetime by donation or othergratuitous title but which the law considersas an advance from the inheritance. (Art1061, CC)

It is the act by virtue of which, thecompulsory heir who concurs with othercompulsory heirs in the inheritance bringback to the common hereditary mass theproperty which they may have received fromthe testator so that a division may beeffected according to law and the will of thetestator.

In reducing inofficious donations, the last tobe donated should be the first to bereduced.

RATIONALE FOR COLLATION: Ifdonations inter vivos will not be collated,then the rule on legitimes shall becircumvented or disregarded.

B. Operations Related to Collation Collation – adding to the mass of the

hereditary estate the value of the donationor gratuitous disposition.

Imputing or Charging – crediting thedonation as an advance on the legitime (ifthe donee is a compulsory heir) or on thefree portion (if the donee is a stranger).(BALANE p 522)

Reduction – determining to what extent thedonation will remain and to what extent it isexcessive or inofficious.


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Restitution – returning or the act ofpayment of the excess to the mass ofhereditary estate.

C. Persons Obliged to Collate GENERAL RULE: Compulsory heirs

EXCEPTIONS: when the testator should have so

expressly provided (Art. 1062, CC) when the compulsory heir should have

repudiated his inheritance (Art 1062,CC)

Grandchildren who survive with their uncles,aunts, or first cousins and inherit by right ofrepresentation (Art 1064, CC)

*Note: Grandchildren may inherit from theirgrandparent in their own right, i.e., as heirsnext in degree, and not by right ofrepresentation if their parent repudiates theinheritance of the grandparent, as no livingperson can be represented except in casesof disinheritance and incapacity. In thiscase, the grandchildren are not obliged tobring to collation what their parent hasreceived gratuitously from their grandparent.

D. What to Collate Any property or right received by gratuitous

title during the testator’s lifetime (Art 1061,CC)

All that they may have received from thedecedent during his lifetime. (Art 1061, CC)

Expenses incurred by the parents in givingtheir children a professional, vocational orother career shall not be brought to collationunless the parents so provide, or unlessthey impair the legitime; but when theircollation is required, the sum which the childwould have spent if he had lived in thehouse and company of his parents shall bededucted therefrom. (Art 1068, CC)

Any sums paid by a parent in satisfaction ofthe debts of his children, election expenses,fines, and similar expenses shall be broughtto collation. (Art 1069, CC)

E. Properties Not Subject to Collation Absolutely no collation

Expenses for support, education (onlyelementary and secondary), medicalattendance, even in extraordinary illness,apprenticeship, ordinary equipment, orcustomary gifts. (Art. 1067, CC)

Generally not imputable to legitime/cannot be collected, subject toexceptions

Expenses incurred by parents in givingtheir children professional, vocational orother career unless the parents soprovide, or unless they impair thelegitime. (Art. 1067, CC)

Wedding gifts by parents andascendants, consisting jewelry, clothingand outfit, except when they exceed1/10 of the sum disposable by will. (Art.1070, CC)

Neither shall donations to the spouse ofthe child be brought to collation; but ifthey have been given by the parent tothe spouses jointly, the child shall beobliged to bring to collation one-half ofthe thing donated. (Art. 1066, CC)

Note: Parents are not obliged to bring tocollation in the inheritance of theirascendants any property which may havebeen donated by the latter to their children.(Art 1065, CC)

CIVIL LAW REVIEWER Chapter V. PARTITION and DISTRIBUTION of ESTATE

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Chapter V. Partition and Distribution ofEstate

I. The Concept of PartitionII. The Effect of PartitionIII. Nullification of PartitionIV. Important Periods in Partition

I. Concept of Partition

Separate, Divide, Assign. Partition is theseparation, division and assignment of athing held in common among those to whomit may belong. The thing itself or its valuemay be divided. (Art. 1079, CC)

Owned in common. Before partition, thewhole estate of the decedent is owned incommon by the heirs. (Art 1078, CC)

Thing or value may be divided. (Art 1079) Acts deemed partition. Every act which is

intended to put an end to indivision amongheirs and legatees or devisees is deemed aparition, although it should purport to be asale, an exchange, a compromise, or anyother transaction. (Art 1082, CC)

A void partition may be valid if—1. the will was in fact a partition2. the beneficiaries of the void will were legal

heirs

The titles of acquisition or ownership of eachproperty shall be delivered to the co-heir towhom said property has been adjudicated.(Art. 1089 CC)

Kinds of Partition—1. Judicial v. Extrajudicial Partition

a. Judicial – Partition done by Courtpursuant to an Order of Distributionwhich may or may not be based on aproject of partition.

b. Extra-judicial – partition made by thedecedent himself by an act inter vivos orby will or by a third person entrusted bythe decedent or by the heirs themselves.(PARAS)

2. Partition Inter Vivos (Asked in ‘85)It is one that merely allocates specificitems or pieces of property on the basisof the pro-indiviso shares fixed by law orgiven under the will to heirs orsuccessors. (Art. 1080, cc)

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 heir2. Voluntary heir upon fulfillment of condition if

any (Art 1084, CC)3. Legatee or devisee4. 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 (Art1083, CC)

2. When the co-heirs Agreed that the estateshall not be divided for a period notexceeding 10 years, renewable for another10 years

3. When Prohibited by law4. When to partition the estate would render it

unserviceable for the use for which it isintended

Prohibition to Partition—1. The prohibition to partition for a period not

exceeding 20 years can be imposed on thelegitime.

2. If the prohibition to the partition is for morethan 20 years, the excess is void.

3. Even if a prohibition is imposed, the heirs bymutual agreement can still make thepartition.

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 void3. Through error or mistake, share of true

heir is allotted to mistaken heir – partitionshall not be rescinded unless there is badfaith or fraud on the part of the otherpersons interested, but the latter shall beproportionately obliged to pay the true heirof his share. The partition with respect to themistaken 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, anyor all of the co-heirs may be subrogated tothe rights of the purchaser by reimbursinghim for the price of the sale, provided theydo so within the period of one month from


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the time they were notified in writing of thesale by the vendor (Art. 1088, CC)

Strangers – those who are not heirs on thesuccession.

II. Effects of Partition

Effect—A partition legally made confers upon each heirthe exclusive ownership of the propertyadjudicated to him (Art 1091, CC)

Warranty— After the partition has been made, the co-

heirs shall be reciprocally bound to warrantthe title to, and the quality of, each propertyadjudicated (Art. 1092 CC)

The reciprocal obligation of warrantyreferred to in the preceding article shall beproportionate to the respectivehereditary shares of the co-heirs; But if any one of them should be

insolvent, the other co-heirs shall beliable for his part in the same proportion,deducting the part corresponding to theone who should be indemnified.

Those who pay for the insolvent heirshall have a right of action against himfor reimbursement, should his financialcondition improve (Art. 1093 CC)

An action to enforce the warranty among theco-heirs must be brought within ten yearsfrom 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 thesubsequent insolvency of the debtor of theestate, but only for his insolvency at thetime the partition is made. (Art 1095, CC)

The warranty of the solvency of the debtorcan only be enforced during the five yearsfollowing the partition.

Co-heirs do not warrant bad debts, if soknown to, and accepted by the distributee. But if such debts are not assigned to a

co-heir, and should be collected, inwhole or in part, the amount collectedshall be distributed proportionatelyamong the heirs. (Art. 1095 CC)

End of Warranty—The obligation of warranty among co-heirs shallcease in the ff cases: The testator himself has made the partition

Unless it appears, or it may bereasonably presumed, that his intentionwas otherwise, but the legitime shallalways remain unimpaired.

When its has been so expressly stipulated inthe agreement of partition Unless there has been bad faith

When the eviction is due to a causesubsequent to the partition, or has beencaused by the fault of the distributee of theproperty. (Art. 1096, CC)

III. Nullification of Partition

(Asked in ‘90)

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 alsobe rescinded on account of lesion, when anyone of the co-heirs received things whosevalue is less by at least one-fourth, than theshare to which he is entitled, considering thevalue of the things at the time they wereadjudicated (Art. 1098, CC) This article applies only to cases of

partition among-coheirs Lesion is the injury suffered in

consequence of inequality of situation byone party who does not receive the fullequivalent for what she gives in a saleor any commutative contract

3. The partition made by the testator cannot beimpugned on the ground of lesion, exceptwhen the legitime of the compulsory heirs isthereby prejudiced, or when it appears ormay be reasonably be presumed, that theintention of the testator was otherwise. (Art.1099, CC)

4. Preterition of a compulsory heir in thepartition (Art 1104, CC): Partition shall not be rescinded unless

bad faith or fraud on the part of otherheirs is proved.

The culpable heirs shall share in thedamages of the prejudiced compulsoryheir proportionately.

5. A partition which includes a person believedto be an heir, but who is not, shall be voidonly with respect to such person. (Art.1105 CC

___________

The action for rescission on account oflesion shall prescribe after four years fromthe time the partition was made. (Art. 1100,CC)

The heir who is sued shall have the option ofindemnifying the plaintiff for the loss, orconsenting to a new partition


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Indemnity may be made: By payment in cash or By the delivery of a thing of the same

kind and quality as that awarded to theplaintiff.

If a new partition is made, it shall affectneither those who have not been prejudicednor those who have not received more thantheir just share (Art. 1101, CC)

An heir who has alienated the whole or aconsiderable part of the real propertyadjudicated to him cannot maintain an actionfor rescission on the ground of lesion, but heshall have a right to be indemnified in cash(Art. 1102, CC)

The omission of one or more objects orsecurities of the inheritance shall not causethe rescission of the partition on the groundof lesion, but the partition shall be completedby the distribution of the objects or securitieswhich have been omitted. (Art. 1103, CC)

Difference of Nullity from Rescission—Nullity is not the same as Rescission:1. Nullity - the act is supposed to never have

existed2. Rescission - the act is valid at the origin

though it afterwards became ineffective

IV. Important Periods in Partition

1 month or lessbefore making awill

Testator, if publicly known to beinsane, burden of proof is on theone claiming validity of the will

20 years Maximum period testator canprohibit alienation of dispositions

5 years fromdelivery to theState

To claim property escheated tothe State

1 month To report knowledge of violentdeath of decedent lest he beconsidered unworthy

5 years from thetime disqualifiedperson tookpossession

Action for declaration ofincapacity & for recovery of theinheritance, devise or legacy

30 days fromissuance of orderof distribution

Must signifyacceptance/repudiationotherwise, deemed accepted

1 month formwritten notice ofsale

Right to repurchase hereditaryrights sold to a stranger by a co-heir

10 years To enforce warranty oftitle/quality of propertyadjudicated to co-heir from thetime right of action accrues

5 years frompartition

To enforce warranty of solvencyof debtor of the estate at the timepartition is made

4 years formpartition

Action for rescission of partitionon account of lesion

CIVIL LAW REVIEWER Chapter VI. APPLICATION

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Chapter VI. Application of the ImportantConcepts through SampleComputational Problems

I. Institution of HeirsII. LegitimesIII. Intestate SuccessionIV.II. The Effect of PartitionIII. Nullification of PartitionIV. Important Periods in Partition

(Based on the lectures of Prof. Danilo L.Concepcion)

I. Institution of Heirs

A. Excess Institution—

Mickey died testate, leaving a total estate ofP12,000. According to his Will, Goofy gets ½,Donald gets 1/3 and Minnie gets ¼ of theproperty. How will you compute the proportionalreduction from each heirs’ shares in order not toexceed the total estate of Mickey (assuming nolegitime is impaired)?

Goofy’s originalshare:

½ of 12,000 6,000

Donald’soriginal share:

1/3 of 12,000 4,000

Minnie’s originalshare:

¼ of 12,000 3,000

TOTAL:13,000

EXCESS:1,000

Goofy’s reduction = 6,000/13,000 x 1,000 =461.53846Donald’s reduction = 4,000/13,000 x 1,000 =307.69231Minnie’s reduction = 3,000/13,000 x 1,000 =230.76923

Total Deduction = P1000P13,000 – P1,000 = P12,000 (the total estate)

Goofy gets P6000 – P461.53846Donald gets P4,000 – P307.69231Minnie gets P3,000 – P230.76923___________

B. Deficiency in Institution—

Mickey died testate, leaving a total estate ofP12,000. According to his Will, Goofy gets 1/3,Donald gets ¼ and Minnie gets ¼ of the

property. How will you compute the proportionalincrease in each heirs’ shares in order not toexceed the total estate of Mickey (assuming nolegitimes were impaired)?

Goofy’soriginal share:

1/3 of 12,000 4,000

Donald’soriginal share:

1/4 of 12,000 3,000

Minnie’soriginal share:

1/4 of 12,000 3,000

TOTAL: 10,000

DEFICIENCY: 2,000

Goofy’s increase = 4,000/10,000 x 2,000 = 800Donald’s increase = 3,000/10,000 x 2,000 = 600Minnie’s increase = 3,000/10,000 x 2,000 = 600

Total Deficiency = P2000P10,000 + P2,000 = P12,000 (the total estate)

Goofy gets P4000 + 800 = P 4,800Donald gets P3,000 + 600 = P3, 600Minnie gets P3,000 + 600 = P 3, 600

II. Legitimes

A. Legitimes: Concurrence of Legitimateand Illegitimate Children—

Homer died of heart attack. His wife, Marge,predeceased him. He had only 1 legitimate child,Bart, and 4 illegitimate children, Lisa, Maggie,Wolverine and Cyclops. Homer has a totalestate of P120,000. How much is the legitime ofeach heir?

The legitimate child should get ½ of the estatewhile the illegitimate children get ½ of what thelegitimate child gets.

Bart - P60,000 Lisa - P30,000 Maggie - P30,000 Wolverine - P30,000 Cyclops - P30,000

But this would amount to a total of P180,000.Thus, there must be a reduction of the shares ofthe illegitimate children.

Reduction = excess / number of illegitimatechildrenReduction = (180,000 – 120,000) / 4 = 15,000P30,000 (share) – 15,000 (reduction) =P15,000


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Final Answer: Bart = P60,000 Lisa = P15,000 Maggie = P15,000 Wolverine = P15,000 Cyclops = P15,000 TOTAL = P120,000

___________

B. Legitimes: Concurrence of Spouse andLegitimate Children—

Anderson Silva died, leaving a total estate ofP120,000. He was survived by his wife,Machida, and his three children: Chuck, Quinton,and George. How much legitime is allotted bylaw to each heir?

Legitimate Children get ½The ½ is divided into as many legitimatechildren.Wife gets an amount equal to the share of alegitimate child.

Final Answer: Chuck = P20,000 Quinton = P20,000 George = P20,000 Machida = P20,000 Free Portion = P40,000

___________

C. Legitimes: Concurrence of Spouse,Legitimate and Illegitimate Children—

Princess toadstool died, survived by herhusband, kupa, her legitimate child, mushroom,and by her two illegitimate children, mario andluigi. She has a total estate of p120,000. Howmuch legitime is allotted by law to each heir?

The legitimate child gets ½.The wife gets ½ of the share of the legitimatechild (because there is only one legitimate child)The illegitimate children will each get ½ of theshare of the legitimate child.

Mushroom – P60,000 Kupa – P30,000 Mario – P30,000 Luigi – P30,000

But this will yield a total of p150,000. Thus theshares of the illegitimate children must bereduced.

Reduction = excess / number of illegitimatechildren

Reduction = (150,000 - 120,000)/2 =15,000P30,000 (share) – 15,000 (reduction)=P15,000

Final Answer: Mushroom = P60,000 Kupa = P30,000 Mario = P15,000 Luigi = P15,000

III. Intestate Succession

Hulk Hogan died intestate, with a total estate ofP70,000. His wife, Sable, his legitimate son,Ultimate Warrior, and his two illegitimatechildren, Stone Cold and Undertaker, survivedhim. How will his estate be divided among theseheirs?

Applying the law in intestate succession, eachheirs will receive the ff:

Ultimate Warrior – P35,000 Stone Cold – P17,500 Undertaker – P17,500 Sable – P35,000

Since the total shares will exceed P70,000,reduction is in order. The share of those who willreceive more than their legitimes must bereduced. The spouse’s share should be reducedfirst to the amount of her legitime (P17,500)(note: the share of the others are equal to theirlegitimes)

Further reductions shall be made since theamount will still exceed the net estate. Followingthe law of legitimes, namely that the legitime ofthe legitimate child and the surviving spouseshall be preferred over the illegitimate children’sshares, the reduction will be suffered by theillegitimate children.

Final Answer: Ultimate Warrior – P35,000 Stone Cold – P8750 Undertaker – P8750 Sable – P17,500

IV. Accretion

Goku died testate, leaving an estate of P720. Inhis will, he instituted his sons to his entire estate.His sons are Vegeta, Napa, Raditz and Freeza.Vegeta, who had two children (Trunks andBulma), predeceased Goku. Napa, who hated


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his father’s guts, repudiated his share in thewill.

Raditz, who likewise has two children(Tenshenhan and Chowzu), was found to beincapacitated to inherit from his father.

Lastly, Freeza, the youngest and most belovedson of Goku, has a son, Magneato.

Determine Legitime and Free Portion:Heir Will

Vegeta (predeceased) 180 = legitime:120free: 60

Napa (repudiated) 180 (automaticallybecomes free portion)

Raditz (incapacitated) 180 = legitime:120free: 60

Freeza 180 = legitime:120free: 60

Determine amount received by heirs throughrepresentation for the legitimes

Heir Representation forLegitime

Vegeta (predeceased) Legitime = 120Trunks: 60Bulma: 60

Napa (repudiated)Raditz (incapacitated) Legitime = 120

Tenshenhan: 60Chowzu: 60

Freeza

Determine if there is accretion:Heir Accretion

Vegeta (predeceased) - 60Napa (repudiated) -180

Raditz (incapacitated) -60Freeza + (60 + 60 + 180) or +

300

COMPUTE:Heir Final Answer

Vegeta (predeceased) Trunks: 60Bulma: 60

Napa (repudiated) 0Raditz (incapacitated) Tenshenhan: 60

Chowzu: 60Freeza 480

V. Collation

Sponge Bob died intestate on September 17,1985. He left an estate of P90,000. He wassurvived by his wife, Sandy, and his two childrenSpiderman and Robinhood. During Mr. Bob’slifetime, on January 1, 1980, he donated

P50,000 to Spiderman. In 1982, he made adonation to Robinhood worth P100,000.Compute for the shares of each heir.Total Estate = Gross Estate – Liabilities +Donations Inter VivosTotal Estate = 90,000 – 0 + 150,000 = P240,000

Determine the Legitimes:Legitimate Children = ½ of Total EstateTherefore: Spiderman = P60,000

Robinhood = P60,000

Surviving Spouse = amount equal to LegitimateChildTherefore: Sandy = P60,000

Determine their Intestate SharesHeir Final Answer

Spiderman 80, 000(60,000 = legitime)

Robinhood 80,000(60,000 = legitime)

Sandy 80,000(60,000 = legitime)

Determine AdvancesHeir Advance

Spiderman 50,000Robinhood 100,000

Sandy

Compute:Heir Computation

Spiderman Legitime: 60,000 – 50,000 = 10,000Free Portion = 20,000

Robinhood Legitime: 60,000 – 60,000 = 0Free Portion: 20,000 – 20,000 = 0

(20,000 still unaccounted for)Sandy

Since Robinhood’s share has been exhaustedbut there is still a deficiency of 20,000, this20,000 will be deducted from the free portionsof Spiderman and Sandy Pro Rata.

Heir ComputationSpiderman Legitime Left: 10,000

Free Portion Left =20,000 – 10,000 = 10,000

Robinhood 0Sandy Legitime: 60,000

Free Portion: 20,000 – 10,000 =10,000

Therefore –Heir Final Answer

Spiderman 20,000Robinhood 0

Sandy 70,000

- end of Succession -


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OBLIGATIONSTable of Contents

Chapter I. General Provisions.......................91I. Obligations ..........................................91II. Sources of Obligations ........................91

Chapter II. Nature and Effect of Obligations93I. Kinds of Prestations ............................93II. Breach of Obligation............................94III. Fortuitous Event (Force Majeure) .......96IV. Remedies to Creditors ........................96V. Usurious Transactions and Rules onInterest .........................................................97

Chapter III. Different Kinds of Obligations ..98I. Pure and Conditional Obligations .......98II. Reciprocal Obligations ......................100III. Obligations with a Period ..................100IV. Alternative and Facultative Obligations

101V. Joint and Solidary Obligations ..........103Effects of Prejudicial and Beneficial Acts(Art.1212) ...................................................105VI. Divisible and Indivisible Obligations..106VII. Oblligations with a Penal Clause ..106

Chapter IV. Extinguishment of Obligations.......................................................................107

I. Payment or Performance ..................107II. Loss or Impossibility..........................109III. Condonation or Remission of the Debt

109IV. Confusion or Merger of Rights ..........110V. Compensation ...................................110VI. Novation ............................................111

Charts: Payment & Performance................114

CIVIL LAW REVIEWER Chapter I. GENERAL PROVISIONS

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Chapter I. General Provisions

I. OBLIGATIONSII. SOURCES OF OBLIGATIONS

A. LAWB. CONTRACTSC. QUASI-CONTRACTSD. DELICTSE. QUASI-DELICTS

Article 1156, Civil Code. An obligation is a juridicalnecessity to give, to do or not to do.

I. Obligations

Elements of an Obligation (De Leon, 2003)—1. ACTIVE SUBJECT (Obligee/Creditor): the

person who has the right or power todemand the prestation.

2. PASSIVE SUBJECT (Obligor/Debtor): theperson bound to the perform the prestation.

3. PRESTATION (Object): the conductrequired to be observed by thedebtor/obligor (to give, to do or not to do).

4. VINCULUM JURIS (Juridical or Legal Tie;Efficient Cause): that which binds orconnects the parties to the obligation.

II. Sources of Obligations

A. LawArt. 1158, Civil Code. Obligations derived from laware not presumed. Only those expressly determined inthis Code or in special laws are demandable, andshall be regulated by the precepts of the law whichestablishes them; and as to what has not beenforeseen, by the provisions of this Book.

B. Contracts

Art. 1159. Has the Force of Law BetweenParties. Obligations arising from contracts havethe force of law between the contracting partiesand should be complied with in good faith

C. Quasi-ContractsArt. 2142, Civil Code. Certain lawful, voluntary andunilateral acts give rise to the juridical relation ofquasi-contract to the end that no one shall be unjustlyenriched or benefited at the expense of another.

Lawful Distinguished from crimesVoluntary Distinguished from quasi-delict,

which are based on fault andnegligence

Unilateral Distinguished from contract which isbased on agreementO

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NTRACTS

OBLIGATIONS & CONTRACTS TEAM

Prof. Solomon LumbaFaculty Editor

Leo LedesmaLead Writer

Krizel MalabananIvy VelascoTin Reyes

Frances DomingoHazel Abenoja

Writers

CIVIL LAW


ACADEMICS COMMITTEE




Kae Guerrero

DESIGN & LAYOUT



LECTURES COMMITTEE


Heads


Arianne Cerezo


Volunteers

MOCK BAR COMMITTEE

Lilibeth Perez


Dahlia Salamat

LOGISTICS

Charisse Mendoza


Jill HernandezHead


Faye CelsoJoie Bajo

Members


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Kinds of Quasi-Contracts Negotiorum Gestio: officious or voluntary

management of the property or affairs ofanother without the knowledge or consent ofthe latter.

Solutio Indebiti: undue payment. Thejuridical relation arises when:o a thing is received without any right; ando the thing delivered by mistake.

Others: See Arts. 2164-2175(De Leon, 2003)

D. Delicts (Acts or omissions punished by law;crimes)

Extent of Civil LiabilityGoverned by the Revised Penal Code and theCivil Code, includes:1. Restitution;2. Reparation of damages caused; and3. Indemnity for consequential damages (Art.

104, Revised Penal Code).(Tolentino, 1987)

Enforcement of Civil Liability1. Independent: Criminal and civil action

arising from the same offense may beinstituted separately.

2. Suspended: However, after criminal actionhas been commenced prosecution for civilaction is suspended in whatever stage itmay be found, until final judgment in thecriminal proceeding is rendered;

3. Impliedly Instituted: Civil action is impliedlyinstituted with the criminal action, when:○ offended party expressly waives the civil

action or reserves the right to institute aseparate civil action; or

○ the law provides for an independent civilaction

Barredo v. Garcia, (1942): The same negligent actmay give rise to an action based on delict or quasi-delict and the injured party is free to choose whichremedy to enforce.

Mendoza vs. Arrieta, (1979): If the civil action isbased on quasi-delict, there is no need to reserve theright to file a civil action in the criminal case.

Effect of Acquittal on Civil Actions

Barred No Effect if based on the very

same facts on whichthe criminal actionwhich ended inacquittal was based

if the facts alleged inthe civil case has beenfound to be non-existent in the criminal

an independent civilaction is allowed by law

acquittal is due to lackof proof beyondreasonable doubt

action (res judicata) if judgment of acquittal

contained a declarationthat no negligence canbe attributed to theaccused and that thefact from which civilaction might arise didnot exist

E. Quasi-Delicts (Voluntary acts or omissionswith fault or negligence causing damage toanother; not a crime nor a contract)

Quasi-Delict CrimesPrivate, againstindividual

Public, against the State

Criminal intent is notnecessary

Criminal intent isnecessary for criminalliability

Present in any act oromission where fault ornegligence intervenes

An act can is onlypunishable when there isa law penalizing it

Gives rise to liability fordamages to the injuredparty

There are crimes fromwhich no civil liabilityarises

Reparation,compensation orindemnification of theinjury suffered by theinjured party

Fine or imprisonment orboth, to public treasury

Preponderance ofevidence

Proof of guilt beyondreasonable doubt

Can be compromised Can never becompromised

Requisites of Liability (DWD)1. Wrongful act or omission by fault or

negligence2. Damage or injury proven by the person

claiming recovery3. Direct causal connection between the fault

or negligence and the damage or injury

Liability for Quasi-Delict (Art. 2180, NCC)

Liability for Crimes(Art. 103, RPC)

Primary, can be directlysued by the injuredparty

Subsidiary, employeemust first be convictedand sentenced to paycivil indemnity

All employers, whetherengaged in someenterprise or not, areliable for acts ofemployees, evenhousehold helpers

Employer is only liablewhen he is engaged insome kind of businessor industry

Avoid civil liability byproving exercise ofdiligence of a goodfather of a family

Subsidiary liability isabsolute and cannot beavoided by any proof ofdiligence

CIVIL LAW REVIEWER Chapter II. NATURE and EFFECT of OBLIGATIONS

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Chapter II. Nature and Effect ofObligations

I. KINDS OF PRESTATIONSII. BREACH OF OBLIGATIONSIII. FORTUITOUS EVENTSIV. REMEDIESV. USURIOUS TRANSACTIONS

I. Kinds of Prestations

KINDS OF PRESTATION1. TO GIVE: real obligation; to deliver either

(1) a specific or determinate thing, or (2) ageneric or indeterminate thing.

2. TO DO: positive personal obligation;includes all kinds of work or services.

3. NOT TO DO: negative personalobligation; to abstain from doing an act;includes the obligation not to give.

Accessories: those joined to or included withthe principal for the latter’s completion, betteruse, perfection or enjoyment

Accessions: additions to or improvement upona thing, either naturally or artificially

OBLIGATION TO GIVE

Specific Thing Generic Thing LimitedGeneric Thing

Particularlydesignated orphysicallysegregatedfrom all other ofthe same class;identified byindividuality.

Object isdesignated onlyby its class/genus/ species.Debtor can giveanything of thesame class aslong as it is ofthe same kind.

When thegeneric objectsare confined toa particularclass.

Cannot besubstituted.

Can besubstituted byany of the sameclass and samekind.

Personal Right Real RightVested before delivery Vested after deliveryA right enforceable onlyagainst the debtor

A right enforceableagainst the world

Right of the creditor todemand from the debtor,the fulfillment of aprestation to give, to door not to do

Right pertaining to aperson over a specificthing, without a passivesubject individuallydetermined againstwhom such right may bepersonally enforced

Duties of the Debtor Rights of the creditorTo GiveSpecificThing(Askedin ’83,’84, ’85and’86)

To preserve or take care of the thingdue

To deliver the thing itself To deliver the fruits of the thing To deliver the accessions and

accessories To pay for damages in case of breach

To compel specific performance To recover damages in case of breach of

the obligation, exclusive or in addition tospecific performance

Entitlement to fruits and interests from thetime the obligation to deliver arises

To GiveGenericThing

To deliver a thing of the quality intendedby the parties taking into considerationthe purpose of the obligation and othercircumstances

Creditor cannot demand a thing ofsuperior quality neither can the debtordeliver a thing of inferior quality

To be liable for damages in case ofbreach

To ask for performance of the obligation To ask that the obligation be complied with

by a third person at the expense of thedebtor

To recover damages in case of breach ofobligation

To Do To do it To shoulder the cost of having someone

else do it To undo what has been poorly done To pay for damages in case of breach

To compel performance To recover damages where personal

qualifications of the debtor are involved


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Not ToDo

Not to do what should not be done To shoulder the cost of undoing what

should not have been done To pay for damages in case of breach

To ask to undo what should not be done To recover damages, where it would be

physically or legally impossible to undowhat has been undone, because of :o the very nature of the act itself;o rights acquired by third persons who

acted in good faith;o when the effects of the acts prohibited

are definite in character and will notcease even if the thing prohibited beundone.

II. Breach of Obligation

A. Voluntary – fraud, negligence, delay orcontravention of tenor of the obligation

B. Involuntary – fortuitous event

TYPES OF BREACH

Substantial Breach Slight or Casual BreachTotal breachAmounts to Non-Performance;Basis for rescissionunder Art. 1191 andpayment of damages

Partial breachObligation is partiallyperformed;Gives rise to liability fordamages only

1. FRAUD (DOLO): deliberate or intentionalevasion of the normal fulfillment of anobligation (De Leon, 2003).

Future Fraud: Any waiver of action forfuture fraud is void (Art. 1171).

Past Fraud: can be subject of a validwaiver by the aggrieved party (De Leon,2003).

Woodhouse vs. Halili, (1953): In orderthat fraud may vitiate consent, it must bethe dolo causante and not merely thedolo incidente, inducement to themaking of the contract. The falserepresentation was used by plaintiff toget from defendant a bigger share of netprofits. This is just incidental to thematter in agreement. Because despiteplaintiff’s deceit, respondent would havestill entered into the contract.

2. NEGLIGENCE or FAULT (CULPA):omission of that diligence which is requiredby the nature of the obligation andcorresponds with the circumstances of theperson, of the time and of the place (Art.1173).

Effect of Contributory NegligenceReduces or mitigates the recoverabledamages, UNLESS, the negligent act oromission of the creditor is theproximate cause of the event which ledto the damage or injury complained of.In this case, he cannot recover.

Diligence Required (De Leon, 2003)a. By stipulation: that agreed upon by

the parties.b. By law: in the absence of

stipulation, that required by law inthe particular case.

c. Diligence of a good father of afamily: if both the contract and laware silent.

Future Negligence: may be waivedexcept in cases where the nature of theobligation or the public requires anotherstandard of care (i.e. extraordinarydiligence as for a common carrier)

Fraud NegligenceThere is deliberateintention to causedamage

There is no deliberateintention to cause damage

Liability cannot bemitigated

Liability may be mitigated

Waiver for future fraudis void

Waiver for futurenegligence may beallowed in certain cases: gross – can NEVER

be excused inadvance; amounts towanton attitude; ruleson fraud shall apply

simple – may beexcused in certaincases

Mandarin Villa Inc. v. CA (1996): Test of Negligence:Did the defendant in doing the alleged negligent actuse the reasonable care and caution which anordinary and prudent person would have used in thesame situation? If not, then he is guilty of negligence.


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Extent of Damages to be Awarded

Bad Faith Good FaithDebtor is liable for alldamages which can bereasonably attributed tothe non-performance ofthe obligation. Any waiveror renunciation made inanticipation of suchliability is null and void

Debtor is liable only forthe natural andprobableconsequences of thebreach of obligation andfortuitous events

Culpa Contractual Culpa Aquiliana Askedin ’83, ’84, and ’86)

Negligence is merelyincidental in theperformance of anobligation

Negligence is substantiveand independent

There is always a pre-existing contractualrelation

There may or may not bea pre-existing contractualobligation

The source of obligationof defendant to paydamages is the breach ornon-fulfillment of thecontract

The source of obligationis the defendant’snegligence itself

Proof of the existence ofthe contract and of itsbreach or non-fulfillmentis sufficient prima facie towarrant recovery

The negligence of thedefendant must beproved

Proof of diligence in theselection and supervisionof the employees is NOTavailable as defense

Proof of diligence in theselection and supervisionof the employee is adefense

Culpa Criminal: wrong or negligence inthe commission of a crime

3. DELAY or DEFAULT (MORA): failure toperform an obligation on time whichconstitutes breach of the obligation (DeLeon, 2003). Mora Solvendi: delay on the part of the

debtor to fulfill his obligation either togive (Ex re) or to do (Ex persona),(Asked in ’83, ’84, ’85, and ’86);

No Mora Solvendi in: Negative Obligations because delay

is impossible (De Leon, 2003); Natural Obligations (Tolentino,

1987).

Mora Accipiendi: delay on the part ofthe creditor to accept the performance ofthe obligation

Compensatio Morae: delay of theparties in reciprocal obligations; effect:as if there is no default.

Mora Solvendi Mora AccipiendiRequisites1. Obligation must be

liquidated, due anddemandable

2. Non-performance bythe debtor on periodagreed upon

3. Demand, judicial orextra-judicial, by thecreditor

Requisites1. Debtor offers of

performance2. Offer must be in

compliance with theprestation

3. Creditor refuses theperformancewithout just cause

Effects1. The debtor is liable

for damages2. The debtor is liable

even if the loss is dueto fortuitous events

3. For determinateobjects, the debtorshall bear the risk ofloss

Effects1. The responsibility of

the debtor isreduced to fraudand grossnegligence

2. The debtor isexempted from riskof loss of the thingwhich is borne bythe creditor

3. The expensesincurred by thedebtor for thepreservation of thething after the morashall be chargeableto the creditor

4. If the obligationbears interest, thedebtor does nothave to pay fromthe time of delay

5. The creditor is liablefor damages

6. The debtor mayrelieve himself ofobligation byconsigning the thing

Rules on Mora, Delay or Default

Unilateral Obligations Reciprocal ObligationsGeneral Rule:

“No demand no delay”.

The mere expiration ofthe period fixed by theparties is not enough inorder that the debtor mayincur in delay.

General Rule:Delay occurs from themoment one party fulfillshis undertaking, while theother does not comply oris not ready to comply ina proper manner withwhat is incumbent uponhim.No delay if neither partyperforms his undertaking(Art. 1169, par. 2).

Exceptions1. the obligation or law

provides2. time is of the

essence3. demand useless4. debtor

acknowledges thathe is in default

Exception:different dates for theperformance ofrespective obligations arefixed by the parties


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4. CONTRAVENTION OF THE TENOR:violation of the terms and conditionsstipulated in the obligation, which must notbe due to a fortuitous event or force majeure(De Leon, 2003). “In any manner contravenes the

tenor” means any illicit act, whichimpairs the strict and faithful fulfillmentof the obligation, or every kind ofdefective performance (Tolentino, 1987).

III. Fortuitous Event (Force Majeure)

Any event which could not be foreseen, or whichthough foreseen are inevitable (Art. 1174)

A happening independent of the will of thedebtor and which makes the normal fulfillment ofthe obligation impossible (De Leon, 2003).

A. Act of God: an accident, due directly orexclusively to natural causes without humanintervention, which by no amount offoresight, pains or care, reasonably to havebeen expected, cold have been prevented.

B. Act of Man: force majeure is a superior orirresistible force, which is essentially an actof man; Includes unavoidable accidents,even if there has been an intervention ofhuman element, provided that no fault ornegligence can be imputed to the debtor

(Asked in ’81, ’87 and ’88)

Liability in case of Fortuitous EventNo person shall be responsible for fortuitousevents, UNLESS:1. expressly specified by law (Arts. 552(2),

1942, 2147, 2148, 2159)2. liability specified by stipulation3. the nature of the obligations requires

assumption of risk (Art. 1174)4. when debtor is guilty of concurrent or

contributory negligence5. debtor has promised to deliver the same

thing to two or more persons who do nothave the same interests (Art. 1165 par. 3)

6. the thing is lost due to the obligor’s fraud,negligence, delay or contravention of thetenor of the obligation (Art. 1170)

7. the obligation to deliver a specific thingarises from a crime (Art. 1268)

8. the object is a generic thing, i.e. the genusnever perishes

Requisites for Exemption1. The event must be independent of the

debtor’s will (fraud or negligence)

2. The event must be unforeseeable orinevitable

3. The event renders it impossible for debtor tofulfill his obligation in a normal manner

4. The debtor must be free from anyparticipation in the aggravation of the injuryto the creditor (Tolentino, 1987; De Leon,2003)

5. It must be the only and sole cause, notmerely a proximate cause.

IV. Remedies to Creditors

Art. 1170, Civil Code. Those who in the performanceof their obligations are guilty of fraud, negligence, ordelay and those who in any manner contravene thetenor thereof, are liable for damages.

Transmissibility of RightsArt. 1178: Rights acquired by virtue of anobligation are transmissible in character,UNLESS prohibited:

1. by their very nature (i.e. personalobligations)

2. by stipulation of the parties3. by operation of law

(De Leon, 2003)

Primary RemediesArts. 1165-1168: PRESS1. Specific Performance – performance

by the debtor of the prestation itself2. Substituted Performance – someone

else performs or something else isperformed at the debtor’s expense

3. Equivalent Performance – right toclaim damages (in either performance orrescission)

4. Rescission – right to rescind or cancelthe contract

5. Pursue the Leviable – to attach theproperties of the debtor, except thoseexempt by law from execution

Subsidiary Remedies of Creditor

General Rule: Contracts are binding onlybetween the parties thereto, and their heirs,assignees, and the estate, UNLESS: AccionSubrogatoria and Accion Pauliana1. Accion Subrogatoria: right of creditor to

exercise all of the rights and bring all of theactions which his debtor may have againstthird persons; Novation by change of debtor(Art. 1291, par.3).


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Requisitesa. Debtor to whom the right of action

properly pertains must be indebted tothe creditor

b. The debt is due and demandablec. The creditor must be prejudiced by the

failure of the debtor to collect his owndebt from 3

rdpersons either through

malice or negligenced. The debtor’s assets are insufficient

(debtor is insolvent)e. The right of action is not purely personal

to the debtor

2. Accion Pauliana: Rescission, whichinvolves the right of the creditor to attack orimpugn by means of a rescissory action anyact of the debtor which is in fraud and to theprejudice of his rights as creditor.

Requisites: CASALa. There is a credit in favor of plaintiff

prior to alienationb. The debtor has performed a

subsequent contract conveying apatrimonial benefit to third persons

c. The creditor has no other legal remedyto satisfy his claim

d. The debtor’s acts are fraudulent to theprejudice of the creditor

e. The third person who received theproperty is an accomplice in the fraud

Accion Subrogatoria Accion PaulianaNot necessary thatcreditor’s claim is prior tothe acquisition of the rightby the debtor

Credit must exist beforethe fraudulent act

No need for fraudulentintent

Fraudulent intent isrequired if the contractrescinded is onerous

No period for prescription Prescribes in 4 yearsfrom the discovery of thefraud

3. Accion Directa (Art. 1729, 1652, 1608,1893): the right of lessor to go directly to asublessee for unpaid rents of the lessee

4. The right of laborers or persons who furnishmaterials for a piece of work undertaken bya contractor to go directly to the owner forany unpaid claim due to the contractor

5. The right of vendor against every possessorwhose right is derived from the vendee

6. The right of a principal against a substitutionappropriated by an agent

Siguan v. Lim, (1999): Petitioner cannot invoke thecredit of a different creditor to justify the rescission ofthe subject deed of donation, because the onlycreditor who may benefit from the rescission is thecreditor who brought the action; those who arestrangers to the action cannot benefit from its effects.

V. Usurious Transactions and Rules onInterest

USURY: stipulation of interest rates higher thanthe ceiling provided by law.

Note: Usury Law (Act No. 2655, as amended)was repealed by Central Bank Circular No. 905,Dec. 10, 1982.

INTEREST

Art. 1176, Civil Code. Receipt of the principal withoutreservation as to the interest shall give rise to adisputable presumption that the interest has beenpaid. Receipt of the latter installment withoutreservation as to prior installments shall likewise giverise to a disputable presumption that such priorinstallments have been paid.

Determination of InterestsEastern Shipping Lines v. CA (1961)

Stage 1For loan or forbearanceof money, goods orcredit, the interest rateis 12%

NOT for loan orforbearance of money,goods or credit, theinterest rate is 6%

a) Interest = interestrate stipulated inwriting + 12% legalinterest, computedfrom date of judicialdemand (filing ofcomplaint)

a) If date of demand iscertain, compute fromthe date when demandis made (judicial orextra-judicial)

b) If there is nostipulated interest rate,the interest rate is 12%computed from date ofdefault or demand(judicial or extra-judicial)

b) If date of demand isNOT certain, computefrom the date of trialcourt decision (judicialdemand)

Stage 2Add 12% interest from finality of SC decision untilfully paid (equivalent to a forbearance of credit)

CIVIL LAW REVIEWER Chapter III. DIFFERENT KINDS of OBLIGATIONS

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Chapter III. Different Kinds of Obligations

I. PURE AND CONDITIONAL OBLIGATIONSII. RECIPROCAL OBLIGATIONSIII. OBLIGATIONS WITH A PERIODIV. ALTERNATIVE AND FACULTATIVE

OBLIGATIONSV. JOINT AND SOLIDARY OBLIGATIONSVI. DIVISIBLE AND INDIVISIBLE OBLIGATIONSVII. OBLIGATIONS WITH A PENAL CLAUSE

I. Pure and Conditional Obligations

(Asked in ’79, ’88, ’00, ’03)

Pure Obligation (Art.1179): Effectivity orextinguishment does not depend upon thefulfillment or non-fulfillment of a condition orupon the expiration of a term or period andcharacterized by the quality of its beingIMMEDIATELY DEMANDABLE.

Conditional Obligation (Art.1181): Effectivity issubject to the fulfillment or non-fulfillment of acondition, which is characterized to be aFUTURE and UNCERTAIN event.

Effects of Conditions1. Suspensive Condition: Obligation shall

only be effective upon the fulfillment of thecondition (Art.1181). What is acquired by theobligee upon the constitution of theobligation is mere hope or expectancy, but isprotected by law.

Before Fulfillment After FulfillmentThe demandability andacquisition or effectivityof the rights arising fromthe obligation issuspended. Anythingpaid by mistake duringsuch time may berecovered.

The obligation arises orbecomes effective.The obligor can becompelled to comply withwhat is incumbent uponhim.

Doctrine of Constructive Fulfillmentof Suspensive ConditionsArt. 1186: the condition shall be deemedfulfilled when the obligor actuallyprevented the obligee from complyingwith the condition, and that suchprevention must have been voluntary orwillful in character. Applicable to suspensive conditions

and not to resolutory conditions. The article can have no application

to an external contingency which islawfully within the control of theobligor.

The mere intention of the debtor toprevent, without actually preventingfulfillment is not sufficient.Constructive fulfillment will not holdwhen the debtor acts pursuant to aright. There is constructivefulfilment:a. Intent of the obligor to prevent

fulfilment; andb. Actual prevention of compliance

Principle of Retroactivity inSuspensive ConditionsArt.1187, par.1: once the condition isfulfilled its effects must logically retroactto the moment when the essentialelements, which gave birth to theobligation have taken place. Thecondition which is imposed is onlyaccidental, not an essential element ofthe obligation. Applied only to consensual

contracts. No application to realcontracts which can only beperfected by delivery.

To Give To Do/Not To DoIf reciprocal, the fruitsand interests shall bedeemed to have beenmutually compensatedas a matter of justice andconvenience(Art. 1187, par. 1)

In obligations to do or notto do, the court shalldetermine the retroactiveeffect of the conditionthat has been compliedwith.(Art. 1187, par. 2)

If unilateral, the debtorshall appropriate thefruits and interestsreceived, unless from thenature and circumstanceit should be inferred thatthe intention of thepersons constituting thesame was different.

The power of the courtincludes thedetermination whether ornot there will be anyretroactive effects. Thisrule shall likewise applyin obligations with aresolutory condition (Art.1190 par. 3)

Preservation of Creditor’s RightsArt.1188, par.1: The creditor may,before the fulfillment of the condition,bring the appropriate action for thepreservation of his rights. However, thisdoes not grant any preference of creditbut only allows the bringing of the properaction for the preservation of thecreditor’s rights.

2. Resolutory Condition: Obligation becomesdemandable immediately after itsestablishment or constitution. The rights areimmediately vested to the creditor, butalways subject to the threat or danger ofextinction by the happening of the resolutorycondition (Tolentino, 1987).


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Before Fulfillment After FulfillmentPreservation of creditor’srights (Art. 1188, par. 1)also applies toobligations with aresolutory condition

Whatever may havebeen paid or delivered byone or both of the partiesupon the constitution ofthe obligation shall haveto be returned upon thefulfillment of thecondition. There is noreturn to the status quo.However, when conditionis not fulfilled, rights areconsolidated and theybecome absolute incharacter

3. Potestative Condition

Exclusivelyupon the

Creditor’s Will

Exclusivelyupon the

Debtor’s Willin case of aSuspensiveCondition(Art. 1182)

Exclusivelyupon the

Debtor’s Willin case of aResolutoryCondition

(Art. 1179, par2)

Condition andobligation isvalid

Condition andobligation arevoid because toallow suchcondition wouldbe equivalent tosanctioningobligationswhich areillusory. It alsoconstitutes adirectcontravention ofthe principle ofmutuality ofcontracts.

Condition andobligation isvalid because insuch situation,the position ofthe debtor isexactly thesame as theposition of thecreditor whenthe condition issuspensive. Itdoes not renderthe obligationillusory.

4. Casual Condition: The fulfillment of thecondition depends upon chance and/or uponthe will of a third person (Art. 1182)

5. Mixed Condition: The fulfillment of thecondition depends partly upon the will of aparty to the obligation and partly uponchance and/or will of a third person

Osmena v. Rama: Defendant executed anendorsement saying that she’ll pay her debt if thehouse in which she lives is sold. Such conditiondepended upon her exclusive will thus it is void.

Hermosa v. Longara: The condition that paymentshould be made by Hermosa as soon as he receivesfunds from the sale of his property in Spain is a mixedcondition. The condition implies that the obligoralready decided to sell the house and all that was

needed to make the obligation demandable is that thesale be consummated and the price thereof remittedto the islands. There were still other conditions thathad to concur to effect the sale, mainly that of thepresence of a buyer, ready, able and willing topurchase the property under the conditions set by theintestate.

6. Impossible Condition: conditions whichare impossible, contrary to good customs, orpublic policy and those prohibited by lawshall annul the obligations which dependupon them (Art. 1183). If pre-existing obligation, only the

impossible condition is void, but not theobligation.

If divisible obligation, that part which isnot affected by the impossible orunlawful condition shall be valid.

If the condition is not to do animpossible thing, it shall be consideredas not having been agreed upon (Art1183, par. 2). Consequently, it becomespure and immediately demandable.

If attached to a simple or remuneratorydonation (Art. 727), or testamentarydisposition (Art. 873), condition isconsidered as not imposed while theobligation is valid.

7. Positive Condition: Obligation shall beextinguished as soon as the time expires orif it becomes indubitable that the event willnot take place (Art.1184)

8. Negative Condition: Obligation shall berendered effective from the moment the timeindicated has lapsed, or if it has becomeevident that the event will not occur(Art.1185) When no period has been fixed, the

intention of the parties is controlling,and the time shall be that which theparties may have contemplated, takinginto account the nature of the obligation(Art 1185, par. 2).

Effects of Loss, Deterioration, andImprovement in Real Obligations Pending theCondition (Art. 1189)

WithoutDebtor’sFault/Act

With Debtor’sFault/Act

Loss Obligation isextinguished

Obligation isconverted intoone ofindemnity fordamages


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Deterioration Impairment to beborne by thecreditor

Creditor maychoosebetweenbringing anaction forrescission ofthe obligationOR bringing anaction forspecificperformancewith damagesin either case.

Improvement Improvement atthe debtor’sexpense, thedebtor shallONLY haveusufructuaryrights

Improvementby the thing’snature or bytime shall inureto the benefit ofthe creditor

Loss, defined: when the thing perishes; goesout of commerce; disappears in such a way thatits existence is unknown or it cannot berecovered

II. Reciprocal Obligations

Obligations which are established from samecause, such that one obligation is correlative tothe other. It results in mutual relationshipbetween the creditor and the debtor. It isperformed simultaneously, so that theperformance of one is conditioned upon thesimultaneous fulfillment of the other.

Tacit Resolutory Condition: if one of theparties fail to comply with what is incumbentupon him, there is a right on the part of the otherto rescind the obligation. The power to rescind isgiven to the injured party (Tolentino, 1987).

Rescission of Reciprocal Obligations (Art.1191, CC) Right to rescind is implied in reciprocal

obligations thus where one party fails tocomply with this obligation under a contact,the other party has the right to eitherdemand the performance or ask for theresolution of the contract.

Based on the breach of faith committed bythe person who is supposed to comply withthe obligation as compared to the rescissionreferred to in Art. 1308 which involves thedamage or lesion, or injury to the economicinterest of a person.

Where both parties have committed abreach of obligation, the liability will be

shouldered by the first infractor. This shallbe determined by the courts. However, if itcannot be determined who was the firstinfractor, the contract shall be deemedextinguished and each shall bear his owndamages (Art.1192).

UP v. Delos Angeles (1970): The injured party mayextra-judicially rescind the contract on account of thebreach of the other party. However, this is withoutprejudice to the option of the other party to resort tothe courts in order to determine if the rescission madeis valid, if not, the party who rescinded the contractwill be sentenced to pay damages.

Where the other party does not oppose theextra-judicial declaration of rescission, suchdeclaration shall produce legal effect.

Effect is retroactive therefore invalidatingand unmaking the juridical tie between thecontracting parties, leaving things in theirstatus before the celebration of the contract.

III. Obligations with a Period

Period or Term (Asked in ’84, ’86 and ’91):Interval of time, which either suspendsdemandability or produces extinguishment.The period must be: future, certain, and possible(Tolentino, 1987).

Fortuitous event does not interrupt therunning of the period. It only relieves thecontracting parties from the fulfillment oftheir respective obligations during theperiod.

Kinds of Period (Art. 1193):1. Ex die - period with a suspensive effect.

Obligation becomes demandable afterthe lapse of the period.

2. In diem - period with a resolutory effect.Obligation is demandable at once but isextinguished upon the lapse of theperiod.

Art. 1180, Civil Code. When the debtor binds himselfto pay when his means permit him to do so, theobligation shall be deemed to be one with a period,subject to the provisions of Article 1197.

Term/Period and Condition Distinguished

Term/Period ConditionInterval of time which isfuture and certain

Fact or event which isfuture and uncertain

Must necessarily come,although it may not beknown when

May or may not happen


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Exerts an influence uponthe time of demandabilityor extinguishment of anobligation

Exerts an influence uponthe very existence of theobligation itself

No retroactive effectunless there is anagreement to the contrary

Has retroactive effect

When it is left exclusivelyto the will of the debtor,the existence of theobligation is not affected

When it is left exclusivelyto the will of the debtor,the very existence of theobligation is affected

Benefit of the PeriodPresumption: Period in an obligation ispresumed to be established for the benefit ofboth the creditor and debtor, UNLESS: If fromthe tenor of the obligation or othercircumstances, it shall appear that the periodhas been established in favor of either thecreditor or debtor (Art. 1196).

Period for the Benefit of either Creditor orDebtor

Creditor DebtorCreditor may demandthe fulfillment orperformance of theobligation at any timebut the obligor cannotcompel him to acceptpayment before theexpiration of the period

Debtor may oppose anypremature demand onthe part of the oblige forthe performance of theobligation, of if he sodesires, he mayrenounce the benefit ofthe period by performinghis obligation in advance

When court may fix periodArt. 1197: as general rule, the court is notauthorized to fix a period for the parties (DeLeon, 2003).

Araneta v. Phil. Sugar Estates, provides:First, the Court shall determine: If the obligation does not fix a period, but from

its nature and circumstances, it can be inferredthat a period was intended

If the period is void, such as when it dependsupon the will of the debtor

If the debtor binds himself when his meanspermit him to do so.

Second, it must decide what period was “probablycontemplated by the parties”.

The only action that can be maintainedunder Art. 1197 is the action to ask thecourts to fix the term within which the debtormust comply with his obligation. Thefulfillment of the obligation itself cannot bedemanded until after the court has fixed theperiod for compliance, therewith, and suchperiod has arrived.

Art. 1197 does not apply to contract ofservices and to pure obligations.

The court, however, to preventunreasonable interpretations of theimmediate demandability of pure obligations,may fix a reasonable time in which thedebtor may pay.

(Tolentino, 1987)

When Debtor Loses Right to Use PeriodArt.1198: I GIV A LA1. Debtor becomes Insolvent, unless he gives

a guaranty or security for his debt, afterobligation is contracted

2. Debtor fails to furnish the Guaranties orsecurities promised

3. Debtor by his own acts Impaired saidguaranties or securities after theirestablishment, and when through afortuitous event they disappear, unless heimmediately gives new one equallysatisfactory

4. Debtor Violates any undertaking, inconsideration of which the creditor agreed tothe period

5. Debtor attempts to Abscond6. By Law or stipulation7. Parties stipulate an Acceleration Clause

In the cases provided, the obligation becomesimmediately due and demandable even if theperiod has not yet expired. The obligation is thusconverted into a pure obligation (Tolentino,1987).

IV. Alternative and FacultativeObligations

Alternative Obligations Facultative ObligationsSeveral objects are due Only one object is dueMay be complied with bydelivery of one of theobjects or by performanceof one of the prestationswhich are alternativelydue

May be complied with bythe delivery of anotherobject or by theperformance of anotherprestation in substitutionof that which is due

Choice may pertain todebtor, creditor, or thirdperson

Choice pertains only tothe debtor

Loss/impossibility of allobjects/prestations due tofortuitous event shallextinguish the obligation.The loss/impossibility ofone of the things does notextinguish the obligation.

Loss/impossibility of theobject/prestation due tofortuitous event issufficient to extinguishthe obligation

Culpable loss of any ofthe objects alternatively

Culpable loss of theobject which the debtor


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due before the choice ismade may give rise toliability on the part of thedebtor

may deliver insubstitution before thesubstitution is effecteddoes not give rise to anyliability on the part of thedebtor

A. Alternative Obligations

Several prestations are due but the performanceof one is sufficient (De Leon, 2003).

Right of ChoiceArt. 1200: to the debtor, UNLESS:

1. when it is expressly granted to thecreditor

2. when it is expressly granted to a thirdperson

Limitations to the right of choice1. impossible prestations2. unlawful prestations3. those which could not have been the

object of the obligation4. only one prestation practicable (Art.

1202)(De Leon, 2003)

When choice shall produce effectArt. 1201: Choice shall produce no effect exceptfrom the time it has been communicated. Theeffect of the notice is to limit the obligation of theobject or prestation selected. Notice of selectionor choice may be in any form provided it issufficient to make the other party know that theselection has been made. It can be:

o oralo in writingo tacito any other equivocal means

Choice of the debtor when communicated tothe creditor does not require the latter’sconcurrence.

When the choice is rendered impossiblethrough the creditor’s fault, the debtor maybring an action to rescind the contract withdamages (Art.1203).

Obligation is converted into a simpleobligation when:o When the person who has the right of

choice has communicated his choice(Art. 1201)

o When only one prestation is practicable(Art. 1202)

Effect of Loss of Objects

Art. 1204: Debtor’s ChoiceFortuitousEvent

Debtor’s Fault

All Lost Debtor isreleased from theobligation

Creditor shall havea right to indemnityfor damages basedon the value of thelast thing whichdisappeared orservice whichbecome impossible

Some Debtor to deliverthat which heshall choosefrom among theremainder

Debtor to deliverthat which thecreditor shallchoose from amongthe remainderwithout damages

OneRemains

Debtor to deliverthat whichremains

Debtor to deliverthat which remains

Art. 1205: Creditor’s ChoiceFortuitousEvent

Debtor’s Fault

All Lost Debtor isreleased from theobligation

Creditor may claimthe price/value ofany of them withindemnity fordamages

Some Debtor to deliverthat which heshall choosefrom among theremainder

creditor may claimany of thosesubsisting without aright to damagesOR price/value ofthe thing lost withright to damages

OneRemains

Creditor mayclaim any ofthose subsistingwithout a right todamages ORprice/value of thething lost withright to damages

Creditor may claimthe remaining thingwithout a right todamages OR theprice/value of thething lost with rightto damages

B. Facultative Obligation

Only one prestation has been agreed upon butthe debtor may render another in substitution(De Leon, 2003)

Effect of Loss of Substitute

Before Substitution isMade

After Substitution isMade

If due to bad faith orfraud of obligor: obligoris liable

The loss ordeterioration of thesubstitute on accountof the obligor’s delay,negligence or fraud


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If due to the negligenceof the obligor: obligor isnot liable

obligor is liablebecause oncesubstitution is made,the obligation isconverted into a simpleone with the substitutedthing as the object ofthe obligation.

V. Joint and Solidary Obligations

A. Joint Obligations

One where a concurrence of several creditors,or of several debtors, or of several creditors anddebtors, by virtue of which, each of the creditorshas a right to demand, and each of the debtorsis bound to render compliance with hisproportionate part of the prestation whichconstitute the object of the obligation (ObligacionMancomunada).

Presumption: Obligation is presumed joint ifthere is a concurrence of several creditors, ofseveral debtors, or of several creditors anddebtors in one and the same obligation (Art.1207).

Exceptions:1. When the obligation expressly stated that

there is solidarity2. When the law requires the solidarity3. When the nature of the obligation requires

solidarity4. When the nature or condition is imposed

upon heirs or legatees, and the testamentexpressly makes the charge or condition insolidum

5. When the solidary responsibility is imputedby a final judgment upon several defendants

Principal Effects of Joint Liability1. Demand by one creditor upon the debtor,

produces the effects of default only withrespect to the creditor who demanded andthe debtor on whom the demand was made,but not with respect to others

2. Interruption of prescription by the judicialdemand of one creditor upon a debtor, doesnot benefit the other creditors nor interruptthe prescription as to other debtors

3. Vices of each obligation arising from thepersonal defect of a particular debtor orcreditor does not affect the obligation or rightof the others

4. Insolvency of a debtor does not increase theresponsibility of his co-debtors, nor does it

authorize a creditor to demand anythingfrom his co-debtors

5. Defense of res judicata is not extended fromone debtor to another

Joint Divisible ObligationArt. 1208: Each creditor can demand only for thepayment of his proportionate share of thecredit, while each debtor can be liable only forthe payment of his proportionate share of thedebit

Presumption: Credit or debt shall be presumedto be divided into as many equal shares as thereare creditors or debtors. Joint creditor cannot act in representation of

the others, neither can a joint debtor becompelled to answer for the liability ofothers.

Joint Indivisible ObligationArt. 1209: no creditor can act in representationof the other; no debtor can be compelled toanswer for the liability of the others. If there are two or more debtors, the

fulfillment of or compliance with theobligation requires the concurrence of all thedebtors, although each for his own shareand for the enforcement of the obligation

In case of breach where one of the jointdebtors fails to comply with his undertaking,the obligation can no longer be fulfilled orperformed. Consequently, it is convertedinto one of indemnity for damages.

In case of insolvency of one of thedebtors, the others shall not be liable for hisshares. To hold otherwise would destroy thejoint character of the obligation.

Joint DivisibleObligations

Joint IndivisibleObligations

In case of breach ofobligation by one of thedebtors, damages duemust be borne by himalone

In case of breach whereone of the joint debtorsfails to comply with hisundertaking, theobligation can no longerbe fulfilled or performed.Thus action must beconverted into indemnityfor damages.

Plurality of Creditors: If one or some ofthe creditors demands the prestation,the debtor may legally refuse to deliverto them, he can insist that all thecreditors together receive the thing, andif any of them refuses to join the others,the debtor may deposit the thing in courtby way of consignation (Tolentino,1987).


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B. Solidary Obligation

An obligation where there is concurrence ofseveral creditors, or of several debtors, or ofseveral creditors and several debtors, by virtueof which, each of the creditors has the right todemand, and each of the debtors is bound torender, entire compliance with the prestationwhich constitutes the object of the obligation(Obligacion Solidaria).

Indivisibility SolidarityRefers to the prestationwhich constitutes theobject of the obligation

Refers to the legal tie orvinculum, andconsequently to thesubjects or parties ofthe obligation

Plurality of subjects is notrequired

Plurality of subjects isindispensable

In case of breach,obligation is converted intoindemnity for damagesbecause the indivisibility ofthe obligation is terminated

When there is liabilityon the part of thedebtors because of thebreach, the solidarityamong the debtorsremains

The indivisibility of an obligation does notnecessarily give rise to solidarity. Nor doessolidarity itself imply indivisibility. (Art. 1211)

Kinds of Solidary Obligations1. Active (solidarity among creditors): Each

creditor has the authority to claim andenforce the rights of all, with the resultingobligation of paying everyone of whatbelongs to him. Creation of a relationship of mutual

agency among co-creditors.

A solidary creditor cannot assign hisrights without the consent of the others.(Art. 1213)

Each debtor may pay to any solidarycreditor, but if any demand, judicial orextrajudicial, has been made by one ofthem, payment must be made to him.(Art. 1214)

2. Passive (solidarity among debtors): Eachdebtor can be made to answer for theothers, with the right on the part of thedebtor-payor to recover from the others theirrespective shares. Creation of a relationship of mutual

guaranty among co-debtors The total remission of the debt in favor

of a debtor releases all the debtors All the debtors are liable for the loss of

the thing due, even if such loss iscaused by the fault of only one of themand for delay, even if it is caused by justone of them

The interruption of prescription as toone debtor affects all the others; but therenunciation by one debtor ofprescription already had does notprejudice the others

3. Mixed: Solidarity among creditors anddebtors Solidarity is not destroyed by the fact

that the obligation of each debtor issubject to different conditions or periods.The creditor can commence an actionagainst anyone of the debtors for thecompliance with the entire obligationminus the portion or share whichcorresponds to the debtor affected bythe condition or period.

____________________________________________________________________________________

Effects of Modes of Extinguishment

Assignment ofRights in Solidary

ObligationsNovation

Compensation &Confusion

RemissionLoss or

Impossibility

The solidarycreditor cannotassign his rightbecause it ispredicated uponmutualconfidence,UNLESS, the (1)the assignment isto a co-creditor;(2) assignment iswith consent ofco-creditor

If prejudicial, thesolidary creditorwho effected thenovation shallreimburse theothers fordamages incurredby them;

If beneficial andsecured by one,he shall be liableto the others forthe share(obligation &benefits) which

If it is partial, therules regardingapplication ofpayment shallapply (w/o)prejudice to theright of othercreditors whohave not causedthe confusion orcompensation tobe reimbursed tothe extent thattheir rights arediminished or

If entireobligation,obligation is totallyextinguished.

If for the benefitof one of thedebtors coveringhis entire share,he is completelyreleased from thecreditor/s.

If for the benefitof one of thedebtors and itcovers only part

If not debtors’fault, theobligation isextinguished

If thru debtors’OR fortuitousevent after delay,the obligation isconverted intoindemnity fordamages but thesolidary characterof the obligationremains.


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corresponds tothem

If by substitutingthe debtor, thesolidary creditorwho effected thenovation is liablefor the acts of thenew debtor indeficiency ordamages

If by subrogatinga third person increditor’s rights,the obligation isnot in realityextinguished asthe relationbetween the othercreditors and thedebtor/s ismaintained.

affected If total, the

obligation isextinguished,what is left is theensuing liabilityfor reimbursement

of his share, hischaracter as asolidary debtor isnot affected.

Effects of Prejudicial and Beneficial Acts(Art.1212)

1. Each one of the solidary creditors may dowhatever may be useful or beneficial to theothers, but not anything which may beprejudicial to the latter.

2. As far as the debtors are concerned, aprejudicial act performed by a solidarycreditor is binding.

3. As between the solidary creditors, thecreditor who performed such act shall incurthe obligation of indemnifying the others fordamages.

Defenses Available to a Solidary Debtor (Art.1222)1. Those derived from the nature of the

obligation2. Those personal to him3. Those pertaining to his own share4. Those personally belonging to other co-

debtors but only as regards that part of thedebt for which the latter are responsible.

Effects

Demand Upon aSolidary Debtor

Payment by a Debtor

The demand madeagainst one of them shallnot be an obstacle tothose which maysubsequently be directedagainst the others solong as the debt has notbeen fully collected. (Art.1216)

Full payment made byone of the solidarydebtors extinguishes theobligation. (Art. 1217)

The creditor may proceedagainst any one of thesolidary debtors or allsimultaneously (Art.1216)

If two or more solidarydebtors offer to pay, thecreditor may choosewhich offer to accept.(Art. 1217)

A creditor’s right toproceed against thesurety existsindependently of his rightto proceed against theprincipal

The solidary debtor whomade the payment shallhave the right to claimfrom his co-debtors theshare which correspondsto them with interest,UNLESS barred byprescription or illegality.(Art. 1218)

When a solidary debtor pays the entireobligation, the resulting obligation of the co-debtors to reimburse him becomes joint.

If payment was made before the debtbecame due, no interest during theintervening period may be demanded. (Art.1217 par. 2)

When one of the solidary debtors cannotreimburse his share to the debtor paying theobligation due to insolvency, such shareshall be borne by all his co-debtors, inproportion to the debt of each. (Art. 1217,par. 2)

Inchausti v. Yulo, (1914): Debtors obligatedthemselves solidarily, so creditor can bring its actionagainst any of them. Remission of any part o fthedebt, made by the creditor in favor of one of thesolidary debtors, inures to the benefit of the rest ofthem.


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VI. Divisible and Indivisible Obligations

A. Divisible Obligations

One which is susceptible of partial performance;that is, the debtor can legally perform theobligation by parts and the creditor cannotdemand a single performance of the entireobligation (Tolentino, 1987).

B. Indivisible Obligations

One which cannot be validly performed in parts(Tolentino, 1987). Divisibility/indivisibility refers to the

performance of the prestation and not to thething which is the object thereof. The thingmay be divisible, yet the obligation may beindivisible.

When the obligation has for its object theexecution of a certain number of days ofwork, the accomplishment of work bymetrical units, or analogous things which bytheir nature are susceptible of partialperformance, it shall be divisible (Art.1225,par. 2).

When there is plurality of debtors andcreditors, the effect of divisibility/indivisibilityof the obligation depend upon whether theobligation is joint or solidary.

A joint indivisible obligation give rise toindemnity for damages from the time anyoneof the debtors does not comply with isundertaking.

(Art. 1224)

EffectCreditor cannot be compelled partially to receivethe prestation in which the obligation consists;neither may the debtor be required to make thepartial payment (Art. 1248), UNLESS: The obligation expressly stipulates the

contrary The different prestations constituting the

objects of the obligation are subject todifferent terms and conditions

The obligation is in part liquidated and in partunliquidated

VII.Oblligations with a Penal Clause

Penal Clause: An accessory undertaking toassume greater liability in case of breach (DeLeon, 2003). It is attached to an obligation inorder to ensure performance. The enforcementof the penalty can be demanded by the creditoronly when the non-performance is due to thefault or fraud of the debtor.

If the principal obligation is void, penalclause shall also be void. However, thenullity of the penal clause does not carrywith it the nullity of the principalobligation (Art.1230).

Purposes of Penalty1. Funcion coercitiva de garantia - to insure the

performance of the obligation.2. Funcion liquidatoria - to liquidate the amount of

damages to be awarded to the injured party incase of breach of the principal obligation(compensatory).

3. Function estrictamente penal - to punish theobligor in case of breach of the principalobligation (punitive).

Effects of Penalty1. The penalty shall substitute the indemnity for

damages and payment of interest in case ofnon-compliance (Art. 1226), UNLESS:a. There is a stipulation to the contraryb. The obligor refuses to pay the penaltyc. The obligor is guilty of fraud

2. Debtor cannot exempt himself from theperformance of the principal obligation bypaying the stipulated penalty unless thisright has been expressly reserved for him(Art. 1227).

3. Creditor cannot demand the fulfillment of theprincipal obligation and demanding thesatisfaction of the penalty at the same timeunless the right has been clearly granted tohim (Art. 1227). Tacit or implied grant isadmissible.a. If creditor has chosen fulfillment of the

principal obligation and performance thereofbecome impossible without his fault, he maystill demand the satisfaction of the penalty.

b. If there was fault on the part of the debtor,creditor may demand not only satisfaction ofpenalty but also the payment of damages.

c. If creditor chooses to demand thesatisfaction of the penalty, he cannotafterwards demand the fulfillment of theobligation.

Proof of Actual DamageArt. 1228: Proof of actual damages is notnecessary is applicable only to the general rulestated in Art. 1226 and not to the exceptions.The penalty is exactly identical with what isknown as “liquidated damages” in Art. 2226.

When Penalty may be ReducedArt. 1229:1. If the principal obligation has been partly

complied with.2. If the principal obligation has been irregularly

complied with.3. If the penalty is iniquitous or unsconscionable

even if there has been no performance.

CIVIL LAW REVIEWER Chapter IV. EXTINGUISHMENT of OBLIGATIONS

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Chapter IV. Extinguishment ofObligations

I. PAYMENT OR PERFORMANCEII. LOSS OF THE THING DUE OR IMPOSSIBILITY

OF PERFORMANCEIII. CONDONATION OR REMISSION OF THE

DEBTIV. CONFUSION OR MERGER OF RIGHTSV. COMPENSATIONVI. NOVATION

I. Payment or Performance

Art. 1232, Civil Code. Payment means not onlydelivery of money but also performance, in anymanner, of the obligation.

See Diagrams of Prof. Labitag at the endsection of Obligations.

SPECIAL FORMS OF PAYMENT

A. Application of Payment (Art. 1252)

Designation of the debt to which should beapplied a payment made by a debtor who owesseveral debts to the same creditor

Rules on Application—1. Preferential right of debtor - debtor has the

right to select which of his debts he ispaying.

2. The debtor makes the designation at thetime he makes the payment

3. If not, the creditor makes the application, byso stating in the receipt that he issues,unless there is cause for invalidating thecontract.

4. If neither the creditor nor debtor exercisesthe right to apply, or if the application is notvalid, the application is made by operation oflaw.

5. If debt produces interest - payment notdeemed applied to the principal unlessinterests are covered.

6. When no application can be inferred fromthe circumstances of payment, it is appliedto: to the most onerous debt of the debtor; orif debts due are of the same nature andburden, to all the debts in proportion

7. Rules of application of payment may not beinvoked by a surety or solidary guarantor.

Reparations Commission vs. Universal Deep SeaFishing Corp. (1978): Rules on application of paymentcannot be made applicable to a person whoseobligation as a mere surety is both contingent and

singular. There must be full and faithful compliancewith the terms of the contract.

B. Payment by Cession (Art. 1255)

Act whereby a debtor abandons all his propertyto his creditors, so that the latter may apply theproceeds (of its sale) to their credits.

C. Dation in payment (Art. 1245)

Delivery and transmission of ownership of athing by the debtor to the creditor as anaccepted equivalent of the performance of theobligation (dacion en pago).

Dation in payment Payment by cession

In favor of only onecreditor

There are variouscreditors

Payment extinguishes theobligation to the extent ofthe value of the thingdelivered, unless theparties agree that theobligation be totallyextinguished

Extinguishes creditsonly up to the extent ofproceeds from sale ofassigned property,unless otherwiseagreed upon

Transfer of ownership ofthing alienated to creditor

Only possession andadministration withauthorization to convertproperty to cash withwhich the debts shallbe paid

Not necessarily in state offinancial difficulty

Assignmentpresupposesinsolvency of debtor.

Assignment of only somespecific thing

Assignment involves allthe property of thedebtor.

D. Tender of payment and consignation

1. Tender of payment: Manifestation made bydebtor to creditor of his desire to complywith his obligation, with offer of immediateperformance Preparatory act to consignation Extrajudicial in character

2. Consignation: Deposit of the object ofobligation in a competent court inaccordance to the rules prescribed by law,whenever the creditor unjustly refusespayment or because of some circumstanceswhich render direct payment to the creditorimpossible or inadvisable. Principal act which constitutes a form of

payment. Judicial in character.


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When Tender and Refusal Not Required (Art.1259)—1. Creditor is absent or unknown, or does not

appear at the place of payment2. Creditor is incapacitated to receive the thing

due at time of payment3. Without just cause, creditor refuses to give

receipt4. Two or more persons claim the same right to

collect5. Title of the obligation has been lost

Effects of Withdrawal by DebtorArts. 1260- 12611. Before approval of the court - Obligation

remains in force.

2. After approval of the court or acceptance bythe creditor, with the consent of the latter -Obligation remains in force, but guarantorsand co-debtors are liberated. Preference ofthe creditor over the thing is lost.

3. After approval of the court or acceptance bythe creditor, and without creditor’s consent -Obligation subsists, without change in theliability of guarantors and co-debtors, or thecreditor’s right of preference.

Art. 1259, Civil Code. Expenses of consignation,when properly made, shall be charged against thecreditor.

Requisites and Effects

Application ofPayment

Cession Dation Tender and Consignation

Requisites1. Plurality of

debts2. Debts are of

the same kind3. Debts are owed

to the samecreditor and bythe samedebtor

4. All debts mustbe due

5. Payment madeis not sufficientto cover alldebts

Requisites1. Plurality of debts2. Plurality of

creditors3. Partial insolvency

of the debtor4. Abandonment of

the totality of thedebtor’sproperties for thebenefit of thecreditors

5. Acceptance bythe creditors

Requisites1. Should not be

prejudicial toother creditors

2. Should notconstitute apactumcommissorium

Requisites1. There is a debt due2. consignation is made because

of some legal cause3. previous notice of consignation

was given to those personsinterested in the performanceof the obligation

4. amount or thing due wasplaced at the disposal of thecourt

5. after the consignation has beenmade, the persons interestedwere notified thereof

EffectsPayment of debtdesignated as tocorrespondingamount

EffectsAssignment liberatesdebtor up to theamount of the netproceeds of the saleof his assetsAssignment does notvets title to theproperty in thecreditors,who are onlyauthorized to sell it.

EffectsExtinguishment ofdebt from as anequivalent of theperformance of theobligation

EffectsIf accepted by the creditor ordeclared properly made by theCourt:1. Debtor is released in same

manner as if he had performedthe obligation at the time ofconsignation

2. Accrual of interest issuspended from the moment ofconsignation.

3. Deterioration or loss of thething or amount consigned,occurring without the fault ofdebtor, must be borne bycreditor from the moment ofdeposit

4. Any increment or increase inthe value of the thing afterconsignation inures to thebenefit of the creditor


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II. Loss or Impossibility

(Asked in ’83, ’84, ’85, and ’94)

A. Loss

A thing is lost when it perishes, goes out ofcommerce or disappears in such a way that itsexistence is unknown or it cannot be recovered(Art. 1189, par. 2)

Effects of Loss

Obligation to Deliver aSpecific Thing

Obligation to Deliver aGeneric Thing

Extinguishment of theobligation if the thing wasdestroyed w/o fault of thedebtor and before he hasincurred delay.

Loss of a generic thingdoes not extinguish anobligation, UNLESS,Delimited genericthings: kind or class islimited itself, and thewhole class perishes

Action against 3rd

persons - creditor shall haveall the rights of action the debtor may haveagainst 3

rdpersons by reason of the loss.

Presumption: The loss was due to the debtor’sfault, UNLESS:1. Law provides that the debtor shall be liable

even if the loss is due to fortuitous events(Arts. 1942, 1979, 2147, 2159)

2. Obligor is made liable by express stipulation3. Nature of the obligation requires an

assumption of risk4. Fault or negligence concurs with the

fortuitous event5. Loss occurs after delay6. Debtor has promised to deliver the same

thing to two or more different parties7. Obligation arises from a criminal act8. Borrower in commodatum: saves his own

things and not the thing of the creditorduring a fortuitous event

In Reciprocal ObligationsExtinguishment of the obligation due to loss ofthe thing or impossibility of performance affectsboth the creditor and debtor; the entire juridicalrelation is extinguished.

Partial lossArt. 1264: Partial loss due to a fortuitous eventdoes not extinguish the obligation; thing dueshall be delivered in its present condition,without any liability on the part of the debtor,UNLESS, the obligation is extinguished whenthe part lost was of such extent as to make thething useless.

Loss of the thing when in possession of thedebtor: Loss was due to the debtor’s fault.Burden of explaining the loss of the thing fallsupon him, UNLESS, due to a natural calamity:earthquake, flood, storm, etc.

Subjective impossibility: Where there is no physicalor legal loss, but the thing belongs to another, theperformance by the debtor becomes impossible. Thedebtor must indemnify the creditor for damages.

B. Impossibility of Performance (Arts. 1266-1267, CC)

When prestation becomes legally or physicallyimpossible (by fortuitous event or forcemajeure), the debtor is released.Impossibilitymust have occurred without fault of debtor, andafter the obligation has been constituted.

PARTIAL IMPOSSIBILITY1. Courts shall determine whether it is so

important as to extinguish the obligation.2. If debtor has performed part of the obligation

when impossibility occurred, creditor mustpay the part done as long as he benefitsfrom it.

3. If debtor received full payment from creditor,he must return excess amountcorresponding to part which was impossibleto perform.

Doctrine of Unforeseen EventsWhen the service has become so difficult as tobe manifestly beyond the contemplation of allthe parties, the obligor may be released in wholeor in part (De Leon, 2003).

Requisites:1. Event could not have been foreseen at the

time of the constitution of the contract.2. Event makes performance extremely difficult

but not impossible.3. Event not due to any act of the parties.4. Contract is for future prestation.

III. Condonation or Remission of theDebt

CONDONATION: An act of liberality, by virtue ofwhich, without receiving any equivalent, creditorrenounces the enforcement of the obligation.The obligation is extinguished either in whole orin such part of the same which to remissionrefers.


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Requisites1. Debt must be existing and demandable2. Renunciation must be gratuitous; without

any consideration3. Debtor must accept the remission

EffectArt. 1273: Renunciation of the principal debtshall extinguish the accessory obligations, butremission of the latter leaves the principalobligation in force.

PresumptionsArts. 1271, 1272, 1274: Whenever the private document in which the

debt is found in the possession of thedebtor, it shall be presumed that the creditordelivered it voluntarily, unless contrary isproved.

Delivery of a private document evidencingcredit, made voluntarily by the creditor to thedebtor, implies the renunciation of the actionof creditor against the latter.

Kinds1. As to form (Art. 1270)

Express: made formally; in accordancewith forms of ordinary donations

Implied: inferred from the act of theparties

2. As to extent Total: entire obligation Partial: may refer only to amount of

indebtedness, or to an accessoryobligation, or to some other aspect ofthe obligation

3. As to constitution Inter vivos: effective during the lifetime

of the creditor Mortis causa: effective upon death of the

creditor; must be contained in a will ortestament

IV. Confusion or Merger of Rights

CONFUSION: The meeting in one person of thequalities of creditor and debtor of the sameobligation.

Requisites1. It should take place between principal debtor

and creditor2. It must be complete and definite- Parties

must meet all the qualities of creditor anddebtor in the obligation/ in the part affected.

EffectsArts. 1275- 1277:1. The obligation is extinguished from the time

the characters of the debtor and creditor aremerged in the same person.

2. In joint obligations, confusion does notextinguish the obligation except as regardsthe corresponding share of the creditor ordebtor in whom the two characters concur.

3. In solidary obligations, confusion in one ofthe solidary debtors extinguishes the entireobligation.

4. Obligation is not extinguished whenconfusion takes place in the person ofsubsidiary debtor (e.g. guarantor), butmerger in the person of the principal debtorshall benefit the former.

V. Compensation

COMPENSATION: Offsetting of two obligationswhich are reciprocally extinguished if they are ofthe same value, or extinguished to theconcurrent amount if of different values. (Askedin ’80, ’81, ’98, and ’02)

Compensation Confusion

There must always be 2obligations

Involves only oneobligation

There are 2 persons who aremutually debtors andcreditors of each other in 2separate obligations, eacharising from the same cause.

There is only oneperson whom thecharacters of thecreditor and debtormeet

Kinds1. As to extent

Total: Debts are of the same amount Partial: Amounts are not equal

2. As to origin Legal: takes place by operation of law Conventional: parties agree to

compensate their mutual obligationseven when some requisite in Art. 1279 islacking (Art. 1282).

Judicial: decreed by court when there iscounterclaim; effective upon finaljudgment (Art. 1283).

Facultative: when it can be claimed byone of the parties who, however, has theright to object to it.


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Requisites Effects1. Each obligor is

bound principally,and at the same timea principal creditor ofthe other

2. Both debts mustconsist in a sum ofmoney, or if thethings due areFUNGIBLE, of thesame kind & quality

3. Both debts are due4. Debts are liquidated

and demandable5. There must be no

retention orcontroversy overeither of the debts,commenced by 3

rd

persons andcommunicated indue time to thedebtor

6. Compensation is notprohibited by law

1. Effects rise from themoment all therequisites concur.

2. Debtor claiming itsbenefits must provecompensation; onceproven, effectsretroact from themoment when therequisites concurred.

3. Both debts areextinguished to theconcurrent amount,eventhough thecreditors and debtorsare not aware of thecompensation.

4. Accessoryobligations are alsoextinguished.

Compensation is prohibited in:1. Contracts of depositum2. Contracts of commodatum3. Future support due by gratuitous title4. Civil liability arising from a penal offense5. Obligations due to the government6. Damage caused to the partnership by a

partner

ASSIGNMENT OF CREDIT (Art. 1285):No effect and does not bind the debtor unlessand until the latter is notified of the assignmentor learns of it.

With Debtor’sConsent

With Debtor’sKnowledge

WithoutDebtor’s

KnowlegeDebtor’sconsent toassignment ofcreditconstitutes awaiver ofcompensation,unless hereserved hisright tocompensation.

Debtor may setupcompensationof debts(maturing)before theassignment ofcredit but not ofsubsequentones

Debtor maysetupcompensationof all credits(maturing) priorto theassignment andalso latter onesuntil he hadknowledge ofthe assignment.

Facultative compensation: Compensation whichcan only be set up at the option of a creditor, whenlegal compensation cannot take place because somelegal requisites in favor of the creditor are lacking.Creditor may renounce his right to compensation, andhe himself may set it up.As opposed to conventionalcompensation, facultative compensation is unilateraland does not depend upon the agreement of theparties.

VI. Novation

NOVATION: Extinguishment of an obligation bythe substitution or change of the obligation by asubsequent one which extinguishes or modifiesthe first either by changing the object or principalconditions, or by substituting the person of thedebtor, or by subrogating a third person in therights of the creditor. A juridical act of dualfunction—it extinguishes an obligation, and atthe same time, it creates a new one in lieu of theold. (Asked in ’78, ’88, ’94 and ’01)

Requisites1. A previous valid obligation2. Agreement of all the parties to the new

obligation3. Extinguishment of the old obligation4. Validity of the new obligation

Novation is not presumed. Express novation: Parties must expressly

disclose their intent to extinguish the oldobligation by creating a new one.

Implied novation: No specific form isrequired. There must be incompatibilitybetween the old and new obligation orcontract.(Asked in ’79, ’82, ’88, and ’94)

California Bus Line v. State Investment (2003): In theabsence of an unequivocal declaration ofextinguishment of the pre-existing obligation, onlyproof of incompatibility between the old and newobligation would warrant a novation by implication.The restructuring agreement merely provided for anew schedule of payments and authority giving Deltato take over management and operations of CBLI incase it fails to pay installments. There was no changein the object of prior obligations.

Test of IncompatibilityWhether or not the old and new obligation canstand together, each one having an independentexistence. No incompatibility exists when theycan stand together. Hence, there is no novation.Incompatibility exists when they cannot standtogether. Hence, there is novation.

Effects

In General If OriginalObligation isVoid

If NewObligation isVoid

1. Oldobligation isextinguishedand replacedby the newonestipulated.

Novation is void ifthe originalobligation wasvoid, exceptwhen annulmentmay be claimedonly by the

New obligation isvoid, the oldobligationsubsists, unlessthe partiesintended that theformer realations


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debtor, or whenratificationvalidates actsthat are voidable.(Art. 1298)1. Originalobligation is void:No novation2. Originalobligationvoidable:Effective ifcontract is ratifiedbefore novation

shall beextinguished inany event. (Art.1297)1. New obligationvoid: No novation2. New obligationvoidable:Novation iseffective

Accessory obligations are also extinguished,but may subsist only insofar as they maybenefit 3

rdpersons who did not give their

consent to the novation OR may not beaffected upon agreement between theparties.

Original or new obligation with suspensive orresolutory conditionArt. 1299: If original obligation was subject to asuspensive or resolutory condition, the newobligation shall be under the same condition,unless it is otherwise stipulated.

Compatible Conditions IncompatibleConditions

Fulfillment of bothconditions: newobligation becomesdemandable

Fulfillment ofcondition concerningthe originalobligation: oldobligation is revived;new obligation losesforce

Fulfillment ofcondition concerningthe new obligation:no novation;requisite of aprevious valid andeffective obligationlacking

Original obligation isextinguished, whilenew obligation exists

Demandability shallbe subject tofulfillment/nonfulfillment of thecondition affecting it

OBJECTIVE NOVATION1. Change of the subject matter2. Change of causa or consideration3. Change of the principal conditions or terms

SUBJECTIVE NOVATION1. Substitution of the Debtor: Consent of

creditor is an indispensable requirementboth in expromision and delegacion.

Expromision DelegacionInitiative for change doesnot emanate from thedebtor, and mayEven be made withouthis knowledge.

Debtor (delegante) offersor initiates the change,and the creditor(delegatorio) accepts 3

rd

person (delegado) asconsenting to thesubstitution

Requisites1. Consent of the

creditor and the newdebtor

2. Knowledge orconsent of the olddebtor is notrequired

Requisites1. Consent of old

debtor, new debtor,and creditor

Effects1. Old debtor is

released2. Insolvency of the

new debtor does notrevive the oldobligation in case theold debtor did notagree to expromision

3. If with knowledgeand consent of olddebtor, new debtorcan demandreimbursement theentire amount paidand w/ subrogationof creditor’s rights

4. If without knowledgeof the old debtor,new debtor candemandreimbursement onlyup to the extent thatthe latter has beenbenefited w/osubrogation ofcreditor’s rights

Effects1. Insolvency of the

new debtor revivesthe obligation of theold debtor if it wasanterior and public,and known to the olddebtor.

2. New debtor candemandreimbursement ofthe entire amount hehas paid, from theoriginal debtor. Hemay compel creditorto subrogate him toall of his rights.

2. Subrogation of a 3rd

person in the rightsof the creditora. Conventional subrogation: by

agreement of the parties;

Requisites: the consent of the 3rd

person, and of the original parties (Art.1301).

Conventionalsubrogation

Assignment of credit

Debtor’s consent isnecessary

Debtor’s consent is notrequired

Extinguishes anobligation and givesrise to a new one

Refers to the same rightwhich passes from oneperson to another, withoutmodifying or extinguishingthe obligation


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Defects/ vices in theold obligation arecured

Defects/ vices in the oldobligation are not cured

b. Legal subrogation: by operation of law

Legal subrogation is not presumed,except in the following circumstances:1. When creditor pays another creditor

who is preferred, even without thedebtor’s knowledge

2. When a 3rd

person not interested inthe obligation pays with the expressor tacit approval of the debtor

3. When, even without the knowledgeof the debtor, a person interested inthe fulfillment of the obligationwithout prejudice to the effects ofconfusion as to the latter’s shareeffects of confusion as to the latter’sshare

Effects

Total Partial1. Transfers to the

person subrogatedthe credit with all therights theretoappertaining, eitheragainst the debtor or3

rdpersons.

2. Obligation is notextinguished, even ifthe intention is topay it.

3. Defenses against theold creditor areretained, unlesswaived by the debtor

1. A creditor, to whompartial payment hasbeen made, mayexercise his right forthe remainder, andshall be preferred tothe personsubrogated in hisplace in virtue of thepartial payment.

CIVIL LAW REVIEWER Charts: PAYMENT & PERFORMANCE

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Charts: Payment & Performance

by Professor Eduardo A. LabitagUP College of Law(Asked in ’75, ’84, ’88, ’95, and ’98)

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WHO CAN PAY?

In GENERAL1. Debtor or his:2. Authorized Agent3. Heir4. Successor-ininterest

3rd PERSON

Interested in obligation(creditor cannot refuse

to accept valid payment)

Payment w/ orw/o debtor’sknowledge

Effects:1. Valid payment;obligation extinguished2. Debtor to reimbursefully 3rd person interestedin obligation3. 3rd person subrogatedto rights of creditor

Not interested in obligation(creditor may refuse to accept

payment [1236])

Payment withdebtor’s consent(express/tacit)

Payment withoutdebtor’s knowledge

or against the will of D

Effects:1. 3rd person is entitledto full reimbursement2. Legal subrogation(novation) – 3rd personis subrogated/step intothe shoes of creditor

Effects:3rd person can only bereimbursed only insofar aspayment has been beneficial todebtor(1236, 2nd. par.)burden of proof on 3rd personcannot compel C to subrogatehim (1237)

3rd person (whether or notinterested in obligation) does notintend to be reimbursed (1238)

Debtor must giveconsent

Effects:1. Payment is deemedas a donation/offer ofdonation2. Donation must be inproper form (if aboveP5Th must be inwriting

In Obligation to Give, ifPAYOR has

No free disposal & nocapacity to alienate

Minor who enteredcontract w/o consent ofparent or guardian

Effects: Payment is invalid w/o prejudice tonatural obligations

Effects: No right to recover fungiblething delivered to creditor who spentor consumed it in good faith

Legend:G = General Rule = ExceptionC = CreditorD = Debtor


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TO WHOM PAYMENT MAY BE MADE

In GENERAL

• Creditor /person in whose favor obligation wasconstituted, or

• His successor in interest, or

• Any person authorized to received payment (1240)

Payment to IncapacitatedCreditor (1241)

G – NOT valid

1) If C has kept the thing delivered2) Insofar as payment benefited C

Payment to 3rd

PERSON (1241,2nd par.)

G VALID if 3rd

person provesthat itredounded toC’s benefit

Exception to proof of benefit:.3rd person acquires C’s rights after payment.C ratifies payment.C’s conduct leads D to believe that 3rd

person had authority to receive payment.Assignment of credit without notice to D

In Case ofACTIVE

SOLIDARITY

If no demand is made, D may pay to ANY ofsolidary creditors

If any judicial/extrajudicial demand is made by anyone of the creditors who made the demand (1214)

If payment is madeto a WRONGPARTY

Effect:No extinguishment

Extinguishment if fault ornegligence can be imputedto creditor

Payment in good faith to person inpossession of credit = debtor released(1242)

If debtor pays creditor after beingjudicially ordered to retain debt =payment not valid (1243)

Payment made in good faith to anyperson in possession of creditEffect: D released (1242)


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WHAT IS TO BE PAID? IDENTITY

In GENERALThe very prestation (thing or service

Obligation to give aSPECIFIC thing

Give:1. Specific thing itself2. Accessions & accessories3. If with loss, improvements,

deterioration Apply Art.1189

Debtor cannot compel Cto receive a differentspecific thing even latterhas same value or morevaluable than that due(1244)

Obligation to give aGENERIC thing

G:C cannot demand a thing of superior quality;can demand inferiorD cannot deliver a thing of inferior quality

Unless quality & circumstances have beenstated (1246) purpose and other circumstancesof obligation considered

Obligation to pay sum of money, if D alienatesproperty to C = DACION EN PAGO governed bylaw on SALES (1245)

Obligation to DO orNOT to DO

Identity: The very same act promised to be doneor not to be done Substitution cannot be done against C’s will(1244, 2nd par.)

Payment ofMONEY

1. Payment of domestic obligations in Phil.Currency

Exceptions under R.A. 4100; R.A. 8183 –Foreign currency if agreed to by parties

2. In case of extraordinary inflation/deflation,basis

of payment is value of currency at the time ofobligation was established (1250)

Payment ofINTEREST

No interest (i.e., for the use of someone’s money)shall be due unless expressly stipulated in writing


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In Case of SUBSTANTIALPERFORMANCE INGOOD FAITH (1234)

D may recover as if there hadbeen complete fulfillment- Less damages suffered by C

PRESUMPTIONSin payment ofINTERESTS &

INSTALLMENTS

INTEREST – If principal amount isreceived w/o reservation as tointerest interest is presumed tohave been paid (1176; 1253)

INSTALLMENTS If a latterinstallment of a debt is receivedw/o reservation to priorinstallments Prior installments arepresumed paid (1176, 2nd par.)

HOW IS PAYMENT TO BE MADE INTEGRITY

In GENERAL1233 – Complete delivery or rendering1248 – C cannot be compelled toreceived partial prestations; D cannotbe compelled to give partial payments

Exceptions:1. Contrary stipulation2. When debt is in part liquidated & in partunliquidated3. When there are several subjects/partiesare bound under different terms/conditions

Effect if C accepts incompleteperformance (1235): WAIVER

- May be express or impliedIf C knows the incompleteness/irregularity of the payment, and hestill accepts it w/o objection, thenobligation is deemed extinguished(estoppel)* There must be intent to waive Except if C has no knowledge ofthe incompleteness


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WHERE PAYMENT IS TO BE MADE (ART. 1251)

In GENERALIn the place designated in the obligation

If no place is designated

If obligation is to deliver aSPECIFIC thing Place of performance iswherever the thing was atthe moment obligation wasconstituted Unless there is acontrary expressstipulation

In any other case Domicile of debtor

If D changes his domicilein bad faith or after he hasincurred in delay Additional expensesshall be borne by D

Expenses of MakingPayment

In GENERALExtrajudicial expensesrequired by the paymentshall be borne by DEBTOR

Unless otherwisestipulated

As to JUDICIAL expenses Rules of Court shallgovern


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WHEN PAYMENT IS TO BE MADE?

When obligation is due anddemandable but D may pay beforedue date if period is for benefit of D

In GENERALPayment to be made when the creditormakes a demand(judicially/extrajudicially)

Exceptions wherein demand of creditor is notnecessary for delay to exist:1. When obligation/law expressly declares2. Nature & circumstances of the obligationdesignation of time is controlling motive orestablishment of contract3. When demand would be useless

WHY SHOULD PAYMENT BE MADE?

Because C may compel D to pay, andfailure to pay will allow C to satisfy creditfrom properties of D that are not exemptfrom execution

- end of Obligations -


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CONTRACTSTable of Contents

Chapter I. General Provisions.....................122I. Classification of Contracts.................122II. Elements of Contracts.......................123III. Stages of Contracts...........................123IV. Charactertics of Contracts (MARCO)123

Chapter II. Essential Requisites .................125I. Consent .............................................125II. Object ................................................127III. Cause................................................127

Chapter III. Forms of Contracts ..................129I. Rules .................................................129II. Kinds of Formalities...........................129

Chapter IV. Reformation of Contracts........130

Chapter V. Interpretation of Contracts.......130

Chapter VI. Defective Contracts .................131I. Rescissible Contracts (Arts. 1380-1389)

131II. Voidable Contracts (Arts. 1390-1402)

132III. Unenforceable Contracts (Arts. 1403-1408)..........................................................133IV. Void or Inexistent Contracts (Arts. 1409-1422)..........................................................134


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Chapter I. General Provisions

I. CLASSIFICATIONII. ELEMENTSIII. STAGESIV. CHARACTERISTICS

Article 1305, Civil Code. A contract is a meeting ofminds, between two persons whereby one bindshimself, with respect to the other, to give somethingor to render some service.

I. Classification of Contracts

A. To formation:1. Consensual: consent is enough; e.g.

sale2. Real: consent and delivery is required;

e.g. deposit, pledge3. Solemn or formal: special formalities are

required for perfection e.g. donation ofrealty

B. To relation to other contracts:1. Principal: may exist alone; e.g. lease2. Accessory: depends on another contract

for its existence; e.g. guaranty3. Preparatory: a preliminary step towards

the celebration of a subsequentcontract; e.g. agency

C. To nature of vinculum1. Unilateral: only one party is bound by

the prestation; e.g. commodatum2. Bilateral (synallagmatic): where both

parties are bound by reciprocalprestations; e.g. sale

D. To fulfillment of prestations1. Commutative: fulfillment is determined in

advance2. Aleatory: fulfillment is determined by

chance

E. By equivalence of prestations1. Gratuitous: no correlative prestation is

received by a party2. Onerous: there is an exchange of

correlative prestations3. Remuneratory: the prestation is based

on services or benefits already received

F. By the time of fulfillment1. Executed: obligation is fulfilled at the

time contract is entered into2. Executory: fulfillment does not take

place at the time the contract is made

G. To their purpose

OBLIG

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OBLIGATIONS & CONTRACTS TEAM


Leo LedesmaLead Writer

Krizel MalabananIvy VelascoTin Reyes

Frances DomingoHazel Abenoja

Writers

CIVIL LAW


ACADEMICS COMMITTEE




Kae Guerrero

DESIGN & LAYOUT



LECTURES COMMITTEE


Heads


Arianne Cerezo


Volunteers

MOCK BAR COMMITTEE

Lilibeth Perez


Dahlia Salamat

LOGISTICS

Charisse Mendoza


Jill HernandezHead


Faye CelsoJoie Bajo

Members


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1. Transfer of ownership, e.g. sale2. Conveyance of Use, e.g. Commodatum3. Rendition of Service, e.g. agency

H. To their subject matter1. Things, e.g. sale, deposit2. Services, e.g. agency

I. To their designation1. Nominate: the law gives the contract a

special designation or particular namee.g. deposit

2. Innominate: the contract has no specialname

Article 1305, Civil Code. INNOMINATECONTRACTS shall be regulated by the stipulationsof the parties, by the general provisions of Titles Iand II of [the Civil Code], by the rules governing themost analogous nominate contracts, and by thecustoms of the place.

Classes of Innominate Contracts1. Do ut des: I give so that you may give2. Do ut facias: I give so that you may do3. Facio ut facias: I do so that you may do4. Facio ut des: I do so that you may give

II. Elements of Contracts

A. Essential: Those without which the contractwould not exist (consent, object, causa).

B. Natural: Those which are derived from thenature of the contract and ordinarilyaccompany the same-they are presumed toexist unless the contrary is stipulated e.g.warranty in sales

C. Accidental: Those which exist only ifstipulated

Solemn Real ConsensualCommonElements

Consent, subject matter, causa

SpecialElements

Formality Delivery None

Example Donationof personalpropertymore thanP5K

Loan,pledge

Others

III. Stages of Contracts

A. Preparation, conception or generation:period of negotiation and bargaining, endingat the moment of agreement

B. Perfection or birth: the moment when theparties come to agree on the terms of thecontract

C. Consummation or death: the fulfillment orperformance of the terms agreed upon

IV. Charactertics of Contracts (MARCO)

A. MUTUALITYThe contract must bind both contracting parties;its validity or compliance cannot be left to the willof one of them (Art.1308).

Taylor v. Uy Teng Piao, 1922: [BUT] a contract mayexpressly confer upon one party the right to cancelthe contract because the exercise of that right is afulfillment of the provisions of the contract itself

The release must be binding on both parties. The determination of the performance may

be left to a 3rd

person, whose decision shallNOT be binding if: It is evidently inequitable (the courts will

decide) The decision had not been made known

to both parties (Art.1309)

B. AUTONOMYThe contracting parties may establish suchstipulations, clauses, terms and conditions asthey may deem convenient, provided they arenot contrary to law, morals, good customs,public order, or public policy (Art. 1306).

C. RELATIVITYContracts take effect only between parties, theirassigns and heirs UNLESS, obligations arisingfrom the contract are not transmissible by their(1) nature, (2) by stipulation or (3) by provision oflaw. The heir is not liable beyond the value ofthe property he received from the decedent. (Art.1311)

Exception: Strangers may enforce the contractin their favor in the ff. cases:1. Stipulations Pour Autrui—

If a contract should contain some stipulationin favor of a third person, he may demand itsfulfilment provided he communicated his


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acceptance to the obligor before itsrevocation. A mere incidental benefit orinterest of a person is not sufficient. Thecontracting parties must have clearly anddeliberately conferred a favour upon a thirdperson (Art.1311).

Requisites:a. There must be a stipulation in favor of a

third personb. The stipulation must be part, not the

whole of the contractc. The contracting parties must have

clearly and deliberately conferred afavor upon a third person, NOT a mereincidental benefit or interest.

d. The third person must havecommunicated his acceptance to theobligor before its revocation

e. No relation of agency exists betweenany of the parties and the third personfavored

Florentino v. Encarnacion, 1977:a. Contracts to perform personal acts

which cannot be as well performed byothers are discharged by the death ofthe promissor. Conversely, where theservice or act is of such a character thatit may as well be performed by another,or where the contract, by its terms,shows that performance by otherswas contemplated, death does notterminate the contract or excusenonperformance.

b. In this case the stipulation is astipulation pour atrui because the trueintent of the parties is to confer a directand material benefit upon a third party.

Accion Directa: Where the statuteauthorizes the creditor to sue on hisdebtor’s contract, e.g. lessor v. sub-lessee (Art. 1651,1652) (J.B.L. Reyes)

2. Third Person In Possession—When the third person comes intopossession of the object of a contractcreating real rights (Art 1312)

3. Fraud—Where the contract is entered into in order todefraud a person (Art. 1313)

4. Tortuous Interference—Where the third person induces acontracting party to violate his contract(Art.1314).

Requisites:a. Existence of a valid contractb. Knowledge of the third person of the

existence of the contract; andc. Interference by third person without

legal justification or excuse

D. CONSENSUALITYContracts are perfected by mere consent andfrom that moment, the parties are bound not onlyto the fulfillment of what has been expresslystipulated but also to all consequences which,according to their nature, may be in keeping withgood faith, usage and law, (Art.1315) EXCEPTreal contracts, such as deposit, pledge andcommodatum, are not perfected until thedelivery of the object of the obligation.(Tolentino)

E. OBLIGATORY FORCE

Art. 1159, Civil Code. Obligations arising fromcontracts have the force of law between thecontracting parties and should be complied with ingood faith.

Art. 1308, Civil Code. The contract must bind bothcontracting parties; its validity or compliance cannotbe left to the will of one of them.

Art. 1315, Civil Code. Contracts are perfected bymere consent, and from that moment the parties arebound not only to the fulfillment of what has beenexpressly stipulated but also to all the consequenceswhich, according to their nature, may be in keepingwith good faith, usage and law.

Art. 1356, Civil Code. Contracts shall be obligatory,in whatever form they may have been entered into,provided all the essential requisites for their validityare present. However, when the law requires that acontract be in some form in order that it may be validor enforceable, or that a contract be proved in acertain way, that requirement is absolute andindispensable. In such cases, the right of the partiesstated in the following article cannot be exercised.

CIVIL LAW REVIEWER Chapter II. ESSENTIAL REQUISITES

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Chapter II. Essential Requisites

I. CONSENTII. OBJECTIII. CAUSE

I. Consent

Conformity of the parties to the terms of thecontract; the acceptance by one of the offermade by the other. (Manresa)

Requisites:1. It must be manifested by the concurrence of

the offer and acceptance (Arts. 1319-1326)2. The contracting parties must possess the

necessary legal capacity (Arts. 1327-1329)3. It must be intelligent, free, spontaneous, and

real (not vitiated) (Arts. 1330-1346)

A. Concurrence1. Offer: a unilateral proposition which one

party makes to the other for the celebrationof the contract. (Tolentino)

Requisites:a. Definiteb. Intentionalc. Complete

Invitations to make offers(advertisements) Business advertisements of things for

sale, are NOT definite offers, justinvitations to make an offer, UNLESSthe contrary appears (Art. 1325)

Advertisements for bidders areinvitations to make proposals, advertiseris NOT bound to accept lowest orhighest bid, UNLESS contrary appears;the bidder is the offeror (Art. 1326).

Statements of intention: no contractresults even if accepted

Rosenstock v. Burke, 1924:FACTS: Elser, in a letter, informed Burke that he was‘in a position and is willing to entertain’ the purchaseof the yacht under some terms.HELD: The word “entertain” applied to an act does notmean the resolution to perform said act, but simply aposition to deliberate for deciding to perform or not toperform said act. It was merely a position to deliberatewhether or not he would purchase the yacht andinvitation to a proposal being made to him, whichmight be accepted by him or not.

OFFER TERMINATES upon:a. Rejection by the offereeb. Incapacity (death, civil interdiction,

insanity, or insolvency) of the offeror orofferee before acceptance is conveyed

c. Counter-offerd. Lapse of the time stated in the offer

without acceptance being conveyede. Revocation of the offer before learning

of acceptancef. Supervening illegality before acceptance

(J.B.L. Reyes)

2. AcceptanceRequisites:a. Unqualified and Unconditional, i.e. it

must conform with all the terms of theoffer, otherwise it is a counter-offer (Art.1319)

b. Communicated to the offeror andlearned by him (Arts. 1319, 1322). Ifmade through an agent, the offer isaccepted from the time the acceptanceis communicated to such agent.

c. Express/Implied, but is not presumed

OPTION CONTRACT: A preparatorycontract in which one party grants to theother, for a fixed period, the option to decidewhether or not to enter into a principalcontract. (Art. 1324)

With consideration Without considerationOfferor cannotunilaterally withdraw hisoffer

Offeror may withdraw bycommunicating withdrawalto the offeree beforeacceptance

B. Capacity1. Incapacitated to Give Consent

a. Minors, UNLESS, the minor’s consentis operative in contracts: For necessaries (Art.1427) Where the minor actively

misrepresents his age (estoppel)

Mercado v. Espiritu, 1917:Minors held in estoppel throughactive misrepresentation

Bambalan v. Maramba, 1928:There is no estoppel if the minoritywas known.

b. Insane or demented persons,UNLESS, they contract during a lucidinterval

c. Deaf-mutes who do not know how toread and write.


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2. Disqualified to Contract (Art. 1329):a. Those under Civil interdiction for

transactions inter vivos (RPC Art. 34)b. Undischarged insolvents (Insolvency

Law, Sec.24)c. Husband and wife: cannot donate (Art.

123 FC) to each other, nor sell if themarriage is under ACP (Art.1490)

d. The ff. cannot purchase (Art. 1491): The guardian: his ward’s property The agent: the principal’s property Executors and administrators:

property under administration Public officers-state property under

their administration Justices, judges, prosecutors, clerks

of court, lawyers-property attachedin litigation.

e. Members of Ethnic Minorities: theircontracts (excluding sale of personalproperty or personal service contracts)must be approved by the Governor orhis representative. (Public Land Act)

Incapacity to GiveConsent (Art. 1327)

Disqualification toContract (Art.1329)

Restrains the exercise ofthe right to contract

Restrains the very rightitself

Based on subjectivecircumstances of certainpersons

Based on public policyand morality

Voidable Void

C. Vices of Consent (Art. 1330, CC) (MIVUF)1. Mistake

Inadvertent and excusable disregard of acircumstance material to the contract. (J.B.L.Reyes) In order that mistake may invalidate

consent, it should refer to thesubstance of the thing which is theobject of the contract, or to thoseconditions which have principally movedone or both parties to enter into thecontract (Art.1331)

Mistake of Fact Mistake of Law Mutual Mistake

When one orboth contractingparties believethat a fact existswhen in reality itdoes not, or viceversa

When one orboth partiesarrive at anerroneousconclusion ontheinterpretation ofa question oflaw or the legaleffects

Must be asto the legaleffect of anagreement

Must bemutual

Real purposeof the partiesmust havebeenfrustrated

2. IntimidationWhen one of the contracting parties iscompelled by a reasonable and well-grounded fear of an imminent and grave evilupon his person or property, or upon theperson or property of his spouse,descendants or ascendants, to give hisconsent (Art. 1335).

Martinez v. HSBC, 1910: The conveyance of severalproperties by to her husband’s creditors, thoughreluctant is still consent. She assented to therequirements of the defendants, the civil and criminalactions against them would be dropped. A contract isvalid even though one of the parties entered into itagainst his wishes and desires, or even against hisbetter judgment. Contracts are also valid even thoughthey are entered into by one of the parties withouthope of advantage or profit.

3. ViolenceIrresistible force used to extort consent(J.B.L. Reyes)

4. Undue InfluenceWhen a person takes improper advantage ofhis power over the will of another, deprivingthe latter of a reasonable freedom of choice(Art. 1337).

Circumstances:a. Relationship of the parties (family,

spiritual, confidential etc.)b. That the person unduly influenced was

suffering from infirmity (mentalweakness, ignorance etc.) (Art.1337)

5. FraudWhen through insidious words ormachinations of one of the contractingparties, the other is induced to enter into acontract which, without them, he would nothave agreed to (Art. 1338).

Art. 1339, Civil Code. Failure to disclose facts, whenthere is a duty to reveal them, as when the parties arebound by confidential relations, constitutes fraud.

Art. 1340, Civil Code. The usual exaggerations intrade, when the other party had an opportunity toknow the facts, are not in themselves fraudulent.

Art. 1341, Civil Code. A mere expression of anopinion does not signify fraud, unless made by anexpert and the other party has relied on the former'sspecial knowledge.

Art. 1342, Civil Code. Misrepresentation by a thirdperson does not vitiate consent, unless, suchmisrepresentation has created substantial mistake


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and the same is mutual.

Art. 1343, Civil Code. Misrepresentation made ingood faith is not fraudulent but may constitute error.

SIMULATION OF CONTRACTS (Art. 1345-1346): Declaration of a non-existent will madedeliberately for the purpose of producing theappearance of a transaction that does not exist,or which is different from the one which actuallyarose. (J.B.L. Reyes)

Absolute RelativeNo real transaction isintended

Real transaction is hidden

Fictitious contract Disguised contractVoid Bound as to hidden

agreement, so long as itdoes not prejudice a thirdperson and is not contraryto law, morals, goodcustoms, public order orpublic policy

II. Object

The thing right or service which is the subjectmatter of the obligation arising from the contract.

Requisites:a. Lawful: Not contrary to law, morals, good

customs, public order or public policy.b. Actual or possiblec. Transmissible: Within the commerce of mand. Determinate or determinable

All things or services may be the object ofcontracts, EXCEPT: Things which are outside the commerce of

men Intransmissible rights Future inheritance except in cases

authorized by law Impossible things or services Objects which are indeterminable as to their

kind, the genus should be expressed

In order that a thing, right or service may be theobject of a contract, it should be in existence atthe moment of the celebration of the contract, orat least, it can exist subsequently or in thefuture.

A FUTURE THING may be the object of acontract, such contract may be interpreted as a: Conditional contract: where its efficacy

should depend upon the future existence ofthe thing

Aleatory contract: where one of the contractingparties assumes the risk that the thing will nevercome into existence, e.g. insurance

III. Cause

It is the impelling reason for which a partyassumes an obligation under a contract.

Requisites:a. Existingb. Licit or Lawfulc. True

Cause in:

OnerousContracts

RenumeratoryContracts

PureBeneficence

As to each ofthe contractingparties isunderstood tobe theundertaking orthe promise ofthe thing orservice by theother party

The service orbenefit which isremunerated

Mereliberality ofthebenefactor

In Villaroel v. Estrada (1940), where a moralobligation is based upon a previous civil obligation,which has already been barred by the statute oflimitations at the time the contract is entered into, itconstitutes a sufficient cause or consideration tosupport a contract (Natural Obligation).

BUT,In Fisher v. Robb (1939), if the moral obligation ariseswholly from ethical consideration, it cannot constitutea sufficient cause to support an onerous contract, aswhen the promise is made on the erroneous beliefthat one was morally responsible for the failure of anenterprise (Moral Obligation).

Cause Defined EffectLack ofCause

Absence or totallack of cause

The contractconfers no rightand has no legaleffect

Illegality ofCause

Contrary to law,morals, goodcustoms, publicpolicy andpublic order

Null and Void

Falsity ofcause

Cause is statedbut is untrue

Void if it shouldnot be proved thatit was foundedupon anothercause which wastrue and lawful

Lesion orinadequacyof cause

Cause is notproportionate toobject

Shall not invalidatethe contractexcept when


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a)there is fraud,mistake, undueinfluenceb)when partiesintended adonation

Liguez v. CA (1957): In making the donation inquestion, Lopez was not moved exclusively by thedesire to benefit Liguez, but also to secure hercohabiting with him, so that he could gratify his sexualimpulses. The donation was an onerous transactionand clearly predicated upon an illicit causa.

CIVIL LAW REVIEWER Chapter III. FORMS OF CONTRACTS

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Chapter III. Forms of Contracts

I. RULESII. KINDS OF FORMALITIES

I. Rules

Contracts shall be obligatory, in whatever formthey may have been entered into, provided allthe essential requisites for their validity arepresent. (Art. 1356)

Spiritual System of the Spanish Code: The law looksmore on the spirit rather than the form of contracts.

Exceptions: When the law requires that a contract be in

some form for validity (Arts. 1357-1358) When the law requires that contract be in

some form to be enforceable (Statute ofFrauds)

II. Kinds of Formalities

A. Contracts Which Must Appear in Writing:1. Donation of personal property whose

value exceeds five hundred pesos (Art748)

2. Sale of a piece of land or any interesttherein through an agent (Art 1874)

3. Antichresis (Art 2134)4. Agreements regarding payment of

interests in contracts of loans (Art. 2314)

B. Contracts Which Must Appear in a PublicDocument1. Art. 1358:

a. Acts and contracts which have fortheir object the creation,transmission, modification orextinguishment of real rights overimmovable property; sales of realproperty or of an interest therein agoverned by Articles 1403, No. 2,and 1405;

b. The cession, repudiation orrenunciation of hereditary rights orof those of the conjugal partnershipof gains;

c. The power to administer property, orany other power which has for itsobject an act appearing or whichshould appear in a public document,or should prejudice a third person;

d. The cession of actions or rightsproceeding from an act appearing ina public document.

e. All other contracts where theamount involved exceeds fivehundred pesos must appear inwriting, even a private one. Butsales of goods, chattels or things inaction are governed by Articles,1403, No. 2 and 1405.

2. Donation of immovable properties (Art.749)

3. Partnership where immovable propertyor real rights are contributed to thecommon fund (Arts.1771 and 1773)

BF Corporation v. CA, 1998: A contract may beencompassed in several instruments even thoughevery instrument is not signed by the parties since it issufficient if the unsigned instruments are clearlyidentified or referred to and made part of the signedinstruments.

CIVIL LAW REVIEWER Chapter IV. REFORMATION OF CONTRACTS

Chapter V. INTERPRETATION OF CONTRACTS

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Chapter IV. Reformation of Contracts

Reformation of Contracts (Art 1359-1369)REFORMATION: is that remedy in equity bymeans of which a written instrument is made orconstrued so as to express or conform to thereal intention of the parties when some error ormistake has been committed. (J.B.L. Reyes)

Requisites (Art 1359):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 ofmistake, fraud, inequitable conduct, oraccident.

If the mistake, fraud, inequitable conduct, or accidenthas prevented the meeting of the minds of the parties,the proper remedy is not reformation but annulment ofthe contract. (See also Art 1390)

Who May Ask for Reformation (Art. 1368):1. Either party or his successors in interest, if

the mistake was mutual; otherwise,2. Upon petition of the injured party, or his

heirs and assigns.

NO REFORMATION in (Art. 1366):1. Simple donations inter vivos wherein no

condition is imposed;2. Wills;3. When the real agreement is void.

Implied Ratification (Art. 1367): The action toenforce the instrument bars subsequent actionto reform.

Chapter V. Interpretation of Contracts

RULES ON DOUBTS (Art. 1378)

PrincipalObjects

GratuitousContracts

OnerousContracts

Doubts whereit cannot beknown whatmay havebeen theintention orwill of theparties, thecontract shallbe null andvoid.

Absolutelyimpossible tosettle doubts bythe rules andonly refer toincidentalcircumstancesthe leasttransmissionof rights andinterests shallprevail.

Absolutelyimpossible tosettle doubts bythe rules andonly refer toincidentalcircumstancesthe doubt shallbe settled infavor of thegreatestreciprocity ofinterests.

CIVIL LAW REVIEWER Chapter VI. DEFECTIVE CONTRACTS

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Chapter VI. Defective Contracts

I. RESCISSIBLEII. VOIDABLEIII. UNENFORCEABLEIV. VOID OR INEXISTENT

I. Rescissible Contracts (Arts. 1380-1389)

What are therescissiblecontracts? (Art1381; see also Art1382)

Contracts ofguardians

Contracts inrepresentationof absentees

Contracts areentered into to

defraud existingcreditors

Contracts referto things in

litigation

What makes itdefective?

When the acts ofadministrationcause LESION ordamage to theWARD theyrepresent by morethan 25% of thevalue of the thing

When the actsof administrationcause LESIONor damage tothe ABSENTEEthey representby more than25% of the valueof the thin

When the creditorscannot in any othermanner collect theclaims due them

If entered into bythe defendantwithout theknowledge &approval of thelitigants orcompetent judicialauthority

Effect on theContract

Valid until rescinded (Art 1380)

How to rescind? Direct Action (different from action forrescission under Art 1191)

NO rescission if:1. Injured party has other legal

means to obtain reparation (Art1383).

2. Plaintiff cannot return his part ofthe obligation (Art 1385 par 1)

3. Object of the contract is in thehands of third person, onerouslyacquired by him in good faith (Art1385 par 2)

4. If the court approves thecontracts under Art 1381 par 1and 2 (Art 1386)

Accion Pauliana for Contracts in Fraud ofCreditors

NO rescission if:1. Injured party has other legal means to

obtain reparation (Art 1383)2. Plaintiff cannot return his part of the

obligation (Art 1385 par 1)3. Object of the contract is in the hands of

third person, onerously acquired byhim in good faith (Art 1385 par 2)

Who can rescind? In general, byinjured party

By ward, or byguardian ad litemof ward duringincapacity of wardin an actionagainst theoriginal guardian

By absentee By creditor(s) By party litigant

When to rescind(Art 1389)

Within four yearsfrom [re-] gainingcapacity

Within 4 yearsfrom knowledgeof domicile ofabsentee

Within 4 years fromknowledge offraudulent contract

Within 4 yearsfrom knowledge offraudulent contract


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II. Voidable Contracts (Arts. 1390-1402)

What makes itdefective? (Art1390)

Incapacity of one party to thecontract

Consent vitiated by mistake, violence,intimidation, undue influence or fraud


Valid until annulled by competent court (Art 1390 last par)

How to annul? 1. Directly, by an action for annulment2. Indirectly, by counterclaim asking for positive action of the court to set aside the

contract

Annulment cannot proceed when:1. the object of the contract is lost through fraud or deceit of the person with right to

institute proceedings (art 1401 par 1);2. the right of action is based upon the incapacity of any one of the contracting

parties and the thing is lost through the fault or fraud of the plaintiff (Art 1401 par2)

Who can/cannotannul?(Art 1397)

1. Parties who are obliged principally or subsidiarily2. Persons who are capable cannot allege the incapacity of those with whom they

contracted3. Persons who exerted intimidation, violence, or undue intimidation, or employed

fraud, or caused mistake, cannot base their action upon these flaws of thecontract

When? (Art 1391) Within four years after guardianship ofminors or incapacitated personsceases

Within four years1. After intimidation, violence or undue

influence ceases2. From the time of discovery of mistake

or fraudEffect ofAnnulment

1. Mutual restitution of the things delivered, along with fruits and price paid withinterest (Art 1398)

2. Damages to be paid by party who caused defect of the contract, by virtue ofArticle 20 and 21 of the Civil Code

How to CureDefect? (Arts1392 - 1396)

1. Express (written or oral manifestation) or tacit ratification (acts or conduct) byinjured party, or guardian of incapacitated person.

- Ratification does not require the conformity of the contracting partywho has no right to bring the action for annulment (Art 1395)


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III. Unenforceable Contracts (Arts. 1403-1408)

What are theunenforceablecontracts? (Art1403)

Contract entered intowithout authority of, orin excess of authoritygiven by owner

Contracts covered byStatute of Frauds whichdid not comply with thewritten memorandumrequirement(See Art 1403 par 2)

Contract where bothparties are incapableof giving consent tocontract


No effect unless ratified. Cannot be enforced by a proper action in court.

How to assail? Not by direct action.1. As a defense, by

motion to dismiss thecomplaint on theground that the contractis unenforceable

Not by direct action.1. As a defense, by motion

to dismiss the complainton the ground that thecontract is unenforceable;

2. Objection to thepresentation of oralevidence to prove an oralcontract (See Art 1405)

Not by direct action.1. As a defense, by

motion to dismiss thecomplaint on theground that thecontract isunenforceable

Who can assail?*anunenforceablecontract cannotbe assailed bythird persons (Art1408)

By person whose namethe contract was enteredinto; By owner of property.

By party against whom thecontract is being enforced;or his privies.

By party against whomthe contract is beingenforced; or his privies;or parents or guardianspersons, as it is apersonal defense

When? When a party asks the court to enforce the contract

How to CureDefect? (Art1403)

1. Ratification by personwhose name thecontract was enteredinto

1. Ratification by partyagainst whom thecontract is beingenforced

2. By failure to object to thepresentation of oralevidence to prove an oralcontract or by theacceptance of benefitsunder the contract (Art1405)

1. By ratification ofparty against whomthe contract is beingenforced; or hisprivies; or parents orguardians

The ratification byone party convertsthe contract into avoidable contract (Art1407)


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IV. Void or Inexistent Contracts (Arts. 1409-1422)

What makes itdefective?

Contract’s Cause, Objectof Purpose is contrary tomorals, good customs,public order or publicpolicy(Art 1409 par 1)

Inexistent contracts, orcontracts whose essentialelements are absent(Art Art 1409 par 2, 3, 4,5)

Contracts expresslyprohibited or declaredvoid by law (Art 1409par 7); contractswhich are directresults of a previousillegal contract (art1422)

Contracts whichare inconsistentand void from thebeginning (Art1409)

1.Those whose Cause, Object of Purpose is contrary to morals, good customs,public order or public policy

2.Those which are absolutely simulated or fictitious3.Those whose cause or object did not exist at the time of the transaction4.Those whose object is outside the commerce of men5.Those which contemplate an impossible service6.Those where the intention of the parties relative to the principal object of the

contract cannot be ascertained7.Those expressly prohibited or declared void by law

How to assail? 1. File for action for declaration of inexistence or nullity of contract2.As a defense during trial (Art 1409 last par). Such defense not available to third

persons not directly affected by contract (Art 1421)3.In pari delicto applies when cause or object of contract constitutes a criminal

offense (Art 1411)Who can assail? 1. Innocent party Art

1411 par 2; Art 1412par2)

2. Less-guilty party, uponcourt discretion

3. Incapacitated personwho is a party to anillegal contract, uponcourt discretion (Art1415)

4. Any person whoseinterests are directlyaffected by thecontract (Art 1421)

1. Any of the parties2. Any person whose

interests are directlyaffected by the contract(Art 1421)

1. Any person whoseinterests aredirectly affected bythe contract Art(1421)

2. By party for whoseprotection theprohibition of thelaw is designed (Art1416)

When? The action or defense does not prescribe (Art 1410)

- end of Contracts -


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PROPERTYTable of Contents

Chapter I. Definition and Classification ofProperty.........................................................137

I. Definition ...........................................137II. Classification .....................................137

Chapter II. Ownership ..................................144I. Definition ...........................................144III. Specific Rights under the Civil Code.144IV. Limitations on Real Right of Ownership

146Chapter III. Accession..................................147

I. Definition ...........................................147II. General Principles of Accession .......147III. Kinds of Accession............................147IV. Principles Governing Each Kind ofAccession...................................................147

Chapter IV. Quieting of Title........................152I. In General .........................................152II. Purpose.............................................152III. Nature: Quasi in Rem........................152IV. Requisites .........................................152V. Prescription of Action ........................153

Chapter V. Co-Ownership............................154I. Definition ...........................................154II. Characteristics ..................................154III. Difference between Co-ownership andJoint Tenancy.............................................155IV. Difference between Co-ownership andPartnership.................................................155V. Sources of Co-Ownership .................155VI. Rights of Each Co-owner over the Thingor Property Owned in Common .................157VII. Implication of Co-owner’s Right overHis Ideal Share ..........................................161VIII. Rules on Co-Ownership NotApplicable to CPG or ACP.........................161IX. Special Rules on Ownership of DifferentStories of a House as Differentiated fromProvisions of the Condominium Act...........162X. Extinguishment of Co-Ownership .....166

Chapter VI. Possession ...............................168I. Definition ...........................................168II. Degrees of Possession .....................169III. Classes of Possession ......................169IV. Cases of Possession.........................169V. What Things May be Possessed ......170VI. What May Not Be Possessed by PrivatePersons......................................................171VII. Acquisition of Possession .............171VIII. Effects of Possession ...................173IX. Effects of Possession in the Concept ofOwner ........................................................177X. Presumption in Favor of thePossessor—for Acquisitive Prescription....178XI. Possesion May Be Lost By ...............179

Chapter VII. Usufruct ...................................181I. Concept.............................................181II. Characteristics ..................................181III. Usufruct Distiguished from Lease andServitude....................................................181IV. Classes of Usufruct...........................182V. Rights of Usufructuary ......................184VI. Rights of the Naked Owner...............186VII. Obligations of the Usufructuary ....187VIII. Special Cases of Usufruct ............190IX. Extinguishment of Usufruct...............192X. Conditions Not Affecting Usufruct.....194

Chapter VIII. Easement ................................196I. Concept.............................................196II. Essential Features ............................196III. Classification of Servitudes...............197IV. General Rules Relating to Servitudes

198V. Modes of Acquiring Easements ........198VI. Rights and Obligations of Owners ofDominant and Servient Estates .................199VII. Modes of Extinguishment ofEasements.................................................200VIII. Legal Easements..........................202

Chapter IX. Nuisance ...................................212I. Definition ...........................................212II. Classes .............................................212III. Liability in Case of Nuisance.............213IV. Regulation of Nuisances ...................214

Chapter X. Modes of Acquiring Ownership.......................................................................217

I. Mode v. Title .....................................217II. Mode .................................................217

Chapter XI. Donation ...................................222I. Nature ...............................................222II. Requisites .........................................222III. Kinds .................................................222IV. Who May Give or Receive Donations

223V. Who May Not Give or ReceiveDonations...................................................224VI. Acceptance .......................................225VII. Form .............................................225VIII. What May Be Donated .................225IX. Effect .................................................226X. Revocation and Reduction................227

Chapter XII. Lease........................................232I. General Characteristics ....................232II. Kinds .................................................232III. Lease of Things ................................232

CIVIL LAW REVIEWER Chapter I. DEFINITION and CLASSIFICATION of PROPERTY

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Chapter I. Definition and Classification ofProperty

I. DEFINITIONII. CLASSIFICATION

A. UNDER THE CIVIL CODEB. BY OWNERSHIPC. OTHER CLASSIFICATIONS

I. Definition

PROPERTY: Mass of things or objectscharacterized by1. Utility – capacity to satisfy human wants2. Individualityand substantivity – separate and

autonomous existence3. Susceptibility of being appropriated – those

which cannot be appropriated because oftheir distance, depth or immensity cannot beconsidered as things (i.e. stars, ocean)

II. Classification

A. UNDER THE CIVIL CODE

Article 414, Civil Code. All things which are or maybe the object of appropriation are considered either:

1. Immovable or real property; or2. Movable or personal property.

IMMOVABLES OR REAL PROPERTYArticle 415—The following are immovable property:1. Land, buildings, roads and constructions of

all kinds adhered to the soil;2. Trees, plants, and growing fruits, while they

are attached to the land or form an integralpart of an immovable;

3. Everything attached to an immovable in afixed manner, in such a way that it cannot beseparated therefrom without breaking thematerial or deterioration of the object;

4. Statues, reliefs, paintings or other objects foruse or ornamentation, placed in buildings oron lands by the owner of the immovable insuch a manner that it reveals the intention toattach them permanently to the tenements;

5. Machinery, receptacles, instruments orimplements intended by the owner of thetenement for an industry or works whichmay be carried on in a building or on a pieceof land, and which tend directly to meet theneeds of the said industry or works;

6. Animal houses, pigeon-houses, beehives,fish ponds or breeding places of similarnature, in case their owner has placed themor preserves them with the intention to have

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them permanently attached to the land, andforming a permanent part of it; the animalsin these places are included;

7. Fertilizer actually used on a piece of land;8. Mines, quarries, and slag dumps, while the

matter thereof forms part of the bed, andwaters either running or stagnant;

9. Docks and structures which, though floating,are intended by their nature and object toremain at a fixed place on a river, lake, orcoast;

10. Contracts for public works, and servitudesand other real rights over immovableproperty.

Immovables by Nature—Those which cannot be moved from place toplace; their intrinsic quality have no utility exceptin a fixed place (Par. 1 & 8)1. Par. 1: Lands, building, roads and

constructionsa. Buildings

To be considered a building, theiradherence to the land must bepermanent and substantial.

Buildings have been considered asimmovables, despite: Treatment by the parties e.g.

they constitute a separatemortgage on the building andthe land (Punzalan v.Lacsamana)

Separate Ownership i.e. abuilding on rented land is stillconsidered an immovable.(Tolentino)

2. Par. 8: Mineral deposits and watersa. Mineral Deposits

Minerals still deposited in the soil When minerals have been

extracted, they become chattel.b. Slag Dump: dirt and soil taken from a

mine and piled upon the surface of theground. Inside the dump can be foundthe minerals.

c. Waters: those still attached to or runningthru the soil or the ground.

Immovables by Incorporation—Those which are essentially movables but areattached to an immovable in such a way as to bean integral part thereof (Par. 2, 3, 4, 6 & 7)1. Par. 2: Trees and plants

a. Trees and plants: only immovableswhen they are attached to the land orform an integral part of an immovable When they have been cut or

uprooted, they become movables.

b. However, by special treatment of Act1508 (Sec. 7, Chattel Mortgage Law),growing crops may be subject of aChattel Mortgage.

c. For the purpose of attachment: growingcrops are to be attached in the samemanner as realty. (Rule 59, Sec. 7)

2. Par. 3: Things incorporateda. Res vinta in Roman Lawb. “Attachment in a fixed manner”:

breakage or injury in case of separationwill be substantial e.g. wells, sewers,aqueducts and railways Whether attached by the owner

himself or some other person3. Par. 7: Fertilizer

Actually used” means it has been spreadover the land.

Immovables by Destination—Those which are essentially movables but by thepurpose for which they have been placed in animmovable, partake of the nature of animmovable because of the added utility derivedtherefrom (Par. 4, 5, 6 & 9)1. Par. 4: Fixtures and ornaments

Requisites:a. Placed by the owner or by the tenant as

agent of the owner;b. With intention of attaching them

permanently even if adherence will notinvolve breakage or injury.

Where the improvement or ornamentsplaced by the lessee are not to pass to theowner at the expiration of the lease, theyremain movables for chattel mortgagepurposes. (Davao Sawmill v. Castillo)

2. Par. 3 v. Par. 4Par. 3 Par. 4

Cannot be separated fromimmovable withoutbreaking or deterioration

Can be separated fromimmovable withoutbreaking or deterioration

Need not be placed by theowner

Must be placed by theowner, or by his agent,expressed or implied

Real property byincorporation

Real property byincorporation anddestination

3. Par. 5: Machinery and equipmenta. Immovable characteristic depends upon

their being destined for use in theindustry or work in the tenement; The moment they are separated,

(from the immovable or from theindustry or work in which they are


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utilized) they recover theircondition as movables.

If it is still needed for the industrybut separated from the tenementtemporarily, the property continuesto be immovable.

b. Requisites for Immovability in Par. 5: Placed by the owner or the tenant

as agent of the owner; Adapted to the needs of the industry

or work carried on EXCEPT: When estoppel operates

Parties to a contract may by agreementtreat as personal property that which bynature would be real property, as longas no interest of third parties would beprejudiced. That characterization iseffective as between the parties.(Makati Leasing v. Wearever)

c. EFFECT of Attachment Machinery become part of the

immovable. The installation of machinery and

equipment in a mortgaged sugarcentral for the purpose of carryingout the industrial functions of thelatter and increasing production,constitutes a permanentimprovement on said sugar centraland subjects said machinery andequipment to the mortgageconstituted thereon. (Berkenkotterv. Cu Unjieng)

4. Par. 6: Animal houses and animals thereina. Requisites:

Placed by the owner or the tenantas agent of the owner, with theintention of permanent attachment;

Forming a permanent part of theimmovable.

5. Par. 9: Docks and fixed floating structuresa. A floating house tied to a shore or bank

post and used as a residence isconsidered real property, consideringthat the waters on which it floats areconsidered immovables.

b. But if the floating house makes it a pointto journey from place to place, itassumes the category of a vessel, andis considered immovable property

Immovables by Analogy (Par. 10)—Contracts for public works, servitudes, otherreal rights over immovable property e.g.

usufruct and lease of real property for aperiod of 1 year and registered

Effect of Enumeration: Art. 415 notabsolute—1. Parties may by agreement treat as movable

that which is enumerated by law asimmovable, but effective only as to them.

The view that parties to a deed of chattelmortgage may agree to consider a house aspersonal property for the purposes of saidcontract, "is good only insofar as thecontracting parties are concerned. It isbased, partly, upon the principle of estoppel"(Evangelista vs. Alto Surety)

2. For purposes of taxation, improvements onland are commonly taxed as realty, eventhough for some purposes, they might beconsidered as personalty.

It is a familiar phenomenon to see thingsclassified as real property for purposes oftaxation, which on general principle, mightbe considered personal property. (ManilaElectric v. Central Bank)

MOVABLES OR PERSONAL PROPERTY

Article 416, Civil Code. The following things aredeemed to be personal property:

1. Those movables susceptible ofappropriation which are not included in thepreceding article;

2. Real property which by any specialprovision of law is considered as personalproperty;

3. Forces of nature which are brought undercontrol by science; and

4. In general, all things which can betransported from place to place withoutimpairment of the real property to whichthey are fixed.

Article 417, Civil Code. The following are alsoconsidered as personal property:

1. Obligations and actions which have for theirobject movables or demandable sums; and

2. Shares of stock of agricultural, commercialand industrial entities, although they mayhave real estate.

Tests to Determine Movable Character—1. By exclusion – everything NOT included in

Article 415

Parties cannot by agreement treat asimmovable that which is legally movable.


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2. By description – an object is immovable if itpossesses:a. Ability to change location – whether it

can be carried from place to place;b. Without substantial injury to the

immovable to which it is attached.

The steel towers built by MERALCO are notbuildings or constructions since they areremovable and merely attached to a squaremetal frame by means of bolts, which whenunscrewed could easily be dismantled andmoved from place to place, without breakingthe material or causing deterioration to theobject they are attached. (Board ofAssessment Appeals v. Meralco)

3. By special provision of law – real property isconsidered as personal propertya. Growing crops under the Chattel

Mortgage Lawb. Machinery installed by a lessee not

acting as agent of the owner (DavaoSawmill v. Castillo)

c. Intellectual property – consideredpersonal property; it consists in thepecuniary benefit which the owner canget by the reproduction or manufactureof his work.

4. By forces of nature – e.g. electricity, gas,heat, oxygen

IMPORTANCE AND SIGNIFICANCE OFCLASSIFICATION UNDER THE CIVIL CODE

Criminal Law—1. Usurpation of property can take place only

with respect to real property.

Art. 312. Occupation of real propertyor usurpation of real rights inproperty.

Any person who, by means of violenceagainst or intimidation of persons, shalltake possession of any real property orshall usurp any real rights in propertybelonging to another, in addition to thepenalty incurred for the acts of violenceexecuted by him, shall be punished by afine from 50 to 100 per centum of thegain which he shall have obtained, butnot less than 75 pesos.

If the value of the gain cannot beascertained, a fine of from 200 to 500pesos shall be imposed.

2. Robbery and theft can be committed onlyagainst personal property.

Art. 293. Who are guilty of robbery.Any person who, with intent to gain,shall take any personal propertybelonging to another, by means ofviolence or intimidation of any person, orusing force upon anything shall be guiltyof robbery.

Art. 308. Who are liable for theft.Theft is committed by any person who,with intent to gain but without violenceagainst or intimidation of persons norforce upon things, shall take personalproperty of another without the latter'sconsent.

Form of Contracts Involving Movables andImmovables—1. Subject matter of specific contracts: only

real property can be the subject of realmortgage (Art. 2124) and antichresis (Art2132); only personal property can be thesubject of voluntary deposit (Art. 1966),pledge (Art. 2094) and chattel mortgage (Act1508)

2. Donations of real property are required tobe in a public instrument (Art. 749) but adonation of a movable mat be made orally orin writing (Art. 748)

Acquisitive Prescription—1. Real Property can be acquired by

prescription in 30 years (bad faith) and 10years (good faith).

2. Movables can be acquired by prescription in8 years (bad faith) and 4 years (good faith).

Venue—1. Rule 4, Sec. 1: Venue of real actions.

Actions affecting title to or possession ofreal property, or interest therein, shall becommenced and tried in the proper courtwhich has jurisdiction over the areawherein the real property involved, or aportion thereof, is situated. Forcibleentry and detainer actions shall becommenced and tried in the municipaltrial court of the municipality or citywherein the real property involved, or aportion thereof, is situated.


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2. Rule 4, Sec. 2: Venue of personal actions.All other actions may be commencedand tried where the plaintiff or any of theprincipal plaintiffs resides, or where thedefendant or any of the principaldefendants resides, or in the case of anon-resident defendant where he maybe found, at the election of the plaintiff.

Governing Law—1. Immovables are governed by the law of the

country wherein they are located2. Movables are governed by the personal

laws of the owner which in some cases isthe law of his nationality and in other cases,the law of his domicile.

Action for Recovery of Possession—1. Possession of real property may be

recovered through accion reivindicatoria,accion publiciana, forcible entry andunlawful detainer.

2. Possession of movable property may berecovered through replevin.

B. CLASSIFICATION BY OWNERSHIP

Article 419, Civil Code. Property is either of publicdominion or of private ownership.

PROPERTY OF PUBLIC DOMINION

Article 420, Civil Code. The following things areproperty of public dominion:

1. Those intended for public use, such asroads, canals, rivers, torrents, ports andbridges constructed by the State, banks,shores, roadsteads, and others of similarcharacter;

2. Those which belong to the State, withoutbeing for public use, and are intended forsome public service or for the developmentof the national wealth.

Public Dominion As defined by Art. 420, CC

Public Domain Used in Article XII, Section 2, ofthe 1987 Constitution

Public Lands Public Land Act

Characteristics of Public Dominion—1. Not owned by the State and its subdivisions

but pertains to it as territorial sovereign, tohold in trust for the interest of thecommunity.

2. Intended for public use, and not for use bythe State as a juridical person

3. Cannot be the subject of appropriation eitherby the State or by private persons

Classifications—1. Administered by the State

a. For public use—may be used byeverybody, even by strangers or aliens,in accordance with its nature but nobodycan exercise over it the rights of aprivate owner.

b. For public service—may be used only byauthorized persons but exists for thebenefit of all e.g. fortresses, unleasedmines and civil buildings

c. For development and national wealth—includes natural resources such asminerals, coal, oil and forest

2. Administered by Municipal Corporations

Article 424, Civil Code. Property for public use, inthe provinces, cities, and municipalities, consist ofthe provincial roads, city streets, municipal streets,the squares, fountains, public waters, promenades,and public works for public service paid for by saidprovinces, cities, or municipalities.

Property of public dominion is outside thecommerce of man—

They cannot be the subject matter of privatecontracts, cannot be acquired byprescription and they are not subject toattachment and execution nor burdened witha voluntary easement.

PRIVATE OWNERSHIPCan be exercised by the State in its privatecapacity or by private persons

Patrimonal Property of the State—Article 421, Civil Code. All other property of theState, which is not of the character stated in thepreceding article, is patrimonial property.

1. Owned by the State over which it has thesame rights as private individuals in relationto their own property

2. Subject to the administrative laws andregulations on the procedure of exercisingsuch rights.

3. Examples: friar lands, escheated propertiesand commercial buildings

4. Purpose of Patrimonial Propertya. Enables the State to attain its economic

endsb. Serves as a means for the State’s

subsistence and preservationc. Enables the State to fulfill its primary

mission5. Conversion of Property of Public

Dominion to Patrimonial Property—


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Property of public dominion, when nolonger intended for public use or forpublic service, shall form part of thepatrimonial property of the State [Art.422, Civil Code]

6. Requires a Declaration by theGovernment through its executive orlegislative departments to the effect that it isno longer needed for public use or service.

Patrimonial Property of MunicipalCorporations—Article 424(2), Civil Code. All other propertypossessed by any of them [the provinces, cities, andmunicipalities] is patrimonial and shall be governedby this Code, without prejudice to the provisions ofspecial laws.

1. The province or municipality, as a juridicalentity, also possesses private property toanswer for its economic necessities.

2. Classification of Properties of provinces,cities and municipalities (Salas v.Jarencio)a. Properties acquired with their own

funds in their private or corporatecapacity over which the politicalsubdivision has ownership and control

b. Properties of public dominion held intrust for the State’s inhabitants aresubject to the control and supervision ofthe State

3. A municipal corporation must prove thatthey acquired the land with their owncorporate funds—The presumption is that land comes from theState upon the creation of the municipality.All lands in the possession of themunicipality, EXCEPT for those acquiredwith its private funds, are deemed to beproperty of public dominion, held in trust forthe State for the benefit of its inhabitants.

Congress has paramount power to disposeof lands of public dominion in a municipality,the latter being a subdivision only forpurposes of local administration. (Salas v.Jarencio)

Private Property of Private Persons—Article 425, Civil Code. Property of privateownership, besides the patrimonial property of theState, provinces, cities, and municipalities, consistsof all property belonging to private persons, eitherindividually or collectively.

Refers to all property belonging to privatepersons, natural or juridical, either

individually or collectively (co-ownedproperty)

CONVERSIONAlienable Public Land converted to PrivateProperty through Prescription—

Alienable public land held by a possessor –personally/through predecessors-in-interest,openly, continuously and exclusively – for 30years is CONVERTED to private property bythe mere lapse or completion of the period.The application for confirmation is mereformality, because land had already beenconverted, giving rise to a registrable title.(Director of Lands v. IAC)

See New Law

Private Land converted to Property of PublicDominion through abandonment andreclamation—

Through the gradual encroachment orerosion by the ebb and flow of the tide,private property may become public IF theowner appears to have ABANDONED theland, and permitted it to be totally destroyedso as to become part of the shore. The landhaving disappeared on account of thegradual erosion, and having remainedsubmerged until they were reclaimed by thegovernment, they are public land.(Government v. Cabangis)

C. OTHER CLASSIFICATIONS

By their physical existence—1. Corporeal

All property the existence of which can bedetermined by the senses (res qui tangipossunt)

2. Incorporeala. Things having abstract existence,

created by man and representing value.b. Includes rights over incorporeal things,

credits, and real rights other thanownership over corporeal things.

By their autonomy or dependence—1. Principal

Those to which other things are considereddependent or subordinated, such as the landon which a house is built.

2. AccessoryThose which are dependent upon orsubordinated to the principal. They aredestined to complete, enhance or ornamentanother property.


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By their subsistence after use—Article 418, Civil Code. Movable property is eitherconsumable or nonconsumable. To the first classbelong those movables which cannot be used in amanner appropriate to their nature without theirbeing consumed; to the second class belong all theothers.

1. Consumablea. Those whose use according to their

nature destroys the substance of thething or causes their loss to the owner.(ex: food)

b. Consumable goods cannot be thesubject matter of a contract ofcommodatum unless the purpose ofthe contract is not the consumption ofthe object, as when it is merely forexhibition.

2. Non-consumable— e.g. money in coin

Susceptibility to substitution—1. Fungibles

Things which because of their nature or thewill of the parties, are capable of beingsubstituted by others of the same kind, nothaving a distinct individuality.

2. Non-FungiblesThings which cannot be substituted foranother

Consumable v. Fungible: It is the intentionof the parties to a contract which determineswhether the object is fungible or non-fungible and not the consumable or non-consumable nature of the thing.

By susceptibility to deterioration—1. Deteriorable that deteriorate through use or

by time2. Non-deteriorable

By reason of their susceptibility to division—1. Divisible

Those which can be divided physically orjuridically without injury to their nature. E.g.:piece of land or an inheritance.

2. IndivisibleThose which cannot be divided withoutdestroying their nature or renderingimpossible the fulfillment of the juridicalrelation of which they are object.

By reason of designation—1. Generic

That which indicates its homogenous nature,but not the individual such as a horse,house, dress, without indicating it.

2. SpecificThat which indicates the specie or its natureand the individual, such as “the white horseof X”.

Existence in point of time—1. Present

Those which exist in actuality, eitherphysical or legal, such as, the erectedbuilding.

2. FutureThose which do not exist in actuality, butwhose existence can reasonably beexpected with more or less probability, suchas ungathered fruits.

CIVIL LAW REVIEWER Chapter II. OWNERSHIP

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Chapter II. Ownership

I. DEFINITIONII. BUNDLE OF RIGHTS IN OWNERSHIPIII. SPECIFIC RIGHTS OF THE OWNERIV. LIMITATIONS ON THE RIGHTS OF

OWNERSHIP

I. Definition

Independent right of exclusiveenjoyment and control of a thing

For the purpose of deriving alladvantages required by the reasonableneeds of the owner/holder of right andpromotion of general welfare

A thing pertaining to one person Completely subjected to his will In everything not prohibited by public

law or the rights of another

II. Rights Included in Ownership

Art. 428, Civil Code—

1. The owner has the right to enjoy anddispose of a thing, without other limitationsthan those established by law.

2. The owner has also a right of action againstthe holder and possessor of the thing inorder to recover it.

5 + 1 BUNDLE OF RIGHTS1. Jus Utendi: Right to enjoy and receive what

the property produces2. Jus Fruendi: Right to receive fruits3. Jus Abutendi: Right to consume a thing by

use1. Jus Disponendi: Right to to alienate,

encumber, transform or evendestroy the thing owned

2. Jus Vindicandi: Right to recoverpossession of property based on aclaim of ownership

4. Jus Possidendi: Right to possess theproperty (Implied from all the other rights)

III. Specific Rights under the Civil Code

Specific Rights—1. Right to Self Help2. Right to Enclose of Fence3. Right to Receive Just Compensation4. Right to Accession5. Right to Space and Subsoil6. Right to Hidden Treasure7. Right to Recover Possession

Right to Self Help—Article 429, Civil Code. The owner or lawfulpossessor of a thing has the right to exclude anyperson from the enjoyment and disposal therof. Forthis purpose, he may use such force as may bereasonably necessary to repel or prevent an actualor threatened unlawful physical invasion orusurpation of his property.

1. Authorizes the lawful possessor to useforce, to prevent a threatened lawfulinvasion or usurpation

2. Requisitesa. Lawful possessionb. Actual or threatened unlawful physical

invasion or usurpation of his property Must not be a valid exercise of right

or public functionc. Force used is reasonably necessary to

repel or prevent the aggression (leastdamage rule)

d. Physical invasion must not havesucceeded yet, and possession has notbeen lost Once property is lost, the owner can

no longer use force, but must fileaction to recover

Right to Enclose or Fence—Article 430, Civil Code. Every owner may encloseor fence his land or tenements by means of walls,ditches, live or dead hedges, or by any other meanswithout detriment to servitudes constituted thereon.

But right is limited by servitudes existingthereon—The owner of lower lands cannot erectworks that will impede or prevent such aneasement or charge, constituted andimposed by the law upon his estate for thebenefit of higher lands belonging to differentowners; neither can the latter do anything toincrease or extend the easement. It is truethat the Code authorizes every owner toenclose his estate by means of walls,ditches, fences or other device, but this rightis limited by the easement imposed upon hisestate. (Lunod v. Meneses)

Right to Receive Just Compensation (in caseof expropriation)—Article 435, Civil Code. No person shall bedeprived of his property except by competentauthority and for public use and always uponpayment of just compensation.

Should this requirement be not first complied with,the courts shall protect and, in a proper case,restore the owner in his possession.


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Requisites of a Valid Expropriationa. For public use or utilityb. Necessity of expropriation: reasonable

in view of purpose of the takingc. Just compensation: Market value +

consequential damages

Right to Accession—Article 440, Civil Code. The ownership of propertygives the right by accession to everything which isproduced thereby, or which is incorporated orattached thereto, either naturally or artificially.

Right to Space and Subsoil—1. Ownership of surface and everything under

the propertya. Can construct works, make plantings

and excavationsb. Respecting servitudes and reasonable

requirements of aerial navigationc. Easement of lateral and subjacent

support2. Subject to laws and ordinances—

The doctrine that ownership of the landextends to the periphery of the universe(Cujus est solum ejus est usque adcoelum, usque ad infernos) is no longerapplied in the modern world, in view of thedoctrine that the air is a public highway. (USv. Causby)

Right to Hidden Treasure—Article 438, Civil Code. Hidden treasure belongs tothe owner of the land, building, or other property onwhich it is found.

Nevertheless, when the discovery is made on theproperty of another, or of the State or any of itssubdivisions, and by chance, one-half thereof shallbe allowed to the finder. If the finder is a trespasser,he shall not be entitled to any share of the treasure.

If the things found be of interest to science or thearts, the State may acquire them at their just price,which shall be divided in conformity with the rulestated.

Article 439, Civil Code. By treasure is understood,for legal purposes, any hidden and unknown depositof money, jewelry or other precious objects, thelawful ownership of which does not appear

1. Legal concept of hidden treasurea. Consist of money jewels or other

precious objectsb. Hidden and unknown, such that the

finding is a real discovery2. Owner also owns hidden treasure found in

the land subject to:

a. Right of a finder by chance who is not atrespasser/intruder: ½ of treasure

b. Right of a usufructuary who findstreasure: ½ of treasure

c. Right of State to acquire things ofinterest to science or the arts

Right to Recover Possession—1. Movable Property: Replevin

for manual delivery of property Prescription of Right: 4 years (GF) or 8

years (BF)

2. Immovable Propertya. Accion Reinvindicatoria: Recovery of

ownership of real property Including but not limited to possession Prescription of Action: 30 years

b. Accion Publiciana: Recovery of a betterright to possess (de jure) Judgment as to who has the better

right of possession Also, actions for ejectment not filed

within 1 year must be filed as accionpubliciana

Prescription: 10 yearsc. Accion Interdictal: Recovery of

actual/physical possession (de facto) FORCIBLE ENTRY: Lawful possessor

deprived through FISTS:o FISTS (Force, Intimidation,

Strategy, Threats, Stealth)o Prescription: 1 year from

dispossession (force,intimidation, threats) or fromknowledge of dispossession(strategy, stealth)

UNLAWFUL DETAINER: Possessorrefused to vacate upon demand byownero Legal possession (by

permission/tolerance) becomesunlawful upon failure to vacate

o Prescription of action: 1 yearfrom last notice to vacate

In case of leases of residential units, thegrounds for judicial ejectment are limited tothose enumerated in, RA 9653: RentControl Law of 2009 (See Section onSpecial Laws)

3. Requisites for Recovery [Art. 434, CivilCode]a. Property must be identified

Through a relocation survey and a titleproperly identifying boundaries andlocation


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b. Plaintiff must rely on the strength of histitle and not on weakness of defendant’stitle Right must be founded on positive title

and not on lack or insufficiency ofdefendant’s

Ei incumbit probatio qui dicit, nonqui negat: He who asserts, not hewho denied must prove

IV. Limitations on Real Right ofOwnership

Limitations Provided by Law—1. In General

a. Police Power: Property taken with nocompensation for general welfare When any property is condemned or

seized by competent authority in theinterest of health, safety or security,the owner thereof shall not be entitledto compensation, unless he can showthat such condemnation or seizure isunjustified. [Art. 436, Civil Code]

Requisites: To justify the exercise ofpolice power, the following mustappear:o The interests of the public

generally, require suchinterference (as distinguishedfrom those of a particular class)

o The means are reasonablynecessary for theaccomplishment of a purpose,and not unduly oppressive

b. Taxation: Forced contribution to theoperation of government

c. Eminent Domain: Property taken forpublic use/purpose, but subject to dueprocess and payment of justcompensation Requisites – To justify the exercise of

the right of eminent domain, thefollowing requisites must all bepresent:o Private property as the object of

the expropriation;o The property is taken by the

State or by competent authority;o The purpose of the taking is for

public use;o The taking must be attended

with due process of law;o There is payment of just

compensation

2. Specific Limitationsa. Legal Servitudes: once requisites are

satisfied, the servient owner may askthe Court to declare the existence of aneasement Art. 644 & 678: Aqueduct Art. 679: Planting of trees Art. 670: Light and View Art. 649 & 652: Right of Way Art. 637: Passage of water from upper

to lower tenements Art. 676: Drainage of buildings Art. 684-687: Lateral and subjacent

supportb. Must not injure the rights of a third

person Sic Utere Tuo Ut Alienum Non

Laedas The owner of a thing cannot make use

thereof in such manner as to injure therights of a third person. [Art. 431, CivilCode]

c. Act in State of Necessity—The owner of a thing has no right toprohibit the interference of another withthe same, if the interference isnecessary to avert an imminent dangerand the threatened damage, comparedto the damage arising to the owner fromthe interference, is much greater. Theowner may demand from the personbenefited, indemnity for the damage tohim. [Art. 432, Civil Code]

CIVIL LAW REVIEWER Chapter III. ACCESSION

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Chapter III. Accession

I. DEFINITIONII. GENERAL PRINCIPLES OF ACCESSIONIII. KINDS OF ACCESSIONIV. PRINCIPLES APPLICABLE TO EACH

A. PRINCIPLES APPLICABLE TOACCESSION DISCRETA

B. PRINICPLES APPLICABLE TOACCESSION CONTINUA

V. ACCESSION OVER MOVABLES

I. Definition

ACCESSION: Owner of a thing becomes theowner of everything that it may produce or whichmay be inseparably united or incorporatedthereto, either naturally or artificially

II. General Principles of Accession

1. Accessory follows the principal: presumptionof ownership of both principal and accessory

2. No one shall be unjustly enriched at theexpense of another: right to acquire but withduty to reimburse

III. Kinds of Accession

1. Accession Discretaa. Naturalb. Industrialc. Civil

2. Accession Continuaa. Over Immovables

Industrial Natural

o Alluviono Avulsiono Change of Course of Rivero Formation of Islands

b. Over Movables Conjunction and Adjunction Commixtion and Confusion Specification

IV. Principles Governing Each Kind ofAccession

A. Accession Discreta

Accession Discreta: Accession of Fruits—Article 441, Civil Code. To the owner belongs:

1. The natural fruits;

2. The industrial fruits;

3. The civil fruits.

Article 442, Civil Code. Natural fruits are thespontaneous products of the soil, and the young andother products of animals.

Industrial fruits are those produced by lands of anykind through cultivation or labor.

Civil fruits are the rents of buildings, the price ofleases of lands and other property and the amountof perpetual or life annuities or other similar income.

1. Accession Discreta NaturalArticle 444, Civil Code. Only such as are manifestor born are considered as natural or industrial fruits..

a. Spontaneous products of the soilwithout the intervention of man

b. The young of animals Products of animals which can be

removed without killing the principal(e.g. fleece, wool, milk, etc. but notmeat, fur, hide)

Time of Accrual depending on kind:

2. Accession Discreta Industrial: Refers tofruits produced by the land through laborand cultivation

3. Accession Discreta Civil: Refers to rentalsof a movable or an immovable

Principles Applicable to AccessionDiscreta—1. Time of Accrual depending on kind:

a. Annuals: from the time seedlingsappear on the ground

b. Perennials: from the time fruits actuallyappear on the plants

c. Young of animals: from the time theyare in the womb, although unborn –beginning of maximum ordinary periodof gestation

d. Fowls: from the time of incubation

2. A receiver of fruits has the obligation to paythe expenses incurred by a third person inthe production, gathering and preservation.(Art. 443, Civil Code) Exception: Receiver does not have to

pay if fruits are recovered beforegathering from a possessor in badfaith, receiver does NOT have to payindemnity

But if recovered after fruits have beengathered, receiver must pay since thefruits have been separated fromimmovable, hence accession principleswill not apply

Accession Continua over Immovables:Accession by Attachment/Incorporation—1. Accession Continua Artificial or

Industrial: Building, planting or sowing onland owned by another (over immovables)a. GENERAL RULE: Whatever is built,

planted or sown on the land of another +


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improvements or repairs made thereon,belong to the owner of the land subjectto the rules on BPS.

b. PRESUMPTIONS: All works, sowing and planting are

presumed made by the owner All works are presumed made at the

owner’s expense, unless the contraryis proved

The owner of the principal thing ownsthe natural, industrial and civil fruits,except when the following personsexist:o Possessor in Good Faitho Usufructuaryo Lesseeo Antichretic creditor

c. Meaning of BAD FAITH Bad faith

o On the part of the landowner:Whenever the building, planting

or sowing was done with theknowledge and withoutopposition on his part

o On the part of owner ofmaterials: Allows the use of hismaterials without protest

o On the part of the builder,planter and sower: Knows thathe does not have title to theland, nor the right to buildthereon OR no permission ofthe owner of the materials topay their value

Bad faith leads to liability fordamages and the loss of the works orthe improvement withoutreimbursement

Bad faith of one party neutralizes thebad faith of the other

SUMMARY OF BUILDER, PLANTER AND SOWER PROVISIONSART. 447-455

Case 1: Landowner is BPS using material of another

Landowner and BPS Owner of MaterialGood faith Right to acquire the improvements after paying the

value of materials.

Good faith Limited right of removal if there would be no injury

to work constructed, or without plantings orconstructions being destroyed. (Article 447)

Right to receive payment for value of materialsBad faith

Acquire BPS after paying its value and payingindemnity for damages (Article 447) but subject toOM’s right to remove

Good faith

Right to receive payment for value of materials Absolute right of removal of the work constructed in

any event Right to be indemnified for damages

Good faith Right to acquire the improvements without paying

indemnity Right to acquire indemnity for damages if there are

hidden defects known to OM

Bad faith Lose materials without right to indemnity

Bad faith

Same as though acted in good faith under Article 453

Bad faith

Same as though acted in good faith under Article453

Case 2: BPS builds, plants, or sows on another’s ;and using his own materialsLandowner BPS and Owner of Material

Good faith Landowner has option to:

a. Acquire the improvement after payingindemnity which may be the original cost ofimprovement OR increase in value of the wholebrought about by the improvement

b. Sell the land to the BP or collect rent fromsower UNLESS value of land is more than thething built, planted or sown or BP shall pay rentfixed by parties or by the court in case of

Good faith BPS has right to retain (right of retention) the land

until the payment of indemnity

NOTE: During this period BPS is not required to payrent.


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disagreement.NOTE: Landowner can be forced to choose under painof direct contempt or court can choose for him.Good faith Landowner has right to collect damages in any case

and option to:a. Acquire improvements without paying

indemnity if the improvements are still standingon the land

b. Sell the land to BP or collect rent from thesower unless value of the improvements inwhich case there will be a forced lease

c. Order demolition of improvements orrestoration o0f land to its former condition atthe expense of the BPS

Landowner must pay for necessary expenses forpreservation

Bad faith Pay damages to landowner BPS lose materials without right to indemnity No right to refuse to buy the land Recover necessary expenses for preservation of

land

Bad faith Landowner must indemnify BPS for the

improvements and pay damages as if he himself didthe BPS

Landowner has no option to sell the land andcannot compel BPS to buy the land unless BPSagrees to

Good faith BPS has right to :

a. Be indemnified for damagesb. Remove all improvements in any event

Bad faith Same as though acted in bad faith under Article 453

Bad faith Same as though acted in bad faith under Article 453

Case 3: BPS builds, plants or sows on another’s land with materials owned by third personsLandowner BPS Owner of Material

Good faith Right to acquire improvements

and pay indemnity to BPS;subsdiarily liable to OM

Has option to:a. Sell land to BP except if the

value of the land isconsiderably more

b. Rent to sower

Good faith Right of retention until

necessary and useful expensesare paid

Pay value of materials to OM

Good faith Collect value of material

primarily from BPS andsubsidiarily liable for landownerif BPS is insolvent

Limited right of removal

Good faith

Right to acquire improvementsand pay indemnity to BPS

Has option to:a. Sell land to BP except if the

value of the land isconsiderably more

b. Rent to sower Without subsidiarily liability for

cost of materials

Good faith

Right of retention untilnecessary and useful expensesare paid.

Keep BPS without indemnity toOM and collect damages fromhim

Bad faith

Lose the material without rightto indemnity

Must pay for damages to BPS

Good faith Landowner has right to collect

damages in any case andoption to:a. Acquire improvements w/o

paying for indemnity; orb. Demolition or restoration;

orc. Sell to BP, or to rent to

sower Pay necessary expenses to

BPS

Bad faith Recover necessary expenses

for preservation of land fromlandowner unless landownersells land

Bad faith Recover value from BPS (as if

both are in good faith) If BPS acquires improvement,

remove materials if feasible w/oinjury

No action against landowner butliable to landowner for damages

Bad faith

Same as when all acted in goodfaith under Article 453

Bad faith


Bad faith



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Bad faith Acquire improvement after

paying indemnity and damagesto BPS unless latter decides toremove

Subsidiarily liable to OM forvalue of materials

Good faith May remove improvements Be indemnified for damages in

any event

Good faith Remove materials if possible

w/o injury Collect value of materials from

BPS; subsidiarily fromlandowner

Bad faith Acquire improvements after

indemnity; subsidiarily liable toOM for value of materials

Has option to:a. Sell the land to BP except if

the value of the land isconsiderably more

b. Rent to sower

Bad faith Right of retention until

necessary expenses are paid Pay value of materials to OM

and pay him damages

Good faith Collect value of materials

primarily from BPS andsubsidiarily from landowner

Collect damages from BPS If BPS acquires improvements,

remove materials in any event

Good faith Acquire imrovement after

paying indemnity; subsidiarilyliable to OM

Landowner has option to:a. Sell land to BP except if

value of land isconsiderably more

b. Rent to sower

Bad faith Right of retention until

necessary expenses are paid Pay value of materials to OM Pay damages to OM

Good faith Collect value of materials

primarily from BPS andsubsidiarily from landowner

Collect damages from BPS If BPS acquires improvements,

absolute right of removal in anyevent

Bad faith

Acquire improvements and payindemnity and damages to BPSunless latter decides to removematerials

Good faith

Receive indemnity for damages Absolute right of removal of

improvements in any event

Bad faith

No right to indemnity Loses right to mnaterial

2. Accession Continua Natural: Landdeposits, etc.a. ALLUVIUM: Soil is gradually deposited

on banks adjoining the river REQUISITES

o Deposit of soil or sediment isgradual and imperceptible

o As a result of the action of thecurrents of the waters of theriver

o Land where the accretion takesplace is adhacent to the banksof the rivers

o Deemed to Exist: When thedeposit of the sediment hasreached a level higher than thehighest level of the water duringthe year

EFFECTo Land automatically owned by

the riparian ownero BUT does not automatically

become registered property RATIONALE

o To offset the owner’s loss frompossible erosion due to thecurrent of the river

o Compensate for the subjectionof the land to encumbrancesand legal easements

b. AVULSION: A portion of land issegregated from one estate by theforceful current of a river, creek ortorrent and transferred to another REQUISITES

o Segregation and transfer of landis sudden and abrupt

o Caused by the current of thewater

o Portion of land transported mustbe known and identifiable

ORo Can also apply to sudden

transfer by other forces ofnature such as land transferredfrom a mountain slope becauseof an earthquake

RESULT: The ownership of thedetached property is retained by theowner subject to removal within 2years from the detachment


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c. CHANGE OF COURSE OF RIVER REQUISITES

o Change in the natural course ofthe waters of the river

o Such change causes theabandonment of the river beds

Natural Bed: groundcovered by its watersduring ordinary floods

o Such change is sudden orabrupt

RESULTS:o Owners whose lands are

occupied by the new courseautomatically become owners ofthe old bed, in proportion to thearea they lost

o Owners of the lands adjoiningthe old bed are given the right toacquire the same by paying thevalue of the land

Not exceeding the valueof the land invaded bythe new bed (the oldproperty of the owner)

o The new bed opened by theriver on a private estate shallbecome of public dominion

d. FORMATION OF ISLANDS Belong to the State if:

o Formed on the SEAS within thejurisdiction of the Philippines

o Formed on LAKESo Formed on NAVIGABLE or

FLOATABLE RIVERS Capable of affording a

channel or passage forships and vessels

Must be sufficient not onlyto float bancas and lightboats, but also biggerwatercraft

Deep enough to allowunobstructed movements ofships and vessels

TEST: can be used as ahighway of commerce, tradeand travel

Belong to the Owners of the nearestmargins or banks ifo Formed through successive

accumulation of alluvial depositso On NON-NAVIGABLE and

NON-FLOATABLE RIVERS If island is in the middle:

divided longitudinally in half.

CIVIL LAW REVIEWER Chapter IV. QUIETING OF TITLE

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Chapter IV. Quieting of Title

I. IN GENERALII. PURPOSEIII. NATUREIV. REQUISITES

A. THERE IS A CLOUD ON TITLE TO REALPROPERTY

B. THE PLAINTIFF MUST HAVE LEGAL OREQUITABLE TITLE TO OR INTEREST INTHE PROPERTY

C. PLAINTIFF MUST RETURN THEBENEFITS RECEIVED FROM THEDEFENDANT

V. PRESCRIPTION

Article 476, Civil Code. Whenever there is a cloudon title to real property or any interest therein, byreason of any instrument, record, claim,encumbrance or proceeding which is apparentlyvalid or effective but is in truth and in fact invalid,ineffective, voidable, or unenforceable, and may beprejudicial to said title, an action may be brought toremove such cloud or to quiet the title.

An action may also be brought to prevent a cloudfrom being cast upon title to real property or anyinterest therein.

Article 478, Civil Code. There may also be anaction to quiet title or remove a cloud therefromwhen the contract, instrument or other obligation hasbeen extinguished or has terminated, or has beenbarred by extinctive prescription.

I. In General

1. Applicable to real property2. Basis: Equity comes to the aid of the plaintiff

who would suffer if the instrument (whichappear to be valid but is in reality void,ineffective, voidable or unenforceable) wasto be enforced.

II. Purpose

1. To declare:a. The invalidity of a claim on a titleb. The invalidity of an interest in property

2. To free the plaintiff and all those claimingunder him any hostile claim on the property.

III. Nature: Quasi in Rem

1. A suit against a particular person or personsin respect to the res and the judgment willapply only to the property in dispute.

2. The action to quiet title are characterized asproceedings quasi in rem. Technically, theyare neither in rem nor in personam. In anaction quasi in rem, an individual is named

as defendant. However, unlike suits in rem,a quasi in rem judgment is conclusive onlybetween the parties. (Spouses Portic v.Cristobal)

Justifications for quieting of title—1. To prevent future or further litigation on the

ownership of the property2. To protect the true title and possession3. To protect the real interest of both parties4. To determine and make known the precise

state of the title for the guidance of all

The action to quiet title does not apply—1. To questions involving interpretation of

documents2. To mere written or oral assertions of claims

a. Unless made in a legal proceedingb. Or asserting that an instrument or entry

in plaintiff’s favor is not what it purportsto be

3. To boundary disputes4. To deeds by strangers to the title unless

purporting to convey the property of theplaintiff

5. To instruments invalid on their face6. Where the validity of the instrument involves

a pure question of law

IV. Requisites

REQUISITES OF AN ACTION TO QUIETTITLE—1. There is a CLOUD on title to real property or

any interest to real property.2. The plaintiff must have legal or equitable title

to, or interest in the real property.3. Plaintiff must return the benefits received

from the defendant.

A. There is a CLOUD on title to real propertyor any interest to real property—

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

2. A cloud exists if:a. There is a claim emerging by reason of:

Any instrument e.g. a contract, orany deed of conveyance, mortgage,assignment, waiver, etc. covering theproperty concerned

Any record, claim, encumbrancee.g. an attachment, lien, inscription,adverse claim, lis pendens, on a title

Any proceeding e.g. an extrajudicialpartition of property

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b. The claim should appear valid oreffective and extraneous evidence isneeded to prove their validity orinvalidity. Test: Would the owner of the property

in an action for ejectment brought bythe adverse party be required to offerevidence to defeat a recovery?

As a general rule, a cloud is notcreated by mere verbal or paroleassertion of ownership or an interestin property.

c. Such instrument, etc. is, in truth and infact, invalid, ineffective, voidable, orunenforceable, or has beenextinguished or terminated, or has beenbarred by extinctive prescription.

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

B. The plaintiff must have legal or equitabletitle to, or interest in the real property—

Article 477, Civil Code. The plaintiff must havelegal or equitable title to, or interest in the realproperty which is the subject matter of the action. Heneed not be in possession of said property.

1. Legal title: the party is the registered ownerof the property.

2. Equitable title: the person has thebeneficial ownership of the property.

C. Plaintiff must return the benefits receivedfrom the defendant—

Article 479, Civil Code. The plaintiff must return tothe defendant all benefits he may have receivedfrom the latter, or reimburse him for expenses thatmay have redounded to the plaintiff’s benefit.

NOTE: REQUISITES OF AN ACTION TOPREVENT A CLOUD—1. Plaintiff has a title to a real property or

interest therein2. Defendant is bent on creating a cloud on the

title or interest therein. The danger must notbe merely speculative or imaginary butimminent.

3. Unless the defendant is restrained orstopped, the title or interest of the plaintiffwill be prejudiced or adversely affected.

V. Prescription of Action

1. When plaintiff is in possession of theproperty – the action to quiet title does notprescribe.a. The reason is that the owner of the

property or right may wait until hispossession is disturbed or his title is

assailed before taking steps to vindicatehis right.

b. An action to quiet title to property inone’s possession is imprescriptible.The rationale for this rule has beenaptly stated thus: “The owner of realproperty who is in possession thereofmay wait until his possession is invadedor his title is attacked before takingsteps to vindicate his right. A personclaiming title to real property, but not inpossession thereof, must actaffirmatively and within the timeprovided by the statute. Possession is acontinuing right as is the right to defendsuch possession. So it has beendetermined that an owner of realproperty in possession has a continuingright to invoke a court of equity toremove a cloud that is a continuingmenace to his title. Such a menace iscompared to a continuing nuisance ortrespass which is treated as successivenuisances or trespasses, not barred bystatute until continued withoutinterruption for a length of time sufficientto affect a change of title as a matter oflaw." (Pingol v. CA)

2. When the plaintiff is not in possession ofthe property, the action to quiet title mayprescribe.a. 10 yrs. – ordinary prescriptionb. 30 yrs. – extraordinary prescription

Article 480, Civil Code. The principles of thegeneral law on the quieting of title are herebyadopted insofar as they are not in conflict with thisCode.

Article 481, Civil Code. The procedure for thequieting of title or the removal of a cloud therefromshall be governed by such rules of court as theSupreme Court shall promulgate.

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Chapter V. Co-Ownership

I. DEFINITIONII. CHARACTERTISTICS

A. THERE IS A PLURALITY OF OWNERSBUT ONLY ONE REAL RIGHT OROBJECT OF OWNERSHIP.

B. THE RECOGNITION OF IDEAL SHARESOR ALIQUOT DEFINED BUT NOTPHYSICALLY IDENTIFIED

C. EACH CO-OWNER HAS ABSOLUTECONTROL OVER HIS IDEAL SHARE

D. MUTUAL RESPECT AMONG CO-OWNERSIN REGARD TO USE, ENJOYMENT ANDPRESERVATION OF THE THINGS AS AWHOLE.

III. DIFFERENCE BETWEEN CO-OWNERSHIPAND JOINT TENANCY

IV. DIFFERENCE BETWEEN CO-OWNERSHIPAND PARTNERSHIP

V. SOURCES OF CO-OWNERSHIPA. LAW

1. COHABITATION2. PURCHASE3. INTESTATE SUCCESSION4. DONATION5. CHANCE—COMMIXTION IN GOOD

FAITH6. HIDDEN TREASURES7. EASEMENT OF PARTY WALL8. OCCUPATION—HARVESTING AND

FISHING9. CONDOMINIUM LAW

B. CONTRACTS1. BY AGREEMENT OF 2 OR MORE

PERSONS2. BY UNIVERSAL PARTNERSHIP3. BY ASSOCIATION AND SOCIETIES

WITH SECRET ARTICLESVI. RIGHTS OF EACH CO-OWNER OVER THE

THING OR PROPERTY OWNED IN COMMONA. TO USE THE THING ACCORDING TO THE

PURPOSE INTENDEDB. TO SHARE IN THE BENEFITS IN

PROPORTION TO HIS INTEREST,PROVIDED THE CHARGES ARE BORNEBY EACH IN THE SAME PROPORTION

C. TO BRING AN ACTION IN EJECTMENTD. TO COMPEL THE OTHER CO-OWNERS

TO CONTRIBUTE TO THE EXPENSESFOR THE PRESERVATION OF THEPROPERTY OWNED IN COMMON AND TOTHE PAYMENT OF TAXES

E. TO OPPOSE ANY ACT OF ALTERATIONF. TO PROTEST AGAINST ACTS OF

MAJORITY WHICH ARE SERIOUSLYPREJUDICIAL TO THE MINORITY

G. TO EXERCISE LEGAL REDEMPTIONH. TO ASK FOR PARTITION

VII. IMPLICATIONS OF CO-OWNER’S RIGHTOVER HIS IDEAL SHAREA. RIGHTS OF A CO-OWNERB. EFFECT OF TRANSACTION BY EACH CO-

OWNERVIII. RULES ON CO-OWNERSHIP NOT

APPLICABLE TO CPG OR ACPIX. SPECIAL RULES ON OWNERSHIP OF

DIFFERENT STORIES OF A HOUSE ASDIFFERENTIATED FROM THE PROVISIONSOF THE CONDOMINIUM ACT

X. EXTINGUISHMENT OF CO-OWNERSHIPA. TOTAL DESTRUCTION OF THE THING OR

LOSS OF THE PROPERTY CO-OWNEDB. MERGER OF ALL INTERESTS IN ONE

PERSONC. ACQUISITIVE PRESCRIPTIOND. PARTITION OR DIVISION

I. Definition

Article 484, Civil Code. There is co-ownershipwhenever the ownership of an undivided thing orright belongs to different persons.

In default of contracts, or of special provisions, co-ownership shall be governed by the provisions ofthis Title.

II. Characteristics

A. There is a plurality of owners but onlyone real right or object of ownership1. There are at least 2 persons2. There is unity or material indivision of a

single object.

B. There are ideal shares defined but notphysically identified

Article 485, Civil Code. The share of the co-owners, in the benefits as well as in the charges,shall be proportional to their respective interests.Any stipulation in a contract to the contrary shall bevoid.

The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless thecontrary is proved.

C. Each co-owner has absolute control overhis ideal share

Every co-owner has absolute ownershipof his undivided interest in the co-ownedproperty and is free to alienate, assignor mortgage his interest except as topurely personal rights. While a co-owner has the right to freely sell anddispose of his undivided interest,nevertheless, as a co-owner, he cannotalienate the shares of his other co-owners – nemo dat qui non habet.(Acabal v. Acabal)


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D. Mutual respect among co-owners inregard to use, enjoyment andpreservation of the things as a whole1. The property or thing held pro-indiviso is

impressed with a fiduciary character:each co-owner becomes a trustee forthe benefit of his co-owners and he maynot do any act prejudicial to the interestof his co-owners.

2. Until a judicial division is made, therespective part of each holder cannot bedetermined. The effects of this would be:a. Each co-owner exercises together

with the others joint ownershipover the pro indiviso property, inaddition to his use and enjoyment ofthe same

b. Each co-owner may enjoy the wholeproperty and use it.

Only limitation: a co-owner cannot useor enjoy the property in a manner thatshall injure the interest of his other co-owners. (Pardell v. Bartolome)

III. Difference between Co-ownershipand Joint Tenancy

Co-Ownership Joint TenancyOrigin

Civil Law Common LawOther names

Tenancy in Common,ownership in common,

Co-dominium

Joint ownership,“all for one, one for all”

Extent of ownership

Each co-owner ownsundivided thing + own

ideal part/share of each

Every joint tenant ownsthe whole property

because their rights areinseparable

Right to dispose of share

Each co-owner maydispose of his undivided

share without the consentof others.

A joint tenant may notdispose of his

share/interest without theconsent of others(rationale: he may

prejudice the others byalienating his share)

Effect of death

The share of a co-ownerdescends to his heirs

The ownership of a jointtenant dies with him, andhis surviving joint tenants

are subrogated to hisrights by virtue of jus

accrescendi(survivorship)

Effect of legal disability/incapacity

Defense againstprescription is exclusive

to the co-owner withdisability/incapacity

Defense of one can beused by all, as

disability/incapacityinures to the benefit of

the others for purposes of

prescription

IV. Difference between Co-ownershipand Partnership

Co-ownership PartnershipCreation

By law, fortuitous event,occupancy, succession

or contract (no formalitiesof a contract necessary)

Only by contract

Legal personality

Co-ownership has nolegal personality

Partnership has a distinctpersonality from the

partnersPurpose

Collective enjoyment ofthe property

Profit or advancement ofpecuniary interest

Disposal of share

Each co-owner maydispose of his undivided

share without the consentof others

A partner may notdispose of his

share/interest or transferthe same to a 3

rdperson

without the consent ofothers

Mutual representationNo mutual representation

(except if there is aspecial authority for such

representation)

Generally, a partnerbinds other partners

(there is mutualrepresentation)

Effect of legal disability/ incapacity/ deathDoes not dissolve the co-

ownershipDissolves partnership

Profit distributionMust be proportional tothe interest of each co-owner (not subject to

stipulation)

Depends upon thestipulation in their

contract

DurationGeneral rule: an

agreement to keep theownership for more than

10 years is void

No term limit set by law

Attachment

Creditors of a co-ownercan attach on the shares

of others

Creditors of a partnercannot attach and sell onexecution the shares of

other partners in thepartnership

V. Sources of Co-Ownership

A. Law1. Cohabitation: co-ownership between

common law spouses—The Family Code, in the followingprovisions, made the rules on co-ownership apply Article 147: between a man and a

woman capacitated to marry eachother


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Article 148: between a man and awoman not capacitated to marry eachother

Article 90: if matter is not provided inthe FC Chapter on ACP, then rules onco-ownership will apply

2. Purchase creating implied trust: co-ownership between persons who agree topurchase property—

Article 1452, Civil Code. If two or morepersons agree to purchase property andby common consent the legal title istaken in the name of one of them for thebenefit of all, a trust is created by forceof law in favor of the others in proportionto the interest of each.

3. Intestate succession: co-ownershipbetween the heirs before partition of theestatea. Article 1078, Civil Code. Where there

are two or more heirs, the whole estateof the decedent is, before its partition,owned in common by such heirs, subjectto the payment of debts of thedeceased.

b. Intestate Succession (without will)c. For as long as the estate is left

undivided the heirs will be consideredco-owners of the inheritance. If one ofthe heirs dies, his heirs will in turn be co-owners of the surviving original heirs.

4. Donation: Co-ownership between doneesArticle 753, Civil Code. When adonation is made to several personsjointly, it is understood to be in equalshares, and there shall be no right ofaccretion among them, unless the donorhas otherwise provided.

5. Chance/Commixtion in Good Faith: Co-ownership between owners of 2 things thatare mixed by chance or by will of the owners

Article 472, Civil Code. If by the will oftheir owners two things of the same ordifferent kinds are mixed, or if themixture occurs by chance, and in thelatter case the things are not separablewithout injury, each owner shall acquirea right proportional to the part belongingto him, bearing in mind the value of thethings mixed or confused.

6. Hidden Treasure – co-ownership betweenfinder and owner of the land

Article 438, Civil Code. Hiddentreasure belongs to the owner of theland, building, or other property onwhich it is found.

Nevertheless, when the discovery ismade on the property of another, orof the State or any of itssubdivisions, and by chance, one-halfthereof shall be allowed to the finder. Ifthe finder is a trespasser, he shall not beentitled to any share of the treasure.

If the things found be of interest toscience or the arts, the State mayacquire them at their just price, whichshall be divided in conformity with therule stated.

7. Easement of Party Wall – co-ownershipof part-owners of a party wall

Article 658, Civil Code. The easementof party wall shall be governed by theprovisions of this Title, by the localordinances and customs insofar as theydo not conflict with the same, and by the

rules of co-ownership.

8. Occupation: Harvesting and Fishing: co-ownership by two or more persons whohave seized a res nullius thing

9. Condominium Law: co-ownership of thecommon areas by holders of units

Sec. 6, RA 4726. The Condominium

Act. Unless otherwise expresslyprovided in the enabling or master deedor the declaration of restrictions, theincidents of a condominium grant are asfollows:

(c) Unless otherwise, provided,the common areas are held incommon by the holders of units,in equal shares, one for eachunit.

B. Contracts1. By Agreement of Two or More Persons

a. Article 494, Civil Code. No co-ownershall be obliged to remain in the co-ownership. Each co-owner may demandat any time the partition of the thingowned in common, insofar as his shareis concerned.

Nevertheless, an agreement to keep thething undivided for a certain period oftime, not exceeding ten years, shall bevalid. This term may be extended by anew agreement.


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A donor or testator may prohibit partitionfor a period which shall not exceedtwenty years.

Neither shall there be any partition whenit is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-ownersor co-heirs so long as he expressly orimpliedly recognizes the co-ownership.

b. Two or more persons may agree tocreate a co-ownership

c. Note: there is a 10-year term limit forownership by agreement; BUT: Termmay be extended by a new agreement

2. By the creation of a UniversalPartnershipa. Of all present property

Article 1778, Civil Code. Apartnership of all present property isthat in which the partners contribute allthe property which actually belongs tothem to a common fund, with theintention of dividing the same amongthemselves, as well as all the profitswhich they may acquire therewith.

Article 1779, Civil Code. In auniversal partnership of all presentproperty, the property which belongedto each of the partners at the time ofthe constitution of the partnership,becomes the common property of allthe partners, as well as all the profitswhich they may acquire therewith.

A stipulation for the commonenjoyment of any other profits mayalso be made; but the property whichthe partners may acquiresubsequently by inheritance, legacy,or donation cannot be included in suchstipulation, except the fruits thereof.

b. Of profitsArticle 1780, Civil Code. A universalpartnership of profits comprises all thatthe partners may acquire by theirindustry or work during the existence ofthe partnership.

Movable or immovable property whicheach of the partners may possess at thetime of the celebration of the contractshall continue to pertain exclusively to

each, only the usufruct passing to thepartnership.

3. By Associations and Societies withSecret Articles

Article 1775, Civil Code. Associationsand societies, whose articles are keptsecret among the members, andwherein any one of the members maycontract in his own name with thirdpersons, shall have no juridicalpersonality, and shall be governed by

the provisions relating to co-ownership.

VI. Rights of Each Co-owner over theThing or Property Owned in Common

Rights of Each Co-owner over the Thing orProperty Owned in Common1. To use the thing according to the purpose

intended (Jus Utendi)2. To share in the benefits in proportion to his

interest provided the charges are borne byeach in the same proportion

3. To bring an action in ejectment4. To compel the other co-owners to contribute

to expense for preservation of the propertyowned in common and to the payment oftaxes

5. To oppose any act of Alteration6. To protest against acts of majority which are

seriously prejudicial to the minority7. To exercise legal redemption8. To ask for partition

Right use the thing according to the purposeintended (Jus Utendi)—Article 486, Civil Code. Each co-owner may usethe thing owned in common, provided he does so inaccordance with the purpose for which it is intendedand in such a way as not to injure the interest of theco-ownership or prevent the other co-owners fromusing it according to their rights. The purpose of theco-ownership may be changed by agreement,express or implied.

1. Limitations on co-owner’s right:a. Use must be to the purpose for which it

is intended. As stipulated in the agreement In the absence of agreement, the

purpose for which it was ordinarilyadapted according to its nature.

In the absence of the above, the usefor which it was previously or formerlydevoted.

b. Use must be without prejudice to theinterest of the co-ownership.


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c. Use must not prevent the other co-owners from making use of the propertyaccording to their own rights.

2. Changing the purpose of the thing—The purpose of the thing may be changedby an agreement, express or implied,provided that the following will be observed:

It does not cause injury or prejudice tothe interest of the co-ownership

Any act against the collective interestis an act against ownership.

A co-owner cannot devote thecommunity property to his exclusiveuse

It does not prevent the use by otherco-owners

Right to share in the benefits in proportion tohis interest provided the charges are borneby each in the same proportion—



Right to bring an action in ejectment—

Article 487, Civil Code. Any one of the co-ownersmay bring an action in ejectment.

1. Action in Ejectment covers all kinds of actionfor recovery of possession (reivindicatoria,publiciana, forcible entry, unlawful detainer)

2. There is no need to include all the co-owners as co-plaintiffs because the suit isdeemed to be instituted for the benefit of all

3. But the action will not prosper if the action isbrought for the benefit of the plaintiff aloneand not for the co-ownership

4. Article 487 of the Civil Code, which providessimply that “any one of the co-owners maybring an action in ejectment,” is a categoricaland an unqualified authority in favor ofowner to evict the petitioners from theportions of lot. The rule is a co-owner maybring an action to exercise and protect therights of all. When the action is brought byone co-owner for the benefit of all, afavorable decision will benefit them; but anadverse decision cannot prejudice theirrights. (Resuena v. CA)

Right to compel the other co-owners tocontribute to expense for preservation of the

property owned in common and to thepayment of taxes—

Article 488, Civil Code. Each co-owner shall have aright to compel the other co-owners to contribute tothe expenses of preservation of the thing or rightowned in common and to the taxes. Any one of thelatter may exempt himself from this obligation byrenouncing so much of his undivided interest as maybe equivalent to his share of the expenses andtaxes. No such waiver shall be made if it isprejudicial to the co-ownership.

1. This provision includes only necessaryexpenses and taxes, and NOT those formere luxury, embellishment or pleasurea. Expenses for preservation: those which,

if not made, would endanger theexistence of the thing or reduce its valueor productivity

b. Not used for the improvement of thething (what is intended is thepreservation of the thing, not gainingprofit from it)

2. Renunciationa. Other co-owners have the option not to

contribute by renouncing so much of hisundivided interest as may be equivalentto his share of the necessary expensesand taxes Must be express; thus, failure to pay

is not a renunciation Requires the consent of other co-

owners because it is a case of dacionen pago (cessation of rights) involvingexpenses and taxes already paid(J.B.L. Reyes)

b. A co-owner cannot renounce his share ifit will be prejudicial to another co-owner

3. Procedure: Repairs for preservation

Article 489, Civil Code. Repairs for preservationmay be made at the will of one of the co-owners, buthe must, if practicable, first notify his co-owners ofthe necessity for such repairs. Expenses to improveor embellish the thing shall be decided upon by amajority as determined in article 492.

a. Notify other co-owners, as far aspracticable

b. However, a co-owner can advanceexpenses for preservation of theproperty even without prior consent ofothers. He is entitled to reimbursementfor the amount spent for necessaryexpenses.


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4. Procedure: Embellishment orimprovementsa. Notify co-owners of improvements and

embellishments to be made If no notification is made, the co-owner

who advanced the expenses still hasthe right to be reimbursed if he provesthe necessity of such repairs and thereasonableness of the expense

EXCEPTION: If the others can provethat had he notified them, they couldhave hired the services of anotherwho would charge less than thepeople with whom the one whoadvanced contracted or that theyknow of a store that sells the neededmaterial at a cheaper priceo Co-owner only entitled to be

reimbursed for the amount thatshould have been spent had henotified the others, anddifference shall be borne by himalone

b. Decision by majority must be followed

Right to oppose any act of Alteration—

Article 491, Civil Code. None of the co-ownersshall, without the consent of the others, makealterations in the thing owned in common, eventhough benefits for all would result therefrom.However, if the withholding of the consent by one ormore of the co-owners is clearly prejudicial to thecommon interest, the courts may afford adequaterelief.

1. Alteration: a change which more or lesspermanently changes the use of a thing andadversely affecting the condition of the thingor its enjoyment by the others.

2. It involves:a. Change of the thing from the state or

essence in which the others believe itshould remain, or

b. Withdrawal of the thing from the use towhich they wish to be intended, or

c. Any other transformation whichprejudices the condition or substance ofthe thing or its enjoyment by the others

3. Rule: Any act of alteration requiresUNANIMOUS CONSENT OF ALL CO-WORKERSa. BUT when there is unreasonable

withholding of consent: the co-ownermay go to court to seek adequate relief.

b. Note: consent may be express or tacitc. Reason for the rule: alteration is an act

of ownership, not of mereadministration.

4. Alteration v. Administration

Alteration AdministrationMore permanent result

and relate to thesubstance or form of

the thing

Refers to theenjoyment of the thing

and is of transitorycharacter

Nature: if the thingdoes not require anymodification for its

enjoyment, anymodification that is

made will beconsidered an

alteration

When the thing in itsnature requires

changes, modificationscan be considered as

acts of simpleadministration

Consent: Unanimousconsent of all

Consent: mere majorityis sufficient

a. Alteration without consent of all is illegal The one who did the alteration will

lose whatever he spent in case he ismade to demolish the work he hasdone (no right to reimbursement)

Damages to the non-consenting co-owner can also be granted by thecourt

b. Note: This is subject to ratification – ifco-owners decide to contribute to theexpenses by reimbursing the co-ownerwho made the alteration (effect: benefitof alteration will inure to the co-ownership)

Right to protest against acts of majoritywhich are seriously prejudicial to theminority—

Article 492(3), Civil Code. Should there be nomajority, or should the resolution of the majority beseriously prejudicial to those interested in theproperty owned in common, the court, at theinstance of an interested party, shall order suchmeasures as it may deem proper, including theappointment of an administrator.

1. Acts of administrationa. Acts of management that do not involve

alteration of the propertyb. Acts which are temporary in character

so much so that they do not bind theproperty for a long time

c. Acts that do not create real rights overthe common property

2. Rule:If there is a disagreement or conflict ofopinions by and among the co-ownerson the matter of administration andbetter enjoyment of the commonproperty, the resolution of the co-owners


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representing the controlling interest (notmajority in number) shall be bindingupon all co-owners.

3. Who can be the administrator?He or she may or may not be a co-owner, PROVIDED that the co-ownersdelegated him or her.

4. What can an administrator do?a. PROVIDED there is a unanimous

consent of all co-owners, anadministrator may compromise on,donate, cede, alienate, mortgage, orencumber the common property

b. If the amount of individual contribution isundetermined, the law presumes thatthey all contributed proportionately(Lavadia v. Cosme)

Right to exercise legal redemption—

Article 1620, Civil Code. A co-owner of a thing mayexercise the right of redemption in case the sharesof all the other co-owners or of any of them, are soldto a third person. If the price of the alienation isgrossly excessive, the redemptioner shall pay only areasonable one.

Should two or more co-owners desire to exercise theright of redemption, they may only do so inproportion to the share they may respectively havein the thing owned in common.

Article 1623, Civil Code. The right of legal pre-emption or redemption shall not be exercised exceptwithin thirty days from the notice in writing by theprospective vendor, or by the vendor, as the casemay be. The deed of sale shall not be recorded inthe Registry of Property, unless accompanied by anaffidavit of the vendor that he has given writtennotice thereof to all possible redemptioners.

The right of redemption of co-owners excludes thatof adjoining owners.

1. Redemption: Act of reclaiming possessionof something by payment of a specific price

2. The 30-day redemption period starts fromthe date of written notification of the salemade by the co-owner.

Without such written notice, the 30-dayperiod does not start to run

3. Exceptions:a. Estoppel by laches (inaction)

If there is oral notification andseveral years have passed (impliedwaiver) and there is reliance on thenon-action of co-owners

b. Estoppel by silenceWhen there is duty to speak

4. Note: The written notification must comefrom the prospective vendor

a. The vendor is in a better position toknow things involving the property andthe sale

b. Redemption of the property by a co-owner does not vest him soleownership over said property.Redemption will inure to the benefit of allco-owners. Redemption is not a mode oftermination of relationship. (Mariano v.CA)

5. Other cases where right of redemption isgivena. Rural land

Article 1621, Civil Code. Theowners of adjoining lands shall alsohave the right of redemption when apiece of rural land, the area of whichdoes not exceed one hectare, isalienated, unless the grantee doesnot own any rural land.

This right is not applicable toadjacent lands which are separatedby brooks, drains, ravines, roadsand other apparent servitudes forthe benefit of other estates.

If two or more adjoining ownersdesire to exercise the right ofredemption at the same time, theowner of the adjoining land ofsmaller area shall be preferred; andshould both lands have the samearea, the one who first requestedthe redemption.

b. Urban land Article 1622, Civil Code. Whenever a

piece of urban land which is so smalland so situated that a major portionthereof cannot be used for anypractical purpose within a reasonabletime, having been bought merely forspeculation, is about to be re-sold, theowner of any adjoining land has a rightof pre-emption at a reasonable price.

If the re-sale has been perfected, theowner of the adjoining land shall havea right of redemption, also at areasonable price.

When two or more owners of adjoininglands wish to exercise the right of pre-emption or redemption, the ownerwhose intended use of the land inquestion appears best justified shallbe preferred.


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Right to ask for partition—

Article 494, Civil Code. No co-owner shall beobliged to remain in the co-ownership. Each co-owner may demand at any time the partition of thething owned in common, insofar as his share isconcerned.

Nevertheless, an agreement to keep the thingundivided for a certain period of time, not exceedingten years, shall be valid. This term may be extendedby a new agreement.

A donor or testator may prohibit partition for a periodwhich shall not exceed twenty years.

Neither shall there be any partition when it isprohibited by law.

No prescription shall run in favor of a co-owner orco-heir against his co-owners or co-heirs so long ashe expressly or impliedly recognizes the co-ownership.

1. Partition: segregation or division of aproperty in common to those to whom itbelongs

2. Rule: Right to demand partition does notprescribe

3. Exceptions to the rule:a. When indivision within 10 years is

stipulated by the co-ownersb. When co-ownership is imposed as a

condition in a donation or in a last willand testament by thetransferor/donor/testator

c. When from the nature of the property incommon, it cannot be divided (i.e. partywall)

d. When partition is generally prohibited bylaw (i.e. ACP, party wall)

e. When the partition would render thething unserviceable or the thing held incommon is essentially indivisible—

If the thing cannot be physicallypartitioned, they may sell the thingand the co-owners may divide theproceeds)

f. When acquisitive prescription has set infavor of a stranger to con-ownership orin favor of a co-owner

VII. Implication of Co-owner’s Right overHis Ideal Share

A. Rights of a Co-owner1. To share in fruits and benefits2. To alienate, mortgage, or encumber and

dispose his ideal share (but other co-ownersmay exercise right of legal redemption within

30 days from notification of prospective co-owner vendor)

3. To substitute another person in theenjoyment of thing

4. To renounce part of his interest to reimbursenecessary expenses incurred by another co-owner (Article 488)

Article 488, Civil Code. Each co-owner shall have aright to compel the other co-owners to contribute tothe expenses of preservation of the thing or rightowned in common and to the taxes. Any one of thelatter may exempt himself from this obligation byrenouncing so much of his undivided interest as maybe equivalent to his share of the expenses andtaxes. No such waiver shall be made if it isprejudicial to the co-ownership.

B. Effect of Transaction by Each Owner1. Limited to his share in the partition2. Transferee does not acquire any specific

portion of the whole property until partition3. Creditors of co-owners may intervene in the

partition to attack the same if it is prejudicial(Art. 499)

Article 499, Civil Code. The partition of a thingowned in common shall not prejudice third persons,who shall retain the rights of mortgage, servitude orany other real rights belonging to them before thedivision was made. Personal rights pertaining tothird persons against the co-ownership shall alsoremain in force, notwithstanding the partition.

Note: Creditors cannot ask for rescission even ifnot notified in the absence of fraud (Art. 497,Civil Code)

Article 497, Civil Code. The creditors or assigneesof the co-owners may take part in the division of thething owned in common and object to its beingeffected without their concurrence. But they cannotimpugn any partition already executed, unless therehas been fraud, or in case it was madenotwithstanding a formal opposition presented toprevent it, without prejudice to the right of the debtoror assignor to maintain its validity.

VIII. Rules on Co-Ownership NotApplicable to CPG or ACP

These two regimes are governed by theprovisions on the Family Code

Even void marriages and cohabitation ofincapacitated persons are governed byArticle 50, 147, and 148 of the Family Code


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IX. Special Rules on Ownership ofDifferent Stories of a House asDifferentiated from Provisions of theCondominium Act

RA 4726. THE CONDOMINIUM ACT

Sec. 2. A Condominium is an interest in realproperty consisting of a separate interests in a unitin a residential, industrial or commercial building orin an industrial estate and an undivided interests incommon, directly and indirectly, in the land, or theappurtenant interest of their respective units in thecommon areas.

The real right in condominium may be ownership orany interest in real property recognized by law onproperty in the Civil Code and other pertinent laws.

Sec. 3. As used in this Act, unless the contextotherwise requires:

b. Unit" means a part of the condominiumproject intended for any type of independentuse or ownership, including one or morerooms or spaces located in one or morefloors (or parts of floors) in a building orbuildings and such accessories as may beappended thereto: Provided, that in the caseof an industrial estate wherein thecondominium project consists of severalbuildings, plants and factories may, bythemselves, be considered separately asindividual units as herein defined.

c. "Project" means the entire parcel of realproperty divided or to be divided incondominiums, including all structuresthereon.

d. "Industrial Estate or Estate" means a certaintract of land which is subdivided anddeveloped primarily for industrial purposesand which usually includes provisions forbasic infrastructure facilities and commonservices such as roads, water, electricity,drainage and waste disposal system.

e. "Common areas" means the entire projectexcept all units separately granted or held orreserved.

f. "To divide" real property means to divide theownership thereof or other interests thereinby conveying one or more condominiumtherein but less than the whole thereof.

Sec. 4. The provisions of this Act shall apply toproperty divided or to be divided into condominiumonly if there shall be recorded in the Register ofDeeds of the province or city in which the propertylies, and duly annotated in the correspondingcertificate of title of the land, if the latter had beenpatented or registered under either the LandRegistration or Cadastral Acts, an enabling or

master deed which shall contain, among others, thefollowing:

a. Description of the land on which the buildingor buildings and improvements are to belocated;

b. Description of the building or buildings,stating the number of storeys and basement,the number of units and their accessories, ifany;

c. Description of the common areas andfacilities;

d. A statement of the exact nature of theinterest acquired or to be acquired by thepurchased in the separate units and thecommon areas of the condominium projects.Where title to or to appurtenant interests inthe common areas is to be held by acondominium corporation, a statement tothis effect shall be included;

e. A certificate of the registered owner of theproperty, if he is other than those executingthe master deed, as well as of all registeredholders of any lien or encumbrances on theproperty, that they consent to theregistration of the deed;

f. The following plans shall be appended to thedeed as integral parts thereof:

1. A survey plan of the land included in theproject, unless a survey plan of the sameproperty had previously been filed in saidoffice.

2. A diagrammatic floor plan of the buildingor buildings each unit, its relativelocation and approximate dimensions.

g. Any reasonable restriction not contrary tolaw, morals, or public policy regarding theright of any condominium owner to alienateor dispose off his condominium.

h. The enabling or master deed may beamended or revoked upon registration of aninstrument executed by a simple majority ofthe registered owners of the property:Provided, That in a condominium projectexclusively for either residential orcommercial use, simple majority shall be ona per unit of ownership basis and that in thecase of mixed use, simple majority shall beon a floor area of ownership basis:Provided, further, That prior notifications toall registered owners shall be submitted tothe Housing and Land Use RegulatoryBoard and the city/municipal engineer forapproval before it can be registered. Untilregistration of a revocation, the provisions ofthis Act shall continue to apply to such


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property.

Sec. 5. Any transfer or conveyance of a unit or anapartment, office or store or other space therein,shall include the transfer or conveyance of theundivided interest in the common areas or in aproper case, the membership or share holdings inthe condominium corporation: Provided, however,That where the common areas in the condominiumproject are held by the owners of separate units asco-owners hereof, no condominium unit therein shallbe conveyed or transferred to persons other thanFilipino citizens or corporation at least 60% of thecapital stock of which belong to Filipino citizens,except in cases of hereditary succession. Where thecommon areas in a condominium project are held bya corporation, no transfer or conveyance of a unitshall be valid if the concomitant transfer of theappurtenant membership or stockholding in thecorporation will cause the alien interest in suchcorporation to exceed the limits imposed by existinglaws.

Sec. 6. Unless otherwise expressly provided in theenabling or master deed or the declaration ofrestrictions, the incidents of a condominium grantare as follows:

a. the boundary of the unit granted are theinterior surfaces of the perimeter walls,floors, ceiling, windows and doors thereof:Provided, that in the case of an industrialestate condominium projects, wherein wholebuildings, plants or factories may beconsidered as unit defined under section 3(b) hereof, the boundary of a unit shallinclude the outer surfaces of the perimeterwalls of said buildings, plants or factories.The following are not part of the unit:bearing walls, columns, floors, roofs,foundations, and other common structuralelements of the buildings; lobbies,stairways, hall ways and other areas ofcommon use, elevator equipment andshafts, central heating, central refrigerationand central air conditioning equipment,reservoir, tanks, pumps and other centralservices and facilities, pipes, ducts, flues,chutes, conduits wires and other utilityinstallations, wherever located, except theoutlets thereof when located within the unit.

b. There shall pass with the unit, as anappurtenant thereof, an exclusive casementfor the use of the air space encompasses bythe boundaries of the unit as it exists at anyparticular time and as the unit may lawfullybe altered or reconstructed from time totime. Such easement shall be automaticallyterminated in any air space upon destructionof the units as to render it untenantable.

c. Unless otherwise provided, the commonareas are held in common by the holders ofunits, in equal share one for each unit.

d. A non-exclusive easement for ingress,egress and support through the commonareas in appurtenant to each unit and thecommon areas are subject to sucheasement.

e. Each condominium owner shall have theexclusive right to paint, repaint, tile, wax,paper or otherwise refinish and decorate theinner surfaces of the walls, ceilings, floors,windows and doors hounding his own unit:provided, that in the case of an industrialestate condominium unit, such right may beexercised over the external surfaces of thesaid unit.

f. Each condominium owner shall have theexclusive right to mortgage, pledge orencumber his condominium and to have thesame appraised independently of the othercondominium owner.

g. Each condominium owner has also theabsolute right to sell or dispose of hiscondominium unless the master deedcontains a requirements that the property befirst offered to the condominium ownerswithin a reasonable period of time beforethe same is offered to outside parties;

Sec. 7. Except as provided in the following section,the common areas shall remain undivided, and thereshall be no judicial partition thereof.

Sec. 8. Where several persons own condominiumin a condominium project, an action may be broughtby one or more such person for partition thereof, bysale of the entire project, as if the owners of all thecondominium in such project were co-owners of theentire project in the same proportion as theirinterests in the common areas: Provided, however,that a partition shall be made only upon a showing:

a. That three years after damage ordestruction to the project which renders amaterial part thereof unfit for its use priorthereto, the project had not been rebuilt orrepaired substantially to its state prior to itsdamage or destruction; or

b. That damage or destruction to the projecthas rendered one half or more of the unitstherein untenantable and that condominiumowners holding in aggregate more than 30percent interest in the common areas areopposed to the repair or restoration of theprojects; or

c. That project has been in existence in excessof 50 years, that it is obsolete anduneconomical, and that condominiumowners holding in aggregate more than 50percent interest in the common areas areopposed to repair or restoration or


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remodeling or modernizing of the project; or

d. That the project or a material part thereofhas been condemned or expropriated andthat the project is no longer viable, or thatthe condominium owners holding inaggregate more than 70 percent interest inthe common areas are opposed to thecontinuation of the condominium regimeafter expropriation or condemnation of amaterial proportion thereof; or

e. That the condition for such partition by saleset forth in the declaration of restrictionsduly registered in accordance with the termsof this Act, have been met.

Sec. 9. The owner of a project shall, prior to theconveyance of any condominium therein, register adeclaration of restrictions relating to such project,which restrictions shall constitute a lien upon eachcondominium in the project, and shall insure to andbind all condominium owners in the project. Suchliens, unless otherwise provided, may be enforcedby any condominium owner in the project or by themanagement body of such project. The Register ofDeeds shall enter and annotate the declaration ofrestrictions upon the certificate of title covering theland included within the project, if the land ispatented or registered under the Land Registrationor Cadastral Acts.

The declaration of restrictions shall provide for themanagement of the project by anyone of thefollowing management bodies: a condominiumcorporation, an association of the condominiumowners, a board of governors elected bycondominium owners, or a management agentelected by the owners or by the board named in thedeclaration. It shall also provide for voting majoritiesquorums, notices, meeting date, and other rulesgoverning such body or bodies.

Such declaration of restrictions, among other things,may also provide:

a. As to any such management body;1. For the powers thereof, including power

to enforce the provisions of thedeclarations of restrictions;

2. For maintenance of insurance policies,insuring condominium owners againstloss by fire, casualty, liability,workmen's compensation and otherinsurable risks, and for bonding of themembers of any management body;

3. Provisions for maintenance, utility,gardening and other services benefitingthe common areas, for the employmentof personnel necessary for theoperation of the building, and legal,accounting and other professional andtechnical services;

4. For purchase of materials, supplies andthe like needed by the common areas;

5. For payment of taxes and specialassessments which would be a lienupon the entire project or commonareas, and for discharge of any lien orencumbrance levied against the entireproject or the common areas;

6. For reconstruction of any portion orportions of any damage to ordestruction of the project;

7. The manner for delegation of itspowers;

8. For entry by its officers and agents intoany unit when necessary in connectionwith the maintenance or constructionfor which such body is responsible;

9. For a power of attorney to themanagement body to sell the entireproject for the benefit of all of theowners thereof when partition of theproject may be authorized underSection 8 of this Act, which said powershall be binding upon all of thecondominium owners regardless ofwhether they assume the obligations ofthe restrictions or not.

b. The manner and procedure for amendingsuch restrictions: Provided, That the vote ofnot less than a majority in interest of theowners is obtained.

c. For independent audit of the accounts ofthe management body;

d. For reasonable assessments to meetauthorized expenditures, eachcondominium unit to be assessedseparately for its share of such expenses inproportion (unless otherwise provided) toits owners fractional interest in anycommon areas;

e. For the subordination of the liens securingsuch assessments to other liens eithergenerally or specifically described;

f. For conditions, other than those providedfor in Sections eight and thirteen of this Act,upon which partition of the project anddissolution of the condominium corporationmay be made. Such right to partition ordissolution may be conditioned upon failureof the condominium owners to rebuildwithin a certain period or upon specifiedinadequacy of insurance proceeds, or uponspecified percentage of damage to thebuilding, or upon a decision of an arbitrator,or upon any other reasonable condition.

Sec. 10. Whenever the common areas in acondominium project are held by a condominiumcorporation, such corporation shall constitute themanagement body of the project. The corporatepurposes of such a corporation shall be limited tothe holding of the common areas, either inownership or any other interest in real property


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recognized by law, to the management of theproject, and to such other purposes as may benecessary, incidental or convenient to theaccomplishment of said purposes. The articles ofincorporation or by-laws of the corporation shall notcontain any provision contrary to or inconsistent withthe provisions of this Act, the enabling or masterdeed, or the declaration of restrictions of the project.Membership in a condominium corporation,regardless of whether it is a stock or non-stockcorporation, shall not be transferable separatelyfrom the condominium unit of which it is anappurtenance. When a member or stockholderceases to own a unit in the project in which thecondominium corporation owns or holds thecommon areas, he shall automatically cease to be amember or stockholder of the condominiumcorporation.

Sec. 11. The registration and regulation of acondominium corporation shall be vested with theHousing And Land Use Regulatory Board (HLURB)and the term of the said corporation shall becoterminous with the duration of the subdivisionprojects, the provision of the corporation law to thecontrary notwithstanding.

Sec. 12. The dissolution of the condominiumcorporation in any manner and any of the causesprovided by law shall be governed by the provisionsof the Title XIV of the Corporation Code.

Sec. 13. Until the enabling or the master deed ofthe project in which the condominium corporationowns or holds the common areas is revoked thecorporation shall not be voluntarily dissolved throughan action for dissolution under Rule 104 of the Rulesof Court except upon a showing:

a. The three years after damage ordestruction to the project in which damageor destruction renders a materials partthereof unfit for its use prior thereto, theproject has not been rebuilt or repairedsubstantially to its state prior to its damageor destruction; or

b. The damage or destruction to the projecthas rendered one half or more of the unitstherein untenantable and that more than 30percent of the member of the corporationentitled to vote, if a stock corporation, areopposed to the repair or reconstruction ofthe project; or

c. That the project has been in existenceexcess of 50 years, that it is obsolete anduneconomical and that more than 50percent of the members of the corporationif non-stock or stockholders representingmore than 50 percent of the capital stockentitled to vote, if a stock corporation, areopposed to the repair or restoration orremodeling or modernizing of the project; or

d. That project or material part thereof hasbeen condemned or expropriated and thatthe project is no longer viable or that themembers holding in aggregate more than70 percent interest in the corporation if non-stock, or the stockholders representingmore than 70 percent of the capital stockentitled to vote, if a stock corporation, areopposed to the continuation of thecondominium regime after expropriation orcondemnation of a material portion thereof;or

e. That the conditions for such a dissolutionset forth in the declaration of restrictions ofthe project in which the corporation, areopposed to the continuation of thecondominium regime after expropriation orcondemnation of a material portion thereof.

Sec. 14. The condominium corporation may also bedissolved by the affirmative vote of all thestockholders or members thereof at a general orspecial meeting duly called for such purpose:Provided, that all the requirements of Section 62 ofthe Corporation Law are complied with.

x x x

Sec. 16. A condominium corporation shall not,during its existence, sell, exchange, lease orotherwise dispose of the common areas owned orheld by it in the condominium project unlessauthorized by the affirmative vote of a simplemajority of the registered owners: provided, thatprior notification to all registered owners are doneand provided further, that the condominiumcorporation may expand or integrate the project withanother upon the affirmative vote of a simplemajority of the registered owners, subject only to thefinal approval of the HLURB.

x x x

Sec. 19. Where the enabling or master deedprovides that the land included within acondominium project are to be owned in common bythe condominium owners therein the Register ofDeeds may at the request of all the condominiumowner and upon surrender of all their condominiumowner's copies, cancel the certificate of title of theproperty and issue a new one in the name of saidcondominium owners as pro-indiviso co-ownersthereof.

x x x

Sec. 23. Where, in an action for partition of acondominium corporation on the ground that theproject or a material part thereof has beencondemned or expropriated, the court finds that thecondition provided in this Act or in the declarationhave not been met, the court may decree areorganization of the project declaring which portionor portions of the project shall continue as a


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condominium project, the owners thereof, and therespective rights of the remaining owners and thejust compensation, if any, that a condominium ownermay be entitled to due to deprivation of his property.Upon receipt of a copy of the decree, the Register ofDeeds shall enter and annotate the same on thepertinent certificate of title.

Sec. 24. Any deed declaration or plan for acondominium project shall be liberally construed tofacilitate the operation of the project, and itsprovisions shall be presumed to be independent andseveral.

Sec. 25. The building and design standards forcondominium projects to be promulgated by HLURBshall provide for, among others, accessibilityfeatures for disabled persons pursuant to BatasPambansa Bilang 344 of 1994.

Sec. 26. Whenever real property has been dividedinto condominiums, each condominium separatelyowned shall be separately assessed, for purposes ofreal property taxation and other tax purposes, to theowners thereof and tax on each such condominiumshall constitute a lien solely thereon.

Sec. 27. All acts or parts of Acts in conflict oninconsistent with this Act are hereby amendedinsofar as condominium and its incidents areconcerned.

Concept of Condominium—It is an interest in real property consisting of a:1. SEPARATE INTEREST in a unit in a

a. residential, orb. industrial, orc. commercial building

2. UNDIVIDED INTEREST in common directlyor indirectly,a. in the land on which it is locatedb. in other common areas of the building

When Ownership of the Unit is Acquired—1. Ownership is acquired only after the buyer

had fully paid the purchase price.2. The ownership of the unit is what makes the

buyer a shareholder in the condominium.

Note: The condominium law effectivelyseparates the building from the land (by amaster deed)

3. Building is deemed an accessory

Amendments—Co-ownership in common areas means sharedexpenses in these areas1. Sec 4: simple majority of the property2. Sec 16: common areas may be disposed by

affirmative vote of a simple majority of theregistered owners

What Does the Housing and Land UseRegulatory Board Do?—They hear the complaints of buyers.

Important Documents in Condo Ownership1. Deed of sale2. Master deed (Sec. 4)3. Declaration of restrictions (Sec. 9): pertains

to how common areas will be governed andwho will do the governinga. i.e. how to contribute to common area

expenses: contribution to maintenance,upkeep, repair of common areasincluded

b. there is an “Assessment”, which is a lienupon the condo unit

X. Extinguishment of Co-Ownership

A. Total destruction of thing or loss of theproperty co-owned

Is there still co-ownership if a building isdestroyed?—Yes, over the land and thedebris.

B. Merger of all interests in one person

C. Acquisitive PresciptionBy whom—1. A third person (Art. 1106)2. A co-owner against the other co-owners

Requisites—1. Unequivocal acts of repudiation of the rights

of the other co-owners (you oust the otherco-owners)a. Must be shown by clear and convincing

evidenceb. Must be within the knowledge of the

other co-ownersc. Must not be a mere refusal to recognize

the others as co-owners2. Open and adverse possession - Not mere

silent possession

Note: there is a presumption thatpossession of a co-owner is NOT adverse Prescription only arises and produces all

effects when the acts are clearly meantto oust the rights of the other co-owners

D. Partition or DivisionEffects of Partition—1. Confers upon each heir the exclusive

ownership of the property adjudicated to him


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2. Co-heirs shall be reciprocally bound towarrant the title to and the quality of eachproperty adjudicated

3. Reciprocal obligation of warranty shall beproportionate to the respective hereditaryshares of co-heirs

4. An action to enforce warranty must bebrought within 10 years from the date theright accrues

5. The co-heirs shall not be liable for thesubsequent insolvency of the debtor of theestate

Note: Unless partition is effected, each heircannot claim sole ownership over adefinite portion of the land and cannotdispose of the same. Heirs become theundivided owner of the whole estate –each co-owner shall have full ownershipif his part even as to fruits and benefits.He may alienate, assign or mortgage hisshare. The effect of such act shall belimited to the portion allotted to himduring partition. Until said partitionthough, he cannot alienate a specificpart of the estate. A co-owner cannotadjudicate to himself a definite portionowned in common until partition byagreement or by a judicial decree. Untilthen, they can only sell theirsuccessional rights. (Carvaria v. CA)

Rights of Creditors of Individual Co-Owners—

Article 497, Civil Code. The creditors or assigneesof the co-owners may take part in the division of thething owned in common and object to its beingeffected without their concurrence. But they cannotimpugn any partition already executed, unless therehas been fraud, or in case it was madenotwithstanding a formal opposition presented toprevent it, without prejudice to the right of the debtoror assignor to maintain its validity.

Creditors referred to in the provision: Allcreditors, whether ordinary or preferred, whobecame such during the subsistence of theco-ownership.

Rule: The creditors are allowed to take partin the partition.

Reason for the rule: They own part of theinterest of the o-owners who made theassignment or alienation.

Procedure for Partition— Governing rule: Rule 69 of the Rules of

Court How: By agreement by parties or by judicial

decree

Form: Oral or Written (Statute of Fraudsdoes not operate here because it is not aconveyance of property but a meresegregation or designation of which partsbelong to whom)

Rules of Court does not precludeagreements or settlements.

Action for Partition:a. WON the plaintiff is indeed a co-owner

of the propertyb. HOW will the property be divided

between the plaintiff and defendant. Intervention of creditors and assignees:

a. The law does not expressly require thatthere should be a previous notice to thecreditors and assignees before apartition can be validly made, but theright of creditors and assignees to takepart in the division presupposes the dutyto notify them.

b. If notice is not given, the partition will notbe binding on them.

c. Once notice has been given, it is theduty of creditors and assignees tointervene and make known their stand.

i. If they fail to do this, they cannotquestion the division made,except in case of fraud.

ii. If they formulate a formalquestion to its being made, theycan contest such partition madin spite of their opposition.

CIVIL LAW REVIEWER Chapter VI. POSSESSION

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Chapter VI. Possession

I. DEFINITION AND CONCEPTII. DEGREES OF POSSESSION

A. MERE HOLDING WITHOUT TITLEWHATSOEVER, AND IN VIOLATION OFTHE RIGHT OF THE OWNER

B. POSSESSION WITH JURIDICAL TITLEBUT NOT THAT OF OWNERSHIP

C. POSSESSION WITH JUST TITLE, BUTNOT FROM THE TRUE OWNER

D. POSSESSION WITH JUST TITLE FROMTHE TRUE OWNER

III. CLASSES OF POSSESSIONA. NATURAL POSSESSIONB. CIVIL POSSESSION

IV. CASES OF POSSESSIONA. POSSESSION IN ONE’S OWN NAME AND

POSSESSION IN THE NAME OFANOTHER

B. POSSESSION IN THE CONCEPT OF ANOWNER AND POSSESSION IN THECONCEPT OF A HOLDER

C. POSSESSION IN GOOD FAITH ANDPOSSESSION IN BAD FAITH

V. WHAT THINGS OR RIGHTS MAY BEPOSSESSED

VI. WHAT MAY NOT BE POSSESSED BYPRIVATE PERSONS

VII. ACQUISITION OF POSSESSIONA. WAYS OF ACQUIRING POSSESSIONB. BY WHOM MAY POSSESSION BE

ACQUIREDC. WHAT DO NOT AFFECT POSSESSIOND. RULES TO SOLVE CONFLICTS OF

POSSESSIONVIII. EFFECTS OF POSSESSION

A. RIGHT TO BE PROTECTED IN HISPOSSESSION

B. ENTITLEMENT TO FRUITSC. REIMBURSEMENT FOR EXPENSESD. GOOD FAITH (IN CONCEPT OF OWNER)

IS EQUIVALENT TO TITLEIX. EFFECT OF POSSESSION IN THE CONCEPT

OF OWNERX. LOSS OF POSSESSION

A. ABANDONMENTB. ASSIGNMENTC. DESTRUCTION OR TOTAL LOSS OF

THING OR THING GOES OUT OFCOMMERCE

D. POSSESSION BY ANOTHER FOR MORETHAN 1 YEAR

I. Definition

Article 523, Civil Code. Possession is the holdingof a thing or the enjoyment of a right.

Concept of Possession—1. To possess, in a grammatical sense, means

to have, to physically and actually occupy athing, with or without right. (SanchezRoman)

2. It is the holding of a thing or a right, whetherby material occupation or by the fact that thething or the right is subjected to the action ofour will. (Manresa)

3. It is an independent right apart fromownership.

Right of Possession(jus possessionis)

Right to possess(jus possidendi)

Independent right Incident to ownership

4. Possession includes the idea of occupation.It cannot exist without it. (Exceptions: Art.537)

Essential Requisites of Possession—1. Corpus possessionis: Holding (actual or

constructive) of a thing or exercise of a right,if right is involved.a. General Rule: Possession and

cultivation of a portion of a tract underclaim of ownership of all is aconstructive possession of all, if theremainder is not in adverse possessionof another.

b. Doctrine of constructive possessionapplies when the possession is undertitle calling for the whole. It does notapply where possession is without title.

Note: Possession in the eyes of law doesnot mean that a man has to have hisfeet on every square meter of theground before it can be said that he is inpossession. The general rule is that thepossession and cultivation of a tract ofland under a claim of ownership of all, isa constructive possession of all, if theremainder is not in adverse possessionof another. (Ramos v. Director ofLands)

2. Animus possidendi: Intention to possessa. Animus possidendi is essential in

possession. There is no possession ifthe holder does not want to exercise therights of a possessor. Animuspossidendi is implied from the acts ofthe possessor.

b. Animus possidendi may be contradictedand rebutted by evidence – to prove thatthe person who is in possession, doesnot in fact exercise power or control anddoes not intend to do so

.


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II. Degrees of Possession

A. Mere holding or possession without titlewhatsoever and in violation of the rightof the owner e.g. possession of a thief or usurper of

land Here, both the possessor and the public

know that the possession is wrongful.

B. Possession with juridical title but not thatof ownership e.g. possession of a tenant, depository

agent, bailee trustee, lessee, antichreticcreditor.

This possession is peaceably acquired. This degree of possession will never

ripen into full ownership as long as thereis no repudiation of concept under whichproperty is held.

C. Possession with just title or titlesufficient to transfer ownership, but notfrom the true owner e.g. possession of a vendee from a

vendor who pretends to be the owner. This degree of possession ripens into

full ownership by lapse of time.

D. Possession with a just title from the trueowner. This is possession that springs from

ownership.

III. Classes of Possession

The Old Civil Code had a distinction betweennatural possession and civil possession. Thisdistinction has been abolished by the presentCode.

A. Natural PossessionPhysical holding of a thing (detention); allretention or enjoyment of a thing or right.

B. Civil PossessionNatural possession coupled with theintention of acquiring ownership of the thingor right.

The following may be said to have civilpossession:a. The owner himself, who holds and

enjoys the things belonging to him.b. The possessor who is not the owner but

has the intention to act as such, and isconsidered as such by others.

c. The thief and the usurper who, in spiteof their intention and the fact that theyare civil possessors according to the

Code, cannot and should not becomeowners.

IV. Cases of Possession

A. Possession for Oneself, or PossessionExercised in One’s Own Name andPossession in the Name of Another.

Article 524, Civil Code. Possession may beexercised in one's own name or in that of another.

Name under which possession may beexercised—1. In one’s own name – the fact of possession

and the right to such possession is found inthe same person.

2. In the name of another – the one in actualpossession is without any right of his own,but is merely an instrument of another in theexercise of the latter’s possession.

Kinds of possession in the name ofanother—1. Necessary – arises by operation of law

e.g. representatives who exercisepossession in behalf of a conceivedchild, juridical persons, persons not suijuris and the conjugal partnership

2. Voluntary – effected through the mutualconsent of the parties e.g. agents or administrators appointed

by the owner or possessor. Third person may also voluntary

exercise possession in the name ofanother, but it does not becomeeffective unless ratified by the person inwhose name it is exercise.

B. Possession in the Concept of an Owner,and Possession in the Concept of aHolder with the Ownership Belonging toAnother

Article 525, Civil Code. The possession of thingsor rights may be had in one of two concepts:either in the concept of owner, or in that of theholder of the thing or right to keep or enjoy it,the ownership pertaining to another person.

1. Possession in Concept of Holder: One who possesses as a mere holder,

not in the concept of owner,acknowledges in another a superior rightwhich he believes to be ownership,whether his belief be right or wrong.

e.g. tenant, usufructuary, borrower incommodatum.


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2. Possession in Concept of Owner: May be exercised by the owner himself

or one who claims to be so. When a person claims to be the owner

of a thing, whether he believes so or not,acting as an owner, and performing actsof ownership, and he is or may beconsidered as the owner by those whowitness his exercise of proprietaryrights, then he is in the possession of anowner. This is the kind of possessionthat ripens into ownership under Article540, when such possession is public,peaceful and uninterrupted (see Art.1118).

Effects of Possession in Concept of anOwner—a. Converted into ownership by the lapse

of time necessary for prescriptionb. Possessor can bring all actions

necessary to protect his possession,availing himself of any action which anowner can bring, except accionrevindicatoria which is substituted byaccion publiciana.

c. He can ask for the inscription ofpossession in the registry of property

d. Upon recovering possession from onewho has unlawfully deprived him of it, hecan demand fruits and damages

e. He can do on the thing possessedeverything that the law authorizes anowner to do; he can exercise the right ofpre-emption and is entitled to theindemnity in case of appropriation.

C. Possession in Good Faith andPossession in Bad Faith

Article 526, Civil Code. He is deemed a possessorin good faith who is not aware that there exists in histitle or mode of acquisition any flaw whichinvalidates it.

He is deemed a possessor in bad faith whopossesses in any case contrary to the foregoing.

Mistake upon a doubtful or difficult question of lawmay be the basis of good faith.

1. Possessor in good faith – one who isunaware that there exists a flaw whichinvalidates his acquisition of the thing. Good faith – consists in the possessor’s

belief that the person from whom hereceived a thing was the owner of thesame and could convey his title.

It implies freedom from knowledge andcircumstances which ought to put aperson on inquiry.

The belief of a possessor that he is theowner of the thing must be based uponthe title or mode of acquisition, such asa sale, a donation, inheritance or othermeans of transmitting ownership; forwithout this, there can be no real, well-grounded belief of one’s ownership.

Error in the application of the law, in thelegal solutions that arise from suchapplication, in the appreciation of legalconsequence of certain acts, and in theinterpretation of doubtful provisions ordoctrines, may properly serve as basisfor good faith.

A misconception of the law, no matterhow honest cannot have the effect ofmaking one a possessor in good faith,when he does not hold a title valid inform or a deed sufficient in terms totransfer property.

2. Possessor in bad faith – one who knowshis title is defective Only personal knowledge of the flaw in

the title or mode of acquisition can makehim a possessor in bad faith for bad faithis not transmissible from one person toanother.

Mistake upon a doubtful or difficultquestion of law as a basis of good faith

Mistake or ignorance of the law, byitself, cannot become the basis of goodfaith. What makes the error or ignorancea basis of good faith is the presence ofan apparent “doubt” or “difficulty” in thelaw. In other words, the law is complex,ambiguous, or vague such that it is opento two or more interpretations.

When the ignorance of the law is grossand inexcusable, as when a person ofaverage intelligence would know thelaw, such ignorance cannot be the basisof good faith. Otherwise, the intendmentof Article 3 which states that, “Ignoranceof the law excuses no one fromcompliance therewith,” will be defeated.

V. What Things May be Possessed

Article 530, Civil Code. Only things and rightswhich are susceptible of being appropriated may bethe object of possession.

Not all things susceptible of appropriation can bethe object of prescription (See Art. 1113)


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VI. What May Not Be Possessed byPrivate Persons

1. Res Communes2. Property of Public Dominion3. Right under discontinuous and/or non-

apparent easement

VII.Acquisition of Possession

A. Ways of Acquiring Possession

Article 531, Civil Code. Possession is acquired bythe material occupation of a thing or the exercise ofa right, or by the fact that it is subject to the action ofour will, or by the proper acts and legal formalitiesestablished for acquiring such right.

1. By material occupation of the thing “Material occupation” – occupation,

under this provision, is used in itsordinary meaning or general sense andnot in its technical meaning under Article712, which defines occupation as amode of acquiring ownership.Possession acquired by materialoccupation is only possession as a fact,not the legal right of possession.

Constructive delivery is considered asan equivalent of material occupation intwo situations where such occupation isessential to the acquisition ofpossession: Tradicion brevi manu – takes place

when one who possess a thing bytitle other than ownership, continuesto possess the same under a newtitle, that of ownership.

Tradicion constitutum possessorium– takes place when the owneralienates the thing, but continues toposses the same under a differenttitle.

2. By subjection to the action of one’s will This mode of acquiring possession

refers more to the right of possessionthan to possession as a fact. The “actionof our will” must be juridical, in the sensethat it must be according to law.

This includes the following kinds ofconstructive delivery: Tradicion symbolica – effected by

delivering some object or symbolplacing the thing under the control ofthe transferee

Tradicion longa manu – effected bythe transferor pointing out to the

tranferee the things which are beingtransferred

3. By execution of proper acts under legalformalities This mode of acquiring possession

refers to juridical acts or the acquisitionof possession by sufficient titleevidenced by the performance ofrequired formalities.

Examples: Donations Succession Contracts (like a sale with right to

repurchase) Judicial possession Execution of judgments Execution and registration of public

instruments Inscription of possessory information

titles The execution of the required formalities

is equivalent to delivery of the propertysubject thereof.

B. By Whom May Possession Be Acquired

Article 532, Civil Code. Possession may beacquired by the same person who is to enjoy it, byhis legal representative, by his agent, or by anyperson without any power whatever: but in the lastcase, the possession shall not be considered asacquired until the person in whose name the act ofpossession was executed has ratified the same,without prejudice to the juridical consequences ofnegotiorum gestio in a proper case.

Possession may be acquired by—1. by the same person2. by his legal representative3. by his agent4. by any person without any power

whatsoever but subject to ratification,without prejudice to proper case ornegotiorum gestio (Arts. 2144, 2149, 2150)

5. qualifiedly, minors and incapacitatedpersons

By the same person—Elements of personal acquisition:1. Must have the capacity to acquire

possession2. Must have the intent to possess3. The possibility to acquire possession must

be present.


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By his legal representative—Requisites of acquisition through another:1. That the representative or agent has the

intention to acquire the thing or exercise theright for another, and not for himself

2. That the person for whom the thing hasbeen acquired or the right exercised, has theintention of possessing such thing orexercising such right

Note: Bad faith is personal and

intransmissible. Its effects must betherefore, be suffered only by the personwho acted in bad faith; his heir shouldnot be saddled with the consequences

Good faith can only benefit the personwho has it; and the good faith of the heircannot erase the effects of bad faith ofhis predecessor.

Article 534, Civil Code. On who succeeds byhereditary title shall not suffer the consequences ofthe wrongful possession of the decedent, if it is notshown that he was aware of the flaws affecting it;but the effects of possession in good faith shall notbenefit him except from the date of the death of thedecedent.

By any person without any powerwhatsoever but subject to ratification,without prejudice to proper case ornegotiorum gestio (Arts. 2144, 2149, 2150)—

Article 2144, Civil Code. Whoever voluntarily takescharge of the agency or management of thebusiness or property of another, without any powerfrom the latter, is obliged to continue the same untilthe termination of the affair and its incidents, or torequire the person concerned to substitute him, if theowner is in a position to do so. This juridical relationdoes not arise in either of these instances:

1. When the property or business is notneglected or abandoned;

2. If in fact the manager has been tacitlyauthorized by the owner.

In the first case, the provisions of Articles 1317,1403, No. 1, and 1404 regarding unauthorizedcontracts shall govern.

In the second case, the rules on agency in Title X ofthis Book shall be applicable.

Article 2149, Civil Code. The ratification of themanagement by the owner of the business producesthe effects of an express agency, even if thebusiness may not have been successful.

Article 2150, Civil Code. Although the officiousmanagement may not have been expressly ratified,the owner of the property or business who enjoys

the advantages of the same shall be liable forobligations incurred in his interest, and shallreimburse the officious manager for the necessaryand useful expenses and for the damages which thelatter may have suffered in the performance of hisduties.

The same obligation shall be incumbent upon himwhen the management had for its purpose theprevention of an imminent and manifest loss,although no benefit may have been derived.

Qualifiedly, minors and incapacitatedpersons—Article 535, Civil Code. Minors and incapacitatedpersons may acquire the possession of things; butthey need the assistance of their legalrepresentatives in order to exercise the rights whichfrom the possession arise in their favor.

Incapacitated – all those who do not havethe capacity to act (insane, lunatic, deaf-mutes who cannot read and write,spendthrifts and those under civilinterdiction)

Object of possession – things only, notrights.

Method of acquisition – material occupation;acquisition by means for which theincapacitated person has the capacity, suchas acquisition by succession, testate orintestate, or by donations propter nuptias,pure and simple donations

C. What Do Not Affect Possession

Article 537, Civil Code. Acts merely tolerated, andthose executed clandestinely and without theknowledge of the possessor of a thing, or byviolence, do not affect possession.

1. Acts merely tolerated Those which by reason of

neighborliness or familiarity, the ownerof property allows his neighbor oranother person to do on the property;

Those particular services or benefitswhich one’s property can give to anotherwithout material injury or prejudice to theowner, who permits them out offriendship or courtesy

Acts of little disturbances which aperson, in the interest of neighborlinessor friendly relations permits others to doon his property, although continued for along time, no right will be acquired byprescription

Note: Permissive use merely tolerated bythe possessor cannot affect possession


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and cannot be the basis of acquisitiveprescription. Possession to constitutethe foundation of prescriptive right, mustbe possession under claim of title, itmust be adverse. (Cuaycong v.Benedicto)

2. Acts executed clandestinely and withoutthe knowledge of the possessor

Article 1108, Civil Code. Possession has to be inthe concept of an owner, public, peaceful anduninterrupted.

3. Acts of violence as long as thepossessor objects thereto (i.e. he files acase)

Article 536, Civil Code. In no case may possessionbe acquired through force or intimidation as long asthere is a possessor who objects thereto. He whobelieves that he has an action or a right to depriveanother of the holding of a thing, must invoke the aidof the competent court, if the holder should refuse todeliver the thing.

Possession acquired by force, not onlywhen one forcibly takes away theproperty from another, but also whenone occupied the property in theproperty in the absence of another, andrepels the latter upon his return.

Force may be actual or threatened; andmay be employed by the possessorhimself, or by another for him, andagainst any possessor.

Effect on Possession: Acts mentioneddo not constitute true possession. Theydo not interrupt the period of prescriptionnor affect the rights to the fruits.

For all purposes that may be favorableto the true possessor, his possession isnot considered interrupted.

D. Rules to Solve Conflicts of Possession

Article 538, Civil Code. Possession as a factcannot be recognized at the same time in twodifferent personalities except in the cases of co-possession. Should a question arise regarding thefact of possession, the present possessor shall bepreferred; if there are two possessors, the onelonger in possession; if the dates of the possessionare the same, the one who presents a title; and if allthese conditions are equal, the thing shall be placedin judicial deposit pending determination of itspossession or ownership through properproceedings.

General Rule—Possession cannot be recognized in twodifferent personalities, except in cases of co-possession by co-possessors without conflict ofclaims of interest.

In case of conflicting possession –preference is given to—1. Present possessor or actual possessor2. If there are two or more possessors, the one

longer in possession3. If the dates of possession are the same, the

one who presents a title4. If all conditions are equal, the thing shall be

placed in judicial deposit pendingdetermination of possession or ownershipthrough proper proceedings

VIII. Effects of Possession

A. Right to be Protected in His Possession

In general, every possessor has a right to berespected in his possession; if disturbed therein,possessor has a right to be protected in orrestored to said possession.

Article 539, Civil Code. Every possessor has aright to be respected in his possession; and shouldhe be disturbed therein he shall be protected in orrestored to said possession by the meansestablished by the laws and the Rules of Court.

A possessor deprived of his possession throughforcible entry may within ten days from the filing ofthe complaint present a motion to secure from thecompetent court, in the action for forcible entry, awrit of preliminary mandatory injunction to restorehim in his possession. The court shall decide themotion within thirty (30) days from the filing thereof.

“Every possessor” – includes all kinds ofpossession, from that of an owner to that of amere holder, except that which constitutes acrime.

Reason for the rule: To prevent anyone fromtaking the administration of justice into his ownhands. Even the owner cannot forcibly eject thepossessor, but must resort to the courts.

Actions to Recover Possession—1. Summary proceedings – Forcible entry and

Unlawful detainer

Article 1674, Civil Code. In ejectment cases wherean appeal is taken the remedy granted in Article539, second paragraph, shall also apply, if thehigher court is satisfied that the lessee's appeal is


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frivolous or dilatory, or that the lessor's appeal isprima facie meritorious. The period of ten daysreferred to in said article shall be counted from thetime the appeal is perfected.

Plaintiff may ask for writ of preliminarymandatory injunction within 10 daysfrom filing of complaint in forcible entry(Art. 539). The same writ is available inunlawful detainer actions upon appeal.(Art. 1674)

Forcible entry and UnlawfulDetainer

Rule 70, Rules of Court gives anyperson deprived of the possession ofany land or building by force,intimidation, strategy, or stealth at anytime within one year after such unlawfuldeprivation, the action of forcible entry.

“by force, intimidation, strategy, orstealth” – includes every situation orcondition under which one person canwrongfully enter upon real property andexclude another, who has had priorpossession therefrom.

2. Accion Publiciana (based on superior rightof possession, no ownership) Action for the recovery of possession of

real property upon mere allegation andproof of a better title thereto

3. Accion Reinvindicatoria (recovery ofpossession based on a claim of ownership) An action setting up title and right to

possession Not barred by a judgment in an action

for forcible entry and unlawful detainer

4. Action for Replevin (possession orownership for movable property)

Lawful Possessor Can Employ Self-help—

Article 429, Civil Code. The owner or lawfulpossessor of a thing has the right to exclude anyperson from the enjoyment and disposal thereof. Forthis purpose, he may use such force as may bereasonably necessary to repel or prevent an actualor threatened unlawful physical invasion orusurpation of his property

Article 540, Civil Code. Only the possessionacquired and enjoyed in the concept of owner canserve as a title for acquiring dominion.

To consolidate title by prescription, thepossession must be under claim of ownership,and it must be peaceful, public and uninterrupted

It is only the conviction of ownership externallymanifested, which generates ownership.

Acts of possessory character done by virtue of alicense or mere tolerance on the part of the realowner are not sufficient and will not confer titleby prescription or adverse possession.

The following cannot acquire title by prescription:1. Lessees, trustees, pledges, tenants on

shares or planters and all those who hold inthe name or representation of another;

2. Mere holders placed in possession of theproperty by the owner, such as agents,employees;

3. Those holding in a fiduciary character, likereceivers, attorneys, depositaries andantichretic creditors

4. Co-owner, with regard to common property;Except: When he holds the same adverselyagainst all of them with notice to them theexclusive claim of ownership

Article 542, Civil Code. The possession of realproperty presumes that of the movables therein, solong as it is not shown or proved that they should beexcluded.

Refers to all kinds of possession, whether inconcept of owner or not, in good faith or in badfaith, and in one’s own name or another’s –inreference to things only, NOT rights.

Article 543, Civil Code. Each one of theparticipants of a thing possessed in common shallbe deemed to have exclusively possessed the partwhich may be allotted to him upon the divisionthereof, for the entire period during which the co-possession lasted. Interruption in the possession ofthe whole or a part of a thing possessed in commonshall be to the prejudice of all the possessors.However, in case of civil interruption, the Rules ofCourt shall apply.

B. Entitlement to fruits – possessor in goodfaith/bad faith (Art. 544, 549)

Article 544, Civil Code. A possessor in good faith isentitled to the fruits received before the possessionis legally interrupted.

Natural and industrial fruits are considered receivedfrom the time they are gathered or severed.

Civil fruits are deemed to accrue daily and belong tothe possessor in good faith in that proportion.


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Provision is based on the following reasonsof equity—1. The fruits received are generally used for

the consumption and livelihood of thepossessor, and his life and expenses mayhave been regulated in view of such fruits

2. The owner has been negligent in notdiscovering or contesting the possession ofthe possessor; it would be unjust after thepossessor has been thus allowed to rely onthe efficacy of the title, to require him toreturn the fruits he has received on the basisof that title.

3. Between the owner, who has abandoned hisproperty and left it unproductive, and thepossessor, who has contributed to the socialwealth, by the fruits he has produced, thelaw leans toward the latter

Right of the possessor in good faith—Only limited to the fruits of the thing. He mustrestore the fruits received from the time suchgood faith ceased. He has no rights to theobjects which do not constitute fruits.

Legal interruption of possession in goodfaith—Takes place when an action is filed againsthim—from the time he learns of the complaint,from the time he is summoned to the trial.

Article 545, Civil Code. If at the time the good faithceases, there should be any natural or industrialfruits, the possessor shall have a right to a part ofthe expenses of cultivation, and to a part of the netharvest, both in proportion to the time of thepossession.

The charges shall be divided on the same basis bythe two possessors.

The owner of the thing may, should he so desire,give the possessor in good faith the right to finish thecultivation and gathering of the growing fruits, as anindemnity for his part of the expenses of cultivationand the net proceeds; the possessor in good faithwho for any reason whatever should refuse toaccept this concession, shall lose the right to beindemnified in any other manner.

Old Civil Code New Civil CodePossessor in GF wasreimbursed the entireexpense of cultivation

incurred by him

Proportionate division ofexpenses of production

“Charges” – Those which are incurred,not on the thing itself but because of it.

It is borne by the two possessors inproportion to their respectivepossession.

It includes every presentation requiredof the possessor by reason ofpossession of the thing, whether itconstitutes a real right or not.

e.g. Taxes, contributions in favor of thegovernment

When fruits are insufficient—There should only be reimbursement ofexpenses; but each possessor should suffer aproportionate reduction due to the insufficiencyof the harvest.

C. Reimbursement for Expenses—Possessor in Good Faith/Bad Faith

Article 546, Civil Code. Necessary expenses shallbe refunded to every possessor; but only thepossessor in good faith may retain the thing until hehas been reimbursed therefor.

Useful expenses shall be refunded only to thepossessor in good faith with the same right ofretention, the person who has defeated him in thepossession having the option of refunding theamount of the expenses or of paying the increase invalue which the thing may have acquired by reasonthereof.

Necessary Expenses—1. Imposed by the thing itself and have no

relation to the desire or purpose of thepossessor; hence they are reimbursed,whatever may be the juridical character ofthe person who advanced them.

2. They are the “cost of living” for the thing andmust be reimbursed to the one who paidthem, irrespective of GF or BF. Only apossessor in GF is entitled to retain the thinguntil he is reimbursed

3. Those imposed for the preservation of thething. They are not consideredimprovements; they do not increase thevalue of the thing, but merely prevent themfrom becoming useless.

Useful Expenses—1. Incurred to give greater utility or productivity

to the thing2. e.g. Wall surrounding an estate, an irrigation

system, planting in an uncultivated land, afishpond, an elevator in the building, electriclighting system

3. They are reimbursed only to the possessorin GF as a compensation or reward for him.Possessor in BF cannot recover suchexpenses


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Article 547, Civil Code. If the useful improvementscan be removed without damage to the principalthing, the possessor in good faith may remove them,unless the person who recovers the possessionexercises the option under paragraph 2 of thepreceding article.

Article 548, Civil Code. Expenses for pure luxury ormere pleasure shall not be refunded to thepossessor in good faith; but he may remove theornaments with which he has embellished theprincipal thing if it suffers no injury thereby, and if hissuccessor in the possession does not prefer torefund the amount expended.

Expenses for Luxury—1. They do not affect the existence or the

substance of the thing itself, but only thecomfort, convenience or enjoyment of thepossessor. They are not the subject ofreimbursement, because the law does notcompensate personal whims or caprices.

2. e.g. Opening of a garden, placing fountainsand statues in it, adorning the ceilingspaintings, and the walls with reliefs

Useful Expenses Expenses for LuxuryThose which increase theincome derived from the

thing

Those which merelyembellished the thing

Result: Increase in theproducts, either

absolutely, or because ofgreater facilities for

producing them

Includes expensesresulting in real benefit or

advantage to the thing

Result: Benefit oradvantage is only for theconvenience of definite

possessors

The resulting utility isessential and absolute, to

all who may have thething.

The utility is for thepossessor or particularpersons alone and istherefore accidental.

Article 549, Civil Code. The possessor in bad faithshall reimburse the fruits received and those whichthe legitimate possessor could have received, andshall have a right only to the expenses mentioned inparagraph 1 of Article 546 and in Article 443. Theexpenses incurred in improvements for pure luxuryor mere pleasure shall not be refunded to thepossessor in bad faith, but he may remove theobjects for which such expenses have beenincurred, provided that the thing suffers no injurythereby, and that the lawful possessor does notprefer to retain them by paying the value they mayhave at the time he enters into possession..

Article 550, Civil Code. The costs of litigation overthe property shall be borne by every possessor.

Article 550, Civil Code. Improvements caused bynature or time shall always inure to the benefit of theperson who has succeeded in recoveringpossession

Includes all the natural accessionsreferred to by articles 457-465, and allthose which do not depend upon the willof the possessor.

e.g. widening of the streets, rising offountains of fresh or mineral water,increase of foliage of trees

Liability for loss or deterioration of propertyby possessor in bad faith—

Article 552, Civil Code. A possessor in good faithshall not be liable for the deterioration or loss of thething possessed, except in cases in which it isproved that he has acted with fraudulent intent ornegligence, after the judicial summons.

A possessor in bad faith shall be liable fordeterioration or loss in every case, even if caused bya fortuitous event.

Possessor in GF Possessor in BF

Fruits ReceivedEntitled to the fruits while possession is in GFand before legal interruption (544)

Must reimburse the legitimate possessor(549)

Pending Fruits

Entitled to part of the expenses of cultivation,and to a part of the net harvest, in proportionto the time of the possession.

Indemnity may be, at the owner’s option,1. In money, OR2. By allowing full cultivation and gathering

of the fruits (545)

Must reimburse the legitimate possessor(549)

ChargesMust share with the legitimate possessor, inproportion to the time of the possession (545) Same as with GF (545)

NecessaryExpenses

Right to reimbursement and retention in themeantime (546) Reimbursement only (546)


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Useful Expenses

Right of retention until reimbursed; Owner’soption to reimburse him either for expensesor for increase in value which the thing mayhave acquired (546)

Limited right of removal – should not damageprincipal and owner does not exercise optionof paying the expenses or increase in value(547)

No right to reimbursement and no right ofremoval (547)

OrnamentalExpenses

Limited right of removal (548) Limited right of removal (549)

Deterioration ofLoss

No liability unless due to fraud or negligenceafter becoming in BF (552)

Liable in every case (552)

Costs of Litigation Bears cost (550) Bears cost (550)

D. Possession of Movable Acquired in GoodFaith (in concept of owner) is Equivalentto Title (Art. 559)

Article 559, Civil Code. The possession of movableproperty acquired in good faith is equivalent to atitle. Nevertheless, one who has lost any movable orhas been unlawfully deprived thereof may recover itfrom the person in possession of the same.

If the possessor of a movable lost or which theowner has been unlawfully deprived, has acquired itin good faith at a public sale, the owner cannotobtain its return without reimbursing the price paidtherefor

Possessor has actual title which is defeasibleonly by true owner.

Requisites of Title—1. Possession in GF2. The owner has voluntarily parted with the

possession of the thing3. The possession is in the concept of an

owner

When the owner can recover—1. Has lost the thing2. Has been unlawfully deprived thereof

IX. Effects of Possession in the Conceptof Owner

1. Possession may be lapsed of time ripen intofull ownership, subject to certain exceptions.

2. Presumption of just title and cannot beobliged to show or prove it (Art. 541);exception (Art. 1131)

Article 541, Civil Code. A possessor in the conceptof owner has in his favor the legal presumption thathe possesses with a just title and he cannot beobliged to show or prove it.

Basis: Possession is presumedownership, unless the contrary isproved. This presumption is prima facieand it prevails until contrary is proved.

Just title – that which is legally sufficientto transfer the ownership or the real rightto which it relates.

For the purposes of prescription, there isjust title when the adverse claimantcame into possession of the propertythrough one of the modes recognized bylaw for the acquisition of ownership orother real rights, but the grantor was notthe owner or could not transmit anyright. (Art. 1129)

Exception

Article 1131, Civil Code. For the purposes ofprescription, just title must be proved; it is neverpresumed.

3. Possessor may bring all actions necessaryto protect his possession exceptrevindicatoria

4. May employ self help under Art. 429

5. Possessor may ask for inscription of suchreal right of possession in the registry ofproperty

6. Has right to the fruits and reimbursement ofexpenses (assuming he is possessor ingood faith)

7. Upon recovery of possession which hasunlawfully deprived may demand fruits anddamages

8. Generally, he can do on the thingspossessed everything that the law


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authorizes the owner to do until he is oustedby one who had a better right.

9. Possession in good faith and possession inbad faith (Art. 528) Mistake upon doubtful or difficult

question of law as a basis of good faith(Art. 526, par 3)

X. Presumption in Favor of thePossessor—for AcquisitivePrescription

Of good faith until contrary is proved—

Article 527, Civil Code. Good faith is alwayspresumed, and upon him who alleges bad faith onthe part of a possessor rests the burden of proof.

Presumption is only juris tantum becausepossession is the outward sign ofownership. Unless such proof of bad faith ispresented, the possessor will be held to bein good faith.

So long as the possessor is not actuallyaware of any defect invalidating his title, heis deemed a possessor in good faith.

Of continuity of initial good faith in whichpossession was commenced of possessionin good faith does not lose this characterexcept in case and from the momentpossessor became aware or is not unawareof improper or wrongful possession—

Article 528, Civil Code. Possession acquired ingood faith does not lose this character except in thecase and from the moment facts exist which showthat the possessor is not unaware that he possessesthe thing improperly or wrongfully.

Good faith ceases from the date of thesummons to appear at the trial

Good faith ceases when there is:a. Extraneous evidenceb. Suit for recovery of the property by the

true owner

Of enjoyment of possession in the samecharacter in which possession was requireduntil contrary is proved—

Article 529, Civil Code. It is presumed thatpossession continues to be enjoyed in the samecharacter in which it was acquired, until the contraryis proved.

Of non-interruption of possession in favor ofpresent possessor who proves possessionat a previous time until the contrary isproved—

Article 554, Civil Code. A present possessor whoshows his possession at some previous time, ispresumed to have held possession also during theintermediate period, in the absence of proof to thecontrary.

Article 1120, Civil Code. Possession is interruptedfor the purposes of prescription, naturally or civilly.

Article 1121, Civil Code. Possession is naturallyinterrupted when through any cause it should ceasefor more than one year.

The old possession is not revived if a newpossession should be exercised by the sameadverse claimant.

Article 1122, Civil Code. If the natural interruptionis for only one year or less, the time elapsed shall becounted in favor of the prescription.

Article 1123, Civil Code. Civil interruption isproduced by judicial summons to the possessor.

Article 1124, Civil Code. Judicial summons shall bedeemed not to have been issued and shall not giverise to interruption:

1. If it should be void for lack of legalsolemnities;

2. If the plaintiff should desist from thecomplaint or should allow the proceedingsto lapse;

3. If the possessor should be absolved fromthe complaint.

In all these cases, the period of the interruption shallbe counted for the prescription

Other presumptions with respect to specificproperties of property rights—1. Of extension of possession of real property

to all movables contained therein so long asin is not shown that they should beexcluded; exceptions.

Article 426, Civil Code. Whenever by provision ofthe law, or an individual declaration, the expression"immovable things or property," or "movable thingsor property," is used, it shall be deemed to include,respectively, the things enumerated in Chapter 1and Chapter 2.

Whenever the word "muebles," or "furniture," is usedalone, it shall not be deemed to include money,credits, commercial securities, stocks and bonds,jewelry, scientific or artistic collections, books,medals, arms, clothing, horses or carriages and theiraccessories, grains, liquids and merchandise, orother things which do not have as their principal


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object the furnishing or ornamenting of a building,except where from the context of the law, or theindividual declaration, the contrary clearly appears.

2. Non-interruption of possession of hereditaryproperty

Article 553, Civil Code. The possession ofhereditary property is deemed transmitted to the heirwithout interruption and from the moment of thedeath of the decedent, in case the inheritance isaccepted.

One who validly renounces an inheritance isdeemed never to have possessed the same.

Article 1078, Civil Code. Where there are two ormore heirs, the whole estate of the decedent is,before its partition, owned in common by such heirs,subject to the payment of debts of the deceased.

3. Of just title in favor of possessor in conceptof owner

Article 541, Civil Code. A possessor in the conceptof owner has in his favor the legal presumption thathe possesses with a just title and he cannot beobliged to show or prove it.

Article 1141, Civil Code. Real actions overimmovables prescribe after thirty years.

This provision is without prejudice to what isestablished for the acquisition of ownership andother real rights by prescription.

XI. Possesion May Be Lost By

Article 555, Civil Code. A possessor may lose hispossession:1. By the abandonment of the thing;

2. By an assignment made to another either byonerous or gratuitous title;

3. By the destruction or total loss of the thing, orbecause it goes out of commerce;

4. By the possession of another, subject to theprovisions of Article 537, if the new possessionhas lasted longer than one year. But the realright of possession is not lost till after the lapseof ten years.

A. Abandonment Includes the giving up possession, and

not necessarily of ownership by everypossessor.

It is the opposite occupation. It consistsof the voluntary renunciation of all therights which the person may have in athing, with intent to lose such a thing. Tobe effective, it must be necessary that itbe made by a possessor in the conceptof an owner.

It must be clearly appear that the spesrecuperandi is gone and the animusrevertendi is finally given up.

B. Assignment, either onerous or gratuitous Complete transmission of ownership

rights to another person, gratuitously oronerously

C. Possession by another; if possessionhas lasted longer than one year; realright of possession not lost after 10years - (Subject to Article 537)

Article 537, Civil Code. Acts merely tolerated, andthose executed clandestinely and without theknowledge of the possessor of a thing, or byviolence, do not affect possession.

Possession that is lost here refers onlyto possession as a fact (de facto), notthe legal right of possession (de jure). Itis the possession that the newpossessor acquires.

Real right of possession is lost only after10 years.

After one year, the actions for forcibleentry and unlawful detainer can nolonger be brought. But accion publicianamay still be instituted to recoverpossession de jure

Article 553, Civil Code. One who recoverspossession shall not be obliged to pay forimprovements which have ceased to exist at thetime he takes possession of the thing.

The improvements, having ceased toexist, the lawful possessor or ownercannot benefit from them; hence heshould not pay for them.

Necessary expenses are not consideredimprovements, and even if the object forwhich they were incurred no longerexists at the time of entry uponpossession, the lawful possessor orowner has to pay for them.

Article 557, Civil Code. The possession ofimmovables and of real rights is not deemed lost, ortransferred for purposes of prescription to theprejudice of third persons, except in accordance with


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the provisions of the Mortgage Law and the LandRegistration laws.

Third parties relying on the Registry ofProperty are privileged to consider theregistered possessors or owners as stillsuch in spite of loss

Article 558, Civil Code. Acts relating to possession,executed or agreed to by one who possesses athing belonging to another as a mere holder to enjoyor keep it, in any character, do not bind or prejudicethe owner, unless he gave said holder expressauthority to do such acts, or ratifies themsubsequently.

Rules for Loss of Movables:

Article 556, Civil Code. The possession ofmovables is not deemed lost so long as they remainunder the control of the possessor, even though forthe time being he may not know their whereabouts.

“Control” – judicial control or right, orthat the thing remains in one’s patrimony

Article 560, Civil Code. Wild animals arepossessed only while they are under one's control;domesticated or tamed animals are considereddomestic or tame if they retain the habit of returningto the premises of the possessor.

Kinds of Animals:1. Wild—those which live naturally

independent of man2. Domesticated—those which, being wild by

nature, have become accustomed torecognize the authority of man. When theyobserve this custom, they are placed in thesame category as domestic and when theylose it, they are considered as wild.

3. Domestic or Tame—those which arebornand reared ordinarily under the controland care of man; they are under theownership of man, and do not become resnullius unless they are abandoned.

CIVIL LAW REVIEWER Chapter VII. USUFRUCT

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Chapter VII. Usufruct

I. CONCEPTII. CHARACTERISTICSIII. DISTINGUISHED FROM LEASE AND

SERVITUDEIV. CLASSIFICATIONV. RIGHTS OF USUFRUCTUARYVI. OBLIGATIONS OF USUFRUCTUARY

A. AT THE BEGINNING OF THE USUFRUCTB. DURING THE USUFRUCTC. AT THE TIME OF THE TERMINATION OF

THE USUFRUCTVII. SPECIAL CASESVIII. EXTINGUISHMENT

I. Concept

Article 562, Civil Code. Usufruct gives a right toenjoy the property of another with the obligation ofpreserving its form and substance, unless the titleconstituting it or the law otherwise provides.

Objects of Usufruct—1. Independent Rights

A servitude which is dependent on thetenement to which it attaches cannot bethe object of usufruct

2. Things Non-consumable things Consumable things, but only as to their

value if appraised, or on an equalquantity and quality if they were notappraised

3. Unproductive things e.g. sterile or absolutelyunproductive land, or things for merepleasure, such as promenades, statues orpaintings, even if they do not produce anyutility.

II. Characteristics

Characteristics—1. It is a real right2. Of temporary duration3. To derive all advantages from the thing due

to normal exploitation

Natural Characteristics—1. Includes only the right to use (jus utendi)

and the right to the fruits (jus fruendi)2. Usufructuary must preserve the form or

substance of the thinga. Preservation is a natural requisite, not

essential because the title constituting itor the law may provide otherwise

b. Reason for preserving form andsubstance – To prevent extraordinary

exploitation;

To prevent abuse, which is frequent; To prevent impairment.

c. Exception: In an abnormal usufruct,alteration is allowed

3. Usufruct is extinguished by the death of theusufructuarya. Natural because a contrary intention

may prevail

III. Usufruct Distiguished from Leaseand Servitude

Usufruct vs. Lease—

Basis Usufruct LeaseBy the nature of

the rightAlways a real

rightQuasi-real orpersonal right

By the creatorof the right

OwnerNeed not be an

owner

By the cause

Passive ownerwho allows theusufructuary toenjoy the thing

Active owner orlessor whomakes the

lessee enjoythe thing

By the extent ofenjoyment

Generallycovers all theutility of which

the thing iscapable

Generallycovers a

particular utility

By the origin

May be createdby law, by will of

the parties, orby prescription

May only becreated by the

will of theparties

As regardsrepairs and

taxes

Pays forordinary repairs

and taxes onthe fruits

Generally notborne by a

lessee

Usufruct vs. Servitude—

Basis Usufruct Servitudes

As to the objectMay involve

real or personalproperty

May onlyinvolve real

property

By the extent orenjoyment

Covers all theuses of the

thing

Limited to aparticular use

Similarities between Usufruct andServitude—Both are real rights, whether registered or not.1. Both rights may be registered, provided that

the usufruct involves real property. Alleasements of course concerns real property.

2. Both may ordinarily be alienated ortransmitted in accordance with theformalities set by law.


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IV. Classes of Usufruct

A. By Origin

Article 563, Civil Code. Usufruct is constituted bylaw, by the will of private persons expressed in actsinter vivos or in a last will and testament, and byprescription.

1. Voluntary: created by the will of privatepersonsa. By act inter vivos – such as contracts

and donations By alienation of the usufruct By retention of the usufruct Where a usufruct is constituted inter

vivos and for valuable consideration,the contract is unenforceable unlessin writing

b. By act mortis causa – such as testament

2. Legal: as provided by law

Usufruct of parents over the property ofunemancipated children (now limited to thecollectively daily needs of the family as perthe Family Code)

Article 226, Family Code. The property of theunemancipated child earned or acquired with hiswork or industry or by onerous or gratuitous titleshall belong to the child in ownership and shall bedevoted exclusively to the latter's support andeducation, unless the title or transfer providesotherwise.

The right of the parents over the fruits and income ofthe child's property shall be limited primarily to thechild's support and secondarily to the collective dailyneeds of the family.

3. Mixed: created both by law and the acts ofpersons

Article 565, Civil Code. The rights and obligationsof the usufructuary shall be those provided in thetitle constituting the usufruct; in default of such title,or in case it is deficient, the provisions contained inthe two following Chapters shall be observed.

The rights and duties of the usufructuaryprovided by law may be modified oreliminated by the parties.

The title constituting the usufruct mayvalidly authorize the usufructuary toalienate the thing itself held in usufruct. If the usufructuary is authorized to

alienate the thing in case ofnecessity, it is the usufructuary who

determines the question ofnecessity.

B. By Person Enjoying Right of Usufruct

Article 564, Civil Code. Usufruct may beconstituted on the whole or a part of the fruits of thething, in favor of one more persons, simultaneouslyor successively, and in every case from or to acertain day, purely or conditionally. It may also beconstituted on a right, provided it is not strictlypersonal or intransmissible.

1. Simple: only one usufructuary enjoys theproperty

2. Multiple: several usufructuaries enjoy thepropertya. Simultaneous: at the same timeb. Successive: one after the other

Limitations on successive usufruct—1. If usufruct is by donation, ALL donees must

be alive.

Article 756, Civil Code. The ownership of propertymay also be donated to one person and the usufructto another or others, provided all the donees areliving at the time of the donation.

2. Fiduciary or first heir and the second heirmust be alive at the time of the death of thetestator.

Article 863, Civil Code. A fideicommissarysubstitution by virtue of which the fiduciary or firstheir instituted is entrusted with the obligation topreserve and to transmit to a second heir the wholeor part of the inheritance, shall be valid and shalltake effect, provided such substitution does not gobeyond one degree from the heir originally instituted,and provided further, that the fiduciary or first heirand the second heir are living at the time of thedeath of the testator.

3. If by testamentary succession, there mustbe only 2 successive usufructuaries, andboth must be alive or at least alreadyconceived at the time of the testator’s death.

Article 869, Civil Code. A provision whereby thetestator leaves to a person the whole or part of theinheritance, and to another the usufruct, shall bevalid. If he gives the usufruct to various persons, notsimultaneously, but successively, the provisions ofArticle 863 shall apply

C. By Object of Usufruct

Article 564, Civil Code. Usufruct may beconstituted on the whole or a part of the fruits of thething, in favor of one more persons, simultaneouslyor successively, and in every case from or to a


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certain day, purely or conditionally. It may also beconstituted on a right, provided it is not strictlypersonal or intransmissible.

1. Rightsa. Must not be strictly personal or

intransmissible.b. Usufruct over a real right is by itself a

real right.c. Right to receive present or future

support cannot be the object of theusufruct.

2. Thingsa. Normal: involves non-consummable

things where the form and substanceare preserved

b. Abnormal or irregular

Article 574, Civil Code. Whenever the usufructincludes things which cannot be used without beingconsumed, the usufructuary shall have the right tomake use of them under the obligation of payingtheir appraised value at the termination of theusufruct, if they were appraised when delivered. Incase they were not appraised, he shall have theright to return at the same quantity and quality, orpay their current price at the time the usufructceases.

In reality, the usufruct is not uponthe consumable things themselveswhich are delivered to theusufructuary, but upon the sumrepresenting their value or upon aquantity of things of the same kindand quality.

The usufructuary, in effect, becomesthe owner of the things in usufruct,while the grantor becomes a merecreditor entitled to the return of thevalue or of the things of the samequantity and quality (as if convertedinto a simple loan)

D. By the Extent of the Usufruct

Article 564, Civil Code. Usufruct may beconstituted on the whole or a part of the fruits of thething, in favor of one more persons, simultaneouslyor successively, and in every case from or to acertain day, purely or conditionally. It may also beconstituted on a right, provided it is not strictlypersonal or intransmissible.

1. As to the fruitsa. Total: all consumed by the usufructb. Partial: only on certain aspects of the

usufruct’s fruits

2. As to objecta. Singular: only on particular property of

the ownerb. Universal: pertains to the whole

property;

Article 598, Civil Code. If the usufruct beconstituted on the whole of a patrimony, and if at thetime of its constitution the owner has debts, theprovisions of Articles 758 and 759 relating todonations shall be applied, both with respect to themaintenance of the usufruct and to the obligation ofthe usufructuary to pay such debts.

The same rule shall be applied in case the owner isobliged, at the time the usufruct is constituted, tomake periodical payments, even if there should beno known capital.

Article 595, Civil Code. The owner may constructany works and make any improvements of which theimmovable in usufruct is susceptible, or make newplantings thereon if it be rural, provided that suchacts do not cause a diminution in the value of theusufruct or prejudice the right of the usufructuary.

A universal usufructuary must pay thedebts of the naked owner, if stipulated.

If there are no stipulations, theusufructuary only has to pay when theusufruct has been made in fraud ofcreditors.

Article 758, Civil Code. When the donationimposes upon the donee the obligation to pay thedebts of the donor, if the clause does not containany declaration to the contrary, the former isunderstood to be liable to pay only the debts whichappear to have been previously contracted. In nocase shall the donee be responsible for the debtsexceeding the value of the property donated, unlessa contrary intention clearly appears.

Article 759, Civil Code. There being no stipulationregarding the payment of debts, the donee shall beresponsible therefor only when the donation hasbeen made in fraud of creditors.

The donation is always presumed to be in fraud ofcreditors, when at the time thereof the donor did notreserve sufficient property to pay his debts prior tothe donation.

E. By the Terms of the Usufruct

1. Pure: no terms or conditions2. Conditional: either suspensive or resolutory3. With a term or period

a. Ex die: from a certain dayb. In diem: up to a certain dayc. Ex die in diem: from a certain day up to

a certain day


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V. Rights of Usufructuary

A. As to Thing and Its Fruits

1. Right to enjoy the property to the sameextent as the owner, but only with respect toits use and the receipt of its fruits.

Article 566, Civil Code. The usufructuary shall beentitled to all the natural, industrial and civil fruits ofthe property in usufruct. With respect to hiddentreasure which may be found on the land ortenement, he shall be considered a stranger.

Usufructuary cannot extract productswhich do not constitute fruits becausehe is bound to preserve the form andsubstance of the thing.

Usufructuary rights may be transferred,assigned or otherwise disposed of bythe usufructuary.

Not exempt from execution and can besold at public auction.

2. As to hidden treasure, usufructuary isconsidered a stranger without a right to ashare, unless he is also the finder of thetreasure


Article 438, Civil Code. Hidden treasure belongs tothe owner of the land, building, or other property onwhich it is found.


If the things found be of interest to science of thearts, the State may acquire them at their just price,which shall be divided in conformity with the rulestated.

3. Right to fruits pending at the beginning ofusufruct


Article 438, Civil Code. Hidden treasure belongs tothe owner of the land, building, or other property on

which it is found.


If the things found be of interest to science of thearts, the State may acquire them at their just price,which shall be divided in conformity with the rulestated.

Fruits pending at thebeginning of the

usufruct

Fruits pending at thetime of termination of

the usufructBelong to theusufructuary

Belong to the nakedowner

Without need toreimburse the expensesto the owners

The owner shallreimburse to theusufructuary ordinarycultivation expensesfrom the proceeds of thefruits (not to exceed thevalue of the fruits)

Without prejudice to theright of 3

rdpersons e.g. if

the fruits had beenplanted by a possessorin good faith, thepending crop expensesand charges shall beprorated between saidpossessor and theusufructuary

Rights of innocent 3rd

parties should not beprejudiced.

Fruits already matured at the time of thetermination of the usufruct, whichordinarily would have already beengathered by the usufructuary, mayremain ungathered for no fault imputableto him, but because of malice or an actimputable to the naked owner or a 3

rd

person, or even due to force majeure orfortuitous event.

4. Right to civil fruits

Article 569, Civil Code. Civil fruits are deemed toaccrue daily, and belong to the usufructuary inproportion to the time the usufruct may last.

Article 570, Civil Code. Whenever a usufruct isconstituted on the right to receive a rent or periodicalpension, whether in money or in fruits, or in theinterest on bonds or securities payable to bearer,each payment due shall be considered as theproceeds or fruits of such right.

Whenever it consists in the enjoyment of benefitsaccruing from a participation in any industrial orcommercial enterprise, the date of the distribution ofwhich is not fixed, such benefits shall have the samecharacter.


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In either case they shall be distributed as civil fruits,and shall be applied in the manner prescribed in thepreceding article.

5. Right to enjoy any increase throughaccessions and servitudes, includingproducts of hunting and fishing

Article 571, Civil Code. The usufructuary shall havethe right to enjoy any increase which the thing inusufruct may acquire through accession, theservitudes established in its favor, and, in general,all the benefits inherent therein

6. Right to lease the thing

Article 572, Civil Code. The usufructuary maypersonally enjoy the thing in usufruct, lease it toanother, or alienate his right of usufruct, even by agratuitous title; but all the contracts he may enterinto as such usufructuary shall terminate upon theexpiration of the usufruct, saving leases of rurallands, which shall be considered as subsistingduring the agricultural year.

a. Exceptions: Legal usufructs cannot be leased. Caucion juratoria (lease would

show that the usufructuary does notneed the property badly)

b. Effect of the transfer of right: The transfer or lease of the usufruct

does NOT terminate the relation ofthe usufructuary with the owner

Death of the transferee does notterminate the usufruct but itterminates upon the death of theusufructuary who made the transfer.

c. Rules as to Lease The property in usufruct may be

leased even without the consent ofthe owner.

The lease should be for the sameperiod as the usufruct. EXCEPT: leases of rural lands

continues for the remainder ofthe agricultural year

A lease executed by theusufructuary before thetermination of the usufruct andsubsisting after the terminationof the usufruct must berespected, but the rents for theremaining period will belong tothe owner.o If the usufructuary has

leased the lands ortenements given in usufruct,and the usufruct should

expire before thetermination of the lease, heor his heirs and successorsshall receive only theproportionate share of therent that must be paid bythe lessee. (Art. 568, CivilCode)

It is the usufructuary and not thenaked owner who has the rightto choose the tenant.o As corollary to the right of

the usufructuary to all therent, to choose the tenant,and to fix the amount of therent, she necessarily hasthe right to choose herselfas the tenant thereof; and,as long as the obligationsshe had assumed towardsthe owner are fulfilled.(Fabie v. Gutierrez David)

A lease executed by the ownerbefore the creation of theusufruct is not extinguished bysuch usufruct.

d. Limitations on the Right to Lease theProperty Usufructuary cannot alienate a thing

in usufruct Cannot alienate or dispose of

the objects included in theusufruct

Cannot renounce a servitude Cannot mortgage or pledge a

thing EXCEPT: When the right of

usufruct is converted into theright of ownershipo When the things are

consumable (574);o When the things by their

nature are intended for sale,such as the merchandise ina commercialestablishment; and

o When the things, whatevertheir nature, are deliveredunder appraisal asequivalent to their sale

Future crops may be sold but suchsale would be void if not ratified bythe owner. The buyer’s remedy is to

recover from the usufructuary. Only voluntary usufruct can be

alienated.


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The usufructuary-lessor is liable forthe act of the substitute. A usufructuary who alienates or

leases his right of usufruct shallanswer for any damage whichthe things in usufruct may sufferthrough the fault or negligenceof the person who substituteshim. (Art. 590, Civil Code)

7. Right to improve the thing, but improvementinures for the benefit of the naked owner

Article 579, Civil Code. The usufructuary maymake on the property held in usufruct such usefulimprovements or expenses for mere pleasure as hemay deem proper, provided he does not alter itsform or substance; but he shall have no right to beindemnified therefor. He may, however, removesuch improvements, should it be possible to do sowithout damage to the property.

Usufructuary is not entitled toreimbursement.

Whenever the usufructuary can removethe improvements without injury to theproperty in usufruct, he has the right todo so, and the owner cannot preventhim from doing so even upon paymentof their value.

This right does not involve an obligation– if the usufructuary does not wish toexercise it, he cannot be compelled bythe owner to remove the improvements.

This right to remove improvements canbe enforced only against the owner, notagainst a purchaser in good faith towhom a clean title has been issued.

Usufructuary may set off theimprovements against any damage tothe property

Article 580, Civil Code. The usufructuary may setoff the improvements he may have made on theproperty against any damage to the same.

It is necessary that theimprovements should haveincreased the value of the property,and that the damages are imputableto the usufructuary.

Increase in value and the amount ofdamages are set off against eachother.

If the damages exceed the increasein value, the difference should bepaid by the usufructuary asindemnity.

If the increase in value exceeds thedamages, and the improvementsare of such nature that they can beremoved without injury to the thingin usufruct, the settlement of thedifference must be agreed upon bythe parties.

If the improvements cannot beremoved without injury, the excessin value accrues to the owner.

Registration of improvements – toprotect usufructuary against 3

rdpersons

B. As to the Legal Right of Usufruct Itself

1. Right to mortgage right of usufruct

Article 572, Civil Code. The usufructuary maypersonally enjoy the thing in usufruct, lease it toanother, or alienate his right of usufruct, even by agratuitous title; but all the contracts he may enterinto as such usufructuary shall terminate upon theexpiration of the usufruct, saving leases of rurallands, which shall be considered as subsistingduring the agricultural year.

Does not include parental usufructbecause of personal and familyconsiderations.

2. Right to alienate the usufruct except inpurely personal usufructs or when titleconstituting it prohibits the same Parental usufruct is inalienable

VI. Rights of the Naked Owner

1. At the beginning of the usufruct (seeobligations of usufructuary at the beginningof the usufruct)

2. During the usufructa. Retains title to the thing or propertyb. He may alienate the property: he may

not alter the form or substance of thething; nor do anything prejudicial to theusufructuary

Article 581, Civil Code. The owner of property theusufruct of which is held by another, may alienate it,but he cannot alter its form or substance, or doanything thereon which may be prejudicial to theusufructuary.

c. He may construct buildings, makeimprovements and plantings, provided: Value of the usufruct is not impaired


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Rights of the usufructuary are notprejudiced

VII.Obligations of the Usufructuary

A. At the Beginning of Usufruct or BeforeExercising the Usufruct

Article 583, Civil Code. The usufructuary, beforeentering upon the enjoyment of the property, isobliged:1. To make, after notice to the owner or his

legitimate representative, an inventory of all theproperty, which shall contain an appraisal of themovables and a description of the condition ofthe immovables;

2. To give security, binding himself to fulfill theobligations imposed upon him in accordancewith this Chapter.

[NOTE: These requirements are NOT conditionsprecedent to the commencement of the right ofthe usufructuary but merely to the entry upon thepossession and enjoyment of the property.]

To make an inventory— Requisites

a. Immovables must be describedb. Movables appraised because they are

easily lost or deteriorated. Concurrence of the owner in the making of

the inventory Expenses for the making of the inventory

are borne by the usufructuary Inventory may be in a private document,

except when immovables are involved (apublic instrument is prescribed to affect 3

rd

persons) Failure to make an inventory failure does not

affect the rights of the usufructuary to enjoythe property and its fruits.a. A prima facie presumption arises that

the property was received by theusfructuary in good condition

b. Even if he is already in possession, hemay still be required to make aninventory.

Exceptions to the requirement ofinventorya. No one will be injured therebyb. Title of the usufruct excuses the making

of the inventory

Article 585, Civil Code. The usufructuary, whatevermay be the title of the usufruct, may be excusedfrom the obligation of making an inventory or ofgiving security, when no one will be injured thereby.

Title constituting usufruct excused themaking of inventory

Title constituting usufruct already makes aninventory

To give a bond for the faithful performance ofduties as usufructuary— Any kind of sufficient security is allowed, e.g.

cash, personal bond, mortgage No bond is required in the following

a. No prejudice would result (Art. 585)b. Usufruct is reserved by a donor (Art.

584) Gratitude on the donee’s part

demands that the donor be excusedfrom filing the bond

c. Title constituting usufruct excusedusufructuary

d. If usufructuary takes possession under acaucion juratoria (Art. 587) The security given may be by a

personal bond, a pledge, or amortgage.

It is only by way of exception that acaucion juratoria is allowed, andonly under the specialcircumstances:o Proper court petitiono Necessity for delivery of

furniture, implements or houseincluded in the usufruct

o Approval of the courto Sworn promise

A usufructuary under this canneither alienate his right nor leasethe property, for that would meanthat he does not need the dwellingor the implements and furniture.



Article 584, Civil Code. The provisions of No. 2 ofthe preceding article shall not apply to the donorwho has reserved the usufruct of the propertydonated, or to the parents who are usufructuaries oftheir children's property, except when the parentscontract a second marriage.

Article 587, Civil Code. If the usufructuary who hasnot given security claims, by virtue of a promiseunder oath, the delivery of the furniture necessaryfor his use, and that he and his family be allowed to


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live in a house included in the usufruct, the courtmay grant this petition, after due consideration of thefacts of the case.

The same rule shall be observed with respect toimplements, tools and other movable propertynecessary for an industry or vocation in which he isengaged.

If the owner does not wish that certain articles besold because of their artistic worth or because theyhave a sentimental value, he may demand theirdelivery to him upon his giving security for thepayment of the legal interest on their appraisedvalue.

Effect of filing a bond

Article 588, Civil Code. After the security has beengiven by the usufructuary, he shall have a right to allthe proceeds and benefits from the day on which, inaccordance with the title constituting the usufruct, heshould have commenced to receive them

Retroactivity: upon giving the security,the usufructuary will be entitled to all thebenefits accruing since the time whenhe should have begun to receive them.

Effect of failure to give bond

Article 586, Civil Code. Should the usufructuary failto give security in the cases in which he is bound togive it, the owner may demand that the immovablesbe placed under administration, that the movablesbe sold, that the public bonds, instruments of creditpayable to order or to bearer be converted intoregistered certificates or deposited in a bank orpublic institution, and that the capital or sums incash and the proceeds of the sale of the movableproperty be invested in safe securities.

The interest on the proceeds of the sale of themovables and that on public securities and bonds,and the proceeds of the property placed underadministration, shall belong to the usufructuary.

Furthermore, the owner may, if he so prefers, untilthe usufructuary gives security or is excused from sodoing, retain in his possession the property inusufruct as administrator, subject to the obligation todeliver to the usufructuary the net proceeds thereof,after deducting the sums which may be agreed uponor judicially allowed him for such administration.

Right of the naked ownero Potestative right; if he does not wish

to exercise it, he may deliver theproperty to the usufructuary.

o Delivery, however, does not mean arenunciation of the right to demandsecurity.

o He shall have the ff. options:1. Receivership of realty, sale of

movables, deposit of securities,or investment of money; or

2. Retention of the property asadministrator.

o Net products less administrationexpenses fixed by agreement or bythe Court, shall be delivered to theusufructuary.

Right of the usufructuaryo He may alienate his right over the

property which he does not possessin the same form as he holds it,without prejudice to the right of thetransferee to give the requiredsecurity.

B. During the Usufruct

To take care of the thing like a good father ofa family—

Article 589, Civil Code. The usufructuary shall takecare of the things given in usufruct as a good fatherof a family.

Article 610, Civil Code. A usufruct is notextinguished by bad use of the thing in usufruct; butif the abuse should cause considerable injury to theowner, the latter may demand that the thing bedelivered to him, binding himself to pay annually tothe usufructuary the net proceeds of the same, afterdeducting the expenses and the compensationwhich may be allowed him for its administration.

1. When damages are caused to the propertyby the fault or negligence of theusufructuary, the naked owner need not waitfor the termination of the usufruct beforebringing the action to recover properindemnity.

2. The bad use of a thing, which causesconsiderable injury, entitles the owner todemand the delivery and administration ofthe thing.

3. The exercise of this remedy does NOTextinguish the usufruct.

To undertake ordinary repairs—

Article 592, Civil Code. The usufructuary is obligedto make the ordinary repairs needed by the thinggiven in usufruct.

By ordinary repairs are understood such as arerequired by the wear and tear due to the natural useof the thing and are indispensable for itspreservation. Should the usufructuary fail to make


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them after demand by the owner, the latter maymake them at the expense of the usufructuary.

1. Ordinary repairs:a. Deteriorations or defects arise from the

natural use of the thing;b. Repairs are necessary for the

preservation of the thing.2. The usufructuary is bound to pay only for the

repairs made during the existence of theusufruct. If the defects existed already at the time

the usufruct began, the obligation todefray the ordinary repairs falls upon theowner.

3. If the defects are caused by the ordinary useof the thing, the usufructuary may exempthimself from making the repairs by returningto the owner the fruits received during thetime that the defects took place. EXCEPT: When the ordinary repairs are

due to defects caused by the fault of theusufructuary

4. If the usufructuary fails to make the repairseven after demand, the owner may makethem at the expense of the usufructuary

To notify owner of need to undertakeextraordinary repairs—

Article 593, Civil Code. Extraordinary repairs shallbe at the expense of the owner. The usufructuary isobliged to notify the owner when the need for suchrepairs is urgent.

Article 594, Civil Code. If the owner should makethe extraordinary repairs, he shall have a right todemand of the usufructuary the legal interest on theamount expended for the time that the usufruct lasts.

Should he not make them when they areindispensable for the preservation of the thing, theusufructuary may make them; but he shall have aright to demand of the owner, at the termination ofthe usufruct, the increase in value which theimmovable may have acquired by reason of therepairs.

1. Extraordinary repairsa. Those caused by exceptional

circumstances, whether or not they arenecessary for the preservation of thething;

b. Those caused by the natural use of thething, but are not necessary for itspreservation.

2. General Rule: Naked owner must make theextraordinary repairs Usufructuary obliged to pay legal

interest on the amount while usufructlasts

3. If the extraordinary repairs areindispensable, and the naked owner fails toundertake them, the usufructuary may makesuch repairs Requisites:

a. There must be due notification tothe naked owner of the urgency – ifit is not urgent, there is no obligationto give notice.

b. The naked owner failed to makethem

c. The repair is needed forpreservation

The usufructuary who has made theextraordinary repairs necessary forpreservation, is entitled to recover fromthe owner the increase in value whichthe tenement acquired by reason ofsuch works.

Usufructuary may retain until he is paid.

To pay for annual charges and taxes on thefruits—

Article 596, Civil Code. The payment of annualcharges and taxes and of those considered as a lienon the fruits, shall be at the expense of theusufructuary for all the time that the usufruct lasts.

Article 597, Civil Code. The taxes which, during theusufruct, may be imposed directly on the capital,shall be at the expense of the owner.

If the latter has paid them, the usufructuary shall payhim the proper interest on the sums which may havebeen paid in that character; and, if the said sumshave been advanced by the usufructuary, he shallrecover the amount thereof at the termination of theusufruct.

Article 612, Civil Code. Upon the termination of theusufruct, the thing in usufruct shall be delivered tothe owner, without prejudice to the right of retentionpertaining to the usufructuary or his heirs for taxesand extraordinary expenses which should bereimbursed. After the delivery has been made, thesecurity or mortgage shall be cancelled.

It is well settled that a real tax, being aburden upon the capital, should be paidby the owner of the land and not by ausufructuary. There is no merit in thecontention of distinguishing public landsinto alienable and indisposable. All


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properties owned by the government,without any distinction, are exempt fromtaxation. (Board of AssessmentAppeals of Zamboanga del Sur v.Samar Mining Company, Inc.)

To notify owner of any act detrimental toownership—

Article 601, Civil Code. The usufructuary shall beobliged to notify the owner of any act of a thirdperson, of which he may have knowledge, that maybe prejudicial to the rights of ownership, and he shallbe liable should he not do so, for damages, as ifthey had been caused through his own fault.

To shoulder the costs of litigation reusufruct—

Article 602, Civil Code. The expenses, costs andliabilities in suits brought with regard to the usufructshall be borne by the usufructuary.

To answer for fault or negligence of alienee,lessee or agent of usufructuary—

Article 590, Civil Code. A usufructuary whoalienates or leases his right of usufruct shall answerfor any damage which the things in usufruct maysuffer through the fault or negligence of the personwho substitutes him. (498)

The usufructuary is made liable for theacts of the substitute. While thesubstitute answers to the usufructuary,the usufructuary answers to the nakedowner.

C. At the Time of the Termination of theUsufruct To deliver the thing in usufruct to the

owner in the condition in which he hasreceived it, after undertaking ordinaryrepairs

Exception: abnormal usufruct – returnthe thing of same kind, quantity andquality; if with appraised value, mustreturn value appraised

VIII. Special Cases of Usufruct

A. Usufruct over a pension or periodicalincome

Article 570, Civil Code. Whenever a usufruct isconstituted on the right to receive a rent or periodicalpension, whether in money or in fruits, or in the

interest on bonds or securities payable to bearer,each payment due shall be considered as theproceeds or fruits of such right.

Whenever it consists in the enjoyment of benefitsaccruing from a participation in any industrial orcommercial enterprise, the date of the distribution ofwhich is not fixed, such benefits shall have the samecharacter.

In either case they shall be distributed as civil fruits,and shall be applied in the manner prescribed in thepreceding article.

B. Usufruct of property owned in common

Article 582, Civil Code. The usufructuary of a partof a thing held in common shall exercise all therights pertaining to the owner thereof with respect tothe administration and the collection of fruits orinterest. Should the co-ownership cease by reasonof the division of the thing held in common, theusufruct of the part allotted to the co-owner shallbelong to the usufructuary.

1. The usufructuary takes the place of theowner as to:a. Management;b. Fruits; andc. Interest

2. Effect of partition:a. The right of the usufructuary is not

affected by the division of the property inusufruct among the co-owners.

b. After partition, the usufruct is transferredto the part allotted to the co-owner

C. Usufruct constituted on a flock or herd oflivestock

Article 591, Civil Code. If the usufruct beconstituted on a flock or herd of livestock, theusufructuary shall be obliged to replace with theyoung thereof the animals that die each year fromnatural causes, or are lost due to the rapacity ofbeasts of prey.

If the animals on which the usufruct is constitutedshould all perish, without the fault of theusufructuary, on account of some contagiousdisease or any other uncommon event, theusufructuary shall fulfill his obligation by delivering tothe owner the remains which may have been savedfrom the misfortune.

Should the herd or flock perish in part, also byaccident and without the fault of the usufructuary,the usufruct shall continue on the part saved.

Should the usufruct be on sterile animals, it shall beconsidered, with respect to its effects, as thoughconstituted on fungible things.


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1. On sterile stock: same rules onconsumable property govern (i.e.replacement upon termination)

2. On fruitful stocka. Must replace ordinary losses of the

stock with the young if: Some animals die from natural

causes Some animals are lost due to

rapacity of beasts of prey

b. There is no obligation to replace if: There is a total loss of animals

because of some unexpected orunnatural loss (like contagiousdisease or any other uncommonevent, provided the usufructuary hasno fault); If all perish, the usufructuary

should deliver the remains tothe owner.

There is a partial loss If a part of the stock perishes,

the usufruct subsists on theremainder.

D. Usufruct over fruit bearing trees andsprout and woodlands

Article 575, Civil Code. The usufructuary of fruit-bearing trees and shrubs may make use of the deadtrunks, and even of those cut off or uprooted byaccident, under the obligation to replace them withnew plants.

Article 576, Civil Code. If the owner should makethe extraordinary repairs, If in consequence of acalamity or extraordinary event, the trees or shrubsshall have disappeared in such considerable numberthat it would not be possible or it would be tooburdensome to replace them, the usufructuary mayleave the dead, fallen or uprooted trunks at thedisposal of the owner, and demand that the latterremove them and clear the land.

The usufructuary can:1. Use dead trunks and those cut off or

uprooted by accident.2. Make usual cuttings that owner used to do.3. Cut the trees that are not useful

E. Usufruct on a right of action

Article 578, Civil Code. The usufructuary of anaction to recover real property or a real right, or anymovable property, has the right to bring the actionand to oblige the owner thereof to give him theauthority for this purpose and to furnish himwhatever proof he may have. If in consequence of

the enforcement of the action he acquires the thingclaimed, the usufruct shall be limited to the fruits, thedominion remaining with the owner.

1. The action may be instituted in theusufructuary’s name. As the owner of theusufruct, he is properly deemed a properparty in interest.

2. If the purpose is the recovery of the propertyor right, he is still required under 578 toobtain the naked owner’s authority.

3. If the purpose is to object to or preventdisturbances over the property, no specialauthority from the naked owner is needed.

F. Usufruct on mortgaged property

Article 600, Civil Code. The usufructuary of amortgaged immovable shall not be obliged to paythe debt for the security of which the mortgage wasconstituted.

Should the immovable be attached or sold judiciallyfor the payment of the debt, the owner shall be liableto the usufructuary for whatever the latter may loseby reason thereof.

1. When the usufruct is universal and someobjects are mortgaged, apply Art. 598.

2. If the usufructuary mortgaged the usufructhimself, he is liable to pay his own debt.

G. Usufruct over an entire patrimony

Article 598, Civil Code. If the usufruct beconstituted on the whole of a patrimony, and if at thetime of its constitution the owner has debts, theprovisions of Articles 758 and 759 relating todonations shall be applied, both with respect to themaintenance of the usufruct and to the obligation ofthe usufructuary to pay such debts

The same rule shall be applied in case the owner isobliged, at the time the usufruct is constituted, tomake periodical payments, even if there should beno known capital.

1. Applies when:a. If the usufruct is a universal oneb. And the naked owner – Has debts or is

obliged to make periodical payments(whether or not there be known capital)

2. General rule: the usufructuary is not liablefor the owner’s debts.

3. Exceptions:a. When it is so stipulated; in which case

The usufructuary shall be liable forthe debt specified.


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If there is no specification, he isliable only for debts incurred by theowner before the usufruct wasconstituted.

b. When the usufruct is constituted in fraudof creditors

4. In no case shall the usufructuary beresponsible for debts exceeding the benefitsunder the usufruct. (except when thecontrary intention appears)

H. Usufruct over deteriorable property

Article 573, Civil Code. Whenever the usufructincludes things which, without being consumed,gradually deteriorate through wear and tear, theusufructuary shall have the right to make use thereofin accordance with the purpose for which they areintended, and shall not be obliged to return them atthe termination of the usufruct except in theircondition at that time; but he shall be obliged toindemnify the owner for any deterioration they mayhave suffered by reason of his fraud or negligence.

1. It is sufficient if the usufructuary returns thethings in the condition in which they mayhave been found at the time of the expirationof the usufruct despite ordinary defectscaused by use and deterioration producedby age and time. EXCEPT when caused by the

usufructuary’s fraud and negligence.2. If usufructuary does not return the things

upon the expiration of the usufruct, heshould pay an indemnity equivalent to thevalue of the things at the time of suchexpiration.

I. Usufruct over consumable property

Article 574, Civil Code. Whenever the usufructincludes things which cannot be used without beingconsumed, the usufructuary shall have the right tomake use of them under the obligation of payingtheir appraised value at the termination of theusufruct, if they were appraised when delivered. Incase they were not appraised, he shall have theright to return at the same quantity and quality, orpay their current price at the time the usufructceases.

Abnormal Usufruct If the thing is appraised at delivery, the

usufructuary must pay their appraisedvalue at the termination of the usufruct.

If they were not appraised, he mustreturn the same kind and quality or paythe current price at the expiration of theusufruct.

IX. Extinguishment of Usufruct

Article 603, Civil Code. Usufruct is extinguished:1. By the death of the usufructuary, unless a

contrary intention clearly appears;2. By the expiration of the period for which it was

constituted, or by the fulfillment of anyresolutory condition provided in the title creatingthe usufruct;

3. By merger of the usufruct and ownership in thesame person;

4. By renunciation of the usufructuary;5. By the total loss of the thing in usufruct;6. By the termination of the right of the person

constituting the usufruct;7. By prescription.

A. Death of usufructuary

Exceptions—1. In multiple usufructs: it ends at the death of

the last survivor

Article 611, Civil Code. A usufruct constituted infavor of several persons living at the time of itsconstitution shall not be extinguished until death ofthe last survivor.

a. If simultaneously constituted: all theusufructuaries must be alive (or at leastconceived) at the time of constitution.

b. If successively constituted: If by virtue of donation – all the

donees-usufructuaries must beliving at the time of the donation;

If by will – there should only be 2successive usufructuaries and bothmust have been alive at the time oftestator’s death.

2. If the period is fixed by reference to the lifeof another or there is a resolutory condition Death does not affect the usufruct and

the right is transmitted to the heirs of theusfructuary until the expiration of theterm or the fulfillment of the condition.

Article 606, Civil Code. A usufruct granted for thetime that may elapse before a third person attains acertain age, shall subsist for the number of yearsspecified, even if the third person should die beforethe period expires, unless such usufruct has beenexpressly granted only in consideration of theexistence of such person.

3. When a contrary intention clearly appears If the usufructuary dies before the

happening of a resolutory condition, theusufruct is extinguished.


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1st

view: usufruct is personal and itCANNOT be extended beyond thelifetime of the usufructuary. (SanchezRoman and SC)

B. Expiration of period or fulfillment ofresolutory condition imposed onusufruct by person constituting theusufruct

1. In favor of juridical persons: period cannotexceed 50yrs.

Article 605, Civil Code. Usufruct cannot beconstituted in favor of a town, corporation, orassociation for more than fifty years. If it has beenconstituted, and before the expiration of such periodthe town is abandoned, or the corporation orassociation is dissolved, the usufruct shall beextinguished by reason thereof.

2. Time that may elapse before a 3rd

personattains a certain age, even if the latter diesbefore period expires, unless granted only inconsideration of his existence

Article 606, Civil Code. A usufruct granted for thetime that may elapse before a third person attains acertain age, shall subsist for the number of yearsspecified, even if the third person should die beforethe period expires, unless such usufruct has beenexpressly granted only in consideration of theexistence of such person.

C. Merger of rights of usufruct and nakedownership in one person Illustration: H was the usufructuary of

land owned by X. x dies, leaving in hiswill, the naked ownership of the land toH. the usufruct is extinguished becausenow H is both the naked owner and theusufructuary.

D. Renunciation of usufruct1. Waiver: voluntary surrender of the rights of

the usufructuary, made by him with intent tosurrender them

2. Limitationsa. Must be express: tacit renunciation is

not sufficientb. Does not need the consent of naked

ownerc. If made in fraud of creditors, waiver may

be rescinded by them through actionunder Article 1381 (accion pauliana)

E. Extinction or loss of property If destroyed property is not insured

Article 607, Civil Code. If the usufruct is constitutedon immovable property of which a building formspart, and the latter should be destroyed in anymanner whatsoever, the usufructuary shall have aright to make use of the land and the materials.

The same rule shall be applied if the usufruct isconstituted on a building only and the same shouldbe destroyed. But in such a case, if the ownershould wish to construct another building, he shallhave a right to occupy the land and to make use ofthe materials, being obliged to pay to theusufructuary, during the continuance of the usufruct,the interest upon the sum equivalent to the value ofthe land and of the materials.

Article 608, Civil Code. If the usufructuary shareswith the owner the insurance of the tenement givenin usufruct, the former shall, in case of loss, continuein the enjoyment of the new building, should one beconstructed, or shall receive the interest on theinsurance indemnity if the owner does not wish torebuild.

Should the usufructuary have refused to contributeto the insurance, the owner insuring the tenementalone, the latter shall receive the full amount of theinsurance indemnity in case of loss, saving alwaysthe right granted to the usufructuary in the precedingarticle.

See Summary of Arts. 607 and 608

F. Termination of right of personconstituting the usufruct Example: usufructs constituted by a

vendee a retro terminate uponredemption

G. Prescription Adverse possession against the owner

or the usfructuary. It is not the non-use which extinguishes

the usufruct by prescription, but the useby a 3

rdperson.

There can be no prescription as long asthe usfructuary receives the rents fromthe lease of the property, or he enjoysthe price of the sale of his right.


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SUMMARY (ARTS. 607 AND 708)

SITUATION EFFECTArt. 607

If destroyed property is not insuredIf the building forms part of an immovable underusufruct

Usufruct continues over the land and the remainingmaterials

If usufruct is on the building only Usufruct continues over the land and materials (plusinterests), if owner does not rebuildIf owner rebuilds, usufructuary must allow owner tooccupy the land and to make use of materials; but theowner must pay interest on the value of both the landand the materials.

Art. 608

If destroyed property is insured before termination of the usufructWhen insurance premium paid by owner and

usufructuary (par. 1)

If owner rebuilds, usufruct subsists on new building

If owner does not rebuild interest upon insuranceproceeds paid to usufructuary

When the insurance taken by the naked owner

only because usufructuary refuses to contribute to

the premium (par. 2)

Owner entitled to insurance money (no interest paid tousufructuary)If he does not rebuild, usufruct continues overremaining land and/or owner may pay interest onvalue of both materials and land (607)If owner rebuilds, usufruct does not continue on newbuilding, but owner must pay interest on value of landand old materials

When insurance taken by usufructuary only

depends on value of usufructuary’s insurable

interest

Insurance proceeds goes to the usufructuaryNo obligation to rebuildUsufruct continues on the land

Owner has not share in insurance proceeds

X. Conditions Not Affecting Usufruct

A. Expropriation of thing in usufruct

Article 609, Civil Code. Should the thing in usufructbe expropriated for public use, the owner shall beobliged either to replace it with another thing of thesame value and of similar conditions, or to pay theusufructuary the legal interest on the amount of theindemnity for the whole period of the usufruct. If theowner chooses the latter alternative, he shall givesecurity for the payment of the interest.

3 SITUATIONS—1. If naked owner alone was given the

indemnity, he has the option:a. To replace with equivalent thingb. Or to pay to the usufructuary legal

interest on the indemnity – requiressecurity given by the naked owner forthe payment of the interest

2. If both the naked owner and theusufructuary were separately given

indemnity, each owns the indemnity given tohim, the usufruct being totally extinguished.

3. If usufructuary alone was given theindemnity, he must give it to the nakedowner and compel the latter to return eitherthe interest or to replace the property. Hemay even deduct the interest himself, if thenaked owner fails to object.

B. Bad use of thing in usufruct

Article 610, Civil Code. A usufruct is notextinguished by bad use of the thing in usufruct; butif the abuse should cause considerable injury to theowner, the latter may demand that the thing bedelivered to him, binding himself to pay annually tothe usufructuary the net proceeds of the same, afterdeducting the expenses and the compensationwhich may be allowed him for its administration.

Does not extinguish the usufruct but—1. Entitles the owner to demand delivery and

administration of the thing.


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2. The bad use must cause considerable injurynot to the thing, but to the owner.

C. Destruction if a building over which theusufruct is constituted (Arts. 607 and608)

CIVIL LAW REVIEWER Chapter VIII. EASEMENT

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Chapter VIII. Easement

I. CONCEPTII. ESSENTIAL FEATURES OF

EASEMENTS/REALIII. CLASSIFICATION OF SERVITUDESIV. GENERAL RULES ON SERVITUDEV. MODES OF ACQUIRING EASEMENTS

A. BY TITLEB. BY PRESCRIPTION

VI. RIGHTS AND OBLIGATIONS OF OWNERSA. OF DOMINANT ESTATEB. OF SERVIENT ESTATE

VII. MODES OF EXTINGUISHMENT OFEASEMENTS

VIII. LEGAL EASEMENTS

I. Concept

Art. 613, Civil Code. An easement or servitude is anencumbrance imposed upon an immovable for thebenefit of another immovable belonging to a differentowner.

The immovable in favor of which the easement isestablished is called the dominant estate; that whichis subject thereto, the servient estate. (530)

A real right which burdens a thing with aprestation of determinate servitudes for theexclusive enjoyment of one who is NOT anowner of a tenement

A real right by virtue of which the owner hasto ABSTAIN from doing or ALLOWsomebody else to do something to hisproperty for the benefit of another

II. Essential Features

1. It is a real right – it gives an action in remor real action against any possessor ofthe servient estateo Owner of the dominant estate can file a

real action for enforcement of right to aneasement

o Action in rem: an action against thething itself, instead of against theperson.

2. It is a right enjoyed over another property(jus in re aliena) – it cannot exist in one’sproperty (nulli res sua servit)o When a dominant and servient estate

have the same owner, an easement isextinguished. Separate ownership is aprerequisite to an easement.

3. It is a right constituted over animmovable by nature (land andbuildings), not over movables. (Article613)o Immovable: used in its common and

not in the legal sense, meaning onlyproperty immovable BY NATURE canhave easements.

4. It limits the servient owner’s right ofownership for the benefit of the dominantestate.o Right of limited use but no right to

possess servient estate.o There exists a limitation on ownership:

the dominant owner is allowed to enjoyor use part of the servient estate, orimposes on the owner a restriction as tohis enjoyment of his own property.

o Being an abnormal limitation ofownership, it cannot bepresumed.

5. It creates a relation between tenementso No transfer of ownership, but a

relationship is created, depending on theeasement.

6. Generally, it may consist in the owner ofthe dominant estate demanding that theowner of the servient estate refrain fromdoing something (servitus in nonfaciendo) or that the latter permit thatsomething be done over the servientproperty (servitus in patendo), but not inthe right to demand that the owner of theservient right to demand that the ownerof the servient estate do something(servitus in faciendo) except if such actis an accessory obligation to a preadialservitude (obligation propter rem)o Servient owner merely allows something

to be done to his estate.o EXCEPTIONS: Praedial servitudes

a. Right to place beams in an adjoiningwall to support a structure

b. Right to use another’s wall tosupport a building

7. It is inherent or inseparable from estateto which they actively or passivelybelong

Art. 617, Civil Code. Easements are inseparablefrom the estate to which they actively or passivelybelong.


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o Easements are merely accessory to thetenements, and a “quality thereof.” Theycannot exist without tenements.

o Easements exist even if they are notexpressly stated or annotated as anencumbrance of the titles.

8. It is intransmissible – it cannot bealienated separately from the tenementaffected or benefitedo Any alienation of the property covered

carries with it the servitudes affectingsaid property. But this affects only theportion of the tenement with theeasement, meaning the portionsunaffected can be alienated without theservitude.

9. It is indivisible

Art. 618, Civil Code. Easements are indivisible. If theservient estate is divided between two or morepersons, the easement is not modified, and each ofthem must bear it on the part which corresponds tohim.

If it is the dominant estate that is divided between twoor more persons, each of them may use the easementin its entirety, without changing the place of its use, ormaking it more burdensome in any other way.

10. It has permanence – once it attaches,whether used or not, it continues andmay be used at anytimeo Perpetual: exists as long as property

exists, unless it is extinguished.

III. Classification of Servitudes

1. As to recipient of benefitsa. Real or Praedial: exists for the benefit of

a particular tenement.b. Personal: exists for the benefit of

persons without a dominant tenemente.g. usus habitatio (right to reside in ahouse) and operae servorum (right tothe labor of slaves) in Roman Law

2. As to cause or origina. Legal: created by law, whether for public

use or for the interest of private personso Once requisites are satisfied, the

owner of the dominant estate mayask the Court to declare that aneasement is created.

o Example: Natural drainage ofwaters, Abutment of land, Aqueduct,etc.

b. Voluntary: Created by the will of theowners of the estate through contract

*** There is no such thing as a JUDICIALEASEMENT. The Courts cannot createeasements, they can only declare the existenceof one, if it exists by virtue of the law or will ofthe parties.

3. As to its exercise (Article 615)

Art. 615, Civil Code. Easements may be continuousor discontinuous, apparent or nonapparent.

Continuous easements are those the use of which isor may be incessant, without the intervention of anyact of man.

Discontinuous easements are those which are used atintervals and depend upon the acts of man.

Apparent easements are those which are madeknown and are continually kept in view by externalsigns that reveal the use and enjoyment of the same.

Nonapparent easements are those which show noexternal indication of their existence. (532)

This classification is important indetermining prescription: only continuousand apparent easements can be created byprescription Continuous: Use is or may be incessant,

without the intervention of any man Discontinuous: Used at intervals, and

dependent upon the acts of man.

4. As indication of its existenceAlso important for purposes of prescription Apparent: Made known and continually

kept in view by external signs that revealthe use and enjoyment of the same

Non-apparent: No external indication oftheir existence

5. By the object or obligation imposed(Article 616)a. Positive: Imposes upon the owner of the

servient estate the obligation of allowingsomething to be done, or doing it himself

b. Negative: Prohibits the owner of theservient estate from doing somethingwhich he could lawfully do if theeasement did not exist.o Prescription starts to run from

service of notarial prohibition)o e.g. Negative Easement of Light

and View: An opening is made on


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the wall of the dominant estate, andthe easement consists of imposingupon the servient estate theobligation to not build anything thatwould obstruct the light

IV. General Rules Relating to Servitudes

1. Nulli res sua servi: No one can have aservitude over one’s own property

2. Servitus in faciendo consistere nequit: Aservitude cannot consist in doingo Although some easements seem to

impose a positive prestation upon theowner of the servient estate, in reality,the primary obligation is still negative.

o Illustration: Under Article 680: the ownerof a tree whose branches extend over toa neighboring property is required to cutoff the extended branches, but the realessence of the easement is theobligation NOT TO ALLOW thebranches of the tree to extend beyondthe land

3. Servitus servitutes esse non potes: Therecan be no servitude over another servitude

4. A servitude must be exercised civiliter –in a way least burdensome to the owner ofthe land

5. A servitude must have a perpetual cause

V. Modes of Acquiring Easements

A. By Title – juridical act which gives riseto the servitude (e.g. law, donations,contracts or wills)

Because the road was voluntarily created as aservitude by the owner, he may close it at hispleasure. But while the road is open, he may notcapriciously exclude the owner of the tuba saloonfrom its use. (North Negros Sugar v. Hidalgo)

1. If easement has been acquired but no proofof existence of easement available, andeasement is one that cannot be acquired byprescription

Article 623, Civil Code. The absence of a documentor proof showing the origin of an easement whichcannot be acquired by prescription may be cured by adeed of recognition by the owner of the servientestate or by a final judgment.

The defect may be cured by:a. Deed of recognition by owner of servient

estate: By affidavit or a formal deedacknowledging the servitude

b. By final judgment: Owner of thedominant estate must file a case inCourt to have the easement declared byproving its existence through otherevidence

2. Existence of an apparent sign considered astitle

Article 624, Civil Code. The existence of an apparentsign of easement between two estates, established ormaintained by the owner of both, shall be considered,should either of them be alienated, as a title in orderthat the easement may continue actively andpassively, unless, at the time the ownership of the twoestates is divided, the contrary should be provided inthe title of conveyance of either of them, or the signaforesaid should be removed before the execution ofthe deed. This provision shall also apply in case of thedivision of a thing owned in common by two or morepersons.

o Illustration: The presence of 4 windowswas considered an apparent sign whichcreated a negative easement of lightand view (altius non tollendi) i.e. not tobuild a structure that will cover thewindows. (Amor v. Florentino)

B. By Prescription

Requisites—1. Easement must be continuous and

apparent. Although the road had been used for

more than 20 years, since an easementof right of way is a discontinuouseasement, it CANNOT be acquired byprescription because of the requirementof continuous or uninterruptedpossession. Since the dominant ownercannot be continually anduninterruptedly crossing the servientestate, but can do so only at intervals,the easement is necessarily of anintermittent or discontinuous nature.(Ronquillo v. Roco)Sasa

2. Easement must have existed for 10 years.3. NO NEED for good faith or just title.


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VI. Rights and Obligations of Owners ofDominant and Servient Estates

A. Of Dominant Estate

1. Right of owner of dominant estate(Limited Jus Utendi: limited by the nature ofthe easement itself)

a. To use the easement and exercise allrights necessary for it

Article 625, Civil Code. Upon the establishment ofan easement, all the rights necessary for its use areconsidered granted.

Article 626, Civil Code. The owner of the dominantestate cannot use the easement except for the benefitof the immovable originally contemplated. Neither canhe exercise the easement in any other manner thanthat previously established.

o Owner of the dominant estate isgranted the right to use the principaleasement, and all accessoryservitudes

o Example: Easement of drawingwater carries with it the easement ofright of way to the place wherewater is drawn.

o Limitation: Only for the originalimmovable and the original purpose

b. To do at his expense, all necessaryworks for the use and preservation ofthe easement

Article 627, Civil Code. The owner of the dominantestate may make, at his own expense, on the servientstate any works necessary for the use andpreservation of the servitude, but without altering it orrendering it more burdensome.

For this purpose he shall notify the owner of theservient estate, and shall choose the most convenienttime and manner so as to cause the leastinconvenience to the owner of the servient estate.

o Necessity of the works determineextent of such works.

c. In a right of way, to ask for change inwidth of easement sufficient forneeds

Article 651, Civil Code. The width of the easement ofright of way shall be that which is sufficient for theneeds of the dominant estate, and may accordingly bechanged from time to time.

Encarnacion v. Court of Appeals: The Courtgranted the modification of the easement stating thatunder the law, the needs of the dominant propertyultimately determine the width of the passage. Andthese needs may vary from time to time. Whenpetitioner started out as a plant nursery operator, heand his family could easily make do with a fewpushcarts to tow the plants to the national highway.But the business grew and with it the need for the useof modern means of conveyance or transport.Petitioner should not be denied a passageway wideenough to accomodate his jeepney since that is areasonable and necessary aspect of the plant nurserybusiness.

2. Obligations of the owner of dominantestate

a. To use the easement for benefit ofimmovable and in the manneroriginally establishedo Article 626 (supra): Right to use

the easement for the benefit of theimmovable originally contemplated,and in the manner originallyestablished.

o If established for a particularpurpose, the easement cannot beused for a different one. However, ifestablished in a general way,without specific purpose, theeasement can be used for all theneeds of the dominant estate.

b. To notify owner of servient beforemaking repairs and to make repairs ina manner least inconvenient toservient estateo Article 627(2) (supra): Notify the

owner of the servient estate beforemaking repairs and choosing themost convenient time and mannerso as to cause the leastinconvenience to the owner of theservient estate.

c. Not to alter easement or render it moreburdensomeo Article 627 (supra): Owner of

dominant estate may make repairsat his expense, but cannot alter theeasement or make it moreburdensome.

o Court allowed Central to use theright of way to transport theadditional sugar. This did not makethe easement more burdensome nordid it alter it. What is prohibited isextending the road or repairing it ordepositing excavations outside the


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area. But the additional useproduced no such effects.(Valderama v. North Negros)

d. To contribute to expenses of worksnecessary for use and preservationof servitude, if there are severaldominant estates, unless herenounces his interest

Article 628, Civil Code. Should there be severaldominant estates, the owners of all of them shall beobliged to contribute to the expenses referred to in thepreceding article, in proportion to the benefits whicheach may derive from the work. Any one who doesnot wish to contribute may exempt himself byrenouncing the easement for the benefit of the others.

If the owner of the servient estate should make use ofthe easement in any manner whatsoever, he shallalso be obliged to contribute to the expenses in theproportion stated, saving an agreement to thecontrary.

B. Of Servient Estate

1. Rights of owner of servient estate

a. To retain ownership and use of hispropertyo The owner of the servient estate

retains the ownership of the portionon which the easement isestablished, and may use the samein such a manner as not to affect theexercise of the easement. (Art. 630,Civil Code)

o Servient owner must respect the useof the servitude, but retainsownership and use of the same, in amanner not affecting the easement.

b. To change the place and manner ofthe use of the easement

Article 629, Civil Code. The owner of the servientestate cannot impair, in any manner whatsoever, theuse of the servitude

Nevertheless, if by reason of the place originallyassigned, or of the manner established for the use ofthe easement, the same should become veryinconvenient to the owner of the servient estate, orshould prevent him from making any important works,repairs or improvements thereon, it may be changedat his expense, provided he offers another place ormanner equally convenient and in such a way that noinjury is caused thereby to the owner of the dominantestate or to those who may have a right to the use ofthe easement.

o REQUISITES if change will causeprejudice to the dominant owner norimpair the use of the servitude: By reason of the place/manner

originally assigned, the use ofsuch easement has becomeVERY INCONVENIENT to theowner

The easement should preventhim from making any importantworks, repairs or improvementsthereon

Change must be done at hisexpense

He offers another place ormanner equally convenient

In such a way that no injury iscaused by the change to theowner of the dominant estate orto those who may have a rightto use the easement

c. To use the easemento May use the easement but must

also contribute proportionately to theexpenses

2. Obligations of the servient estatea. Not to impair the use of the easement

o The owner of the servient estatecannot impair, in any mannerwhatsoever, the use of theservitude. (Art. 629(1), Civil Code)

b. To contribute proportionately toexpenses if he uses the easemento If the owner of the servient estate

should make use of the easement inany manner whatsoever, he shallalso be obliged to contribute to theexpenses in the proportion stated,saving an agreement to the contrary(Art. 628(2), Civil Code)

VII.Modes of Extinguishment ofEasements

Article 631, Civil Code. Easements are extinguished:1. By merger in the same person of the ownership

of the dominant and servient estates;2. By nonuser for ten years; with respect to

discontinuous easements, this period shall becomputed from the day on which they ceased tobe used; and, with respect to continuouseasements, from the day on which an actcontrary to the same took place;

3. When either or both of the estates fall into suchcondition that the easement cannot be used; butit shall revive if the subsequent condition of theestates or either of them should again permit its


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use, unless when the use becomes possible,sufficient time for prescription has elapsed, inaccordance with the provisions of the precedingnumber;

4. By the expiration of the term or the fulfillment ofthe condition, if the easement is temporary orconditional;

5. By the renunciation of the owner of the dominantestate;

6. By the redemption agreed upon between theowners of the dominant and servient estates.(546a)

Modes of Extinguishment—1. Merger: must be absolute, perfect and

definite, not merely temporaryo Absolute: Ownership of the property

must be absolute, thus not applicable tolease, usufruct, etc.

o Perfect: Merger must not be subject toa condition

o If the merger is temporary, there is atmost a suspension of the easement, butno extinguishment.

2. By non-user for 10 yearso Owner of dominant estate does not

exercise right over easement.o Inaction, not outright renunciation.o Due to voluntary abstention by the

dominant owner, and not to a fortuitousevent

o Computation of the period Discontinuous easements: counted

from the day they ceased to be used Continuous easements: counted

from the day an act adverse to theexercise of the easement took place E.g. in an easement of light and

view, the erection of worksobstructing the servitude wouldcommence the period ofprescription

o Use by a co-owner of the dominantestate bars prescription with respect tothe others

o Servitudes not yet exercised cannot beextinguished by non-user An easement must have first been

used, before it can be extinguishedby inaction.

3. Extinguishment by impossibility of useo Impossibility referred to must render the

entire easement unusable for all time.o Impossibility of using the easement due

to the condition of the tenements (e.g.flooding) only suspends the servitudeuntil it can be used again.

o EXCEPT: If the suspension exceeds 10years, the easement is deemedextinguished by non-user

4. Expiration of the term or fulfillment ofresolutory conditiono Applicable only to voluntary easements

5. Renunciation of the owner of thedominant estateo Must be specific, clear, express

(distinguished from non-user)

6. Redemption agreed upon between theowners

7. Other causes not mentioned in Article631o Annulment and rescission of the title

constituting the voluntary easemento Termination of the right of grantor of the

voluntary easemento Abandonment of the servient estate

Owner of the servient estate givesup ownership of the easement (e.g.the strip of land where the right ofway is constituted) in favor of thedominant estate.

The easement is extinguishedbecause ownership is transferred tothe dominant owner, who now ownsboth properties.

o Eminent domain The government’s power to

expropriate property for public use,subject to the payment of justcompensation.

o Special cause for extinction of legalrights of way; if right of way no longernecessary Art. 655, Civil Code

If the right of way granted to asurrounded estate ceases to benecessary because its ownerhas joined it to another abuttingon a public road, the owner ofthe servient estate may demandthat the easement beextinguished, returning what hemay have received by way ofindemnity. The interest on theindemnity shall be deemed to bein payment of rent for the use ofthe easement.

The same rule shall be appliedin case a new road is openedgiving access to the isolatedestate.


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In both cases, the publichighway must substantially meetthe needs of the dominantestate in order that theeasement may be extinguished.

Right of way ceases to benecessary: Owner of the of the dominant

estate has joined to anotherabutting on a public road

A new road is opened givingaccess to the isolated estate

Requisite: the public highway mustsubstantially meet the needs of thedominant estate in order that theeasement may be extinguished

Owner of the servient estate maydemand that the easement beextinguished.

Owner of the servient estate mustreturn indemnity he received (valueof the land)

VIII. Legal Easements

A. Law governing legal easements

1. For public easementsa. Special laws and regulations relating

thereto (ex: PD 1067 and PD 705)b. By the provisions of Chapter 2, Title VII,

Book II, NCC

2. For private legal easementsa. By agreement of the interested parties

whenever the law does not prohibit itand no injury is suffered by a 3

rdperson

b. By the provisions of Chapter 2, title VII,Book II

B. Private legal easements provided for bythe NCC

THOSE ESTABLISHED FOR THE USE OFWATER OR EASEMENTS RELATING TOWATERS—

1. Natural drainage of waters

Article 637, Civil Code. Lower estates are obliged toreceive the waters which naturally and without theintervention of man descend from the higher estates,as well as the stones or earth which they carry withthem.

The owner of the lower estate cannot construct workswhich will impede this easement; neither can theowner of the higher estate make works which willincrease the burden.

a. REQUISITE: Waters must flow naturally,without the intervention of man

b. DUTIES:o DOMINANT OWNER (Higher

Estate) Cannot construct works to

increase the burden e.g. canalsdraining other lands into thelower estate, works whichprevent absorption of water likepavements which make theground more impervious than itis.

May demand that the servientowner allow him to make worksnecessary to removeobstructions impeding naturalpassage

o SERVIENT OWNER (Lower Estate) Cannot make works which

would impede the servitude e.g.dams which would block thenatural flow, walls, ditches thatenclose the tenements.

Can construct works that hemay deem necessary to preventdamage to himself, so long ashe does not cause damage toinferior tenements

2. Easements on lands along riverbanks

Article 638, Civil Code. The banks of rivers andstreams, even in case they are of private ownership,are subject throughout their entire length and within azone of three meters along their margins, to theeasement of public use in the general interest ofnavigation, floatage, fishing and salvage.

Estates adjoining the banks of navigable or floatablerivers are, furthermore, subject to the easement oftowpath for the exclusive service of river navigationand floatage.

If it be necessary for such purpose to occupy lands ofprivate ownership, the proper indemnity shall first bepaid.

3. Abutment of a dam

Article 639, Civil Code. Whenever for the diversionor taking of water from a river or brook, or for the useof any other continuous or discontinuous stream, itshould be necessary to build a dam, and the personwho is to construct it is not the owner of the banks, orlands which must support it, he may establish theeasement of abutment of a dam, after payment of theproper indemnity. (554)


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o Easement of abutment of a dam may beestablished after payment of properindemnity

o REQUISITES:1) Construction of dam mecessary for

the use of any other continuous ordiscontinuous stream

2) Person who is to construct the damis NOT the owner of the banks orlands which must support the dam

4. Aqueduct

Article 642, Civil Code. Any person who may wish touse upon his own estate any water of which he candispose shall have the right to make it flow throughthe intervening estates, with the obligation toindemnify their owners, as well as the owners of thelower estates upon which the waters may filter ordescend.

Article 643, Civil Code. One desiring to make use ofthe right granted in the preceding article is obliged:1. To prove that he can dispose of the water and

that it is sufficient for the use for which it isintended;

2. To show that the proposed right of way is themost convenient and the least onerous to thirdpersons;

3. To indemnify the owner of the servient estate inthe manner determined by the laws andregulations.

Article 644, Civil Code. The easement of aqueductfor private interest cannot be imposed on buildings,courtyards, annexes, or outhouses, or on orchards orgardens already existing.

Article 645, Civil Code. The easement of aqueductdoes not prevent the owner of the servient estate fromclosing or fencing it, or from building over theaqueduct in such manner as not to cause the latterany damage, or render necessary repairs andcleanings impossible.

Article 645, Civil Code. For legal purposes, theeasement of aqueduct shall be considered ascontinuous and apparent, even though the flow of thewater may not be continuous, or its use depends uponthe needs of the dominant estate, or upon a scheduleof alternate days or hours.

o Any person wishing to use upon his ownestate any water can make it flowthrough intervening estates withobligation to indemnify owners of suchestates

o Considered as a continuous andapparent easement, even though theflow of water may not be continuous

o REQUISITES:1) Dominant owner must prove that:

a) He can dispose of the waterb) Water is sufficient for the use for

which it is intendedc) The proposed right of way is the

most convenient and the leastonerous to third persons

2) Dominant owner must alsoindemnify the servient estate in themanner determined by laws andregulations

3) Dominant owner cannot impose theeasement of aqueduct on buildings,courtyards, annexes, outhouses,orchards or gardens already existing

Existing structures cannot be injured toestablish the easement. RIGHT OF SERVIENT OWNER:

May fence or build over theaqueduct in such a manner as not tocause any damage, or renderimpossible any necessary repairsand cleanings

5. Stop lock and sluice gate

Article 647, Civil Code. One who for the purpose ofirrigating or improving his estate, has to construct astop lock or sluice gate in the bed of the stream fromwhich the water is to be taken, may demand that theowners of the banks permit its construction, afterpayment of damages, including those caused by thenew easement to such owners and to the otherirrigators.

6. Stop lock and sluice gate1. REQUISITES:

1) Can be imposed only for reasons ofpublic use in favor of a town orvillage

2) After payment of proper indemnity

THE EASEMENT OF RIGHT OF WAY—

Article 649, Civil Code. The owner, or any personwho by virtue of a real right may cultivate or use anyimmovable, which is surrounded by other immovablespertaining to other persons and without adequateoutlet to a public highway, is entitled to demand aright of way through the neighboring estates, afterpayment of the proper indemnity.

Should this easement be established in such amanner that its use may be continuous for all theneeds of the dominant estate, establishing apermanent passage, the indemnity shall consist of thevalue of the land occupied and the amount of thedamage caused to the servient estate.


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In case the right of way is limited to the necessarypassage for the cultivation of the estate surroundedby others and for the gathering of its crops throughthe servient estate without a permanent way, theindemnity shall consist in the payment of the damagecaused by such encumbrance.This easement is not compulsory if the isolation of theimmovable is due to the proprietor's own acts. (564a)

2. Who may demand:(1) The owner of the dominant estate(2) Any person with the real right to

cultivate or use the immovable e.g.a usufructuary

BUT a lessee cannot demand sucheasement, because the lessor is the onebound to maintain him in the enjoymentof the property

3. REQUISITES:(1) Dominant estate is surrounded by

other immovables owned by otherpersons

(2) There must absolutely be no accessto a public highway

(3) Even if there is access, it is difficultor dangerous to use, or grosslyinsufficient4. Mere inconvenience in the use

of an outlet does not render theeasement a necessity.

5. An adequate outlet is one thatis sufficient for the purpose andneeds of the dominant owner,and can be established at areasonable expense.

6. Does not necessarily have to beby land – an outlet through anavigable river if suitable to theneeds of the tenement issufficient.

(4) Isolation of the immovable is NOTdue to the dominant owner’s ownacts e.g. if he constructs building toothers obstructing the old way

(5) Payment of indemnityo If right of way is permanent and

continuous for the needs of thedominant estate = value of theland + amount of damagecaused to the servient estate

o If right of way is limited tonecessary passage forcultivation of the estate and forgathering crops, withoutpermanent way = damagecaused by encumbrance.

7. RULES FOR ESTABLISHING THERIGHT OF WAY1) Must be established at the point

LEAST prejudicial to the servientestate

Art. 650, Civil Code. The easement of right of wayshall be established at the point least prejudicial tothe servient estate, and, insofar as consistent withthis rule, where the distance from the dominant estateto a public highway may be the shortest.

a. Insofar as consistent with thefirst rule, where the distancefrom the dominant estate to apublic highway is shortest

E.g. as between a longer waywithout injury to the servientestate’s constructions, etc. anda shorter way that would causeinjury

b. The criterion of least prejudiceto the servient estate mustprevail over the criterion ofshortest distance although thisis a matter of judicialappreciation. While shortestdistance may ordinarily implyleast prejudice, it is not alwaysso as when there are permanentstructures obstructing theshortest distance; while on theother hand, the longest distancemay be free of obstructions andthe easiest or most convenientto pass through. (Quimen v.CA)

c. The fact that LGV had othermeans of egress to the publichighway cannot extinguish thesaid easement, being voluntaryand not compulsory. The freeingress and egress alongMangyan Road created by thevoluntary agreement betweenthe parties is thus legallydemandable with thecorresponding duty on theservient estate not to obstructthe same. (La VistaAssociation v. CA)

2) Width of the easement shall be thatwhich is sufficient for the needs ofthe dominant estate


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a. Easement may be changedfrom time to time dependingupon the needs of the dominanttenement

b. The width of the easement ofright of way shall be that whichis sufficient for the needs of thedominant estate, and mayaccordingly be changed fromtime to time. (Art. 651, CC)

3) Necessary repairs for a permanentright of way shall be made by theDOMINANT OWNER.

4) A proportionate share of taxes shallbe reimbursed by the dominantowner to the proprietor of theservient estate If the right of way is permanent,

the necessary repairs shall bemade by the owner of thedominant estate. Aproportionate share of the taxesshall be reimbursed by saidowner to the proprietor of theservient estate (Art. 654, CC)

5) In cases where the dominant estateneeding the right of way is acquiredby sale, exchange or partition andthe Estate is surrounded by otherestates owned by the vendor,exchanger of co-owner

a. Vendor, exchanger or co-ownershall grant the right of wayWITHOUT INDEMNITY Granting the servitude

without indemnity is a tacitcondition of the sale,exchange or partition: eachparty receives something

b. Donor (simple donation) muststill be indemnified for right ofway Grantor receives nothing

from the grantee, thereforeno implied condition as to aright of way is constituted

c. If the land of the grantor is theone which becomes isolated, hemay demand right of way afterpaying an indemnity Whenever a piece of land

acquired by sale, exchangeor partition, is surroundedby other estates of thevendor, exchanger, or co-owner, he shall be obliged

to grant a right of waywithout indemnity. In case ofa simple donation, the donorshall be indemnified by thedonee for the establishmentof the right of way. (Art.652, CC)

8. EXTINGUISHMENTExtinguished in the followingcircumstances because easementceases to be necessary:1) Owner has joined the dominant

estate to another abutting the publicroad

2) A new road is opened giving accessto the isolated estate

3) Extinguishment is NOT automatic.The owner of the servient estatemust ask for such extinguishment

4) Indemnity paid to the servient ownermust be returned:a. If easement is permanent: value

of the land must be returnedb. If easement is temporary:

nothing to be returned

9. SPECIAL RIGHTS OF WAY Right of way to carry materials for

the construction, repair,improvement, alteration orbeautification of a building throughthe estate of another

Right of way to raise on another’sland scaffolding or other objectsnecessary for the work If it be indispensable for the

construction, repair,improvement, alteration orbeautification of a building, tocarry materials through theestate of another, or to raisetherein scaffolding or otherobjects necessary for the work,the owner of such estate shallbe obliged to permit the act,after receiving payment of theproper indemnity for thedamage caused him. (Art. 656)

Right of way for the passage oflivestock known as animal path,animal trail, watering places, restingplaces, animal folds (Art. 657) Easements of the right of way

for the passage of livestockknown as animal path, animaltrail or any other, and those for


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watering places, resting placesand animal folds, shall begoverned by the ordinances andregulations relating thereto, and,in the absence thereof, by theusages and customs of theplace.

Without prejudice to rightslegally acquired, the animal pathshall not exceed in any case thewidth of 75 meters, and theanimal trail that of 37 metersand 50 centimeters.

Whenever it is necessary toestablish a compulsoryeasement of the right of way orfor a watering place for animals,the provisions of this Sectionand those of Articles 640 and641 shall be observed. In thiscase the width shall not exceed10 meters

THE EASEMENT OF PARTY WALL—

Article 659, Civil Code. The existence of aneasement of party wall is presumed, unless there is atitle, or exterior sign, or proof to the contrary:1. In dividing walls of adjoining buildings up to the

point of common elevation;2. In dividing walls of gardens or yards situated in

cities, towns, or in rural communities;3. In fences, walls and live hedges dividing rural

lands.

PARTY WALLWALL OWNED IN

COMMONBuilt by commonagreement by gettingland from the adjoiningtenements in equal parts

Owned by adjoiningowners from itsconstruction or bysubsequent act

Owner may use the wallfor his own exclusivebenefit

Co-owner cannot use thewall for his own exclusivebenefit, because hewould be impairing therights of his co-owners

Each owner may insertbeams but only to theextent of ½ of itsthickness

Each owner can insertbeams in the wall to theextent of entire thickness

1. DETERMINING THE EXISTENCE OF APARTY WALLa. PRESUMED in the following situations

unless there is a TITLE or EXTERIORSIGN or PROOF to the contrary(i) In dividing walls of adjoining

buildings, up to the point of commonelevation

(ii) In dividing walls of gardens or yards,situated in cities, towns or ruralcommunities

(iii) In fences, walls and live hedgesdividing rural lands

(iv) Ditches or drains between twoestates

b. EXTERIOR SIGNS CONTRARY TOTHE EASEMENT OF PARTY WALL(merely illustrative and not exclusive)(i) A window or opening in the dividing

wall of buildings(ii) A lower part of the wall slants or

projects outward on one side of thewall, while the other side is straightand plumb on its facement

(iii) Entire wall is built WITHIN theboundaries of one of the estates

(iv) Dividing wall bears the burden ofbeams, floors and roof frame of onlyone of the buildings

(v) Dividing wall between courtyards,garden or tenements is constructedin such a way that the it sheds waterupon only one of the estates

(vi) Dividing wall has stepping stoneswhich project from the surface ofone side only, but not on the other

(vii) Lands enclosed by fences or livehedges adjoin others which are notenclosed

2. OTHERS NOT ENUMERATED in ARTICLE659a. Two adjoining tenements surrounded by

live hedges of different kinds = thehedge must belong to the owner of thetenement using the same kind of plants

b. For ditches or drains between twoestates, whenever the earth or dirtremoved to open or clean the ditch isonly on one side thereof

3. CONTRADICTORY SIGNSa. Contradictory external signs are left to

the determination of the Court, but thequality instead of the number of signsmust prevail. Also, a presumption arisingfrom the object or purpose of the wall isof more force than that arising from adoubtful external sign.

b. Title, as an express proof of ownershipprevails over an external sign, whichmerely gives rise to a presumption


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4. RULESa. Cost of repairs and construction,

maintenance of fences, hedges, ditchesand drains shall be borne by ALL theowners of the lands or tenements

EXCEPT: if the defects were occasionedonly by one owner

b. An owner may exempt himself fromcontributing to the expenses byrenouncing his part-ownership,UNLESS the party wall supports abuilding he owns

Renunciation refers not only to the wall,but also to the land on which it isconstructed.

c. An owner of a building supported by aparty wall who desires to demolish hisbuilding, may also renounce his partownership of the wall.

BUT he must still bear the cost of all therepairs and work necessary to preventany damage to the party wall.

d. Every owner may increase the heightof the wall, at his own expense andpaying for damages caused by the work.He must also pay for: Expenses of maintaining the wall in

the part newly raised, or deepenedfoundation

Indemnity for increased expensesnecessary for the preservation ofthe wall by reason of the greaterheight or depth which has beengiven it

Reconstruction expenses in casethe party wall cannot bear theincreased height.

If increased thickness is needed, theowner shall give the space requiredfrom his own land

Other owners may acquire partownership of the increased height,depth or thickness of the wall, bypaying proportionately the value ofthe work at the time of theacquisition, and of the land for itsincreased thickness

e. Part-owners may use the party wall INPROPORTION to the right he may havein the co-ownership, without interferingwith the common and respective uses ofthe others.

E.g. A ½ interest in the wall = ½payment for expenses = ½ use as inone can insert beams in the wall up to ½thickness

THE EASEMENT OF LIGHT AND VIEW—1. NATURE OF THE EASEMENT

a. POSITIVE: Opening a window through aparty wall

When a part owner of a party wall opensa window therein, such act implies theexercise of the right of ownership by theuse of the entire thickness of the wall =invasion of the right of the other partowners / violation of the right toproportional use of the party wall.

b. NEGATIVE: Formal prohibition upon theowner of the adjoining land or tenement

When a person opens a window on hisown building, he does nothing more thanexercise an act of ownership on hisproperty. Does not establish an easement

Coexistent is the right of the owner ofthe adjacent property to build on his ownland, even if such structures cover thewindow

If the adjacent owner does not buildstructures to obstruct the window, suchis considered mere tolerance and NOT awaiver of the right to build.

An easement is created only when theowner opens up a window prohibits orrestrains the adjacent owner from doinganything, which may tend to cut off orinterrupt the light + prescriptive period

2. EASEMENT vs. DIRECT VIEWo Acquired by the person who opens the

windowo The following structures cannot be built

without following the prescribeddistances Window, apertures, balconies and

other projections with a direct viewupon or towards an adjoining landmust have a distance of 2 METERSbetween the wall and the contiguousproperty.


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For structures with a side or obliqueview (at an angle from the boundaryline), there should be a distance of60 centimeters.

Measured from: The outer line of the wall if the

openings do not project The outer line of the openings if

they project The dividing line between the

two properties in cases ofoblique view

If distances are not compliedwith: Windows are considered

unlawful openings Owner may be ordered by the

Court to close them Even if the adjoining owner

does not object to theconstruction of such structuresat first, he cannot be held to bein estoppel, except if 10-yearperiod of acquisitive prescriptionhas passed.

Does not give rise toprescription

Mere opening of the window inviolation of the distances doesnot give rise to the easement oflight and view by prescription

o In buildings separated by a public wayor alley, not less than 3 meters wide, thedistances required (2 m, 60 cm) do notapply.

o If an easement is acquired to have directviews, balconies or belvederes, theowner of the servient estate must notbuild at less than 3 meters from theboundary line of the two tenements. The distances may be stipulated by

the parties, but should not be lessthan what is prescribed by the law(2 meters and 60 cm)

3. EXCEPTION TO EASEMENT vs. DIRECTVIEWo Owners of a wall (not a party wall)

adjoining a tenement of another canmake openings to admit light withoutcomplying with the distancerequirements SO LONG AS: Openings are made at the height of

the ceiling joists (horizontal beams)or immediately under the ceiling

Size: 30 cm square

With iron grating imbedded in thewall

With a wire screeno But owner of the adjoining estate can

close the opening if: He acquires part ownership of the

party wall He constructs a building or raises a

wall on his land, unless aneasement of light has been acquired

o If requirements are not complied with,the owner of the adjoining estate maycompel the closure of the opening.

o The action to compel the closing of theopening may prescribe, if the opening ispermitted without protest. BUT prescription of the action to

compel the closure of the openingDOES NOT MEAN that theservitude of light and view has beenacquired.

Period of acquisitive prescription willonly start to run from the time theowner asserting the servitude hasforbidden the owner of the adjoiningtenement from doing something hecould lawfully do.

THUS, although the action tocompel the closure might haveprescribed, the owner of theadjoining estate may still build onhis own land a structure which mightobstruct the view.

THE EASEMENT OF DRAINAGE OFBUILDINGS

Article 674, Civil Code. The owner of a building shallbe obliged to construct its roof or covering in suchmanner that the rain water shall fall on his own land oron a street or public place, and not on the land of hisneighbor, even though the adjacent land may belongto two or more persons, one of whom is the owner ofthe roof.

Even if it should fall on his own land, the owner shallbe obliged to collect the water in such a way as not tocause damage to the adjacent land or tenement.

Article 675, Civil Code. The owner of a tenement ora piece of land, subject to the easement of receivingwater falling from roofs, may build in such manner asto receive the water upon his own roof or give itanother outlet in accordance with local ordinances orcustoms, and in such a way as not to cause anynuisance or damage whatever to the dominant estate.

Article 676, Civil Code. Whenever the yard or courtof a house is surrounded by other houses, and it isnot possible to give an outlet through the house itselfto the rain water collected thereon, the establishment


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of an easement of drainage can be demanded, givingan outlet to the water at the point of the contiguouslands or tenements where its egress may be easiest,and establishing a conduit for the drainage in suchmanner as to cause the least damage to the servientestate, after payment of the property indemnity.

1. Regulating the disposal of rain watera. Owner of a building is obliged to

construct a roof or covering so as toensure that the rain water shall fall onhis own land, or on a street or publicplace, and NOT on the land of hisneighbor.

b. Owner is also obliged to collect the warfalling on his own land so as not tocause damage to adjacent tenements

2. Rain water is res nullius, and has no owner.This article merely imposes a limitation onthe use of one’s property, so that rain waterfalling thereon may not cause damage.

3. Obligation to collect water (#2) is anexception to the rule requiring lowertenements to receive water flowing fromhigher tenements.

EASEMENT GIVING AN OUTLET TO THEWATER THROUGH CONTIGUOUSESTATES—o Requisites:

a. Yard or court of a house is surroundedby other houses

b. Water is collected thereonc. Not possible to give an outlet through

the house itselfd. Establishment of conduit for drainage

must be at a point where egress iseasiest and where it will cause the leastdamage to the servient estate

e. After payment of proper indemnity

INTERMEDIATE DISTANCES AND WORKSFOR CERTAIN CONSTRUCTIONS ANDPLANTINGS—

Article 677, Civil Code. No constructions can be builtor plantings made near fortified places or fortresseswithout compliance with the conditions required inspecial laws, ordinances, and regulations relatingthereto

Article 675, Civil Code. No person shall build anyaqueduct, well, sewer, furnace, forge, chimney,stable, depository of corrosive substances,machinery, or factory which by reason of its nature orproducts is dangerous or noxious, without observingthe distances prescribed by the regulations andcustoms of the place, and without making thenecessary protective works, subject, in regard to themanner thereof, to the conditions prescribed by suchregulations. These prohibitions cannot be altered or

renounced by stipulation on the part of the adjoiningproprietors.

In the absence of regulations, such precautions shallbe taken as may be considered necessary, in order toavoid any damage to the neighboring lands ortenements.

Article 679, Civil Code. No trees shall be plantednear a tenement or piece of land belonging to anotherexcept at the distance authorized by the ordinances orcustoms of the place, and, in the absence thereof, ata distance of at least two meters from the dividing lineof the estates if tall trees are planted and at a distanceof at least fifty centimeters if shrubs or small trees areplanted.

Every landowner shall have the right to demand thattrees hereafter planted at a shorter distance from hisland or tenement be uprooted.

The provisions of this article also apply to trees whichhave grown spontaneously.

Article 680, Civil Code. If the branches of any treeshould extend over a neighboring estate, tenement,garden or yard, the owner of the latter shall have theright to demand that they be cut off insofar as theymay spread over his property, and, if it be the roots ofa neighboring tree which should penetrate into theland of another, the latter may cut them off himselfwithin his property.

Art. 681, Civil Code. Fruits naturally falling upon

adjacent land belong to the owner of said land.

1. SUMMARYCONSTRUCTIONS may be built only aftercomplying with prescribed regulations(special laws, ordinances, regulations):a. Constructions or plantings near fortified

places or fortressesb. Aqueduct, well, sewer, furnace, forge,

chimney, stable, depository of corrosivesubstances, machinery, factory (withdangerous and noxious substances) Distances must be observed and

protective works necessary for theconditions must be made

c. Trees planted near a tenement or pieceof land In the absence of ordinances or

customs of the place:(1) TALL TREES: At a distance of

at least 2 meters from thedividing line of the estates

(2) SHRUBS/SMALL TREES: Atleast 50 cm from the dividingline


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If trees are planted at a shorterdistance, landowner may demandthat it be uprooted

2. Plantings Encroaching on AdjoiningEstatesa. Branches of any tree extending over a

neighboring estate, garden, etc.

Owner of the adjoining estate has theright to demand that they be cut offinsofar as they may spread over hisproperty.

b. Roots of a neighboring tree whichshould penetrate into the land of anothero Owner may cut the roots off himself

within his property, even withoutnotice to the owner of the trees

o Roots, by accession are convertedinto the property of the owner of theland into which they penetrate.

o Also, cutting off the roots will notgive the cutter any benefit, incontrast to cutting off the branchesof a tree.

o PRESCRIPTION OF ACTION TOCUT: Period only starts to run afterthe owner of the estate hasdemanded that the owner of thetrees cut off the branches or roots,and the latter refuses. The fact that the owner does not

cut off the trees only constitutedmere tolerance.

c. Fruits naturally falling upon adjacentland belong to the owner of the lando Not by right of occupation but by

principle of accession.o Owner of the tree retains ownership:

If he picks the fruits from thebranches which invade theneighboring tenement

If fruits fall on immovables forpublic use (not considered asfruits of these

THE EASEMENT AGAINST NUISANCES—

Article 682, Civil Code. Every building or piece ofland is subject to the easement which prohibits theproprietor or possessor from committing nuisancethrough noise, jarring, offensive odor, smoke, heat,dust, water, glare and other causes.

o Material impairment depends on thenature and purpose of the tenement e.g.dwelling house vs. factory

o Degree of annoyance to be tolerateddepends on what is usual for a specificlocality.

Article 683, Civil Code. Subject to zoning, health,police and other laws and regulations, factories andshops may be maintained provided the least possibleannoyance is caused to the neighborhood.

EASEMENT OF LATERAL AND SUBJACENTSUPPORT—

Article 684, Civil Code. No proprietor shall makesuch excavations upon his land as to deprive anyadjacent land or building of sufficient lateral orsubjacent support.

1. An owner cannot make such excavations asto deprive any adjacent land or building ofsufficient lateral or subjacent support

2. LATERAL SUPPORTa. Limitation on the right to excavate on his

own land: one cannot excavate so closeto an adjoining estate as to deprive it ofnatural support and cause it to crumble.

b. Not necessary that the excavation ismade on the lot immediately adjoining. Itis sufficient if the excavation results in aslide in the plaintiff’s property

c. An owner who makes excavations caneither: Observe a sufficient distance to

permit the necessary lateral supportof adjoining land

Support the latter artificially throughwalls, etc.

3. SUBJACENT SUPPORTa. Exists when there is severance of

ownership (surface owner vs. substrataowner) as in mines and tunnels.

b. The owners of the rights below thesurface are burdened with the easementto refrain from removing such sufficientsupport which will protect the surfacefrom subsidence or sinking, and keep itsecurely at its original level.

4. REMEDIES FOR VIOLATIONa. Action for Damages against the one who

made the excavation, whether owner orcontractor, etc.


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b. Injunction Restraining the owner from

excavating so as to deprive the landof natural support

Will prohibit merely any excavationwhich shall cause the plaintiff’s landto fall away due to withdrawal ofsupport

5. OTHER RULES:a. Stipulations or testamentary provisions

allowing excavations that cause dangerto adjacent land or building is VOID.

b. Also applicable to future constructionsc. Any proprietor intending to make any

excavation shall notify all owners ofadjacent lands. Notice must sufficiently inform the

adjoining owner of the nature andextent of the proposed excavation,so as to enable the owner to takethe necessary precautions to protecthis property.

No formal notice is necessary if theadjoining owner already has actualknowledge of such excavation.

But giving notice does not absolvethe excavator from the duty toexercise reasonable care to avoidinjury to neighbors.

CIVIL LAW REVIEWER Chapter IX. NUISANCE

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Chapter IX. Nuisance

I. DEFINITIONII. CLASSESIII. LIABILITY IN CASE OF NUISANCEIV. REGULATION OF NUISANCE

I. Definition

Article 694, Civil Code. A nuisance is any act,omission, establishment, business, condition ofproperty, or anything else which:1. Injures or endangers the health or safety of

others; or2. Annoys or offends the senses; or3. Shocks, defies or disregards decency or morality;

or4. Obstructs or interferes with the free passage of

any public highway or street, or any body ofwater; or

5. Hinders or impairs the use of property.

To constitute a nuisance there must be anarbitrary or abusive use of property or disregardof commonly accepted standards set by society.

Nuisance v. Trespass—

Nuisance TrespassUse of one’s ownproperty in such a

manner as to cause injuryto the property or right orinterest of another, and

generally results from thecommission of an act

beyond the limits of theproperty affected.

Direct infringement ofanother’s right of

property.

Injury is consequential Injury is immediate

Nuisance v. Negligence—

Nuisance NegligenceWhether it was

unreasonable for thedefendant to act as he

did in view of thethreatened danger or

harm to one in plaintiff’sposition.

Whether the defendant’suse of his property was

unreasonable as toplaintiff, without regard to

foreseeability of injury.

Liability for the resultinginjury to others

regardless of the degreeof care or skill exercised

to avoid such injury.

Liability is based on awant of proper care

Principles ordinarily applywhere the cause of action

is for continuing harmcaused by continuing or

recurrent acts whichcause discomfort or

annoyance to plaintiff inthe use of his property.

Principles ordinarily applywhere the cause of actionis for harm resulting fromone act which created an

unreasonable risk ofinjury.

Examples as enumerated under CC—1) Injury to health – Any business,

although itself lawful, which necessarilyimpregnates large volumes of theatmosphere with disagreeable,unwholesome or offensive matter, maybecome a nuisance to those occupyingadjacent property, in case it is so near,and the atmosphere is contaminated tosuch an extent as substantially to impairthe comfort and enjoyment of adjacentoccupants.

2) Dangerous to safety – manufacture,storing or keeping of explosives in largequantities in the vicinity of dwellinghouses or excavation adjoining a publichighway

3) Annoyance to senses –slaughterhouses and cowhide storagevats from which emanated vile andoffensive odors; noise of animals kept inresidential neighborhoodo To be judged by the effect they are

calculated to produce uponordinary people under normalcircumstances, not by their effectupon the oversensitive, thefastidious or the sick, nor, on theother hand, by their effect uponthose who are abnormallyindifferent to such things, or who bylong experience have learned toendure them withoutinconvenience.

o Inconvenience must be materiallyinterfering with the ordinarycomfort, physically, of humanexistence.

4) Shocking to decency – bawdy ordisorderly house; building used for eitherlewdness or of assignation orprostitution

5) Hinders or impairs the use ofproperty – illegal construction onanother’s land

II. Classes

Art. 695, Civil Code. Nuisance is either public orprivate. A public nuisance affects a community orneighborhood or any considerable number of persons,although the extent of the annoyance, danger ordamage upon individuals may be unequal. A privatenuisance is one that is not included in the foregoingdefinition.

1. According to Nature (old classification)a. Nuisance per se or at law


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o An act, occupation or structurewhich is a nuisance at all times andunder any circumstances,regardless of location orsurroundings.

b. Nuisance per accidens or in facto One that becomes a nuisance by

reason of circumstances andsurroundings.

o It is not a nuisance by its nature butit may become so by reason of thelocality, surrounding, or the mannerin which it is conducted, managed,etc.

Per se Per accidensThe wrong is establishedby proof of the mere act.It becomes a nuisanceas a matter of law.

Proof of the act and itsconsequences.

2. According to Scope of Injurious Effectso Test: not the number of persons

annoyed but the possibility ofannoyance to the public by the invasionof its rights – the fact that it is in a publicplace and annoying to all who comewithin its sphere.

a. Publico The doing of or the failure to do

something that injuriously affects thesafety, health or morals of thepublic.

o It causes hurt, inconvenience orinjury to the public, generally, or tosuch part of the public asnecessarily comes in contact with it.

b. Privateo One which violates only private

rights and produces damages to butone or a few persons.

Public Private

Affects the public at largeAffects the individual or alimited number ofindividuals only

Need not affect the wholecommunity or hurt andinjure all the public. It issufficient if it affects thesurrounding communitygenerally or if the injury isoccasioned to such partof the public as come incontact with it.

c. Mixed

3. Doctrine of Attractive Nuisanceo One who maintains on his premises

dangerous instrumentalities orappliances of a character likely to attractchildren in play, and who fails toexercise ordinary care to preventchildren from playing therewith orresorting thereto, is liable to a child oftender years who is injured thereby,even if the child is technically atrespasser in the premises.

o Basis of liability – The attractiveness isan invitation to children. Safeguards toprevent danger must therefore be setup.

A swimming pool or water tank is not an attractivenuisance, for while it is attractive, it cannot be anuisance, being merely an imitation of the work ofnature. (Hidalgo Enterprises v. Balandan)

III. Liability in Case of Nuisance

o Who are liable

Art. 696, Civil Code. Every successiveowner or possessor of property who fails orrefuses to abate a nuisance in that propertystarted by a former owner or possessor isliable therefor in the same manner as theone who created it.

o Liability of creator of nuisance: He whocreates a nuisance is liable for the resultingdamages and his liability continues as longas the nuisance continues. There must be a breach of some duty on

the part of the person sought to be heldliable for damages resulting from anuisance before an action will lie againsthim.

No one is to be held liable for anuisance which he cannot himselfphysically abate without legal actionagainst another for that purpose.

Where several persons, actingindependently, cause damage by actswhich constitute a nuisance, each isliable for the damage which he hascaused or for his proportionate share ofthe entire damage.

o Liability of transferees: The grantee ofland upon which there exists a nuisancecreated by his predecessors in title is NOTresponsible therefore merely because hebecomes the owner of the premises, ormerely because he permits it to remain. He shall be liable if he knowingly

continues the nuisance. Generally, he is


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not liable for continuing it in its originalform, unless he has been notified of itsexistence and requested to remove it, orhas actual knowledge that it is anuisance and injurious to the rights ofothers.

o Nature of liability: All persons whoparticipate in the creation or maintenance ofa nuisance are jointly and severally liable forthe injury done. If 2 or more persons who create or

maintain the nuisance act entirelyindependent of one another, and withoutany community of interest, concert ofaction, or common design, each is liableonly so far as his acts contribute to theinjury.

For joint liability, there must be somejoint or concurrent act or community ofaction or duty, or the several wrongfulacts done at several times must haveconcurred in their effects as one singleact to produce the injury complained of.

o Right to recover damages

Art. 697, Civil Code. The abatement of anuisance does not preclude the right of anyperson injured to recover damages for itspast existence.

Abatement and damages arecumulative remedies.

o No Prescription

Art. 698, Civil Code. Lapse of time cannotlegalize any nuisance, whether public orprivate.

The action to abate a public or privatenuisance is NOT extinguished byprescription. (Art. 1143[2])

IV. Regulation of Nuisances

A. PUBLIC NUISANCE

1. Remedies to abate a nuisance

Article 699, Civil Code. The remedies against apublic nuisance are:1. A prosecution under the Penal Code or any local

ordinance: or2. A civil action; or2. (3) Abatement, without judicial proceedings.

a. Criminal prosecution: Only for a publicnuisance, not for a private one. Public nuisances are offenses

against the State, and since earlytimes it has been held that one whois responsible for this may beproceeded against criminally byindictment.

Question of intent is immaterial. Persons liable – person is liable for

the consequence which his actproduced

b. Civil action:1) Judgment with abatement –

defendant convicted of maintain anuisance may also be ordered toabate the nuisance

2) Injunction – where the injuryoccasioned by an indictablenuisance is pressing or imminent, sothat the public safety is menaced orpublic rights are obstructed orinterfered with, and the specialcircumstances are such that theordinary process of the court is notsufficiently prompt or effective toprevent the injury or obstruction, theremedy can be injunction providedthe right is clear and the wrong hasnot been acquiesced in by theplaintiff.

c. Extrajudicial abatement: This right isbased upon necessity which must bepresent to justify its exercise. It must be reasonably and efficiently

exercised, means employed mustnot be unduly oppressive onindividuals, and no more injury mustbe done to the property or rights ofindividuals than is necessary toaccomplish the abatement.

No right to compensation if propertytaken or destroyed is a nuisance.

2. Who can file an action for abatement

Article 700, Civil Code. The district health officershall take care that one or all of the remedies againsta public nuisance are availed of.

Article 701, Civil Code. If a civil action is brought byreason of the maintenance of a public nuisance, suchaction shall be commenced by the city or municipalmayor.

Article 702, Civil Code. The district health officershall determine whether or not abatement, withoutjudicial proceedings, is the best remedy against a


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public nuisance.

Article 703, Civil Code. A private person may file anaction on account of a public nuisance, if it is speciallyinjurious to himself.

a. General rule: Individual has no right ofaction against a public nuisance. Theabatement proceedings must beinstituted in the name of the State or itsrepresentatives.

b. Except: An individual who has sufferedsome special damage different from thatsustained by the general public, maymaintain a suit in equity for an injunctionto abate it, or an action for damageswhich he has sustained. Action becomes a tort if an

individual has suffered particularharm, in which case the nuisance istreated as a private nuisance withrespect to such person.

3. Requisites of the right of a privateindividual to abate a public nuisance

Article 704, Civil Code. Any private person mayabate a public nuisance which is specially injurious tohim by removing, or if necessary, by destroying thething which constitutes the same, without committinga breach of the peace, or doing unnecessary injury.But it is necessary: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 ofthe local police; and

4. That the value of the destruction does not exceedthree thousand pesos.

a. The right must be exercised only incases of urgent or extreme necessity.The thing alleged to be a nuisance mustbe existing at the time that it was allegedto be a nuisance.

b. Summary abatement must be resortedto within a reasonable time afterknowledge of the nuisance is acquiredor should have been acquired by theperson entitled to abate.

c. Person who has the right to abate mustgive a reasonable notice of his intentionto do so, and allow thereafter areasonable time to enable the other toabate the nuisance himself.

d. Means employed must reasonable andfor any unnecessary damage or force,the actor will be liable. Right to abate isnot greater than the necessity of thecase and is limited to the removal of

only so much of the objectionable thingas actually causes the nuisance.

e. Abatement must be approved by thedistrict health officer.

f. Property must not be destroyed unless itis absolutely necessary to do so.

g. Right must always be exercised with theassistance of local police so as not todisturb the public peace.

B. PRIVATE NUISANCE

Article 705, Civil Code. The remedies against aprivate nuisance are:1. A civil action; or2. Abatement, without judicial proceedings.

Article 706, Civil Code. Any person injured by aprivate nuisance may abate it by removing, or ifnecessary, by destroying the thing which constitutesthe nuisance, without committing a breach of thepeace or doing unnecessary injury. However, it isindispensable that the procedure for extrajudicialabatement of a public nuisance by a private person befollowed.

Article 707, Civil Code. A private person or a publicofficial extrajudicially abating a nuisance shall beliable for damages:1. If he causes unnecessary injury; or2. If an alleged nuisance is later declared by the

courts to be not a real nuisance.

a. Action for damages: Recovery islimited to the damage occasioned up tothe time of the commencement of theaction. If nuisance continues to the time of

trial, then damages shall becomputed from that time.

If nuisance is permanent, a singleaction is enough to cover both pastand prospective damages. Iftemporary or recurrent, eachrepetition of it gives rise to a newcause of action and successiveactions will lie.

b. Defenses to action:1) Public necessity – private interest

must yield to the public good;creation of nuisance amounts totaking of property therefore justcompensation must be made.

2) Estoppel – one who voluntarilyplaces himself in a situationwhereby he suffers an injury will notbe heard to say that his damage isdue to a nuisance maintained byanother.


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3) Non-existence of the nuisance4) Impossibility of abatement

c. Liability of person abating: Whoeverabates an alleged nuisance and thusdestroys or injures private property, orinterferes with private rights, whether apublic officer or private person, unlesshe acts under the order of a court havingjurisdiction, does so at his peril.

d. Remedies of property owner: Aperson whose property is seized ordestroyed as a nuisance may resort tothe courts to determine w/n it was in facta nuisance.1) Action for replevin2) Enjoin the sale or destruction of the

property3) Action for the proceeds of its sale

and damages if it has been sold4) Enjoin private parties from

proceeding to abate a supposednuisance

CIVIL LAW REVIEWER Chapter X. MODES of ACQUIRING OWNERSHIP

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Chapter X. Modes of AcquiringOwnership

I. MODE V. TITLEII. MODES

A. ORIGINAL MODES1. OCCUPATION2. INTELLECTUAL CREATION

B. DERIVATIVE MODES1. LAW2. DONATION3. SUCCESSION4. ACQUISITIVE PRESCRIPTION5. TRADITION

I. Mode v. Title

Article 712, Civil Code. Ownership is acquired byoccupation and by intellectual creation.Ownership and other real rights over property areacquired and transmitted by law, by donation, bytestate and intestate succession, and in consequenceof certain contracts, by tradition.

They may also be acquired by means of prescription.

Mode is a specific cause which producesdominion and other real rights as a result ofthe co-existence of special status of things,capacity and intention of persons andfulfillment of the requisites of law.

Title is every juridical right which gives ameans to the acquisition of real rights but initself is insufficient to produce them.

Ownership is not transferred by contractmerely but by tradition or delivery. Contractsonly constitute titles or rights to transfer oracquisition of ownership, while delivery isthe mode accomplishing the same.

Distinctions:

Mode Title

Directly and immediatelyproduces a real right

Serves merely to give theoccasion for its

acquisition or existenceCause Means

Proximate cause Remote causeEssence of the right

which is to be created ortransmitted

Means whereby that“essence” is transmitted

II. Mode

A. ORIGINAL

Original modes of acquisition are those whichproduce the acquisition of ownershipindependent of any preexisting right of anotherperson, hence, free from burdens orencumbrances.

1. OCCUPATION

Article 713, Civil Code. Things appropriable bynature which are without an owner, such as animalsthat are the object of hunting and fishing, hiddentreasure and abandoned movables, are acquired byoccupation.

Requisites:o Corporeal personal propertyo Property susceptible of

appropriation – not res communeso Seizure with intent to appropriateo Res nullius (no owner) or res

derelict (abandoned property)o Observance of conditions

prescribed by law

Kinds:o Of Animals

Wild or feral animals – seizure(hunting/fishing) in open seasonby means NOT prohibited

Tamed/domesticated animals –general rule: belong to thetamer but upon recoveringfreedom are susceptible tooccupation UNLESS claimedwithin 20days from seizure byanother (ART. 716)

Tame/domestic animals – notacquired by occupationEXCEPT when ABANDONED

o Of Other Personal Property Abandoned – may be acquired Lost – not known to be

abandoned (ART. 719) Hidden treasure – finder gets ½

by occupation; landowner gets½ by accession; EXCEPT inCPG system, share goes to thepartnership


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Specific ruleso Not applicable to ownership of a

piece of land The ownership of a piece of

land cannot be acquired byoccupation. (Article 714, CivilCode)

State owns a piece of landwhich has no owner therefore itcannot be acquired byoccupation.

o Privilege to hunt and fish regulatedby special law Article 715, Civil Code. The

right to hunt and to fish isregulated by special laws.

o Occupation of a swarm of bees ordomesticated animals Article 716, Civil Code. The

owner of a swarm of bees shallhave a right to pursue them toanother’s land, indemnifying thepossessor of the latter for thedamage. If the owner has notpursued the swarm, or ceasesto do so within two consecutivedays, the possessor of the landmay occupy or retain the same.The twenty days to be countedfrom their occupation by anotherperson. This period havingexpired, they shall pertain to himwho has caught and kept them.

Article 560, Civil Code. Wildanimals are possessed onlywhile they are under one'scontrol; domesticated or tamedanimals are considereddomestic or tame if they retainthe habit of returning to thepremises of the possessor.

o Pigeons and fish Article 717, Civil Code.

Pigeons and fish which fromtheir respective breeding placespass to another pertaining to adifferent owner shall belong tothe latter, provided they havenot been enticed by someartifice or fraud.

o Hidden treasure Article 718, Civil Code. He

who by chance discovershidden treasure in another’s

property shall have the rightgranted him in article 438 of thisCode.

o Lost movables; procedure afterfinding lost movables Art. 719, CC

Whoever finds a movable,which is not treasure, mustreturn it to its previouspossessor. If the latter isunknown, the finder shallimmediately deposit it withthe mayor of the city ormunicipality where thefinding has taken place.

The finding shall be publiclyannounced by the mayor fortwo consecutive weeks inthe way he deems best.

If the movable cannot bekept without deterioration, orwithout expenses whichconsiderably diminish itsvalue, it shall be sold atpublic auction eight daysafter the publication.

Six months from thepublication having elapsedwithout the owner havingappeared, the thing found,or its value, shall beawarded to the finder. Thefinder and the owner shallbe obliged, as the case maybe, to reimburse theexpenses.

Article 720, CC. If the ownershould appear in time, he shallbe obliged to pay, as a rewardto the finder, one-tenth of thesum or of the price of the thingfound.

2. INTELLECTUAL CREATION

Article 721, Civil Code. By intellectual creation, thefollowing persons acquire ownership:1. The author with regard to his literary, dramatic,

historical, legal, philosophical, scientific or otherwork

2. The composer; as to his musical composition;3. The painter, sculptor, or other artist, with respect

to the product of his art;4. The scientist or technologist or any other person

with regard to his discovery or invention.

Article 722, Civil Code. The author and thecomposer, mentioned in Nos. 1 and 2 of thepreceding article, shall have the ownership of theircreations even before the publication of the same.Once their works are published, their rights are


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governed by the Copyright laws.

The painter, sculptor or other artist shall havedominion over the product of his art even before it iscopyrighted.

The scientist or technologist has the ownership of hisdiscovery or invention even before it is patented.

Article 723, Civil Code. Letters and other privatecommunications in writing are owned by the person towhom they are addressed and delivered, but theycannot be published or disseminated without theconsent of the writer or his heirs. However, the courtmay authorize their publication or dissemination if thepublic good or the interest of justice so requires.

Article 724, Civil Code. Special laws governcopyright and patent.

Dual interest in letters (ART. 723):o From the viewpoint of the

SENDER/WRITER – the intellectualproperty consists in the ideas andthoughts expressed therein.

o From the viewpoint of theRECIPIENT – the paper or materialused where the writing wasimpressed or done, pertains inownership to the recipient.

Intellectual Property Code of 1997(RA 8293) is the special law whichgoverns copyright and patent

INTELLECTUAL PROPERTY RIGHTS

1. COPYRIGHT and RELATED RIGHTS Copyright

o an intangible, incorporeal righto granted by statuteo to the author or originator of certain

literary or artistic productions,o whereby he is invested, for a

specific period, 30 YRS. renewable for another

30 YRS. 40 YRS for SERIAL publications

from the publication of the 1st

volume renewable for 30 YRS.o with the sole and exclusive privilege

of multiplying copies of the sameand publishing and selling them.

Purpose of the law: protect and controlthe visible thing created and theintangible estate arising from theprivilege of publishing and selling toothers copies of the thing produced

Kindso Common law copyright

o Statutory copyright

2. TRADEMARKS, TRADE NAMES andSERVICE MARKS Definitions under the Trademark Law

(RA 166):o Trademark - any word, name,

symbol, emblem, sign or device orany combination thereof adoptedand used by a manufacturer ormerchant to identify his goods anddistinguish them from thosemanufactured, sold or dealt in byothers.

o Trade-name - individual names andsurnames, firm names, trade-names, devices or words used bymanufacturers, industrialists,merchants, agriculturists, and othersto identify their business, vocationsor occupations

o Service mark - mark used in thesale or advertising of services toidentify the services of one personand distinguish them from theservices of others

3. GEOGRAPHIC INDICATIONS of ORIGIN False designation of origin is punishable

under ART. 189 of RPC

4. INDUSTRIAL DESIGNS Any composition of lines and colors or

any 3-dimensional form, w/n associatedwith lines and colors

5. PATENTS An exclusive right to invention granted to

a patentee, his heirs or assigns for theterm thereof

Essential elements of an invention tobe patentable:o Noveltyo Prior art

Requisites:o There must be an inventiono Of a new and useful machine,

product/substance of possibleadvantage to the public

o Not previously known or used ordescribed in printed publications orin public use or on sale in the Phils.or covered by prior patent

o Includes new and original industrialdesigns

o NOT patentable if: Contrary to public order, morals,

public health or welfare Abstract idea/principle/theorem


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6. TOPOGRAPHIES of INTEGRATEDCIRCUITS

7. RIGHTS of PERFORMERS, PRODUCERSof SOUND RECORDINGS andBROADCASTING ORGANIZATIONS

8. PROTECTION of UNDISCLOSEDINFORMATION

_______________

B. DERIVATIVE

Derivative modes of acquiring ownership arebased on a right previously held by anotherperson, and therefore, subject to the samecharacteristics, powers, burdens, etc. as whenheld by previous owner.

1. LAW – should be interpreted to apply only tosituations where ownership is vestedindependently of the other modes

2. DONATION – see next chapter

3. SUCCESSION MORTIS CAUSA

Article 774, Civil Code. Succession is a mode ofacquisition by virtue of which the property, rights andobligations to the extent of the value of theinheritance, of a person are transmitted through hisdeath to another or others either by his will or byoperation of law.

Article 776, Civil Code. The inheritance includes allthe property, rights and obligations of a person whichare not extinguished by his death

Article 777, Civil Code. The rights to the successionare transmitted from the moment of the death of thedecedent.

Elements of Succession:o Transmission of property, rights and

obligations to anothero Cause of transmission is the DEATH

of the decedento Procedure of transmission is by

WILL or OPERATION of LAWo ACCEPTANCE of the inheritance by

the heir Rights to the succession are vested as

of the MOMENT of DEATH of thedecedent

4. (ACQUISITIVE) PRESCRIPTION Mode of acquiring ownership through

the lapse of time in the manner andunder the conditions laid down by law

Possession should be:o In the concept of an owner

o Publico Peacefulo Uninterruptedo Adverse

ACQUISITIVE v. EXTINCTIVE

AcquisitivePrescription

Extinctive Prescription

vests the property andraise a new title in the

occupantStatute of limitation

Positive action of thepossessor

Inaction or neglect of theowner

Requisites common to ordinary andextraordinary acquisitiveprescription:o Capacity of the acquirero Capacity of the loser to lose by

prescriptiono Object susceptible to prescriptiono Lapse of required time

Ordinary acquisitive- Movable property – 4yrs- Immovable – 10yrs

Extraordinary acquisitive- Movable – 8yrs- Immovable – 30yrs

Additional requirements for ordinaryacquisitive prescription:o Good faitho Just title

5. TRADITION Requisites:

o Pre-existence of right in estate ofgrantor

o Just cause or title for thetransmission

o Intentiono Capacityo Act of giving it outward form,

physically, symbolically or legally

Kinds:o Real tradition – PHYSICALY

DELIVERY of the thing; actualtransfer of control and possessionwith intent to pass ownership or realright over the property Movable – hand to hand transfer

of the thing Immovable – material acts

performed by grantee


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o Constructive tradition – NOT the realor material delivery of the thing thatmay take place in any of the ff: Symbolic delivery – delivery of

signs or things which representthat which is being transmitted

Delivery of public instrument– substitution of the real deliveryof possession by a public writingwith delivery of document

Traditio longa manu – pointingof the thing within sight bygrantor to grantee

Traditio brevi manu –grantee’s continuouspossession over the thingdelivered but now under the titleof ownership

Traditio constitutumpossessorium – ownerremains in possession of thething but in another concept

Quasi-tradition – delivery ofincorporeal things or rights bythe grantee of his right with theowner’s consent

Tradition by operation of law

CIVIL LAW REVIEWER Chapter XI. DONATION

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Chapter XI. Donation

I. NATUREII. REQUISITESIII. KINDSIV. WHO MAY GIVE OR RECEIVE DONATIONSV. WHO MAY NOT GIVE OR RECEIVE

DONATIONSVI. ACCEPTANCEVII. FORMVIII. WHAT MAY BE DONATEDIX. EFFECTX. REVOCATION AND REDUCTION

I. Nature

BILATERAL contract creatingUNILATERAL obligations on the donor’spart

Requires CONSENT of BOTH donorand donee though it producesobligations only on the side of theDONOR

II. Requisites

CONSENT and CAPACITY of theparties

ANIMUS DONANDI (intent to donate) DELIVERY of thing donated FORM as prescribed by law IMPOVERISHMENT of donor’s

patrimony and ENRICHMENT on part ofdone

III. Kinds

A. As to its taking effect

1. INTER VIVOS

Article 729, Civil Code. When the donor intendsthat the donation shall take effect during the lifetime ofthe donor, though the property shall not be deliveredtill after the donor's death, this shall be a donationinter vivos. The fruits of the property from the time ofthe acceptance of the donation, shall pertain to thedonee, unless the donor provides otherwise.

Article 730, Civil Code. The fixing of an event or theimposition of a suspensive condition, which may takeplace beyond the natural expectation of life of thedonor, does not destroy the nature of the act as adonation inter vivos, unless a contrary intentionappears.

Article 731, Civil Code. When a person donatessomething, subject to the resolutory condition of thedonor's survival, there is a donation inter vivos.

Take effect independently of the donor’sdeath

Irrevocable EXCEPT for the ff grounds:o Subsequent birth of the donor’s

childreno Donor’s failure to comply with

imposed conditionso Donee’s ingratitudeo Reduction of donation by reason of

inofficiousness NO OPTION to revoke AT WILL before

the donor dies

2. MORTIS CAUSA

Article 728, Civil Code. Donations which are to takeeffect upon the death of the donor partake of thenature of testamentary provisions, and shall begoverned by the rules established in the Title onSuccession.

Becomes effective upon the death ofdonor

Donor’s death ahead of the donee is aSUSPENSIVE CONDITION for theexistence of the donation

Characteristics:o Transferor retains ownership and

control of the property while aliveo Transfer is revocable at will before

his deatho Transfer will be VOID if the

transferor should survive thetransferee

INTER VIVOS v. MORTIS CAUSA

Inter vivos Mortis causa

As toformalities

Executed andaccepted with

formalitiesprescribed by CC

748 & 749

Must be in theform of a will, withall the formalitiesfor the validity of

willsOtherwise, it’s

void and cannottransfer

ownership.

As toeffectivity

Effective duringthe lifetime of the

donor

Effective after thedeath of the

donor

As toacceptance

Acceptance mustbe made during

the lifetime of thedonor

Acceptance mustbe made after the

death of thedonor, the

donation beingeffective only

after the death ofdonor.

Acceptanceduring the donor’s

lifetime ispremature and

ineffectivebecause there


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can be nocontract regardingfuture inheritance

As totransfer ofownershipfor right ofdisposition

Ownership isimmediatelytransferred.Delivery of

possession isallowed after

death

Ownership istransferred after

death

As torevocation

Irrevocable – maybe revoked onlyfor the reasonsprovided in CC760, 764, 765

Revocable uponthe exclusive will

of the donor

As toreduction orsuppression

When it isexcessive or

inofficious, beingpreferred, it is

reduced only afterthe donations

mortis causa hadbeen reduced or

exhausted

When it isexcessive or

inofficious, it isreduced first, or

even suppressed

NATURE of the act, whether it’s one of disposition orof execution, is CONTROLLING to determine whetherthe donation is mortis causa or inter vivos.

What is important is the TIME of TRANSFER ofownership even if transfer of property donated may besubject to a condition or a term.

Whether the donation is inter vivos or mortis causadepends on whether the donor intended to transferownership over the properties upon the execution ofthe deed. (Gestopa v. CA; Austria-Magat v. CA)

3. PROPTER NUPTIAS

Article 82, Family Code. When the donor intendsthat the donation shall take effect during the lifetime ofthe donor, though the property shall not be deliveredtill after the donor's death, this shall be a donationinter vivos. The fruits of the property from the time ofthe acceptance of the donation, shall pertain to thedonee, unless the donor provides otherwise.

Article 87, Family Code. Every donation or grant ofgratuitous advantage, direct or indirect, between thespouses during the marriage shall be void, exceptmoderate gifts which the spouses may give eachother on the occasion of any family rejoicing. Theprohibition shall also apply to persons living togetheras husband and wife without a valid marriage.

Requisiteso Must be made BEFORE the

celebration of marriageo Made in CONSIDERATION of the

marriageo Made in FAVOR of ONE or BOTH of

the future spouses

ORDINARY v. PROPTER NUPTIAS

Ordinary Propter nuptiasExpress

acceptanceNecessary Not required

As tominors

Can’t be made byminors

May be made byminors (FC 78)

As to futureproperty

Cannot includefuture property

May includefuture property(same rule as

wills)

Limit as todonation of

presentproperty

No limit todonation of

present propertyprovided legitimesare not impaired

If present propertyis donated and

property regime isACP, limited to

1/5Grounds

forrevocation

Law on donations FC 86

______________

B. As to cause or consideration

1. SIMPLE – made out of PURE LIBERALITYor because of the MERITS of the done

2. REMUNERATORY – made for SERVICESalready rendered to the donor

3. ONEROUS – imposes a BURDEN inferior invalue to property donateda. Improper – burden EQUAL in value to

property donatedb. Sub-modo or modal – imposes a

prestation upon donee as to howproperty donated will be applied

c. Mixed donations – ex: sale for pricelower than value of property

A simple or pure donation is one whose cause is pureliberality, while an onerous donation is one subject toburdens, charges, or future services equal to or morein value than the thing donated. (Lagazo v. CA)

C. As to effectivity or extinguishment

1. PURE – donation is without conditions orperiods

2. CONDITIONAL – donation is subject tosuspensive or resolutory conditions

3. WITH A TERM

IV. Who May Give or Receive Donations

Article 735, Civil Code. All persons who maycontract and dispose of their property may make adonation.

Article 737, Civil Code. The donor's capacity shall bedetermined as of the time of the making of thedonation.


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Article 738, Civil Code. All those who are notspecially disqualified by law therefor may acceptdonations.

Article 741, Civil Code. Minors and others whocannot enter into a contract may become donees butacceptance shall be done through their parents orlegal representatives.

Article 737, Civil Code. Donations made toconceived and unborn children may be accepted bythose persons who would legally represent them ifthey were already born.

Capacity to donate is required for donationsinter vivos and NOT mortis causao Donor’s capacity determined as of the

TIME of the DONATION. Subsequentincapacity is immaterial

Capacity to accept donations – ALL personsNOT disqualified by law may be donees

V. Who May Not Give or ReceiveDonations

Article 736, Civil Code. All persons who maycontract and dispose of their property may make adonation.

Article 739, Civil Code. The following donations shallbe void:1. Those made between persons who were guilty of

adultery or concubinage at the time of thedonation;

2. Those made between persons found guilty of thesame criminal offense, in consideration thereof;

3. Those made to a public officer or his wife,descedants and ascendants, by reason of hisoffice.In the case referred to in No. 1, the actionfor declaration of nullity may be brought by thespouse of the donor or donee; and the guilt of thedonor and donee may be proved bypreponderance of evidence in the same action.

Article 1027, Civil Code. The following are incapableof succeeding:1. The priest who heard the confession of the

testator during his last illness, or the minister ofthe gospel who extended spiritual aid to himduring the same period;

2. The relatives of such priest or minister of thegospel within the fourth degree, the church,order, chapter, community, organization, orinstitution to which such priest or minister maybelong;

3. A guardian with respect to testamentarydispositions given by a ward in his favor beforethe final accounts of the guardianship have beenapproved, even if the testator should die after theapproval thereof; nevertheless, any provisionmade by the ward in favor of the guardian whenthe latter is his ascendant, descendant, brother,

sister, or spouse, shall be valid;4. Any attesting witness to the execution of a will,

the spouse, parents, or children, or any oneclaiming under such witness, spouse, parents, orchildren;

5. Any physician, surgeon, nurse, health officer ordruggist who took care of the testator during hislast illness;

6. Individuals, associations and corporations notpermitted by law to inherit.

Article 1032, Civil Code. The following are incapableof succeeding by reason of unworthiness:1. Parents who have abandoned their children or

induced their daughters to lead a corrupt orimmoral life, or attempted against their virtue;

2. Any person who has been convicted of anattempt against the life of the testator, his or herspouse, descendants, or ascendants;

3. Any person who has accused the testator of acrime for which the law prescribes imprisonmentfor six years or more, if the accusation has beenfound groundless;

4. Any heir of full age who, having knowledge of theviolent death of the testator, should fail to report itto an officer of the law within a month, unless theauthorities have already taken action; thisprohibition shall not apply to cases wherein,according to law, there is no obligation to makean accusation;

Article 740, Civil Code. Incapacity to succeed by willshall be applicable to donations inter vivos.

Article 743, Civil Code. Donations made toincapacitated persons shall be void, though simulatedunder the guise of another contract or through aperson who is interposed.

Article 744, Civil Code. Donations of the same thingto two or more different donees shall be governed bythe provisions concerning the sale of the same thingto two or more different persons.

A. By reason of public policy (ART. 739)1. Those made between persons guilty of

adultery or concubinage at the time ofdonation

2. Those made between persons guilty of thesame criminal offense if the donation ismade in consideration thereof

3. Those made to a public officer, his spouse,descendants, and/or ascendants by reasonof the office

B. By reason of donee’s unworthiness(ART. 1032 and 1027 [except (4)])

C. By reason of prejudice to creditors orheirs (voidable)


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VI. Acceptance

Donation is perfected upon theDONOR’S LEARNING of theacceptance

Acceptance may be made during theLIFETIME of BOTH donor and donee

A. WHO MAY ACCEPT

Article 745, Civil Code. The donee must accept thedonation personally, or through an authorized personwith a special power for the purpose, or with a generaland sufficient power; otherwise, the donation shall bevoid.

Article 747, Civil Code. Persons who acceptdonations in representation of others who may not doso by themselves, shall be obliged to make thenotification and notation of which Article 749 speaks.

Acceptance or consent must bePERSONAL or through a personAUTHORIZED generally or specifically

B. TIME of ACCEPTANCE

Article 746, Civil Code. Acceptance must be madeduring the lifetime of the donor and of the donee.

The donation is perfected only upon the momentthe donor knows of the donee’s acceptance. If theacceptance is made in a separate instrument, thedonor shall be notified thereof in an authentic form,and this step shall be noted in both instruments.(Lagazo v CA)

VII.Form

A. PERSONAL PROPERTY

Article 748 , The donation of a movable may bemade orally or in writing.

An oral donation requires the simultaneous delivery ofthe thing or of the document representing the rightdonated.

If the value of the personal property donated exceedsfive thousand pesos, the donation and the acceptanceshall be made in writing, otherwise, the donation shallbe void.

WITH simultaneous delivery of donatedproperty – may be oral UNLESS itexceeds P5k in which case it’s VOID ifNOT in writing

WITHOUT simultaneous delivery – mustbe in WRITING including theACCEPTANCE regardless of value

B. REAL PROPERTY

Article 749, Civil Code. In order that the donation ofan immovable may be valid, it must be made in apublic document, specifying therein the propertydonated and the value of the charges which thedonee must satisfy.

The acceptance may be made in the same deed ofdonation or in a separate public document, but it shallnot take effect unless it is done during the lifetime ofthe donor.

If the acceptance is made in a separate instrument,the donor shall be notified thereof in an authenticform, and this step shall be noted in both instruments.

Must be in PUBLIC INSTRUMENTspecifying donated property andburdens assumed by the doneeregardless of value

Acceptance must be EITHER:o In the SAME INSTRUMENT ORo In ANOTHER PUBLIC

INSTRUMENT notified to the donorin authentic form and noted in bothdeeds

Title to immovable property does not pass from donorto donee by virtue of a deed of donation until andunless it has been accepted in a public instrumentand the donor duly notified thereof. Where the deedfails to show the acceptance, or where the formalnotice of the acceptance made in a separateinstrument is not given to the donor or else not notedin the deed of donation and in the separateacceptance, the donation is null and void. (Sumipat vBanga)

Exceptions:o Donations propter nuptias – need

NO express acceptanceo Onerous donations – form governed

by the rules of contracts

VIII. What May Be Donated

A. ALL PRESENT PROPERTY or PARTTHEREOF of THE DONOR

1. Provided he RESERVES, in full ownershipor usufruct, sufficient means for support ofhimself and all relatives entitled to besupported by donor at the time ofacceptance

Article 750, Civil Code. The donations maycomprehend all the present property of the donor, orpart thereof, provided he reserves, in full ownership orin usufruct, sufficient means for the support of himself,


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and of all relatives who, at the time of the acceptanceof the donation, are by law entitled to be supported bythe donor. Without such reservation, the donationshall be reduced in petition of any person affected.

2. Provided that NO PERSON may give orreceive by way of donation, more than hemay give or receive by will (ART. 752); also,reserves property sufficient to pay donor’sdebts contracted before donation, otherwise,donation is in FRAUD of creditors (ARTS.759, 1387)

Article 752, Civil Code. The provisions of Article 750notwithstanding, no person may give or receive, byway of donation, more than he may give or receive bywill.

The donation shall be inofficious in all that it mayexceed this limitation.

Article 759, Civil Code. There being no stipulationregarding the payment of debts, the donee shall beresponsible therefor only when the donation has beenmade in fraud of creditors.The donation is always presumed to be in fraud ofcreditors, when at the time thereof the donor did notreserve sufficient property to pay his debts prior to thedonation.

Article 1387, Civil Code. All contracts by virtue ofwhich the debtor alienates property by gratuitous titleare presumed to have been entered into in fraud ofcreditors, when the donor did not reserve sufficientproperty to pay all debts contracted before thedonation.

Alienations by onerous title are also presumedfraudulent when made by persons against whomsome judgment has been issued. The decision orattachment need not refer to the property alienated,and need not have been obtained by the partyseeking the rescission.

In addition to these presumptions, the design todefraud creditors may be proved in any other mannerrecognized by the law of evidence.

3. If donation EXCEEDS the disposable or freeportion of his estate, donation is inofficious

4. EXCEPTIONSa. Donations provided for in marriage

settlements between future spouses –not more than 1/5 of present property

FC Article 84. If the future spouses agree upon aregime other than the absolute community ofproperty, they cannot donate to each other in theirmarriage settlements more than one-fifth of theirpresent property. Any excess shall be consideredvoid.

Donations of future property shall be governed by theprovisions on testamentary succession and theformalities of wills.

CC Article 130. The future spouses may give eachother in their marriage settlements as much as one-fifth of their present property, and with respect to theirfuture property, only in the event of death, to theextent laid down by the provisions of this Codereferring to testamentary succession.

b. Donation propter nuptias by anascendant consisting of jewelry,furniture or clothing not to exceed 1/10of disposable portion

Article 1070, Civil Code. Wedding gifts by parentsand ascendants consisting of jewelry, clothing, andoutfit, shall not be reduced as inofficious exceptinsofar as they may exceed one-tenth of the sumwhich is disposable by will.

B. WHAT MAY NOT BE DONATED –FUTURE PROPERTY

Article 751, Civil Code. Donations cannotcomprehend future property.

By future property is understood anything which thedonor cannot dispose of at the time of the donation.

Includes ALL property that belongs toothers at the time the donation is madealthough it may or may not later belongto the donor

IX. Effect

A. IN GENERAL

1. Donee may demand actual delivery of thingdonated

2. Donee is SUBROGATED to rights of donorin the property donated

Article 754, Civil Code. The donee is subrogated toall the rights and actions which in case of evictionwould pertain to the donor. The latter, on the otherhand, is not obliged to warrant the things donated,save when the donation is onerous, in which case thedonor shall be liable for eviction to the concurrence ofthe burden.

The donor shall also be liable for eviction or hiddendefects in case of bad faith on his part.

3. Donor NOT obliged to warrant thingsdonated EXCEPT in onerous donations inwhich case donor is liable for eviction up toextent of burden (ART. 754)


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4. Donor is liable for EVICTION or HIDDENDEFECTS in case of BF on his part (ART.754)

5. In donation propter nuptias, donor mustRELEASE property donated from mortgagesand other encumbrances UNLESS thecontrary has been stipulated

Article 131, Civil Code. The donor by reason ofmarriage shall release the property donated frommortgages and all other encumbrances upon thesame, with the exception of easements, unless in themarriage settlements or in the contracts the contraryhas been stipulated.

6. Donations to several donees jointly – NOright of accretion EXCEPT:a. Donor provides otherwiseb. Donation to husband and wife jointly

with right of accretion UNLESS donorprovides otherwise

Article 753, Civil Code. When a donation is made toseveral persons jointly, it is understood to be in equalshares, and there shall be no right of accretion amongthem, unless the donor has otherwise provided.

The preceding paragraph shall not be applicable todonations made to the husband and wife jointly,between whom there shall be a right of accretion, ifthe contrary has not been provided by the donor.

B. SPECIAL PROVISIONS

1. Reservation by donor of power to dispose(in whole or in part) or to encumber propertydonated

Article 755, Civil Code. The right to dispose of someof the things donated, or of some amount which shallbe a charge thereon, may be reserved by the donor;but if he should die without having made use of thisright, the property or amount reserved shall belong tothe donee.

2. Donation of naked ownership to one doneeand usufruct to another

Article 756, Civil Code. The ownership of propertymay also be donated to one person and the usufructto another or others, provided all the donees are livingat the time of the donation.

3. Conventional reversion in favor of donor orother person

Article 757, Civil Code. Reversion may be validlyestablished in favor of only the donor for any caseand circumstances, but not in favor of other personsunless they are all living at the time of the donation.

Any reversion stipulated by the donor in favor of a

third person in violation of what is provided in thepreceding paragraph shall be void, but shall not nullifythe donation.

4. Payment of donor’s debt

Article 758, Civil Code. When the donation imposesupon the donee the obligation to pay the debts of thedonor, if the clause does not contain any declarationto the contrary, the former is understood to be liableto pay only the debts which appear to have beenpreviously contracted. In no case shall the donee beresponsible for the debts exceeding the value of theproperty donated, unless a contrary intention clearlyappears.

If expressly stipulated – donee to payonly debts contracted BEFORE thedonation UNLESS specified otherwise.But in no case shall donee beresponsible for debts exceeding value ofproperty donated unless clearly intended

If there’s NO stipulation – doneeanswerable only for donor’s debt ONLYin case donation is in fraud of creditors

5. Illegal or impossible conditions

Article 272, Civil Code. Children who are legitimatedby subsequent marriage shall enjoy the same rightsas legitimate children.

Article 1183, Civil Code. Impossible conditions,those contrary to good customs or public policy andthose prohibited by law shall annul the obligationwhich depends upon them. If the obligation isdivisible, that part thereof which is not affected by theimpossible or unlawful condition shall be valid.The condition not to do an impossible thing shall beconsidered as not having been agreed upon.

X. Revocation and Reduction

A. DISTINCTIONS

Revocation ReductionTotal, whether the

legitime is impaired or notMade insofar as thelegitime is prejudiced

Benefits the donor

Benefits the donor’s heirs(except when made on

the ground of theappearance of a child)

B. CAUSES of REVOCATION ORREDUCTION

1. Inofficiousness

Article 752, Civil Code. The provisions of Article 750notwithstanding, no person may give or receive, byway of donation, more than he may give or receive bywill.


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The donation shall be inofficious in all that it mayexceed this limitation.

Article 771, Civil Code. Donations which inaccordance with the provisions of Article 752, areinofficious, bearing in mind the estimated net value ofthe donor's property at the time of his death, shall bereduced with regard to the excess; but this reductionshall not prevent the donations from taking effectduring the life of the donor, nor shall it bar the doneefrom appropriating the fruits.

For the reduction of donations the provisions of thisChapter and of Articles 911 and 912 of this Code shallgovern.

Article 773, Civil Code. If, there being two or moredonations, the disposable portion is not sufficient tocover all of them, those of the more recent date shallbe suppressed or reduced with regard to the excess.

Who may ask for reduction

Article 772, Civil Code.Only those who at the time ofthe donor's death have a right to the legitime and theirheirs and successors in interest may ask for thereduction or inofficious donations.

Those referred to in the preceding paragraph cannotrenounce their right during the lifetime of the donor,either by express declaration, or by consenting to thedonation.

The donees, devisees and legatees, who are notentitled to the legitime and the creditors of thedeceased can neither ask for the reduction nor availthemselves thereof.

Rule applied – if disposable portion notsufficient to cover 2 or more donations(ART. 773)

2. Subsequent birth, reappearance of childor adoption of minor by donor

Article 760, Civil Code. Every donation inter vivos,made by a person having no children or descendants,legitimate or legitimated by subsequent marriage, orillegitimate, may be revoked or reduced as provided inthe next article, by the happening of any of theseevents:1. If the donor, after the donation, should have

legitimate or legitimated or illegitimate children,even though they be posthumous;

2. If the child of the donor, whom the latter believedto be dead when he made the donation, shouldturn out to be living;

3. If the donor subsequently adopt a minor child.

Effects:o Donation is VALID if not exceeding

the free part computed as of the

birth, adoption or reappearance ofthe child

o Donee must return the property orits value at the time of the donation

o Fruits to be returned from the filingof the action

o Mortgages by the donee are validbut may be discharged subject toreimbursement from the donee

Extent of revocation – only to theextent of the presumptive legitime of thechild

Prescription – 4yrs

C. REVOCATION ONLY

1. Ingratitude

Article 765, Civil Code. The donation may also berevoked at the instance of the donor, by reason ofingratitude in the following cases:1. If the donee should commit some offense against

the person, the honor or the property of thedonor, or of his wife or children under his parentalauthority;

2. If the donee imputes to the donor any criminaloffense, or any act involving moral turpitude,even though he should prove it, unless the crimeor the act has been committed against the doneehimself, his wife or children under his authority;

2. If he unduly refuses him support when the doneeis legally or morally bound to give support to thedonor.

Applies to all donations EXCEPT:o Mortis causao Propter nuptiaso Onerous

Founded on moral duty – one whoreceived a donation must be grateful tohis benefactor

Conviction NOT necessary Time to file action for revocation – within

1yr from knowledge of the offense

Article 769, Civil Code. The action granted to thedonor by reason of ingratitude cannot be renouncedin advance. This action prescribes within one year, tobe counted from the time the donor had knowledge ofthe fact and it was possible for him to bring the action.

Who may file – donor must bring actionhimself; NOT transmissible to his heirs

Article 770, Civil Code. This action shall not betransmitted to the heirs of the donor, if the latter didnot institute the same, although he could have doneso, and even if he should die before the expiration ofone year.


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Neither can this action be brought against the heir ofthe donee, unless upon the latter's death thecomplaint has been filed.

Effect of revocation on alienations andencumbrances

Article 766, Civil Code. Although the donation isrevoked on account of ingratitude, nevertheless, thealienations and mortgages effected before thenotation of the complaint for revocation in the Registryof Property shall subsist.

Later ones shall be void.

Article 767, , Civil Code.In the case referred to in thefirst paragraph of the preceding article, the donor shallhave a right to demand from the donee the value ofproperty alienated which he cannot recover from thirdpersons, or the sum for which the same has beenmortgaged.

The value of said property shall be fixed as of the timeof the donation.

2. Violation of condition

D. Effect of revocation or reduction

Article 762, Civil Code. Upon the revocation orreduction of the donation by the birth, appearance oradoption of a child, the property affected shall bereturned or its value if the donee has sold the same.

If the property is mortgaged, the donor may redeemthe mortgage, by paying the amount guaranteed, witha right to recover the same from the donee.

When the property cannot be returned, it shall beestimated at what it was worth at the time of thedonation.

Article 764, par. 2, Civil Code. In this case, theproperty donated shall be returned to the donor, thealienations made by the donee and the mortgagesimposed thereon by him being void, with thelimitations established, with regard to third persons,by the Mortgage Law and the Land Registration Laws.

Article 767, Civil Code. In the case referred to in thefirst paragraph of the preceding article, the donor shallhave a right to demand from the donee the value ofproperty alienated which he cannot recover from thirdpersons, or the sum for which the same has beenmortgaged.

Effect as to fruits

Article 768, Civil Code. When the donation isrevoked for any of the causes stated in Article 760, orby reason of ingratitude, or when it is reducedbecause it is inofficious, the donee shall not return thefruits except from the filing of the complaint.If the revocation is based upon noncompliance withany of the conditions imposed in the donation, thedonee shall return not only the property but also thefruits thereof which he may have received after havingfailed to fulfill the condition.

SUMMARY—

What may be donated (Article 750)All present property of the donor orpart thereof

Limitation:1) He reserves in full ownership or

in usufruct, sufficient means forhis support and all relatives whoare at the time of the acceptanceof the donation are, by law,entitled to be supported

Effect of non-reservation: reductionof the donation

2) He reserves sufficient propertyat the time of the donation forthe full settlement of his debts

Effect of non-reservation: consideredto be a donation in fraud of creditors,and donee may be liable fordamages


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What may not be donated

1) Future property; those which thedonor cannot dispose of at thetime of the donation (Article 751)

2) More than what he may give orreceive by will (Article 752)

If exceeds: inofficious

Donations made to severalpersons jointly

No accretion – one donee does notget the share of the other doneeswho did not accept (Article 753)

Exception: those given to husbandand wife, except when the donorotherwise provides

Donor

Who are allowed: All persons whomay contract (of legal age) anddispose of their property (Article 735)Donor’s capacity is determined at thetime of the making of donation(Article 737)

Who are not allowed:1) Guardians and trustees with

respect to the property entrustedto them (Article 736)

2) Made between person who areguilty of adultery andconcubinage (Article 739)

3) Made between persons foundguilty of the same criminaloffense, in consideration thereof(Article 739)

Donee

Who are allowed to acceptdonations: Those who are notspecifically disqualified by law(Article 738)

Those who are allowed, withqualifications:1) Minors and others who are

incapacitated (see Article 38),provided that their acceptance isdone through their parents orlegal representatives (Article741)

2) Conceived and unborn children,provided that the donation isaccepted by those who wouldlegally represent them if theywere already born

Who are not allowed:1) Made between person who are

guilty of adultery andconcubinage (Article 739)

2) Made between persons foundguilty of the same criminaloffense, in consideration thereof(Article 739)

3) Made to a public officer or hiswife, descendant andascendants, by reason of hisoffice (Article 739)

4) Those who cannot succeed bywill (Article 740)

5) Those made to incapacitatedpersons, although simulatedunder the guise of anothercontract (Article 743)

Acceptance of the donation

Who may accept (Article 745):1) Donee personally2) Authorized person with a special

power for the purpose or with ageneral sufficient power

When to accept: during the lifetime ofthe donor or donee (Article 746)

What the donee acquires with thething

He shall be subrogated to all therights and actions that would pertainto the donor in case of eviction(Article 754)

Obligation of the donor No obligation to warrant (Article 754)Exception: when the donation isonerous

Obligation of the donee

If the donation so states, the doneemay be obliged to pay the debtspreviously contracted by the donorand in no case shall he beresponsible for the debts exceedingthe value of the thing donated (Article758)

Exception: when contrary intentionappears

What may be reserved by thedonor

Right to dispose of some of thethings donated, or of dome amountwhich shall be a charge thereon

If the donor dies without exercisingthis right, the portion reserved shallbelong to the donee

Reversion

The property donated may berestored or returned to1) Donor or his estate; or2) Another person

Limitation to (2): the third personwhoul be living at the time of thedonation


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REVOCATION/REDUCTION

Basis Time of Action Transmissibility Effect Liability (Fruits)

Birth, appearance,adoption

Within 4 years frombirth, legitimationand adoption

Transmitted tochildren anddescendants uponthe death of donor

Property returned/value (if sold)/redeem mortgagewith right to recover

Fruits returned fromthe filing of thecomplaint

Non-compliancewith condition

Within 4 years fromnon-compliance

May be transmitted todonor’s heirs andmay be exercisedagainst donee’s heirs

Property returned,alienations andmortgages voidsubject to rights ofthird persons ingood faith

Fruits received afterhaving failed to fulfillcondition returned

IngratitudeWithin 1 year afterknowledge of thefact

Generally nottransmitted to heirs ofdonor/ donee

Property returned,but alienations andmortgages effectedbefore the notationof the complaint forrevocation in theregistry of propertysubsist

Fruits received fromthe filing of thecomplaint returned

Failure to reservesufficient means forsupport

At any time, by thedonor or relativesentitled o support

Not transmissibleReduced to theextent necessary toprovide support

Donee entitled

Inofficiousness forbeing in excess ofwhat the donor cangive by will

Within 5 years fromthe death of thedonor

Transmitted todonor’s heirs

Donation takeseffect on the lifetimeof donor. Reductiononly upon his deathwith regard to theexcess

Donee entitled

Fraud againstcreditors

Rescission within 4years from theperfection ofdonation/ knowledgeof the donation

Transmitted tocreditor’s heirs orsuccessors-in-interest

Returned for thebenefit of thecreditor who broughtthe action

Fruits returned/ ifimpossible,indemnify creditorfor damages

CIVIL LAW REVIEWER Chapter XII. LEASE

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Chapter XII. Lease

I. GENERAL CHARACTERISTICSII. KINDS

A. LEASE OF THINGSB. LEASE OF WORKC. LEASE OF SERVICES

III. LEASE OF THINGS

I. General Characteristics

a. Temporary durationb. Onerousc. Price is fixed according to contract

duration

II. Kinds

A. Lease of things – Involves an obligation onthe part of the lessor to deliver the thingwhich is the object thereof and thecorrelative right of the lessee to peacefuland adequate enjoyment thereof for a pricecertain

B. Lease of work or contract of labor (Arts.1700-1712)

C. Lease of services1. Household service2. Contract for a piece of work (ARTS.

1713-1731)3. Lease of services of common carriers

(ARTS. 1732-1763)

III. Lease of Things

A. CONCEPT

Article 1643, Civil Code. In the lease of things, oneof the parties binds himself to give to another theenjoyment or use of a thing for a price certain, and fora period which may be definite or indefinite. However,no lease for more than ninety-nine years shall bevalid.

Subject matter must be WITHIN THECOMMERCE OF MAN

General rule: CONSUMMABLE thingsCANNOT be the subject matter of lease;EXCEPTIONS –

o Lease of consumable propertyNOT for purpose of consumingit but for purpose of DISPLAY orADVERTISING it (lease adpompam et ostentationem)

o Lease of consumables whichare ACCESSORIES in the leaseof an industrial management

B. SPECIAL CHARACTERISTICS of LEASEof THINGS

Essential purpose is to TRANSMIT theUSE or ENJOYMENT of a thing

Consensual Onerous Price is FIXED in relation to the period

of use/enjoyment Temporary

C. LEASE DISTINGUISHED FROM SALE,USUFRUCT, COMMODATUM

Lease SaleOnly the use or

enjoyment of the thing istransferred and only for a

determinate period

Permanent transmissionof ownership of the thingsold, unless subject to a

resolutory condition

Lessor need not be theowner of the thing leased

Seller must be the owneror at least authorized by

the owner to transferownership of the thing at

the time it is derived

Lease UsufructA real right only byexception (When

registered and for morethan 1 year)

Always a real right

To constitute usufruct,ownership is not required

in order to lease anobject

To constitute a usufruct,one must be the owner of

the thing.

Lessor places andmaintains the lessee inenjoymentof the thing.

Owner allows theusufructuary to use and

enjoy the property

Lease may be limited toparticular uses by the

contract

Usufruct includes allpossible uses and

manner of enjoyment ofthe property

Contract of lease must befor a definite period,absent stipulation of

such, court must fix suchperiod.

Usufruct may be for anindefinite period of time

Lease CommodatumOnerous Gratuitous

Not essentially personalin character, therefore,

the right may betransmitted to the heirs

Purely personal incharacter and

consequently, the deathof either the bailor or

bailee extinguishes thecontract

Consensual contractReal contract – perfectedby the delivery of theobject therefor


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D. PERIOD of LEASE

MAXIMUM period is 99yrs When period is INDEFINITE:

o RURAL land

Article 1682, Civil Code. The lease of a piece ofrural land, when its duration has not been fixed, isunderstood to have been for all the time necessary forthe gathering of the fruits which the whole estateleased may yield in one year, or which it may yieldonce, although two or more years have to elapse forthe purpose.

o URBAN land

Article 1687, Civil Code. If the period for the leasehas not been fixed, it is understood to be from year toyear, if the rent agreed upon is annual; from month tomonth, if it is monthly; from week to week, if the rentis weekly; and from day to day, if the rent is to be paiddaily. However, even though a monthly rent is paid,and no period for the lease has been set, the courtsmay fix a longer term for the lease after the lesseehas occupied the premises for over one year. If therent is weekly, the courts may likewise determine alonger period after the lessee has been in possessionfor over six months. In case of daily rent, the courtsmay also fix a longer period after the lessee hasstayed in the place for over one month.

E. ASSIGNMENT of LEASE

Article 1649, Civil Code. The lessee cannot assignthe lease without the consent of the lessor, unlessthere is a stipulation to the contrary.

General Rule: lessee CANNOT assign thelease WITHOUT the CONSENT of thelessor

UNLESS there’s a stipulation to thecontrary

ASSIGNMENT v. SUBLEASE

Assignment of Lease SubleaseTransfer to a third person

of the rights andobligations arising from

the lease contract. It is infact a sale of the lessee’s

rights, and when thelessor gives his consent

to it, the original lessee isreleased from his

obligations under thecontract. The Express of

the lessor is eitherexpress or implied. There

is a succession byparticular title to one

contract of lease.

Merely another contractof lease, where the

original lessee becomesin turn a lessor. Even

when the lessor consentsto the sublease, the

original lease contractstill subsists and is

binding on the lessee.There is a juxtaposition of

two leases.

F. SUBLEASE

Article 1650When in the contract of lease of things there isno express prohibition, the lessee may subletthe thing leased, in whole or in part, withoutprejudice to his responsibility for theperformance of the contract toward the lessor.

There are 2 leases and 2 distinctjuridical relations:

o Between the LESSOR andLESSEE

o Between the SUBLESSOR(lessee) and the SUBLESSEE

Sublessee generally does not have anydirect action against the lessor to requirecompliance with his or the lessee’sobligations or vice versa

Sublessee is NOT a party to the contractbetween the lessor and lessee

Obligation of sublessee to lessor

Article 1651, Civil Code. Without prejudice to hisobligation toward the sublessor, the sublessee isbound to the lessor for all acts which refer to the useand preservation of the thing leased in the mannerstipulated between the lessor and the lessee.

For RENTS

Article 1652, Civil Code. The sublessee issubsidiarily liable to the lessor for any rent due fromthe lessee. However, the sublessee shall not beresponsible beyond the amount of rent due from him,in accordance with the terms of the sublease, at thetime of the extrajudicial demand by the lessor.

Payments of rent in advance by the sublessee shallbe deemed not to have been made, so far as thelessor's claim is concerned, unless said paymentswere effected in virtue of the custom of the place.

G. RIGHTS and OBLIGATIONS of LESSORand LESSEE

1. Obligations of LESSORArticle 1654, Civil Code. The lessor is obliged:(1) To deliver the thing which is the object of thecontract in such a condition as to render it fit for theuse intended;

(2) To make on the same during the lease all thenecessary repairs in order to keep it suitable for theuse to which it has been devoted, unless there is astipulation to the contrary;

(3) To maintain the lessee in the peaceful andadequate enjoyment of the lease for the entireduration of the contract.


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Article 1661, Civil Code. The lessor cannot alter theform of the thing leased in such a way as to impair theuse to which the thing is devoted under the terms ofthe lease.

2. Obligations of LESSEE

Article 1657, Civil Code. The lessee is obliged:(1) To pay the price of the lease according to the

terms stipulated;(2) To use the thing leased as a diligent father of a

family, devoting it to the use stipulated; and in theabsence of stipulation, to that which may beinferred from the nature of the thing leased,according to the custom of the place;

(3) To pay expenses for the deed of lease.

Article 1662, Civil Code. If during the lease it shouldbecome necessary to make some urgent repairs uponthe thing leased, which cannot be deferred until thetermination of the lease, the lessee is obliged totolerate the work, although it may be very annoying tohim, and although during the same, he may bedeprived of a part of the premises.

If the repairs last more than forty days the rent shallbe reduced in proportion to the time - including thefirst forty days - and the part of the property of whichthe lessee has been deprived.

When the work is of such a nature that the portionwhich the lessee and his family need for their dwellingbecomes uninhabitable, he may rescind the contract ifthe main purpose of the lease is to provide a dwellingplace for the lessee.

Article 1663, Civil Code. The lessee is obliged tobring to the knowledge of the proprietor, within theshortest possible time, every usurpation or untowardact which any third person may have committed ormay be openly preparing to carry out upon the thingleased.

He is also obliged to advise the owner, with the sameurgency, of the need of all repairs included in No. 2 ofArticle 1654.

In both cases the lessee shall be liable for thedamages which, through his negligence, may besuffered by the proprietor.

If the lessor fails to make urgent repairs, the lessee, inorder to avoid an imminent danger, may order therepairs at the lessor's cost.

Article 1665, Civil Code. The lessee shall return thething leased, upon the termination of the lease, as hereceived it, save what has been lost or impaired bythe lapse of time, or by ordinary wear and tear, orfrom an inevitable cause.

Article 1668, Civil Code. The lessee is liable for anydeterioration caused by members of his householdand by guests and visitors.

Article 1667, Civil Code. The lessee is responsiblefor the deterioration or loss of the thing leased, unlesshe proves that it took place without his fault. Thisburden of proof on the lessee does not apply whenthe destruction is due to earthquake, flood, storm orother natural calamity.

SUMMARY of OBLIGATIONS

Lessor’s Obigations Lessee’s ObligationsDeliver the thing which isthe object of the contractin a condition fit for the

use intended

Pay the price of the leaseaccording to the terms

stipulated

Make on the thing all thenecessary repairs in

order to keep it suitablefor the use to which it has

been devoted, unlessthere is a stipulation to

the contrary

Use the thing leased as adiligent father of a family,

devoting it to the usestipulated, and in theabsence of stipulation

according to the nature ofthe thing leased andcustom of the place.

Maintain the lessee in thepeaceful and adequateenjoyment of the lease

for the entire duration ofthe contract.

Pay for the expenses forthe deed of lease.

3. Right of LESSEE to suspend payment ofrentals

Article 1658, Civil Code. The lessee may suspendthe payment of the rent in case the lessor fails tomake the necessary repairs or to maintain the lesseein peaceful and adequate enjoyment of the propertyleased.

4. Right to ask for RESCISSION

Article 1659, Civil Code. If the lessor or the lesseeshould not comply with the obligations set forth inArticles 1654 and 1657, the aggrieved party may askfor the rescission of the contract and indemnificationfor damages, or only the latter, allowing the contractto remain in force.

Article 1660, Civil Code. If a dwelling place or anyother building intended for human habitation is in sucha condition that its use brings imminent and seriousdanger to life or health, the lessee may terminate thelease at once by notifying the lessor, even if at thetime the contract was perfected the former knew ofthe dangerous condition or waived the right to rescindthe lease on account of this condition.

5. LESSOR not obliged to answer for mereact of trespass by a 3

rdperson

Article 1664, Civil Code. The lessor is not obliged toanswer for a mere act of trespass which a thirdperson may cause on the use of the thing leased; butthe lessee shall have a direct action against theintruder.


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H. GROUNDS for EJECTMENT of LESSEEby LESSOR

Article 1673The lessor may judicially eject the lessee for any ofthe following causes:(1) When the period agreed upon, or that which is

fixed for the duration of leases under Articles1682 and 1687, has expired;

(2) Lack of payment of the price stipulated;(3) Violation of any of the conditions agreed upon in

the contract;(4) When the lessee devotes the thing leased to any

use or service not stipulated which causes thedeterioration thereof; or if he does not observethe requirement in No. 2 of Article 1657, asregards the use thereof.

The ejectment of tenants of agricultural lands isgoverned by special laws

I. RIGHT to ASK for PRELIMINARYMANDATORY INJUNCTION inUNLAWFUL DETAINER CASES

Article 1674, Civil Code. In ejectment cases wherean appeal is taken the remedy granted in Article 539,second paragraph, shall also apply, if the higher courtis satisfied that the lessee's appeal is frivolous ordilatory, or that the lessor's appeal is prima faciemeritorious. The period of ten days referred to in saidarticle shall be counted from the time the appeal isperfected.

Article 539 (2), Civil Code. A possessor deprived ofhis possession through forcible entry may within tendays from the filing of the complaint present a motionto secure from the competent court, in the action forforcible entry, a writ of preliminary mandatoryinjunction to restore him in his possession. The courtshall decide the motion within thirty (30) days from thefiling thereof.

J. IMPLIED EXTENSION of LEASE

Article 1679, Civil Code. If nothing has beenstipulated concerning the place and the time for thepayment of the lease, the provisions or Article 1251shall be observed as regards the place; and withrespect to the time, the custom of the place shall befollowed.

Article 1682, Civil Code. The lease of a piece ofrural land, when its duration has not been fixed, isunderstood to have been for all the time necessary forthe gathering of the fruits which the whole estateleased may yield in one year, or which it may yieldonce, although two or more years have to elapse forthe purpose.Article 1687, Civil Code. If the period for the leasehas not been fixed, it is understood to be from year toyear, if the rent agreed upon is annual; from month tomonth, if it is monthly; from week to week, if the rentis weekly; and from day to day, if the rent is to be paid

daily. However, even though a monthly rent is paid,and no period for the lease has been set, the courtsmay fix a longer term for the lease after the lesseehas occupied the premises for over one year. If therent is weekly, the courts may likewise determine alonger period after the lessee has been in possessionfor over six months. In case of daily rent, the courtsmay also fix a longer period after the lessee hasstayed in the place for over one month.

Article 1675, Civil Code. Except in cases stated inArticle 1673, the lessee shall have a right to make useof the periods established in Articles 1682 and 1687.

K. RIGHT of PURCHASER of LEASED LAND

Article 1676, Civil Code. The purchaser of a piece ofland which is under a lease that is not recorded in theRegistry of Property may terminate the lease, savewhen there is a stipulation to the contrary in thecontract of sale, or when the purchaser knows of theexistence of the lease.

If the buyer makes use of this right, the lessee maydemand that he be allowed to gather the fruits of theharvest which corresponds to the current agriculturalyear and that the vendor indemnify him for damagessuffered.

If the sale is fictitious, for the purpose of extinguishingthe lease, the supposed vendee cannot make use ofthe right granted in the first paragraph of this article.The sale is presumed to be fictitious if at the time thesupposed vendee demands the termination of thelease, the sale is not recorded in the Registry ofProperty.

Article 1677, Civil Code. The purchaser in a salewith the right of redemption cannot make use of thepower to eject the lessee until the end of the periodfor the redemption.

L. USEFUL IMPROVEMENTS in GF MADEby LESSEE

Article 1678, Civil Code. If the lessee makes, ingood faith, useful improvements which are suitable tothe use for which the lease is intended, withoutaltering the form or substance of the property leased,the lessor upon the termination of the lease shall paythe lessee one-half of the value of the improvementsat that time. Should the lessor refuse to reimbursesaid amount, the lessee may remove theimprovements, even though the principal thing maysuffer damage thereby. He shall not, however, causeany more impairment upon the property leased than isnecessary.

With regard to ornamental expenses, the lessee shallnot be entitled to any reimbursement, but he mayremove the ornamental objects, provided no damageis caused to the principal thing, and the lessor doesnot choose to retain them by paying their value at thetime the lease is extinguished.


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M. SPECIAL PROVISIONS for LEASES ofRURAL LANDS

Article 1680, Civil Code. The lessee shall have noright to a reduction of the rent on account of thesterility of the land leased, or by reason of the loss offruits due to ordinary fortuitous events; but he shallhave such right in case of the loss of more than one-half of the fruits through extraordinary and unforeseenfortuitous events, save always when there is aspecific stipulation to the contrary.

Extraordinary fortuitous events are understood to be:fire, war, pestilence, unusual flood, locusts,earthquake, or others which are uncommon, andwhich the contracting parties could not havereasonably foreseen.

Article 1681, Civil Code. Neither does the lesseehave any right to a reduction of the rent if the fruitsare lost after they have been separated from theirstalk, root or trunk.

Article 1682, Civil Code. The lease of a piece ofrural land, when its duration has not been fixed, isunderstood to have been for all the time necessary forthe gathering of the fruits which the whole estateleased may yield in one year, or which it may yieldonce, although two or more years have to elapse forthe purpose.

Article 1683, Civil Code. The outgoing lessee shallallow the incoming lessee or the lessor the use of thepremises and other means necessary for thepreparatory labor for the following year; and,reciprocally, the incoming lessee or the lessor isunder obligation to permit the outgoing lessee to dowhatever may be necessary for the gathering orharvesting and utilization of the fruits, all inaccordance with the custom of the place.

Article 1684, Civil Code. Land tenancy on sharesshall be governed by special laws, the stipulations ofthe parties, the provisions on partnership and by thecustoms of the place.

Article 1685, Civil Code. The tenant on sharescannot be ejected except in cases specified by law.

N. SPECIAL PROVISIONS for LEASES ofURBAN LANDS

Article 1686, Civil Code. In default of a specialstipulation, the custom of the place shall be observedwith regard to the kind of repairs on urban property forwhich the lessor shall be liable. In case of doubt it isunderstood that the repairs are chargeable againsthim.

Article 1687, Civil Code. If the period for the leasehas not been fixed, it is understood to be from year toyear, if the rent agreed upon is annual; from month tomonth, if it is monthly; from week to week, if the rentis weekly; and from day to day, if the rent is to be paiddaily. However, even though a monthly rent is paid,and no period for the lease has been set, the courtsmay fix a longer term for the lease after the lesseehas occupied the premises for over one year. If therent is weekly, the courts may likewise determine alonger period after the lessee has been in possessionfor over six months. In case of daily rent, the courtsmay also fix a longer period after the lessee hasstayed in the place for over one month.

Article 1688, Civil Code. When the lessor of ahouse, or part thereof, used as a dwelling for a family,or when the lessor of a store, or industrialestablishment, also leases the furniture, the lease ofthe latter shall be deemed to be for the duration of thelease of the premises.

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LAND TITLES and DEEDSTable of Contents

Chapter I: Background, Basic Concepts andGeneral Principles........................................239

I. Definitions and Basic Concepts ........239II. Nature and stages.............................240III. Purpose of Registration.....................240IV. Modes of Acquiring Land Titles.........240V. Jurisdiction ........................................240

Chapter 2: Torrens Certificate of Title .......241I. Original Certificate of Title or OCT....241II. Transfer Certificate of Title................241III. Patents ..............................................241

Chapter 3: Original Registration.................242I. Laws Governing Land Registration...242II. Effect of Registration.........................242III. Original Registration Proceeding ......242IV. Attributes of and Limitation In Certificateof Title and Registered Land (FIIC) ...........247V. Judicial Confirmation of Imperfect orIncomplete Titles............................249

Chapter 4: Cadastral RegistrationProceedings..................................................251

I. Steps in Cadastral RegistrationProceedings ...............................................252

Chapter 5: Subsequent Registration..........253I. Two Types of Dealings......................253II. Necessity and Effects of Registration

253III. Voluntary vs. Involuntary Dealings..253IV. Registration of Voluntary Instruments inGeneral ......................................................254V. Registration of Deeds of Sale andTransfers....................................................255VI. Mortgages and Leases......................256VII. Powers of Attorney; Trusts ...........257VIII. Involuntary Dealings .....................257

Chapter 6: System of Registration ofUnregistered Lands .....................................261

I. Key Points.........................................261II. Procedure .........................................261

Chapter 7: Registration of Public Lands ...262I. Classification of Land of the PublicDomain ......................................................262II. Nature of Title to Public LandsConveyed ..................................................262III. Procedure of Conveying Public Land toa Private Person ........................................262IV. Director of Lands: Quasi-judicial officer

263V. Modes of Alienating Public Lands:....263VI. Patents .........................................263

Chapter 8: Remedies of the Aggrieved Party.......................................................................264

Chapter 9: Reconstitution 0f Titles ...........266I. Grounds ............................................266II. Petitions for Reconstitution ...............266III. Duties of the Land Registration Authority

266IV. Effects of Fraud, Deceit andMachination in the Reconstitution of Titles 266

CIVIL LAW REVIEWER Chapter 1: BACKGROUND, BASIC CONCEPTS and GENERAL PRINCIPLES

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Chapter I: Background, Basic Conceptsand General Principles

This 1st

Chapter will give an overview of the definitions ofconcepts relating to Land, Titles and Deeds. It also includesa short discussion of what exactly is land registration.

There are FIVE MAJOR LESSONS in this section:

I. Definitions of the Basic ConceptsII. Nature of Land RegistrationIII. Purpose of RegistrationIV. Modes of Acquiring Land TitlesV. Jurisdiction

I. Definitions and Basic Concepts

A. THE TORRENS SYSTEM A system for registration of land under

which, upon landowner’s application, thecourt may, after appropriate proceedings,direct the issuance of a certificate of title.(Black’s Law Dictionary)

B. LAND TITLE Evidence of the right of the owner or the

extent of his interest, and by which meanshe can maintain control, and as a rule assertright to exclusive possession and enjoymentof property.

C. DEED An instrument in writing which any real

estate or interest therein is created,alienated, mortgaged or assigned or bywhich title to any real estate may be affectedin law or equity. Necessarily includes:1. The name of the Grantor2. The name of the Grantee3. Words of grant4. Description of property5. Signatue of grantor6. Witnesses

D. FEE SIMPLE Absolute title; absolute estate in perpetuity.

Land is conferred upon a man and his heirsabsolutely and without any limitationimposed upon the state.

E. REGISTRATION Process whereby the State provides a public

record of the title itself upon which aprospective purchaser or someone elseinterested may rely. It is a means toguarantee the title

F. RECORDING It is the process whereby Register of Deeds

writes information in his Registry Book. Thisdoes not guarantee the title

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LAND TITLES and DEEDS TEAM

* This reviewer is a reproduction of the2009 edition and was not updated by the

2010 Academics Committee.

Kat AglibotLead Writer

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CIVIL LAW REVIEWER Chapter 1: BACKGROUND, BASIC CONCEPTS and GENERAL PRINCIPLES

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II. Nature and stages

Land registration is a proceeding in rem. Roxas vs. Enriquez, (1914): A proceeding in rem,

dealing with a tangible res, may be instituted andcarried to judgment, without personal service.

PD 1529Sec. 2 Nature of registration proceedings; jurisdictionof courts. Judicial proceedings for the registration oflands throughout the Philippines shall be in rem andshall be based on the generally accepted principlesunderlying the Torrens system. xxx

3 Stages:1. Production & delivery of deed by grantor to

grantee without registration2. Deed of conveyance is recorded to bind 3rd

persons3. Registration of title

III. Purpose of Registration

1. Serve as constructive notice2. Prevent fraudulent claims3. Protect interest of strangers to transaction4. Grey Alba vs. CA, (1910): To establish and

certify to the ownership of an absolute andindefeasible title to realty, and to simplify itstransfer.

5. SM Prime Holdings vs. Angela Madayag(2009, Nachura): The fundamental purposeof the Land Registration Law (PresidentialDecree No. 1529) is to finally settle title toreal property in order to preempt anyquestion on the legality of the title – exceptclaims that were noted on the certificateitself at the time of registration or those thatarose subsequent thereto. Consequently,once the title is registered under the saidlaw, owners can rest secure on theirownership and possession.

IV. Modes of Acquiring Land Titles

1. Title by public grant – conveyance of publicland by government to a private individual

2. Title by acquisitive prescription – open,continuous, exclusive, notorious possession of aproperty

3. Title by accretion – alluvion4. Title by reclamation – filling of submerged land

by deliberate act and reclaiming title thereto;government

5. Title by voluntary transfer – private grant;voluntary execution of deed of conveyance

6. Title by involuntary alienation – no consentfrom owner of land; forcible acquisition by state(expropriation)

7. Title by descent or devise – hereditarysuccession to the estate of deceased owner

8. Title by emancipation patent or grant – forpurpose of ameliorating sad plight of tenant-

farmers; not transferable except by hereditarysuccession.

V. Jurisdiction

(Asked in ’83)

PD 1529Sec. 2Nature of registration proceedings; jurisdiction ofcourts. xxx (Courts of First Instance) Regional TrialCourts shall have exclusive jurisdiction over allapplications for original registration of title to lands,including improvements and interests therein, andover all petitions filed after original registration of title,with power to hear and determine all questions arisingupon such applications or petitions. xxx

BP 129Sec. 34Delegated jurisdiction in cadastral and landregistration cases. Metropolitan Trial Courts,Municipal Trial Courts, and Municipal Circuit TrialCourts may be assigned by the Supreme Court tohear and determine cadastral or land registrationcases covering lots where there is no controversy oropposition, or contested lots the where the value ofwhich does not exceed One hundred thousand pesos(P100,000.00), such value to be ascertained by theaffidavit of the claimant or by agreement of therespective claimants if there are more than one, orfrom the corresponding tax declaration of the realproperty. Their decisions in these cases shall beappealable in the same manner as decisions of theRegional Trial Courts. (as amended by R.A. No.7691)

GENERAL RULE: Land registration proceedings and all

petitions after original registration oftitles are filed with the RTC’s of theprovince or city where the land or aportion or it lies.

SM Prime Holdings vs. Angela Madayag(2009, Nachura): Presidential Decree (P.D.) No. 1529

eliminated the distinction between thegeneral jurisdiction vested in the RTC andthe latter’s limited jurisdiction when actingmerely as a land registration court. Landregistration courts, as such, can now hearand decide even controversial andcontentious cases, as well as those involvingsubstantial issues. It may, therefore, hearand determine all questions that arise from apetition for registration.

EXCEPTIONS: When the case involves -

o lots without controversy or oppositiono contested lots where the value does not

exceed P100,000.00, in which case, theMTC’s have jurisdiction.

CIVIL LAW REVIEWER Chapter 2: TORRENS CERTIFICATE of TITLE

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Chapter 2: Torrens Certificate of Title

This 2nd

Chapter will explore the three major kinds ofTorrens certificate of title. These are:

I. Original Certificate of TitleII. Transfer Certificate of TitleIII. Patents

I. Original Certificate of Title or OCT

It is the first certificate of title issued in thename of a registered owner by theRegister of Deeds covering a parcel of landwhich had been registered under theTorrens System, by virtue of judicial oradministrative proceedings.

II. Transfer Certificate of Title

The subsequent certificate of titlepursuant to any deed of transfer orconveyance to another person. TheRegister of Deeds shall make a newcertificate of title and given him an owner’sduplicate certificate. The previous certificate(need not be an OCT) shall be stamped“cancelled”.

PD 1529Sec. 43Transfer Certificate of Title. The subsequentcertificate of title that may be issued by the Registerof Deeds pursuant to any voluntary or involuntaryinstrument relating to the same land shall be in likeform, entitled "Transfer Certificate of Title", andlikewise issued in duplicate. The certificate shall showthe number of the next previous certificate coveringthe same land and also the fact that it was originallyregistered, giving the record number, the number ofthe original certificate of title, and the volume andpage of the registration book in which the latter isfound.

III. Patents

PD 1529Sec. 103Certificates of title pursuant to patents. Wheneverpublic land is by the Government alienated, grantedor conveyed to any person, the same shall bebrought forthwith under the operation of thisDecree.

It shall be the duty of the official issuing theinstrument of alienation, grant, patent orconveyance in behalf of the Government to cause

such instrument to be filed with the Register ofDeeds of the province or city where the land lies,and to be there registered like other deeds andconveyance, whereupon a certificate of title shall beentered as in other cases of registered land, and anowner's duplicate issued to the grantee.

The deed, grant, patent or instrument ofconveyance from the Government to the granteeshall not take effect as a conveyance or bind theland but shall operate only as a contract betweenthe Government and the grantee and as evidenceof authority to the Register of Deeds to makeregistration.

It is the act of registration that shall be the operativeact to affect and convey the land, and in all casesunder this Decree, registration shall be made in theoffice of the Register of Deeds of the province orcity where the land lies. The fees for registrationshall be paid by the grantee. After due registrationand issuance of the certificate of title, such landshall be deemed to be registered land to all intentsand purposes under this Decree.

NOTE: Patents only involve public lands which

are alienated by the Government,pursuant to the Public Land Act.

The patent (even if denominated as deed ofconveyance) is not really a conveyance buta contract between the grantee and theGovernment and evidence of authority tothe Register of Deeds to make registration.

The act of registration is the operative actto affect and convey the land.

(Patents will be discussed more thoroughly inChapter 7.)

GENERAL RULE: A Torrens Certificate of Title is valid

and enforceable against the wholeworld. (Asked in ’08)

Egao vs. CA, (1989): A Torrens title, onceregistered, cannot be defeated, even byadverse, open and notorious possession. Aregistered title under the Torrens systemcannot be defeated by prescription. Thetitle, once registered, is notice to the wholeworld. All persons must take notice. No onecan plead ignorance of the registration.

CIVIL LAW REVIEWER Chapter 3: ORIGINAL REGISTRATION

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Chapter 3: Original Registration

This 3rd

Chapter will first give you everything you needto know about original land registration: a summary ofpertinent laws, steps in original registrationproceedings, among others.

The chapter discusses FIVE MAJOR LESSONS:

I. Laws Governing Land RegistrationII. Effect of RegistrationIII. Original Registration ProceedingsIV. Attributes of and Limitations on

Certificates of Title andRegistration

V. Judicial Confirmation of Imperfector Incomplete Titles

I. Laws Governing Land Registration

A. PD NO. 1529 The Property Registration Decree covers

both ordinary and cadastral registrationproceedings. It supersedes the LandRegistration Act and the Cadastral Act.

Application of the Land Registration Act, asamended by the Property RegistrationDecree: (Asked in ’89 and ’07)

B. CA 141 The Public Land Act governs the procedure

for the judicial confirmation of imperfect orincomplete titles.

It applies to lands of the public domainwhich have been declared open todisposition or concession and officiallydelimited and classified.

C. RA NO. 8371 The Indigenous Peoples Rights Act

recognizes the rights of ownership andpossession of indigenous culturalcommunities to their ancestral domains andlands on the basis of native title, and definesthe extent of these lands and domains. Itexpressly converts ancestral lands intopublic agricultural lands, and individualsmembers of the cultural communicates shallhave the option to secure title to theirancestral lands under the CA 141 or PD1529.

NOTE: The IPRA still refers to the LandRegistration Act and not the PropertyRegistration Decree, which bolsters theargument that the former was not repealed bythe latter.

II. Effect of Registration

Registration does not vest or give title to theland, but merely confirms and thereafterprotects the title already possessed by theowner, making it imprescriptible byoccupation of third parties. It does not givethe owner any better title than he has.(Asked in ’98)

Vagalidad vs. Vagalidad, (2006):Registration is not a mode of acquiringownership. A certificate of title cannot beused to protect a usurper from the trueowner or as a shield for the commission offraud.

Camitan and Lopez vs. Fidelity InvestmentCorp.: (2008,Nachura):Possession of anowner’s duplicate copy of a certificate oftitle is not necessarily equivalent toownership the land covered by it. Thecertificate by itself does not vest ownership.It is merely an evidence of title over theproperty.

III. Original Registration Proceeding

Steps in Original RegistrationProceedings:

1. Determine if the land is registrable2. Determine if you are qualified to apply3. Survey the land4. File the application (survey attached) for land

registration with the appropriate court5. Court sets initial hearing6. Publication of the initial hearing7. File an opposition to the application8. Hearing9. Judgment10. Issuance of decree

A. WHAT LANDS ARE REGISTRABLE?

1. Registrable landsa. Private Landsb. Agricultural Lands

1987 CONSTITUTIONArt. XIISec. 2xxx With the exception of agricultural lands, all other naturalresources shall not be alienated. xxx

Sec 3. Lands of the public domain are classified intoagricultural, forest or timber, mineral lands and nationalparks. Agricultural lands of the public domain may be furtherclassified by law according to the uses to which they maybe devoted. Alienable lands of the public domain shall belimited to agricultural lands. xxx


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Republic vs. CA and Naguit, (2005): If in thepublic domain, the land must be classifiedas alienable and disposable. It must beclassified as such at the time of filing theapplication for registration.

2. Non- registrable lands: (Asked in ’07)1987, CONSTITUTIONArt. XIISec. 2All lands of the public domain, waters, minerals, coal,petroleum, and other mineral oils, all forces of potentialenergy, fisheries, forests or timber, wildlife, flora and fauna,and other natural resources are owned by the State. xxx

Civil CodeArt. 420The following things are property of public dominion:1. Those intended for public use, such as roads,canals, rivers, torrents, ports and bridges constructedby the State, banks, shores, roadsteads, and othersof similar character;2. Those which belong to the State, without being forpublic use, and are intended for some public serviceor for the development of the national wealth.

The following lands cannot be registered: Forest or timberlands Lands for public use: roads, ports and

bridges, etc. Lands which are owned by the State for

public service or development ofnational wealth.

B. WHO MAY APPLY? Constitutional Requirements and

Limitations:

Only Filipino Citizens:1987, CONSTITUTIONArt. XIISec. 3xxx Citizens of the Philippines may lease not more than fivehundred hectares, or acquire not more than twelve hectaresthereof by purchase, homestead, or grant. Xxx

Exceptions:1. Aliens by way of hereditary succession2. Natural born citizens who have3. lost their citizenship- limited to4. 5,000 sq. m. for urban land and 3

hectares for rural land (RA No. 7042 asamended by RA No. 8179)

Private corporations may not hold alienablelands of the public domain except by lease:

1987, CONSTITUTIONArt. XIISec. 3xxx Private corporations or associations 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, andnot to exceed one thousand hectares in area. xxx

Private lands may be owned for as long asthe corporation is at least 60% Filipino. :

1987, CONSTITUTIONArt. XIISec. 2xxx The State may directly undertake such activities,or it may enter into co-production, joint venture, orproduction-sharing agreements with Filipino citizens,or corporations or associations at least sixty percentum of whose capital is owned by such citizens.Such agreements may be for a period not exceedingtwenty-five years, and under such terms andconditions as may be provided by law. xxx

Additional Requirements: (OCEN-PAAL)

PD 1529Sec. 14Who may apply. The following persons may file in theproper (Court of First Instance) Regional Trial Courtan application for registration of title to land, whetherpersonally or through their duly authorizedrepresentatives:

(1) Those who by themselves or through theirpredecessors-in-interest have been in Open,continuous, exclusive and notorious possession andoccupation of alienable and disposable lands of thepublic domain under a bona fide claim of ownershipsince June 12, 1945, or earlier.

(2) Those who have acquired ownership of privatelands by Prescription under the provision of existinglaws.

(3) Those who have acquired ownership of privatelands or abandoned river beds by right of Accessionor accretion under the existing laws.

(4) Those who have acquired ownership of land inany other manner provided for by Law.

Where the land is Owned in common, all the co-owners shall file the application jointly.

Where the land has been sold under Pacto de retro,the vendor a retro may file an application for theoriginal registration of the land, provided, however,that should the period for redemption expire duringthe pendency of the registration proceedings andownership to the property consolidated in the vendeea retro, the latter shall be substituted for the applicantand may continue the proceedings.

A trustee on behalf of his principal may apply fororiginal registration of any land held in trust by him,unless prohibited by the instrument creating the trust.


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Judicial Confirmation of Title: CA 141 vs.PD 1529

Republic vs. Tsai, (2009): CA 141 has beenamended many times…As the law now stands,a mere showing of possession and occupationfor 30 years or more is not sufficient. Therefore,since the effectivity of PD 1073 on 25 January1977, it must now be shown that possession andoccupation of a piece of land by the applicant,by himself or through his predecessors-in-interest, started on 12 June 1945 or earlier.This provision is in total conformity with Section14(1) of PD 1529.

BUT take note: There are still some cases that use CA

141 for judicial confirmation of imperfecttitle:

Republic vs. Fabio, (2008): CA 141, also knownas the Public Land Act, remains to this day theexisting general law governing the classificationand disposition of lands of the public domain,other than timber and mineral lands.

C. SURVEY The survey may be done by a public or

private surveyor. When done by a privatesurveyor it has to be approved by the LandManagement Bureau. PD 239 withdrewthe authority of the Land RegistrationAuthority to approve original surveyplans.

D. APPLICATION

PD 1529Sec. 15Form and contents. The application for landregistration shall be in writing, signed by theapplication or the person duly authorized in his behalf,and sworn to before any officer authorized toadminister oaths for the province or city where theapplication was actually signed. If there is more thanone applicant, the application shall be signed andsworn to by and in behalf of each.

The application shall contain a description of the landand shall state the citizenship and civil status of theapplicant, whether single or married, and, if married,the name of the wife or husband, and, if the marriagehas been legally dissolved, when and how themarriage relation terminated. It shall also state the fullnames and addresses of all occupants of the land andthose of the adjoining owners, if known, and, if notknown, it shall state the extent of the search made tofind them.

The application for land registration shall be: in writing

signed and sworn to by theapplicant/duly authorized person, and ifmore than one applicant, it shall besigned and sworn to by and in behalf ofeach

It shall contain: a description of the land citizenship and civil status of the

applicant if married, the name of the wife or

husband if the marriage has been legally dissolved,

when and how full names and addresses of all

occupants and those of the adjoiningowners, if known

if not known, it shall state the extent ofthe search made to find them.

Note: It must be accompanied by the originaltracing cloth plan, white or blue copies thereof,the original and copies of the technicaldescription and geodetic engineer’s certification.

Special Cases:

PD 1529Sec. 20When land applied for borders on road. If theapplication describes the land as bounded by a publicor private way or road, it shall state whether or not theapplicant claims any and what portion of the landwithin the limits of the way or road, and whether theapplicant desires to have the line of the way or roaddetermined.

PD 1529Sec. 16Non-resident applicant. If the applicant is not aresident of the Philippines, he shall file with hisapplication an instrument in due form appointing anagent or representative residing in the Philippines,giving his full name and postal address, and shalltherein agree that the service of any legal process inthe proceedings under or growing out of theapplication made upon his agent or representativeshall be of the same legal effect as if made upon theapplicant within the Philippines. If the agent orrepresentative dies, or leaves the Philippines, theapplicant shall forthwith make another appointmentfor the substitute, and, if he fails to do so the courtmay dismiss the application.

If the land bounded by a road, the applicantmust state in his application if he claims anyportion of the land within the limits of theroad, or if he likes to have the boundariesdetermined.

If the applicant is a non-resident, he shallappoint an agent or representative who is aPhilippine resident.


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Intestate Estate of Don Mariano San Pedrovs. CA, (1996): A person claiming ownershipof real property must clearly identify the landclaimed by him.

In re: Application for Land Registration vs.Republic, (2008, Nachura): An applicant in aland registration case must prove the factsand circumstances evidencing the allegedownership of the land applied for. Generalstatements which are mere conclusions oflaw and not factual proof of possession areunavailing. The deeds in its favor onlyproved possession of its predecessors-in-interest as early as 1948. (The law nowstands that a mere showing of possessionfor 30 years is not sufficient. OCENpossession must be shown to have statedon June 12, 1945 or earlier.)

E. INITIAL HEARING

PD 1529Sec. 23Notice of initial hearing, publication, etc. The courtshall, within five days from filing of the application,issue an order setting the date and hour of the initialhearing which shall not be earlier than forty-five daysnor later than ninety days from the date of the order.xxx

The court shall issue an order setting thedate and hour of the initial hearing withinfive days from filing of the application.The initial hearing shall be 45-90 days fromthe date of the order.

F. PUBLICATION

PD 1529Sec. 23xxx The public shall be given notice of the initialhearing of the application for land registration bymeans of (1) publication; (2) mailing; and (3) posting.

1. By publication.Upon receipt of the order of the court setting the timefor initial hearing, the Commissioner of LandRegistration shall cause notice of initial hearing to bepublished once in the Official Gazette and once in anewspaper of general circulation in the Philippines:

Provided, however, that the publication in the OfficialGazette shall be sufficient to confer jurisdiction uponthe court. Said notice shall be addressed to allpersons appearing to have an interest in the landinvolved including the adjoining owners so far asknown, and "to all whom it may concern".

Said notice shall also require all persons concerned toappear in court at a certain date and time to showcause why the prayer of said application shall not begranted.

2. By mailing.(a) Mailing of notice to persons named in theapplication. The Commissioner of Land Registrationshall also, within seven days after publication of saidnotice in the Official Gazette, as hereinbeforeprovided, cause a copy of the notice of initial hearingto be mailed to every person named in the noticewhose address is known.

(b) Mailing of notice to the Secretary of PublicHighways, the Provincial Governor and the Mayor. Ifthe applicant requests to have the line of a public wayor road determined, the Commissioner of LandRegistration shall cause a copy of said notice of initialhearing to be mailed to the Secretary of PublicHighways, to the Provincial Governor, and to theMayor of the municipality or city, as the case may be,in which the land lies.

(c) Mailing of notice to the Secretary of AgrarianReform, the Solicitor General, the Director of Lands,the Director of Public Works, the Director of ForestDevelopment, the Director of Mines and the Directorof Fisheries and Aquatic Resources. If the landborders on a river, navigable stream or shore, or onan arm of the sea where a river or harbor line hasbeen established, or on a lake, or if it otherwiseappears from the application or the proceedings that atenant-farmer or the national government may have aclaim adverse to that of the applicant, notice of theinitial hearing shall be given in the same manner tothe Secretary of Agrarian Reform, the SolicitorGeneral, the Director of Lands, the Director of Minesand/or the Director of Fisheries and AquaticResources, as may be appropriate.

3. By posting.The Commissioner of Land Registration shall alsocause a duly attested copy of the notice of initialhearing to be posted by the sheriff of the province orcity, as the case may be, or by his deputy, in aconspicuous place on each parcel of land included inthe application and also in a conspicuous place on thebulletin board of the municipal building of themunicipality or city in which the land or portion thereofis situated, fourteen days at least before the date ofinitial hearing.The court may also cause notice to be served to suchother persons and in such manner as it may deemproper.

1. By Publication The Commissioner of Land Registration

shall cause it to be published: once in theOfficial Gazette (sufficient to conferjurisdiction) and once in a newspaper ofgeneral circulation in the Philippines

The notice is addressed to: all persons appearing to have an

interest in the land the adjoining ownersso far as known "to all whom it mayconcern"


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2. By Mailing Within 7 days from publication in the OG,

the Commissioner of Land Registration shallmail a copy of the notice to:a. every person named in the notice whose

address is known.b. the Secretary of Public Highways, to the

Provincial Governor, and to the Mayor ofthe municipality or city, in which the landlies, if the applicant requests to have theline of a public way or road determined

c. Secretary of Agrarian Reform, theSolicitor General, the Director of Lands,the Director of Mines and/or the Directorof Fisheries and Aquatic Resources, (asappropriate) if the land borders on ariver, navigable stream or shore, or onan arm of the sea where a river orharbor line has been established, or ona lake, or if it otherwise appears fromthe application or the proceedings that atenant-farmer or the nationalgovernment may have a claim adverseto that of the applicant

3. By Posting CLR shall cause the sheriff or his deputy to

post the notice at least 14 days before thehearing: in a conspicuous place on eachparcel of land included in the application andin a conspicuous place on the bulletinboard of the municipal building of themunicipality or city in which the land orportion thereof is situated.

G. OPPOSITION (ASKED IN ’89)

PD 1529Sec. 23 Opposition to application in ordinaryproceedings. Any person claiming an interest,whether named in the notice or not, may appear andfile an opposition on or before the date of initialhearing, or within such further time as may be allowedby the court. The opposition shall state all theobjections to the application and shall set forth theinterest claimed by the party filing the same and applyfor the remedy desired, and shall be signed andsworn to by him or by some other duly authorizedperson.If the opposition or the adverse claim of any personcovers only a portion of the lot and said portion is notproperly delimited on the plan attached to theapplication, or in case of undivided co-ownership,conflicting claims of ownership or possession, oroverlapping of boundaries, the court may require theparties to submit a subdivision plan duly approved bythe Director of Lands.

PD 1529Sec 26. Order of default; effect. If no person appearsand answers within the time allowed, the court shall,

upon motion of the applicant, no reason to thecontrary appearing, order a default to be recordedand require the applicant to present evidence. By thedescription in the notice "To all Whom It MayConcern", all the world are made parties defendantand shall be concluded by the default order.Where an appearance has been entered and ananswer filed, a default order shall be entered againstpersons who did not appear and answer.

Who may file? Any person claiming aninterest.

When to file? On or before the date of initialhearing, or within such further time as maybe allowed by the court.

What shall it contain? It shall state all theobjections and the interest claimed by theparty the remedy desired.

How shall it be made? It shall be signedand sworn to by him or by some other dulyauthorized person.

NOTE: If no one appears/files an answer, upon

motion, the court shall order a default to berecorded.

By the description in the notice "To allWhom It May Concern", all the world aremade parties defendant and shall beconcluded by the default order.

Where an appearance has been enteredand an answer filed, a default order shall beentered against persons who did not appearand answer.

Director of Lands vs. Agustin, (1921):Absence of opposition does not justifyoutright registration.

H. HEARING Proof of Ownership:1. Municipality of Santiago vs. CA, (1983):

Tax declaration and receipts are notconclusive but have strong probative valuewhen accompanied by proof of actualpossession.

2. Republic vs. Tayag, (1984): Payment inone lump sum to cover all past taxes is“irregular” and affects the validity of theapplicant’s claim of ownership

3. Spanish titles are no longer admissible.

I. JUDGMENT

PD 1529Sec 30. When judgment becomes final; duty to causeissuance of decree. The judgment rendered in a landregistration proceedings becomes final upon theexpiration of thirty days to be counted from the data ofreceipt of notice of the judgment. An appeal may betaken from the judgment of the court as in ordinarycivil cases.


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After judgment has become final and executory, itshall devolve upon the court to forthwith issue anorder in accordance with Section 39 of this Decree tothe Commissioner for the issuance of the decree ofregistration and the corresponding certificate of title infavor of the person adjudged entitled to registration.

Judgment becomes final upon expiration of30 days from receipt of notice of judgment.

Forms of Judgment:1. Writ of possession

Vencilao vs. Vano, (1990): The writ maybe issued not only against the persondefeated in the registration case butalso against any one adverselyoccupying the land during theproceedings.

Bernas vs. Nuevo, (1984): The writ doesnot lie against a person who entered theland after the issuance of the decreeand who was not a party in the case.He can only be proceeded against in aseparate action for ejectment orreinvindicatory action.

2. Writ of demolition Gawaran vs. IAC, (1988): This writ is a

complement of the writ of possession.

J. ISSUANCE OF DECREE

PD 1529Sec 39. Preparation of decree and Certificate of Title.After the judgment directing the registration of title toland has become final, the court shall, within fifteendays from entry of judgment, issue an order directingthe Commissioner to issue the corresponding decreeof registration and certificate of title. The clerk of courtshall send, within fifteen days from entry of judgment,certified copies of the judgment and of the order of thecourt directing the Commissioner to issue thecorresponding decree of registration and certificate oftitle, and a certificate stating that the decision has notbeen amended, reconsidered, nor appealed, and hasbecome final.

Thereupon, the Commissioner shall cause to beprepared the decree of registration as well as theoriginal and duplicate of the corresponding originalcertificate of title.

The original certificate of title shall be a true copy ofthe decree of registration. The decree of registrationshall be signed by the Commissioner, entered andfiled in the Land Registration Commission. Theoriginal of the original certificate of title shall also besigned by the Commissioner and shall be sent,together with the owner's duplicate certificate, to theRegister of Deeds of the city or province where theproperty is situated for entry in his registration book.

PD 1529Sec 40. Entry of Original Certificate of Title. Uponreceipt by the Register of Deeds of the original andduplicate copies of the original certificate of title thesame shall be entered in his record book and shall benumbered, dated, signed and sealed by the Registerof Deeds with the seal of his office. Said certificate oftitle shall take effect upon the date of entry thereof.The Register of Deeds shall forthwith send notice bymail to the registered owner that his owner's duplicateis ready for delivery to him upon payment of legalfees.

Preparation of the Decree: Court directs the Land Registration

Authority to issue a decree ofregistration and certificate of Title within15 days from entry of judgment.

o Appeal reckoned from theSolicitor General’s receipt ofthe decision

o Becomes final 15 days fromreceipt

Commissioner signs the decree Decree is entered and filed with the LRC OCT and owner’s duplicate certificate

are sent to the Register of Deeds whereproperty is situated.

Register of Deeds enters the informationin his registration book.

Register of Deeds sends notice by mailto owner that his duplicate is ready fordelivery upon payment of legal fees.

Gomez vs. CA, (1988): Court retainsjurisdiction over the case until after theexpiration of 1 year from the issuance of thedecree of registration.

IV. Attributes of and Limitation InCertificate of Title and RegisteredLand (FIIC)

PD 1529Sec 44. Statutory liens affecting title. Every registeredowner receiving a certificate of title in pursuance of adecree of registration, and every subsequentpurchaser of registered land taking a certificate of titlefor value and in good faith, shall hold the same freefrom all encumbrances except those noted in saidcertificate and any of the following encumbranceswhich may be subsisting, namely:

First. Liens, claims or rights arising or existing underthe laws and Constitution of the Philippines which arenot by law required to appear of record in the Registryof Deeds in order to be valid against subsequentpurchasers or encumbrancers of record.


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Second. Unpaid real estate taxes levied andassessed within two years immediately preceding theacquisition of any right over the land by an innocentpurchaser for value, without prejudice to the right ofthe government to collect taxes payable before thatperiod from the delinquent taxpayer alone.

Third. Any public highway or private way establishedor recognized by law, or any government irrigationcanal or lateral thereof, if the certificate of title doesnot state that the boundaries of such highway orirrigation canal or lateral thereof have beendetermined.

Fourth. Any disposition of the property or limitation onthe use thereof by virtue of, or pursuant to,Presidential Decree No. 27 or any other law orregulations on agrarian reform.

A. FREE FROM LIENS ANDENCUMBRANCES

EXCEPT those noted in the certificate andCATH:

1. Liens, claims or rights existing under thelaws and Constitution which are not requiredto appear of record in the Registry of Deeds

2. Unpaid real estate Taxes levied andassessed within 2 yrs preceding theacquisition of any right over the land

3. Any public Highway or private wayestablished or recognized by law, or anygovernment irrigation canal or lateralthereof, if the certificate of title does notstate that the boundaries of such have beendetermined.

4. Any disposition of the property or limitationon the use thereof by virtue of, or pursuantto, Presidential Decree No. 27 or any otherlaws on Agrarian reform.

B. INDEFEASIBLE (ASKED IN’08)

PD 1529Sec 32. Review of decree of registration; Innocentpurchaser for value. The decree of registration shallnot be reopened or revised by reason of absence,minority, or other disability of any person adverselyaffected thereby, nor by any proceeding in any courtfor reversing judgments, subject, however, to the rightof any person, including the government and thebranches thereof, deprived of land or of any estate orinterest therein by such adjudication or confirmation oftitle obtained by actual fraud, to file in the properCourt of First Instance a petition for reopening andreview of the decree of registration not later than oneyear from and after the date of the entry of suchdecree of registration, but in no case shall suchpetition be entertained by the court where an innocentpurchaser for value has acquired the land or aninterest therein, whose rights may be prejudiced.

Whenever the phrase "innocent purchaser for value"

or an equivalent phrase occurs in this Decree, it shallbe deemed to include an innocent lessee, mortgagee,or other encumbrancer for value.

Upon the expiration of said period of one year, thedecree of registration and the certificate of title issuedshall become incontrovertible. Any person aggrievedby such decree of registration in any case may pursuehis remedy by action for damages against theapplicant or any other persons responsible for thefraud.

Ground for reopening and reviewing thedecree of registration: actual fraud (Askedin ’92)

Periods: Must be reopened not later than 1 yr

from and after the date of the entry ofsuch decree. (Asked in ’90 and ’03)

Upon the expiration of said period ofone year, the decree of registration andthe certificate of title issued shallbecome incontrovertible. The onlyremedy left is an action for damages.

Prohibitions: Cannot be reopened because of

absence, minority, or other disability ofany person adversely affected thereby

Cannot be reopened where an innocentpurchaser for value may be prejudiced(includes an innocent lessee,mortgagee, or other encumbrancer forvalue.)

Arguelles vs. Timbancaya, (1976): The ruleon the incontrovertible nature of a certificateof title applies when what is involved is thevalidity of the OCT, not when it concernsthat of the TCT.

C. IMPRESCRIPTIBLE

PD 1529Sec 47. Registered land not subject to prescriptions.No title to registered land in derogation of the title ofthe registered owner shall be acquired by prescriptionor adverse possession.

Barcelona vs. Barcelona, (1956):Prescription is unavailing not only againstthe registered owner but also against hishereditary successors because the lattermerely step into the shoes of the decedentby operation of law and are merely thecontinuation of the personality of theirpredecessor-in-interest.


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D. NOT SUBJECT TO COLLATERALATTACK

PD 1529Sec 48. Certificate not subject to collateral attack. Acertificate of title shall not be subject to collateralattack. It cannot be altered, modified, or canceledexcept in a direct proceeding in accordance with law.

Spouses Padilla vs. Velasco, et. al, G.R. No.169956 (2009, Nachura)

Facts: Velasco et al (respondents) are the heirsof Artemio who died, leaving a parcel of land.He acquired it by virtue of a deed of sale in hisfavor. The Padilla sps (petitioners) entered theland as trustees by virtue of a deed of saleexecuted by a bank in favor of the Solomon sps.Velascos demanded that the Padillas vacate theproperty.Padillas cut trees, built a house and harvestedcrops. Velascos filed a complaint for accionpubliciana before the RTC. Velascos presenteddeed of sale in favor of Artemio, while Padillaspresented deed of sale between bank andSolomons.The Padillas also argue that the Solomon spsacquired the land in good faith and for value andthat they argue that Lot 2161 (the one they areoccupying) and Lot 76-pt (the lot the Solomonspouses bought) are one and the same.

Held: The Velascos have a better right to theland. The instant case is for accion publiciana,or for recovery of the right to possess.Accion publiciana is also used to refer to anejectment suit where the cause of dispossessionis not among the grounds for forcible entry andunlawful detainer, or when possession has beenlost for more than one year and can no longerbe maintained under Rule 70 of the Rules ofCourt.The objective of the plaintiffs in accionpubliciana is to recover possession only, notownership. The Velascos were able to establishlawful possession of the land when the Padillasoccupied the property. The OCT was issued tothe original owners who then sold the land toArtemio.From then on, he was in continuous possessionof the land until his death. It was only in 1987,when the Padillas occupied the property. Theargument that the lots are one and the sameis a collateral attack on the title over theproperty which is registered in the name ofArtemio, which cannot be countenanced.

V. Judicial Confirmation of Imperfect orIncomplete Titles

CA 141Sec 57No title or right to, or equity in, any lands of the publicdomain may hereafter be acquired by prescription orby adverse possession or occupancy, or under or byvirtue of any law in effect prior to Americanoccupation, except as expressly provided by lawsenacted after said occupation of the Philippines by theUnited States.

General Rule: No title or right to, or equity in,any lands of the public domain may beacquired by prescription or by adversepossession or occupancy except asexpressly provided by law. The Public LandAct recognizes the concept of ownershipunder the civil law. This ownership is basedon adverse possession and the right ofacquisition is governed by the Chapter onjudicial confirmation of imperfect orincomplete titles.

This applies only to alienable anddisposable agricultural lands of the publicdomain. Under Sec. 6 of CA 141, theclassification of public lands into alienableand disposable forest lands, or minerallands is the prerogative of the ExecutiveDepartment.

Bracewell vs. CA, (2000): The rule onconfirmation of imperfect title does not applyunless and until the land classified as, say,forest land, is released in an officialproclamation to that effect so that if mayform part of the disposable agricultural landsof the public domain.

A. PERIOD OF FILING

RA No. 9176 extended the period to file anapplication for judicial confirmation ofimperfect or incomplete title to December31, 2020. It further limited the area appliedfor to 12 hectares.

B. REQUISITES:

Filipino citizen He must have, by himself, or thru his

predecessors – in - interest, possessed andoccupied an alienable and disposableagricultural portion of the public domain

Such possession and occupation must havebeen OCEN and in the concept of ownersince June 12, 1945

Application filed with proper court


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C. PRIVATE CORPORATIONS

Director Of Lands vs. IAC and AcmePlywood and Veneer Co., (1986): Where atthe time the corporation acquired the land,its predecessor-in-interest had been inpossession and occupation thereof in themanner and for the period prescribed by lawas to entitle him to registration in his name,then the proscription against corporationacquiring alienable lands of the publicdomain does not apply for the land was nolonger public land but private property. Sincethe land is private, the corporation caninstitute confirmation proceedings.

NOTE: MAXIMUM LAND THAT CAN BE APPLIED

FOR: 144 hectares In case of foreigner, it sufficient that he is

already Filipino citizen at the time of hisapplication.

Corporation who has less than 60% Filipinoownership cannot apply confirmation ofimperfect title; can only lease

PERSONS COMPETENT TO QUESTIONLAND GRANT: Persons who obtained titlefrom State or thru persons who obtained titlefrom State.

CIVIL LAW REVIEWER Chapter 4: CADASTRAL REGISTRATION PROCEEDINGS

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Chapter 4: Cadastral RegistrationProceedings

This 4th

Chapter deals with processes involved inCadastral Registration.

Only one lesson is discussed in this Chapter.I. Steps in Cadastral Registration Proceedings

Unlike other kinds of registration, this iscompulsory as it is initiated by thegovernment.

PD 1529Sec 35. Cadastral Survey preparatory to filing ofpetition.

(a) When in the opinion of the President of thePhilippines public interest so requires that title to anyunregistered lands be settled and adjudicated, hemay to this end direct and order the Director of Landsto cause to be made a cadastral survey of the landsinvolved and the plans and technical descriptionthereof prepared in due form.

(b) Thereupon, the Director of Lands shall give noticeto persons claiming any interest in the lands as wellas to the general public, of the day on which suchsurvey will begin, giving as fully and accurately aspossible the description of the lands to be surveyed.Such notice shall be punished once in the OfficialGazette, and a copy of the notice in English or thenational language shall be posted in a conspicuousplace on the bulletin board of the municipal building ofthe municipality in which the lands or any portionthereof is situated. A copy of the notice shall also besent to the mayor of such municipality as well as tothe barangay captain and likewise to theSangguniang Panlalawigan and the SangguniangBayan concerned.

(c) The Geodetic Engineers or other employees of theBureau of Lands in charge of the survey shall givenotice reasonably in advance of the date on which thesurvey of any portion of such lands is to begin, whichnotice shall be posted in the bulletin board of themunicipal building of the municipality or barrio inwhich the lands are situated, and shall mark theboundaries of the lands by monuments set up inproper places thereon. It shall be lawful for suchGeodetic Engineers and other employees to enterupon the lands whenever necessary for the purposesof such survey or the placing of monuments.(d) It shall be the duty of every person claiming aninterest in the lands to be surveyed, or in any parcelthereof, to communicate with the Geodetic Engineerupon his request therefor all information possessedby such person concerning the boundary lines of anylands to which he claims title or in which he claimsany interest.

(e) Any person who shall willfully obstruct the makingof any survey undertaken by the Bureau of Lands or

by a licensed Geodetic Engineer duly authorized toconduct the survey under this Section, or shallmaliciously interfere with the placing of anymonument or remove such monument, or shalldestroy or remove any notice of survey posted on theland pursuant to law, shall be punished by a fine ofnot more than one thousand pesos or byimprisonment for not more than one year, or both.

PD 1529Sec 36. Petition for registration. When the lands havebeen surveyed or plotted, the Director of Lands,represented by the Solicitor General, shall instituteoriginal registration proceedings by filing thenecessary petition in the Court of First Instance of theplace where the land is situated against the holders,claimants, possessors, or occupants of such lands orany part thereof, stating in substance that publicinterest requires that the title to such lands be settledand adjudicated and praying that such titles be sosettled and adjudicated:

The petition shall contain a description of the landsand shall be accompanied by a plan thereof, and maycontain such other data as may serve to furnish fullnotice to the occupants of the lands and to all personswho may claim any right or interest therein.

Where the land consists of two or more parcels heldor occupied by different persons, the plan shallindicate the boundaries or limits of the various parcelsas accurately as possible. The parcels shall be knownas "lots" and shall on the plan filed in the case begiven separate numbers by the Director of Lands,which numbers shall be known as "cadastral lotnumbers".

The lots situated within each municipality shall, as faras practicable, be numbered consecutively beginningwith number "one", and only one series of numbersshall be used for that purpose in each municipality.However in cities or townsites, a designation of thelandholdings by blocks and lot numbers may beemployed instead of the designation by cadastral lotnumbers.

The cadastral number of a lot shall not be changedafter final decision has been entered decreasing theregistration thereof, except by order of court. Futuresubdivisions of any lot shall be designated by a letteror letters of the alphabet added to the cadastralnumber of the lot to which the respective subdivisionspertain. The letter with which a subdivision isdesignated shall be known as its "cadastral letter":Provided, however, that the subdivisions of cities ortownsites may be designated by blocks and lotnumbers.

CIVIL LAW REVIEWER Chapter 4: CADASTRAL REGISTRATION PROCEEDINGS

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I. Steps in Cadastral RegistrationProceedings

1. Determination of the President that publicinterest requires title to unregistered landsbe settled

2. Director of lands shall make a cadastralsurvey

3. Director of Lands gives notice to interestedpersons

4. Publication of notice5. A copy of the notice shall also be sent to the

mayor and the sanggunian6. Geodetic engineers/ Bureau of Land

employees shall notify (re: survey) byposting at the municipal building

7. Interested persons should communicate withthe geodetic engineer if he requests for anyinformation about the land

8. Actual survey/ plotting of the land9. Director of Lands represented by Solicitor

General shall institute original registrationproceedings

10. Publication, mailing posting11. Hearing12. Decision13. Issuance of the decree and certificate of title

NOTE: In voluntary registration proceedings,there is no res judicata when the applicant failsto prove his title. In cadastral registration, if theapplicant cannot prove that he is entitled to theland, the land becomes public land. There is resjudicata.

CIVIL LAW REVIEWER Chapter 5: SUBSEQUENT REGISTRATION

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Chapter 5: Subsequent Registration

This 5th

Chapter tackles the subsequent registrationpursuant to dealings such as conveyances ortransfers. These dealings may be voluntary (sale,lease etc.) or involuntary (writs, orders etc.)

There are EIGHT MAJOR LESSONS in this chapter:

I. Two Types of DealingsII. The Necessity and Effects of

RegistrationIII. Voluntary vs. Involuntary

DealingsIV. Registration of Voluntary

Instruments in GeneralV. Registration of Deeds of Sale and

TransfersVI. Mortgages and LeasesVII. Powers of Attorney, TrustsVIII. Involuntary Dealings

I. Two Types of Dealings

A. VOLUNTARY DEALINGS Deeds, instruments, documents which are

the results of free and voluntary acts ofparties thereto.

B. INVOLUNTARY DEALINGS Writ, order, or process issued by the court of

record affecting registered land, also otherinstruments which are not willful acts of theregistered owner, executed without hisknowledge or consent.

II. Necessity and Effects of Registration

PD 1529Sec 51. Conveyance and other dealings by registeredowner. An owner of registered land may convey,mortgage, lease, charge or otherwise deal with thesame in accordance with existing laws. He may usesuch forms of deeds, mortgages, leases or othervoluntary instruments as are sufficient in law.

But no deed, mortgage, lease, or other voluntaryinstrument, except a will purporting to convey or affectregistered land shall take effect as a conveyance orbind the land, but shall operate only as a contractbetween the parties and as evidence of authority tothe Register of Deeds to make registration.

The act of registration shall be the operative act toconvey or affect the land insofar as third persons areconcerned, and in all cases under this Decree, theregistration shall be made in the office of the Registerof Deeds for the province or city where the land lies.

NOTE: The deed, mortgage, lease, or othervoluntary instrument, except a will shall ONLYoperate as:1. A contract between the parties and2. Evidence of authority to the Register of

Deeds to make registration. The act of registration shall be the

operative act to convey or affect the landinsofar as third persons are concerned.

A forged deed is an absolute nullity andconveys no title. (Asked in ’85, ’89, ’00 and’05) EXCEPTION: If there is good faith, a

TCT has already been issued to thepurchaser, the latter being an innocentpurchaser for value according to Sec.39, PD 1529, then the title is good.

PD 1529Sec 52. Constructive notice upon registration. Everyconveyance, mortgage, lease, lien, attachment, order,judgment, instrument or entry affecting registered landshall, if registered, filed or entered in the office of theRegister of Deeds for the province or city where theland to which it relates lies, be constructive notice toall persons from the time of such registering, filing orentering.

Every entry affecting registered land shall, ifregistered, filed or entered in the office ofthe Register of Deeds be constructive noticeto all persons from the time of registering.

III. Voluntary vs. Involuntary Dealings

VOLUNTARYDEALINGS

INVOLUNTARYDEALINGS

Sale, mortgage, lease,patent, powers ofattorney, trusts

Attachment, injunction,mandamus, levy onexecution, notice of lispendens

Presentation of theowner’s duplicatecertificate of title isrequired to notify;mere entry insufficient

Entry in the day book issufficient notice to allpersons

An innocent purchaserfor value of registeredland becomes theregistered owner themoment he presentsand files a dulynotarized and validdeed of sale and thesame is entered in theday book and at thesame time hesurrenders or presentsthe owner’s duplicatecertificate of title

Lenin vs. Bass, (1952):Entry thereof in the daybook of the ROD issufficientnotice to all persons even ifthe owner’s duplicatecertificate of title is notpresented to the ROD.


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VOLUNTARYDEALINGS

INVOLUNTARYDEALINGS

covering the land soldand paysthe registration fees.(Asked in ’98)Villasor vs. Camon,(1951):It is necessary toregister the deed orinstrument in the entrybook and amemorandum thereofshall also be made inthe owner’s duplicatecertificate and itsoriginal

Dir. Of Lands vs. Reyes,(1976):Entry in the day book issufficient notice to allpersons of an adverseclaim without the samebeing annotated at the backof the certificate of title

Spouses Labayen vs.Leonardo Serafica,(2008, Nachura): Atthe time of the filing ofthe petition forcancellation ofencumbrance, thelease contract alreadylost its efficacy. Thus,there is no basis tosave its annotation ondefendant’s title. Thefact that thecancellation of thelease contract wasforged is of nomoment, for there wasno violation of a right.

AFP Mutual BenefitAssociation vs. Santiago,(2008, Nachura): Entry ofthe attachment in the booksis sufficient notice to allpersons. Hence, the factthat the deed of sale wasalready annotated is of nomoment with regard to thirdpersons. The preferencecreated by the levy onattachment is notdiminished by thesubsequent registration ofthe deed of sale.

General Rule: Campillo vs. PNB. (1969): A person dealing

with registered property need not gobeyond, but only has to rely on, the title.(Asked in ’86 and ’04)

He is charged with notice only of suchburdens and claims which are annotated onthe title, for registration is the operative actthat binds the property. (Asked in ’84 and’04)

When should a purchaser investigate? Banks are required to exercise more

care and prudence in dealing withregistered lands for their business is oneaffected with public interest. The generalrule does not apply.

Leung Yee vs. Strong Machinery,(1918): When party concerned hasactual knowledge of facts andcircumstances that would impel areasonably cautious man to makeinquiry.

Jamoc vs. CA, (1991): When purchaseris in bad faith; e.g. he had fullknowledge of a previous sale.

Quiniano vs. CA, (1971): When aperson buys land from one whose rightsover the land is evidenced only by adeed of sale and an annotation in thecertificate of title but no TCT.

IV. Registration of Voluntary Instrumentsin General

PD 1529Sec 54. Dealings less than ownership, howregistered. No new certificate shall be entered orissued pursuant to any instrument which does notdivest the ownership or title from the owner or fromthe transferee of the registered owners.

All interests in registered land less than ownershipshall be registered by filing with the Register of Deedsthe instrument which creates or transfers or claimssuch interests and by a brief memorandum thereofmade by the Register of Deeds upon the certificate oftitle, and signed by him.

A similar memorandum shall also be made on theowner's duplicate. The cancellation or extinguishmentof such interests shall be registered in the samemanner.

PD 1529Sec 55. Grantee's name, nationality, etc., to bestated. Every deed or other voluntary instrumentpresented for registration shall contain or haveendorsed upon it the full name, nationality, residenceand postal address of the grantee or other personacquiring or claiming an interest under suchinstrument, and every deed shall also state whetherthe grantee is married or unmarried, and if married,the name in full of the husband or wife.

If the grantee is a corporation or association, theinstrument must contain a recital to show that suchcorporation or association is legally qualified toacquire private lands. Any change in the residence orpostal address of such person shall be endorsed bythe Register of Deeds on the original copy of thecorresponding certificate of title, upon receiving asworn statement of such change. All names andaddresses shall also be entered on all certificates.

Notices and processed issued in relation to registeredland in pursuance of this Decree may be served uponany person in interest by mailing the same to theaddresses given, and shall be binding, whether suchperson resides within or without the Philippines, butthe court may, in its discretion, require further or othernotice to be given in any case, if in its opinion theinterest of justice so requires.

PD 1529Sec 56. Primary Entry Book; fees; certified copies.Each Register of Deeds shall keep a primary entrybook in which, upon payment of the entry fee, he shall


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enter, in the order of their reception, all instrumentsincluding copies of writs and processes filed with himrelating to registered land.

He shall, as a preliminary process in registration, notein such book the date, hour and minute of reception ofall instruments, in the order in which they werereceived. They shall be regarded as registered fromthe time so noted, and the memorandum of eachinstrument, when made on the certificate of title towhich it refers, shall bear the same date:

Provided, that the national government as well as theprovincial and city governments shall be exempt fromthe payment of such fees in advance in order to beentitled to entry and registration.

Every deed or other instrument, whether voluntary orinvoluntary, so filed with the Register of Deeds shallbe numbered and indexed and endorsed with areference to the proper certificate of title. All recordsand papers relative to registered land in the office ofthe Register of Deeds shall be open to the public inthe same manner as court records, subject to suchreasonable regulations as the Register of Deeds,under the direction of the Commissioner of LandRegistration, may prescribe.

All deeds and voluntary instruments shall bepresented with their respective copies and shall beattested and sealed by the Register of Deeds,endorsed with the file number, and copies may bedelivered to the person presenting them.

Certified copies of all instruments filed and registeredmay also be obtained from the Register of Deedsupon payment of the prescribed fees

A. PROCESS OF REGISTRATION:

1. File instrument creating or transferringinterest and certificate of title withRegister of Deeds together with:a. Owner’s duplicateb. Payment of fees & documentary stamp

taxc. Evidence of full payment of real estate

taxd. Document of transfer – 1 copy additional

for city/provincial assessor2. Register of Deeds shall make a

memorandum on the certificate of title,signed by him

3. TCT shall then be issued.

NOTE: If the grantee is a corporation or association,

it must show that it is qualified to acquireprivate lands.

PNB vs. Fernandez, (1935): The issuance ofa new transfer certificate withoutpresentation of an owner’s duplicate is

unwarranted and confers no right on thepurchaser

RA 456 prohibits registration of documentsaffecting real property which is delinquent inthe payment of real estate taxes. Further, ifevidence of such payment is not presentedwith 15 days form the date of entry of saiddocument in the primary entry book of theregister of deeds the entry shall be deemedcancelled.

Pay fees and DST (government is exempt) The instruments are regarded as registered

from the time ROD enters them in his book.

V. Registration of Deeds of Sale andTransfers

PD 1529Sec 57. Procedure in registration of conveyances. Anowner desiring to convey his registered land in feesimple shall execute and register a deed ofconveyance in a form sufficient in law.

The Register of Deeds shall thereafter make out inthe registration book a new certificate of title to thegrantee and shall prepare and deliver to him anowner's duplicate certificate.

The Register of Deeds shall note upon the originaland duplicate certificate the date of transfer, thevolume and page of the registration book in which thenew certificate is registered and a reference bynumber to the last preceding certificate. The originaland the owner's duplicate of the grantor's certificateshall be stamped "canceled".

The deed of conveyance shall be filled and indorsedwith the number and the place of registration of thecertificate of title of the land conveyed.

PD 1529Sec 58. Procedure where conveyance involvesportion of land. If a deed or conveyance is for a partonly of the land described in a certificate of title, theRegister of Deeds shall not enter any transfercertificate to the grantee until a plan of such landshowing all the portions or lots into which it has beensubdivided and the corresponding technicaldescriptions shall have been verified and approvedpursuant to Section 50 of this Decree.

Meanwhile, such deed may only be annotated by wayof memorandum upon the grantor's certificate of title,original and duplicate, said memorandum to serve asa notice to third persons of the fact that certainunsegregated portion of the land described thereinhas been conveyed, and every certificate with suchmemorandum shall be effectual for the purpose ofshowing the grantee's title to the portion conveyed tohim, pending the actual issuance of the correspondingcertificate in his name.


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Upon the approval of the plan and technicaldescriptions, the original of the plan, together with acertified copy of the technical descriptions shall befiled with the Register of Deeds for annotation in thecorresponding certificate of title and thereupon saidofficer shall issue a new certificate of title to thegrantee for the portion conveyed, and at the sametime cancel the grantor's certificate partially withrespect only to said portion conveyed, or, if thegrantor so desires, his certificate may be canceledtotally and a new one issued to him describing thereinthe remaining portion: Provided, however, thatpending approval of said plan, no further registrationor annotation of any subsequent deed or othervoluntary instrument involving the unsegregatedportion conveyed shall be effected by the Register ofDeeds, except where such unsegregated portion waspurchased from the Government or any of itsinstrumentalities.

If the land has been subdivided into several lots,designated by numbers or letters, the Register ofDeeds may, if desired by the grantor, instead ofcanceling the latter's certificate and issuing a new oneto the same for the remaining unconveyed lots, enteron said certificate and on its owner's duplicate amemorandum of such deed of conveyance and of theissuance of the transfer certificate to the grantee forthe lot or lots thus conveyed, and that the grantor'scertificate is canceled as to such lot or lots.

PD 1529Sec 59. Carry over of encumbrances. If, at the time ofany transfer, subsisting encumbrances or annotationsappear in the registration book, they shall be carriedover and stated in the new certificate or certificates;except so far as they may be simultaneously releasedor discharged.

A. IF ENTIRE PROPERTY IS SUBJECT Owner executes and registers the deed

which must be sufficient in form. A new certificate of title is issued and

Register of Deeds prepares and delivers tograntee his owner's duplicate certificate

Register of Deeds notes upon the OCT andthe duplicate certificate the date of transfer,the volume and page of the registrationbook where the new certificate is registered

The original and the owner's duplicate of thegrantor's certificate shall be stamped"canceled".

The deed of conveyance shall be filed andindorsed with the number and the place ofregistration of the certificate of title of theland conveyed.

B. IF ONLY A PORTION OF PROPERTY ISSUBJECT

Include a plan which shows all the portionsalready subdivided with verified andapproved technical descriptions.

That plan with the certified copy of thetechnical descriptions shall be filed with theRegister of Deeds for annotation in the TCT.

Register of Deeds hall issue a TCT andcancel the grantor's certificate partially ORit may be canceled totally and a new oneissued describing therein the remainingportion

C. IF THERE ARE SUBSISTINGENCUMBRANCES AND ANNOTATIONS

They shall be carried over in the newcertificate or certificates; except when theyhave been simultaneously discharged.

VI. Mortgages and Leases

PD 1529Sec 60. Mortgage or lease of registered land.Mortgage and leases shall be registered in themanner provided in Section 54 of this Decree.

The owner of registered land may mortgage or leaseit by executing the deed in a form sufficient in law.Such deed of mortgage or lease and all instrumentswhich assign, extend, discharge or otherwise dealwith the mortgage or lease shall be registered, andshall take effect upon the title only from time ofregistration.

No mortgagee's or lessee's duplicate certificate of titleshall hereafter be issued by the Registers of Deeds,and those issued prior to the effectivity of this Decreeare hereby deemed canceled and the holders thereofshall immediately surrender the same to the Registerof Deeds concerned.

PD 1529Sec 61. Registration. Upon presentation forregistration of the deed of mortgage or lease togetherwith the owner's duplicate, the Register of Deeds shallenter upon the original of the certificate of title andalso upon the owner's duplicate certificate amemorandum thereof, the date and time of filing andthe file number assigned to the deed, and shall signthe said memorandum.

He shall also note on the deed the date and time offiling and a reference to the volume and page of theregistration book in which it is registered

Mortgage and leases shall be registered inthe manner provided for in Section 54.

When a deed of mortgage or lease ispresented, ROD will enter upon the OCTand upon the owner’s duplicate amemorandum thereof and shall sign.


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VII.Powers of Attorney; Trusts

PD 1529Sec 64. Power of attorney. Any person may, by powerof attorney, convey or otherwise deal with registeredland and the same shall be registered with theRegister of Deeds of the province or city where theland lies. Any instrument revoking such power ofattorney shall be registered in like manner.

PD 1529Sec 65. Trusts in registered land. If a deed or otherinstrument is filed in order to transfer registered landin trust, or upon any equitable condition or limitationexpressed therein, or to create or declare a trust orother equitable interests in such land without transfer,the particulars of the trust, condition, limitation orother equitable interest shall not be entered on thecertificate; but only a memorandum thereof shall beentered by the words "in trust", or "upon condition", orother apt words, and by a reference by number to theinstrument authorizing or creating the same.

A similar memorandum shall be made upon theoriginal instrument creating or declaring the trust orother equitable interest with a reference by number tothe certificate of title to which it relates and to thevolume and page in the registration book in which it isregistered.

PD 1529Sec 66. Trust with power of sale, etc., howexpressed. If the instrument creating or declaring atrust or other equitable interest contains an expresspower to sell, mortgage or deal with the land in anymanner, such power shall be stated in the certificateof title by the words "with power to sell", or "power tomortgage", or by apt words of description in case ofother powers.

No instrument which transfers, mortgages or in anyway deals with registered land in trust shall beregistered, unless the enabling power thereto isexpressly conferred in the trust instrument, or unlessa final judgment or order of a court of competentjurisdiction has construed the instrument in favor ofthe power, in which case a certified copy of suchjudgment or order may be registered.

PD 1529Sec 68. Implied, trusts, how established. Whoeverclaims an interest in registered land by reason of anyimplied or constructive trust shall file for registrationwith the Register of Deeds a sworn statement thereofcontaining a description of the land, the name of theregistered owner and a reference to the number of thecertificate of title. Such claim shall not affect the titleof a purchaser for value and in good faith before itsregistration.

Powers of attorney and revocations shall beregistered with the Register of Deeds of theprovince or city where the land lies.

To transfer registered land in trust withouttransfer, the particulars of the trust shall notbe entered on the certificate. Only amemorandum shall be entered by the words"in trust", or "upon condition".

Power must be expressly conferred in thetrust instrument.

If implied of constructive trust, personclaiming such must execute a swornstatement. But such claim doesn’t affect thetitle of a purchaser for value and in goodfaith before its registration.

VIII. Involuntary Dealings

A. ATTACHMENT - a writ issued at theinstitution or during progress of an actioncommanding the sheriff to attach theproperty, rights, credits or effects of thedefendant to satisfy demands of the plaintiff

Kinds:a. Preliminaryb. Garnishmentc. Levy on execution

PD 1529Sec 69. Attachments. An attachment, or a copy of anywrit, order or process issued by a court of record,intended to create or preserve any lien, status, right,or attachment upon registered land, shall be filed andregistered in the Registry of Deeds for the province orcity in which the land lies, and, in addition to theparticulars required in such papers for registration,shall contain a reference to the number of thecertificate of title to be affected and the registeredowner or owners thereof, and also if the attachment,order, process or lien is not claimed on all the land inany certificate of title a description sufficientlyaccurate for identification of the land or interestintended to be affected.

A restraining order, injunction or mandamus issued bythe court shall be entered and registered on thecertificate of title affected, free of charge.

1. REGISTRATION OF ATTACHMENT/OTHER LIENS

a. Copy of writ in order to preserve any lien,right or attachment upon registered landmay be filed with Register of Deeds whereland lies, containing number of certificate oftitle of land to be affected or description ofland

b. Register of Deeds to index attachment innames of both plaintiff & defendant or nameof person whom property is held or in whosename stands in the records

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Register of Deeds shall within 36 hourssend notice to registered owner by mailstating that there has been registration& requesting him to produce duplicateso that memorandum be made

If owner neglects or refuses – Registerof Deeds shall report matter to court.

Court after notice shall enter an order toowner to surrender certificate at time &place to be named therein.

d. Although notice of attachment is not noted induplicate, notation in book of entry ofRegister of Deeds produces effect ofregistration already

2. EFFECT OF REGISTRATION OFATTACHMENT:

a. Creates real rightb. Has priority over execution salec. But between 2 attachments –d. one that is earlier in registration is

preferred

3. DUTY OF REGISTER OF DEEDS

Ministerial but may refuse registration infollowing circumstances:1. Title to land is not in the name of

defendant2. No evidence is submitted to show that

he has present or possible futureinterest in land

Exception: If petitioner is an heir

B. EXECUTION AND TAX DELINQUENCYSALES

1. EXECUTION SALEa. To enforce a lien of any description on

registered land, any execution oraffidavit to enforce such lien shall befiled with Register of Deeds where landlies

b. Register in registration book &memorandum upon proper certificate oftitle as adverse claim or as anencumbrance

c. To determine preferential rights between2 liens: priority of registration ofattachment

2. TAX SALEa. Sale of land for collection of delinquent

taxes and penalties due theGovernment

b. In personam (all persons interestedshall be notified so that they are givenopportunity to be heard)

c. Notice to be given to delinquent taxpayer at last known address

d. Publication of notice must also be madein English, Spanish & local dialect &posted in a public & conspicuous placein place wherein property is situated &at main entrance of provincial building

e. Sale cannot affect rights of other lienholders unless given right to defendtheir rights: due process must be strictlyobserved

f. Tax lien superior to attachmentg. No need to register tax lien because it is

automatically registered once the taxaccrues

h. But sale of registered land to foreclose atax lien need to be registered.

PD 1529Sec 74. Enforcement of liens on registered land.Whenever registered land is solved on execution, ortaken or sold for taxes or for any assessment or toenforce a lien of any character, or for any costs andcharges incident to such liens, any execution or copyof execution, any officer's return, or any deed,demand, certificate, or affidavit, or other instrumentmade in the course of the proceedings to enforcesuch liens and required by law to be recorded, shallbe filed with the Register of Deeds of the province orcity where the land lies and registered in theregistration book, and a memorandum made upon theproper certificate of title in each case as lien orencumbrance.

3. PROCEDURE OF REGISTRATION OFTAX SALEa. Officer’s return shall be submitted to

Register of Deeds together withduplicate title

b. Register in registration bookc. Memorandum shall be entered in

certificate as an adverse claim orencumbrance

d. After period of redemption has expired& no redemption (2 years fromregistration of auction sale) cancellationof title & issuance of new one

e. Before cancellation, notice shall be sentto registered owner: to surrender title &

f. show cause why it shall not becancelled

NOTE: Actual knowledge is equivalent toregistration.


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C. NOTICE OF LIS PENDENS

PD 1529Sec 76. Notice of lis pendens. No action to recoverpossession of real estate, or to quiet title thereto, or toremove clouds upon the title thereof, or for partition,or other proceedings of any kind in court directlyaffecting the title to land or the use or occupationthereof or the buildings thereon, and no judgment,and no proceeding to vacate or reverse any judgment,shall have any effect upon registered land as againstpersons other than the parties thereto, unless amemorandum or notice stating the institution of suchaction or proceeding and the court wherein the sameis pending, as well as the date of the institutionthereof, together with a reference to the number of thecertificate of title, and an adequate description of theland affected and the registered owner thereof, shallhave been filed and registered.

Section 77. Cancellation of lis pendens. Before finaljudgment, a notice of lis pendens may be canceledupon order of the court, after proper showing that thenotice is for the purpose of molesting the adverseparty, or that it is not necessary to protect the rights ofthe party who caused it to be registered. It may alsobe canceled by the Register of Deeds upon verifiedpetition of the party who caused the registrationthereof.

At any time after final judgment in favor of thedefendant, or other disposition of the action such asto terminate finally all rights of the plaintiff in and tothe land and/or buildings involved, in any case inwhich a memorandum or notice of lis pendens hasbeen registered as provided in the preceding section,the notice of lis pendens shall be deemed canceledupon the registration of a certificate of the clerk ofcourt in which the action or proceeding was pendingstating the manner of disposal thereof.

PD 1529Sec 77. Cancellation of lis pendens. Before finaljudgment, a notice of lis pendens may be canceledupon order of the court, after proper showing that thenotice is for the purpose of molesting the adverseparty, or that it is not necessary to protect the rights ofthe party who caused it to be registered. It may alsobe canceled by the Register of Deeds upon verifiedpetition of the party who caused the registrationthereof.

At any time after final judgment in favor of thedefendant, or other disposition of the action such asto terminate finally all rights of the plaintiff in and tothe land and/or buildings involved, in any case inwhich a memorandum or notice of lis pendens hasbeen registered as provided in the preceding section,the notice of lis pendens shall be deemed canceledupon the registration of a certificate of the clerk ofcourt in which the action or proceeding was pendingstating the manner of disposal thereof.

1. PURPOSE: Keep subject matter within thepower of the court until the entry of finaljudgment. It therefore creates merely acontingency & not a lien.

2. EFFECT OF REGISTRATIONa. Impossibility of alienating the property in

dispute during the pendency of the suit– may be alienated but purchaser issubject to final outcome of pending suit

b. Register of Deeds duty bound to carryover notice of lis pendens on all newtitles to be issued

3. CANCELLATION OF LIS PENDENSa. Before final judgment – court may order

cancellation after showing that notice ifonly for purpose of molesting anadverse party or it is not necessary toprotect rights of party who caused it tobe registered

b. Register of Deeds may also cancel byverified petition of party who causedsuch registration

c. Deemed cancelled when certificate ofclerk of court stating manner of disposalof proceeding is registered

3. OTHER PARTIES WHO NEED TOREGISTERa. Assignee in involuntary proceeding for

insolvencyo Duty of the officer serving notice to

file copy of notice to Register ofDeeds where the property of debtorlies

o Assignee elected or appointed bycourt shall be entitled to entry ofnew certificate of registered landupon presentment of copy ofassignment with bankrupt’scertificate of title (duplicate)

o New certificate shall not that it isentered to him as assignee ortrustee in insolvency proceedings

b. Government in eminent domaino Copy of judgment file in Register of

Deeds which states description ofproperty, certificate number, interestexpropriated, nature of public use

o Memorandum shall be made or newcertificate of title shall be issued

D. ADVERSE CLAIM

Section 70. Adverse claim. Whoever claims any partor interest in registered land adverse to the registeredowner, arising subsequent to the date of the originalregistration, may, if no other provision is made in this


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Decree for registering the same, make a statement inwriting setting forth fully his alleged right or interest,and how or under whom acquired, a reference to thenumber of the certificate of title of the registeredowner, the name of the registered owner, and adescription of the land in which the right or interest isclaimed.

The statement shall be signed and sworn to, and shallstate the adverse claimant's residence, and a place atwhich all notices may be served upon him. Thisstatement shall be entitled to registration as anadverse claim on the certificate of title. The adverseclaim shall be effective for a period of thirty days fromthe date of registration. After the lapse of said period,the annotation of adverse claim may be canceledupon filing of a verified petition therefor by the party ininterest: Provided, however, that after cancellation, nosecond adverse claim based on the same groundshall be registered by the same claimant.Before the lapse of thirty days aforesaid, any party ininterest may file a petition in the Court of FirstInstance where the land is situated for thecancellation of the adverse claim, and the court shallgrant a speedy hearing upon the question of thevalidity of such adverse claim, and shall renderjudgment as may be just and equitable. If the adverseclaim is adjudged to be invalid, the registration thereofshall be ordered canceled.If, in any case, the court, after notice and hearing,shall find that the adverse claim thus registered wasfrivolous, it may fine the claimant in an amount notless than one thousand pesos nor more than fivethousand pesos, in its discretion. Before the lapse ofthirty days, the claimant may withdraw his adverseclaim by filing with the Register of Deeds a swornpetition to that effect.

1. WHEN IS A CLAIM ADVERSE? When a person claims any part or interest in

registered land adverse to the registeredowner, after date of the original registration.

2. DURATION OF AN ADVERSE CLAIM 30 days from the date of registration. After

that the annotation of adverse claim may becancelled upon filing of a verified petition bythe party in interest. When cancelled nosecond adverse claim based on the sameground may be registered by the sameclaimant. (Asked in ’98)

3. REQUISITES The adverse claimant must give a statement

signed and sworn before a notary public, theff in writing:a. his alleged right or interestb. how and under whom such alleged right

or interest is acquiredc. the description of the land in which the

right or interest is claimed andd. the number of the certificate of title

e. his residence or the place to which allnotices may be served upon him.

NOTE: Non-compliance with the aboverequisites renders the adverse claim non-registrable and ineffective.

CIVIL LAW REVIEWER Chapter 6: SYSTEM of REGISTRATION of UNREGISTERED LANDS

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Chapter 6: System of Registration ofUnregistered Lands

This 6th

chapter will discuss the process of registrationof unregistered lands.

There are TWO MAJOR LESSON is included in thisChapter.

I. Key Points in the Registration of UnregisteredLands

II. Procedure in the Registration of UnregisteredLands

PD 1529Sec 113. Recording of instruments relating to unregisteredlands. No deed, conveyance, mortgage, lease, or othervoluntary instrument affecting land not registered under theTorrens system shall be valid, except as between the partiesthereto, unless such instrument shall have been recorded inthe manner herein prescribed in the office of the Register ofDeeds for the province or city where the land lies.

(a) The Register of Deeds for each province or city shallkeep a Primary Entry Book and a Registration Book. ThePrimary Entry Book shall contain, among other particulars,the entry number, the names of the parties, the nature of thedocument, the date, hour and minute it was presented andreceived. The recording of the deed and other instrumentsrelating to unregistered lands shall be effected by any ofannotation on the space provided therefor in the RegistrationBook, after the same shall have been entered in the PrimaryEntry Book.

(b) If, on the face of the instrument, it appears that it issufficient in law, the Register of Deeds shall forthwith recordthe instrument in the manner provided herein. In case theRegister of Deeds refuses its administration to record, saidofficial shall advise the party in interest in writing of theground or grounds for his refusal, and the latter may appealthe matter to the Commissioner of Land Registration inaccordance with the provisions of Section 117 of thisDecree. It shall be understood that any recording madeunder this section shall be without prejudice to a third partywith a better right.

(c) After recording on the Record Book, the Register ofDeeds shall endorse among other things, upon the originalof the recorded instruments, the file number and the date aswell as the hour and minute when the document wasreceived for recording as shown in the Primary Entry Book,returning to the registrant or person in interest the duplicateof the instrument, with appropriate annotation, certifying thathe has recorded the instrument after reserving one copythereof to be furnished the provincial or city assessor asrequired by existing law.

(d) Tax sale, attachment and levy, notice of lis pendens,adverse claim and other instruments in the nature ofinvoluntary dealings with respect to unregistered lands, ifmade in the form sufficient in law, shall likewise beadmissible to record under this section.

(e) For the services to be rendered by the Register of Deedsunder this section, he shall collect the same amount of feesprescribed for similar services for the registration of deeds orinstruments concerning registered lands.

I. Key Points

A. The system of registration for unregisteredland is under the torrens system.

B. Before: covers voluntary dealings, nowincludes involuntary dealings

C. Effect if prospective; binds 3rd persons afterregistration but yields to better rights of 3rdperson prior to registration (limited effect to3rd parties) reason: no strict investigationinvolved

D. Subsequent dealings – also valid if recordedE. Register of deeds keeps day book & a

register; index system is also kept

II. Procedure

A. Presentment of instrument dealing inunregistered land

B. If found in order – registeredC. If found defective – registration is refused

writing his reason for refusal

CIVIL LAW REVIEWER Chapter 7: REGISTRATION of PUBLIC LANDS

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Chapter 7: Registration of Public Lands

This 7th

Chapter will discuss the process ofregistration of public lands. It includes also thedifferent modes of alienating public lands.

There are SIX MAJOR LESSONS in this chapter:

I. Classification of Land of the PublicDomain

II. Nature of Public LandsIII. ProcedureIV. Role of Director of LandsV. Modes of Alienating Public LandsVI. Patents

I. Classification of Land of the PublicDomain

A. UNDER THE CONSTITUTION

1. Agricultural- only type of land that isalienable

2. Forest or timber3. Mineral lands4. National Park

B. UNDER THE PUBLIC LAND ACT1. Alienable/disposable

a. Agriculturalb. Residential, commercial, industrialc. Educational, charitabled. Town sites and for public and quasi-

public uses2. Timber lands – inalienable3. Mineral lands – inalienable

NOTE: If patent of title is issued for inalienable

lands, such patent or title is void ab initio Not subject to acquisitive prescription; even

if in possession for long time, will not ripeninto ownership.

EXCEPT: mineral lands and forest landsacquired before inauguration ofCommonwealth in November 15, 1935;vested rights which are protected is exclusive prerogative of executive &

not by judiciary Anyone who applies for confirmation of

imperfect title has burden of proof toovercome the presumption that the landsought to be registered forms part ofpublic domain (Regalian doctrine)

Before, fishponds are included in thedefinition of agriculture, conversion of

agricultural land to fishponds does notchange character of land.

Now: restricted meaning; fishpondshas distinct category; cannot bealienated but maybe leased fromgovernment

Republic vs. Imperial, (2000): Theclassification of public lands is a functionof the executive branch of government.

II. Nature of Title to Public LandsConveyed

Indefeasible and Conclusive In absence of registration, title to public

land is not perfected and therefore not Indefeasible In case of 2 titles obtained on same date,

the one procured through the decree ofregistration is superior than patent issuedby director of lands

2 titles procured by one person – one fromhomestead patent, one from judicialdecree & sold to 2 different persons, theone who bought it for value and in goodfaith & one who register first shall havepreference

III. Procedure of Conveying Public Landto a Private Person

A. Official issuing instrument of conveyance toissue instrument

B. File instrument with Register of DeedsC. Instrument to be entered in books and owner’s

duplicate to be issuedD. Instrument – only contract between

Government and private person and does nottake effect as conveyance if unregistered, it isregistration which is operative act of conveyingland; evidence of authority for Register ofDeeds to register

E. Fees to be paid by grantee

PUBLICLANDS

Inalienable

Lands of thePublic Domain

Alienable

PublicAgricultural

Land

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F. After issuance of certificate of title, land isdeemed registered land within the purview ofthe Torrens system

IV. Director of Lands: Quasi-judicialofficer

A. Findings of fact conclusive on higher court withabsence of fraud, mistake other than error ofjudgment; but not with regards to finding of law.

B. Empowered to alienate and dispose lands.

V. Modes of Alienating Public Lands:

A. Homestead settlementB. SaleC. Confirmation of Imperfect or incomplete title,

supra.1. Judicial legalization2. Administrative legalization

NOTE: Lease is not included since lease does not

transfer ownership Free-title grant: free distribution of public

lands to encourage people to cultivate:government furnishes the applicant with tollsplus cash allowance to enable him to cultivate

VI. Patents

A. WHEN IS GOVERNMENT GRANTDEEMED ACQUIRED BY OPERATION OFLAW

1. Deed of conveyance issued by governmentpatent/grant

2. Registered with Register of Deeds –mandatory: operative act to convey & transfertitle

3. Actual physical possession, open & continuous

NOTE: Land ceased to be part of public domain &

now ownership vests to the grantee Any further grant by Government on same

land is null & void Upon registration, title is indefeasible

B. TITLE ISSUED PURSUANT TOREGISTRATION OF PATENT

1. Indefeasible – when registered, deemedincorporated with Torrens system; 1 year afterissuance of patent

2. May not be opened one year after entry byLand Registration Authority; otherwise,confusion, uncertainty & confusion on

government system, of distribution of publiclands may arise & this must be avoidedEXCEPT: Annullable on ground of fraud,may be reopened even after 1 year becauseregistration does not shield bad faith

3. Court in exercise of equity jurisdiction maydirect reconveyance even without orderingcancellation of title

C. AIM OF HOMESTEAD PATENT1. Benevolent intention of government to

distribute disposable agricultural land todestitute citizens for their home and cultivation

2. As a matter of public policy, may berepurchased even if after 5 years provided notfor profit

3. Right of repurchase not allowed if sold withinfamily & not for cultivating or living but forspeculation purpose

D. RESTRICTIONS1. Cannot be alienated within 5 years after

approval of application for patent2. Cannot be liable for satisfaction of debt within

5 years after approval of patent application3. Subject to repurchase of heirs within 5 years

after alienation when allowed already4. No corporation, partnership, association may

acquire unless solely for commercial,industrial, educational, religious or charitablepurpose or right of way subject to consent ofgrantee & approval of Secretary of Naturalresources

EXCEPTIONS:1. Action for partition because it is not a

conveyance2. Alienations or encumbrances made in favor of

the government

NOTE: Erring homesteader not barred by pari delicto Pari delicto rule does not apply in void contract Violation of prohibitions results in void contract Action to recover does not prescribe If the homesteader dies, heirs succeed him in

this application Legal restriction in disposition by non-

Christians (Cultural Minorities) Conveyance is valid if able to read and can

understand language where deed is written Otherwise, not valid unless approved by

Commission on National Integration Safeguard is to protect them against

fraud/deceit

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Chapter 8: Remedies of the AggrievedParty

The remedies listed here are:

I. Motion For New TrialII. AppealIII. Relief from JudgmentIV. Petition for ReviewV. Action for ReconveyanceVI. DamagesVII. Action for Compensation from the Assurance

FundVIII. Annulment of JudgmentIX. ReversionX. Criminal Action

Motion for New Trial 15 days from notice of judgment Grounds: Fraud, accident, mistake, excusable negligence Newly discovered evidence Awarded excessive damages, or insufficiency of evidence, or that the decision is

against lawAppeal 15 days from notice

appealable to the CA or to the SC in the same manner as in ordinary actionsRelief from Judgment 60 days after petitioner learns of judgment, but not more than 6 months after

judgment was entered Grounds: Fraud, accident, mistake, excusable negligence

Petition for Review Requisites: Walstrom vs. Mapa,, (1990): petitioner must have an estate or interest in the land he must show actual fraud petition must be filed within one year form the issuance of the decree by LRA property has not yet passed to an innocent purchaser for value. Grounds: extrinsic fraud, void decision for want of due process lack of jurisdiction Calalang vs. Register of Deeds (1992): Under the Torrens system of registration,

the Torrens still becomes indefeasible and incontrovertible one year form theissuance of the final decree and is generally conclusive evidence of the ownership

Iglesia ni Cristo vs. CFI, (1983): This applies as well to title acquired through homestead or free patents

Action forReconveyance

before issuance of decree, or within/after 1 year from entry if based on implied trust, 10 years; if based on expressed trust and void contract, imprescriptible if based on fraud, 4 years from the discovery it is not available if the property has already been transferred to an innocent

purchaser for value. Esconde vs. Barlongay, (1987): It does not reopen proceedings but a mere

transfer of the land from registered owner to the rightful owner Huang vs. CA,1994: It is available in case of fraud thereby creating a constructive trust between parties

Damages Ching vs. CA, 1990: It can be availed of when reconveyance is no longer possible as when the land

has been transferred to an innocent purchaser for value

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Action for Compensationfrom the Assurance

Fund1

Requisites: A person sustains loss or damage or is deprived by any estate or interest in land On account of bringing of land under the Torrens system Through (FEMOM) fraud, error, mistake, omission, or misdescription in the

certificate of entry in the registration book Without negligence on his part And is barred from bringing an action for recovery of the land. The action has not prescribed. It must be instituted within 6 years from the time

the right to bring such action first occurred--> date of issue of the certificate of title Against whom filed: against the Register of Deeds and the National Treasurer if

FEMOM is caused by court personnel, Register of Deeds, his deputy or otheremployees of the Registry

If other those above mentioned: the Register of Deeds, the National Treasurerand other person or persons, as co-defendants.

Annulment of Judgment Grounds: extrinsic fraud and lack of jurisdiction. Galicia vs. Marquez (2007): Ordinary remedies of appeal, motion for new trial etc

should no longer be available. If based on extrinsic fraud, file 4 within years fromdiscovery.

If based on lack of jurisdiction, before it is barred by laches or estoppelReversion Instituted by the government, thru Solgen 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.

Criminal Action Perjury, Forgery, Others involving fraud

1 Upon registration, there shall be paid to the Register of Deeds ¼ of 1% of the assessed value of the real estate on thebasis of the last assessment for taxation purposes, as contribution to the Assurance Fund.

CIVIL LAW REVIEWER Chapter 9: RECONSTITUTION of TITLES

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Chapter 9: Reconstitution 0f Titles

(Asked in ’96)

I. GroundsII. Petitions For ReconstitutionIII. Duties of the Land Registration

AuthorityIV. Effects of Fraud in the

Reconstitution

I. Grounds

A. LOSSB. DESTRUCTION

II. Petitions for Reconstitution

A. WHO MAY FILE?1. Registered owner2. His assigns3. Other persons, both natural and juridical,

having an interest in the property

B. WHAT DOES IT CONTAIN? A statement, among other things:1. That no deed or other instrument affecting the

property had been presented for registration.If there is, include its particulars.

2. That the owner's duplicate certificate or co-owner's duplicate is in due form;

3. That the certificate of title is not the subject oflitigation or investigation, administrative orjudicial, regarding its genuineness or dueexecution or issuance;

4. That the certificate of title was in full force andeffect at the time it was lost or destroyed;

5. That the certificate of title is covered by a taxdeclaration regularly issued by the Assessor'sOffice; and

6. That real estate taxes have been fully paid upto at least two (2) years prior to the filing of thepetition for reconstitution.

NOTE: The procedure relative to administrative

reconstitution of lost or destroyed certificateprescribed in said Act may be availed of only incase of substantial loss or destruction of landtitles due to fire, flood or other force majeureas determined by the Administrator of the LandRegistration Authority:

Provided, that the number of certificates oftitles lost/damaged should be at least 10 % ofthe total number in the possession of theOffice of the Register of Deeds, and that thenumber of certificates of titles lost or damagedbe less than 500.

C. WHAT IF IT IS SUBSEQUENTLY FOUNDBUT IT IS NOT IN THE NAME OF THESAME PERSON IN WHOSE FAVOR THE

RECONSTITUTED CERTIFICATE OFTITLE HAS BEEN ISSUED?

The ROD or party concerned should notify theproper RTC. After which, shall order thecancellation of the reconstituted certificate oftitle and render, with respect to thememoranda of new liens and encumbrances, ifany, made in the reconstituted certificate oftitle, after its reconstitution, such judgment asjustice and equity may require:

Provided, however, That if the reconstitutedcertificate of title has been cancelled by virtueof any deed or instrument, whether voluntaryor involuntary, or by an order of the court, anda new certificate of title has been issued, theprocedure prescribed above, with respect tothe memorandum of new liens andencumbrances made on the reconstitutedcertificate of title, after its reconstitution, shallbe followed with respect to the new certificateof title, and to such new liens andencumbrances, if any, as may have been onthe latter, after the issuance thereof.

III. Duties of the Land RegistrationAuthority

A. Keep a true, complete and faithful inventory ofall books, titles, cash and property of theRegister of Deeds.

B. Produce three image copies in whatevermeans the original can be produced.

C. Surrender the owner’s duplicate to ROD andprepare and deliver a new owner’s duplicate tothe registered owner.

D. Issue rules and regulationsE. Review, revise decisions of the reconstituting

officer of the Register of Deeds.

IV. Effects of Fraud, Deceit andMachination in the Reconstitution ofTitles

A. A reconstituted title obtained by means offraud, deceit or other machination is void abinitio as against the party obtaining the sameand all persons having knowledge thereof.

B. Any person who by means of fraud, deceit orother machination obtains or attempts to obtaina reconstituted title shall be subject to criminalprosecution

C. Any public officer or employee who knowinglyapproves or assists in securing a decision

allowing reconstitution in favor of any personnot entitled thereto shall be subject to criminal

prosecution.

- end of Land titles and Deeds -


268

SALES

SALESTable of Contents

Chapter I. The Contract of Sale ..................269I. Definition (Art 1458, CC) ...................269II. Elements ...........................................269III. Stages ...............................................274IV. Kinds of Sale .....................................275V. Form..................................................276VI. Sale Distinguished From OtherContracts....................................................276

Chapter II. Obligations of the Seller andBuyer .............................................................278

I. Obligations of the Seller ....................278II. Obligations of the Buyer....................284

Chapter III. Double Sales .............................286I. General Rule .....................................286II. Requisites .........................................286III. Rules Governing Sale of Movables,Immovables and Unregistered Lands........286

Chapter IV. Risk of Loss..............................288I. General Rule .....................................288II. Exceptions.........................................288

Chapter V. Documents of Title....................289I. In General .........................................289II. Negotiable Documents of Title..........289III. Non-Negotiable Documents of Title ..289

Chapter VI. Remedies of the Seller and Buyer.......................................................................291

I. General Remedies (Art. 1191, CC) ...291II. Remedies of the Seller......................291III. Remedies of the Buyer......................295

Chapter VII. Extinguishment of Sale ..........298I. In General .........................................298II. Conventional Redemption.................298III. Equitable Mortgage ...........................299IV. Legal Redemption .............................300

Chapter VIII. Philippine Bulk Sales Law (Act3952) ..............................................................303

I. Purpose.............................................303II. Coverage...........................................303III. Duty of Seller.....................................303IV. Effect of non-compliance...................304

CIVIL LAW REVIEWER Chapter I. The CONTRACT of SALE

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SALES

Chapter I. The Contract of Sale

I. DEFINITIONII. ELEMENTS

A. CONSENTB. SUBJECT MATTERC. PRICE

III. STAGESA. PREPARATION/NEGOTIATIONB. PERFECTIONC. CONSUMMATION

IV. KINDSA. ABSOLUTEB. CONDITIONAL

V. FORMVI. SALE DISTINGUISHED FROM OTHER

CONTRACTSA. DONATIONB. BARTERC. CONTRACT FOR A PIECE OF WORKD. LEASE OF THINGSE. AGENCY TO BUY AND SELLF. DACION EN PAGOG. CONTRACT TO SELLH. BILATERAL PROMISE TO BUY AND SELL

I. Definition (Art 1458, CC)

Contract where one of the parties (Seller)obligates himself to:

Transfer ownership of and

to deliver a determinate thing;

and the other (Buyer) to pay a price certain inmoney or its equivalent.

II. Elements

The case of (Coronel v CA, 1996) enumeratesthe 3 elements of a valid contract of salenamely: Consent Subject matter Price_______

A. CONSENTMeeting of minds upon the thing which is theobject of the contract and the price. (Art 1475,CC)

Requisites—1. Capacity2. Offer and acceptance3. No vitiation

SALES

SALES TEAM

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CAPACITY

All persons who have capacity to enter intoobligations may enter into a contract of sale (Art1489, CC)

Kinds of Incapacity—1. Absolute Incapacity (MInD-CI) (Art. 1327,

CC)a. Minorsb. Insane or Dementedc. Deaf-mutes who do not know how to

writed. Civil Interdictione. Judicially-declared Incompetents(Art.

39) Prodigals Imbeciles Absence & presumption of death Persons not of unsound mind but by

reason of age, disease, weak mind,and other similar causes, cannottake care of themselves andmanage their property withoutoutside aid (Easy prey for deceitand exploitation)

2. Relative Incapacitya. Husband and Wife (Art 1490, CC)—

(Asked in 75, 76, 00, 02, 06)

General Rule: Cannot sell property toeach other

Exceptions:1. Separation of property in marriage

settlement, OR2. Judicial separation of property.

b. Alienage (Art. 39, CC)—Aliens disqualified to purchase oracquire property.

Exception: if acquisition is throughhereditary succession

c. Trusteeship (Art. 39)

3. Specific Incapacity (Art. 1491, CC) (AGE-PLJ)a. Agents—

Property whose administration or salewas entrusted to them

Exception: principal gives consent.

b. Guardian—Cannot purchase property of personunder his guardianship

Rationale: Guardianship is a trust of thehighest order, and the trustee can not beallowed to have any inducement oneglect his ward’s interest. (Phil TrustCo v Roldan, 1956)

c. Executors and Administrators—Property of estate under theiradministration

d. Public Officers and Employees—Property of State/any of itssubdivisions/GOCC, the administrationof which was entrusted to them.

e. Lawyers—Property or rights in litigation in whichthey take part because of theirprofession

Rationale: Lawyer may have undueinfluence over client. Greed may get thebetter of the sentiments of loyalty anddisinterestedness. (Valencia vCabanting, 1991)

Prohibition is definite and permanent,cannot be cured by ratification. (Rubiasv Batiller, 1973)

Exceptions: An assignment to a lawyerby his client of an interest in the propertydoes not violate Art 1491, where A judgment has been rendered and

has become final; and In case of contingency fee

arrangements. The interest of thelawyer maybe annotated as anadverse claim on the propertyawarded to his client (Director ofLands v Ababa, 1979)

f. Justices, Judges, prosecuting attorneys,clerks—Property or rights in litigation or leviedupon on execution

Rationale: to prevent fraud and tosurround their profession with prestige

Prohibition applies only on sales orassignment during the pendency oflitigation involving the property.(Macariola v Asuncion, 1963)

Effects of Incapacity—1. Absolute Incapacity

If both parties are incapacitated:UNENFORCABLE (Art. 1403 (3))


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If only 1 party is incapacitated:VOIDABLE

-If necessaries are sold and delivered toan incapacitated person: must pay areasonable price therefore. (Art 1489,CC)

“Necessaries” – those which areindispensable for sustenance, dwelling,clothing, medical attendance, educationand transportation. (Art 194, FamilyCode)

2. Relative Incapacity Sale between spouses is VOID. Rationale: (as provided in the case of

Medina v CIR, 1961) To protect 3

rdpersons who may

have contracted with the spouse To avoid undue advantage of the

dominant spouse over the weakerspouse.

To avoid indirect prohibition againstdonations between spouses.

Such prohibition shall likewise apply tocommon law spouses. (Calimlim-Canulas v Fortun, 1984) BUT ifalready sold to a third person who reliedon the title of his immediate seller,reconveyance to the seller spouse is nolonger available (Cruz v CA, 1997)

3. Specific Incapacity Contracts expressly prohibited by law

are void and cannot be ratified. Neithercan the right to set-up the defense ofillegality be waived. (Art. 1409 (7), CC)

Sales entered into by guardians,administrators, and agents (specificincapacities) in violation of Art. 1491may be ratified by means of and in theform of a new contract when the causeof nullity has ceased to exist. Ratificationis valid only from date of execution ofthe new contract and does not retroact.

Those entered into by publicofficer/employees, justices and judges,and lawyers also in violation of Art. 1491are inexistent and void from thebeginning. (Rubias v Batiller, 1973).

OFFER AND ACCEPTANCE

In General— The contract of sale is perfected at the

moment there is meeting of the minds uponthe thing which is the object of the contractand upon the price.

From that moment, the parties mayreciprocally demand performance, subject to

the provisions of law governing the form ofcontracts. (Art. 1475, CC)

A private instrument signed by thedefendant reciting that he bought from theplaintiff a property at a specific address for aspecific price to be paid as soon as a bill ofsale is signed is not a mere draft but aperfected agreement and hence, obligatory,even if there was no statement as to area orprice per meter. (Goyena v. Tambunting,1902)

Form and Offer— Offer must be certain as to the object and

price (Art. 1319, CC) Business advertisements of things for sale

are not offers but mere invitations to makean offer Exception: If otherwise provided (Art.

1325, CC) Advertisements for bidders are simply

invitations to make proposals (Asked in 80) Advertiser not bound to accept the

highest or lowest bid Exception: Unless the contrary appears

(Art. 1326, CC)

Form of Acceptance— unconditional Qualified acceptance = counter-offer (Art.

1319, CC) May be express or implied (Art. 1320, CC) Acceptance must be in accordance with the

terms and conditions of the offer. There isno meeting of the minds if the offer lapsedeven though the offeree later on was willingto accept the terms and conditions of theoffer. (Beaumont vs. Prieto, 1916)

MUST NOT BE VITIATED A contract where consent is given through

mistake, violence, intimidation, undueinfluence, or fraud is voidable. (Art. 1330,1390 (2), CC)

There is fraud where through insidiouswords or machinations of one of contractingparties, the other is induced to enter into acontract which, without them, he would nothave agreed to. (Art. 1338, CC)

_______

B. SUBJECT MATTER

Requisites—1. Licit2. Existing, future or contingent3. Determinate or determinable


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MUST BE LICIT (ART. 1459)

The thing is licit when—1. Within the commerce of man (Art 1347, CC)

Example of properties that are not within thecommerce of man:a. Those belonging to the State or its

political subdivisions intended for publicuse or public service. (Art 420, CC).

b. Churchc. Narcotics or dangerous drugs except

upon prescription (RA 6425, thedangerous drugs act of 1972)

2. Rights are also licit when not intransmissible(Art 1347, CC)

Sale of future inheritance is void. (Art. 1347,CC)—1. The rights to succession are transmitted

from the moment of the death of thedecedent (Art. 777, CC). Thus, one cannotsell or promise to sell what he expects toinherit from a living person. (Rivero v.Serrano, 1950)

2. -Heir may sell his hereditary rights (whichhave accrued).

When the subject matter is illicit, the contract ofsale is void (Art. 1409 (7))

EXISTING, FUTURE, CONTINGENT

The goods which form the subject of acontract of sale may be either—1. existing goods owned or possessed by the

seller;2. goods to be manufactured, raised, acquired

by the seller, also called “future goods”;3. whose acquisition of the seller depends

upon a contingency which may or may nothappen. (Art 1462, CC)

4. Things having potential existence may bethe object of a contract of sale. (Art 1461,CC)

Sale of MERE hope orexpectancy

Sale of VAIN hope orexpectancy

Valid BUT subject tocondition that the thingwill come into existence

Example: “Next catch” ofa fisherman.

Void

Example: Sale of afalsified raffle ticketwhich will never win.

Emptio Rei Speratei Emptio SpeiValid VoidParties make thecontract depend uponthe existence of a thing, If the thing does not

Parties intend thecontract to exist at allevents Buyer will have to pay

come into existence:contract is considered asnot made and there is noobligation to pay theprice

the price even if thething does not actuallycame into existence

In case of doubt the presumption is in favor ofemptio rei speratae since it is more in keeping withthe commutative character of the contract.

DETERMINATE OR DETERMINABLE A thing is determinate when it is particularly

designated or physically segregated from allothers of the same class. (Art 1460, CC)

A thing is determinable when it is capableof being made determinate at the timethe contract was entered into without thenecessity of a new or further agreementbetween the parties. (Art 1460, CC)

Failure to state the exact location of the landdoes not make the subject matterindeterminate, so long as it can be located.(Camacho v C,A 2007)

The fact that the exact area of subject landin the contract of sale is subject to the resultof a survey does not render the subjectmatter indeterminate. (Heirs of Juan SanAndres v. Rodriguez (2000))

Particular Kinds—1. Future Goods

Sale of future goods or those goods whichare to be manufactured, raised, or acquiredby seller after the perfection of the sale isvalid (Art 1462, CC). “Future goods” arethose capable of future existence.

2. Sale of Undivided Interest or Sharea. Sole owner of a thing may sell an

undivided interest therein. (Art1463,CC) Ex., a fraction (½ or half) orpercentage (50%), or “my share in theproperty.”

b. The sale of an undivided share in aspecific mass of fungible goods makesthe buyer a co-owner of the entire massin proportion to the amount he bought.(Art 1464,CC)

c. Co-owner cannot sell more than hisshare (Yturralde v CA, 1972) (Askedin 01, 02)

3. Sale of Things in Litigationa. Sale of things under litigation entered

into by defendant, without the approvalof the litigants or the court isrescissible. (Art 1381 (4))

b. NO RESCISSION where the thing islegally in the possession of 3

rdpersons

who did not act in bad faith (Art 1385(2))


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4. Things Subject to Resolutory ConditionSale of things subject to a resolutorycondition, i.e. things acquired under legal orconventional right of redemption, or subjectto reserva troncal, may be the object of acontract of sale. (Asked in 99) (Art 1465,CC)

5. Quantity of Subject Matter not determinateThe fact that the quantity is not determinateshall not be an obstacle to the existence ofthe contract provided it is possible todetermine the same, without the need ofnew contract. (Art. 1349, CC)

_______

C. PRICE

Requisites (Ce-MoRe)—1. Certain or ascertainable at the time of

perfection2. In Money or its equivalent3. Real

CERTAIN OR ASCERTAINABLE AT THE TIMEOF PERFECTION

Price considered certain in the followingcases—1. Fixed by agreement of the parties

a. Fixing of price cannot be left todiscretion of one of the parties

b. BUT if such is accepted by the other,sale is perfected. (Art 1473, CC)

2. Determination is left to the judgment of aspecified persona. If unable or unwilling: Sale is

inefficacious UNLESS partiessubsequently agree about the price.

b. If in bad faith/by mistake: Courts may fixprice

c. If 3rd

person is prevented from fixingprice by fault of seller or buyer: Innocentparty may avail of remedies.

3. It be so in reference to another thing, orwhen the price fixed is that which the thinghave on a definite day, or in a particularexchange or market, OR when the amountfixed is above or below the price on suchday, exchange or market. (Art 1472, CC)

If price cannot be determined (Asked in 76)—1. Sale is inefficacious (Art. 1474, CC)

2. But if thing or part thereof has beendelivered and appropriated by the buyer, hemust pay a reasonable price therefore.a. What is reasonable price? A question

of fact dependent on circumstances.(Art 1474, CC)

b. In the case of Philippine Free Press vCA (2005), the court held that the pricewas reasonable based on factualdetermination predicated on offeredevidence (Company’s BalanceSheet showed the book value or fairmarket value of its shares)

IN MONEY OR ITS EQUIVALENT

Example of “equivalent”: Letters of credit If price is partly in money and partly in

another thing: Determine manifest intentionof the parties to see whether it was barter orsale. (Art 1468,CC)

If intention does not clearly appear, it shallbe considered a barter if the value of thething exceed the amount of money or itsequivalent.(Art 1468,CC)

REAL

Meaning of Real—When buyer has an intention to pay and theseller has an expectation to receive the price1. If simulated: Sale is VOID; BUT act may be

shown to have been a donation or someother act or contract. (Art 1471, CC)

2. In Labagala vs. Santiago (2001), Petitioneradmittedly did not pay any centavo for theproperty. Hence, the sale is void.

If Price is false (real consideration is not thesame as that stated in the contract)—1. Sale is void2. UNLESS proved to be founded on another

true and lawful price (Art 1353, CC)_______

Gross Inadequacy of Price—1. General Rule: Does not affect a contract of

sale. (Art 1470,CC) The stipulation in a contract of sale

which states that the consideration is“P1 and other valuable considerations”does not make the contract void. Grossinadequacy of price does not affect thecontract of sale except that it mayindicate a defect in consent. (Bagnas v.C.A., 1989)


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2. Exceptions:a. It may indicate a defect in consent such

as fraud, mistake, or undue influenceb. It may indicate that the contract was in

reality a donation or some other act orcontract

c. Inadequacy would make the contract ofsale rescissible where a contract wasentered into by the guardian of a ward ora representative of an absentee, withoutthe court’s approval, and the ownersuffers lesion by more than ¼ of thevalue of the thing sold. (Art 1381 (1) (2),CC)

Manner of Payment—Disagreement on the manner of payment istantamount to a failure to agree on the price.(Toyota Shaw vs. CA, 1995)

III. Stages

A. Negotiation/Preparation

From the time the parties indicate interest in thecontract up to the time said contract is perfected

1. Offera. General Rule: Offer may be withdrawn

at any time without even communicatingsuch withdrawal to the interested buyer.

b. Exception: When the offerer hasallowed the offeree a certain period toaccept, the offer may be withdrawn atany time before acceptance bycommunicating such withdrawal. (Art1324, CC)

c. Exception to the exception: Cannot bewithdrawn within the period if offer isfounded upon a consideration. (Art 1324and 1479, CC)

2. Option Contract (Asked in 75, 77, 80, 93,02)a. Definition

An accepted unilateral promise tobuy or sell supported by aconsideration distinct from the price(Art 1479, CC)

An optional contract is a privilegeexisting in one person, for which hehad paid a consideration, whichgives him the right to buy, forexample, certain merchandise orcertain specified property, if hechooses, at any time within the

agreed period, at a fixed price. (Dela Cavada vs. Diaz, 1918)

An option is not of itself a purchase,but merely secures the privilege tobuy.

A consideration for an optionalcontract is just as important as theconsideration for any other kind ofcontract. If there was noconsideration for the option, then itcannot be enforced any more thatany other contract where noconsideration exists. (Baviera)

b. Difference from Sale:

SALE OPTION CONTRACTBilateral Unilateral: gives a right to buy

or to sell, but imposes noobligation on the part of theoption-holder, aside from theconsideration for the offer

Sale of property Sale of right to purchase

c. Right of first refusal (Asked in 93, 96,98, 02, 08) As to enforceability

Equatorial Realty Developmentvs. Mayfair, (1996): If the right tothe first offer is embodied in thecontract, it should be executedaccording to the termsstipulated. The right should beenforced according to the lawon contracts and not on thepanoramic and indefinite rule onhuman relations. This juridicalrelation is not amorphous nor isit merely preparatory.

When the grantee fails to exercisethe right Paranaque Kings vs. CA,

(1997): Only after the granteefails to exercise its right of 1

st

priority under the same termsand conditions within the periodagreed upon, could the grantorvalidly offer to sell the propertyto a 3

rdperson under the same

terms as offered to the grantee. As to the effects of the violation

of the right Rosencor Devt. Corp. Vs.

Inquing (2001): A sale made inviolation of a right of first refusalis valid but rescissible, andmay be the subject of an actionfor specific performance.

However, before the sale to the3

rdperson may be rescinded, he


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must have been actually orconstructively aware of theright of 1

strefusal at the time

he bought it. The sanction for the

enforcement of the right of firstrefusal against third persons isbased on Art. 19 of NCC, as noreal right was created on theproperty.

Difference from sale:

SALE RIGHT OF 1ST

REFUSALBilateral UnilateralPrice and otherterms of paymentare certain

Price and other terms are yet tobe agreed upon

the thing to be sold must be determinate

Distinction from Option Contract

OPTIONCONTRACT

RIGHT OF 1ST

REFUSAL

Separateconsideration isnecessary

No need for a separateconsideration

Grantee has theright to buy or sell

No right to buy or sell, only aright to match the 1

stoffer to

buy should the grantor decideto sell

_______B. Perfection(Asked in ’88 and ’91)

When Perfected—1. Contract of sale is a consensual contract,

hence perfected at the moment of themeeting of the minds of the parties as to theobject of the contract and the price. (Art1475,CC)

2. It is the proof of all the essential elements ofthe contract of sale, and not the mere givingof earnest money, which establishes theexistence of a perfected sale. (PlatinumPlans Phils. vs. Cucueco, 2006)

Effect of Perfection—From the moment of the perfection of thecontract of sale, the parties may reciprocallydemand performance, subject to the provisionsof the Statute of Frauds. (Art 1475,CC)

Earnest Money—Definition- paid in advance of the purchaseprice agreed upon by the parties in a contract ofsale, given by the buyer to the seller, to bind thelatter to the bargain. (Asked in 93, 02)

Option Money vs. Earnest Money (Limson vs.Ca, 2001)—

OPTION MONEY EARNEST MONEYSeparate and distinctconsideration from thepurchase price

Part of purchase price(Art 1482, CC)

Given when sale is notyet perfected

Given only when thereis already a sale

When given, the would-be-buyer is not requiredto buy, but may evenforfeit it depending onthe terms of the option

When given, the buyeris bound to pay thebalance

Grantee of option is stillundecided whether ornot to buy or sell theproperty (Baviera)

Buyer manifests hisearnest desire to buythe property

_______

C. Consummation

Begins when the parties perform their respectiveundertakings under the sale. It culminates in theextinguishment of the sale. (See obligations ofseller and buyer, Chapter II)

IV. Kinds of Sale

(Asked in 97, 00)

A. Absolute SaleSale is not subject to any conditionwhatsoever; title passes to the buyer upondelivery of thing sold

B. Conditional SaleContract is subject to certain conditions(usually the payment of the purchase price);title will only pass once the conditions havebeen fulfilled

In some cases, the Court makes finerdistinctions between a conditional sale and acontract to sell:a. Contract to sell- The fulfilment of the

suspensive condition, which is the fullpayment of the price, will notautomatically transfer ownership to thebuyer although the property may havebeen previously delivered to him.

b. Conditional Sale: The fulfilment of thesuspensive condition renders the saleabsolute and affects the seller’s titlethereto such that if there was previousdelivery of the property, the seller’sownership or title the property isautomatically transferred to the buyer.(Ursal vs. CA, 2005)


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V. Form

General rule: No form required as to validitysince sale is perfected by consent of the parties.

The sale may be (Art.1483,CC):1. Written2. Oral3. Partly written and partly oral4. Inferred from the conduct of the parties

Exceptions:1. Statute of Frauds (Art,1403 (2),CC)

a. Contract or some memorandum thereofmust be in writing and subscribed bythe party or his agent, otherwisecontract is unenforceable. Unlessratified by failure to object to oralevidence or acceptance of benefitsunder the contract

b. What are under the Statute of Frauds: Sale of goods, chattels, or things in

action at a price not less than P500 Sale not to be performed within 1

year Sale of real property or an interest

therein (Art 1358, CC)c. Applies only to executory contracts, not

to contracts either totally or partiallyperformed. (Iñigo v. Estate of Maloto,1967)

2. Sale of realty by an agentAgent’s authority must be in writing,otherwise the sale is void (Art.1874, CC)

3. Sale of large cattleTo be valid, transfer of large cattle must beregistered with the municipal treasurer(Sec.529, Revised Administrative Code)

Electronic Commerce Act (RA 8792)1. Electronic documents have the legal effect,

validity or enforceability of any otherdocument or legal writing

2. As long as electronic document maintains itsintegrity and reliability and is capable ofbeing displayed to the person to whom it isto be presented, containing the electronicsignature of the person sending it. (Sec 7, 8of RA 8792)

VI. Sale Distinguished From OtherContracts

A. DONATION

SALE DONATIONOnerous GratuitousPerfected by mereconsent

Must comply with theformalities required bylaw. (Art 745, CC)

When the price of the contract of sale issimulated, the sale may be void but the act maybe shown to have been in reality a donation orsome other contract. (Art.1471.CC)

B. BARTER

SALE BARTERConsideration is pricein money or itsequivalent

Consideration isanother thing

Barter is a contract where one of the partiesbinds himself to give one thing in considerationof the other’s promise to give another thing(Art.1638, CC)

If consideration consists partly in money andpartly in another thing, the intention of theparties determines whether the contract is one ofsale or barter: If manifest intention is not clear: Barter

when the value of thing is more than theamount of money or its equivalent,otherwise, sale. (Art.1468)

C. CONTRACT FOR A PIECE OF WORK

SALE CONTRACT FOR APIECE OF WORK

Goods are manufacturedor procured in theordinary course ofbusiness

Goods are manufacturedfor customer upon hisspecial order

For the general market,whether on hand or not

Specifically for customer

The fact that the object were made by the selleronly when customers placed their orders, doesnot alter the nature of the contract of sale, for itonly accepted such orders as called for theemployment of such materials as it ordinarilymanufactured or was in a position habitually tomanufacture such. (Celestino Co & Co vs.Collector, 1956)

When each product or system executed isalways UNIQUE and could not mass-producethe product because of its very nature, such is a


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contract for a piece of work. (Commissioner vs.Engineering Equipment and Supply Co.,1975)

D. LEASE OF THINGS

SALE DACION EN PAGONo pre-existing debt Pre-existing debtCreates an obligation Extinguishes the

obligation (mode ofpayment)

Price is more freelyagreed upon, fixed by theparties

Price is value of the thinggiven

There is a novation of the contract of loan into acontract of sale when the creditor agrees toaccept a thing in payment of the debt. Hence, ifthe thing given in payment turns out to belong toanother, the creditor’s remedy should begoverned by the law on sales, not loan.(Baviera)

E. CONTRACT TO SELL(Asked in 97, 01, 03)

Contract of Sale Contract to SellOwnership is transferredupon delivery

Ownership is onlytransferred upon fullpayment of price

Non-payment is aresolutory condition

Full payment is a positivesuspensive condition,hence non paymentwould not give rise to theobligation to transferownership

Conditional Contract ofSale

Contract to sell

Sale is already perfected No perfected sale yetA subsequent buyer ispresumed to be a buyerin bad faith

A subsequent buyer ispresumed to be a buyerin good faith

NOTE: Contract to Sell is an executory contract,while a Contract of Sale is a consummatedcontract.

F. BILATERAL PROMISE TO BUY ANDSELL

(Asked in 80, 91)

A promise to buy and sell a determinate thing fora price certain is reciprocally demandable. (Art479, CC)

Like a sale, the thing must be determinate andthe price certain.

SALE BILATERAL PROMISE TO BUYAND SELL

ConsiderationBuyer: thingSeller: price

Consideration is the promisemade by the other (Baviera)

Title passes tothe buyer

No transfer of title

CIVIL LAW REVIEWER Chapter II. OBLIGATIONS of the SELLER and BUYER

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Chapter II. Obligations of the Seller andBuyer

I. OBLIGATIONS OF THE SELLERA. TO TRANSFER OWNERSHIPB. TO WARRANT AGAINST EVICTION AND

HIDDEN DEFECTSC. TO PRESERVE THE THINGD. TO PAY FOR THE EXPENSES FOR THE

EXECUTION AND REGISTRATION OFTHE DEED OF SALE

II. OBLIGATIONS OF THE BUYERA. TO ACCEPT DELIVERYB. TO PAY THE PRICE OF THE THING SOLD

I. Obligations of the Seller

Obligations of the Seller (TWPP)—1. Transfer ownership2. Warrant against eviction and hidden defects3. Preserve the thing4. Pay for the expensed for the execution and

registration of the deed of sale

A. To transfer ownership(Asked in 84, 98, 99, 03)

Obligation to transfer ownership and to deliver isreally implied in every contract of sale (Arts.1458-1459)

Transfer of ownership requires delivery (Art.1495)

General Concepts—1. Delivery comprises 2 obligations in Art.

1495:a. Actual duty to deliverb. Transfer of ownership – can only be

accomplished via delivery

2. What to Delivera. Thing sold (Art. 1495)b. Fruits (Art. 1164 & 1537)c. Accessions and accessories (Art. 1166

& 1537) Improvements by seller at his

expense grants him a usufructuaryright.

No indemnification But he may remove it to the extent

that there is no damage (Art. 1538)

3. Where to Delivera. A hierarchy is followed (STOR):

Stipulation Usage of trade Seller’s place of business (office)

Seller’s residence

b. In case of specific goods, which theparties knew to be at some other placewhen the contract was perfected, thatplace is the place of delivery

c. If goods are at the time of salepossessed by a third person, then thereis no delivery until he acknowledges tothe buyer that he holds the goods forbuyer.

4. When to DeliverAbsent a stipulation as to time, delivery mustbe made within a reasonable time; demandor tender of delivery shall be made at areasonable hour.

Ways of Effecting Delivery—1. Actual Delivery

a. When deemed made: when the thingsold is placed in the control andpossession of the vendee (Art. 1497)

b. Not always essential to passing of title(Art. 1475)

c. Parties may agree when and on whatconditions the ownership in the subjectof the contract shall pass to the buyer(example: Art 1478 where ownership willonly pass after full payment of the price)

2. Constructive Deliverya. Execution of public instrument (Art

1498, par. 1) General rule: produces the same

legal effects of actual delivery. Exceptions:

The intention of the parties isotherwise.

At the time of execution, thesubject matter was not subjectto the control of the seller whichmust subsist for a reasonablelength of time after execution.(Pasagui v Villablanca, 68SCRA 18)

“Control” over thing sold must besuch that seller is capable ofphysically transferring it to buyer

b. Symbolic Delivery Delivery of keys of the place or

depositary where the movable isstored or kept. (Art 1498, CC)

Unless otherwise agreed, whensymbolic delivery has been made,the seller is not obliged to removetenants to place the buyer in actual


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possession of the property as hehas already complied with hisobligation to transfer ownership ofand deliver the thing sold. (PowerCommercial and Industrial Corp.v. CA, 1997; Sabio v. TheInternational Corporate Bank,Inc., 2001)

c. Tradition Longa Manu (Long Hand) Delivery of thing by mere

agreement. Example: Seller points to the

property without actually transferringphysical possession thereof.

When an employer assigned all itsrights and title to all surplus propertysalvaged by the contractor, traditionlonga manu takes place. Delivery isupon the moment a thing issalvaged. (Board of Liquidators v.Floro, 1960)

d. Tradition Brevi Manu (Short Hand)MOVABLE is delivered when the buyerhad the thing already in his possessionbefore the sale took place, not as ownerbut as lessee, borrower, or depositary.

e. Tradition Constitutum PossessoriumSeller continues to be in possession ofthe property sold, by virtue of a leasecontract agreement with the vendee.

f. Delivery to a Common Carrier General Rule: Delivery to the

courier or carrier tantamount todelivery to buyer.

Exceptions Seller reserved title by the form

of the bill of lading, with intent toremain the owner, not merely forthe purpose of securingpayment, OR

Contrary intent appears in thecontract (i.e. seller is required todeliver goods to buyer at thepoint of destination)

F.O.B.: “Free on Board”When seller bears the expensesof transportation up to theF.O.B. point.

C.I.F.: “Cost, Insurance,Freight”Price quoted includes the costsof the goods, insurance, andfreight charges on the goods upto the point of destination.

F.A.S.: “Free Alongside”Seller bears the expenses oftransportation until he deliversthe goods alongside a vessel ata named port.

Completeness of Delivery—1. When may the seller refuse to deliver:

a. No payment yet or no period forpayment has been fixed in the contract(Art.1524);

b. The buyer loses the right to make useof the term, as when: He becomes insolvent UNLESS he

gives a guaranty or security for thedebt;

He does not does not furnish theseller the guaranties or securities hepromised;

He impairs the guaranties orsecurities or they disappearfortuitously UNLESS he immediatelygives new ones equally satisfactory;

He violates any undertaking, inconsideration of which the selleragreed to the period;

He attempts to abscond. (Art.1536)

2. Rules on Sales of Goodsa. When Quantity less than expected

Buyer may reject all Buyer accepts with knowledge of

seller’s inability to deliver the rest –buyer pays at contract price

Buyer has used or disposed prior toknowing seller’s inability to deliverthe rest – buyer pays fair value

b. Quantity more than expected If divisible, buyer may reject excess If indivisible, buyer may reject all

c. Quality different or different goods If divisible, buyer may accept the

goods compliant with contract andreject those that are not

If indivisible, buyer may reject all(Art. 1522)

d. Sale of specific mass of goodsIn the sale of fungibles where themeasure or weight has not beenagreed upon nor is there a fixed ratebased upon a measurement, thesubject matter of the sale is adeterminate object – the specificmass; seller is merely required todeliver such mass even if actualquantity falls short of parties’estimate (Art. 1480)


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e. Delivery by installments By default, buyer is not bound to

accept delivery of goods byinstalments

In a contract of delivery byinstallment to be paid for viainstallment as well, delay or breachmay not necessarily mean breach ofthe entire contract; depending onthe circumstances, breach may beseverable and the aggrieved partyis entitled to damages and notrescission. (Art. 1583)

3. Rules on Sales of Immovablesa. Sale at a fixed rate per unit of measure

Seller bound to deliver entire land If the area is less than that stated,

buyer may rescind or demand aproportionate reduction in price

If a part of the land is not of thequality stated in the contract, buyermay rescind or demand aproportionate reduction in price

Buyer may only avail of rescission ifthe area deficiency is 10% or moreof total area or if the inferior value ofthe part of the land exceeds 10% ofthe price agreed upon. (Art. 1539)

If the area turns out to be greaterthan that stated, buyer may acceptarea included and reject the excessor accept all and pay aproportionate increase in price (Art.1540)

b. Sale for lump sum Follows the same rule as the sale of

a specific mass which is explainedabove

There is no change in price even ifarea or number turns out to begreater or lesser than that stated(Art. 1542)

Exception: when the excess ordeficiency is no longer reasonable;in Asian v Jalandoni, 1923, 644 sqm was found to be unreasonable.

Exception to the exception: whenbuyer expressly assumes risk onactual area of the land. (Garcia vVeloso, 1941)

If the price per unit or measure isnot provided for in the contract, thenthe rules of lump sum sale shouldprevail. (Sta. Ana v Hernandez,1966)

Effect of Delivery—1. Delivery, generally, results in transfer of

ownership from seller to buyer.2. As such, it also transfers the risk of loss of

the thing sold to the buyer.3. Acceptance is not a condition for the

completeness of delivery; even with suchrefusal of acceptance, delivery will bedeemed completed and produce its legaleffects.

4. By default, expenses of and incidental toputting the goods into a deliverable statemust be borne by seller. (Art. 1521)

When delivery does not transfer title—1. Sale on approval, trial, or satisfaction

General Rule: Title remains with the seller

Exceptions:a. Buyer signifies his approval or

acceptance to the seller or does anyother act adopting the transaction

b. Retains the goods without giving noticeof rejection after the time fixed hasexpired, if no time has been fixed, afterthe expiration of a reasonable time (Art1502, CC)

Difference between sale on approval andsale on return

Sale on Approval Sale on ReturnOwnership does not passupon delivery

Ownership passes upondelivery, but buyer may revestownership in the seller byreturning or tendering thegoods within the time fixed inthe contract

Depends on the characteror quality of goods

Depends on the will of thebuyer

Subject to a suspensivecondition

Subject to a resolutorycondition

Risk of loss remains withthe seller

Risk of loss remains with thebuyer

2. Express ReservationIf it was stipulated that ownership in thething shall not pass to the purchaser until hehas fully paid the price. (Art 1478, CC)

3. Implied ReservationThe following are instances when there is animplied reservation of ownershipa. Goods are shipped, but by the bill of

lading goods are deliverable to the selleror his agent, or to the order of the selleror his agent


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b. Bill of lading is retained by the seller orhis agent.

c. When the seller of the goods draws onthe buyer for the price and transmits thebill of exchange and bill of lading to thebuyer, and the latter does not honor thebill of exchange by returning the bill oflading to the seller.

4. When sale not valideg. When the thing sold is a public property

5. When Seller is not the owner(Asked in 77, 78, 86, 87)

General Rule: Ownership is not acquired bythe buyer. One cannot give what one doesnot have. (Art 1505, CC)

Exceptions: (RE-ROM)a. Seller has a Right to transfer ownership

Seller need not be the owner of thething at the time of perfection of thecontract It is sufficient that seller hasa right to transfer ownership thereofat the time it is delivered (Art. 1459)

One who sells something he doesnot own yet is bound by the salewhen he acquires the thing later(Bucton vs Gabar, 55 SCRA 469)

b. Estoppel: Owner is by his conductprecluded from denying the seller’sauthority to sell. (Art. 1434)

c. Registered land bought in good faith General rule: Buyer need not go

beyond the Torrens title Exception: When he has actual

knowledge of facts andcircumstances that would impel areasonably cautious man to makefurther inquiry

d. Order of courts Statutory SaleIn execution sale, the buyer merelysteps into the shoes of the judgmentdebtor (Rule 39, sec. 33, ROC)

e. When goods are purchased inMerchant’s store, Fair, or Market (Art1505, CC)

The policy of the law has alwaysbeen that where the rights andinterest of the vendor clash with thatof an innocent buyer for value, thelatter must be protected. (SunBrothers and Co. V. Velasco,(1958)

6. Sale by person having a voidable titlea. True owner may recover the thing when

provided the ff. requisites concur: Subject matter is movable Owner has either lost the thing or

has been unlawfully deprived. (Art559, CC)

b. Reimbursement is necessary beforeowner 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)__________

B. To warrant against eviction & hiddendefects (Art. 1495; 1547)

Warranties—A statement or representation made by the sellercontemporaneously and as part of the contractof sale, having reference to the character,quality, or title of the goods, and by which hepromises or undertakes to ensure that certainfacts are or shall be as he then represents.

Effects of Warranties—1. Natural tendency is to induce buyer to

purchase the subject matter2. Buyer purchases subject matter relying

thereon3. Seller liable for damages in case of breach

Effects of Waivers—Only applicable to waiver of warranty againsteviction (see the following section) – parties mayincrease or decrease warranty against evictionbut the effect depends on good/bad faith of theseller1. Seller in bad faith and there is warranty

against eviction – null and void2. buyer without knowledge of a particular risk,

made general renunciation of warranty – notwaiver but merely limits liability of seller incase of eviction (pay value of subject matterat time of eviction)

3. buyer with knowledge of risk of evictionassumed its consequences and made awaiver – vendor not liable

4. waiver to a specific case of eviction – wipesout warranty as to that specific risk but notas to eviction caused by other reasons


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Condition v. Warranty—

Condition WarrantyPertains to and affectsthe existence of theobligation

Goes into theperformance of anobligation and may, initself, be an obligation

Non-happening does notamount to breach ofcontract

Non-fulfillmentconstitutes breach ofcontract

Must be stipulated Stipulation or operationof law

May attach to either tothe seller’s duty todeliver thing or someother circumstance

Always relates to thesubject matter or theseller’s obligations as tothe subject matter

If seller has promised that the conditionshould happen or be performed, thebuyer may treat the nonperformance ofthe condition as a breach of warranty.(Art.1545)

Form—1. Express Warranty (APIR)

For there to be express warranty, thefollowing requisites must concur:a. An affirmation of fact or any promise

relating to the thing sold;b. The natural tendency of such affirmation

or promise is to induce the buyer to buy;c. The buyer buys the thing relying

thereon. (Art. 1546)d. Made before the sale not upon delivery

or any other point

An express warranty can be made by andalso be binding on the seller even in the saleof a second hand article. (Moles v. IAC,1989)

Express Warranty Dealer’s or Trader’sTalk

What is specificallyrepresented as true insaid document cannot beconsidered as meredealer's talk. (Moles v.IAC, 1989)

Affirmation of thevalue of the thing orstatement of theseller’s opinion onlyis not a warrantyunless:

- The seller madeit as an expert;

- It was relied uponby the buyer.(Art.1546)

Ordinarily, what doesnot appear on the faceof the writteninstrument (Moles v.IAC, 1989)

Express Warranty False RepresentationConcealment of factsdoes not necessarilyamount to falserepresentation

When concealment offacts comes with anactive misstatement offact or a partialstatement of fact suchthat withholding of thatunsaid portion makesthat which is statedabsolutely false

However, buyer whofails to inspect conditionof property despiteample opportunity to doso and no opposition onthe part of seller cannotlater on allege falserepresentation. (PhilMftg Co. v Go Jucco,1926) This is becausebuyer’s duty to inspectremains despite falserepresentation by theseller. Buyer has theduty to exercise duediligence.

2. Implied Warrantya. Implied Warranty of Titleb. Implied Warranty against Encumbrance

/ Non-Apparent Servitudesc. Implied Warranty against Hidden

Defects (Art. 1547) Implied warranty as to

Merchantable Quality and Fitnessof Goods

Implied warranty againstRedhibitory Defect in the Sale ofAnimals (Art. 1572)

Quality and Fitness of Goods inSale by Sample or Description

d. Other Warranties

Implied Warranty of Title—1. Implied warranty arises by operation of law

and need not be stipulated in the contract ofsale.

2. Warranty of Seller’s Right to Sell: sellerwarrants his right to sell at the time theownership is to pass. Inapplicable to a sheriff, auctioneer,

mortgagee, pledgee, or other personprofessing to sell by virtue of authority infact or law. (Art. 1547)

3. Warranty against Eviction: seller warrantsthat buyer, from the time ownership passes,shall have and enjoy legal and peacefulpossession of the thing. Its requisites are:a. Buyer is deprived of the whole or a part

of the thing sold;


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b. Eviction is by final judgmentc. Final judgment based on a right prior to

the sale or an act imputable to thevendor

d. Seller is summoned and made co-defendant in the suit for eviction at theinstance of the buyer. (PowerCommercial and Industrial Corp. v.CA, 1997)

Implied Warranty against Encumbrance /Non-Apparent Servitudes—Requisites for breach:1. Thing sold is an immovable2. Burden or servitude encumbering the thing

sold isa. Non-apparent to the naked eyeb. Not mentioned in the agreementc. Of such nature that it must be presumed

that the buyer would not have bought ithad he been aware thereof

d. Not recorded in the Registry of Propertyunless there is an express warranty thatthe thing is free from all burdens andencumbrances (Art.1560)

Implied warranty against Hidden Defects—Requisites for breach:1. The defect renders the thing sold unfit for

the use for which it was intended ORdiminishes its fitness for such use to such anextent that had the buyer been awarethereof, he would not have bought it orwould have paid a lower price;

2. The defect is not patent or visible;3. The buyer is not an expert who, by reason of

his trade or profession, should have knownthe defect

4. The seller is aware of the hidden fault ordefect, OR even he is not aware thereof, ifthere is no stipulation to the contrary(Arts.1561 &1566)

Implied warranty as to Merchantable Qualityand Fitness of Goods—Merchantable Quality:1. Where the goods are brought by description

from a seller who deals in goods of thatdescription (Art.1562)

2. In a sale by sample, if the seller is a dealerin goods of that kind and the defect is notapparent on reasonable examination of thesample (Art.1566)

Fitness for a particular purpose: Where thebuyer expressly or impliedly makes known to theseller the particular purpose for which the goodsare acquired AND it appears that the buyer

relies on the seller’s skill or judgment(Art.1562(1))

Implied warranty against Redhibitory Defectin the Sale of Animals (Art. 1572)— Redhibitory defect- a hidden defect of

animals of such nature that expertknowledge is not sufficient to discover it,even in case a professional inspection hasbeen made

No warranty in case of (Art. 1574):a. Animals sold at fairs or public auctionsb. Livestock sold as condemned

The following sales are void (Art. 1575):a. Sale of animals suffering from

contagious diseasesb. Sale of animals unfit for the purpose for

which they are acquired as stated in thecontract

Veterinarian liable if he fails to discover ordisclose the hidden defect throughignorance or bad faith (Art 1576)

Seller liable if animal dies within 3 days afterits purchase due to a disease that existed atthe time of sale. (Art 1578)

Other Warranties—1. Warranty in Sale of Consumer Goods

Consumer goods – goods primarily forpersonal, family, household or agriculturalpurposes, which shall include but not limitedto food, drugs, cosmetics, and devices(Sec.4(q), RA 7493

:Consumer Act of the

Phil)

Kinds:a. “Full warranty”- if the written warranty

meets the minimum standardsb. “Limited warranty- if the written warranty

does not meet the minimum standards(Sec.6(c), RA7394)

Minimum standard for warranties that thewarrantor shall:a. Remedy such consumer product within

a reasonable time and without charge incase of a defect, malfunction or failure toconform to such written warranty;

b. Permit the consumer to elect whether toask for a refund or replacement withoutcharge of such product or part, as thecase may be, where after reasonablenumber of attempts to remedy the defector malfunction, the product continues tohave the defect or to malfunction

The warrantor will not be required to performthe above duties if he can show that thedefect, malfunction or failure to conform to a


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written warranty was caused by damage dueto unreasonable use thereof. (Sec.68(d), RA7394)

2. Warranty in sale of Subdivision Lot orCondominium UnitsThe owner or developer shall be answerableand liable for the facilities, improvements,infrastructures or other forms ofdevelopment represented or promised inbrochures, advertisements and other salespropaganda disseminated by the owner ordeveloper or his agents and the same shallform part of the sales warranties enforceableagainst said owner or developer, jointly andseverally. (Sec.19, PD 957: TheSubdivision and Condominium Buyers’Protective Decree)

__________

C. To preserve the thing, pending delivery,with proper diligence (Art. 1163)

Duration: From the perfection of sale untildelivery (Art 1480)

Default standard of care: Diligence of a goodfather of a family

General rule: seller is liable for loss ordeterioration (Art. 1174)

Exception: fortuitous event (Art. 1174)

Exception to exception: seller is still liable forfortuitous event if1. Law provides for it (e.g. delay or promising

to deliver the same thing to 2 or morepersons with different interests – Art. 1165)

2. By stipulation3. Nature of obligation requires assumption of

risk

Fungibles sold for a price fixed according toweight, number or measure: duty to preservebegins only after the things are weighed,counted or measured except when seller isalready in delay.__________

D. To pay for the expenses for the executionand registration of the deed of sale (Art.1487)

General rule: The seller has the duty to pay forthe expenses for the execution and registrationof the deed of sale

Exception: if there is a stipulation to thecontrary (Art. 1487)

Expenses incurred subsequent to the transfer oftitle are to be borne by the buyer, unless causedby the fault of the seller

II. Obligations of the Buyer

Obligations of the Buyer—1. To Accept delivery2. To Pay the price of the thing sold

Pertinent Rules—1. In a contract of sale, the seller is not

required to deliver the thing sold until theprice is paid nor is the buyer required to paythe price before the thing is delivered in theabsence of an agreement to the contrary(Art 1524)

2. If stipulated, then the buyer is bound toaccept delivery and to pay the price at thetime and place designated

3. If there is no stipulation as to the time andplace of payment and delivery, the buyer isbound to pay at the time and place ofdelivery

4. In the absence also of stipulation, as to theplace of delivery, it shall be made whereverthe thing might be at the moment thecontract was perfected (Art. 1521)

5. If only the time for delivery of the thing soldhas been fixed in the contract, the vendee isrequired to pay even before the thing isdelivered to him.

First Obligation: accept delivery—1. Form

a. Express: buyer intimates acceptanceb. Implied:

Goods delivered to the buyer and hedoes any act in relation to them thatis inconsistent with the ownership ofthe seller.

After the lapse of a reasonable time,the buyer retains the goods withoutintimating to the seller that he hasrejected them. (Art.1585)

2. MannerRight of Inspection: reasonableopportunity to examine the goods upondelivery. If there is a stipulation that deliveryis preconditioned on payment, then buyerhas no right of inspection until he has paid.(Art.1584) Exception: in case such right ofinspection is permitted by agreement orusage trade.


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3. Effect of Refusal to accepta. If buyer refuses to accept goods, having

the right to do so, he is not bound toreturn them to the seller; it beingsufficient that he notifies the seller of hisrefusal to accept If he voluntarily constitutes himself a

depositary of the goods, he shall beliable as such. (Art.1587)

b. Unjust refusal to accept still results totransfer of ownership; title to the goodspasses to the buyer from the momentthey are placed at his disposal, except ifownership has been reserved by theseller (Art.1588)

Second Obligation: pay the price of the thingsold (Art. 1582)—1. Payment of interest

Buyer is liable for interest when: (SFD)a. Interest is stipulated;b. Thing sold produces fruits or income;c. Buyer is in default - interest accrues

from the time of judicial or extrajudicialdemand for payment

2. Suspension of paymentsBuyer may suspend payment when:a. his ownership or possession of the thing

is disturbed orb. he has reasonable grounds to fear such

disturbance by a vindicatory action or aforeclosure of mortgage

Exceptions: buyer cannot suspendpayment when:a. seller gives security for the return of the

price in a proper caseb. it has been stipulated that,

notwithstanding any such contingency,the buyer shall be bound to pay (Art.1590)

Suspension may continue until the seller hascaused the disturbance or danger to cease

A mere act of trespass shall notauthorize the suspension of thepayment. (Art.1590)

3. Sale of real property In the sale of immovable property, buyer

may pay even beyond the expiration ofthe period agreed upon, as long as nodemand for rescission of the contracthas been made upon him eitherjudicially or by a notarial act, despite astipulation providing for ipso jurerescission (Art.1592) (Asked in 88, 00)After demand, court may not grant him a

new term (Heirs of Escanlar, et.al. v.CA, 1997)

R.A. 6552 (Maceda Law) – applies tosale or financing of real estate oninstallment (Rillo v. Court ofAppeals,1997) Buyer is awarded a grace period of

1 month per year of installmentspaid or 60 days, whichever ishigher, within which he may paywithout additional interesto may be used once every 5

years of the life of the contractor any of its extensions

If contract is to be cancelled, sellermust first:o 30 day notice of cancellation,

ando refund cash surrender value to

buyer; amount is equivalent to50% of total payments madeincluding deposits, options anddown-payments plus 5% forevery year in excess of 5 yearsof the life of the contract or anyof its extensions

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Chapter III. Double Sales

(Asked in 77, 87, 89, 98, 01, 04)

I. General RuleII. RequisitesIII. Rules governing sale of movables,

immovables and unregistered landsIV. Purchaser in good faith

I. General Rule

Prior tempore, potior jure (“he who is first in timeis preferred in right”) applies.

II. Requisites

Requisites (Cheng v Genato, 1998)1. 2 or more valid sales;2. Same subject matter;3. 2 or more buyers with conflicting interests at

odds over the rightful ownership of the thingsold;

4. Same seller

III. Rules Governing Sale of Movables,Immovables and Unregistered Lands

A. Sale of MovablesOwnership shall be transferred to the personwho may have first taken possession ingood faith.

B. Immovables1. Ownership belongs to the person who:

a. In good faith first recorded in theRegistry of Property; OR

b. If there is no inscription, ownershippasses to the person who in good faithwas first in possession; OR

c. In the absence thereof, to the personwho presents the oldest title,PROVIDED there is good faith. NOTE:good faith is required all the time.

NOTE:a. “Oldest Title” – any public document

showing acquisition of the land in goodfaith. To constitute “title,” thetransmission of ownership must appearin a public document [Art. 1358 (1)]

b. Examples: Deed of Sale, Deed ofDonation, Deed of Trust

2. Registration includes any entry made in thePrimary Entry Book of the registry, including

both registration in its ordinary and strictsense and cancellation, annotation, andeven marginal notes. (Cheng v. Genato,1998)

NOTE: Pencilled entries on the title are notconsidered registration (AFPMBAI v.Court of Appeals, 1999).

C. Sale by Virtue of Execution andAttachmentArt. 1544 does NOT apply to the sale ofunregistered land at an execution salebecause a buyer of unregistered land at aexecution sale only steps into the shoes ofthe judgment debtor, and merely acquiresthe latter's interest in the property sold as ofthe time the property was levied upon.(Carumba v. CA, 1970)

D. Sale of Unregistered Land1. Instrument or deeds establishing,

transmitting, acknowledging, modifying orextinguishing rights with respect to lands notregistered under the Land Registration Actor the Spanish Mortgage Law, are requiredto be registered in the Registry of Propertyto prejudice 3

rdpersons, although such

registration is understood to be “w/oprejudice to a 3

rdparty with a better right”.

(PD 1528 Sec 113)2. Art. 1544 applies to unregistered land

subject to a conventional sale (because ofArt. 1358) but NOT to unregistered landsubject to judicial sale.

E. Purchaser in good faith(Asked in 76, 86, 08)1. General Characteristics

a. One who buys the property of another,without notice that some other personhas a right to or interest in suchproperty, and who pays a full and fairprice for the sale, at the time of thepurchase or before he has notice of theclaim/interest of some other person inthe property. (Agricultural and HomeExtension Development Group v CA,1992)

b. A buyer could not have failed to know ordiscover that the land sold to him was inadverse possession; hence he isdeemed to have acted in bad faith.(Heirs of Ramon Duran v Uy, 344SCRA 238)

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2. PresumptionGen Rule: As a rule, he who asserts thestatus of a purchaser in good faith and forvalue, has the burden of proving suchassertion. This onus probandi cannot bedischarged by mere invocation of the legalpresumption of good faith, i.e., that everyoneis presumed to act in good faith (Mathay vCA, 295 SCRA 556)

When buyer is presumed to be in badfaith:a. Annotation of adverse claim: Places

any subsequent buyer of the registeredland in bad faith. (Balatbat v CA, 261SCRA 128)

b. Annotation of Lis Pendens: Buyercannot be considered an innocentpurchaser for value where it ignored thelis pendens on the title.

Lis Pendens Annotation of AdverseClaim

maybe cancelled evenbefore the action isfinally terminated forcauses which may notbe attributable to theclaimant

may be cancelled only inone instance, i.e., after theclaim is adjudged invalidor unmeritorious by theCourt

Both are intended to protect the interest of aclaimant by posing as notices and caution to thosesaid with the property that same is subject to aclaim.

NOTE: The two are not contradictory orrepugnant to one another; nor does theexistence of one automatically nullify theother, and if any of the registrations shouldbe considered unnecessary or superfluous,it would be the notice of lis pendens (A.Doronila Resources Development Inc v CA,1988)

CIVIL LAW REVIEWER Chapter IV. RISK of LOSS

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Chapter IV. Risk of Loss

I. GENERAL RULEII. EXCEPTION

I. General Rule

Res perit domino: Owner bears risk ofloss

Ownership is not transferred until delivery

II. Exceptions

1. Contrary stipulation2. An obligation to deliver a generic thing is

not extinguished by loss. (Art 1263, CC)3. Risk of loss of specific things is subject to

the ff:a. When loss occurs before perfection,

such loss is borne by sellerb. When loss occurs at time of perfection,

loss must have occurred before thecontract was entered into, without theknowledge of both parties

TOTAL LOSS PARTIAL LOSS (Or losswhich results insubstantial change incharacter)

Contract isineffective.

Because therecan be no contractwithout an object

Buyer may withdraw fromthe contractORBuy the remainder at aproportionate price

c. When loss occurs after perfection butbefore delivery Seller bears risk of loss Buyer does not bear risk of loss until

goods are delivered to him

CIVIL LAW REVIEWER Chapter V. DOCUMENTS of TITLE

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Chapter V. Documents of Title

I. IN GENERALII. NEGOTIABLE DOCUMENTS OF TITLEIII. NON-NEGOTIABLE DOCUMENTS OF TITLE

I. In General

Definition—A document used in the ordinary course ofbusiness in the sale or transfer of goods, asproof of the possession or control of the goods,or authorizing or purporting to authorize thepossessor of the document to transfer orreceive, either by endorsement or by delivery,goods represented by such document. (Art.1636)

Examples: bill of lading, quedan, warehousereceipts, trust receipts

Purpose—1. Evidence of possession or control of goods

described therein2. Medium of transferring title and possession

over the goods described therein withouthaving to effect actual delivery thereof(Villanueva)

3. The custody of a negotiable warehousereceipts issued to the order of the owner, orto bearer, is a representation of title uponwhich bona fide purchasers for value areentitled to rely, despite breaches of trust orviolations of agreement on the part of theapparent owner. (Siy Cong Bieng vs.HSBC, 56 Phil 598)

II. Negotiable Documents of Title

Definition—Document of title which states that the goodsreferred to therein will be delivered to the bearer,or to the order of any person named in suchdocument (Art. 1508, CC).

TERMS OF THEDOCUMENT

HOW NEGOTIATED

Goods are deliverable tobearer

Endorsed in blank by theperson to whose order thegoods were deliverable

By delivery of thedocument to another

Goods are deliverable tothe order of a specifiedperson

By indorsement ofsuch person (Art.1509,CC)

Who may negotiate it? (Art.1512,CC)—1. Owner2. Person to whom the possession or custody

of the document has been entrusted by theownera. If bailee undertakes to deliver the goods

to such personb. If document is in such form that it may

be negotiated by delivery

A person to whom a document has beennegotiated acquires—1. Rights of the vendor2. Rights of the original consignee

A person who negotiates a document of titlewarrants—1. Genuineness of document2. Legal right to negotiate or transfer3. No knowledge of fact which would impair the

validity or worth of the document4. Right to transfer the title to the goods and

merchantability or fitness for a particularpurpose, whenever such warranties wouldhave been implied had the contract beentransfer the goods without a document

He does not warrant that—1. Common carrier will fulfill its obligation to

deliver the gods2. Previous indorsers will fulfill their obligation

(Art. 1516-1517, CC)

Goods in the hands of the carrier covered bya negotiable document cannot be attached orlevied upon, UNLESS—1. Document is first surrendered to the carrier;

or2. Impounded by the court; or3. Its negotiation is enjoined. (Art. 1519-

1520,CC)

III. Non-Negotiable Documents of Title

Goods described in a non-negotiabledocument of title are deliverable only to aspecified person

Carrier will not deliver the goods to anyholder of the document or to whom suchdocument may have been endorsed by theconsignee

Must present the deed of sale or donation inhis favor

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“Negotiation” [negotiable document oftitle] VS. “Transfer” [non-negotiabledocument of title]:

Negotiation (Art. 1508) TransferDelivery of a negotiabledocument of title toanother if by the termsthereof, the goods aredeliverable to bearer, orwhen the document wasendorsed in blank bythe person to whoseorder the goods aredeliverable.

In a negotiabledocument of title, thebuyer may acquire abetter title.

The assignment of rightsof the consignee of anon-negotiable documentof title to another; or

Document of title wasordered sold or assigned,without indorsement.

Transferee does notacquire a better title thanhis transferor

CIVIL LAW REVIEWER Chapter VI. REMEDIES of the SELLER and BUYER

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Chapter VI. Remedies of the Seller andBuyer

I. GENERAL REMEDIESA. SPECIFIC PERFORMANCEB. RESCISSIONC. DAMAGES

II. REMEDIES OF THE SELLERA. IN THE SALE OF MOVABLES

1. EXTRAJUDICIAL REMEDIES2. JUDICIAL REMEDIES

B. IN THE SALE OF IMMOVABLES1. RESCISSION FOR ANTICIPATORY

BREACH2. SPECIFIC PERFORMANCE WITH

DAMAGES3. RESCISSION WITH DAMAGES4. MACEDA LAW

III. REMEDIES OF THE BUYERA. FOR BREACH OF OBLIGATION TO

PRESERVEB. FOR BREACH OF OBLIGATION TO

DELIVERC. FOR BREACH OF WARRANTY

I. General Remedies (Art. 1191, CC)

The following remedies arise from the bilateralnature of the contract of sale:1. Specific performance (Asked in 02)2. Rescission (Asked in 03, 08)

General rule is that rescission of acontract will not be permitted for a slightor casual breach, but only for suchsubstantial and fundamental breachas would defeat the very object of theparties in making the agreement. (SongFo & Co. vs. Hawaiian-Philippine Co.,(1925))

3. Damages

Neither party incurs in delay if the other does notcomply or is not ready to comply in a propermanner with what is incumbent upon him (Art1169, CC)

Prescriptive periods—1. 10 years if based on written contract2. 6 years if based on oral contract

II. Remedies of the Seller

A. In the Sale of Movables1. Extrajudicial or Self-Help Remedies

[NOTE: No need to resort to the courts; aslong as possession of the goods has not yetpassed to the buyer]

a. Possessory lien over the goods—

Right to retain possession of goods untilpayment or tender of the whole price, orunless he agrees to sell on credit (1526-1529, 1503, 1535)

When available: Goods are sold without stipulation

as to credit Goods are sold on credit, but term

of credit has expired Buyer becomes INSOLVENT

When lost: Seller delivers goods to carrier or

other bailee for transmission to thebuyer under a straight or non-negotiable bill of lading

Buyer/his agent lawfully obtainspossession of goods

Seller waives it Not lost in remainder of goods

when only partial delivery ismade (unless such is symbolicdelivery of the whole)

Not lost by mere fact that sellerobtained a judgment for theprice

When revived: Goods are returned bythe buyer in a wrongful repudiation ofthe contract

b. Right of stoppage in transitu—

An extension of the lien for the price;entitles unpaid seller to resumepossession of the goods while they arein transit before the goods come inpossession of the vendee (1530-1532,1535, 1636[2])

Available when: Vendee becomesINSOLVENT

When are goods in transit? From time of delivery to the

carrier or other bailee by the seller,for the purpose of transmission tothe buyer, until the buyer or hisagent takes such delivery from thecarrier.

Even when goods have reachedtheir ultimate destination, if buyerrejects them and carrier retainspossession


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To terminate transit by deliveryto a middleman, delivery mustbe to keep, not to transport.

When are goods no longer in transit? Buyer obtained delivery of the

goods before such have reachedtheir ultimate destination

Goods have arrived at ultimatedestination, but carrier refuses todeliver

Carrier enters into a new contractwith the buyer upon arrival of thegoods at their ultimate destination

How exercised? By obtaining actual possession of

the goods By giving notice of his claim to the

carrier/other bailee who haspossession of the goods Carrier must redeliver goods to

seller, or according to hisinstructions

Carrier not obliged to redeliveruntil the negotiable document oftitle, if any, has beensurrendered for cancellation

Seller’s right to stoppage in transitu notaffected even if buyer has sold ordisposed of the goods; Unless the sellerassented

c. Special right of resale—

Available to unpaid seller who has aright of lien or who has stopped thegoods in transitu (1533)

Purpose: For seller to liquidate hisdamages He must do so within a reasonable

time and in such manner as toobtain the best price possible.

Resale = fair sale if in accordancewith established business practices,with no attempt to take advantage ofthe original buyer.

Resale may be in a private or publicsale, but seller cannot buy indirectlyor directly.

For resale to be valid, buyer neednot be notified of an intention toresell or the time and place of theresale.

Effects: Seller is no longer liable to the

original buyer upon the contract ofsale or for any profit made by theresale

Buyer at resale acquires good titleas against the original owner

In case resale is at a loss, sellerentitled to recover the differencefrom the original buyer

Seller may recover damages fromoriginal buyer for breach of contract

d. Special right to rescind:

RETURN of the title over theundelivered goods to the seller, andright to recover DAMAGES for breach ofcontract (1534)

Available to unpaid seller who has aright of lien or who has stopped thegoods in transitu

When available: Seller expressly reserved right to

rescind in case buyer defaults Buyer has been in default in

payment for an unreasonable time

Transfer of title shall not be held to havebeen rescinded by the unpaid seller untilhe manifests by notice to the buyer orsome other overt act an intention torescind.

2. Judicial Remedies of an unpaid sellera. Action for the price or specific

performance (1595)—

Conditions: the goods has passed to the buyer Price is payable on a certain day,

irrespective of delivery of the goods Buyer can set up the defense that

seller could not or did not intend todeliver the goods

Seller was notified by the buyer ofhis repudiation of the contract afterthe seller has completed themanufacture of the goods/hadprocured the goods to be deliveredand the goods could not readily beresold for a reasonable price

b. Action for damages for non-acceptance, if buyer wrongfully neglectsor refuses to accept and pay for thegoods (1596)


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Measure of damages: Estimated lossdirectly and naturally resulting in theordinary course of events from thebuyer’s breach Where there is available market for

goods: Difference between thecontract price and the market priceat the time the goods ought to havebeen accepted or if no time wasfixed, at the time of refusal to accept

If the resale was made withdiligence, resale price is evidence ofmarket value, taking into accountwhether or not the goods could bereadily sold

Where labor/expense wasnecessary for seller to fulfill hisobligation: Labor performed andexpenses made by seller beforereceiving notice of buyer’srepudiation or countermand

Profit that the seller would havemade if sale had been fullyperformed

c. Rescission by giving the buyer notice ofthe election to rescind (1597)

Under this rule, rescission would bar anaction on the contract because it meanscancellation of the contractualobligations between the parties.(Baviera)

d. Special rule for sale of movables byinstalments – Recto Law (1484, 1485)(Asked in ‘99)

Applies in cases of: Sale of movables in installment

Levy Hermanos vs. Gervacio,(1939): The rule is intended toapply to sales of movables, theprice of which is payable in 2 ormore installments, but not tostraight-term sales where theprice is payable in full, aftermaking a down paymentbecause the law aims to protectimprovident buyers who may betempted to buy beyond theirmeans.

Lease of personal property withoption to buy When lessor has deprived the

lessee of the possession orenjoyment of the thing (Ex.When lessor files a complaintfor replevin against lessee)

Also applies when seller assignshis credit to someone else

Alternative Remedies of the unpaidseller under Recto Law Specific Performance Cancellation of sale: If vendee fails

to pay 2 or more installments When the seller cancels the sale

by repossessing the propertysold, he is barred from exactingpayment for its price.

Foreclosure of Chattel Mortgage: Ifvendee fails to pay 2 or moreinstallments If seller chooses this remedy, he

shall have no further action torecover any unpaid balance,and any stipulation to thecontrary shall be void

Motors vs. Sapinoso, (1970):What Art 1484 (3) prohibits is“further action against thepurchaser to recover any unpaidbalance of the price;” andalthough this Court hasconstrued the word “action” tomean “any judicial orextrajudicial proceeding byvirtue of which the vendor maylawfully be enabled to exactrecovery of the supposedunsatisfied balance of thepurchase price from thepurchaser or his privy,” there isno occasion at this stage toapply the restrictive provision ofthe said article because therehas not yet been a foreclosuresale resulting in a deficiency.The payment of the sum ofP1,250 of Sapinoso was avoluntary act on his part and didnot result from a “further action”instituted by Northern Motors.

Bachrach Motor Co., Inc. v.Millan, (1935): Purpose of thelaw is to remedy the abusescommitted in foreclosure ofchattel mortgages. It preventsmortgagees from seizing themortgaged property, buying it atforeclosure sale for a low priceand then bringing the suitagainst the mortgagor for adeficiency judgment. Thealmost invariable result of thisprocedure was that themortgagor found himself minus


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the property and still owingpractically the full amount of hisoriginal indebtedness.

Nonato vs. IAC (1985): Remedies areALTERNATIVE, not cumulative, i.e.exercise of one bars exercise of theothers

NOTE: “Unpaid Seller” (1525):e. When the whole of the price has not

been paid or tendered;f. When a bill of exchange or other

negotiable instrument has been receivedas conditional payment, and thecondition on which it was received hasbeen broken by reason of the dishonorof the instrument, the insolvency of thebuyer, or otherwise.

_________

B. In the Sale of Immovables

1. Rescission for Anticipatory Breach(1591)a. Available when seller has reasonable

grounds to fear the loss of theimmovable property sold and its price

b. Example: Buyer destroys the buildingsold, there being no security therefor,and buyer becomes insolvent

c. Court has no discretion to compel theseller to wait for the expiration of theperiod to pay, or to grant the buyer moretime to pay

2. Specific Performance + Damages (1191)a. Seller may choose between specific

performance and rescission, withdamages in either case

b. Court has discretion, for a just cause, togive the buyer more time to pay even ifthe seller chooses rescission

3. Rescission + Damages (1191)a. If seller chose specific performance, and

such becomes impossible, he may stillavail of rescission

b. If absolute sale, seller must make ademand for rescission Judicially, OR By a notarial act

c. Necessary even if automatic rescissionis stipulated

d. Effect of lack of demand: Buyer can stillpay

e. Effect of demand: Court may not grantbuyer a new term

4. Maceda Law: Sale of Residential Realtyon Installments(Asked in 77, 89, 99, 00)

RA 6552: An Act To Provide Protection forBuyers of Real Estate on InstallmentPayments

DOES not apply to:a. Industrial lotsb. Commercial buildingsc. Sale to tenants under Agricultural

Reform Code (RA 3844)

Imposes ADDITIONAL REQUIREMENTSFOR A VALID RESCISSION:a. If buyer has paid at least 2 years of

installments: GRN Grace period: 1 month per year of

installment payments made. BUTbuyer may only avail of it only oncein every 5 years

Refund of Cash Surrender Value(CSV): 50% of total amount paid +5% for every year after the 1

st5

years of installments BUT not greater than 90% of

total amount paid Notice of cancellation of demand for

rescission by notarial act, effective30 days from the buyer’s receiptthereof and upon full payment ofCSV

b. If buyer has paid less than 2 years: GN Grace period: at least 60 days Notice of cancellation or demand for

rescission by notarial act, effective30 days upon receipt thereof

c. Down payments, deposits, or options onthe contract shall be included in the totalnumber of installments made

d. Seller may go to court for judicialrescission in lieu of a notarial act ofrescission

e. During the grace period, buyer shallhave the right: To sell or assign his rights, to be

evidenced in a notarial instrument To update his account To pay in advance any installment,

or the full unpaid balance of theprice, without any interest


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III. Remedies of the Buyer

General rule: Courts will refuse to decreespecific performance with respect tochattels, because damages are a sufficientremedy

Exception: Buyer is entitled to the specificthing which to him has special value andwhich he cannot readily obtain in the marketOR where damages would not furnish acomplete and adequate remedy (Baviera)

_________

A. Remedy for breach of obligation topreserve

If thing is lost—1. Without fault of seller: No breach; Obligation

is extinguished2. Through fault of seller (or through fortuitous

event, if seller is liable): Damages

A thing is lost when it—1. Perishes2. Goes out of commerce3. Disappears in such a way that its existence

is unknown or it cannot be recovered

If thing deteriorates—

Without fault of seller Through fault of sellerNo breach Impairment shall beborne by buyer

Rescission + damagesOrSpecific performance +damages

_________

B. Remedy for breach of obligation todeliver

Delivery of wrong quantity (1522)—

Goods are less than whatwas contracted

More

Reject the goodsORAccept and pay At contract rate if buyeraccepts knowing that sellerwon’t perform in full At fair value: If goods wereused before knowing thatseller won’t be able toperform in full

Reject the excess (Orthe whole, ifindivisible)ORAccept the whole andpay at contract rate

Art. 1464. Civil Code. In the sale of an undividedshare of a specific mass of fungible goods, if themass contains less than the number, weight, ormeasure bought, the buyer becomes the owner of thewhole mass and the seller is bound to make good the

deficiency from goods of the same kind and quality,UNLESS a contrary intent appears.

Real Estate (1539-1543)—1. If at the rate of a certain price per unit of

measure or number:

Less (in area or quality) thanwhat was agreed upon:

More

Proportional reduction of priceORRescission, if: Lack in area is at least 1/10of what is stated, or inferiorvalue of thing sold exceeds1/10 of price Buyer would not havebought the property has hebeen aware of the inferiorquality or smaller area

Reject the excessORAccept the wholeand pay at contractrate

[NOTE: Also applies to judicial sales (1541)]

2. If for a lump sum:

Everything is withinboundaries, even if less ormore than stated area

Not everything iswithin boundaries

No remedyRudolf Lietz, Inc. v. CA,(2005): Where both the areaand the boundaries of theimmovable are declared, thearea covered within theboundaries of the immovableprevails over the stated area.

Proportionalreduction in priceORRescission

Prescriptive period: 6 months, counted fromdate of delivery_________

C. Remedy for breach of warranty

Express Warranty—1. Prescriptive period: Period specified in

express warranty OR 4 years, if no period isspecified (following the general rule onrescission of contracts)

2. Remedies:a. Accept goods + demand

diminution/extinction of priceb. Accept goods + damagesc. Refuse to accept goods + damagesd. Rescind (Refuse to accept or return or

offer to return) + recover price paid3. Rescission not available when buyer:

a. Knew of breach of warranty when heaccepted the goods without protest


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b. Fails to notify the seller about election torescind within a reasonable period oftime

c. Fails to return or offer to return thegoods to the seller in substantially agood condition as they were whendelivered, unless deterioration was dueto breach of warranty

4. Measure of damages: Difference betweenvalue of goods at time of delivery and thevalue they would have had if they hadanswered to the warranty

5. Effects of rescission:a. Buyer no longer liable for price

Entitled to return of any part of pricepaid, concurrently with orimmediately after an offer to returnthe goods

b. If seller refuses to accept offer to returngoods: buyer deemed bailee for sellerand has right of lien to secure paymentof part of price paid

Implied warranty against eviction(1555,1556)—

TOTAL EVICTION PARTIAL EVICTIONEnforce liability foreviction- Demand from seller:VICED Value of thing sold at

time of eviction Income or fruits, if he

has been ordered todeliver them to theparty who won theeviction suit

Costs of eviction suitand in a proper case,suit against seller forwarranty

Expenses of thecontract, if buyer haspaid them

Damages andinterests, andornamentalexpenses, IF salewas made in badfaith

Enforce liability (demandVICED)ORRescind If he would not havebought the thing soldwithout the part lost BUThe must return the thingwithout otherencumbrances thanthose which it had whenhe acquired it

1. Rules:a. Buyer need not appeal from decision to

hold seller liable for evictionb. When adverse possession commenced

before sale, but prescription periodcompleted after transfer: seller is notliable

c. If property sold for nonpayment of taxesdue and not made known to the buyerbefore the sale: seller liable

d. Judgment debtor also responsible foreviction in judicial sales, unless it isotherwise decreed in the judgment

2. If there is waiver of warranty:a. Seller acted in bad faith: Waiver is void,

seller liable for evictionb. Buyer made waiver without knowledge

of risks of eviction: Seller liable only forthe value of thing sold at time of eviction

c. Buyer made waiver with knowledge ofrisks: Seller not liable, buyer assumedthe consequences

Implied warranty against encumbrances(1560)—1. Rescission: Within 1 year from execution of

deed of sale OR2. Damages: Within 1 year from execution of

deed of sale or discovery of the burden orservitude

Implied warranty against hidden defects(1567-1571)—1. If thing is not lost:

a. Withdraw from contract (accionredhibitoria) + damages

b. Demand a proportionate reduction of theprice (accion quanti minoris) + damages

2. If thing is lost:

Due to hiddenfault

Due to fortuitous eventor fault of buyer

If seller aware ofdefect, buyer maydemand:- Return of price- Refund ofexpenses ofcontract- Damages

Demand:- Price paid minus value ofthing when it was lost- Damages, if seller actedin bad fait

If seller not awareof defect:Buyer may demandprice and expensesBUT NOT damages

Prescriptive period: 6 months from delivery

Implied warranty against redhibitory defectsof animals—1. Remedies

a. Withdraw from contract + damagesb. Demand a proportionate reduction of the

price + damages


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2. If sale is rescinded:a. Buyer must return animal in condition in

which it was sold and deliveredb. Buyer shall be liable for injury due to his

negligence.3. Prescriptive period: 40 days from delivery

Warranty in sale of consumer goods (RA7394, Sec.68)—If implied warranty accompanies expresswarranty, both will be of equal duration.

EXPRESS WARRANTY IMPLIED WARRANTY1. Demand repair within

30 days Extendible forcauses beyond thecontrol of thewarrantor

2. Demand refund ofprice minus amountdirectly attributable tothe use of theconsumer prior to thediscovery of the non-conformity

1. Retain the goodsand recoverdamagesOR

2. Reject the goods,cancel contract andrecover from sellerso much of thepurchase price ashas been paid +damages

CIVIL LAW REVIEWER Chapter VII. EXTINGUISHMENT of SALE

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Chapter VII. Extinguishment of Sale

I. IN GENERALII. CONVENTIONAL REDEMPTIONIII. EQUITABLE MORTGAGEIV. LEGAL REDEMPTION

I. In General

Generally, extinguished by the same causes asall other obligations (Arts.1600 &1231) (P-PLAN-C

3-R

3)

1. Payment/performance2. Prescription3. Loss of thing due4. Annulmenta. Novation5. Condonation/remission6. Confusion/merger7. Compensation8. Rescission9. Resolutory condition fulfilled10. Redemption (Conventional or Legal)

II. Conventional Redemption

Definition—1. Vendor reserves the right to repurchase the

thing sold, with the obligation to comply withthe provisions of Article 1616 and otherstipulations which may have been agreedupon. (Art 1601,CC)

2. Available when the seller reserves the rightto repurchase the thing sold in the sameinstrument of sale as one of the stipulationsof the contract (Villarica v CA, 1968)

Period (Asked in 77)—General Rule: Follow period stipulated incontract, but should not exceed 10 years.1. If no period stipulated, then it shall be four

years from the execution of the contract2. But vendor may still exercise the right to

repurchase within thirty days from the timefinal judgment was rendered in a civil actionon the basis that the contract was a truesale with right to repurchase

By whom exercised—1. Vendor2. His heirs, assigns or agents3. Creditor, if he has exhausted the property of

the vendor

4. Co-owners of an immovable, if they soldtheir interests to the same person, may onlyredeem their respective sharesa. Vendee cannot be compelled to agree to

a partial redemptionb. If the co-owners sold their interest to the

same person who previously bought theshare of a co-owner subject to a right ofredemption, then the latter may becompelled to redeem the whole property

From whom to redeem—1. Vendee a retro2. His heirs, assigns or agents3. Subsequent purchaser of property, even if

the right to redeem was not mentioned in thesubsequent contract; except if registeredland, where the right to redeem must beannotated in the title

4. If several heirs, then the right of redemptioncan be exercised against each heir for hisshare of the property

How exercised—1. Returning the ff. to the buyer: (PEN)

a. Price of the sale;b. Expenses of the contract and other

legitimate payments made by reason ofthe sale;

c. Necessary and useful expenses madeon the thing sold

2. Complying with any other stipulation agreedupon, if any.

NOTE:1. BPI Family Savings Bank, Inc. v. Veloso,

(2004): The general rule in redemption isthat it is not sufficient that a person offeringto redeem manifests his desire to do so. Thestatement of intention must be accompaniedby an actual and simultaneous tender ofpayment for the full amount of therepurchase price.

2. Paez v. Magno, (1949):Tender of paymentis enough (i.e., consignation is notnecessary), if made on time, as a basis foraction against the buyer to compel him toresell. But that tender does not in itselfrelieve the buyer from his obligation to paythe price when redemption is allowed by thecourt.

Effect of redemption—1. The seller shall receive the thing free from

all charges or mortgages constituted by thebuyer BUT he shall respect leases executedby the buyer in good faith and in accordancewith local custom.

2. If there are growing fruits at the time of sale


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and at the time of redemption: noreimbursement or prorating if the buyer didnot pay indemnity at the time of sale

3. If there were no growing fruits at the time ofsale, but some exist at the time ofredemption: fruits prorated (buyer entitled topart corresponding to time he possessed theland in the last year, counted from theanniversary of the date of sale)

Effect of non-redemption—Ownership is consolidated in the buyer BUTthe consolidation shall not be recorded inthe Registry of property w/o a judicial order,after the vendor has been duly heard.

Right to Redeem vs. Option to Purchase(Villanueva)—

Right to Redeem Option to PurchaseNot a separate contractbut part of a maincontract of sale, andcannot exist unlessreserved at the time ofthe perfection of the maincontract of sale

Generally a principalcontract and may becreated independent ofanother contract

Does not need itsseparate consideration tobe valid and effective

Must have aconsideration separateand distinct from thepurchase price to be validand effective (Arts. 1324and 1479)

The maximum period forthe exercise of the rightto repurchase cannotexceed 10 years

The period of the optioncontract may be beyondthe 10-year period

Requires in addition atender of payment of theamount required by law,including consignmentthereof if tender ofpayment cannot be madeeffectively on the buyer

May be exercised bynotice of its exercise tothe offeror

III. Equitable Mortgage

(Asked in 79, 80, 82, 84, 86, 89, 91, 05)

Definition—Molina v. CA, (2003): An equitable mortgage isdefined as one which, although lacking in someformality, or form or words, or other requisitesdemanded by a statute, nevertheless reveals theintention of the parties to charge real propertyas security for a debt, and contains nothingimpossible or contrary to law.

Tan v. Valdehueza, (2003): The Valdehuezashaving remained in possession of the land and

the realty taxes having been paid by them, thecontracts which purported to be pacto de retrotransactions are presumed to be equitablemortgages, whether registered or not, therebeing no third parties involved.

Legaspi v. Spouses Ong, (2005): A pactumcommissorium is a stipulation enabling themortgagee to acquire ownership of themortgaged properties without need offoreclosure proceedings which is a nullity beingcontrary to the provisions of Article 2088 of theCivil Code. The inclusion of such stipulation inthe deed shows the intention to mortgage ratherthan to sell.

A pactum commissorium is contrary to thenature of a true pacto de retro sale sinceownership of the property sold is immediatelytransferred to the vendee a retro upon executionof the sale, subject only to the repurchase of avendor a retro within the stipulated period.

Presumption that a contract is an equitablemortgage arises when (5P-R)—1. Price unusually inadequate;2. Possession retained by the seller as lessee

or otherwise;3. Period of redemption extended (or granted

anew) upon or after the expiration of theright to repurchase;

4. Part of the purchase price retained by theseller;

5. Payment of taxes on the thing sold borne bythe seller;

6. Any other case where it may be fairlyinferred that the Real intention of the partiesis for the transaction to secure a debt orother obligation.

For the presumption of an equitablemortgage to arise under Art. 1602, 2requisites must concur (Molina v. CA,2003)—1. That the parties entered into a contract

denominated as a contract of sale, and2. That their intention was to secure an existing

debt by way of a mortgage.

Sale with right torepurchase

Equitable mortgage

Right to repurchase thething sold granted tothe vendor in aseparate instrumentfrom the deed of sale

When any of thecases in Art. 1602arise


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In case of doubt, a contract purporting to be asale with right to repurchase shall be construedas an equitable mortgage (Art. 1603)

Rationale behind provision on equitablemortgage—1. Circumvention of usury law2. Circumvention of prohibition against pactum

commissorium – creditor cannot appropriatethe things given by way of pledge ormortgage since remedy here is foreclosure.

Remedies of apparent vendor—1. If the instrument does not reflect the true

agreement, the remedy is reformation2. If decreed to be an equitable mortgage, then

any money, fruits or other benefit to bereceived by the buyer as rent or otherwiseconsidered as interest.

3. If decreed as a true sale with right topurchase- seller may redeem w/in 30 daysfrom finality of judgment, even if the periodfor redemption has expired.

IV. Legal Redemption

Definition— Right to be subrogated:

a. upon the same terms and conditionsstipulated in the contract,

b. in the place of one who acquires a thingby purchase or dation in payment, or byany other transaction wherebyownership is transmitted by onerous title(Art 1619, CC)

Applies to transfers of ownership by oneroustitle where subrogation is possible. Hence, itcannot apply to barter or to transfer bygratuitous title or hereditary succession.

Applies to sales with pacto de retro(BAVIERA citing MANRESA)

Manner—1. a formal offer to redeem or2. filing of an action in court together with the

consignation of the redemption price withinthe reglementary period

Period to Redeem—

To whom granted Perioda. Co-owner (Art 1620)

b. Adjoining owner ofRural Land (Article1621)

c. Adjoining owner ofurban land (Art. 1622)

30 days from notice- In writing- By the seller- Of the actual executionand delivery of the deedof sale

Doromal v. CA: Actualknowledge of the sale isimmaterial

Conejero v. CA: the lawdid not provide for aparticular mode of writtennotice, thus anycompliance with “writtennotice” should suffice,including the giving of acopy of the deed of sale

Debtor in case acredit orincorporeal right inlitigation is sold(Art.1634)

30 days from the date theassignee demandspayment from debtor

Applicant or his widowor legal heirs in case ofsale of homestead(Sec.119, PublicLand Act)

5 yrs. from date ofconveyance

Taxpayer in case of taxsale (Sec. 215,NIRC)

1 year from date offorfeiture

Judgment debtor,successor–ininterest,or creditor withsubsequent lien, in caseof execution sale(Rule 39, Sec.27,ROC)

1 year from the date ofregistration of thecertificate of sale

Debtor-mortgagor,successors-ininterest,judicial/judgmentcreditor, any personhaving a lien on theproperty, in case ofextrajudicial foreclosureof mortgage (Act No.3135. Sec. 6. )

1 year from the date ofthe sale

Debtor-mortgagor incase of judicialforeclosure of realestate mortgage IF themortgagee is a bank ora banking institution.(TheGeneral BankingLaw of 2000)

90 days from finality ofjudgment


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Agricultural lessee w/oknowledge of sale oflandholding(Agrarian LandReform Code,Sec.12)

2 years from theregistration of the sale

Instances of Legal Redemption—1. Redemption by Co-owners (Art. 1621)

A co-owner of a thing may exercise the rightof redemption in case the shares of all theco-owners or any of them are sold to a thirdpersona. Third person” refers to all persons who

are not heirs of the vendor, by will orintestate succession

b. The right is available not only to originalco-owners, but to those who had lateracquired the share of the co-owner

c. But the right of redemption may beexercised by a co-owner only when partof the community property is sold to astranger. When the portion is sold toanother co-owner, the right does notarise because a new participant is notadded to the co-ownership (Fernandezv. Taun)

If the price of the alienation is grosslyexcessive, the redemptioner shall pay only areasonable one

Should two or more co-owners desire toexercise the right, they may also do so inproportion to the share they mayrespectively have in the thing owned incommon

Rationale: Public Policy, since co-ownership is a hindrance to thedevelopment and administration of theproperty (BAVIERA)

2. Redemption by Adjoining Land-ownersof rural land (Art. 1621)

The ff. Requisites must concur:a. A piece of rural land is alienatedb. Area does not exceed one hectare

When not applicable:a. The grantee does not own any rural landb. Adjacent lands are separated by brooks,

drains, roads and other apparentservitudes for the benefit of otherestates

Order of preference if two or more wish toexercise the right:a. Owner with smaller land areab. If same land area, then the one who first

requested the redemption

Ortega v. Orcine, (1971): What constitutes“rural” or “urban” is to be determined fromthe character of the community or vicinity inwhich it is found, and NOT from the natureof the land itself nor the purpose to which itis devoted

3. Redemption by adjoining land-owners ofurban land (applies only to smallportions of urban land) (Art. 1621)

4. Redemption of Credit

Available when it is sold while in litigation(From the time the complaint is answered)

NOT available when the assignment in favorof:a. Co-heir/co-owner of right assignedb. Creditor in payment of his creditc. Possessor of a tenement or piece of

land which is subject to the rightassigned

How exercised: reimburse the assignee forthe:a. Price paidb. Judicial expenses incurredc. Interest on the price from date of

payment

Right of Pre-emption Right of RedemptionOwner of any adjoiningland has a right of pre-emption at a reasonableprice when:-Urban land is so smalland so situated that amajor portion of it cannotbe used for any practicalpurpose w/in areasonable time;-Was bought merely forspeculation;-Was resold

If the resale has beenperfected, the owner ofthe adjoining land shallhave a right ofredemption, also at areasonable price

Priority if 2 or moreadjoining owners want toredeem: owner whoseintended use of the landappears to be bestjustified

Arises before sale Arises after saleNo rescission becauseno sale exists yet

There can be rescissionof the original sale

The action is directedagainst prospectiveseller

Action is directed againstbuyer


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5. Under the Public Land Act

Coverage:a. Every conveyance of land acquired

under a free patent or homesteadb. The ownership of the land must have

been transferred to another. If thetransaction is a mere promise to sell,there is no right yet to redeem

c. This refers to conveyances made afterthe prohibited 5 years from the issuanceof the patent or grant

Period:a. Within 5 years from the date of

conveyanceb. If pacto de retro sale, the period to

redeem cannot be less than 5 years

Who may redeem:a. Gen Rule: Applicant, widow, or heirsb. Exception: land is sold to another

member of the family of the applicant, orhis direct descendant or heir

c. From whom: Subsequent purchasers

6. Redemption in Foreclosure andExecution Sales

Who may redeem In extra judicialforeclosure-Debtor-Successor in interest-Judicial or judgmentcreditor of said debtor-Junior encumbrancer

In execution sales-Judgment debtor-Successor in interest-Creditor having a lienon the property sold byattachment, judgment ormortgage on theproperty subsequent tothe judgment

Period to redeem Extra judicial foreclosure- within 1 year from thedate of the saleExecution sale- within 12 months afterthe saleIf land is mortgaged infavor of a bank- within 1 year after thesale (not available incase of a corporatemortgagor)

Amount of redemption -Amount of the purchase-Interest at 1% permonth from the time of

the sale up to the time ofredemption-Any assessment ortaxes which thepurchaser may havepaid

7. Under the Agrarian Land Reform CodeLessees right of pre-emptiona. The agricultural lessee shall have the

preferential right to buy under the samereasonable terms and conditions, incase the lessor decides to hold thelandholding

b. Conditions: The landholding must be pre-

empted by the DAR When two or more lessees, each

shall have preferential right only tothe extent of the area cultivated byhim

c. Period: 180 days from notice in writing

Lessees right of redemptiona. Sec. 12 RA 3844: In case landholding is

sold to 3rd

person without the knowledgeof the lessee, the latter shall have theright to redeem the same at areasonable price and consideration

b. Period: within 180 days from notice inwriting

CIVIL LAW REVIEWER Chapter VIII. PHILIPPINE BULK SALES LAW

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Chapter VIII. Philippine Bulk Sales Law(Act 3952)

I. PURPOSEII. COVERAGEIII. DUTY OF SELLERIV. EFFECT OF NON-COMPLIANCE

I. Purpose

Purpose (Villanueva)— To compel the seller in bulk to execute

and deliver a verified list of his creditorsto his buyer, and notice of intended saleto be sent in advance to said creditorsand to use the proceeds to coverpayment of outstanding liabilities

To protect creditor of merchant stores

The Law is constitutional as a valid exercise ofpolice power of the State. (Liwanag v.Menghraj, (1941))

II. Coverage

The Law covers all transactions, whether donein good faith or not, that fall within thedescription of what is “bulk sale” (Villanueva)

Transactions Covered—Applies to sales and transfers in bulk,including any sale, transfer, mortgage orassignment of:1. A stock of goods, wares, merchandise,

provisions or materials NOT in the ordinarycourse of trade and the regular prosecutionof the business of the seller, transferor,mortgagor, or assignor

2. All, or substantially all, of the business ortrade theretofore conducted by the seller,transferor, mortgagor, or assignor

3. All, or substantially all, of the fixtures andequipment used in and about the businessof the seller, transferor, mortgagor, orassignor

When not applicable—1. Written waiver by vendor, transferor,

mortgagor or assignor, as shown by verifiedstatements

2. To executors, administrators, receivers,assignees in insolvency, or public officers,acting under judicial process.

III. Duty of Seller

1. Sworn statement of list of creditors Contents:

o Names + addresses of allcreditors

o Amount of indebtedness due orowing

When delivered: Before any part ofthe purchase price is received, orany promissory note or evidence ofindebtedness therefor

Delivered to:o Buyer, mortgagee or agento If corporation: president, vice-

president, treasurer or secretaryo If partnership firm: a member

thereof

2. Pro-rata application of the purchase ormortgage money to the payment oflisted creditors

3. Inventory of the goods, wares,merchandise, provisions or materials When made: at least 10 days before

sale or mortgage Contents:

Quantity

Cost price of each article (as far aspossible)

4. Notice to listed creditors When made: at least 10 days before

transfer of possession How: personally or by registered

mail Contents: Price, terms and

conditions of sale, transfer,mortgage or assignment

5. Consideration for the sale, transfer,mortgage or assignment Must not be nominal


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IV. Effect of non-compliance

On Transaction Itself—If the purchase or mortgage money is notapplied pro-rata to the bona fide claims of listedcreditors: Sale, transfer or mortgage shall beFRAUDULENT and VOID.

On Seller, Mortgagor, Transferor orAssignor—

Violation SanctionFailure to comply withthe obligation toprepare and deliver thesworn statement listinghis creditors and theapplication pro-rata ofthe proceeds to thecreditors. (Sec 4)

criminal liability

Section 7: Transfer by anyperson, firm or corporation“as owner of any stock ofgoods, wares,merchandise, provisionsor materials, in bulk” oftitle to the same withoutconsideration or for anominal considerationonly, subjects him tocriminal liability

On Buyer, Mortgagee, Transferee orAssignee—The Law imposes no direct obligation, thus abuyer in bulk sale cannot be deemed to besubject to the criminal liability under the Law

[NOTE: Criminal liability: 6 months to 5 yearsimprisonment, or fine of P5K or less, or both.]

- end of Sales -


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CREDIT TRANSACTIONSTable of Contents

Chapter I. General Principles......................307I. Types of Credit Transactions ............307II. Security .............................................307III. Bailment ............................................307

Chapter II. Loan (Arts. 1933-1961, CC).......309I. Definition ...........................................309II. Characteristics of a Loan ..................309III. Kinds of Loan: In General .................309IV. Commodatum....................................309V. Obligations of the Bailee inCommodatum ............................................310VI. Obligations of the Bailor inCommodatum ............................................311VII. Mutuum or Simple Loan................311VIII. Interests ........................................312IX. The Usury Law ..................................312

Chapter III. Deposit ......................................314I. Definition ...........................................314II. Kinds of Deposit ................................314III. Characteristics of Deposit .................314IV. Deposit Distinguished From Mutuumand Commodatum .....................................314V. Obligations of the Depositary............314VI. Obligations of the Depositor..............317VII. Extinguishment of Deposit (Art. 1995)

317VIII. Necessary Deposit........................317IX. Judicial Deposit .................................318

Chapter IV. Guaranty ...................................319I. Definition ...........................................319II. Characteristics ..................................319III. Classification .....................................319IV. Rules Governing Guaranty ...............319V. Guaranty Distinguished from Others.322VI. The Guarantor (Arts. 2056-2057)......322VII. Effects of Guaranty .......................322VIII. Extinguishment of Guaranty .........325

Chapter V. Legal and Judicial Bonds.........326

Chapter VI. Suretyship.................................327

Chapter VII. Pledge, Mortgage, Antichresis.......................................................................328

I. Essential Requisites Common to Pledgeand Mortgage (Art. 2085)...........................328II. Pledge ...............................................329III. Mortgage ...........................................332IV. Foreclosure of Mortgage (Art. 2085).334V. Antichresis.........................................336VI. Chattel Mortgage...............................336

Chapter VIII. Concurrence and Preference ofCredits...........................................................338

I. General Provisions............................338II. Classification of Credits ....................338III. Preference of Credits ........................338

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Chapter I. General Principles

I. TYPES OF CREDIT TRANSACTIONSII. SECURITYIII. BAILMENT

CREDIT TRANSACTIONS - include alltransactions involving the purchase or loan ofgoods, services or money in the present with apromise to pay or deliver in the future (contractof security)

I. Types of Credit Transactions

Secured transactions or contracts of realsecurity – Those supported by collateral or anencumbrance of property

Unsecured transactions or contracts ofpersonal security – Those the fulfillment ofwhich by the principal debtor is secured orsupported only by a promise to pay or thepersonal commitment of another such as aguarantor or surety

II. Security

SECURITY - something given, deposited orserving as a means to ensure the fulfillment orenforcement of an obligation or of protectingsome interest in property.

2 TYPES OF SECURITY1. Personal Security – as when an individual

becomes a surety or a guarantor2. Real Security - as when a mortgage,

pledge, antichresis, charge or lien or otherdevice used to have property held, out ofwhich the person to be made secure can becompensated for loss. Thus, a securedcreditor is one who holds a security from hisdebtor for payment of the latter’s debts.

III. Bailment

BAILMENT - the delivery of property of oneperson to another in trust for a specific purpose,with a contract, express or implied, that the trustshall be faithfully executed and the propertyreturned or duly accounted for when the specialpurpose is accomplished or kept until the bailorreclaims it.

[NOTE: The word “bailment” comes from theFrench word “bailer,” meaning “to deliver”]

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CREDIT TRANSACTIONS TEAM


Katrina Elena GuerreroLead Writer

Diana GervacioPatricia Andrea Hernandez

Mark LucianoIxara Maroto

Writers

CIVIL LAW


ACADEMICS COMMITTEE




Kae Guerrero

DESIGN & LAYOUT



LECTURES COMMITTEE


Heads


Arianne Cerezo


Volunteers

MOCK BAR COMMITTEE

Lilibeth Perez


Dahlia Salamat

LOGISTICS

Charisse Mendoza


Jill HernandezHead


Faye CelsoJoie Bajo

Members

CIVIL LAW REVIEWER Chapter I. GENERAL PRINCIPLES

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PARTIES IN BAILMENT1. Bailor – the giver, the party who delivers

possession/custody of the thing bailed2. Bailee – the recipient, the party who

receives the possession/custody of the thingdelivered

KINDS OF CONTRACTUAL BAILMENT(With Reference to Compensation)1. Those for the sole benefit of the bailor,

e.g. gratuitous deposit (Art.1965) andmandatum, i.e., where the mandatory orperson to whom the property is deliveredundertakes to do some act with respect tothe same

2. Those for the sole benefit of the bailee,e.g. commodatum and gratuitous simpleloan or mutuum (Art.1933)

3. Those for the benefit of both parties, e.g.deposit for a compensation, involuntarydeposit, pledge and bailments for hirea. Hire of things – for the temporary use

of the hirer (i.e. lease, Arts.1642-1643)b. Hire of service – for work or labor upon

the goods delivered (i.e. contract forpiece of work, Art.1713)

c. Hire for carriage of goods – for goodsdelivered to be carried from place toplace by a common carrier (Art.1732) orprivate person

d. Hire of custody – for storage of goodsdelivered (Arts.1507-1520, WarehouseReceipts Law)

Contract where one of the parties (Seller)obligates himself to:

Transfer ownership of and

to deliver a determinate thing;

and the other (Buyer) to pay a price certain inmoney or its equivalent.

CIVIL LAW REVIEWER Chapter II. LOAN

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Chapter II. Loan (Arts. 1933-1961, CC)

I. DEFINITIONII. CHARACTERISTICS OF A LOANIII. KINDS OF LOAN: IN GENERALIV. COMMODATUMV. OBLIGATIONS OF THE BAILEE IN

COMMODATUMVI. OBLIGATIONS OF THE THE BAILOR IN

COMMODATUMVII. MUTUUM OR SIMPLE LOANVIII. INTERESTSIX. THE USURY LAW

I. Definition

LOAN - a contract by which one of the partiesdelivers to another, either something notconsumable so that the latter may use the samefor a certain time and return it, in which case thecontract is called commodatum; or money orother consumable thing, upon the condition thatthe same amount of the same kind and qualityshall be paid, in which case the contract issimply called a loan or mutuum. (Art.1933)

II. Characteristics of a Loan

Real contract1. delivery is essential for perfection of the

contract of loan.2. An accepted promise to loan, is

nevertheless binding on the parties, it beinga consensual contract.

Unilateral contract1. creates obligations on only one party, i.e.,

the borrower2. In a contract of loan, the cause is, as to the

borrower, the acquisition of the thing, and asto the lender, the right to demand its returnor its equivalent. (Monte de Piedad v. Javier)

III. Kinds of Loan: In General

Commodatum MutuumOrdinarily involvessomething notconsumable*(Art.1936)

Involves money orother consumable thing

Ownership of the thingloaned is retained bylender (Art.1933)

Ownership istransferred to theborrower

Essentially gratuitous(Art.1933)

Maybe gratuitous or itmaybe onerous, i.e.with stipulated interest

Borrower must returnthe same thing loaned(Art.1933)

Borrower need onlypay the same amountof the same kind andquality

May involve real orpersonal property(Art.1937)

Refers only to personalproperty

Loan for use ortemporary possession(Art.1935)

Loan for consumption

Bailor may demand thereturn of the thingloaned before theexpiration of the termin case of urgent need(Art.1946)

Lender may notdemand its returnbefore the lapse of theterm agreed upon

Bailor suffers the lossof the subject mattersince he is the owner(Art.1942; Art.1174)

Borrower suffers theloss even if causedexclusively by afortuitous event and heis not, therefore,discharged from hisduty to pay

Not purely personal incharacter

Purely personal incharacter

A thing is consumable when it is used in amanner appropriate to its purpose or nature.(Art 418)

GENERAL RULE: If the subject of the contractis a consumable thing, such as money, thecontract would be a mutuum.

EXCEPTION: Consumable goods may be thesubject of commodatum if the purpose of thecontract is not the consumption of the object, aswhen it is merely for exhibition. (Art.1936)[Producer’s v. CA, 397 SCRA 651]

IV. Commodatum

2 KINDS OF COMMODATUM1. Ordinary commodatum - See Art.19332. Precarium – one whereby the bailor may

demand the thing loaned at will; exists incases where:a. neither the duration of the contract nor

the use to which the thing loaned shouldbe devoted has been stipulated

b. if the use of the thing is merely toleratedby the owner (Art 1947)

GENERAL RULE: In a commodatum, the rightto use is limited to the thing loaned, and not toits fruits

EXCEPTION: When there is stipulation to thecontrary (Art.1940). In cases where there issuch a stipulation, enjoyment of the fruits must


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be incidental to the use of the thing itself.Otherwise, if the use of the fruits is the maincause, the contract may be one of usufruct.(Art.562)

What is the effect of an accepted promise todeliver by way of commodatum or mutuum?

It is binding upon the parties, but thecontract of loan shall not be perfected untildelivery of the contract. (Art.1934)

Who may be bailor in commodatum?1. Anyone. The bailor in commodatum need

not be the owner of the thing loaned.(Art.1938)

2. But the bailee himself may not lend norlease the thing loaned to him to a thirdperson (Art 1939(2))

_______

GENERAL RULE: Commodatum is purelypersonal in character (Art.1939) such that:1. Death of either party extinguishes the

contract2. Bailee can neither lend nor lease the thing

lent to him to a third person

EXCEPTION: Members of the bailee’shousehold may make use of the thing loaned

EXCEPTION TO EXCEPTION: Bailee’shousehold may NOT use it when:1. There is stipulation to the contrary, or2. The nature of the thing forbids such use

V. Obligations of the Bailee inCommodatum

OBLIGATIONS OF THE BAILEE1. Obligation to pay for the ordinary expenses

for the use and preservation of the thingloaned (Art.1941)

2. Obligation to take good care of the thing withthe diligence of a good father of a family(Art.1163)

3. Liability for loss, even if loss throughfortuitous event, in certain circumstances(Art.1942)

4. Liability for deterioration of thing loaned,except under certain circumstances(Art.1943)

5. Obligation to return the thing upon expirationof term or upon demand in case of urgentneed

6. Solidary obligation where there are 2 ormore bailees to whom a thing was loaned inthe same contract (Art.1945)

_______

GENERAL RULE: Bailee is not liable for loss ordamage due to a fortuitous event (Art.1174),since the bailor retains ownership of the thing

EXCEPTION: Bailee is liable even for loss dueto a fortuitous event when: (Art 1942)1. He devotes the thing to any purpose

different from that for which it was loaned2. He keeps it longer than the period

stipulated, or after the accomplishment ofthe use for which the commodatum hasbeen constituted

3. The thing loaned has been delivered withappraisal of its value, unless there isstipulation exempting the bailee fromresponsibility in case of a fortuitous event

4. He lends or leases the thing to a thirdperson who is a not a member of hishousehold

5. Being able to save either the thing borrowedor his own thing, he chose to save the latter.

_______

GENERAL RULE: Bailee is liable fordeterioration of thing loaned.

EXCEPTION: The deterioration of the thing isdue only to the use thereof and without his fault(Art.1943)_______

GENERAL RULE: Bailee has no right ofretention of the thing loaned, on the ground thatthe bailor owes him something.

EXCEPTION: Bailee has a right of retention fordamages for known hidden flaws mentioned inArt 1951. (Art.1944)

REQUISITES FOR THE APPLICATION OFART.19511. There is a flaw or defect in the thing loaned2. The flaw or defect is hidden3. The bailor is aware thereof4. He does not advise the bailee of the same5. The bailee suffers damages by reason of

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VI. Obligations of the Bailor inCommodatum

1. To allow the bailee the use of the thingloaned for the duration of period stipulatedor until the accomplishment of the purposefor which commodatum was constituted.

EXCEPTIONS:a. Urgent need during which time the

commodatum is suspended (Art.1946)b. Precarium (Art.1947)

If duration of the contract has notbeen stipulated

If use or purpose of the thing hasnot been stipulated

If use of thing is merely tolerated bythe bailor

c. Bailee commits an act of ingratitudespecified in Art. 765 (Art.1948): Commission of offenses against the

person, the honor, or the property ofthe bailor, or of his wife or childrenunder his parental authority

Imputing to the bailor any criminaloffense, or any act involving moralturpitude, even though he shouldprove it, unless the crime or the acthas been committed against thebailee himself, his wife, or childrenunder his authority

Undue refusal to give the bailorsupport when the bailee is legally ormorally bound to

[NOTE: Article 765 is applicable, becauselike donation, commodatum is essentiallygratuitous. (Art.1933, par.2)]

2. To refund extraordinary expenses for thepreservation of the thing loaned providedbailor is notified before the expenses wereincurred. (Art.1949) EXCEPTION: Urgent need hence no

notice is necessary.

3. To refund 50% of the extraordinaryexpenses arising from actual use of bailee ofthe thing loaned (Art.1949) EXCEPTION: Contrary stipulation

4. To pay damages to bailee for known hiddenflaws in the thing loaned.

[NOTE: Bailor has no right of abandonment;he cannot exempt himself from payment ofexpenses to bailee by abandoning the thing tothe latter. (art. 1952)]

VII.Mutuum or Simple Loan

A mutuum or simple loan is a contract bywhich a person (creditor) delivers to another(debtor) money or other consumable thing withthe understanding that the same amount of thesame kind and quality shall be paid. (Art.1953)

MUTUUM AND LEASE DISTINGUISED

MUTUUM LEASEObject is money or anyconsumable (fungible)thing

Object may be anything, whether movableor immovable, fungibleor non-fungible

Thing loaned becomesproperty of debtor

Owner does not losehis right of ownership

Relationship created isthat of creditor anddebtor

Relationship created isthat of landlord andtenant or lessor andlessee (Tolentino v.Gonzales, 50 Phil 558)

MUTUUM AND COMMODATUMDISTINGUISHED FROM BARTER1. In mutuum, subject matter is money or any

other fungible things; in barter, non-fungible(non-consumable) things.

2. In commodatum, the bailee is bound toreturn the identical thing borrowed when thetime has expired or the purpose has beenserved. In barter, the equivalent thing isgiven in return for what has been received.

3. Mutuum may be gratuitous andcommodatum is always gratuitous. Barteron the other hand is an onerous contract. Itis really a mutual sale.

[NOTE: BARTER – contract where by one of theparties binds himself to give one thing inconsideration of the other’s promise to giveanother thing. (Art.1968)]

CONSUMABLE AND FUNGIBLEDISTINGUISHED Whether a thing is consumable or not

depends on its nature and whether it isfungible or not depends on the intention ofthe parties.

Example: Wine is consumable by nature, butit may be non-fungible if the intention ismerely for display or exhibition.

[NOTE: Fixed, savings, and current deposits ofmoney in banks and similar institutions shall begoverned by the provisions concerning simpleloan. (Art.1980)]


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VIII. Interests

INTEREST – is the compensation allowed bylaw or fixed by the parties for the loan orforbearance of money, goods or credits

KINDS OF INTEREST1. Simple interest – Paid for the principal at a

certain rate fixed or stipulated by the parties.2. Compound Interest – that which is

imposed upon interest due and unpaid.3. Legal Interest – that which the law directs

to be charged in the absence of anyagreement as to the rate between theparties.

4. Lawful Interest – that which the laws allowor do not prohibit

5. Unlawful or Usurious Interest – paid orstipulated to be paid beyond the maximumfixed by law. However, by virtue of CBCircular 905, usury has become “legallyinexistent.”

When is compound interest allowed?1. When there is an express written stipulation

to that effect (Art.1959)2. Upon judicial demand. HOWEVER, debtor

is not liable to pay compound interest evenafter judicial demand when there is nostipulation for payment of interest. (Art.2212)

REQUISITES FOR INTEREST TO BECHARGEABLE1. Must be expressly stipulated2. Agreement must be in writing (Art.1956)3. Must be lawful

EXCEPTIONS TO REQUISITE OF EXPRESSSTIPULATION1. The debtor in delay is liable to pay legal

interest (6% or 12%) as indemnity fordamages (Art.2209)

2. Interest accruing from unpaid interest –Interest demanded shall earn interest fromthe time it is judicially demanded (Art.2212)or where there is an express stipulation(Art.1959)

RULES FOR AWARD OF INTEREST IN THECONCEPT OF ACTUAL & COMPENSATORYDAMAGES (Eastern Shipping Lines v. CA, 234SCRA 78)1. When obligation is breached consists in

the payment of a sum of money, i.e., aloan or forbearance of money, the interestdue should be that which may have beenstipulated in writing. Furthermore, theinterest due shall itself earn legal interest

from the time it is judicially demanded. Inthe absence of stipulation, the rate ofinterest shall be 12% per annum to becomputed from default, i.e., from judicial orextrajudicial demand under and subject tothe provisions of Art.1169.

2. When an obligation, not constituting aloan or forbearance of money, isbreached, an interest on the amount ofdamages awarded may be imposed at thediscretion of the court at the rate of 6% perannum. No interest, however, shall beadjudged on unliquidated claims ordamages except when or until the demandcan be established with reasonablecertainty. Accordingly, where the demand isestablished with reasonable certainty, theinterest shall begin to run from the time theclaim is made judicially or extrajudicially (Art.1169) but when such certainty cannot be soreasonably established at the time thedemand is made, the interest shall begin torun only from the date the judgment of thecourt is made (at which time thequantification of damages may be deemedto have been reasonably ascertained). Theactual base for the computation of legalinterest shall, in any case, be on the amountfinally adjudged.

3. When the judgment of the court awarding asum of money becomes final and executory,the rate of legal interest, whether the casefalls under paragraph 1 or paragraph 2,above, shall be 12% per annum from suchfinality until its satisfaction, this interimperiod being deemed to be by then anequivalent to a forbearance of credit.

IX. The Usury Law

THE USURY LAW (Act No.2566) is an act fixingrates of interests upon loans and declaring theeffect of receiving or taking usurious rates andfor other purposes. (Arevalo v. Dimayuga 49Phil 894)

CB Circular No. 905 – abolished interest rateceilings. Conversely, with the promulgation ofsuch circular, usury has become “legallyinexistent” as the parties can now legally agreeon any interest that may be charged on the loan.

ELEMENTS OF USURY1. A loan or forbearance of money2. An understanding between parties that the

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3. An unlawful intent to take more than thelegal rate for the use of money or itsequivalent

4. The taking or agreeing to take for the use ofthe loan of something in excess of what isallowed by law

MACALINAO v BPI (Sept 2009):Regarding the credit card interest rate, “Weare of the opinion that the interest rate andpenalty charge of 3 percent per monthshould be equitably reduced to 2 percentper month or 24 percent per annum… wehad affirmed in a plethora of cases thatstipulated interest rates of 3 percent permonth and higher are excessive, iniquitous,unconscionable and exorbitant. Suchstipulations are void for being contrary tomorals, if not against the law. While theBangko Sentral ng Pilipinas C.B. CircularNo. 905-82 dated Jan. 1, 1983 effectivelyremoved the ceiling on interest rates for bothsecured and unsecured loans, regardless ofmaturity, nothing in the said circular couldpossibly be read as granting carte blancheauthority to lenders to raise interest rates tolevels which would either enslave theirborrowers or lead to a hemorrhaging of theirassets.”

[NOTE: The case of Chua vs. Timan involvingpromissory notes NOT credit cards transactions,which stated that the said 3% interest per monthis unconscionable, was cited in this case.]

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Chapter III. Deposit

I. DEFINITIONII. KINDS OF DEPOSITIII. CHARACTERISTICS OF DEPOSITIV. DEPOSIT DISTINGUISHED FROM MUTUUM

AND COMMODATUMV. OBLIGATIONS OF THE DEPOSITARYVI. OBLIGATIONS OF THE DEPOSITORVII. EXTINGUISHMENT OF DEPOSITVIII. NECESSARY DEPOSITIX. JUDICIAL DEPOSIT

I. Definition

DEPOSIT is constituted from the moment aperson receives a thing belonging to another,with the obligation of safely keeping it and ofreturning the same. If the safekeeping of thething delivered is not the principal purpose of thecontract, there is no deposit but some othercontract. (Art.1962)

II. Kinds of Deposit

Judicial – takes place when an attachment orseizure of property in litigation is ordered(Arts.2005-2008)

Extrajudicial (Art. 1967)1. Voluntary- delivery is made by the will of

the depositor or by two or more personseach of whom believes himself entitled tothe thing deposited;

2. Necessary- made in compliance with a legalobligation, or on the occasion of anycalamity, or by travelers in hotels and inns(Arts.1996-2004) or by travelers withcommon carriers (Arts.1734-1735)

III. Characteristics of Deposit

Characteristics—1. Real Contract because it is perfected by the

delivery of the subject matter.2. Principal purpose of the contract of deposit

is the safekeeping of the thing delivered.3. If gratuitous, it is unilateral because only the

depository has an obligation. If onerous, it isbilateral.

The principal purpose is safekeeping of thething delivered, so that if it is only an accessoryor secondary obligation, deposit is notconstituted but some other contract.

Contract of deposit is generally gratuitous.(Art.1965), subject to the following exceptions:1. There is a contrary stipulation2. Depository is in the business of storing

goods3. Property saved from destruction during

calamity without owner’s knowledge; justcompensation should be given thedepository. (Art.1996[2] and Art.1997, par.2)

Only movable things may be the object of adeposit (Art.1966) if the deposit is eithervoluntary (Art.1968) or necessary (Art.1995).HOWEVER, a judicial deposit may covermovable as well as immovable property, itspurpose being to protect the rights of parties tothe suit.

IV. Deposit Distinguished From Mutuumand Commodatum

DEPOSIT AND MUTUUMDISTINGUISHED

DEPOSIT MUTUUMPrincipal purpose issafekeeping

Principal purpose isconsumption of thesubject matter

Depositor can demandreturn of subject matterat will

Lender must wait untilexpiration of the periodgranted to the debtor

Both movable andimmovable may be theobject

Only money or anyother fungible thingmay be the object

DEPOSIT AND COMMODATUMDISTINGUISHED

DEPOSIT COMMODATUMPrincipal purpose issafekeeping

Principal purpose istransfer of use

May be gratuitous Always and essentiallygratuitous

In extrajudicial deposit,only movable(corporeal) things maybe the object. But forjudicial deposits, objectmay be movable orimmovable.

Both movable andimmovable may be theobject.

V. Obligations of the Depositary

OBLIGATIONS1. Depositary is obliged to keep the thing

safely and to return it when required, eventhough a specified term may have beenstipulated in the contract. (Art.1972)

2. Depositary is liable if the loss occursthrough his fault or negligence. (Art.1972


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in rel. to Art.1163) Loss of thing while in thedepositary’s possession raises apresumption of fault. (Art.1265) Requireddegree of care is greater if the deposit is forcompensation than when it is gratuitous.

3. Depositary is not allowed to deposit thething with a third person. (Art.1973)

EXCEPTION: There is a contrary stipulation

NOTE: Depositary is liable for the loss of thething deposited if:a. He transfers the deposit with a third

person without authority although thereis no negligence on his part and the thirdperson;

b. He deposits the thing with a third personwho is manifestly careless or unfitalthough authorized, even in theabsence of negligence; or

c. The thing is lost through the negligenceof his employees whether the latter aremanifestly careless or not.

EXEMPTION FROM LIABILITY: Depositaryis not responsible for loss of thing withoutnegligence of the third person with whom hewas allowed to deposit the thing if such thirdperson is not “manifestly careless or unfit.”

4. Depositary is obliged not to change wayof deposit. He may change the way ormanner of deposit only if there arecircumstances indicating that the depositorwould consent to the change and notice isgiven to depositor. HOWEVER, notice is notrequired if delay will cause danger.(Art.1974)

5. If thing deposited should earn interest, thedepositary is under obligation (1) to collectthe interest as it becomes due and (2) totake such steps as may be necessary topreserve its value and the rightscorresponding to it. The depositary is boundto collect not only the interest but also thecapital itself when due. (Art.1975)

6. Depositary has the obligation not tocommingle things deposited if sostipulated, even if they are of the same kindand quality. (Article 1976)

GENERAL RULE: The depositary ispermitted to commingle grain or otherarticles of the same kind and quality.EXCEPTION: When there is a stipulation tothe contrary

EFFECT OF COMMINGLING:a. The various depositors of the mingled

goods shall own the entire mass incommon

b. Each depositor shall be entitled to suchportion of the entire as the amountdeposited by him bears the whole.

7. Depositary is under obligation not tomake use of the thing deposited;otherwise he shall be liable for damages.(Art.1977)

EXCEPTIONS:a. Express permission of the depositorb. Preservation of the thing deposited

required its use

8. Depositary is liable for loss of the thingthrough a fortuitous event:a. If it is so stipulated;b. If he uses the thing without the

depositor’s permission;c. If he delays its return;d. If he allows others to use it, even though

he himself may have been authorized touse the same (Art.1979)

9. Where thing deposited is deliveredclosed and sealed, depositary hasobligation to:a. Return the thing deposited when

delivered closed and sealedb. Pay for damages should seal or lock be

broken through his fault, which ispresumed unless proven otherwise

c. Keep secret of the deposit when theseal or lock is broken, with or without hisfault (Art.1982)

10. Depositary is obliged to return theproducts, accessories and accessions ofthe thing deposited. (Art.1983)

11. Depositary is obliged to pay interest onsums converted to personal use.(Art.1983)

12. Depositary who receives the thing indeposit cannot require that the depositorprove his ownership over the thing (Art.1984)

13. Where the thing appears to be stolen andthe depositary knows the true owner, hemust advise the true owner about thedeposit. If the owner, in spite of suchinformation, does not claim it within theperiod of one month, the depositary is


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relieved from liability. (Art.1984, pars.2 and3) If the depositary has reasonable groundsto believe that the thing has not beenlawfully acquired by the depositor, he mayreturn the same. (Art.1984, par.4)

RIGHT OF TWO OR MORE DEPOSITORS(Art.1985)1. Where the thing is divisible and depositors

not solidary – each one of the depositorscan demand only his share proportionatethereto.

2. Where the thing is not divisible or theobligation is solidary – rules on activesolidarity must applya. Each one of the depositors may do

whatever may be useful to the othersbut not anything which may beprejudicial to the latter. (Art.1212)

b. The depositary may return the thing toany one of the solidary depositorsUNLESS a demand for its return hasbeen made by one of them in whichcase delivery should be made to him.(Art. 1214)

3. Where there is a stipulation of return to oneof the depositors, the depositary is bound toreturn it only to the person designatedalthough he has not made any demand forits return.

PERSONS TO WHOM RETURN MUST BEMADE1. The depositary is obliged to return the thing

deposited, when required, to:a. The depositor;b. To his heirs or successors; orc. To the person who may have been

designated in the contract. (Art.1972)2. If the depositor was incapacitated at the time

of making the deposit, the property must bereturned to:a. His guardian or administrator;b. To the person who made the deposit;c. To the depositor himself should he

acquire capacity. (Art.1970)3. Even if the depositor had capacity at the

time of making the deposit but hesubsequently loses his capacity during thedeposit, the thing must be returned to hislegal representative. (Art.1986)

PLACE OF RETURN (Art.1987)1. At the place agreed upon by the parties2. In the absence of stipulation, at the place

where the thing deposited might be even if itshould not be the same place where theoriginal deposit was made, provided that

there was no malice on the part of thedepositary

TIME OF RETURN (Art.1988)1. GENERAL RULE: The thing deposited must

be returned to the depositor upon demand,even though a specified period or time forsuch return may have been fixed.

2. EXCEPTIONS:a. When the thing is judicially attached

while in the depositary’s possessionb. When notified of the opposition of a third

person to the return or the removal ofthe thing deposited

RIGHT OF THE DEPOSITARY TO RETURNTHE THING (Art.1989)1. GENERAL RULE: The depositary may

return the thing deposited notwithstandingthat a period has been fixed for the depositif:a. The deposit is gratuitous;b. The reason is justifiable.

[NOTE: If the depositor refuses to receivethe thing, the depositary may deposit thething at the disposal of the judicial authority.]

2. EXCEPTION: When the deposit is for avaluable consideration, the depositary hasno right to return the thing before theexpiration of the time designated even if heshould suffer inconvenience as aconsequence.

Is the depositary liable for loss by forcemajeure or government order? The depositary is not liable in cases of loss

by force majeure or by government order.HOWEVER, he has the duty to deliver to thedepositor money or another thing hereceives in place of the thing. (Art.1990)

ALIENATION IN GOOD FAITH BYDEPOSITARY’S HEIRWhen alienation is done in GOOD FAITH, theheir is obliged to:1. Return the value of the thing deposited2. Assign the right to collect from the buyer.

NOTE: The heir does not need to pay theactual price of the thing deposited.

When alienation is done in BAD FAITH, the heirmust:1. Be liable for damages;2. Pay the actual price of the thing deposited.


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DEPOSITARY’S RIGHT OF RETENTION The depositary may retain the thing in

pledge until the full payment of what may bedue him by reason of the deposit. (Art.1994)

NOTE: This is an example of a pledgecreated by operation of law. (Art.2121)

VI. Obligations of the Depositor

1. Depositor is obliged to reimburse thedepositary for expenses incurred forpreservation – if deposit is gratuitous.(Art.1992)

2. Depositor is obliged to pay lossesincurred due to character of thingdeposited. (Art. 1993)

GENERAL RULE: The depositary must bereimbursed for loss suffered by him because ofthe character of the thing deposited.

EXCEPTIONS:1. Depositor was not aware of the danger;2. Depositor was not expected to know the

dangerous character of the thing;3. Depositor notified the depositary of such

dangerous character;4. Depositary was aware of the danger without

advice from the depositor.

VII.Extinguishment of Deposit (Art. 1995)

A deposit is extinguished:1. Upon the loss or deterioration of the thing

deposited;2. Upon the death of the depositary, ONLY in

gratuitous deposits;3. By other modes provided in the Civil Code,

e.g. novation, merger, etc. (See Art.1231)

EFFECT OF DEATH OF DEPOSITOR ORDEPOSITARY (Art. 1995)1. Where deposit gratuitous – death of either of

the depositor or depositary extinguishes thedeposit (personal in nature). By the word“extinguished,” the law really means that thedepositary is not obliged to continue with thecontract of deposit.

2. (2) Where deposit for compensation – notextinguished by the death of either party.

VIII. Necessary Deposit

KINDS OF NECESSARY DEPOSITS1. It is made in compliance with a legal

obligation, in which case it is governed bythe law establishing it, and in case of

deficiency, the rules on voluntary deposite.g. Arts. 538, 586 and 2104

2. It takes place on the occasion of anycalamity, such as fire, storm, flood, pillage,shipwreck, or other similar events. Theremust be a causal relation between thecalamity and the constitution of the deposit.In this case the deposit is governed by therules on voluntary deposit and Art. 2168

3. Made by passengers with common carriers.(Art.1754)

4. Made by travelers in hotels or inns. (Art.1998)

DEPOSITS BY TRAVELLERS IN HOTELSAND INNSBefore keepers of hotels or inns may be heldresponsible as depositaries with regard to theeffects of their guests, the following must concur:1. They have been previously informed about

the effects brought by the guests; and2. The latter have taken the precautions

prescribed regarding their safekeeping.

EXTENT OF LIABILITY UNDER ART.19981. Liability in hotel rooms which come under

the term “baggage” or articles such asclothing as are ordinarily used by travelers

2. Include those lost or damages in hotelannexes such as vehicles in the hotel’sgarage.

2. In the following cases, the hotel- keeper isliable

WHEN HOTEL-KEEPER LIABLERegardless of the amount of care exercised -1. The loss or injury to personal property is

caused by his servants or employees as wellas by strangers (Art. 2000).

2. The loss is caused by the act of a thief orrobber done without the use of arms andirresistible force. (Art. 2001)

WHEN HOTEL-KEEPER NOT LIABLE1. The loss or injury is cause by force majeure,

like flood, fire, (Art.2000) theft or robbery bya stranger - not the hotel-keeper’s servant oremployee with the use of firearms orirresistible force (Art.2001)

EXCEPTION: Hotel- keeper is guilty of faultor negligence in failing to provide against theloss or injury from his cause. (Arts.1170 and1174)

2. The loss is due to the acts of the guests, hisfamily, servants, visitors (Art.2002)

3. The loss arises from the character of thethings brought into the hotel (Ibid.)


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[NOTE: The hotel-keeper cannot free himselffrom responsibility by posting notices to theeffect that he is not liable for the articles broughtby the guest. Such kind of stipulation shall beVOID. (Art. 2003)]

TRIPLE-V FOOD SERVICES v. FILIPINOMERCHANTS INSURANCE COMPANY: Regarding the legal deposit of a vehicle that

was stolen while parked with Saisakirestaurant, “the depositary may not exemptitself from responsibility or loss or damage ofthe thing deposited with it, by exclusionarystipulation. Such stipulations are void forbeing contrary to law.”

HOTEL-KEEPER’S RIGHT TO RETENTION The hotel-keeper has a right to retain the

things brought into the hotel by the guest, asa security for credits on account of (a)lodging, and (b) supplies usually furnished tohotel guests.

NOTE: The right of retention recognized inthis article is in the nature of a pledgecreated by operation of law.

IX. Judicial Deposit

JUDICIAL DEPOSIT - Judicial deposit takesplace when an attachment or seizure of propertyin litigation is ordered by a court. (Art. 2005)

NATURE AND PURPOSE It is auxiliary to a case pending in court. The

purpose is to maintain the status quo duringpendency of the litigation or to insure theright of the parties to the property in case ofa favorable judgment.

EXTRAJUDICIAL AND JUDICIAL DEPOSITSDISTINGUISHED

EXTRAJUDICIAL JUDICIAL(Voluntary) deposit madeby free will of thedepositor.

Constituted by virtue of acourt order

Object must be movableproperty

Object may be eithermovable or immovableproperty

Purpose is safekeepingof the thing deposited

Purpose is to secure orprotect the owner’s right;to maintain status quoduring pendency of case

Generally gratuitous Always onerousDepositary is obliged toreturn the thing depositedupon demand made bythe depositor

Thing shall be deliveredonly upon order of thecourt

DEPOSITARY OF SEQUESTEREDPROPERTYA person appointed by the court (Art. 2007) withthe obligations:1. To take care of the property with the

diligence of a good father of the family. (Art.2008)

2. To continue in his responsibility until thelitigation is ended or the court so orders.(Art. 2007)

APPLICABLE LAW The law on judicial deposit is remedial or

procedural in nature. Hence, the Rules of Court are applicable. (Art. 2009)

CIVIL LAW REVIEWER Chapter IV. GUARANTY

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Chapter IV. Guaranty

I. DEFINITIONII. CHARACTERISTICSIII. CLASSIFICATIONIV. RULES GOVERNING GUARANTYV. GUARANTY DISTIGUISHED FROM OTHERSVI. THE GUARANTORVII. EFFECTS OF GUARANTYVIII. EXTINGUISHMENT OF GUARANTY

I. Definition

GUARANTY is a contract whereby a person,called the guarantor, binds himself to the creditorto fulfill the obligation of the principal debtor incase the latter should fail to do so. (Art. 2047)

While a surety undertakes to pay if the principaldoes not pay, the guarantor only binds himselfto pay if the principal cannot pay (See benefit ofexcussion, 2058).

II. Characteristics

1. Accessory – dependent for its existenceupon the principal obligation guaranteed byit;

2. Subsidiary and conditional – takes effectonly when the principal debtor fails in hisobligation

3. Unilateral –a. It gives rise only to a duty on the part of

the guarantor in relation to the creditorand not vice versa

b. It may be entered into even without theintervention of the principal debtor.

4. Guarantor must be a person distinct fromthe debtor – a person cannot be thepersonal guarantor of himself

III. Classification

CLASSIFICATION OF GUARANTY1. Guaranty in the broad sense:

a. Personal – guaranty is the credit givenby the person who guarantees thefulfillment of the principal obligation; or

b. Real – guaranty is property, movable, orimmovable Real mortgage (2124) or antichresis

(2132) – guaranty is immovable Chattel mortgage (2140) or pledge

(2093) – guaranty is movable2. As to its origin:

a. Conventional – constituted byagreement of the parties (2051[1])

b. Legal – imposed by virtue of a provision

of lawc. Judicial – required by a court to

guarantee the eventual right of one ofthe parties in a case.

3. As to consideration:a. Gratuitous – guarantor does not receive

any price or remuneration for acting assuch (2048)

b. Onerous – one where the guarantorreceives valuable consideration for hisguaranty

4. As to person guaranteed:a. Single – constituted solely to guarantee

or secure performance by the debtor ofthe principal obligation;

b. Double or sub-guaranty – constituted tosecure the fulfillment by the guarantor ofa prior guaranty

5. As to its scope and extent:a. Definite – where the guaranty is limited

to the principal obligation only, or to aspecific portion thereof;

b. Indefinite or simple – where theguaranty included all the accessoryobligations of the principal, e.g. costs,including judicial costs.

IV. Rules Governing Guaranty

1. A guaranty is generally gratuitous (2048)a. General Rule: Guaranty is gratuitousb. Exception: When there is a stipulation to

the contrary2. On the cause of a guaranty contract

SEVERINO v SEVERINO: “A guarantor orsurety is bound by the same consideration thatmakes the contract effective between theprincipal parties thereto.”

a. Presence of cause which supportsprincipal obligation: Cause of thecontract is the same cause whichsupports the obligation as to theprincipal debtor. The considerationwhich supports the obligation as to theprincipal debtor is a sufficientconsideration to support the obligation ofa guarantor or surety.

b. Absence of direct consideration orbenefit to guarantor: Guaranty or suretyagreement is regarded valid despite theabsence of any direct considerationreceived by the guarantor or surety,such consideration need not passdirectly to the guarantor or surety; aconsideration moving to the principal willsuffice.a


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3. A married woman who is a guarantorbinds only her separate property,generally (2049)

Exceptions:a. With her husband’s consent, bind the

community or conjugal partnershipproperty

b. Without husband’s consent, in casesprovided by law, such as when theguaranty has redounded to the benefit ofthe family.

4. A guaranty need not be undertaken withthe knowledge of the debtor (2050)a. Guaranty is unilateral – exists for the

benefit of the creditor and not for thebenefit of the principal debtor

b. Creditor has every right to take allpossible measures to secure payment ofhis credit – guaranty can be constitutedeven against the will of the principaldebtor

However, as regards payment made by athird person:a. Payment without the knowledge or

against the will of the debtor: Guarantor can recover only insofar

as the payment has been beneficialto the debtor

Guarantor cannot compel thecreditor to subrogate him in hisrights

b. Payment with knowledge or consent ofthe debtor: Subrogated to all the rightswhich the creditor had against thedebtor

5. The guaranty must be founded on a validprincipal obligation (2052[1]) Guaranty is an accessory contract: It is

an indispensable condition for itsexistence that there must be a principalobligation. Hence, if the principalobligation is void, it is also void.

6. A guaranty may secure the performanceof a voidable, unenforceable, and naturalobligation (2052[2])A guaranty may secure the performance ofa:a. Voidable contract – such contract is

binding, unless it is annulled by a propercourt action

b. Unenforceable contract – because suchcontract is not void

c. Natural obligation – the creditor may

proceed against the guarantor althoughhe has no right of action against theprincipal debtor for the reason that thelatter’s obligation is not civillyenforceable. When the debtor himselfoffers a guaranty for his naturalobligation, he impliedly recognizes hisliability, thereby transforming theobligation from a natural into a civil one.

7. A guaranty may secure a future debt(2053)

Continuing Guaranty or Suretyship:

DIÑO v. CA: “Under the Civil Code, a guarantymay be given to secure even future debts, theamount of which may not known at the time theguaranty is executed. This is the basis forcontracts denominated as continuing guaranty orsuretyship.”

Future debts, even if the amount is not yetknown, may be guaranteed but there can beno claim against the guarantor until theamount of the debt is ascertained or fixedand demandable

Rationale: A contract of guaranty issubsidiary.

a. To secure the payment of a loan atmaturity – surety binds himself toguarantee the punctual payment of aloan at maturity and all other obligationsof indebtedness which may become dueor owing to the principal by theborrower.

b. To secure payment of any debt to besubsequently incurred – a guaranty shallbe construed as continuing when by theterms thereof it is evident that the objectis to give a standing credit to theprincipal debtor to be used from time totime either indefinitely or until a certainperiod, especially if the right to recall theguaranty is expressly reserved.

c. To secure existing unliquidated debts –refers to debts existing at the time of theconstitution of the guaranty but theamount thereof is unknown and not todebts not yet incurred and existing atthat time.

d. The surety agreement itself is valid andbinding even before the principalobligation intended to be securedthereby is born, any more than therewould be in saying that obligationswhich are subject to a condition


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precedent are valid and binding beforethe occurrence of the conditionprecedent.

A continuing guaranty is one which is not limited to asingle transaction, but which contemplates a futurecourse of dealing, covering a series of transactions,generally for an indefinite time or until revoked. It isprospective in its operation and is generally intendedto provide security with respect to future transactionswithin certain limits, and contemplates a succession ofliabilities, for which, as they accrue, the guarantorbecomes liable.

A continuing guaranty is one which covers alltransactions, including those arising in the future,which are within the description or contemplation ofthe contract, of guaranty, until the expiration ortermination thereof. A guaranty shall be construed ascontinuing when by the terms thereof it is evident thatthe object is to give a standing credit to the principaldebtor to be used from time to time either indefinitelyor until a certain period, especially if the right to recallthe guaranty is expressly reserved.

Where the contract of guaranty states that the same isto secure advances to be made "from time to time"the guaranty will be construed to be a continuing one.”

8. A guaranty may secure the performanceof a conditional obligation (2053)a. Principal obligation subject to a

suspensive condition – the guarantor isliable only after the fulfillment of thecondition.

b. Principal obligation subject to aresolutory condition – the happening ofthe condition extinguishes both theprincipal obligation and the guaranty

9. A guarantor’s liability cannot exceed theprincipal obligation (2054)

General Rule: Guaranty is a subsidiary andaccessory contract – guarantor cannot bindhimself for more than the principal debtorand even if he does, his liability shall bereduced to the limits of that of the debtor.But the guarantor may bind himself for lessthan that of the principal.

Exceptions:a. Interest, judicial costs, and attorney’s

fees as part of damages may berecovered – creditors suing on asuretyship bond may recover from thesurety as part of their damages, interestat the legal rate, judicial costs, andattorney’s fees when appropriate, evenwithout stipulation and even if the suretywould thereby become liable to pay

more than the total amount stipulated inthe bond.

Interest runs from: Filing of the complaint (upon judicial

demand); or The time demand was made upon

the surety until the principalobligation is fully paid (upon extra-judicial demand)

Rationale: Surety is made to pay, not byreason of the contract, but by reason ofhis failure to pay when demanded and forhaving compelled the creditor to resort tothe courts to obtain payment.

b. Penalty may be provided – a surety maybe held liable for the penalty providedfor in a bond for violation of the conditiontherein.

Principal’s liability may exceedguarantor’s obligations

The amount specified in a surety bondas the surety’s obligation does not limitthe extent of the damages that may berecovered from the principal, the latter’sliability being governed by theobligationshe assumed under his contract

10. The existence of a guaranty is notpresumed (2055)

Guaranty requires the expression of consenton the part of the guarantor to be bound. Itcannot be presumed because of theexistence of a contract or principalobligation.

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 withconsciousness of what he was doing.

11. Contract of guaranty is covered by theStatute of Frauds (See Art. 1403(2(a)) Guaranty must not only be expressed

but must so be reduced into writing.Hence, it shall be unenforceable byaction, unless the same or some note ormemorandum thereof be in writing, andsubscribed by the party charged, or byhis agent; evidence, therefore, of theagreement cannot be received withoutthe writing, or a secondary evidence of


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its contents. However, It need notappear in a public document

V. Guaranty Distinguished from Others

GUARANTY DISTINGUISHED FROMWARRANTY

Guaranty Warranty

Guaranty is a contractby which a person isbound to another for thefulfillment of a promiseor engagement of a thirdparty

Warranty is anundertaking that the title,quality, or quantity of thesubject matter of acontract is what is hasbeen represented to be,and relates to someagreement madeordinarily by the partywho makes the warranty

GUARANTY DISTINGUISHED FROMSURETYSHIP

Guaranty Suretyship

Guarantor’s liabilitydepends upon anindependent agreementto pay the obligation

Surety assumes liabilityas a regular party to theundertaking

Guarantor’s engagementis a collateralundertaking

Surety is an originalpromissor

Guarantor is subsidiarilyliable i.e. only obliged topay if the principalcannot pay

Surety is primarily liablei.e. bound to pay if theprincipal does not pay

Guarantor not bound totake notice of default ofhis principal

Surety ordinarily held toknow every default of hisprincipal

Guarantor oftendischarged by the mereindulgence of thecreditor and is usuallynot liable unless notifiedof the principal’s default

Surety not dischargedeither by the mereindulgence of thecreditor or by want ofnotice of default of theprincipal

VI. The Guarantor (Arts. 2056-2057)

Qualifications:1. He possesses integrity;2. He has capacity to bind himself;3. He has sufficient property to answer for the

obligation which he guarantees.

Exception: The creditor waives therequirements

The qualifications above need only be present atthe time of the perfection of the contract.

The subsequent loss of integrity or property orsupervening incapacity of the guarantor wouldnot operate to exonerate the guarantor of theeventual liability he has contracted, and thecontract of guaranty continues. The creditor canmerely demand another guarantor with theproper qualifications except that the creditor maywaive such remedy if he chooses and hold theguarantor to his bargain.

Selection of Guarantor:1. Specified person stipulated as guarantor:

Substitution of guarantor may not bedemanded

Reason: The selection of the guarantor is:a. Term of the agreement;b. As a party, the creditor is, therefore,

bound thereby.

2. Guarantor selected by the principal debtor:Debtor answers for the integrity, capacity,and solvency of the guarantor.

3. Guarantor personally designated by thecreditor: Responsibility of the selectionshould fall upon the creditor because heconsidered the guarantor to have thequalifications for the purpose.

VII.Effects of Guaranty

EFFECTS OF GUARANTY BETWEEN THEGUARANTOR AND THE CREDITOR1. The guarantor has the right to benefit

from excussion/ exhaustion (2058)

Exceptions to the benefit of excussion(2059)a. As provided in Art. 2059:

If the guarantor has expresslyrenounced it; waiver is valid but itmust be made in express terms.

If he has bound himself solidarilywith the debtor, the liability assumedis that of a surety. The guarantorbecomes primarily liable as asolidary co- debtor. In effect, herenounces in the contract itself thebenefit of exhaustion.

In case of insolvency of the debtor –guarantor guarantees the solvencyof the debtor. If the debtor becomesinsolvent, the liability of theguarantor as the debtor cannot fulfillhis obligation

When he (debtor) has absconded,


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or cannot be sued within thePhilippines – the creditor is notrequired to go after a debtor who ishiding or cannot be sued in ourcourts, and to incur the delays andexpenses incident thereto. Theexception is when the debtor hasleft a manager or representative;

If it may be presumed that anexecution on the property of theprincipal debtor would not result inthe satisfaction of the obligation – ifsuch judicial action includingexecution b would not satisfy theobligation, the guarantor can nolonger require the creditor to resortto all such remedies against thedebtor as the same would be but auseless formality. It is not necessarythat the debtor be judicially declaredinsolvent.

SOUTHERN MOTORS, INC. v BARBOSA: “Theright of guarantors…to demand exhaustion ofthe property of the principal debtor, exists onlywhen a pledge or a mortgage has not beengiven as special security for the payment of theprincipal obligation.”

LUZON STEEL CORP. v SIA: “The surety in thepresent case bound itself "jointly and severally"(in solidum) with the defendant; and excussion(previous exhaustion of the property of thedebtor) shall not take place "if he (the guarantor)has bound himself solidarily with the debtor".”

b. If he does not comply with Art. 2060: Inorder that the guarantor may make useof the benefit of excussion, he must: Set it up against the creditor upon

the latter’s demand for paymentfrom him;

Point out to the creditor:o Available property of the debtor

– the guarantor should facilitatethe realization of the excussionsince he is the most interestedin its benefit.

o Within the Philippine territory –excussion of property locatedabroad would be a lengthy andextremely difficult proceedingand would not conform with thepurpose of the guaranty toprovide the creditor with themeans of obtaining thefulfillment of the obligation.

o Sufficient to cover the amount of

the debtc. If he is a judicial bondsman and sub-

surety (2084)d. Where a pledge or mortgage has been

given by him as a special securitye. If he fails to interpose it as a defense

before judgment is rendered againsthim.

2. The creditor has the right to secure ajudgment against the guarantor prior tothe excussion

General rule: An ordinary personalguarantor (NOT a pledgor or mortgagor),may demand exhaustion of all the propertyof the debtor before he can be compelled topay.

Exception: The creditor may, prior thereto,secure a judgment against the guarantor,who shall be entitled, however, to adeferment of the execution of said judgmentagainst him, until after the properties of theprincipal debtor shall have been exhausted,to satisfy the latter’s obligation.

3. The creditor has the duty to make priordemand for payment from the guarantor(2060)a. The demand is to be made only after

judgment on the debtb. Joining the guarantor in the suit against

the principal debtor is not the demandintended by law. Actual demand has tobe made.

4. The guarantor has the duty to set up thebenefit of excussion (2060) As soon as he is required to pay,

guarantor must also point out to thecreditor available property (not inlitigation or encumbered) of the debtorwithin the Philippines.

5. The creditor has the duty to resort to alllegal remedies (2061)a. After the guarantor has fulfilled the

conditions required for making use ofthe benefit of exhaustion, it becomes theduty of the creditor to:

b. Exhaust all the property of the debtorpointed out by the guarantor;

c. If he fails to do so, he shall suffer theloss but only to the extent of the value ofthe said property, for the insolvency ofthe debtor


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6. The creditor has the duty to notify theguarantor in the action against the debtor(2062)

Under this article, notice to the guarantor ismandatory in the action against the principaldebtor. The guarantor, however, is not dutybound to appear in the case, and his non-appearance shall not constitute default, w/its consequential effect.

Rationale: The purpose of notification is togive the guarantor the opportunity to allegeand substantiate whatever defenses he mayhave against the principal obligation, andchances to set up such defenses as areafforded him by law if he so desires

7. A compromise shall not prejudice theperson not party to it (2063)a. A compromise between creditor and

principal debtor benefits the guarantorbut does not prejudice him.

b. A compromise between guarantor andthe creditor benefits but does notprejudice the principal debtor.

8. Co-guarantors are entitled to the benefitof division (2065) The benefit of division applies only when

there are several guarantors and onedebtor for a single debt. Except whensolidarity has been stipulated among theco-guarantors, a co- guarantor is liableonly to the extent of his share in theobligation as divided among all the co-guarantors.

EFFECTS OF GUARANTY BETWEEN THEDEBTOR AND THE GUARANTOR

1. The guarantor has the right to besubrogated to the rights of the creditor(2067)

A guarantor who pays the debt is entitled toevery remedy which the creditor has againstthe principal debtor, to enforce everysecurity and all means of payments; to standin the place of the creditor not only throughthe medium of the contract, but even bymeans of the securities entered into w/outthe knowledge of the surety; having the rightto have those securities transferred to himthough there was no stipulation for it, and toavail himself of all securities against thedebtor

The need to enforce the provisions onindemnity in Article 2066 forms the basis for

the subrogation clause of Article 2067. Theassumption, however, is that the guarantorwho is subrogated to the rights of thecreditor, has the right to be reimbursed forhis answering for the obligation of thedebtor. Absent this right of reimbursement,subrogation will not be proper.

2. The guarantor has the duty to notify thedebtor before paying the creditor (2068).

Should payment be made without notifyingthe debtor, and supposing the debtor hasalready made a prior payment, the debtorwould be justified in putting up the defensethat the obligation has already beenextinguished by the time the guarantor madethe payment.

In this case, the guarantor will lose the rightof reimbursement and consequently the rightof subrogation as well.

3. The guarantor cannot make paymentbefore the obligation has become due(2069).

General rule: Since a contract of guaranty isonly subsidiary, the guarantor cannot beliable for the obligation before the period onwhich the debtor’s liability will accrue. Anypayment made by the guarantor before theobligation is due cannot be indemnified bythe debtor.

Exception: Prior consent or subsequentratification by the debtor

4. The guarantor may proceed against thedebtor even before payment has been made(2071)

General rule: Guarantor has no cause ofaction against the debtor until after theformer has paid the obligation.

Exceptions:a. When he is sued for the payment;b. In case of insolvency of the principal

debtor;c. When the debtor has bound himself to

relieve him from the guaranty within aspecified period, and this period hasexpired;

d. When the debt has becomedemandable, by reason of the expirationof the period for payment;

e. After the lapse of 10 years, when theprincipal obligation has no fixed period


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for its maturity, unless it be of suchnature that it cannot be extinguishedexcept within a period longer than 10years;

f. If there are reasonable grounds to fearthat the principal debtor intends toabscond;

g. If the principal debtor is in imminentdanger of becoming insolvent.

Rationale: To enable the guarantor to takemeasures for the protection of his interest inview of the probability that he would becalled upon to pay the debt. As such, hemay, in the alternative, obtain release fromthe guaranty; or demand security that shallprotect him from any proceedings by thecreditor; and against the insolvency of thedebtor.

EEFECTS OF GUARANTY AS BETWEEN CO-GUARANTORSRequisites for the applicability of Art. 2073:1. Payment has already been made by one

guarantor;2. The payment was made because

a. Of the insolvency of the debtor, orb. By judicial demand

3. The paying guarantor seeks to beindemnified only to the extent of hisproportionate share in the total obligation.For purposes of proportionatereimbursement, the other guarantors mayinterpose such defenses against the payingguarantor as are available to the debtoragainst the creditor, except those that arepersonal to the debtor.

VIII. Extinguishment of Guaranty

1. Once the obligation of the debtor isextinguished in any manner provided in theCivil Code, the obligation of the guarantor isalso extinguished (2076). However, theremay be instances when, after theextinguishment of the guarantor’s obligation(as in the case of a release from theguaranty), the obligation of the debtor stillsubsists.

2. Although the guarantor generally has tomake payment in money, any other thing ofvalue, if accepted by the creditor, is validpayment and therefore releases theguarantor (2077).

3. If one guarantor is released, the releasewould benefit the co-guarantors to the extentof the proportionate share of the guarantor

released (2078).4. A guarantor is also released if the creditor,

without the guarantor’s consent, extends thetime within which the debtor may perform hisobligation (2079). This is to protect theinterest of the guarantor should the debtorbe insolvent during the period of extensionand deprive the guarantor of his right toreimbursement.

5. If through the fault of the creditor theguarantors are precluded from beingsubrogated to the former’s rights, the latterare released from the obligation. (2080)

CIVIL LAW REVIEWER Chapter V. LEGAL AND JUDICIAL BONDS

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Chapter V. Legal and Judicial Bonds

Bond – an undertaking that is sufficientlysecured, and not cash or currency.Bondsman – a surety offered in virtue of aprovision of law or a judicial order.

Qualifications of personal bondsman (2082 inrelation to Art. 2056):1. He possesses integrity;2. He has capacity to bind himself;3. He has sufficient property to answer for

the obligation which he guarantees.

PLEDGE OR MORTGAGE IN LIEU OF BOND(2083) Guaranty or suretyship is a personal

security. Pledge or mortgage is a property or real

security. If the person required to give alegal or judicial bond should not be able todo so, a pledge or mortgage sufficient tocover the obligation shall be admitted in lieuthereof.

BONDSMAN NOT ENTITLED TOEXCUSSION (2084)

A judicial bondsman and the sub-surety are notentitled to the benefit of excussion.

Reason: They are not mere guarantors, butsureties whose liability is primary andsolidary.

Effect of negligence of creditor: Merenegligence on the part of the creditor incollecting from the debtor will not relieve thesurety from liability.

CIVIL LAW REVIEWER Chapter VI. SURETYSHIP

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Chapter VI. Suretyship

SURETYSHIP is a relation which exists whereone person (principal) has undertaken anobligation and another person (surety) is alsounder a direct and primary obligation or otherduty to the obligee, who is entitled to but oneperformance, and as between the two who arebound, the second, rather than the first shouldperform.

If a person binds himself solidarily with theprincipal debtor, the contract is called suretyshipand the guarantor is called a surety.

NATURE OF SURETY’S UNDERTAKING1. Liability is contractual and accessory but

direct2. Liability is limited by terms of contract3. Liability arises only if principal debtor is

held liablea. In the absence of collusion, the surety is

bound by a judgment against theprincipal event though he was not aparty to the proceedings;

b. The creditor may sue, separately ortogether, the principal debtor and thesurety;

c. A demand or notice of default is notrequired to fix the surety’s liability

d. Exception: Where required by theprovisions of the contract of suretyship

e. A surety bond is void where there is notprincipal debtor because such anundertaking presupposes that theobligation is to be enforceable againstsomeone else besides the surety, andthe latter can always claim that it wasnever his intention to be the sole personobligated thereby.

NOTE: Surety is not entitled to exhaustion

4. Undertaking is to creditor, not to debtor

The surety makes no covenant oragreement with the principal that it will fulfillthe obligation guaranteed for the benefit ofthe principal. The surety’s undertaking isthat the principal shall fulfill his obligationand that the surety shall be relieved ofliability when the obligation secured isperformed.

Exception: Unless otherwise expresslyprovided.

NOTE: Surety is not entitled to notice ofprincipal’s default

5. Prior demand by the creditor uponprincipal not required. Surety is notexonerated by neglect of creditor to sueprincipal.

STRICTISSIMI JURIS RULE APPLICABLEONLY TO ACCOMMODATION SURETY

Reason: An accommodation surety actswithout motive of pecuniary gain and hence,should be protected against unjustpecuniary impoverishment by imposing onthe principal, duties akin to those of afiduciary. This rule will apply only after it hasbeen definitely ascertained that the contractis one of suretyship or guaranty.

STRICTISSIMI JURIS RULE NOTAPPLICABLE TO COMPENSATED SURETIESReasons:1. Compensated corporate sureties are

business association organized for thepurpose of assuming classified risks in largenumbers, for profit and on an impersonalbasis.

2. They are secured from all possible loss byadequate counter-bonds or indemnityagreements.

3. Such corporations are in fact insurers and indetermining their rights and liabilities, therules peculiar to suretyship do not apply.

CIVIL LAW REVIEWER Chapter VII. PLEDGE, MORTGAGE, ANTICHRESIS

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Chapter VII. Pledge, Mortgage,Antichresis

I. ESSENTIAL REQUISITES COMMON TOPLEDGE AND MORTGAGE

II. PLEDGEIII. MORTGAGEIV. FORECLOSURE OF MORTGAGEV. ANTICHRESISVI. CHATTEL MORTGAGE

I. Essential Requisites Common toPledge and Mortgage (Art. 2085)

ESSENTIAL REQUISITES COMMON TOPLEDGE AND MORTGAGE (Art. 2085)1. Constituted to secure the fulfillment of a

principal obligation.2. Pledgor or mortgagor must be the absolute

owner of the thing pledged or mortgaged.3. The persons constituting the pledge or

mortgage have the free disposal of theirproperty, and in the absence thereof, thatthey be legally authorized for the purpose.

4. Cannot exist without a valid obligation.5. Debtor retains the ownership of the thing

given as a security.6. When the principal obligation becomes due,

the thing pledged or mortgaged may bealienated for the payment to the creditor.

IMPORTANT POINTS1. Future property cannot be pledged or

mortgaged.2. Pledge or mortgage executed by one who is

not the owner of the property pledged ormortgaged is without legal existence andregistration cannot validate it.

3. Mortgage of a conjugal property by one ofthe spouses is valid only as to ½ of theentire property.

4. In case of property covered by Torrens title,a mortgagee has the right to rely upon whatappears in the certificate of title and doesnot have to inquire further.

5. Pledgor or mortgagor has free disposal ofproperty.

6. Thing pledged or mortgaged may bealienated.

7. Creditor not required to sue to enforce hiscredit.

8. Pledgor or mortgagor may be a third person.

RIGHT OF CREDITOR WHERE DEBTORFAILS TO COMPLY WITH HIS OBLIGATION1. Creditor is merely entitled to move for the

sale of the thing pledged or mortgaged withthe formalities required by law in order to

collect.

MANILA SURETY V VELAYO: The accessorycharacter is of the essence of pledge andmortgage. As stated in Art 2085 CC, anessential requisite of these contracts is that theybe constituted to secure the fulfillment of aprincipal obligation

2. Creditor cannot appropriate to himself thething nor can he dispose of the same asowner.

PROHIBITION AGAINST PACTUMCOMMISSORIUM (Art. 2088)1. Stipulation is null and void: Stipulation where

thing or mortgaged shall automaticallybecome the property of the creditor in theevent of nonpayment of the debt within theterm fixed.

2. Requisites of pactum commissorium:a. Pledge or mortgage.b. A stipulation for an automatic

appropriation by the creditor of theproperty in the event of nonpayment.

3. Effect on security contract: Nullity of thestipulation does not affect validity andefficacy of the principal contract.

IMPORTANT POINTS1. Debtor-owner bears the risk of loss of the

property.2. Pledge or mortgage is indivisible (2089,

2090).Exceptions:a. Where each of several things

guarantees a determinate portion of thecredit.

b. Where only a portion of loan wasreleased.

c. Where there was failure ofconsideration.

3. Rule that real property, consisting of severallots should be sold separately, applies tosales in execution, and not to foreclosure ofmortgages.

4. The mere embodiment of a real estatemortgage and a chattel mortgage in onedocument does not have the effect of fusingboth securities into an indivisible whole.

UY TONG v CA: The 2 elements for pactumcommissorium to exist:(1) that there should be a pledge or mortgagewherein a property is pledged or mortgaged byway of security for the payment of the principalobligation; (2) that there should be a stipulation


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for an automatic appropriation by the creditor ofthe thing pledged or mortgaged in the event ofnon-payment of the principal obligation withinthe stipulated period.

5. Pledge or mortgage may secure all kinds ofobligation, be they pure or subject tosuspensive or resolutory conditions (2091).

6. A promise to constitute pledge or mortgagecreates no real right, only a personal rightbinding upon the parties, only right of actionto compel the fulfillment of the promise butthere is no pledge or mortgage yet (2092).

7. Under the RPC, estafa is committed by aperson who, pretending to be the owner ofany real property, shall convey, sell,encumber or mortgage the same knowingthat the real property is encumbered andshall dispose of the same asunencumbered. It is essential that fraud ordeceit be practiced upon the vendee at thetime of the sale.

II. Pledge

PLEDGE is a contract by virtue of which thedebtor delivers to the creditor or to a third persona movable or document evidencing incorporealrights for the purpose of securing the fulfillmentof a principal obligation with the understandingthat when the obligation is fulfilled, the thingdelivered shall be returned with all its fruits andaccessions. (Art.2085 in rel to 2093)

KINDS1. Voluntary or conventional – Created by

agreement of parties.2. Legal – Created by operation of law.

CENTRAL BANK vs. CA: The consideration ofthe accessory contract of real estate mortgage isthe same as that of the principal contract. Forthe debtor, the consideration of his obligation topay is the existence of a debt. Thus, in theaccessory contract of real estate mortgage, theconsideration of the debtor in furnishing themortgage is the existence of a valid, voidable, orunenforceable debt (Art. 2086, in relation to Art.2052, of the Civil Code).

It is not necessary that any consideration shouldpass at the time of the execution of the contractof real mortgage. It may either be a prior orsubsequent matter. But when the considerationis subsequent to the mortgage, the mortgagecan take effect only when the debt secured by itis created as a binding contract to pay. And,when there is partial failure of consideration, the

mortgage becomes unenforceable to the extentof such failure. Where the indebtedness actuallyowing to the holder of the mortgage is less thanthe sum named in the mortgage, the mortgagecannot be enforced for more than the actual sumdue.

The rule of indivisibility of the mortgage asoutlined by Article 2089 above-quotedpresupposes several heirs of the debtor orcreditor which does not obtain in this case.Hence, the rule of indivisibility of a mortgagecannot apply.

BELO vs. PNB: From Art. 2089 is excepted thecase in w/c, there being several things given inmortgage or pledge, each one of themguarantees only a determinate portion of thecredit. The debtor, in this case, shall have a rightto the extinguishment of the pledge or mortgageas the portion of the debt for w/c each thing isspecially answerable is satisfied. From thewordings of the law, indivisibility arises onlywhen there is a debt, that is, there is a debtor-creditor relationship.

CHARACTERISTICS1. Real – Perfected by delivery.2. Accessory – Has no independent existence

of its own.3. Unilateral – Creates obligation solely on the

part of the creditor to return the thing subjectupon the fulfillment of the principalobligation.

4. Subsidiary – Obligation incurred does notarise until the fulfillment of the principalobligation.

CAUSE OR CONSIDERATION1. Principal obligation – In so far as the pledgor

is concerned.2. Compensation stipulated for the pledge or

mere liberality of the pledgor – If pledgor isnot the debtor.

PROVISIONS APPLICABLE ONLY TOPLEDGE1. Transfer of possession to the creditor or to

third person by common agreement isessential in pledge (2093).a. Actual delivery is important.b. Constructive or symbolic delivery of the

key to the warehouse is sufficient toshow that the depositary appointed bycommon consent of the parties waslegally placed in possession.

2. All movables within the commerce of manmay be pledged as long as they are


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susceptible of possession (2094).3. Incorporeal rights may be pledged. The

instruments representing the pledged rightsshall be delivered to the creditor; if they benegotiable instruments, they must beindorsed (2095).

4. Pledge shall take effect against 3rd personsonly if the following appear in a publicinstrument:a. Description of the thing pledged.b. Date of the pledge (2096).

5. The thing pledged may be alienated by thepledgor or owner only with the consent ofthe pledgee. Ownership of the thing pledgedis transmitted to the vendee or transferee assoon as the pledgee consents to thealienation, but the latter shall continue tohave possession (2097).

6. Pledge gives the creditor the right to retainthe thing in his possession or in that of athird person to whom it has been delivered,until the debt is paid (2098).

7. Special Laws apply to pawnshops andestablishments engaged in making loanssecured by pledges. Provisions of the CivilCode shall apply subsidiarily to them.

RIGHTS AND DUTIES OF CREDITOR IN APLEDGE1. Shall take care of the thing pledged with the

diligence of a good father of a family (2099).2. Has right to reimbursement of the expenses

made for preserving the thing. Shall be liablefor loss or deterioration of the thing byreason of fraud, negligence, delay orviolation of the terms of the contract, but notfor fortuitous events (2099).

3. May bring actions pertaining to the owner ofthe thing in order to recover it from, ordefend it against, a 3rd person (2103).

4. Cannot use the thing without the authority ofthe owner. If he uses the thing withoutauthority, or if he misuses the thing when hewas authorized to use it, the owner may askthat it be judicially or extrajudiciallydeposited (2104).

5. May use the thing if necessary for itspreservation (2104).

6. May either claim another thing in pledge ordemand immediate payment of the principalobligation if he is deceived on the substanceor quality of the thing (2109).

THE PLEDGEE1. Cannot deposit the thing pledged with a 3rd

person, unless there is a contrary stipulation(2100).

2. Is responsible for the acts of his agents oremployees with respect to the thing pledged

(2100).3. Has no right to use the thing or to

appropriate its fruits without authority fromthe owner (2104)

4. May cause the public sale of the thingpledged if, without fault on his part, there isdanger of destruction, impairment ordimunition in value of the thing. Theproceeds of the auction shall be a securityfor the principal obligation (2108).

RIGHTS AND DUTIES OF THE PLEDGOR1. Takes responsibility for the flaws of the thing

pledged (2101 in relation to Art. 1951).2. Cannot ask for the return of the thing against

the will of the creditor, unless and until hehas paid the debt and its interest, withexpenses in proper cases (2105).

YULIONGSIU vs. PNB: There is authoritysupporting the proposition that the pledgee cantemporarily entrust the physical possession ofthe chattels pledged to the pledgor withoutinvalidating the pledge. In such a case, thepledgor is regarded as holding the pledgedproperty merely as trustee for the pledgee. Thetype of delivery will depend upon the nature andthe peculiar circumstances of each case.

PNB vs. ATENDIDO: according to law, apledgee cannot become the owner of, norappropriate to himself, the thing given in pledge.If by the contract of pledge the pledgor continuesto be the owner of the thing pledged during thependency of the obligation, it stands to reasonthat in case of loss of the property, the lossshould be borne by the pledgor.

3. Subject to the right of the pledge under article2108, pledgor is allowed to substitute thething which is in danger of destruction orimpairment without any fault on the part ofthe pledgee with another thing of the samekind and quality (2107).

4. May require that the thing be deposited witha 3rd person, if through the negligence orwillful act of the pledgee the thing is in dangerof being lost or impaired (2106).

EXTINGUISHMENT OF A PLEDGE1. Ways to extinguish a pledge:

a. Payment of the debt.b. Sale of the thing pledged at public

auction.c. Thing pledged is returned by the

pledgee to the pledgor or owner (2110).d. Written statement by the pledgee that he

renounces or abandons the pledge.For


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this purpose, neither the acceptance bythe pledgor or owner nor the return ofthe thing pledged is necessary, and thepledgee becomes a depositary (2111).

2. Presumptions:a. If, subsequent to the perfection of the

pledge, the thing is found in thepossession of the pledgor or owner,there is prima facie presumption that thething has been returned by the pledge(2110).

b. If the thing is in the possession of a 3rdperson who received it from the pledgoror owner after the constitution of thepledge, there is prima facie presumptionthat the thing has been returned by thepledge (2110).

REQUIREMENTS IN SALE OF THE THINGPLEDGED BY A CREDITOR, IF CREDIT ISNOT PAID ON TIME (Art 2112)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 shallbe held.

6. If at the second auction, there is no saleeither, the creditor may appropriate the thingpledged but he shall give an acquittance(release) for his entire claim.

EFFECT OF THE SALE OF THE THINGPLEDGED (Art 2115)1. Extinguishes the principal obligation,

whether the price of the sale is more or lessthan the amount due.

2. if the price is more than amount due, thedebtor is not entitled to the excess unlessthe contrary is provided.

3. If the price of the sale is less, neither is thecreditor entitled to recover the deficiency. Acontrary stipulation is void.

MANILA BANKING v TEODORO:In case of doubt as to whether a transaction is apledge or a dation in payment, the presumptionis in favor of pledge, the latter being the lessertransmission of rights and interests (as earlierestablished in Lopez v. Court of Appeals)

LEGAL PLEDGES (Article 2121)1. Necessary expenses shall be refunded to

every possessor, but only a possessor ingood faith may retain the thing until he hasbeen reimbursed.

Useful expenses shall be refunded only tothe possessor in good faith with thesame right of retention, the person whohas defeated him in the possessionhaving the option of refunding theamount of the expenses or of paying theincrease in value which the thing mayhave acquired and by reason thereof(Art. 546)

2. He who has executed work upon a movablehas a right to retain it by way of pledge untilhe is paid. This is called the mechanic’slien. (Art. 1731)

3. 3) The agent may retain the things which arethe objects of agency until the principaleffects the reimbursement and pays theindemnity. This is called the agent’s lien.(Art. 1914)

4. 4) The laborer’s wages shall be a lien on thegoods manufactured or the work done.

5. (Art. 1707)

NOTE:1. In legal pledges, the remainder of the price

of the sale shall be delivered to the obligor.2. Public auction of legal pledges may only be

executed after demand of the amount forwhich the thing is retained. It shall takeplace within one month after the demand,otherwise the pledgor may demand thereturn of the thing pledged, provided s/he isable to show that the creditor did not causethe public sale without justifiable grounds.(Article 2122)

PAWNSHOP REGULATION ACT PD 114SEC 9: Loans granted by pawnshops shall notbe less than 30% of the value of the securityoffered, UNLESS the pawner manifests inwriting the desire to borrow a lesser amount.

SEC 10:a. Interests not to exceed usury lawb. Pawn broker prohibited from dividing the

pawn offered to collect greater interestc. Pawn broker prohibited from requiring

additional charge for safekeeping /insurance

d. Maximum service charge: Php5 to notmore than 1% of the principal loan

SEC 13: Pawner who fails to pay his obligationon the date it falls due may WITHIN 90 DAYSfrom the date of the maturity of the obligation,REDEEM the pawn by payment of the principaldebt and interest


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SEC 15: Requisites of public auction of pawnedarticles

a. Public auction must be held at the placeof business of the pawn shop, or withinthe municipality or city where it islocated

b. Must be under the control and directionof a licensed auctioneer

c. Prior publication one week before thesale

III. Mortgage

MORTGAGE is a contract whereby the debtorsecures to the creditor the fulfillment of aprincipal obligation, immediately makingimmovable property or real rights overimmovable property answerable to the principalobligation in case it is not complied with at thetime stipulated.

OBJECTS OF REAL MORTGAGE (Art. 2124)1. Immovables2. Alienable real rights over immovables.

Future property cannot be object of mortgage;however, a stipulation subjecting to themortgage improvements which the mortgagormay subsequently acquire, install or use inconnection with real property already mortgagedbelonging to the mortgagor is valid.

KINDS1. Voluntary – constituted by the will of the

owner of the property on which it is created2. Legal – required by law to be executed in

favor of certain persons:a. Persons in whose favor the law

establishes a mortgage have no otherright than to demand the execution andrecording of the document in which themortgage is formalized (Article 2125)

b. The bondsman who is to be offered invirtue of a provision of law or of a judicialorder shall have the qualificationsprescribed in Art 2056 (integrity,capacity to bind himself, and sufficientproperty to answer the obligation), an inother laws (Article 2082)

c. If the person bound to give a bondshould not be able to do so, a pledge ormortgage considered sufficient torecover his obligation shall be admittedin lieu thereof (Article 2083)

3. Equitable – One which, although lacking theproper formalities of a mortgage, shows theintention of the parties to make the property

as a security for a debt.a. lien created through equitable mortgage

ought not to be defeated by requiringcompliance with formalities necessaryto the validity of a voluntary real estatemortgage. Ex.: Pacto de retro

b. ovisions governing equitable mortgage:Arts. 1365, 1450, 1454, 1602, 1603,1604 and 1607.

PRINCIPLE OF INDIVISIBILITY OF PLEDGE /MORTGAGE(ART. 2089 TO 2090)

DAYRIT v CA: A mortgage directly andimmediately subjects the property upon which itis imposed. It is indivisible even though the debtmay be divided, and such indivisibility is likewiseunaffected by the fact that 'the debtors are notsolidarity liable.

Central Bank v CA: Where only a portion of theloan is released, the mortgage becomesenforceable only as to the proportionate value ofthe loan

Indivisibility applies only as topledgors/mortgagors who are themselvesdebtors in the principal obligation, and not toaccommodation pledgors / mortgagors

"When several things are pledged or mortgaged,each thing for a determinate portion of the debt,the pledges or mortgage, are consideredseparate from each other. But when the severalthings are given to secure the same debt in itsentirety, all of them are liable for the debt, andthe creditor does not have to divide his action bydistributing the debt among the various thingspledged or mortgaged. Even when only a part ofthe debt remains unpaid, all the things are stillliable for such balance." (Tolentino)

ESSENTIAL REQUISITES1. Constituted to secure the fulfillment of a

principal obligation.2. Mortgagor must be the absolute owner of

the thing mortgaged.3. The persons constituting the mortgage have

free disposal of the property; in the absencethereof, they should be legally authorized forthe purpose. (Article 2085)

4. Cannot exist without a valid obligation. (Art.2086 cf 2052)

5. When the principal obligation becomes due,the thing in which the mortgage consistsmay be alienated for payment to thecreditor. (Art. 2087)


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6. Must appear in a public document dulyrecorded in the Registry of Property, to bevalidly constituted. (Art. 2125) In a legal mortgage, the persons in whose

favor the law establishes a mortgagehave the right to demand the executionand recording of a document formalizingthe mortgage. (Art. 2125, par. 2)

EFFECTS1. Creates real rights, a lien inseparable from

the property mortgaged, enforceable againstthe whole world.

2. Creates merely an encumbrance.

LAWS GOVERNING MORTGAGE1. New Civil Code.2. PD 1952.3. Revised Administrative Code.4. RA 4882, regarding aliens becoming

mortgagees5. Act 3135, as amended6. Property Registration Decree7. General Banking Act of 2000

EFFECTS OF A MORTGAGE1. It creates a real right, a lien inseparable from

the property mortgaged2. If a person is the first mortgagee over a

property sold in an auction sale by thesecond mortgagee, the only right left to himis to collect his mortgage credit from theproceeds of the sale (by virtue of merger ofrights, Art 1275).

3. The first mortgagee has superior rights overjunior mortgagees / attaching creditors

IMPORTANT POINTS1. As a general rule, the mortgagor retains

possession of the property. He may deliversaid property to the mortgagee withoutaltering the nature of the contract ofmortgage.

2. It is not an essential requisite that theprincipal of the credit bears interest, or thatthe interest as compensation for the use ofthe principal and the enjoyment of its fruitsbe in the form of a certain percentagethereof.

3. Mortgage creates an encumbrance over theproperty, but ownership of the property isnot parted with. It merely restricts themortgagor’s jus disponendi over theproperty. The mortgagor may still sell theproperty, and any stipulation to the contraryis void (Art. 2130)

4. Mortgage extends to the natural accessions,to the improvements of growing fruits andthe rents or income NOT YET RECEIVED

when the obligation becomes DUE,including indemnity from insurance, and / oramount received from expropriation forpublic use (Art. 2127)a. Applies only when the accessions and

accessories subsequently introducedbelongs to the mortgagor.

b. To exclude them, there must be anexpress stipulation, or the fruits must becollected before the obligation becomesdue.

c. Third persons who introduceimprovements upon the mortgagedproperty may remove them at any time

Registration – ministerial act by which deed,contract or instrument is sought to be inscribedin the office of the Register of Deeds andannotated at the back of the certificate of titlecovering the land subject of the deed, title, orcontract

SAMANILLA v CAJUCOM: A mortgage,whether registered or not, is binding between theparties, registration being necessary only tomake the same valid against third persons (Art.2125, CC).

Registration only operates as a notice of themortgage to others, but neither adds to itsvalidity nor convert an invalid mortgage into avalid one between the parties. In Gurbax SinghPabla vs. Reyes, SC ruled that "if the purpose ofregistration is merely to give notice, thequestions regarding the effect or invalidity ofinstruments are expected to be decided after,not before, registration. It must follow as anecessary consequence that registration mustfirst be allowed and validity or effect litigatedafterwards".

INCIDENTS OF REGISTRATION OFMORTGAGE1. Mortgagee is entitled to registration of

mortgage as a matter of right.2. Proceedings for registration do not

determine validity of the mortgage or itseffect

3. Registration is without prejudice to betterrights of third parties.

4. Mortgage deed, once duly registered, formspart of the records for the registration of themortgaged property.

5. Mortgage by a surviving spouse of his/herundivided share in the conjugal property canbe registered.


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EFFECT OF INVALIDITY OF MORTGAGEON THE PRINCIPAL OBLIGATION1. Principal obligation remains valid.2. Mortgage deed remains evidence of a

personal obligation.

MOJICA v CA: Mortgages given to secure futureadvancements are valid and legal contracts; thatthe amounts named as consideration in saidcontract do not limit the amount for which themortgage may stand as security if from the fourcorners of the instrument the intent to securefuture and other indebtedness can be gathered.A mortgage given to secure advancements is acontinuing security and is not discharged byrepayment of the amount named in themortgage, until the full amount of theadvancements are paid (as established earlier inLim Julian v. Lutero).

IV. Foreclosure of Mortgage (Art. 2085)

FORECLOSURE OF MORTGAGEIt is the remedy available to the mortgagee bywhich he subjects the mortgaged property to thesatisfaction of the obligation secured by themortgage.

In General: An action for foreclosure of amortgage is limited to the amount mentionedin the mortgage, EXCEPT when themortgage contract intends to secure futureloans or advancements

BLANKET mortgage / DRAGNET–mortgage that subsumes all debts of past orfuture origin

Mortgage may be used as a “continuingsecurity” which secures futureadvancements and is not discharged by therepayment of the amount in the mortgage

Alienation or assignment of mortgage creditis valid even if it is not registered

ACCELERATION CLAUSE, or the stipulationstating that on the occasion of the mortgagor’sdefault, the whole sum remaining unpaidautomatically becomes due and demandable, isALLOWED

KINDS OF FORECLOSURE1. Judicial Foreclosure2. Extrajudicial Foreclosure

JUDICIAL FORECLOSURERule 68, ROC: May be availed of by bringing an action in

the proper court which has jurisdiction overthe area wherein the real or personal (in

case of chattel mortgage) property involvedor a portion thereof is situated.

If the court finds the complaint to be well-founded, it shall order the mortgagor to paythe amount due with interest and othercharges within a period of not less than 90days nor more than 120 days from the entryof judgment. If the mortgagor fails to pay atthe time directed, the court, upon motion,shall order the property to be sold to thehighest bidder at a public auction.

Upon confirmation of the sale by the court,also upon motion, it shall operate to divestthe rights of all parties to the action and tovest their rights to the purchaser subject tosuch rights of redemption as may be allowedby law.

Before the confirmation, the court retainscontrol of the proceedings

Execution of judgment subject to APPEALbut not annulment

The foreclosure of the property is completedonly when the sheriff’s certificate isexecuted, acknowledged and recorded

The proceeds of the sale shall be applied tothe payment of the:

a. Costs of the sale;b. Amount due the mortgagee;c. Claims of junior encumbrancers or

persons holding subsequent mortgagesin the order of their priority; and

d. Balance, if any shall be paid to themortgagor.

NATURE OF JUDICIAL FORECLOSUREPROCEEDINGS: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.

EXTRAJUDICIAL FORECLOSURE(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 agencycoupled with interest.

3. Public sale should be made after propernotice to the public, otherwise it is ajurisdictional defect which could render thesale voidable.

4. There is no need to notify the mortgagor.Proper notice consists of:a. posting notice in three public places

and / orb. publication in newspaper of general


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circulationc. purpose of notice is to obtain the best

bid for the foreclosed property5. Surplus proceeds of foreclosure sale belong

to the mortgagor.6. Debtor (who must be a NATURAL

PERSON) has the right to redeem theproperty sold within 1 year from and afterthe date of sale.a. If the mortgagee is a bank and the

debtor is a juridical person, then thereis no right of redemption. However, itmay redeem the property BEFORE theregistration of the TCT to the buyer,which is similar to the equity ofredemption. The TCT must beregistered within THREE MONTHSafter the foreclosure.

b. The mortgagor can only legally transferthe right to redeem and the use of theproperty during the period ofredemption.

7. Remedy of party aggrieved by foreclosure isa petition to set aside sale and cancellationof writ of possession. However, if themortgagee is a bank, the mortgagor isrequired to post a bond equal to the value ofthe mortgagee’s claim.

8. Republication is of the notice of salenecessary for validity of postponedextrajudicial sale

9. In foreclosure of real estate mortgage underAct 3135, the buyer at auction may petitionthe land registration court for a writ ofpossession pending the one-year period ofredemption of the foreclosedproperty.

Nature of power of foreclosure byextrajudicial sale:1. Conferred for mortgagee’s protection.2. An ancillary stipulation.3. A prerogative of the mortgagee.

Note:a. Both should be distinguished from

execution sale governed by Rule 39,ROC.

b. Foreclosure retroacts to the date ofregistration of mortgage.

c. A stipulation of upset price, or theminimum price at which the propertyshall be sold to become operative in theevent of a foreclosure sale at publicauction, is null and void.

RIGHT OF MORTGAGEE TO RECOVERDEFICIENCY1. Mortgagee is entitled to recover deficiency.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.

EFFECT OF INADEQUACY OF PRICE INFORECLOSURE SALE1. Where there is right to redeem, inadequacy

of price is immaterial because the judgmentdebtor may redeem the property.

Exception: Where the price is so inadequateas to shock the conscience of the court,taking into consideration the peculiarcircumstances.

2. Property may be sold for less than its fairmarket value, upon the theory that the lesserthe price the easier it is for the owner toredeem.

3. The value of the mortgaged property has nobearing on the bid price at the publicauction, provided that the public auction wasregularly and honestly conducted.

WAIVER OF SECURITY BY CREDITOR1. Mortgagee may waive right to foreclose his

mortgage and maintain a personal action forrecovery of the indebtedness.

2. Mortgagee cannot have both remedies.

REDEMPTION1. It is a transaction by which the mortgagor

reacquires the property which may havepassed under the mortgage or divests theproperty of the lien which the mortgage mayhave created

2. Kinds:a. Equity of redemption: in judicial

foreclosure of real estate mortgageunder the ROC, it is the right of themortgagor to redeem the mortgagedproperty by paying the secured debtwithin the 120 day period from entry ofjudgment or after the foreclosure sale,but before the sale of the mortgagedproperty or confirmation of sale formal offer to redeem preserves the

right of redemption, e.g., by filing anaction to enforce the right to redeem

b. Right of redemption: in extrajudicialforeclosure of real estate mortgage, theright of the mortgagor to redeem theproperty within a certain period after itwas sold for the satisfaction of the debt. For natural persons – one year from

the registration of the TCT


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For juridical persons – three monthsfrom the foreclosure

Formal offer to redeem must be withtender of redemption price topreserve right of redemption

NOTE: There is no right of redemption inpledge and chattel mortgage.

MEDIDA v CA: The rule up to now is thatthe right of a purchaser at a foreclosure saleis merely inchoate until after the period ofredemption has expired without the rightbeing exercised. The title to land sold undermortgage foreclosure remains, in themortgagor or his grantee until the expirationof the redemption period and conveyance bythe master's deed

V. Antichresis

ANTICHRESIS is a contract whereby thecreditor acquires the right to receive the fruits ofan immovable of the debtor, with the obligationto apply then to the payment of the interest, ifowing, and thereafter to the principal of thecredit (Art 2132)

CHARACTERISTICS1. Accessory contract – it secures the

performance of a principal obligation2. formal contract – it must be in a specified

form to be valid (Art. 2134)

SPECIAL REQUISITES:1. it can cover only the fruits of an immovable

property2. delivery of the immovable is necessary for

the creditor to receive the fruits and not thatthe contract shall be binding

3. amount of principal and interest must bespecified in writing

4. express agreement that debtor will givepossession of the property to creditor andthat the latter will apply the fruits to theinterest, if any, then to the principal of hiscredit

5. NOTE: The obligation to pay interest is notof the essence of the contract of antichresis;there being nothing in the Code to show thatantichresis is only applicable to securing thepayment of interest-bearing loans. On thecontrary, antichresis is susceptible ofguaranteeing all kinds of obligations, pure orconditional

OBLIGATIONS OF ANTICHRETIC CREDITOR1. to pay taxes and charges on the estate,

including necessary expenses. Creditor mayavoid said obligation by:a. compelling debtor to reacquire

enjoyment of the propertyb. by stipulation to the contrary

2. to apply all the fruits, after receiving them, tothe payment of interest, if owing, andthereafter to the principal

3. to render an account of the fruits to thedebtor

4. to bear the expenses necessary for itspreservation and repair

REMEDIES OF CREDITOR IN CASE OF NON-PAYMENT OF DEBT1. action for specific performance2. Petition for the sale of the real property as in

a foreclosure of mortgages under Rule 68 ofthe Rules of Courta. The parties, however, may agree on an

extrajudicial foreclosure in the samemanner as they are allowed in contractsof mortgage and pledge (Tavera v. ElHogar Filipino, Inc. 68 Phil 712)

b. A stipulation authorizing the antichreticcreditor to appropriate the property uponthe non-payment of the debt within theagreed period is void (Art. 2088)

VI. Chattel Mortgage

CHATTEL MORTGAGE is a contract by virtueof which a personal property is recorded in theChattel Mortgage Register as security for theperformance of an obligation.

If the movable, instead of being recorded, isdelivered to the creditor, it is pledge and notchattel mortgage.

LAWS GOVERNING CHATTEL MORTGAGE1. Chattel Mortgage Law (Act.1508, as

amended).2. New Civil Code.3. Revised Administrative Code.4. Revised Penal Code.5. Ship Mortgage Decree of 1978 (PD 1521)

governs mortgage of vessels of domesticownership.

AFFIDAVIT OF GOOD FAITH An oath in a contract of chattel mortgage

wherein the parties "severally swear that themortgage is made for the purpose ofsecuring the obligation specified in theconditions thereof and for no other purposes


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and that the same is a just and validobligation and one not entered into for thepurpose of fraud.

EFFECT OF REGISTRATION1. Creates real rights.2. Adds nothing to mortgage.

Note: Registration of assignment of mortgage isnot required.

RIGHT OF REDEMPTION OF MORTGAGE1. When the condition of a chattel mortgage is

broken, the following may exerciseredemption:a. Mortgagor.b. Person holding a subsequent mortgage.c. Subsequent attaching creditor.

2. An attaching creditor who so redeems shallbe subrogated to the rights of the mortgageeand entitled to foreclose the mortgage in thesame manner as a mortgagee.

3. Redemption is made by paying or deliveringto the mortgagee the amount due on suchmortgage and the costs and expensesincurred by such breach of condition beforethe sale.

FORECLOSURE OF CHATTEL MORTGAGE1. Public sale.2. Private sale – There is nothing illegal,

immoral or against public order in anagreement for the private sale of thepersonal properties covered by chattelmortgage.

PERIOD TO FORECLOSE1. After 30 days from the time of the condition

is broken.2. The 30-day period is the minimum period

after violation of the mortgage condition forthe creditor to cause the sale at publicauction with at least 10 days notice to themortgagor and posting of public notice oftime, place, and purpose of such sale, and isa period of grace for the mortgagor, todischarge the obligation.

3. After the sale at public auction, the right ofredemption is no longer available to themortgagor.

CIVIL ACTION TO RECOVER CREDIT1. Independent action to recover debt is not

required.2. However, mortgage lien is deemed

abandoned by obtaining a personaljudgment.

RIGHT OF MORTGAGEE TO RECOVERDEFICIENCY1. Where mortgage foreclosed: Creditor may

maintain action for deficiency although theChattel Mortgage Law is silent on this point,because a chattel mortgage is given only asa security and not as payment of the debt.

2. Where mortgage constituted as security forpurchase of personal property payable ininstallments: No deficiency judgment can beasked and any contrary agreement shall bevoid.

3. Where mortgaged property subsequentlyattached and sold: Mortgagee is entitled todeficiency judgment in an action for specificperformance.

APPLICATION OF PROCEEDS OF SALE1. Costs and expenses of keeping and sale.2. Payment of the obligation.3. Claims of persons holding subsequent

mortgages in their order.4. Balance, if any, shall be paid to the

mortgagor, or person holding rights underhim.


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Chapter VIII. Concurrence andPreference of Credits

I. GENERAL PROVISIONSII. CLASSIFICATION OF CREDITSIII. PREFERENCE OF CREDITS

CONCURRENCE OF CREDIT impliespossession by two or more creditors of equalright or privileges over the same property or allof the property of a debtor.

PREFERENCE OF CREDIT is the right held bya creditor to be preferred in the payment of hisclaim above other out of the debtor’s assets.

I. General Provisions

1. The debtor is liable with all his property,present and future, for the fulfillment of hisobligations, subjects to exemptions providedby law.

Exempted property:a. Present property:

Family home. (Arts. 152, 153 and155, CC)

Right to receive support, as well asmoney or property obtained by suchsupport, shall not be levied upon onattachment or execution. (Art. 205,CC)

Sec. 13, Rule 39, ROC. Sec 118, Public Land Act. (CA 141,

as amended)b. Future property: A debtor who obtains a

discharge from his debts on account ofinsolvency, is not liable for theunsatisfied claims of his creditors withsaid property. (Sec. 68 and 69,Insolvency Law, Act 1956)

c. Property in custodia legis and of publicdominion.

2. Insolvency shall be governed by theInsolvency Law. (Act 1956, as amended)

3. Exemption of conjugal property or absolutecommunity or property, provided that:a. Partnership or community subsists.b. Obligations of the insolvent spouse have

not redounded to the benefit of thefamily.

4. If there is co-ownership, and one of the co-owners is the insolvent debtor, his undividedshare or interest in the property shall bepossessed by the assignee in insolvencyproceedings because it is part of his assets.

5. Property held by the insolvent debtor as atrustee of an express or implied trust, shallbe excluded from the insolvencyproceedings

II. Classification of Credits

1. Special preferred credits. (Art. 2241 and2242, CC)a. Considered as mortgages or pledges of

real or personal property or liens withinthe purview of legal provisionsgoverning insolvency.

b. Taxes due to the State shall first besatisfied.

2. Ordinary preferred credits (Art. 2244) –Preferred in the order given by law.

3. Common credits (Art. 2245) – Credits of anyother kind or class, or by any other right ortitle not comprised in Arts. 2241- 2244 shallenjoy no preference.

III. Preference of Credits

1. Credits which enjoy preference with respectto specific movables exclude all others tothe extent of the value of the personalproperty to which the preference refers.

2. If there are 2 or more credits with respect tothe same specific movable property, theyshall be satisfied pro rata, after the paymentof duties, taxes and fees due the State orany subdivision thereof

3. Those credits which enjoy preference inrelation to specific real property or real rightsexclude all others to the extent of the valueof the immovable or real right to which thepreference refers.

4. If there are 2 or more credits with respect tothe same specific real property or real rights,they shall be satisfied pro rata, after thepayment of the taxes and assessment of thetaxes and assessments upon the immovableproperty or real right.

5. The excess, if any, after the payment of thecredits which enjoy preference with respectto specific property, real or personal, shallbe added to the free property which thedebtor may have, for the payment of othercredits.

6. Those credits which do not enjoy anypreference with respect to specific property,and those which enjoy preference, as to theamount not paid, shall be satisfied accordingto the following rules:a. Order established by Art 2244b. Common credits referred to in Art 2245

shall be paid pro rata regardless ofdates

-end of Credit Transactions -


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AGENCYTable of Contents

Chapter I. Nature, Form, and Kinds of Agency.......................................................................341

I. Definition [Art. 1868, CC] ..................341II. Purpose.............................................341III. Characteristics [CNPPBF].................342IV. Essential Elements............................342V. Determination of Existence of Agency

342VI. Agency v Similar Contracts ...............343VII. Kinds .............................................344

Chapter II. Obligations of the Agent...........348I. To Carry Out the Agency ..................348III. To Advance the Necessary Funds [Art.1886, CC] ...................................................349IV. To Act in Accordance with Principal’sInstructions.................................................349V. To Prefer Interest of Principal OverPersonal Interest........................................349VI. To Render Accounts and Deliver ThingsReceived by Virtue of the Agency..............349VII. To Be Responsible for Substitutes350VIII. To Pay Interest .............................350IX. To Answer for His Negligence or Fraud[Art. 1909, CC] ...........................................350X. Special Obligations of Factor/Commission Agents ...................................350

Chapter III. Liabilities of the Agent.............352I. Liability to Third Persons...................352II. Liability to the Principal .....................352III. Liability of Two or More Agents.........353

Chapter IV. Obligations of the Principal ...354I. To Comply with the obligationscontracted by the agent .............................354II. To Advance the Necessary Sums andReimburse the Agent .................................355III. To Indemnify the Agent for Damages355IV. To Pay the Agent’s Compensation ...356V. To Be Solidarily Liable ......................356

Chapter V. Extinguishment of Agency......357Extinguishment of Agency [EDWARD] ......357I. Expiration of the period for which it wasconstituted..................................................357II. Death, civil interdiction, insanity,insolvency ..................................................357III. Withdrawal of the agent ....................357IV. Accomplishment of the object of theagency .......................................................357V. Revocation ........................................357VI. Dissolution of the firm/corp. Whichentrusted/accepted the agency..................358

CIVIL LAW REVIEWER Chapter I. NATURE, FORM, and KINDS of AGENCY

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Chapter I. Nature, Form, and Kinds ofAgency

I. DEFINITIONII. PURPOSEIII. CHARACTERISTICSIV. ESSENTIAL ELEMENTSV. DETERMINATION OF EXISTENCEVI. AGENCY V SIMILAR CONTRACTSVII. KINDS

I. Definition [Art. 1868, CC]

By the contract of agency,1. a person (agent) binds himself2. to render some service or to do something in

representation or on behalf of another(principal),

3. with the consent or authority of the latter.

II. Purpose

The purpose of agency is to extend theprincipal’s personality.

The personality of the principal is extendedthrough the facility of the agent. In so doing,the agent, by legal fiction, becomes theprincipal, authorized to perform all actswhich the latter would have him do. Therelationship can only be effected with theconsent of the principal, which must not, inany way, be compelled by law or by anycourt. (Litonjua, Jr. v. Eternit Corp.)

What acts may be authorized1. General Rule: What a man may do in

person, he may do thru another.2. Exceptions—

a. Personal actsb. Criminal actsc. Unlawful acts

Theory of Imputed knoweldge1. General Rule: For knowledge of agent to be

imputed to the principal, there must be:a. Actual notice to the agent;b. The notice must pertain to a matter of

fact and not of law; andc. The fact must be within the scope of the

agent’s authority.2. Exceptions—

a. Agent’s interests are adverse to those ofthe principal;

b. Agent’s duty is not to discloseinformation;

c. 3rd person claiming the benefit of therule colludes with agent to defraudprincipal.

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&P

ARTN

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HIP

AGENCY & PARTNERSHIP TEAM


Genevieve E. JusiLead Writer

Joyce Anne C. RoldanWriter

CIVIL LAW


ACADEMICS COMMITTEE




Kae Guerrero

DESIGN & LAYOUT



LECTURES COMMITTEE


Heads


Arianne Cerezo


Volunteers

MOCK BAR COMMITTEE

Lilibeth Perez


Dahlia Salamat

LOGISTICS

Charisse Mendoza


Jill HernandezHead


Faye CelsoJoie Bajo

Members


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Note—The theory of imputed knowledgeascribes the knowledge of the agent, to theprincipal, not the other way around. Theknowledge of the principal can’t be imputed to itsagent. (Sunace Internat’l Mgt. Services v. NLRC,2006)

III. Characteristics [CNPPBF]

1. Consensual: perfected by mere consent2. Nominate: has its own name3. Preparatory: purpose is the execution of a

juridical act in relation to a third person4. Principal: can stand by itself without need of

another contract5. Bilateral: gives rise to reciprocal rights and

obligations6. Fiduciary: since it is based on trust and

confidence

IV. Essential Elements

Essential Elements [CORS] (Rallos v Felix GoChan, 1978)1. Consent, express or implied, of the parties

to establish the relationship2. Object is the execution of a juridical act in

relation to a third person3. Agent acts as a Representative and not for

himself4. Agent acts within the Scope of his authority

Intent to establish agency essentialGeneral Rule—1. On the part of the principal there must be an

intention to appoint or an intention naturallyinferable from his words or actions; and

2. On the part of the agent, there must be anintention inferable from words or deeds toaccept the appointment and act on it.

Exception—1. Agency by estoppel; and2. Agency by operation of law

Agency by Estoppel—1. The principal manifested a representation of

the agent’s authority or knowlingly allowedthe agent to assume such authority;

2. The third person, in good faith, relied uponsuch representation;

3. Relying upon such representation, such thirdperson has changed his position to hisdetriment. (Litonjua vs. Eternit Corporation,G.R. No. 144806)

Apparent Authority—It imposes liability, not as the result of thereality of a contractual relationship, butrather because of the actions of a principalor an employer in somehow misleading the

public into believing that the relationship orthe authority exists.

The principal is bound by the acts of hisagent with the apparent authority which heknowingly permits the agent to assume, orwhich he holds the agent out to the public aspossessing. The question in every case iswhether the principal has by his voluntaryact placed the agent in such a situation thata person of ordinary prudence, conversantwith business usages and the nature of theparticular business, is justified in presumingthat such agent has authority to perform theparticular act in question. (ProfessionalServices Inc. vs. Agana, G.R. No. 126297)

One who clothes another with apparentauthority as his agent, and holds him out tothe public as such, cannot be permitted todeny the authority of such person to act ashis agent, to the prejudice of innocent thirdparties dealing with such person in goodfaith. (Macke v Camps, 1907)

Capacity of the partiesThe principal must be capacitated to giveconsent.

The agent must have the capacity to enterinto contracts although he/she may not havethe capacity to enter into the particularcontract subject of the agency

However, as between the principal and theagent, the agent can set up his incapacityprovided he is not estopped. [Paras, CivilCode of the Philippines Annotated]

V. Determination of Existence of Agency

Designation by parties—is not controlling.

Fact of existenceIf relations that constitute agency exist, thereis agency regardless of whether or not theparties understood the exact nature of therelation.

No presumption of existence1. General Rule: Agency must exist as a fact.2. Exceptions:

a. When agency arises ipso jureb. To prevent unjust enrichment

Intention of the parties to create—The nature of the contract depends on theintention of the parties as gathered from


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their words and actions and thecircumstances of the case.

As between principal and 3rd person,however, agency may exist without theexpress consent of the agent.

Keeler Rule (Harry Keeler Electric vRodriguez, 1922)1. Against the principal, the third party has the

obligation to determine existence and scopeof agency and has the burden of proof incase the principal denies it

2. Against the agent, the third person dealswith him at his own peril. A third person mayrequire the presentation of the POA or theprincipal’s instructions as regards theagency (Art. 1902)

3. The person dealing with the agent must alsoact with ordinary prudence and reasonablediligence. If he knows or has good reason tobelieve that the agent is exceeding hisauthority, he cannot claim protection.

VI. Agency v Similar Contracts

Partnership1. An agent acts not for himself, but for his

principal; a partner can act for himself, forhis firm, and for his partners

2. Parity of Standing Test—A partnership generally presupposes aparity of standing between the partners, inwhich each party has an equal proprietaryinterest in the capital or property contributes& where each party exercises equal rights inthe conduct of the business. (Sevilla v CA,1988)

Independent Contractor (IC)Agency IC

1. ControlThe agent acts underthe control andinstruction of theprincipal.

The IC is authorized todo the work accordingto his own method,without being subjectto the other party’scontrol, except insofaras the result of thework is concerned

2. Liability for tortPrincipal is liable fortorts committed by theagent within the scopeof his authority.

Employer not liable fortorts committed by theindependentcontractor.

3. SubagentsAgents of the agentcan be controlled bythe principal

The employees of thecontractor are not theemployees of theemployer of thecontractor

Lease of ServiceAgency Lease of Service

1. BasisBasis isrepresentation

Basis is employment

2. PurposeExecution of a juridicalact in relation to athird person

Execution a piece ofwork or rendering ofservice

3. Authorized ActsThe agent is destinedto execute juridicalacts (creation,modification orextinction of relationswith third parties)

Lease of servicescontemplate onlymaterial acts.

4. DiscretionAgent exercisesdiscretionary powers.

Lessor ordinarilyperforms onlyministerial functions.

5. Parties3 parties: Principal,agent and the 3rdperson with whom theagent contracts

2 parties: Lessor andlessee.

Lease of PropertyAgency Lease of Property

1. ControlThe agent acts underthe control andinstruction of theprincipal.

Lessee is notcontrolled by thelessor

2. Things involvedAgency may involvethings other thanproperty

Lease of property onlyinvolves property

3. Binding powerAgent can bind theprincipal

Lessee cannot bindthe lessor

Agency to Sell v SaleAgency to Sell Sale

1. Ownership of goodsAgent receives thegoods as the goods ofthe principal

Buyer receives thegoods as owner

2. PaymentAgent deliversproceeds of the sale tothe principal

Buyer pays the price


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3. Return of goodsGenerally, the agentcan return the goodsin case he is unable tosell them to a thirdperson

generally, buyercannot return thegoods bought



5. PartiesAgent in dealing withthing received isbound to act accordingto the instructions ofhis principal;

Buyer can deal withthe thing as hepleases, being theowner.

Agency to Buy v SaleAgency to Buy Sale

1. Ownership of goodsThe agent acquiresownership in behalf ofthe principal

The buyer acquiresownership for himself.

2. Changes in priceGenerally, any changein the price should beborne by the principal

Buyer cannot adjustthe price alreadyagreed upon.

3. PaymentThe agent pays thepurchase price inbehalf of the principal

Buyer pays the price

GuardianshipAgency Guardianship

1. Person representedAgent represents acapacitated person

A guardian representsan incapacitatedperson.

2. Source of authorityAgent is appointed bythe principal and canbe removed by thelatter.

Guardian is appointedby the court or by law.

3. ControlThe agent acts underthe control of theprincipal.

Guardian is not subjectto the directions of theward but must act forthe benefit of the latter.



5. Binding powerAgent can make theprincipal personallyliable.

Guardian has nopower to imposepersonal liability on theward.

VII.Kinds

As to Manner of Creation1. Express

a. Agent has been actually authorized bythe principal

b. Agency may be oral or in writing, unlessthe law requires a specific form. [Art.1869, CC]

2. Implieda. On the part of the principal:

From his acts his silence or lack of action; his failure to repudiate the agency

knowing that another person isacting on his behalf without authority[Art. 1869, CC]

b. On the part of the agent: from his acts which carry out the

agency; from his silence or inaction

according to the circumstances [Art.1870, CC]

Acceptance of the Agency— Between persons who are present

Principal delivers his power ofattorney to the agent; and

Agent receives it withoutobjection [Art. 1871, CC]

Between persons who are absent: General Rule: Acceptance

cannot be implied from thesilence of the agent

Exceptionsi. when the principal transmits

his POA to the agent, whoreceives it without anyobjection;

ii. when the principal entrusts tohim by letter or telegram aPOA with respect to thebusiness in which he ishabitually engaged as anagent, and he did not reply tothe letter [Art. 1872, CC]

c. Agency by estoppel If a person specially informs another

or states by public advertisementthat he has given a power ofattorney to a third person, the latterbecomes a duly authorized agent,even if previously there was never ameeting of minds between them.

The power shall continue to be infull force until the notice is rescindedin the same manner in which it wasgiven. [Art. 1869, CC]


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d. In Litonjua, Jr. v. Eternit Corp. (2006),the following must be present for agencyby estoppels to exist: the principal manifested a

representation of the agent’sauthority or knowingly allowed theagent to assume such authority;

the third person, in good faith, reliedupon such representation;

relying upon such representation,such third person has changed hisposition to his detriment.

As to FormalitiesGeneral Rule—

Agency may be oral or in writing [Art. 1869,CC]

Exceptions—a. When the law requires a specific form

[Art. 1869, CC]b. Sale of a piece of land or any interest

therein—When a sale of a piece of land or anyinterest therein is through an agent, theauthority of the latter shall be in writing;otherwise, the sale shall be void. [Art.1874, CC]

It is not necessary that the real propertyto be sold be precisely described in thewritten authority of the agent. It issufficient if the authority is so expressedas to determine without doubt the limitsof the agent’s authority. [Jimenez vRabot, 1918]

As to Cause or Consideration—Agency may be onerouse or gratuitous

a. General Rule—Agency is presumed tobe for compensation [Art. 1875, CC]

b. Exception—There is proof to thecontrary [Art. 1875, CC]

As to Extent of Business Covered1. Universal—

A universal agent is one authorized todo all acts for his principal which canlawfully be delegated to an agent.[Siasat v. IAC (1985)]

2. General—It comprises all the business of theprincipal [Art. 1876, CC]

3. Special—It comprises one or more specifictransactions [Art. 1876, CC]

General Agency Special Agency1. Scope of authority

All acts connected withthe business oremployment in which heis engaged.

Specific acts inpursuance of particularinstructions or withrestrictions necessarilyimplied from the act to bedone.

2. Nature of service authorizedInvolves continuity ofservice.

No continuity of service.

3. Extent to which agent may bind principalMay bind his principal byan act within the scope ofhis authority although itmay be contrary to thelatter’s specialinstructions.

Cannot bind his principalin a manner beyond oroutside the specific actswhich he is authorized toperform.

4. Termination of authorityApparent authority doesnot terminate by the mererevocation of his authoritywithout notice to the 3rdparty.

Duty imposed upon the3rd party to inquiremakes termination of therelationship as betweenthe principal and agenteffective as to such 3rdparty, unless the agencyhas been entrusted forthe purpose ofcontracting with such 3rdparty.

5. Construction of principal’s instructionsMerely advisory in nature. Strictly construed as they

limit the agent’s authority.

As to Authority Conferred1. Agency may be couched in general or

specific termsa. Couched in general terms [Art. 1877,

CC]—If couched in general terms, it comprisesonly acts of administration, EVEN IF: the principal states that he withholds

no power; or he states that the agent may

execute such acts as he mayconsider appropriate; or

the agency should authorize ageneral and unlimited management

b. Couched in specific terms—authorizingonly the performance of specific act/acts

2. Power of AttorneyDefinition—

Written authorization to an agent toperform specified acts in behalf of hisprincipal which acts, when performed,shall have binding effect on the principal[2 Am. Jur. 30]

Purpose—Not to define the agent’s authority, but toevidence such authority to 3rd parties


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Interpretation—General Rule: Power of Attorney shouldbe strictly construedException: When strict construction willdestroy the very purpose of the power

Special Power of Attorney—A special power of attorney is anauthority granted by the principal to theagent where the act for which it is drawnis expressly mentioned. [Strong v.Repide, 1906]

A special power can be included in ageneral power of attorney, either bygiving authority for all acts of a particularcharacter or by specifying therein theact/transaction for which a special poweris needed. [Tolentino]

3. When special powers are necessary [Art.1878, CC] (PNC-WIG-LLB-PORIRS):a. to make such Payments as are not

usually considered acts of administrationb. to effect Novations which put an end to

obligations already in existence at thetime the agency was constituted

a. Compromise, to submit questions toarbitration, to renounce the right toappeal from a judgment, to waiveobjections to the venue of an action or toabandon a prescription already acquired

b. to Waive any obligation gratuitouslyc. to enter into any contract by which the

ownership of an Immovable istransmitted or acquired eithergratuitously or for a valuableconsideration

d. to make Gifts, except customary onesfor charity or those made to employeesin the business managed by the agent;

e. to Loan or borrow money, unless thelatter act be urgent and indispensablefor the preservation of the things whichare under administration

f. to Lease any real property to anotherperson for more than one year

g. to Bind the principal to render someservice without compensation

h. to bind the principal in a contract ofPartnership

i. to Obligate the principal as a guarantoror surety

j. to create or convey Real rights overimmovable property

k. to accept or repudiate an Inheritancel. to Ratify or recognize obligations

contracted before the agencym. any other act of Strict dominion

Note—a. Art. 1878 refers to the nature of the

authorization, not to its form. Even if adocument is titled as a general power ofattorney, the requirement of specialpower of attorney is met if there is aclear mandate from the principalspecifically authorizing the performanceof the act (Bravo-Guerrero v Bravo,2005)

b. What SPA to sell/mortgage does notinclude [Art. 1879, CC] A special power to sell excludes the

power to mortgage; Special power to mortgage does not

include the power to sell.c. A special power to compromise does not

authorize submission to arbitration. [Art.1880, CC]

d. The power to legally compel thepayment of debts owing to the principalis an express grant of the right to bringsuit for the collection of such debts.(Germann & Co v Donaldson, 1901)

e. A power of attorney “to loan and borrowmoney” and to mortgage the principal’sproperty does not carry with it or implythat that the agent has a legal right tomake the principal liable for the personaldebts of the agent. (BPI v De Coster,1925)

f. Unless the contrary appears, theauthority of an agent must be presumedto include all the necessary and usualmeans of carrying the agency into effect.(Macke v Camps, 1907)

g. If agent is empowered to borrowmoney—the agent may be the lender atthe current rate of interest.

h. If agent is empowered to lend money atinterest—the agent cannot borrow themoney without the consent of theprincipal

i. Effect of lack of SPA where one isrequired— It is neither accurate notcorrect to conclude that the absence ofSPA (where one is required by law)renders the contract entered into byvirtue of said SPA void. The contract ismerely unenforceable. (Dungo vLopena, 1962, citing Art. 1403(1), CC)

As to Nature and Effects1. Ostensible or Representative—agent acts in

the name and representation of the principal2. Simple or Commission—agent acts in his

own name but for the principal’s account3. Agency by Estoppel—there is no agency,

and the alleged agent seemed to have


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apparent or ostensible, but not real,authority to represent another

Apparent Authority Agency by EstoppelThough not actuallygranted, principalknowingly permits orholds out the agent aspossessing thenecessary powers to actin a certain way.

Where the principal, byhis acts or omission,permits his agent toexercise powers notgranted to him, eventhough the principal mayhave no notice orknowledge of the conductof the agent.

Implied Agency Agency by EstoppelPrincipal alone is liable. If caused by the principal,

he is responsible. Ifcaused by the agent, heis responsible. Provided,3

rdperson in good faith.

4. When the principal ratifies the acts of theagenta. Conditions for ratification (CaP-DECK)

i. The principal must have Capacityand Power to ratify

ii. The act must be Done in behalf ofthe principal

iii. He must ratify the acts in its Entiretyiv. The act must be Capable of

ratificationv. He must have had Knowledge of

material facts.b. Effects of ratification

i. With respect to the agent: It relievesthe agent from liability. He may alsorecover compensation

ii. With respect to the principal: Heassumes responsibility for theunauthorized act, as fully as if theagent had acted under originalauthority; but he is not liable for actsoutside the authority approved byhis ratification.

iii. With respect to 3rd persons: Theyare bound by ratification. Theycannot question agent’s authority.

Ratification EstoppelRests on intention Rests on prejudiceAffects the entiretransaction from thebeginning.

Affects only relevantparts of the transaction.

The substance ofratification is confirmationof unauthorized acts orconduct after it has beendone.

The substance ofestoppel is the principal’sinducement to another toact to his prejudice.

As to Kinds of Principal1. Principal may be:

a. Disclosedb. Partially disclosed—third persons are

unaware of principal’s identityc. Undisclosed—agent acts in his own

name2. General Rule [Art. 1883, CC]

If the principal is undisclosed (agent acts inhis own name):a. the agent is the one directly bound in

favor of the person with whom he hascontracted, as if the transaction were hisown

b. the principal has no right of actionagainst the persons with whom theagent has contracted; neither have suchpersons against the principal.

Exception [Art. 1883, CC]a. When the contract involves things

belonging to the principalb. Exception qualified by National Bank v

Agudelo, 1933—For the principal to be bound by theact of an agent who contracted inhis [agent’s] own name, it is notsufficient that the contract involvedthings belonging to the principal.The agent should also have actedwithin his scope of authority.[National Bank v Agudelo, 1933;Rural Bank of Bombon v CA, 1992]

3. Agent may still be sued even if principal isundisclosed and contract involved thingsbelonging to the principal.—

Even if the principal is undisclosed andthe contract involved things belonging tothe principal, the third person whocontracted with the agent has a right ofaction not only against the principal butalso against the agent, when the rightsand obligations which are the subjectmatter of the litigation cannot be legallyand juridically determined withouthearing both of them. In such case, theagent being a necessary party to the fulland complete determination of the casewhich originated from his act should beincluded in the case as defendant.[Beaumont v Prieto, 1921]

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Chapter II. Obligations of the Agent

I. TO CARRY OUT THE AGENCYII. TO ACT WITHIN THE SCOPE OF HIS

AUTHORITYIII. TO ADVANCE NECESSARY FUNDSIV. TO ACT IN ACCORDANCE WITH

INSTRUCTIONSV. TO PREFER PRINCIPAL’S INTEREST OVER

PERSONAL INTERESTVI. NOT TO LOAN TO HIMSELF WITHOUT

PRINCIPAL’S CONSENTVII. TO RENDER ACCOUNT AND DELIVER

THINGS RECEIVED BY VIRTUE OF AGENCYVIII. TO BE RESPONSIBLE FOR SUBSTITUTESIX. TO PAY INTERESTX. TO ANSWER FOR HIS FRAUD/NEGLIGENCEXI. SPECIAL OBLIGATIONS OF

FACTOR/COMMISSION AGENTS

I. To Carry Out the Agency

Obligation to carry out the agency heaccepted [Art. 1884, CC]—1. The agent is bound by his acceptance to

carry out the agency own2. He shall be liable for damages that the

principal may suffer due to his non-performance [Art. 1884, CC]

Exception: An agent shall not carry out anagency if its execution would manifestly result inloss or damages to the principal. [Art. 1888, CC]

Obligation to finish business began onprincipal’s death [Art. 1884, CC]—

The agent must finish the business alreadybegun on the death of the principal, shoulddelay entail any danger

Obligation should he decline the agency [Art.1885, CC]—1. He is bound to observe the diligence of a

good father of a family in the custody andpreservation of the goods forwarded to himby the owner until the latter should appointan agent or take charge of the goods

2. However, the owner must act as soon aspracticable either by appointing an agent orby taking charge of the property

Obligation to continue agency should hewithdraw [Art. 1929, CC]—

The agent, even if he should withdraw fromthe agency for a valid reason, must continueto act until the principal has had reasonableopportunity to take the necessary steps tomeet the situation.

II. To Act Within the Scope of HisAuthority [Art. 1881, CC]

Authority is the power of the agent to affect thelegal relations of his principal by acts done inaccordance with the principal’s manifestations ofconsent.

When agent acting within the scope of hisauthority—1. When he is performing acts which are

conducive to the accomplishment of thepurpose of the agency [Art. 1881, CC]

2. If the agency has been performed in amanner more advantageous to the principalthan that specified by him [Art. 1882, CC]

3. Insofar as third persons, when the agent’sact is within the terms of the power ofattorney, as written, even if the agent has infact exceeded the limits of his authorityaccording to an understanding between theprincipal and the agent. [Art. 1900, CC]

Note:1. A 3

rdperson with whom the agent wishes to

contract on behalf of the principal mayrequire the presentation of a power ofattorney or the principal’s instructions [Art.1902, CC]

2. The scope of the agent’s authority is whatappears in the written terms of the power ofattorney. While third persons are bound toinquire into the extent or scope of theagent’s authority, they are not required to gobeyond the terms of the written power ofattorney. [Siredy Enterprises, Inc. v CA,2002]

Effect when agent acts within the scope ofhis authority—1. General Rule— The agent who acts as such

is not personally liable to the party withwhom he contracts

2. Exceptions—a. If he expressly bound himself [Art. 1897,

CC]b. If he exceeds the limits of his authority

without giving such party sufficientnotice of his powers [Art. 1897, CC]

c. If he acted in his own name; except ifthe contract involves things belonging tothe principal [Art. 1883, CC]


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III. To Advance the Necessary Funds[Art. 1886, CC]

General Rule—The agent is bound to advance necessaryfunds, should there be a stipulation to do so.

Exception—When the principal is insolvent

IV. To Act in Accordance with Principal’sInstructions

Obligation to act in accordance withprincipal’s instructions—

In the execution of the agency, the agentshall act in accordance with the instructionsof the principal. [Art. 1887, CC]

Obligation in the absence of instructions—Agent shall do all that a good father of afamily would do, as required by the nature ofthe business [Art. 1887, CC]

When private orders and instructions notbinding to third persons—

Private or secret orders and instructions ofthe principal do not prejudice third personswho have relied upon the power of attorneyor instructions shown them. [Art. 1902, CC]

Effect when agent acts in accordance withprincipal’s orders—

Principal cannot set up the ignorance of theagent as to circumstances whereof hehimself was, or ought to have been aware[Art. 1899, CC]

Authority v InstructionsAuthority Instructions

The sum total of thepowers committed orpermitted to the agent

Only a private rule ofguidance to the agent

Relates to the subject(biz/transaction) withwhich the agent isempowered to deal oract.

Refers to the manneror mode of agent’saction with respect tomatters within thepermitted scope ofaction.

Limits of authority tooperate vs those whohave/are charged withknowledge of them.

Binding only on theprincipal and agent

V. To Prefer Interest of Principal OverPersonal Interest

Rule in case of conflict of interest1. General Rule—

The agent shall be liable for damages if,there being a conflict between hisinterests and those of the principal, heshould prefer his own. [Art. 1889, CC]

2. Exceptions—a. The principal waives the benefit of the

rule, provided he does so with fullknowledge of the facts.

b. The interests of the agent are superior,ex., agency coupled with an interest.

Agent prohibited from purchasing propertyof principal—1. General Rule—

The agent cannot acquire by purchase,even at a public or judicial auction,either in person or through the mediationof another property whoseadministration or sale may have beenentrusted to them.

2. Exception—The principal has consented to thepurchase. [Art. 1491(2), CC]

VI. To Render Accounts and DeliverThings Received by Virtue of theAgency

Obligation to account and deliver [Art. 1891,CC]—Every agent is bound to:1. render an account of his transactions; and2. deliver to the principal whatever he may

have received by virtue of the agency, eventhough it may not be owing to the principal.

Effect of failure to comply—If he fails to do so or uses themoney/property for his own use, the agent isliable for estafa [Art. 315, RPC]

Contrary stipulation void—Every stipulation exempting the agent fromthe obligation to render an account shall bevoid [Art. 1891, CC]

When not applicable (LIM)—1. A right of Lien exists in favor of the agent.2. The agent or broker Informed the principal of

the gift or bonus or profit he received fromthe vendee, and the principal did not object.


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3. If the agent or broker acted only as aMiddleman with the task of merely bringingtogether the vendor and vendee (Domingo vDomingo)

VII.To Be Responsible for Substitutes

The agent shall be responsible for the acts ofhis substitute:1. when he was not given the power to appoint

one; or2. when he was given such power, but without

designating the person, and the personappointed was notoriously incompetent orinsolvent.

The agent may appoint a substitute if theprincipal has not prohibited him from doing so.All acts of the substitute appointed against theprohibition of the principal shall be void

Principal may also bring an action against thesubstitute with respect to the obligations whichthe latter has contracted under the substitution.[Art. 1893, CC]

VIII. To Pay Interest

The agent owes interest on:1. the sums he has applied to his own use from

the day on which he did so2. those which he owes after the

extinguishment of the agency

IX. To Answer for His Negligence orFraud [Art. 1909, CC]

The agent is responsible not only for fraud, butalso for negligence

Liability shall be judged with more or less rigorby the courts, according to whether the agencywas or was not for a compensation

X. Special Obligations of Factor/Commission Agents

Definition—one whose business is to receive & sellgoods for a commission, and is entrusted bythe principal with its possession [Mechemon Agency]

Obligations of a commission agent1. For goods received [Art. 1903, CC]

a. He shall be responsible for the goodsreceived by him in the terms andconditions and as described in theconsignment

b. To avoid liability, he should make awritten statement of the damage anddeterioration suffered by the same uponreceiving them

2. When handling goods of the same kind andmark with different owners [Art. 1904, CC]—

He should distinguish the goods bycountermarks, and designate themerchandise respectively belonging toeach principal.

3. Not to sell on credit without express consent[Art. 1905, CC]—

The commission agent cannot, withoutthe express or implied consent of theprincipal, sell on credit.Should he do so:a. the principal may demand from him

payment in cashb. but the commission agent shall be

entitled to any interest or benefit,which may result from such sale

4. To inform the principal of sale made oncredit, if authorized to do so [Art. 1906,CC]—a. Should the commission agent, with

authority of the principal, sell on credit,he shall so inform the principal, with astatement of the names of the buyers

b. Should he fail to do so, the sale shall bedeemed to have been made for cashinsofar as the principal is concerned.

5. To indemnify principal for damages forfailure to collect the credits of his principalwhen they fall due [Art. 1908, CC]—General Rule:

The commission agent who does notcollect the credits of his principal at thetime when they become due anddemandable shall be liable for damages

ExceptionIf he proves that he exercised duediligence for that purpose

6. When he receives a guarantee commission(del credere commission) [Art. 1907, CC]—a. Bear the risk of collectionb. Pay the principal the proceeds of the

sale on the same terms agreed uponwith the purchaser

Ordinary Agent v Commission AgentOrdinary Agent Commission Agent

Acts for and inbehalf of theprincipal.

Acts in his own name orin that his principal.

Need not havepossession of thegoods of theprincipal.

Must be in possessionof the goods of theprincipal.


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Broker v Commission Agent (PacificCommercial v Yatco, 1939)

Broker Commission AgentHas no custody orpossession of thething he disposes;merely acts as anintermediary betweenthe sellers and thebuyer.

Engaged in thepurchase and sale, fora principal, of personalproperty which has tobe placed in hispossession anddisposal.

Maintains no relationwith the thing whichhe purchases or sells.

Has a relation with theprincipal (buyers orsellers) and theproperty which is theobject of thetransaction.

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Chapter III. Liabilities of the Agent

I. LIABILITITY TO THIRD PERSONSII. LIABILITY TO THE PRINCIPALIII. LIABILITY OF TWO OR MORE AGENTS

I. Liability to Third Persons

Agent not personally liable as a generalrule—General Rule

An agent who acts as such is not personallyliable to the party with whom contracts [Art.1897, CC]

Exceptions1. When he acts in his own name, except when

the contract involves things belonging to theprincipal [Art. 1883, CC]

2. If he expressly binds himself [Art. 1897, CC]3. If he exceeds the limits of his authority

without giving such party sufficient notice ofhis powers [Art. 1897, CC]

Note—When an agent contracts in hisown name and without the expressauthority of his principal, the obligationso contracted by him is personal and isnot binding on his principal. [PNB v.Agudelo]

BUT Third persons cannot set up thefact that the agent has exceeded hispowers if the principal has ratified, orhas signified his willingness to ratify theagent’s acts [Art. 1901, CC]

4. Under Art. 1898, CC—a. Agent contracts in the name of the

principal;b. He exceeds the scope of his authority;c. The party with whom he contracted with

is aware of the limits of his powers; ANDd. The agent undertook to secure the

principal’s ratification.

Note— Under Art. 1898, CC, the contractshall be void if the principal does not ratifythe contract and the party with whom theagent has contracted is aware of the limits ofthe powers granted by the principal.

Agent liable for damages to third personsunder Art. 1916 & 1917, CC—1. When two persons contract with regard to

the same thing, one of them with the agentand the other with the principal;

2. the two contracts are incompatible with eachother

3. the agent acted in bad faith4. agent shall be liable for damages to third

person whose contract must be rejected

II. Liability to the Principal

Agent is liable for damages—1. Due to non-performance of agency—

The agent is liable for the damages which,thru his non-performance, the principalmay suffer [Art. 1884, CC]

2. For preferring personal interest to that ofprincipal—

The agent shall be liable for damages if,there being a conflict between his interestsand those of the principal, he shouldprefer his own. [Art. 1889, CC]

3. Damages due to his withdrawal [Art. 1928,CC]—

The agent must indemnify the principal forany damage that the principal may sufferby reason of the withdrawal of the agent;

Exception: The agent should base hiswithdrawal upon the impossibility ofcontinuing the performance of the agencywithout grave detriment to himself.

Liability of agent for acts of substitute underArt. 1892, CC—The agent shall be responsible for the acts of thesubstitute:1. when he was not given the power to appoint

one; or2. when he was given such power, but without

designating the person, and the personappointed was notoriously incompetent orinsolvent.

Principal may bring an action against thesubstitute with respect to the obligations whichhe has contracted under the substitution. [Art1893, CC]

All acts of the substitute appointed against theprohibition of the principal is void. [Art 1893, CC]

Responsibility for fraud or negligence—The agent is responsible not only for fraud,but also for negligence, which shall bejudged with more or less rigor by the courts,according to whether the agency was or wasnot for compensation. [Art. 1909, CC]

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Interest under Art. 1896, CC—The agent owes interest on:1. the sums he has applied to his own use from

the day on which he did so2. those which he owes after the

extinguishment of the agencya. If he converted for personal use, his

liability is without prejudice to a criminalaction that may be brought against him.

b. If for the sum he owes afterextinguishment, demand is notnecessary because the agent is requiredto deliver to the principal whatever hemay have received by virtue of theagency. [Art 1891, CC]

Liablity of Commission Agents1. For any damage or deterioration of the

goods in the terms and conditions and asdescribed in the consignment

Exception: Upon receiving the goods, theagent makes a written statement of thedamage and deterioration suffered [Art1903, CC]

2. For commingling goods belonging todifferent owners [Art 1904, CC]

3. For selling on credit without the express orimplied consent of the principal [Art 1905,CC]

III. Liability of Two or More Agents

Liability is joint as a general rule [Art. 1894,CC]General Rule: Responsibility of two or moreagents, even though they have been appointedsimultaneously, is joint

Exception: Solidarity is expressly stipulated

Liability of two or more agents [Art. 1895,CC]—If solidarity has been agreed upon, each of theagents is responsible for:1. the non-fulfillment of agency; and2. for the fault or negligence of his fellows

agents, except: When the fellow agentsacted beyond the scope of their authority incase of fault or negligence.

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Chapter IV. Obligations of the Principal

I. TO COMPLY WITH THE OBLIGATIONSCONTRACTED BY THE AGENT

II. TO ADVANCE NECESSARY SUMS ANDREIMBURSE THE AGENT

III. TO INDEMNIFY AGENT FOR DAMAGESIV. TO PAY THE AGENT’S COMPENSATIONV. BE SOLIDARILY LIABLE

General Rule: THE ACT OF THE AGENT ISTHE ACT OF THE PRINCIPAL—

Principal is bound by the acts of his agent.He has an obligation to deal fairly and ingood faith with his agent

SPECIFIC OBLIGATIONS OF THE PRINCIPAL[CARICS]3. to Comply with the obligations contracted by the

agent4. To Advance necessaty sums and Reimburse the

agent5. To Indemnify agent for damages6. To pay the agent’s Compensation7. be Solidarily liable

I. To Comply with the obligationscontracted by the agent

Obligations principal is bound to complywith—1. obligations which the agent may have

contracted within the scope of his authority[Art. 1910, CC]

Note: Principal is directly liable to creditor fordebt incurred by agent acting within thescope of his authority. That the agent alsobound himself personally does not relieveprincipal from liability if the debt wasincurred for his benefit. [Tuason v. Orozco]

2. obligations which the agent may havecontracted beyond the scope of his authoritybut were ratified expressly or tacitly by theprincipal [Art. 1910, CC]

Note: Conditions for ratification (CaP-DECK)a. The principal must have Capacity and

Power to ratify.b. The act must be Done in behalf of the

principalc. He must ratify the acts in its Entiretyd. The act must be Capable of ratificatione. He must have had Knowledge of

material facts.

3. When an agent acts in his own name, butthe contract involves things belonging to theprincipal, the contract must be consideredas entered into between the principal andthe third person. [Art. 1883, CC; Sy-Jucoand Viardo v Sy-Juco, 1920]

4. The principal is solidarily liable with theagent who has exceeded his authority if theformer allowed the latter to act as though hehad full power. [Art. 1911, CC]

5. If two persons contract simultaneously withagent & principal for the same thing:a. Contract of prior date prevailsb. If applicable, follow the rule on double

sales in Art. 1544, CC. [Art. 1916, CC]

Liability of Principal for Tort of Agent [Art.1910, CC]—

The principal is civilly liable to third personsfor torts of an agent if he commit such in thecourse and within the scope of the agency.

Agent’s negligence or disobedience to theprincipal does not relieve him from liability,even if he had no knowledge about the tort.

Agent and principal are solidarily liable tothird persons.

Liability of Joint Principals: Solidary [Art1915]—

Each principal may be sued by the agent forthe entire amount due, not just forproportionate shares.

Any of the principals may revoke the agency

Requisites of Solidary Liability:a. Two or more principalsb. All principals concurred in the

appointment of the same agentc. Agent was appointed for a common

undertaking

Rules on Double Sale by Principal and Agent[Art. 1916-1917]General Rule:1. When two persons contract with regard to

the same thing, one of them with the agentand the other with the principal

2. two contracts are incompatible with eachother

3. the agent acted in good faith4. the principal shall be liable for damages to

the third person whose contract must berejected

In case of double sale, which contracts areincompatible with each other, that of PRIOR


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DATE shall be preferred, without prejudice to Art1544.

Art. 1544 provides that:a. If the same movable property is sold to

different persons, ownership istransferred to whoever first tookpossession in good faith.

b. If it be immovable, ownership belongs tothe person who in good faith firstrecorded it in the Registry of Property.

c. If there is no inscription, ownership shallbelong to the person who, in good faithwas first in possession; and in theabsence of such, to the one whopresents the oldest title, provided thereis good faith.

Principal not liable in the following cases—1. Void or inexistent contracts under Art. 1409,

CC2. Sale of a piece of land or any interest

therein & the authority of the agent is not inwriting [Art. 1874, CC]

3. Acts of the substitute appointed against theprohibition of the principal [Art. 1892, CC]

4. Art. 1898, CCRequisites:a. agent contracts in the name of the

principalb. he exceeds the scope of the his

authorityc. the principal does not ratify the contractd. the party with whom the agent

contracted is aware of the limits of thepowers granted by the principal; andi. the agent did not undertake to

secure the principal’s ratification5. Agent has no authority or acted beyond the

scope of his authority [Arts. 1403(1); 1910,CC; Dungo v Lopena, 1962]

6. When the agent acts in his own name,persons with whom the agent hascontracted have no right of action againstthe principal, except when the contractinvolves things belonging to the principal.[Art. 1883, CC]

7. Unenforceable contracts under Art. 1403,CC

II. To Advance the Necessary Sums andReimburse the Agent

Obligation to advance sums [Art. 1912, CC]—The principal must advance to the agent,should the latter so request, the sumsnecessary for the execution of the agency.

Obligation to reimburse [Art. 1912, CC]—1. Should the agent have advanced sums, the

principal must reimburse him even if thebusiness or undertaking was not successful,provided the agent is free from all fault.

2. The reimbursement shall include interest onthe sums advanced, from the day on whichthe advance was made.

Exceptions to obligation to reimburse[Art.1918] (FCKS)1. When the expenses were due to the Fault of

the agent;2. If the agent acted in Contravention of the

principal's instructions, unless the lattershould wish to avail himself of the benefitsderived from the contract;

3. When the agent incurred them withKnowledge that an unfavorable result wouldensue, if the principal was not awarethereof;

4. When it was Stipulated that the expenseswould be borne by the agent, or that thelatter would be allowed only a certain sum.

Note: Under Art. 1236(2), CC:“whoever pays for another may demandfrom the debtor what he has paid, exceptthat if he paid without the knowledge oragainst the will of the debtor, he can recoveronly insofar as the payment has beenbeneficial to the debtor.”

Agent’s right to retain in pledge object ofagency should principal fail to reimburse him1. The agent may retain in pledge the things

which are the object of the agency until theprincipal:a. effects the reimbursement set forth in

Art. 1912, CC; andb. pays indemnity set forth in Art. 1913, CC

2. But agent is not entitled to the excess incase the thing was sold to satisfy his claim,and the proceeds are more than his claim[Arts. 2115, 2121, CC]. Also he mustpossess the thing lawfully in his capacity asagent [2 C.J.S. 457]

III. To Indemnify the Agent for Damages

Obligation to pay indemnity for damages[Art. 1913, CC]—

The principal must indemnify the agent forall the damages which the execution of theagency may have caused the latter, withoutfault or negligence on his part.


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The agent’s has the right to retain in pledge theobject of the agency should principal fail to paythe indemnity set forth in Art. 1913, CC.

IV. To Pay the Agent’s Compensation

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

General Rule on Commission—The agent must be the efficient procuringcause in order to be entitled tocompensation [Inland Realty v. Court ofAppeals]. His efforts must have resulted infinding a ready, able and willing buyer of thegoods.

But for equity purposes, commission may begranted if the agent, even if he is not theprocuring cause, nonetheless took diligentsteps to bring back the parties which led tothe consummation of the sale [Prats v. Courtof Appeals]

Compensation of Brokers—Since the broker’s only job is to bringtogether the parties to a transaction, itfollows that if the broker does not succeed inbringing the mind of the purchaser and thevendor to an agreement with reference tothe terms of a sale, he is not entitled to acommission. [Rocha v Prats, 1922]

Doctrine of Procuring Cause—When a party is not the efficientprocuring cause in bringing about a sale,he is not entitled to the stipulatedbroker’s commission. [Inland Realty vCA, 1997]

If the principal breaks off from negotiationswith a buyer brought by the agent in order todeliberately deal later with the buyerpersonally, this is evident bad faith. In suchcase, justice demands compensation for theagent. [Infante v Cunanan, 1953]

V. To Be Solidarily Liable

With agent, if agent acted beyond scope ofauthority and principal allowed him to act asthough he had full powers—

Even when the agent has exceeded hisauthority, the principal is solidarily liable withthe agent if the former allowed the latter to

act as though he had full powers. [Art. 1911,CC]

With person who appointed an agent withhim for a common transaction—

If two or more persons have appointed anagent for a common transaction orundertaking, they shall be solidarily liable tothe agent for all the consequences of theagency. [Art. 1915, CC]

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Chapter V. Extinguishment of Agency

I. EXPIRATION OF THE PERIOD FOR WHICH ITWAS CONSTITUTED

II. DEATH, CIVIL INTERDICTION, INSANITY,INSOLVENCY

III. WITHDRAWAL OF THE AGENTIV. ACCOMPLISHMENT OF THE OBJECT OF THE

AGENCYV. REVOCATIONVI. DISSOLUTION OF THE FIRM/CORPORATION

WHICH ENTRUSTED/ACCEPTED THEAGENCY

Extinguishment of Agency [EDWARD]

1. Expiration of the period for which it wasconstituted

2. Death, civil interdiction, insanity, insolvency3. Withdrawal of the agent4. Accomplishment of the object of the agency5. Revocation6. Dissolution of the firm/corp. Which

entrusted/accepted the agency

I. Expiration of the period for which itwas constituted

If created for fixed period, expiration of theperiod extinguishes agency even if thepurpose was not accomplished

If no time is specified, Art. 1197 shall apply.The courts may fix the period “as under thecircumstances have been probablycontemplated by the parties”.

Period may be implied from terms ofagreement, purpose of agency, and thecircumstances of the parties

II. Death, civil interdiction, insanity,insolvency

Death extinguishes agencyGeneral Rule: Death extinguishes agency

Exceptions:1. Agency coupled with an interest

a. Interest common to principal and agent;or

b. Interest of a 3rd

person who hasaccepted the stipulation in his favor. [Art.1930, CC]

2. Anything done by the agent, withoutknowledge of the death of the principal or ofany other cause which extinguishes theagency, is valid and fully effective withrespect to 3

rdpersons who may have

contracted with him in good faith. [Art. 1931,CC]

3. Agent must finish business already begunon the death of the principal, should delayentail any danger. [Art. 1884, CC]

Obligation of heirs of agent upon agent’sdeath [Art. 1932, CC]—1. They must notify the principal of the agent’s

death2. They should adopt such measures as the

circumstances may demand in the interestof the principal in the meantime.

3. The law does not impose a duty on theprincipal’s heirs to notify the agent of theprincipal’s death. [Rallos vs Felix Go Chan]

III. Withdrawal of the agent

1. General Rule: Agent may withdraw from theagency by giving due notice to the principal[Art. 1928, CC]

But: If the principal should suffer anydamage by reason of the withdrawal, theagent must indemnify him;

Exception: If the agent based his withdrawalupon the impossibility of continuingperformance of the agency without gravedetriment to himself. [Art. 1928, CC]

2. The agent, even if he should withdraw fromthe agency for a valid reason, must continueto act until the principal has had reasonableopportunity to take the necessary steps tomeet the situation. [Art. 1929, CC]

IV. Accomplishment of the object of theagency

Between principal and agent, the fulfilmentof the purpose for which agency wascreated ipso facto terminates agency even ifit be expressly made irrevocable. If thepurpose has not been accomplished, theagency continues indefinitely for as long asthe intent to continue is manifested throughwords or actions of the parties

V. Revocation

Principal may revoke the agency at will as ageneral rule—General Rule:

The principal may revoke the agency at will,and compel the agent to return thedocument evidencing the agency. Such

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revocation may be express or implied. [Art.1920, CC]

Exceptions:1. The right of the principal to terminate the

authority of his agent is absolute andunrestricted, except only that he may not doso in bad faith [Danon v Brimo, 1921]

2. Agency is coupled with an interest [Art.1927, CC]a. A bilateral contract depends upon itb. It is the means of fulfilling an obligation

already contracted;c. Partner is appointed manager of a

partnership in the contract of partnershipand his removal from the managementis unjustifiable.

Note:1. Powers of attorney falling under 1927

cannot be revoked at the pleasure of theprincipal, but may be revoked for a justcause, such as when the attorney-in-factbetrays the interest of the principal.(Coleongco v Claparols, 1964)

2. A mere statement in the power of attorneythat it is coupled with an interest is notenough. In what does such interest consistmust be stated in the power of attorney. (DelRosario v Abad, 1958)

3. Irrevocability of the contract cannot affect3rd persons and is obligatory only on theprincipal who executed the agency. (NewManila Lumber v Republic, 1960)

Revocation may be express or implied1. Express—principal clearly and directly

makes a cancellation of the authority of theagent in writing or orally

2. Implied—a. The appointment of a new agent for the

same business or transaction revokesthe previous agency from the day onwhich notice thereof was given to theformer agent, without prejudice to theprovisions Art. 1921 and Art. 1922, CC[Art. 1923, CC]

b. The agency is revoked if the principaldirectly manages the business entrustedto the agent, dealing directly with thirdpersons. [Art. 1924, CC]

c. A general power of attorney is revokedby a special one granted to another

agent, as regards the special matterinvolved in the latter [Art. 1926, CC]

d. In all three cases, there is impliedrevocation only where the newappointment is incompatible with theprevious one.

When revocation makes principal liable fordamages1. If there is a period stipulated in the agency

contract, the agent may still revoke theagent’s authority at will; but principal will beliable for damages.

2. No period fixed: principal liable if the agentcan prove the former acted in bad faith.

Effect of revocation with respect to 3rd

persons [Arts. 1921-1922,CC]

Agency to contractwith specific

persons

Agency to contractwith general public

Won’t prejudice 3rd

persons until notice isgiven them.

Won’t prejudice thosein good faith & w/oknowledge.

Notice must bepersonal.

Notice must bepublished (Arts. 1873,1922).

Revocation in case of solidary principals[Art. 1925, CC]—

When two or more principals have granted apower of attorney for a common transaction,any one of them may revoke the samewithout the consent of others.

Notice of Revocation as against thirdpersons—1. If agent had general powers:

Revocation DOES NOT prejudice thirdpersons who acted in good faith andwithout knowledge of the revocation

Notice of revocation in a newspaper ofgeneral circulation is a sufficient warningto third persons

2. If agency is for the purpose of contractingspecified persons: to prejudice personsspecified, they must be given actual notice.

VI. Dissolution of the firm/corp. Whichentrusted/accepted the agency

- end of Agency -


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PARTNERSHIPTable of Contents

Chapter I. Nature, Creation, Kinds ofPartnership ...................................................361

I. Essential Features ............................361II. Characteristics ..................................362III. Distinctions........................................362IV. Rules to Determine Existence...........363V. How Partnership is Formed ..............363VI. Partnership Term ..............................363VII. Kinds of Partnerships....................363

Chapter II. Obligations of thePartnership/Partners Among Themselves 366

CRRAMP-LS..............................................366I. Make Contributions as Promised ......366III. Manage the Partnership....................367IV. Render Full Information.....................368V. Account for benefits ..........................368VI. Reimburse expenses ........................368VII. Liable for Partnership Contracts ...368VIII. Solidarily Liable with Partnership.369

Chapter III. Obligations of thePartnership/Partners as to Third Persons.370

LANN .........................................................370I. Operate Under a Firm Name (Art. 1815,CC) 370II. Bound by Partnership Admission......370III. Bound by Notice Partner ...................370IV. Liable for Acts of the Partnership......370

Chapter IV. Rights of Partners...................371I. Share in Losses and Profits ..............371II. Associate Another in His Interest......371III. Access to Partnership Books ............371IV. Obtain Formal Account .....................371V. Property Rights .................................371VI. Convery Real Property (Art. 1819, CC)

372

Chapter V. Rights of the Partnership ........374I. Acquire Immovables..........................374II. Preference of Creditors .....................374

Chapter VI. Dissolution and Winding Up ..375I. Definitions .........................................375II. Causes for Dissolution ......................375III. Consequences of Dissolution ...........375IV. Partner’s Liability...............................376

Chapter VII. Rights of Partners UponDissolution....................................................377

I. Right to Wind Up ...............................377II. Right to Damages for or to ContinueBusiness on Wrongful Dissolution .............377

III. Right to Lien or Retention, to Stand inPlace of Creditor, to be Indemnified ..........377IV. Right of Retiring/Deceased Partner (Art.1841, CC) ..................................................377V. Right of Account (Art. 1842, CC) ......378

Chapter VIII. Rules on Settlement (Art. 1839,CC).................................................................379

Chapter IX. Limited Partnership ................380I. Definition ...........................................380II. Forming/Amending a LimitedPartnership (Art. 1844, CC) .......................381III. Limited Partner..................................382IV. General Partner ................................384V. Dissolution ........................................384VI. Settling Accounts for Dissolution ......385


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Chapter I. Nature, Creation, Kinds ofPartnership

I. ESSENTIAL FEATURESII. CHARACTERISTICSIII. DISTINCTIONSIV. RULES TO DETERMINE EXISTENCEV. HOW PARTNERSHIP IS FORMEDVI. PARTNERSHIP TERMVII. CLASSES OF PARTNERSVIII.KINDS OF PARTNERSHIPS

Art. 1767. By the contract of partnership two ormore persons bind themselves to contributemoney, property, or industry to a common fund,with the intention of dividing the profits amongthemselves.

Two or more persons may also form apartnership for the exercise of a profession.(1665a)

I. Essential Features

1. A mutual contribution of money, property, orindustry to a common fund;

2. With the intention of dividing profits amongthemselves

Note: The object must be for profit andnot merely for common enjoyment;otherwise only a co-ownership has beenformed.

3. The parties must have legal capacity.Exception: corporation cannot become apartner on grounds of public policy.

4. It has a separate juridical personality (Art.1768, CC) apart from the separatepersonality of each of the member.

Note: Associations and societies, whosearticles are kept secret among themembers, and wherein any one of themembers may contract in his own namewith third persons, shall have nojuridical personality, and shall begoverned by the provisions relatingto co-ownership. (Art. 1775, CC)

Although not a juridical entity, it may stillbe sued by third persons under thecommon name it uses. (Sec. 15, Rule 3,Rules of Court)A

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AGENCY & PARTNERSHIP TEAM


Genevieve E. JusiLead Writer

Joyce Anne C. RoldanWriter

CIVIL LAW


ACADEMICS COMMITTEE




Kae Guerrero

DESIGN & LAYOUT



LECTURES COMMITTEE


Heads


Arianne Cerezo


Volunteers

MOCK BAR COMMITTEE

Lilibeth Perez


Dahlia Salamat

LOGISTICS

Charisse Mendoza


Jill HernandezHead


Faye CelsoJoie Bajo

Members


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5. Has a lawful object (Art. 1770, CC)a. A partnership must have a lawful object

or purpose, and must be established forthe common benefit or interest of thepartners.

Note: When an unlawful partnershipis dissolved by a judicial decree, theprofits shall be confiscated in favorof the State, without prejudice to theprovisions of the Penal Codegoverning the confiscation of theinstruments and effects of a crime

II. Characteristics

1. Fiduciary2. Nominate – designated by a specific name3. Consensual – perfected by mere consent4. Bilateral/Multilateral – entered into between

two or more persons5. Principal - existence does not depend on

another contract6. Onerous – money, property or industry must

be contributed1. Preparatory – other contracts essential in

the carrying out of its purposes can beentered into

III. Distinctions

Partnership Corporation

Created by mereagreement of theparties;

Created by operation of law

May be organized byonly two persons

Requires at least 5incorporators;

Juridical personalitycommences fromthe moment ofexecution of thecontract ofpartnership

Personality commences fromSEC’s issuance of thecertificate of incorporation

May exercise anypower authorized bythe partners as longas it is not contraryto law, etc.

Can exercise such powersexpressly granted by law orincident to its existence

If no agreement asto mgt. - everypartner is an agentof the partnership

Power to do business isvested in the board ofdirectors/ trustees

A partner as suchmay sue a co-partner whomismanages

Suit against the board/directorwho mismanages must bebrought in the corp.’s name

Has no right ofsuccession

Has right of succession

The partners areliable personally andsubsidiarily forpartnership debts

The stockholders are liable tothe extent of the sharessubscribed by them

Partnership Corporation

Based on delectuspersonam*

Not based on delectuspersonam

May be establishedfor any period oftime stipulated

May not be formed for aperiod exceeding 50 years

May be dissolved atanytime by the will ofany or all partners

May be dissolved only withthe consent of the state

Governed by theCivil Code

Governed by the CorporationCode

*Delectus personam: the right of partners toexercise their choice and preference as to theadmission of any new members to thepartnership, and as to the persons to be soadmitted, if any.

Partnership Co-ownershipCreation Always

created by acontract

General,created by law,may exist evenwithout acontract

JuridicalPersonality

Has aseparate,distinctjuridicalpersonality

Has no juridicalpersonality

Purpose Realization ofprofits

Commonenjoyment of athing or right

Duration No limitationupon theduration is setby law

An agreementto keep thethingundivided, notexceeding tenyears, shall bevalid. (Art. 494,CC)

Transfer ofInterests

Needunanimousconsent ofpartners tomakeassignee ofinterest apartner

A co-owner candispose of hisshare withoutthe consent ofthe others

Power toact withThirdPersons

A partner maybind thepartnership

A co-ownercan’t representthe co-ownership

Dissolution Death orincapacity of apartnerdissolves thepartnership

Death orincapacity of aco-owner doesnot dissolve theco-ownership

Representa-tion

There ismutual agency

There is nomutual agency


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Partnership Co-ownershipProfits Must be

stipulatedupon

Must alwaysdepend uponproportionateshares and anystipulation tothe contrary isvoid.

IV. Rules to Determine Existence

Art. 1769. In determining whether a partnershipexists, these rules shall apply:1. General Rule: Persons who are not partners

to each other are not partners as to thirdpersons

Exception: partnership by estoppel.

2. Co-ownership or co-possession and sharingof gross returns DO NOT establish apartnership

3. Prima facie evidence of partnership: receiptof a share of the business profits

Except if received in payment as:a. A debt by instalment or otherwise;b. As wages to an employee or rent to a

landlord;c. 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 profitsof the business; and

e. As the consideration for the sale ofgoodwill of a business or other propertyby instalment or otherwise.

V. How Partnership is Formed

1. Form of ContractGeneral Rule: The contract may beconstituted in any form (Art. 1771, CC)

Exceptionsa. Where immovable property or real rights

are contributed (Art. 1771, CC)i. The contract must appear in a public

instrument (1771)ii. It must have an inventory of such

immovable property signed by theparties and attached to theinstrument (1773)

b. Where the capital is at least P3,000, inmoney or propertyi. The contract must appear in a public

instrument which must be recorded

in the Securities and ExchangeCommission (SEC). (Art. 1772, CC)

ii. FAILURE to comply with thisrequirement shall NOT affect theliability of the partnership and themembers to third persons.

VI. Partnership Term

Commencement of the partnership—1. General Rule: A partnership begins from the

moment of the execution of the contract2. Exception: When otherwise agreed upon by

the parties (Art. 1784, CC)

A Partnership may either be for—1. Fixed term or particular undertaking2. at will

Extension of Life of Partnership1. By express renewal of the agreement2. By implied renewal—Requisites:

a. A partnership is for a fixed term orparticular undertaking

b. It is continued after the termination ofsuch term or particular undertakingwithout any express agreemen

Note: Prima facie evidence of continuation—a. Continuation of the business by the

partners without any settlement orliquidation of the partnership affairs(1785)

b. Effect: The rights and duties of thepartners remain the same as they wereat such termination, so far as isconsistent with a partnership at will(1785)

VII.Kinds of Partnerships

As to legality of existence1. De jure – has complied with all the

necessary requisites for lawfulestablishment (Arts. 1772, 1773, CC)

2. De facto – failed to comply with therequisites

As to its object1. Universal (Art. 1777, CC)

a. As to all present property (Art. 1778,CC)—Partners contribute all their properties toa common fund with the intention ofdividing them among themselves as wellas all the profits they may acquire

Includes all properties which belongedto each partner at the time of the


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constitution of the partnership

Partners may stipulate that all may enjoyall other profits made except thoseproperties which may be acquiredsubsequently through inheritance,legacy or donation

b. As to profits (Art. 1780, CC)—Partners contribute all that they mayacquire by their industry or work duringthe existence of the partnership

Does not include properties which eachpartner may possess at the time of thecelebration of the contract

Articles of Universal Partnership—If the Articles of a universal partnershipdo not state its nature, it only constitutesa universal partnership of profits. (Art.1781, CC)

Persons prohibited to enter into a universalpartnership—Those persons who areprohibited from giving donation (Art. 133and 739, CC):a. Between husband and wifeb. Those guilty of adultery or concubinagec. Those guilty of a criminal offense, if the

partnership was entered into inconsideration of the same

d. A person and a public officer (or hiswife, descendants, ascendants) byreason of his office

2. Particular (Art. 1783, CC)—The object may be determinate things, theiruse or fruits, or specific undertaking or theexercise of a profession or vocation.


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As to partners’ liability1. General2. Limited

General LimitedAll partners are generalpartners liable forpartnership obligationspro rata with all theirproperty after exhaustionof partnership assets

Formed by two or morepartners, with one ormore general partnersand one or more limitedpartners

Industrialist Partner v Capitalist PartnerIndustrialist

PartnerCapitalistPartner

Contribution Contributes hisindustry

Contributesmoney orproperty

Prohibition toengage inotherbusiness

Cannot engagein any businessfor himself

Cannotengage inthe same orsimilarenterprise

Profits Receives a justand equitableshare

Shares inprofitsaccording toagreementthereon; ifnone, prorata to hiscontribution

Losses Exempted as tolosses asbetweenpartners but itis liable to 3rdpersons withoutprejudice toreimbursementfrom thecapitalistpartners

1. stipulationas to losses

2. if none,theagreementas to profits

3. if none,pro rata tocontribution

Partnership by Estoppel1. Requisites of “Partner By Estoppel”:

a. The person— represents himself as a partner of

an existing partnership or of two ormore persons not actual partners, or

consents to another representinghim as a partner of an existingpartnership or of two or morepersons not actual partners

b. Third person relied on themisrepresentation, unaware of thedeception.

c. On the faith of the misrepresentation,the 3

rdperson gave credit to the

actual/apparent partnership.d. The person representing or consenting

to the representation is liable: as an actual member if a

partnership liability results pro rata with other persons when no

partnership liability results (Art.1825, CC)

2. No real partnership is created by estoppel. Itis only insofar as 3

rdpersons are involved

and for the purpose of protecting them thatthe principal of estoppel is recognized.

3. As to liability resulting from therepresentation:a. when all the members consent,

partnership obligation resultsb. if not all consent, only a joint obligation

of the one representing and of thosewho consented results

Note: Corporation by estoppel—All persons are liable as general partners(Sec. 21, Corp. Code). A de factopartnership is created.

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Chapter II. Obligations of thePartnership/Partners Among Themselves

I. MAKE THE CONTRIBUTIONS AS PROMISEDII. PAY DAMAGESIII. MANAGE THE PARTNERSHIPIV. RENDER FULL INFORMATIONV. ACCOUNT BENEFITSVI. REIMBURSE EXPENSESVII. LIABILITY FOR PARTNERSHIP CONTRACTSVIII. SOLIDARY LIABILITY WITH PARTNERSHIP

CRRAMP-LS

1. Make Contributions as promised2. Render full information3. Account benefits4. Manage the partnership5. Pay damages6. Liability for partnership contracts7. Solidary liability with partnership

I. Make Contributions as Promised

A partner is a debtor: for whatever he hadpromised to contribute thereto (Art. 1786, CC)

When promised contribution is property: ingeneral1. Partner is a warrantor in case of eviction

with regard to specific and determinatethings he may have contributed (Art. 1786,CC)Note: If breached—

Partnership may recover indemnity fromcontributing partner.

2. Liable for fruits from the time they shouldhave been delivered without need of anydemand (Art. 1786, CC)

3. Other duties of contributing partners:a. to preserve the property with the

diligence of a good father of a family(Art. 1163, CC)

b. to indemnify the partnership fordamages caused to it by delay incontribution of property (Art. 1170, CC)

4. Risk of loss of things contributed (Art. 1795,CC)a. Borne by the partner who owns them—

If they are not fungible, so that onlytheir use and fruits may be for thecommon benefit

b. Borne by the partnership—If the things contributed are:i. fungible;ii. cannot be kept without deteriorating;

iii. if they were contributed to be sold

But in the absence of stipulation, the riskof things brought and appraised in theinventory, shall also be borne by thepartnership, and in such case the claimshall be limited to the value at whichthey were appraised.

When promised contribution is goods— (Art.1787, CC)1. Appraisal must be made in a manner

prescribed in the contract of partnership2. In the absence of stipulation

a. Made by experts chosen by the partnersb. Made by experts chosen by the partners

When promised contribution is immovableproperty— (Art. 1771-1773, CC)1. An inventory of the property is signed by the

parties, and attached to the publicinstrument

2. The public instrument must be filed with theSEC if the capital is more than P3,000.00.

When promised contribution is a sum ofmoney –Sanctions:1. Partner becomes the firm’s debtor for

interest and damages from the time of hisfailure to contribute or from time ofconversion (Art. 1788, CC)

2. When money or property has been receivedby a partner for a specific purpose and helater misappropriated it, such partner isguilty of estafa. (Liwanag v CA, 2008)

Bring to partnership capital credit receivedEqual contribution by general partners:capitalist partners shall contribute equalshares to the capital of the partnership (Art.1790, CC).

Obligation of capitalist partner to contributeadditional capital1. To contribute additional capital in case of

imminent loss, requisites:a. There is an imminent loss of the

businessb. There is a need to contribute additional

capital to save the venturec. Capitalist partner refuses deliberately to

contribute an additional shared. There is no agreement to the contrary

2. If refused to contribute: the partner must sellhis interest in the partnership to the otherpartners (Art. 1791, CC)

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Obligation of managing partner who is also acreditor of the same partnership debtor1. Requisites:

a. 2 separate credits, both demandable,b. one credit is owed to the partnership,c. the other to the collecting partner who’s

a managing partner.2. Managing partner should:

a. If issued receipt for own account only apply the sum to the 2 credits inproportion to their amounts

b. Issued receipt for partnership’s account apply whole sum to partnership’scredit (Art. 1792, CC)

When the partner who has received, in wholeor in part, his share of a partnership credit—Partner shall give to the partnership what hereceived if:1. a debtor made a partial payment of his debt

to the partnership2. a partner received his share of the credit

and the others haven’t3. the debtor later becomes insolvent, (Art.

1793, CC).4. Cf. 1792: in 1793 there’s only 1 debt where

the partnership is the creditor

II. Pay Damages

Liability for damages due to partner’s faultThe damages cannot be compensated withthe profits and benefits he may have earnedfor the partnership by his industry (Art.1794, CC).

Mitigation of liabilityThe courts may equitably lessen hisresponsibility if through his extraordinaryefforts in other activities unusual profits havebeen realized (Art. 1794, CC)

Before a partner may sue another foralleged fraudulent management andresultant damages, a liquidation must firstbe effect to determine the extent of thedamage. Without liquidation of partnershipaffairs, partner cannot claim damages.(Soncuya v. De Luna)

III. Manage the Partnership

General Rules1. Right of management is primarily governed

by agreement of the partners as provided inthe articles of partnership (Art. 1800, CC)

2. Right to manage may either be:a. exercised by all the partners, orb. limited to a certain number of partners

called managing partners

If a specific person has been appointed asmanager (Art. 1800, CC)—1. If right is conferred in the articles of

partnershipa. Manager may execute all acts of

administration despite the opposition ofother partners unless he is in bad faith

b. Power is irrevocable without just orlawful cause.

Note: The vote of the controllinginterest of the partners is necessaryfor revocation.

2. If power is granted after constitution ofpartnership, it may be revoked at anytime

If two or more partners are appointed asmanagers—1. Without specification of their duties or

without a stipulation of how each one willact-- (Art. 1801, CC)a. Each one may separately execute all

acts of administrationb. If opposed, decision of majority prevailsc. In case of a tie, the matter is to be

decided by the controlling interest.2. If there is a stipulation that managers must

act jointly (Art. 1802, CC)a. The concurrence of all managers is

necessary for validity of the actsb. Their absence or disability cannot be

alleged as a defense unless there isimminent danger or grave or irreparableinjury to the partnership.

If the manner of management has not beenagreed upon (Art. 1803, CC)—1. All partners are considered agents and the

act of anyone bind the partnership withoutprejudice to Art. 1801

2. To make important alterations in theimmovable property of the partnership, evenif useful, need the consent of all the partners

If refusal to give consent is manifestlyprejudicial to the partnership, the court’sintervention may be sought

Every partner is considered an agent (Art.1818, CC)—General Rule:

Every partner is considered an agent of thepartnership for the purpose of its businessand any act of the agent for apparently


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carrying on the usual business of thepartnership binds the partnership.

Exception:If the partner has no authority to act; ANDthe third person dealing with him knew thatthe partner had no authority

If the acts are not for carrying out thebusiness of the partnership—(Art. 1818, CC)General Rule:

Acts of the partner not apparently forcarrying out the business of the partnershipdo not bind the partnership.

Exceptions:When authorized by other partners; OR other

partners have abandoned the business

Acts not usual in the business of partnership(Art. 1818, CC) [ADD-CRES]—1. Assign the partnership property in trust for

creditors or on the assignee's promise topay the debts of the partnership;

2. Dispose of the good-will of the business;3. Do any other act which would make it

impossible to carry on the ordinary businessof a partnership;

4. Confess a judgment;5. Renounce a claim of the partnership.6. Enter into a compromise concerning a

partnership claim or liability;7. Submit a partnership claim or liability to

arbitration;

IV. Render Full Information

Duty to give information:1. On demand, to give true and full information

of all things affecting the partnership to anypartner or their legal representatives (Art.1806, CC).

2. Voluntary disclosure of material facts withinhis knowledge relating to/affectingpartnership affairs (Art. 1821, CC).

V. Account for benefits

Duty to account (Art. 1807, CC)—Every partner must:1. Account to the partnership for any benefit;

AND2. Hold as trustee for it any profits derived by

him without the consent of the other partnersfrom any transaction connected with theformation, conduct or liquidation of thepartnership

VI. Reimburse expenses

The partnership is responsible to everypartner for:1. Amounts disbursed on behalf of the

partnership plus interest from the time theexpense is made

2. Obligations contracted in good faith in theinterest of the business

3. Risks in consequence of management

VII.Liable for Partnership Contracts

Liability of partnership and partners forpartnership contracts-- (Art. 1816, CC)1. All partners shall be liable pro rata with all

their property but—The private property of the partnerscannot be seized for satisfaction ofpartnership debts until all thepartnership assets have been exhausted

2. For the contracts which may be entered into:a. in the name and for the account of the

partnershipb. under its signature andc. by a person authorized to act for the

partnership.

The exemption of an industrial partner frompaying losses relates exclusively to thesettlement of the partnership affairs among thepartners themselves, and not to the partners’subsidiary liability to 3

rdpersons (La Compania

Maritima v Munoz, 1907).

While the liability of the partners is joint intransactions entered into by the partnership, a3

rdperson who transacted with the partnership

can hold partners solidarily liable for the wholeobligation if the 3

rdperson’s case falls under

Arts. 1822-1823 (Muñasque v. CA, 1985)

However, any party may enter into a separateobligation to perform a partnership contract.(Art. 1816, CC)

Stipulation against pro-rata liability void—1. General Rule: Stipulation against pro rata

liability is void2. Exception:such stipulation is valid among

the partners (Art. 1817, CC)

Art. 1817 vs. 1799—it is permissible to stipulate among partnersthat a capitalist partner will be exemptedfrom liability in excess of the original capitalcontributed; but won’t be exempted insofaras his capital is concerned (Paras).


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Liability of a newly-admitted partner—1. Obligations contracted before his admission:

liable only up to his share in the partnershipproperty unless there’s a contrary stipulation(Art. 1826, CC).

2. Obligations contracted after admission:liable as an ordinary original partner

Liability of outgoing partner—1. When he gives notice of his retirement or

withdrawal, he’s freed from liability oncontracts entered into thereafter but stillliable on existing incomplete contracts

2. He is liable for goods sold and deliveredafter his retirement/withdrawal if the salewas pursuant to a contract made beforesuch retirement/withdrawal

VIII. Solidarily Liable with Partnership

The partnership and the partner are solidarilyliable in the following cases—1. Vicarious liability, requisites:

a. the partner committed a wrongfulact/omission;

b. he acted in the ordinary course of thepartnership business or with theauthority of the co-partners even if theact wasn’t connected with thepartnership business;

c. loss/injury is caused to a 3rd

person bythe wrongful act/omission;

d. 3rd

person is not a partner (Art. 1822,CC);

2. Misappropriation of one partner (Art. 1824,CC)a. partner acts within the scope of his

apparent authorityb. when partner in the course of business,

receives money or property and thesame is misapplied by the partner whilein the custody of the said partner.

Exceptions are without prejudice to the guiltypartner being liable to the other partners, but asfar as third partners are concerned, thepartnership is answerable.

Liability for money misappropriated covers—1. Interest2. Damages

Extent of liability—firm is liable to the same extent as thepartner (Art. 1822, CC) and all partners aresolidarily liable with the firm (Art. 1824, CC)

The liability of partners under the Workmen’sCompensation Act also solidary. If theirresponsibility was merely joint and one becameinsolvent, the amount awarded would only bepartially satisfied, which is contrary to the law’spurpose (Liwanag v. Workmen’sCompensation Commission, 1959)

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Chapter III. Obligations of thePartnership/Partners as to Third Persons

I. OPERATE UNDER A FIRM NAMEII. BOUND BY PARTNERSHIP ADMISSIONIII. BOUND BY NOTICE TO PARTNERIV. LIABLE FOR ACTS OF THE PARTNERSHIP

LANN

1. Liable for acts of the Partnership2. Bound by partnership Admission3. Operate under a Firm name4. Bound by Notice to partner

I. Operate Under a Firm Name (Art.1815, CC)

The firm name may or may not include the nameof one or more of the partners.

Persons, not being members of the partnership,who include their names in the firm name, areliable as partners (Art. 1825, CC)

Use of deceased partner’s name in law firm—permissible as long as it’s indicated in the firm’scommunications that the partner is deceased(Rule 3.02, CPR)

Limited partner’s surname shall not appearin the firm name unless—1. It is also the surname of a general partner2. Before the limited partner became such, the

business had been carried on under a namein which his surname appeared (Art. 1846,CC)

II. Bound by Partnership Admission

Requisites to be admissible against thepartnership—1. it must be connected with partnership affairs2. it is within the scope of the partner’s

authority (Art. 1820, CC)3. it is made during the firm’s existence

Exception: when a partner makesadmissions for himself only withoutpurporting to act for the partnership

Admission by a former partner not admissible inevidence against the partnership. (Congco vs.Trillana, 1909)

III. Bound by Notice Partner

Notice to the partner relating partnershipaffairs

Knowledge acquired by a partner who isacting in a particular matter (acting partner),acquired while he was still a partner or thenpresent in his mind

Knowledge of a partner who reasonablycould and should have communicated it tothe acting partner (Art. 1821, CC)

Exception: In case of fraud on thepartnership, committed by or with theconsent of the partner (Art. 1821)

IV. Liable for Acts of the Partnership

All partners, including the industrial partner,are liable pro rata with their own propertiesafter partnership properties have beenexhausted (Art. 1816, CC)—1. General Rule: liability is joint2. However, liability is solidary in the following:

a. Wrongful acts and omissions causingloss to a non-partner.

b. Conversion or misappropriation of fundscommitted in the usual course ofbusiness or consented to by all partners

Any stipulation against this liability is void asagainst third persons but valid among thepartners (Art. 1817, CC)

An industrial partner is liable to third personsbut as between the partners, he is not liablefor losses (Art. 1797, CC)

Partners are individually liable afterpartnership assets are exhausted

Contracts for which partners are liable prorata with their individual property—1. those entered into in the name and account

of the partnership2. entered into under its signature3. entered into by a person authorized to act

for the partnership Exception: partner may enter into a

separate obligation to perform apartnership contract.

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Chapter IV. Rights of Partners

I. SHARE IN LOSSES AND PROFITSII. ASSOCIATE ANOTHER IN HIS SHAREIII. ACCESS PARTNERSHIP BOOKSIV. OBTAIN FORMAL ACCOUNTV. PROPERTY RIGHTSVI. CONVEY REAL PROPERTY

BASCOP1. Access to partnership Books2. Associate another in his share3. Share in losses and profits4. Convey real property5. Obtain formal account6. Property rights

I. Share in Losses and Profits

The distribution shall be in conformity with theagreement. (Art. 1797, CC)

PROFITS LOSSESWithagreement

According toagreement

According toagreement

Withoutagreement

1. Share ofcapitalist partneris in proportionto his capitalcontribution

2. Share ofpurely industrialpartner is notfixed - as maybe just andequitable underthecircumstances

1. If sharing ofprofits isstipulated - applyto sharing oflosses

2.If no profitsharingstipulated -losses shall beborne accordingto capitalcontribution

3.Purelyindustrial partnernot liable forlosses

If the partners agreed to entrust to a thirdperson the designation of the share in profitsand losses (Art. 1798, CC)— Designation may only be impugned if

manifestly inequitable Even if manifestly inequitable, the

designation cannot be impugned in thefollowing instances:a. The aggrieved partner has already

begun to execute the decisionb. If he has not impugned within three

months from the time he had knowledgeof it

Stipulation excluding one or more partners fromany share in the profits or losses is void. (Art.1799, CC)

II. Associate Another in His Interest

Every partner may associate another personwith him in his share, but the associate shall notbe admitted into the partnership without theconsent of all the other partners, even if thepartner having an associate should be amanager. (Art. 1804, CC)

III. Access to Partnership Books

Partnership books: open to inspection of all thepartners at a reasonable hour (Art. 1805, CC).

The books shall be kept at:1. The place agreed upon2. If without agreement, at principal place of

business (Art. 1805, CC)

Reasonable hours on business days throughoutthe year, not merely during some arbitrary periodof a few days chosen by the managing partners(Pardo v. Lumber Co., 1924)

IV. Obtain Formal Account

Any partner shall have the right to a formalaccount as to partnership affairs—1. If he is wrongfully excluded from the

business/possession of the property by hisco-partners

2. If the right exists by agreement3. When the partner derives any profit as

provided in Art. 18074. Whenever other circumstances render it just

and reasonable (Art. 1809, CC)

The right of a partner to demand an accountingexists as long as the partnership exists. Theprescription period begins to run only upon thedissolution when the final accounting is done(Fue Leung v. IAC,1989).

V. Property Rights

Property rights (Art. 1810, CC)—1. In the specific partnership property2. In the partnership, and3. To participate in the management


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Partnership capital vs. partnershipproperty—Capital PropertyWith a constant value Value varies, in

accordance with marketvalue

Includes only the actualcapital contributed andpromised to thepartnership

Includes the contributionand all property lateracquired on thepartnership’s account

Partners are co-owners of specificpartnership property: the incidents are—1. A partner has an equal right with his co-

partners to possess specific property forpartnership purposes if excluded from this, can seek a formal

accounting (Art. 1809, CC) or judicialdissolution (Art. 1831, CC)

2. A partner’s right in specific property can’t beassigned except when all partners assigntheir rights in that property

3. A partner’s right in specific property is notsubject to attachment/execution except on aclaim against the partnership

4. A partner’s right in specific property is notsubject to support payment (Art.1811, CC)

Property used by the partnership: a partnermay—1. contribute only the use of property2. allow partnership to use his separate

property3. hold the title to partnership property in his

own name without having it belong to him

Property acquired by a partner withpartnership funds—General Rule: partnership propertyExceptions:1. contrary intention appears2. property was acquired after dissolution but

before winding up

Partner’s interest in the partnership—his share in the profits and surplus (Art. 1812,CC). This may be assigned, attached, subject topayment of support as there was already aliquidation of the partnership affairs. Theassignee is only entitled to the profits assigned.

Conveyance of partner’s entire interest—It does not dissolve the partnership (Art. 1813,CC)

Rights of thetransferee orassignee

What assigneescannot do

To receive inaccordance with hiscontract the profitsaccruing to theassigning partner

Interfere in themanagement;

To avail of the usualremedies provided bylaw in the event offraud in themanagement

Require any informationor account

To receive theassignor’s interest incase of dissolution;may require an accountfrom the date only ofthe last account agreedto by all the partners.

Inspect any of thepartnership books.

Enforcement of a judgment vs. a debtor-partner’s interest (Art. 1814, CC)—The judgment creditor may:1. Apply for an order charging the partner’s

interest with payment of the unsatisfiedamount of the final judgment with interest

2. Have a receiver appointed3. Have the court make an order as the

circumstances render it necessary

Redemption—A partner or more may redeem the interestcharged at any time before the foreclosure with:1. their separate property2. with partnership property, with the consent

of all partners whose interests are notcharged/sold (Art. 1814, CC)

VI. Convery Real Property (Art. 1819, CC)

Title inpartnershipname:Any partner

may conveyunderpartnershipname

Conveyance passes title butpartnership can recover unless:1. The partner who sold it

was carrying on in theusual way the business ofthe partnership hencebinding the partnership; or

2. Buyer had no knowledgeof the lack of authority ofthe seller

Title inpartnershipname:Conveyance inpartner's name

Conveyance does not pass titlebut only equitable interest.Provided that: The partner whosold it was carrying on in theusual way the business of thepartnership hence binding thepartnership


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Title in thename of one ormore but not allthe partners andthe record doesnot disclose theright of thepartnership -The partners inwhom the titlestands mayconvey

Conveyance passes title butpartnership can recover unless:1. he partner who sold it was

carrying on in the usualway the business of thepartnership hence bindingthe partnership; or

2.3. Buyer had no knowledge

of the lack of authority ofthe seller

Title in thename of one ormore or allpartners or inthird person intrust for thepartnership -Conveyance inpartner's nameor in partner’sname

Conveyance does not pass titlebut only equitable interest.Provided that: The partner whosold it was carrying on in theusual way the business of thepartnership hence binding thepartnership

Title in thenames of all thepartners –Conveyance byall partners

Passes all their rights in suchproperty

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Chapter V. Rights of the Partnership

I. ACQUIRE IMMOVABLESII. PREFERENCE OF CREDITORS

I. Acquire Immovables

An immovable property or any interesttherein may be acquired in the partnershipname, and title so acquired can only beconveyed in the partnership name (Art.1774, CC).

Cf Art. 1819: see table

II. Preference of Creditors

Preference: partnership creditors preferredto creditors of individual partners (Art. 1827,CC).

Remedy of private creditors of partners:seek the attachment/public sale of theshares

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Chapter VI. Dissolution and Winding Up

I. DEFINITIONSII. CAUSES FOR DISSOLUTIONIII. CONSEQUENCES OF DISSOLUTIONIV. PARTNER’S LIABILITY

I. Definitions

Dissolution (Art. 1828, CC)—Change in the partners’ relation caused byany partner ceasing to be associated in thecarrying on of the business

Winding Up (JBL Reyes)—Process of liquidation of partnership affairs,between dissolution and termination

Termination (JBL Reyes)—When all the affairs of the partnership areliquidated and the partnership is definitelyended. It is the final settlement of accountsof the partnership

Effect of dissolution—Partnership continues until winding up iscompleted (Art. 1829, CC).

Effect of dissolution on the partners—1. they cannot evade prior obligations2. Generally, they are spared from new

obligations to which they didn’t consent,unless these are essential for the winding up(Testate Estate of Mota v. Serra, 1925)

II. Causes for Dissolution

Voluntary—1. without violation of the agreement between

the partners (Art. 1830, CC)a. termination of the term or particular

undertakingb. express will of any partner in good faith,

when the partnership is at willc. express will of all partners who have not

assigned their interests or suffered themto be charged

d. bona fide expulsion of any partner inaccordance with the agreement

2. in contravention of the agreement, byexpress will of one partner effects – partner is liable for damages;

other partners may continue thebusiness

Involuntary (Grounds)—1. business becomes unlawful2. specific thing promised perishes before

delivery to the partnership, the use and

enjoyment of which has been transferred tothe partnership

3. death of a partner4. insolvency of any partner or the partnership5. civil interdiction of any partner

Judicial—1. Decree of court upon application (Art. 1831,

CC)a. application by partner (grounds)

insanity of any partner incapacity of any partner to perform

his part of the contract partner guilty of conduct prejudicial

to the partnership business wilfull breach of agreement by any

partner business can only be carried out

with lossb. application by purchaser of partnership

interest may be allowed in the followingcases: termination of term or undertaking partnership is at will and interest of

partnership is assigned

III. Consequences of Dissolution

Except as necessary for winding up, dissolutionterminates all authority of the partners to act forthe partnership (Art. 1832, CC)

Partnership is not bound by any act of apartner when—1. dissolution is not by the act, insolvency or

death of a partner2. dissolution is by such act, insolvency or

death and the partners acting haveknowledge thereof

3. acts not connected with winding up

Partnership is not bound with respect tothird persons (Art. 1834, CC)—1. business becomes unlawful2. partner dealing with third party becomes

insolvent3. partner has no authority to wind up

Partner can bind the partnership even afterdissolution (Art. 1834, CC)—1. acts appropriate to winding up2. third person is in good faith and without

knowledge of dissolution:a. third person who extended credit to the

partnershipb. third person who knew the existence of

the partnership

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IV. Partner’s Liability

If partner transacts business with thirdpersons notwithstanding death or insolvencyof a co-partner, liability shall be satisfied outof partnership assets alone if—1. Partner was unknown as partner to third

person2. Partner is unknown and inactive in

partnership affairs

A partner still has existing liabilities to thepartnership at the time of the dissolution(Art. 1835, CC)—1. Dissolution does not discharge a partner2. Discharged only by agreement among

partner, creditor and the person orpartnership continuing the business

3. In case of death: Individual property is liable for obligation

of the partnership incurred while he wasa partner, subject to prior payments ofindividual debts.

Liability of partner or partnership continuingthe business (Art. 1840,CC)—1. Contemplates seven situations:

a. When any partner is admitted into anexisting partnership

b. When any partner retires and assignshis rights in partnership property to twoor more partners or third persons

c. When all but one partner retire andassign their rights to the remainingpartner

d. Any partner retires or dies without anyassignment of his right in partnershipproperty

e. All the partners or their representativesassign their rights in partnershipproperty to one or more third personswho promise to pay the debts and whocontinue the business of the dissolvedpartnership

f. Any partner wrongfully causes adissolution

g. When a partner is expelled

2. When applicable: a partnership is dissolveddue to change in membership but theremaining partners continue the businesswithout liquidation.

3. Effect: unpaid old creditors of the dissolvedpartnership automatically become creditorsof the new partnership.

4. New partner’s liability: satisfied out ofpartnership property only, unless with acontrary stipulation

5. Not only the retiring partners but also thenew partnership itself which continued thebusiness of the dissolved one, are liable forthe debts of the prior partnership. Awithdrawing partner remains liable to a 3

rd

party creditor of the old partnership(Singsong vs. Isabela Sawmill, 1979).

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Chapter VII. Rights of Partners UponDissolution

I. RIGHT TO WIND UPII. RIGHT TO DAMAGES FOR/TO CONTINUE

BUSINESS ON WRONGFUL DISSOLUTIONIII. RIGHT TO LIEN OR RETENTION, TO STAND

IN PLACE OF CREDITOR, TO BEINDEMNIFIED

IV. RIGHT OF RETIRING/DECEASED PARTNERV. RIGHT TO ACCOUNT

I. Right to Wind Up

Who has the right to wind up?1. By agreement2. If there is no agreement—

a. Partners who have not wrongfullydissolved the partnership

b. The legal representative of the lastsurviving partner, not insolvent

Any partner, his legal representative or hisassignee, upon cause shown, may obtainwinding up by the court.

II. Right to Damages for or to ContinueBusiness on Wrongful Dissolution

General Rule—1. Each partner may have the partnership

property applied to the payment of the firm’sdebt

2. Surplus is applied to payment in cash of thenet amount owed to the respective partners

Each partner who has not causeddissolution wrongfully shall have the right, asagainst each partner who has caused thedissolution wrongfully, to damages forbreach of the agreement.

The partners who have not caused thedissolution wrongfully, if they all desire tocontinue the business in the same nameeither by themselves or jointly with others,may do so, during the agreed term for thepartnership and for that purpose maypossess the partnership property, provideda. they secure the payment by bond

approved by the court, orb. pay any partner who has caused the

dissolution wrongfully, the value of hisinterest in the partnership at thedissolution, less any damagesrecoverable

c. In like manner indemnify him against allpresent or future partnership liabilities.

A partner who has caused the dissolutionwrongfully shall have the right to—1. If the business is not continued—

a. Each partner may have the partnershipproperty applied to the payment of thefirm’s debt

b. Surplus is applied to payment in cash ofthe net amount owed to the respectivepartners subject to payment of damages

2. If the business is continued—a. the right as against his co-partners and

all claiming through them in respect oftheir interests in the partnership,

b. to have the value of his interest in thepartnership, less any damage caused tohis co-partners by the dissolution,ascertained and paid to him in cash, orthe payment secured by a bondapproved by the court,

c. to be released from all existing liabilitiesof the partnership; but in ascertainingthe value of the partner's interest thevalue of the good-will of the businessshall not be considered.

III. Right to Lien or Retention, to Stand inPlace of Creditor, to be Indemnified

Where a partnership contract is rescindedon the ground of the fraud ormisrepresentation of one of the partiesthereto, the party entitled to rescind is,without prejudice to any other right, entitled:a. To a lien on, or right of retention of, the

surplus of the partnership property aftersatisfying the partnership liabilities tothird persons for any sum of money paidby him for the purchase of an interest inthe partnership and for any capital oradvances contributed by him;

b. To stand, after all liabilities to thirdpersons have been satisfied, in theplace of the creditors of the partnershipfor any payments made by him inrespect of the partnership liabilities; and

c. To be indemnified by the person guilty ofthe fraud or making the representationagainst all debts and liabilities of thepartnership.

IV. Right of Retiring/Deceased Partner(Art. 1841, CC)

Factual Situation—1. any partner retires or dies, and2. the business is continued without any

settlement of accounts as between him or

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his estate and the person or partnershipcontinuing the business

Rights—1. he or his legal representative as against

such person or partnership may have thevalue of his interest at the date of dissolutionascertained

2. either:a. receive as an ordinary creditor an

amount equal to the value of his interestin the dissolved partnership withinterest; or,

b. at his option or at the option of his legalrepresentative, receive in lieu of interest,the profits attributable to the use of hisright in the property of the dissolvedpartnership;

The provision shall not apply if there is anagreement between the parties.

V. Right of Account (Art. 1842, CC)

The right to an account of his interest shallaccrue to any partner, or his legalrepresentative as against—1. the winding up partners or the surviving

partners or2. the person or partnership continuing the

business,

When right accrues—At the date of dissolution, in the absence ofany agreement to the contrary.

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Chapter VIII. Rules on Settlement (Art.1839, CC)

The rules for distribution will not apply if there isa contrary agreement between the partners.

Rule of preference in the payment ofpartnership liabilities—1. those owed to creditors other than partners2. those owed to partners other than capital

and profits3. those owed to partners in respect of capital4. those owed to partners in respect of profits

When assets are insufficient to satisfyliabilities—1. If refuses to contribute – a petition in court

may be filed for its enforcement.2. If partner is dead – contribution may be

enforced against his private propertythrough the administrator

Doctrine of Marshalling of Assets—If there are claims over both partnership assetsand partners’ individual properties, both incustody of the court for distribution:1. Partnership creditors are preferred with

regard to partnership property2. Individual creditors are preferred with

respect to individual properties of partners.3. Anything left from either goes to the other.

Order in case of insolvency of a partner orhis estate (in case of death)—1. Separate creditors2. Partnership creditors3. Partners who gave contributions

Liquidation needed—The business profits can’t be determined bytaking into account the result of 1 transactioninstead of all the transactions had, thus the needfor a general liquidation before a partner mayclaim a specific sum as his share of the profits(Sison v. McQuaid, 1953).

No return of shares without dissolution andliquidation—Because the firm’s outside creditors havepreference over the firm’s assets and the firm’sproperty can’t be diminished to their prejudice(Magdusa v. Albaran, 1962).

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Chapter IX. Limited Partnership

I. DEFINITIONII. FORMING/AMENDING A LIMITED

PARTNERSHIPIII. LIMITED PARTNER

A. CONTRIBUTIONB. LIABILITIES OF A LIMITED PARTNER

1. TO THE PARTNERSHIP2. AS TRUSTEE FOR THE

PARTNERSHIP3. LIABILITIES TO PARTNERSHIP

CREDITORS AND OTHERPARTNERSi. CONTRIBUTES SERVICESii. SURNAME IN FIRM NAMEiii. FALSE STATEMENTiv. CONTROL OF BUSINESSv. PROHIBITED TRANSACTIONSvi. NON-COMPLIANCE WITH

REQUISITES FORFORMATION

4. LIABILITIES TO SEPARATECREDITORS

C. RIGHTS OF LIMITED PARTNERS1. COMMON RIGHTS OF LIMITED

AND GENERAL PARTNERS2. LOAN MONEY AND TRANSACT

BUSINESS3. RETURN OF CONTRIBUTION4. SHARE OF PROFITS5. ASSIGN INTERESTS6. EFFECT OF DEATH OF A LIMITED

PARTNER7. PERSON ERRONEOUSLY

BELIEVING HE’S A LIMITEDPARTNER

IV. GENERAL PARTNERV. DISSOLUTIONVI. SETTLING OF ACCOUNTS AFTER

DISSOLUTION

I. Definition

Limited Partnership1. formed by two or more persons;2. in accordance with the requirements of law;

and3. composed of one or more general partners

and one or more limited partners (Art. 1843,CC).

Limited partners are not bound by thepartnership’s obligations (Art. 1843, CC).

Characteristics—1. Complied with the statutory requirement of

form (Art. 1844 CC)2. The business is controlled by one or more

general partners who are personally liable tocreditors (Arts. 1848, 1850 CC)

3. One or more limited partners contribute tothe capital and share in the profits but do notmanage the business

4. The limited partners are not personally liablefor obligations beyond their contribution(Arts. 1845, 1848, 1856 CC)

5. Obligations or debts are paid out ofpartnership assets and the general partner’sseparate assets

6. Limited partners may get back their capitalcontributions subject to conditionsprescribed by law (Arts. 1844, 1857 CC)

Advantages of limited partnerships—1. For general partners: secure capital from

others while retaining control andsupervision of the business

2. For limited partners: share in the profitswithout the risk of personal liability

GeneralPartner

Limited Partner

Extent ofliability

Personallyliable forpartnershipobligations

Only to theextent of hiscapitalcontributions

Right toparticipate inmanagement

If manner ofmgt. not agreedupon, allgeneralpartners havean equal right inbusiness mgt

No participationin management

Contribution Cash, propertyor industry

Cash orproperty only,not industry

Proper partytoproceedingsby or againstthepartnership

Proper party toproceedingsby/againstpartnership

Not proper partyto proceedingsby/againstpartnershipunless:1. he is also ageneral partner2. where theobject of theproceedings isto enforce alimited partner'sright against orliability to thepartnership

Name in firmname

Name mayappear in firmname

Name mustappear in firmname


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GeneralPartner

Limited Partner

Prohibition toengage inotherbusiness

Prohibited No prohibition

Effect ofretirementdeath insanityor insolvency

Dissolves thepartnership

Different effect;rightstransferred tolegal rep.

Assignabilityof interest inpartnership

Not assignable Assignable

GeneralPartnership

LimitedPartnership

Creation May be constitutedin any form, exceptwhere immovableproperty or realrights arecontributed, apublic instrumentshall be necessary

Partners must:(1) Sign and swearto a certificatewhich shall statethe itemsenumerated in Art.1844 and

(2) File for recordthe certificate in theOffice of theSecurities andExchangeCommission

Composition

Only generalpartners

1/more generalpartners and1/more limitedpartners

Firmname

Must contain theword “Company”(SEC Memo Circ.#14-00) unless it’sa professionalpartnership

Every partnershipshall operate undera firm name, whichmay or may notinclude the name ofone or more of thepartners.

Name must includethe word “Limited”(SEC Memo Circ.#14-00)

The surname of alimited partner shallnot appear in thepartnership nameunless:

(1) It is also thesurname of ageneral partner, or

(2) Prior to the timewhen the limitedpartner becamesuch, the businesshas been carried onunder a name inwhich his surnameappeared.

GeneralPartnership

LimitedPartnership

Dissolution andWindingUp

Rules governingare Art. 1828-1842

Rules governingare Art. 1860-1863

II. Forming/Amending a LimitedPartnership (Art. 1844, CC)

Two or more persons desiring to form apartnership shall—1. Sign and swear to a certificate which shall

state the following items enumerated in Art.1844

2. File for record the certificate in the Office ofSecurities and Exchange Commission

A limited partnership is formed if there has beensubstantial compliance in good faith with Art.1844

When the cert. of partnership may beamended (CSAAG – CFCTM)—1. Change in partnership name or in the

amount/character of contribution of anylimited partner

2. Substitution of a limited partner3. Additional limited partner is admitted4. Admission of a general partner5. General partner retires, dies, becomes

insolvent or insane, or under civil interdictionand the business is continued:a. Under a right so to do stated in the

certificate, orb. With the consent of all members

6. Change in the character of business7. False/erroneous statement in the cert.8. Change in the time as stated in the cert. for

the dissolution of the partnership or return ofa contribution

9. Time is fixed for dissolution or return of acontribution

10. The Members want to change a statement inthe cert. to make it more accurate (Art.1864, CC)

Requirements to amend—1. Must be in writing, under oath, and set forth

clearly the change desired2. Signed and sworn to by all the members,

including the new members and assigningmembers

3. The cert., as amended, must be filed in theSEC (Art. 1865, CC)


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When the certificate shall be cancelled—1. When the partnership is dissolved2. When all limited partners cease to be such

(Art. 1864, CC)

Requirements to cancel—1. Must be in writing2. Signed by all the members3. Filed with the SEC; if cancellation is court-

ordered, a certified copy of the order shallalso be filed (Art.1865, CC)

III. Limited Partner

Who may be limited partners—1. A partnership – no2. A general partnership may be changed into

a limited one, and a partner in the formergeneral partnership may be a limited partnerin the limited partnership formed.

Contribution—May be cash or property, but not services.

Liabilities of a Limited Partner—General rule: He is not liable as a generalpartner. His liability is limited to the extent ofhis contribution to the partnership.

Liabilities to the partnership (Art. 1858, CC)—1. Difference between his actual contribution

and that stated in the certificate as havingbeen made

2. Unpaid contributions which he agreed tomake at specified future time and on theconditions stated in the certificate

Liabilities as Trustee for the Partnership1. Specific property which he committed but

did not contribute, or which he contributedbut was wrongfully returned to him

2. Money or property wrongfully paid orconveyed to him

Liabilities of a limited partner can be waivedor compromised only by the consent of allthe members. However, this too shall notaffect the right of the creditor who:a. Extended credit; orb. Whose claim arose after the filing and

before a cancellation or amendment ofthe certificate.

Even if a limited partner rightfully receivedback his contribution to capital, he remainsliable to the partnership for any sumnecessary to discharge the liabilities of thepartnership to creditors who:a. Extended credit or

b. Whose claims arose before such return.Liabilities to partnership creditors and otherpartners—1. Contributes services (Art. 1845, CC); Effect

a. The limited partner:o Will be considered an industrial and

general partner; oro If the certificate states that he’s a

limited partner, he will be a generalpartner and limited partner at thesame time.

b. He divests himself of the privilege oflimited liability and will be exposed to allthe liabilities of a general partner.

2. Surname in firm name (Art.1846, CC)General rule: the surname of a limitedpartner shall not appear in the partnershipname

If used in firm name, he is liable as ageneral partner to creditors who didnot know that he is not a generalpartner.

3. False statement (Art. 1847, CC)If a person suffers loss by reliance on thefalse statement in the certificate, he mayhold liable any party to the certificate whoknew the statement to be false:a. At the time he signed the certificate, orb. Subsequently but within a sufficient time

before the reliance to enable him toamend or cancel the certificate

4. Control of business (Art. 1848, CC)a. He becomes liable as a general partner

without acquiring the rights of one.b. Control here contemplates active

participation in the business and not justhaving the option to exercise control.

5. Prohibited Transactions (Art. 1854, CC)a. Prohibited transactions of limited

partners: Receiving or holding as collateral

security any partnership property Receiving any payment,

conveyance, or release from liabilityif it will prejudice the rights of 3

rd

personsb. If prohibited acts are performed

Presumption of fraud on thecreditors.

But the law does not absolutelyprohibit the taking as collateralsecurity of the property, as theprohibitions are modified by therequirement of sufficient assets todischarge the partnershipobligations.


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6. Non-compliance with requisites for formation(Art. 1844 par.2, CC)If there is no substantial compliance:

The partnership becomes a generalpartnership with respect to 3

rd

persons The members are liable as general

partners.

Liabilities to separate creditors—1. Right of creditors of a limited partner to

petition a court of competent jurisdiction to:a. Charge the interest of the indebted

limited partner with the payment of theunsatisfied amount of the claim

b. Appoint a receiver to preserve theinterest

c. Make all other orders as thecircumstances would require

2. The interest may be redeemed with theseparate property of any general partner butnot with partnership property. (Art. 1862,CC) This is different from the rule in general

partnership where the interest can alsobe redeemed with partnership property.(Art. 1814, CC)

Rights of Limited Partners—1. Common rights of limited and general

partners (Art. 1851, CC)a. Demand that partnership books be kept

at the principal place of businessb. Inspect and copy any of the booksc. Demand true and full info of all things

affecting the partnershipd. Demand a formal account whenever

circumstances render it just andreasonable

e. Resort to the court for the dissolutionand winding up of the business

f. Receive a share of the profits or othercompensation by way of income

g. Demand the return of his contributionprovided assets are more than theliabilities

2. Loan money and transact business (Art.1854, CC)a. Limited partner allowed to loan money,

transact business because therelationship between the limited partnerand partnership is not based on trustand confidence. There is no conflict ofinterests.

b. Unless he is also a general partner, heis entitled to a pro rata share of thepartnership assets together with thegeneral creditors.

3. Return of contribution (Art.1857,CC)a. Conditions for return:

All liabilities to non-partner creditorshad been paid, or there aresufficient assets to satisfy them, or

All members consent, unless thelimited partner desiring the returnhas lawfully demanded the return ofhis contribution, or

The certificate had been cancelledor amended as to reflect thewithdrawal or reduction ofcontribution.

b. When return may be demanded: On the dissolution of the partnership On the arrival of the date specified

in the certificate On the lapse of 6 months from

notice in writing to all othermembers if no time is specified

c. General rule: return of contribution is incash, except: if there is a statement to that effect

in the certificate or all partnersconsent

d. Dissolution, upon petition of limitedpartner: When he rightfully but

unsuccessfully demands the returnof his contribution

The other liabilities of thepartnership have not been paid prproperty is insufficient for paymentand the limited partner wouldotherwise be entitled to the return ofhis contribution

e. In case of several limited partners: Members may agree to give priority

to one or more limited partners, and This must be stated in the certificate

of partnership. The preferencecovers –o Return of contributions;o Compensation; ando Other matters where some

benefit is granted (Art. 1855,CC).

f. In the absence of such statement, all thelimited partners shall stand upon equalfooting.

4. Share of profits (Art. 1856, CC) When the assets exceed liabilities

(except those to limited and generalpartners), a limited partner may recoverhis share in the profits or compensationby way of income stipulated in thecertificate.

5. Assign interests (Art. 1859, CC)a. A limited partner’s interest is assignable.


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b. Substituted limited partner: a personadmitted to all the rights of a limitedpartner who has died or assigned hisinterest in a partnership He has all the rights and powers of

a limited partner Subject to all restrictions and

liabilities of his assignor except:o those he was ignorant of when

he became a limited partner andcould not be ascertained in thecertificate

c. An assignee who does not become asubstituted limited partner has: No right to require any information

or account of partnershiptransactions

No right to inspect partnershipbooks

Only entitled to receive theassignor’s share of the profits orother compensation by way ofincome

Only entitled to the return of theassignor’s contribution

d. The assignee shall have the right tobecome a substituted limited partner if – All the members consent, or The assignor is empowered in the

articles of partnership, and he gavethe assignee the right to be asubstituted limited partner.

In either case, it is still required that thecertificate be amended (Art. 1865, CC)and registered with the SEC.

e. That the assignee has become asubstituted limited partner does notrelieve the assignor from liabilities to thepartnership under Art. 1858, as atrustee, or for false statement in thecertificate.

6. Effect of death of a limited partner (Art.1861, CC)a. Rights of executors or administrators:

All the rights of a limited partner forthe purpose of settling the estate

If the deceased had assigned hisinterest in the partnership, theexecutor or administrator mayconstitute the assignee a substitutedlimited partner if the deceased wasempowered to do so

b. The deceased limited partner’s estate isliable for all the deceased’s obligationsand liabilities to the partnership as alimited partner

7. Person erroneously believing he is a limitedpartner (Art. 1852, CC)a. A person who has contributed capital

erroneously believing that he hasbecome a limited partner: Does not become a general partner,

or Become bound by the obligations of

the partnership, if:o he exercises the rights of a

limited partnero on ascertaining his mistake he

promptly renounces his interestin the profits of the business

IV. General Partner

A general partner shall have all the rights andpowers and is subject to all the restrictions andliabilities of a partner in a partnership withoutlimited partners.

General partners cannot, without the writtenconsent or written ratification of all limitedpartners, do the ff. (ACAP-ACA)—1. Any act in contravention of the certificate2. Confess judgment3. Any act which would make it impossible to

carry on the partnership business4. Possess partnership property, or assign

their rights in specific partnership propertyfor other than a partnership purpose

5. Admit a person as a general partner6. Continue the business with partnership

property on the death, retirement, insanity,civil interdiction or insolvency of a generalpartner, unless the power is granted in thecertificate

7. Admit a person as a limited partner, unlessthe right is granted in the certificate (Art.1850, CC)

V. Dissolution

When a limited partnership may bedissolved—1. The misconduct of a general partner2. Fraud on the limited partner by the general

partner3. The retirement, death, insolvency, insanity,

or civil interdiction of a general partner,except: if the business is continued by theremaining general partnersa. Under a right stated in the certificationb. When all members consented to the

continuation (Art. 1860, CC)4. When all the limited partners ceased to be

such (Art. 1864, CC)


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5. End of the term for which it was to exist (Art.1844, CC)

6. By mutual consent of the partners before theend of the firm’s original term

7. When the limited partner demanded thereturn of his contribution but wasunjustifiably denied (Art. 1857, CC)

8. The causes in Arts. 1830 and 1831.

If dissolved by expiration of the fixed term, thenotice of dissolution need not be given since thepapers filed in the SEC are notice to the world.

If dissolved by express will of the partners, thecertificate should be cancelled, and dissolution isnot effected until there has been compliancewith this requirement.

VI. Settling Accounts for Dissolution

Order of priority in the payment of liabilities(Art. 1863, CC)—1. Those owed to creditors, in the order of

priority provided by law (Arts. 2236-2251,CC), except those to limited partners onaccount of their contribution and to generalpartners

2. Those to limited partners in respect to theirshare of the profits and other compensationby way of income in their contributions

3. Those to limited partners in respect of theircapital contributions

4. Those to general partners other than forcapital and profits

5. Those to general partners in respect toprofits

6. Those to general partners in respect tocapital

General partners have the duty and power towind up the partnership’s affairs—

If there is no agreement, the limited partnersshall share in the partnership assets andprofits in proportion to the respectiveamounts of their claims (Art. 1863, CC)

- end of Partnership -


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TORTS & DAMAGESTable of Contents

Chapter I. Introduction, Definitions............388A. Tort and Quasi-Delict ........................388B. Damages...........................................389

Chapter II. Concept of Quasi-Delict............390A. Elements ...........................................390B. Distinguished.....................................390

Chapter III. Negligence ................................392A. Concept of Negligence......................392B. Degrees of Negligence......................393C. Proof of Negligence...........................393D. Defenses ...........................................394

Chapter IV. Causation..................................396A. Proximate Cause...............................396

Chapter V. Persons Liable...........................399A. The Tortfeasor...................................399B. Vicarious Liability ..............................399C. Specific Liability.................................403D. Joint and Solidary Liability ................407E. Civil Liability Arising From Crime...........407F. Prescription .......................................408

Chapter VI. Tortious Interference WithContract.........................................................409

Chapter VII. Torts with Independent CivilAction ............................................................410

A. Violation of Civil and Political Rights.410B. Defamation, Fraud, Physical Injuries 410

Chapter VIII. Human Relations Provisions 413A. Abuse of Rights.................................413B. Acts Contra Bonus Mores .................413Other Torts ...............................................414C. Dereliction of Duty.............................414D. Illegal Acts .........................................414E. Unfair Competition ............................414F. Violation of Human Dignity................414

Chapter IX. Damages ...................................415A. Definition and Concept......................415B. Kinds of Damages.............................415

CIVIL LAW REVIEWER Chapter I. INTRODUCTION, DEFINITIONS

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Chapter I. Introduction, Definitions

A. Tort and Quasi-DelictB. Damages

A. Tort and Quasi-Delict

1. Tort

Essentially, "tort" consists in the violation ofa right given or the omission of a dutyimposed by law. Tort is a breach of a legalduty. (Naguiat vs. NLRC, 1997)

A tort is civil wrong, other than breach ofcontract, for which a court of law will afford aremedy in the form of an action fordamages. [Prosser, Handbook of the Law ofTorts]

Elements: A legal duty Breach Causation Damage

2. Quasi-Delict

Art. 2176. Whoever by act or omission causesdamage to another, there being fault or negligence, isobliged to pay for the damage done. Such fault ornegligence, if there is no pre-existing contractualrelation between the parties, is called a quasi-delictand is governed by the provisions of the Civil CodeChapter on quasi-delicts.

Barredo vs. Garcia (1952): A quasi-delict or"culpa aquiliana" is a separate legal institutionunder the Civil Code, entirely independent froma delict or crime. A concurrence of scope inregard to negligent acts does not destroy thedistinction between the civil liability arising froma crime and the responsibility for cuasi- delitosor culpa extra-contractual. The same negligentact causing damages may produce civil liabilityarising from a crime under article 100 of theRevised Penal Code, or create an action forcuasi-delito or culpa extra-contractual.

Elcano vs. Hill (1977): Article 2176, where itrefers to "fault or negligence”, covers not onlyacts "not punishable by law" but also actscriminal in character, whether intentional andvoluntary or negligent.

[There is also the other view which statesotherwise. To make it balanced you shouldinclude the other view]

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TORTS & DAMAGES TEAM

Prof. Gwen Grecia-De VeraFaculty Editor

Ana Patricia Ruiz TobiasLead Writer

Darwin AngelesRon Michael Garcia

Jena de MesaJuan Antonio Oposa

Writers

CIVIL LAW


ACADEMICS COMMITTEE




Kae Guerrero

DESIGN & LAYOUT



LECTURES COMMITTEE


Heads


Arianne Cerezo


Volunteers

MOCK BAR COMMITTEE

Lilibeth Perez


Dahlia Salamat

LOGISTICS

Charisse Mendoza


Jill HernandezHead


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Members

CIVIL LAW REVIEWER Chapter I. INTRODUCTION, DEFINITIONS

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B. Damages

1. Damage, Damages, Injury

Custodio v. CA (1996): (Damage vs. Injury)Injury is the illegal invasion of a legal right.Damage is the loss, hurt, or harm which resultsfrom the injury. Damages are the recompenseor compensation awarded for the damagesuffered.

People vs. Ballesteros (1998): Damages may bedefined as the pecuniary compensation,recompense or satisfaction for an injurysustained or as otherwise expressed, thepecuniary consequences which the law imposesfor the breach of some duty or the violation ofsome right.

2. Damnum Absque Injuria

Custodio vs. CA (1996): To warrant damagesthere must be a right of action for a legal wronginflicted by the defendant and damage resultingto plaintiff. Mere fact that plaintiff suffered lossdoes not give rise to a right to recover damages.Proper exercise of a lawful right cannotconstitute a legal wrong.

CIVIL LAW REVIEWER Chapter II. CONCEPT of QUASI-DELICT

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Chapter II. Concept of Quasi-Delict

A. ElementsB. Distinguished

1. Quasi-Delict vs. Delict2. Quasi-Delict vs. Breach of

Contract

A. Elements

Act or omission amounting to fault ornegligence

Damage or injury is caused to another Causal connection between damage done

and act/omission. (Art. 2176) There is no pre-existing contractual relations

between the parties1

In order that liability under Article 2176 of theCivil Code will arise the following requisites mustexist:a. There must be damage or prejudice which

must be proven by the party claiming it;b. There must be an unlawful act or omission

amounting to fault or negligence; andc. There must be a direct causal connection

between the damage or prejudice and theact or omission. (Manresa; Taylor vs. ManilaElectric Co.; Jarencio, Torts and Damages)

B. Distinguished

I. Quasi-Delict vs. Delict

Quasi-Delict Delictprivate concern public interestCC repairs the damage byindemnification

RPC punishes andcorrects the act

includes all acts in which"any kind of fault ornegligence intervenes."

Punishes only whenthere is a penal lawcovering the act

solidary liability ofemployer

Subsidiary liability ofemployer

ER’s defense is thataccused observed duediligence of a good fatherof a family

ER’s defense is thatemployee’s resourcesmust first be exhausted

(Barredo vs. Garcia)

Padilla vs. CA (1997): The extinction of the civilaction by reason of acquittal in the criminal caserefers exclusively to civil liability ex delictofounded on Article 100 of the Revised PenalCode. The same punishable act or omission can

1However, the court has held that there can be a tort even

where there is a pre-existing contract between the parties.(Far East vs. CA, infra)

create two kinds of civil liabilities against theaccused and, where provided by law, hisemployer. Civil liability is not extinguished byacquittal where the acquittal is based onreasonable doubt. However, the offended partycannot recover damages under both types ofliability. (Asked in the 1990 and 2003 bar exams)

II. Quasi-Delict vs. Breach of Contract

Cangco vs. Manila Railroad (1918): The field ofnon- contractual obligation is much broader thanthat of contractual obligations. These two fieldsare concentric: the mere fact that a person isbound to another by contract does not relievehim from extra-contractual liability to suchperson. When such a contractual relation existsthe obligor may break the contract under suchconditions that the same act constitutes thesource of an extra-contractual obligation, had nocontract existed between the parties.

Air France vs. Carrascoso (1966): The act thatbreaks the contract of carriage may also be atort.

Far East v. CA (1995): The doctrine that “aquasi-delict can be the cause for breaching acontract that might thereby permit the applicationof applicable principles on tort even where thereis a pre-existing contract between the plaintiffand the defendant can aptly govern only wherethe act or omission complained of wouldconstitute an actionable tort independently of thecontract. Where, without a pre-existing contractbetween two parties, an act or omission cannonetheless amount to an actionable tort byitself, the fact that the parties are contractuallybound is no bar to the application of quasi-delictprovisions.

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CONTRACT QUASI DELICT DELICT

Vinculum Juris Contract Negligent act/ omission (culpa,imprudence)

Act committed by meansof dolo (deliberate,malicious, in bad faith)

Proof Needed Preponderance of evidence Preponderance of evidence Proof beyond reasonabledoubt

Defense available Exercise of extraordinarydiligence (in contract ofcarriage), Force Majeure

Exercise of diligence of goodfather of a family in theselection and supervision ofemployees

Pre-existingcontract

There is pre-existing contract No pre-existing contract [notnecessarily]

No pre-existing contract

Burden of proof Contractual party. Prove the ff:1. existence of a contract2. breach

Victim. Prove the ff.:1. damage2.negligence 3. causalconnection between negligenceand damage done

Prosecution. Accused ispresumed innocent untilthe contrary is proved.

(Asked in the 2003 bar exams)

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Chapter III. Negligence

A. CONCEPT OF NEGLIGENCE1. DEFINITION; ELEMENTS2. STANDARD OF CONDUCT

i. SPECIAL CASESa. CHILDRENb. EXPERTS/PROFESSIONALSc. INSANITY

ii. EMERGENCY RULEB. DEGREES OF NEGLIGENCEC. PROOF OF NEGLIGENCE1. BURDEN OF PROOF2. PRESUMPTIONS3. RES IPSA LOQUITURD. DEFENSES1. PLAINTIFF'S NEGLIGENCE2. CONTRIBUTORY NEGLIGENCE3. FORTUITOUS EVENT4. ASSUMPTION OF RISK5. DUE DILIGENCE6. PRESCRIPTION7. DOUBLE RECOVERY

A. Concept of Negligence

1. Definition; Elements

Art. 1173. The fault or negligence of the obligorconsists in the omission of that diligence which isrequired by the nature of the obligation andcorresponds with the circumstances of the persons, ofthe time and of the place. When negligence showsbad faith, the provisions of Articles 1171 and 2201,paragraph 2, shall apply.

If the law or contract does not state the diligencewhich is to be observed in the performance, thatwhich is expected of a good father of a family shall berequired.

Elements: Legal duty Breach Causation Damage

Layugan vs. IAC (1988): Negligence is theomission to do something which a reasonableman, guided by those considerations whichordinarily regulate the conduct of human affairs,would do, or the doing of something which aprudent and reasonable man would not do.

2. Standard of Conduct

Picart vs. Smith (1918): Test: Did the defendantin doing the alleged negligent act use thatreasonable care and caution which an ordinarilyprudent man would have used in the same

situation? If not, then he is negligent. Negligencein a given case is not determined by reference tothe personal judgment of the actor in thesituation before him, but is determined in thelight of human experience the facts involved inthe particular case.

i. Special cases

a) Children

Taylor vs. Manila Railroad (1910)Children must be expected to act uponchildlike instincts and impulses andothers chargeable with a duty of careand caution toward them must takeprecautions accordingly. If they leaveexposed to the observation of childrenanything which would be tempting tothem, and which they in their immaturejudgment might naturally suppose theywere at liberty to play with, they shouldexpect that liberty to be taken. (But thechild in this case was still negligentbecause of his experience).

Jarco v. CA (1999): The rule, therefore,is that a child under nine years of agemust be conclusively presumedincapable of contributory negligence asa matter of law. The presumption of lackof discernment or incapacity fornegligence in the case of a child overnine but under fifteen years of age is arebuttable one.

Ylarde vs. Aquino (1988): The degree ofcare required to be exercised must varywith the capacity of the personendangered to care for himself. A minorshould not be held to the same degreeof care as an adult, but his conductshould be judged according to theaverage conduct of persons of his ageand experience: that degree of careordinarily exercised by children of thesame age, capacity, discretion,knowledge and experience under thesame or similar circumstances.

b) Experts/Professionals

Culion vs. Philippine(1930): When aperson holds himself out as beingcompetent to do things requiringprofessional skill, he will be held liablefor negligence if he fails to exhibit thecare and skill of one ordinarily skilled inthe particular work which he attempts todo.


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Cruz vs. CA (1997): Whether or not aphysician has committed an"inexcusable lack of precaution" in thetreatment of his patient is to bedetermined according to the standard ofcare observed by other members of theprofession in good standing undersimilar circumstances bearing in mindthe advanced state of the profession atthe time of treatment or the presentstate of medical science.

c) Insanity

Art. 2180. …Guardians are liable for damages causedby the minors or incapacitated persons who are undertheir authority and live in their company…

Art. 2182. If the minor or insane person causingdamage has no parents or guardian, the minor orinsane person shall be answerable with his ownproperty in an action against him where a guardian adlitem shall be appointed.

US vs. Baggay (1911): A lunatic orinsane person who, in spite of hisirresponsibility on account of thedeplorable condition of his derangedmind, is still reasonably and justly liablewith his property for the consequencesof his acts.

ii. Emergency Rule

Valenzuela vs. CA (1996): An individual whosuddenly finds himself in a situation ofdanger and is required to act without muchtime to consider the best means that may beadopted to avoid the impending danger, isnot guilty of negligence if he fails toundertake what subsequently and uponreflection may appear to be a better solution,unless the emergency was brought by hisown negligence.

B. Degrees of Negligence

Art. 2231. In quasi-delicts, exemplary damages maybe granted if the defendant acted with grossnegligence.

Amedo vs Rio (1952): Gross negligence is awant of even a slight care or diligence; an entirewant of care that raises the presumption that theperson at fault is conscious of the probableconsequence thereof, and is indifferent or worse,to the danger or injury to persons or property.

Marinduque vs. Workmen's (1956): "Notorious"negligence, is the same thing as "gross"negligence: pursuing a course of conduct whichwould naturally and probably result in injury, orutter disregard of consequences.

Benguet vs. CA (1999): Acting or omitting to actin a situation where there is duty to act, notinadvertently but willfully and intentionally, with aconscious indifference to consequences in so faras other persons may be affected.

C. Proof of Negligence

1. Burden of Proof (ROC)

Rule 131, Sec. 3(c and d)

(c) That a person intends the ordinary consequencesof his voluntary act;

(d) That a person takes ordinary care of his concerns:

2. Presumptions

Art. 2184. In motor vehicle mishaps, the owner issolidarily liable with his driver, if the former, who wasin the vehicle, could have, by the use of due diligence,prevented the misfortune. It is disputable presumedthat the driver was negligent, if he had been foundguilty of reckless driving or violating traffic regulationsat least twice within the next preceding two months.Art. 2185. Unless there is proof to the contrary, it ispresumed that a person driving a motor vehicle hasbeen negligent if at the time of the mishap, he wasviolating any traffic regulation.Art. 2188. There is prima facie presumption ofnegligence if the death or injury results from hispossession of dangerous weapons or substances,such as firearms and poison, except when the use orpossession thereof is indispensable in his occupationor business.Art. 1735. In all cases other than those mentioned inNos. 1, 2, 3, 4, and 5 of the preceding article(calamity, act of public enemy in war, act of owner ofthe goods, character of the goods, order of competentpublic authority), if the goods are lost destroyed ordeteriorated, common carriers are presumed to havebeen at fault or to have acted negligently, unless theyprove that they observed extraordinary diligence asrequired under Art. 1733.

3. Res Ipsa Loquitur

Layugan vs. IAC 1988): Res ipsa loquitur (Thething speaks for itself): Where the thing whichcauses injury is shown to be under themanagement of the defendant, and the accidentis such as in the ordinary course of things does


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not happen if those who have the managementuse proper care, it affords reasonable evidence,in the absence of an explanation by thedefendant, that the accident arose from want ofcare.

Ramos vs. CA (1999): The injury itself, takentogether with the circumstances raises thepresumption of negligence that the defendantmust meet with an explanation.

Elements: The accident is such that it would not

have happened in the ordinary course ofevents without the negligence ofsomeone;

The defendant exercises control andmanagement.

There is no contributory negligence onthe part of the plaintiff.

DM Consunji vs. CA (2001): The res ipsaloquitur doctrine is based in part upon the theorythat the defendant in charge of theinstrumentality which causes the injury eitherknows the cause of the accident or has the bestopportunity of ascertaining it and that the plaintiffhas no such knowledge, and therefore iscompelled to allege negligence in general termsand to rely upon the proof of the happening ofthe accident in order to establish negligence.

(NOTE: For the res ipsa loquitur doctrine toapply, it must appear that the injured party hadno knowledge as to the cause of the accident, orthat the party to be charged with negligence hassuperior knowledge or opportunity forexplanation of the accident.)

D. Defenses

1. Plaintiff’s Negligence

Art. 2179. When the plaintiff’s own negligence was theimmediate and proximate cause of his injury, hecannot recover damages. But if his negligence wasonly contributory, the immediate and proximate causeof the injury being the defendant’s lack of due care,the plaintiff may recover damages, but the courts shallmitigate the damages to be awarded.

Manila Electric vs. Remonquillo (1956): Even ifManila Electric is negligent, in order that it maybe held liable, its negligence must be theproximate and direct cause of the accident.

Bernardo vs. Legaspi (1914): Both of the partiescontributed to the proximate cause; hence, theycannot recover from one another.

2. Contributory Negligence

Art. 2214. In quasi-delicts, the contributory negligenceof the plaintiff shall reduce the damages that he mayrecover.

Genobiagon vs. CA (1989): The allegedcontributory negligence of the victim, if any, doesnot exonerate the accused in criminal casescommitted through reckless imprudence, sinceone cannot allege the negligence of another toevade the effects of his own negligence.

Rakes vs. Atlantic (1907): If so, thedisobedience of the plaintiff in placing himself indanger contributed in some degree to the injuryas a proximate, although not as its primarycause.

(Supreme Court in this case cited numerousforeign precedents, mostly leaning towards thedoctrine that contributory negligence on the partof the plaintiff did not exonerate defendant fromliability, but it led to the reduction of damagesawarded to the plantiff.)

3. Fortuitous Event

Art. 1174. Except in cases expressly specified by thelaw, or when it is otherwise declared by stipulation, orwhen the nature of the obligation requires theassumption of risk, no person shall be seenresponsible for those events which, could notforeseen, or which, though foreseen, were inevitable.

Juntilla vs. Fontanar (1985): The elements ofcaso fortuito are:1. the cause of the unforeseen and unexpected

occurrence, or of the failure of the debtor tocomply with his obligation, must beindependent of the human will;

2. It must be impossible to foresee the event orif it can be foreseen, it must be impossible toavoid;

3. The occurrence must be such as to render itimpossible for the debtor to fulfill hisobligation in a normal manner;

4. The obligor must be free from anyparticipation in the aggravation of the injuryresulting to the creditor.

Hernandez vs. COA (1984): The robbery thathappened to him cannot be said to be the resultof his imprudence and negligence. This wasundoubtedly a fortuitous event covered by thesaid provisions, something that could not have


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been reasonably foreseen although it could havehappened.

4. Assumption of Risk

Afialda vs. Hisole (1958): It is the caretaker'sbusiness to try to prevent the animal fromcausing injury or damage to anyone, includinghimself. It was a risk he voluntarily assumed.

Exception:

Ilocos Norte vs. CA (1989): A person is excusedfrom the force of the rule (volenti non fit injuria),that when he voluntarily assents to a knowndanger he must abide by the consequences, ifan emergency is found to exist or if the life orproperty of another is in peril or when he seeksto rescue his endangered property.

5. Due Diligence

MMTC vs. CA (1998): Due diligence in thesupervision of employees, on the other hand,includes the formulation of suitable rules andregulations for the guidance of employees andthe issuance of proper instructions intended forthe protection of the public and persons withwhom the employer has relations through his orits employees and the imposition of necessarydisciplinary measures upon employees in caseof breach or as may be warranted to ensure theperformance of acts indispensable to thebusiness of and beneficial to their employer.

6. Prescription

4 years for QD 1 year for defamation

Kramer vs. CA (1989): It is clear that theprescriptive period must be counted from thetime of the commission of an act or omissionviolative of the right of the plaintiff, which is thetime when the cause of action arises.

Allied Banking vs. CA (1989): Relations BackDoctrine (footnote 17 of Allied Banking case):That principle of law by which an act done at onetime is considered by a fiction of law to havebeen done at some antecedent period.

7. Double Recovery

Art. 2177. Responsibility for fault or negligence underthe preceding article is entirely separate and distinctfrom the civil liability arising from negligence under thePenal Code. But the plaintiff cannot recover damagestwice for the same act or omission of the defendant.

CIVIL LAW REVIEWER Chapter IV. CAUSATION

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Chapter IV. Causation

A. PROXIMATE CAUSE1. DEFINITION2. DISTINGUISHED FROM OTHERKINDS

i. REMOTEii. CONCURRENT

3. TESTS TO DETERMINE THEPROXIMATE CAUSE

4. EFFICIENT INTERVENING CAUSE5. LAST CLEAR CHANCE

A. Proximate Cause

1. Definition

Bataclan vs. Medina (1960): that acting first andproducing the injury, either immediately or bysetting other events in motion, all constituting anatural and continuous chain of events, eachhaving a close causal connection with itsimmediate predecessor, the final event in thechain immediately effecting the injury as anatural and probable result of the cause whichfirst acted, under such circumstances that theperson responsible for the first event should, asan ordinarily prudent and negligent person, havereasonable ground to expect at the moment ofhis act or default that an injury to some personmight probably result therefrom.”

Lambert v. Heirs of Ray Castillon (2005):Proximate cause is defined as that which, in thenatural and continuous sequence unbroken byany efficient, intervening cause, produces theinjury, and without which the result would nothave occurred.

Pilipinas Bank vs. CA (1994): ...and from which itought to have been foreseen or reasonablyanticipated by a person of ordinary care that theinjury complained of or some similar injury,would result therefrom as a natural and probableconsequence.

(NOTE: Same definition as in the Bataclan case,except that the SC added the element ofFORESEEABILITY.)

Quezon City vs. Dacara (2005): Proximatecause is determined from the facts of each case,upon a combined consideration of logic,common sense, policy or precedent.

2. Distinguished from Other Kinds

i. Remote

Manila Electric Co. v. Remonquillo (1956): Aprior and remote cause cannot be made thebasis of an action if such remote cause didnothing more than furnish the condition or giverise to the occasion by which the injury wasmade possible, if there intervened between suchprior or remote cause and the injury, a distinct,successive, unrelated and efficient cause of theinjury, even though such injury would not havehappened but for such condition or occasion.

If no danger existed in the condition exceptbecause of the independent cause, suchcondition was not the proximate cause. And if anindependent negligent act or defective conditionsets into operation the circumstances whichresult in injury because of the prior defectivecondition, such act or condition is the proximatecause.

ii. Concurrent

Far Eastern vs. CA (1998): Where theconcurrent or successive acts of 2 ormore persons, although doneindependently, constitute in combinationthe proximate cause of the injury to the3

rdperson, either shall be responsible

for the whole injury.

3. Tests to determine the proximate cause

Cause in fact: The first step is to determinewhether the defendant’s conduct, in point of fact,was a factor in causing plaintiff’s damage.

Effectiveness of the cause; “but for” rule:whether such negligent conduct is a causewithout which the injury would not have takenplace (sine qua non rule) or is the efficient causewhich set in motion the chain of circumstancesleading to the injury. (Bataclan v. Medina)

1. Substantial factor test underRestatement: If the actor’s conduct is asubstantial factor in bringing about harmto another, the fact that the actor neitherforesees nor should have foreseen theharm or the manner in which it occurred,does not prevent him from being liable.(Philippine Rabit v. IAC)

2. Foreseeability test: Anticipation ofconsequence is a necessary element indetermining not only whether a


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particular act or omission was negligent,but also whether the injury complainedof was proximately caused by such actor omission.

3. Natural and probable consequencetest: A natural consequence of an act isthe consequence which ordinarilyfollows it. A probable consequence isone that is more likely to follow than failto follow its supposed cause but it neednot be one which necessarily followsuch cause.

4. Ordinary and natural or directconsequence test: if negligence is acause in fact of the injury , the liability ofthe wrongdoer extends to all theinjurious consequences.

5. Hindsight test: A party guilty ofnegligence or omission of duty isresponsible for all the consequenceswhich a prudent and experienced party,fully acquainted with all thecircumstances which in fact exist,whether they could have beenascertained by reasonable diligence, ornot, would have thought at the time ofthe negligent act as reasonably possibleto follow, if they had been suggested tohis mind.

6. Orbit of the risk test: If the foreseeablerisk to plaintiff created a duty which thedefendant breached, liability is imposedfor any resulting injury within the orbit orscope of such injury. It is not theunusual nature of the act resulting ininjury to plaintiff that is the test offoreseeability, but whether the result ofthe act is within the ambit of the hazardscovered by the duty imposed upon thedefendant.

4. Efficient Intervening Cause

Teague vs. Fernandez (1973): The test is not inthe number of intervening causes, but in theircharacter and in the natural and probableconnection between the wrong done and theinjurious consequence.

5. Last Clear Chance

Also known as: "doctrine of discovered peril” or“doctrine of supervening negligence.”

Elements:1) Plaintiff’s own negligence put himself

in a dangerous situation2) Defendant saw/discovered, by

exercising reasonable care, perilousposition of plaintiff

3) In due time to avoid injuring him4) Despite notice and imminent peril,

defendant failed to employ care toavoid injury

5) Injury of plaintiff resulted.

Doctrine covers successive acts ofnegligence:Primary negligence of the defendant contributory negligence of the plaintiff subsequent negligence of the defendant infailing to avoid the injury to the plaintiff

The doctrine cannot be extended into the field ofjoint tortfeasors as a test of whether only one ofthem should be held liable to the injured personby reason of his discovery of the latter’s peril,and it cannot be invoked as between defendantsconcurrently negligent.

As against third persons, a negligent actorcannot defend by pleading that another hadnegligently failed to take action which could haveavoided the injury.

Picart vs. Smith (1918): If both parties are foundto be negligent; but, their negligence are notcontemporaneous, the person who has the lastfair chance to avoid the impending harm andfails to do so is chargeable with theconsequences, without reference to the priornegligence of the other party.

Bustamante vs. CA (1991): The doctrine of lastclear chance, as enunciated in Anuran v. Buno,applies in a suit between the owners and driversof colliding vehicles. It does not arise where apassenger demands responsibility from thecarrier to enforce its contractual obligations. Itwill be inequitable to exempt the negligent driverof the jeepney and its owners on the ground thatthe other driver was likewise guilty of negligence

Phoenix vs. IAC (1987): Doctrine of last clearchance does not seem to have a role to play in ajurisdiction where the common law concept ofcontributory negligence as an absolute bar torecovery by the plaintiff, has itself been rejected,as it has been in 2179 of CC

(NOTE: Interpretation of 2179: It is not just therelative location in the continuum of time of thenegligence of both parties but also the weighing


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and assessing of other factors such as thenature of the negligent act/omission and thecharacter and gravity of the risks created bysuch for the rest of the community.a) If plaintiff IS the proximate cause: NO

RECOVERY can be made.b) If plaintiff is NOT the proximate cause:

Recovery can be made but such will bemitigated.

c) If negligence of parties are equal in degree,then each bears his own loss.)

Pantranco vs. Baesa (1989): Last clear chanceapplies only if the person who allegedly had thelast opportunity to avert the accident was awareof the existence of peril or should, with exerciseof due care, have been aware of it.

Ong vs. Metropolitan (1958): Last clear chancedoes not apply where the party charged isrequired to act instantaneously, and if the injurycannot be avoided by the application of allmeans at hand after the peril is or should havebeen discovered.

Emergency rule: McKee v. IAC (1992): Onewho suddenly finds himself in a place of danger,and is required to act without time to considerthe best means that may be adopted to avoidthe impending danger, is not guilty ofnegligence, if he fails to adopt whatsubsequently and upon reflection may appear tohave been a better method, unless theemergency in which he finds himself is broughtabout by his own negligence.

Consolidated Bank vs. CA (2003): This is a caseof culpa contractual where neither contributorynegligence nor last clear chance will exoneratedefendant from liability. (NOTE: This means thatLast Clear Chance is not a defense in culpacontractual.)

CIVIL LAW REVIEWER Chapter V. PERSONS LIABLE

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Chapter V. Persons Liable

A. THE TORTFEASORB. VICARIOUS LIABILITY

1. PARENTS2. GUARDIANS3. TEACHERS AND HEADS OF

INSTITUTIONS4. OWNERS AND MANAGERS OF

ESTABLISHMENTS5. EMPLOYERS6. STATE

C. SPECIFIC LIABILITY1. Possessor of Animals2. Things Thrown or Falling from a Building3. Death/Injuries in the Course of Employment4. Product Liability5. Inference with Contractual Relations6. Liability of Local Government Units

D. JOINT AND SOLIDARY LIABILITYE. CIVIL LIABILITY ARISING FROM CRIMEF. PRESCRIPTION

A. The Tortfeasor

Worcester vs. Ocampo (1958): (Refers to) Allthe persons who command, instigate, promote,encourage, advise, countenance, cooperate in,aid or abet the commission of a tort, or whoapprove of it after it is done, if done for theirbenefit.

Each joint tortfeasor is not onlyindividually liable for the tort in which heparticipates, but is also jointly liable with histortfeasors.

B. Vicarious Liability

Art. 2180, par 1. The obligation imposed by Article2176 is demandable not only for one’s own acts oromissions, but also for those of persons for whom oneis responsible.

Art. 2180, par 8. The responsibility treated of in thisarticle shall cease when the persons hereinmentioned prove that they observed all the diligenceof a good father of a family to prevent damage.

Art. 2181. Whoever pays for the damage caused byhis dependents or employees may recover from thelatter what he has paid or delivered in satisfaction ofthe claim.

NOTE: Common defense: exercise of the diligence

of a good father of a family. Exception: common carriers—extraordinary

diligence.

Were the liability subsidiary and not primaryand solidary, the defense of due diligencewould not be available

Basis of LiabilityArises by virtue of a presumption juris tantum ofnegligence on the part of the persons maderesponsible under the article, derived from theirfailure to exercise due care and vigilance overthe acts of the subordinates to prevent themfrom causing damage.

The non-performance of certain duties ofprecaution and prudence imposed upon thepersons who become responsible by civil bonduniting the actor to them.

Underlying Basis of Vicarious Liability of

parents: Tamargo v. CA (1992): The basis ofthis vicarious, although primary, liability is, as inArticle 2176, fault or negligence, which ispresumed from that which accompanied thecausative act or omission. The presumption ismerely prima facie and may therefore berebutted

2 Requisites According to Chironi:1. The duty of supervision2. The possibility of making such

supervision effective

Respondeat superiorIt means nothing more than “look to the manhigher up,” (usually the employer or personunder whose control the tortfeasor was under)which is a manifestation of vicarious liability.

Bonus paterfamilias.The relationship of pater familias (“good father ofthe family”) is the basis of civil law liability,particularly for an employer. It is a defense for allinstances of vicarious liability based on Art.2180. (Most frequently asked topic in Torts,1975-2003)

Liability of AuthorArticle does not exempt the author who are theonly ones liable if there are no persons who willbe held liable if there are no person havingauthority over him or if due diligence of thepersons having authority over him. He may besued alone or with the person responsible forhim.

Strict InterpretationThe liability under this article cannot beextended to those persons not enumeratedbecause this is an extraordinary responsibilitycreated by way of exception to the rule that no


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person can be liable for the acts or omissions ofanother.

1. Parents

Based on the presumption of failure on their partto properly exercise their parental authority forthe good education of their children and exertadequate vigilance over them.

Imposed only when children are living with theparents

If there is just cause for separation, theresponsibility ceases.

The responsibility of the father and mother is notsimultaneous but alternate.

When Responsibility CeasesWhen parent is not in the position to exerciseauthority and supervision over the child

Illegitimate ChildrenResponsibility is with the mother whom the lawvests parental authority

Exconde vs. Capuno (1957): The civil liabilitywhich the law imposes upon the father and, incase of his death or incapacity, the mother, forany damages that may be caused by the minorchildren who live with them, is obvious. This is anecessary consequence of the parental authoritythey exercise over them which imposes uponthe parents the 'duty of supporting them,keeping them in their company, educating themin proportion to their means', while, on the otherhand, gives them the 'right to correct and punishthem in moderation.'

Tamargo vs. CA (1992): The basis of parentalauthority for the torts of a minor child is therelationship existing between the parents andthe minor child living with them and over whom,the law presumes, the parents exercisesupervision and control. To hold that parentalauthority had been retroactively lodged in theadoptive parents so as to burden them with theliability for a tortious act that they could not haveforeseen and prevented would be unfair.

Parental liability is, in other words,anchored upon parental authority coupled withpresumed parental dereliction in the dischargeof the duties accompanying such authority. Theparental dereliction is, of course, only presumedand the presumption can be overturned underArticle 2180 of the Civil Code by proof that the

parents had exercised all the diligence of a goodfather of a family to prevent the damage

(NOTE: Art 2180, par 2 of the Civil Code whichholds the father liable for damages has beenmodified by the Family Code and PD 603. Art.211 of the FC declares joint parental authority ofthe mother and father over common children.The parent(s) exercising parental authority areliable for the torts of their children. Despite thelowering of the age of majority from 21 to 18,parents are still liable for the torts committed bytheir children below 21 years of age. Art 236, par3 FC, as amended by RA 6809)

Art. 2180, par 2. The father and, in case of his deathor incapacity, the mother, are responsible for thedamages caused by the minor children who live intheir company.

Art 58 (PD 603). Torts – Parents and guardians areresponsible for the damage caused by the child undertheir parental authority in accordance with the civilcode.

Art 221 (FC). Parents and other persons exercisingparental authority shall be civilly liable for the injuriesand damages caused by the acts or omissions of theirunemancipated children living in their company andunder their parental authority subject to theappropriate defenses provided by law.

Art. 101 (RPC). Rules regarding civil liability in certaincases. — The exemption from criminal liabilityestablished in subdivisions 1, 2, 3, 5 and 6 of Article12 and in subdivision 4 of Article 11 of this Code doesnot include exemption from civil liability, which shallbe enforced subject to the following rules:

First. In cases of subdivisions 1, 2, and 3 ofArticle 12, the civil liability for acts committed by animbecile or insane person, and by a person undernine years of age, or by one over nine but underfifteen years of age, who has acted withoutdiscernment, shall devolve upon those having suchperson under their legal authority or control, unless itappears that there was no fault or negligence on theirpart.

Should there be no person having such insane,imbecile or minor under his authority, legalguardianship or control, or if such person beinsolvent, said insane, imbecile, or minor shallrespond with their own property, excepting propertyexempt from execution, in accordance with the civillaw.

Libi vs. IAC (1992): The parent's liability under2180 should be primary and not subsidiary. If itwere subsidiary, the parents cannot invoke duediligence as a defense. Such interpretationreconciles 2180 with 2194 which calls forsolidary liability of joint tortfeasors.


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Guardians

Art. 2180, par 3. Guardians are liable for damagescaused by the minors or incapacitated persons whoare under their authority and live in their company.

Art. 216. In default of parents or a judicially appointedguardian, the following person shall exercisesubstitute parental authority over the child in the orderindicated: The surviving grandparent, as provided in Art.

214; The oldest brother or sister, over twenty-one

years of age, unless unfit or disqualified; and The child's actual custodian, over twenty-one

years of age, unless unfit or disqualified.Whenever the appointment or a judicial guardian overthe property of the child becomes necessary, thesame order of preference shall be observed.

Art. 217. In case of foundlings, abandoned neglectedor abused children and other children similarlysituated, parental authority shall be entrusted insummary judicial proceedings to heads of children'shomes, orphanages and similar institutions dulyaccredited by the proper government agency.

REQUISITES FOR LIABILITY TO ATTACH:

Parents - (mnemonic: 21 + Authority &Company):

1. The child is below 21 years old2. The child is under the parental authority

of the parents3. The child is living in the company of the

parents

Guardians - (mnemonic: Authority & Company)1. The ward if minor is below 21 years

old. If incapacitated, the guardian isliable for the acts of the ward regardlessof the latter’s age.

2. The child is under the parentalauthority of the parents.

3. The tortfeasor is under his authority.4. The tortfeasor is living in his

company.

Is a minor or insane tortfeasor with NO parent orguardian liable?Yes. He shall be answerable with his ownproperty in an action against him where aguardian ad litem shall be appointed. (Art. 2182)

2. Teachers and Heads of Institutions

Who are liable For whose Acts Requisite for Liability to Attach

Teacher- in- charge (the onedesignated to exercise supervisionover students)

Pupils and students pupils and students remain inteacher’s custody regardless of theage

Head of establishment of arts andtrades

Apprentices custody regardless of the age

School (generally not held liable) If the tortfeasor is a student ofthe school (Art 218 FC)

If the tortfeasor is a teacher/employee of the school, it isliable as employer under 2180(5) of CC (St. Francis vs. CA)

If the tortfeasor is a stranger, itis liable for breach of contract.(PSBA vs. CA)

must be below 18

Palisoc vs, Brillantes (1971): “Custody” meansthe protective and supervisory custody that theschool and its heads and teachers exercise overthe pupils and students for as long as they are atattendance in the school and includes recesstime.

There is nothing in the law thatrequires that for such liability to attach, the pupilor student who commits the tortious act mustlive and board in the school, as erroneously heldby the lower court, and in the dicta in Mercado(as well as in Exconde) on which it relied, must

now be deemed to have been set aside by thisdecision

Amadora vs. CA (1988): Art. 2180 should applyto ALL schools, academic as well as non-academic. Where the school is academic ratherthan technical or vocational in nature,responsibility for the tort committed by thestudent will attach to the teacher in charge ofsuch student. In establishments of arts andtrades, it is the head thereof, and only he, whoshall be held liable as an exception to thegeneral rule.


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Teachers in general shall be liable for acts oftheir students except where the school istechnical in nature, in which case it is the headthereof who shall be answerable.

Salvosa v. IAC (1988): A student not “atattendance in the school” cannot be in “recess”thereat. A “recess,” as the concept is embracedin the phrase “at attendance in the school,”contemplates a situation of temporaryadjournment of school activities where thestudent still remains within call of his mentor andis not permitted to leave the school premises, orthe area within which the school activity isconducted. Recess by its nature does notinclude dismissal.

Mere fact of being enrolled or being in thepremises of a school without more does notconstitute “attending school” or being in the“protective and supervisory custody” of theschool, as concemplated by law.

Ylarde vs. Aquino (1988): The principal of theschool cannot be held liable for the reason thatthe school he leads is an academic school andnot a school of arts and trades. (Teachers’liability has been asked four times from 1975-1990, and four times from 2004- 2007)

3. Owners and Managers ofEstablishments

Who are liable For whoseacts

Requisites forliability to attach

Owners andmanagers of anestablish-mentor enterprise

Theiremployees

The damage wascaused in theservice of thebranches in whichthe employeesare employed-OR-The damage wascaused on theoccasion of theirfunctions

Philippine Rabbit vs. Philam Forwarders (1975):“Owners and managers of an establishment orenterprise” does not include a manager of acorporation. (Spanish term “directores” connotes“employer.” But manager of a corporation is notan employer, merely an employee of the owner.)

4. Employers

Art 2180, par 5. Employers shall be liable for thedamages caused by their employees and householdhelpers acting within the scope of their assignedtasks, even though the former are not engaged in anybusiness or industry.

3 Essential Requisites:

1. That the employee was chosen by theemployer, personally or through another

2. That the services are to be rendered inaccordance with orders which the employerhas the authority to give at all times

3. That the illicit act of the employees was onthe occasion or by reason of the entrusted tohim

Presumption of negligenceThe presentation of proof of the negligence of itsemployee gives rise to the presumption that thedefendant employer did not exercise thediligence of a good father of a family in theselection and supervision of its employees

Nature of liability of the employerThe employer is primarily and solidarily liable forthe tortious act of the employee. The employermay recover from the employee, the amount itwill have to pay the offended party’s claim.

Such recovery, however, is NOT for the entireamount. To allow such would be as if to say thatthe employer was not negligent.

Necessity of presumption of negligenceIt is difficult for any person injured to prove theemployer’s negligence as they would be provingnegative facts. (Here comes in the fabrication ofdocuments, etc.)

Independent contractorMaster not generally liable for the fault ornegligence of an independent contractorperforming some work for him

A contractor may at the same time be sosituated that he would be regarded as anemployee for whose negligence the employer isliable

Cuison vs. Norton & Harrison (1930): Basis forcivil liability of employers is pater familias

The existence of the employer-employeerelationship must first be established before anemployer may be made vicariously liable underArt. 2180, CC.

Philtranco vs. CA (1997): The liability of theregistered owner and driver is solidary, primaryand direct.

Filamer vs. IAC (1992): “Within the scope oftheir assigned task” in Art. 2180 includes any actdone by an employee in furtherance of the


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interests, or for the account of the employer atthe time of the infliction of the injury or damage.

De Leon Brokerage v. CA (1962): Employerneed not be riding in the vehicle to becomeliable for a driver’s negligence. Article 2184mandating that the owner is only held solidarilyliable if he is riding in the vehicle at the time ofthe mishap, only applies to those owners ofvehicles, who do not come within the ambit ofArticle 2180 (as owners of an establishment orenterprise.)

5. State

Sec 3, Art XVI, 1987 Constitution. The State may notbe sued without its consent.Art 2180, par 6. The State is responsible in likemanner when it acts through a special agent; but notwhen the damage has been caused by the official towhom the task done properly pertains, in which casewhat is provided in Article 2176 shall be applicable.

Merrit vs. Government of the Philippine Islands(1960): A special agent is one who receives adefinite and fixed order or commission, foreignto the exercise of the duties of his office if he is aspecial official.

This concept does not apply to any executiveagent who is an employee of the activeadministration and who on his own responsibilityperforms the functions which are inherent in andnaturally pertain to his office.

The responsibility of the state is limited to thatwhich it contracts through a special agent, dulyempowered by a definite order or commission toperform some act or charged with some definitepurpose which gives rise to the claim and notwhere the claim is based on acts or omissionsimputable to a public official charged with someadministrative or technical office who can beheld to the proper responsibility in the mannerlaid down by the law of civil responsibility.

General Rule: The State cannot be sued.

Exceptions:a. There is express legislative consentb. The State filed the case

Instances where the state gives its consent to besued:a. Art. 2180 (6) is an example of an express

legislative consent. Here, the State assumesa limited liability for the acts of its specialagents.

b. Art. 2189 provides for state liability fordamages caused by defective condition ofpublic works.

c. Local Government Code provides for theliability of local government units forwrongful exercise of its proprietary (asopposed to its governmental) functions. Thelatter is the same as that of a privatecorporation or individual. (Mendoza vs. DeLeon, 1916)

The state agencies or subdivisions, in thepursuance of proprietary functions, are akin toany other private corporation. They may be suedfor: torts committed by them (Art. 2176) or torts committed by their employees (art

2180).

As long as it is performing proprietary functions,it can be held liable for the acts of its employees,both regular and special.

Quick Glanceo As a governmental entity: Liable only for

acts of its special agentso As a corporate entity: May be held liable

just as any other employer for the acts of itsemployees

o Special Agent: One duly empowered by adefinite order or commission to performsome act or one charged with some definitepurpose which give rise to the claim; if he isa government employee or official, he mustbe acting under a definite and fixed order orcommission, foreign to the exercise of theduties of his office

C. Specific Liability

1. Possessor of Animals

Art. 2183 (CC). The possessor of an animal orwhoever may make use of the same is responsible forthe damage which it may cause, although it mayescape or be lost. This responsibility shall cease onlyin case the damage should come from force majeureor from the fault of the person who has suffereddamage.

Applicability of provisionSince the law makes no distinction, this isapplicable to both wild (in case the wild animal iskept) and domestic animals. It is enough thatdefendant is the possessor, owner, or user ofthe animal at the time it caused the damagecomplained of, to hold him liable therefor.


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BasisNegligence is immaterial. It is based on naturalequity and on the principle of social interest thathe who possesses animals for his utility,pleasure, or service, must answer for anydamage which such animal may cause.

Possible defenses against this liability:1. Force Majeure2. Fault of person suffering damage3. Act of third persons

Vestil vs. IAC (1989): Possession of the animal,not ownership, is determinative of liability underArt. 2183. The obligation imposed by said articleis not based on the negligence or on thepresumed lack of vigilance of the possessor oruser of the animal causing damage. It is basedon natural equity and on the principle of socialinterest that he who possesses animals for hisutility, pleasure, or service, must answer for anydamage which such animal may cause.

Scope of provisionContention that the defendant could not beexpected to exercise remote control of theanimal is not acceptable. In fact, Art. 2183 holdsthe possessor liable even if the animal should“escape or be lost” and so be removed from hiscontrol.

It is likewise immaterial that the animal wastame and was merely provoked by the victim.The law does not speak only of vicious animalsbut covers even tame ones as long as theycause injury.

2. THINGS THROWN OR FALLINGFROM A BUILDING

Art 2193 (CC). The head of a family that lives in abuilding or a part thereof, is responsible for damagescaused by things thrown or falling from the same.

Purpose of the lawTo relieve the injured party of the

difficulty of determining and proving who threwthe thing or what caused it to fall, or that eitherwas due to the fault or negligence of anyparticular individual.

Dingcong vs. Kanaan (1941): Lessee isconsidered as the head of the family. It isenough that he lives in and has control over it.

3. DEATH/INJURIES IN THE COURSEOF EMPLOYMENT

Art 1711: Owners of enterprises and other employersare obliged to pay compensation for the death orinjuries ti their laborers, workmen, mechanics or otheremployees even though the event may be purelyaccidental or entirely due to a fortuitous cause, if thedeath or personal injury arose out of and in the courseof employment. The employer is also liable forcompensation if the employee contracts any illness ordisease caused by such employment or as a result ofthe nature of the employment. If the mishap was dueto the employee's own notorious negligence, orvoluntary act, or drunkenness, the employer shall notbe liable for compensation. When the employee's lackof due care contributed to his death or injury, thecompensation shall be equitable reduced.Art. 1712: If the death or injury is due to thenegligence of a fellow-worker, the latter and theemployer shall be solidarily liable for compensation. Ifa fellow worker's intentional or malicious act is theonly cause of the death or injury, the employer shallnot be answerable, unless it should be shown that thelatter did not exercise due diligence in the selection orsupervision of the plaintiff's fellow worker.

Afable vs Singer (1933): The injury must bereceived while engaged in the furtherance of theaffairs of the employer.

4. PRODUCT LIABILITY

Art 2187 (CC). Manufacturers and processors offoodstuffs, drinks, toilet articles and similar goodsshall be liable for death or injuries caused by anynoxious or harmful substances used, although nocontractual relation exists between them and theconsumers.

Consumer Act ProvisionsArt. 4. n) "Consumer" means a natural person who isa purchaser, lessee, recipient or prospectivepurchaser, lessor or recipient of consumer products,services or credit.(as) "Manufacturer" means any person whomanufactures, assembles or processes consumerproducts, except that if the goods are manufactured,assembled or processed for another person whoattaches his own brand name to the consumerproducts, the latter shall be deemed themanufacturer. In case of imported products, themanufacturer's representatives or, in his absence, theimporter, shall be deemed the manufacturer.

Art. 97. Liability for the Defective Products. - AnyFilipino or foreign manufacturer, producer, and anyimporter, shall be liable for redress, independently offault, for damages caused to consumers by defectsresulting from design, manufacture, construction,assembly and erection, formulas and handling andmaking up, presentation or packing of their products,as well as for the insufficient or inadequateinformation on the use and hazards thereof.


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A product is defective when it does not offer thesafety rightfully expected of it, taking relevantcircumstances into consideration, including but notlimited to:

a. presentation of productb. use and hazards reasonably expected of it;c. the time it was put into circulation.

A product is not considered defective becauseanother better quality product has been placed in themarket. The manufacturer, builder, producer orimporter 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.Art. 99. Liability for Defective Services. - The servicesupplier is liable for redress, independently of fault, fordamages caused to consumers by defects relating tothe rendering of the services, as well as forinsufficient or inadequate information on the fruitionand hazards thereof.

The service is defective when it does not provide thesafety the consumer may rightfully expect of it, takingthe relevant circumstances into consideration,including but not limited to: the manner in which it is provided; the result of hazards which may reasonably be

expected of it; the time when it was provided.

A service is not considered defective because of theuse or introduction of new techniques.The supplier of the services shall not be held liablewhen it is proven:

◦ that there is no defect in the service rendered;

◦ that the consumer or third party is solely atfault.

Art. 106. Prohibition in Contractual Stipulation. - Thestipulation in a contract of a clause preventing,exonerating or reducing the obligation to indemnify fordamages effected, as provided for in this and in thepreceding Articles, is hereby prohibited, if there ismore than one person responsible for the cause ofthe damage, they shall be jointly liable for the redressestablished in the pertinent provisions of this Act.However, if the damage is caused by a component orpart incorporated in the product or service, itsmanufacturer, builder or importer and the person whoincorporated the component or part are jointly liable.

Coca-Cola v. CA (1993): While it may be truethat the pre-existing contract between theparties may, as a general rule, bar theapplicability of the law on quasi-delict, theliability may itself be deemed to arise fromquasi-delict if the act which breaks the contractis also a quasi-delict.

5. INTERFERENCE WITHCONTRACTUAL RELATIONS

Art 1314: Any third person who induces another toviolate his contract shall be liable for damages to theother contracting party.

Gilchrist vs. Cuddy (1915): Everyone has a rightto enjoy the fruits of his enterprise. He has noright to be protected from competition, but hehas the right to be free from malicious andwanton interference. If the injury is a result ofcompetition, it is a case of damnum absqueinjuria, unless superior right by contract isinterfered with.

So Ping Bun vs. CA (1999): Elements ofInterference are:

Existence of a valid contract; Knowledge of the third person of the

existence of such contract; Interference without legal justification or

excuse.

Lagon vs. CA (2005): If there in no bad faith,there is no tortious interference; Actualknowledge of the contract is not required so longas there are facts leading one to investigate.

6. LIABILITY OF LOCAL GOVERNMENTUNITS

Art 2189: Provinces, cities and municipalities shall beliable for damages for the death of, or injuries sufferedby, any person by reason of the defective condition ofroads, streets, bridges, public buildings, and otherpublic works under their control or supervision.

Guilatco vs Dagupan: It is not necessary that thedefective road belongs to the LGU, only that theLGU exercises control and supervision over it.


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QUICK GLANCE

Person Strictly Liable For What Defenses or ExceptionsPossessor of an animal or whoevermakes use of them even if theanimal is lost or escaped

For the damage it may cause Force majeureFault of the person who suffereddamage

Owner of Motor Vehicle Motor vehicle mishaps Solidary liability only if the owner wasin the vehicle and if he could haveprevented it thru due diligenceIf not in vehicleà 2180

Manufacturers and Processors offoodstuffs, drinks, toilet articles andsimilar goods (FDTAS)

death and injuries caused by anynoxious or harmful substances used

Absence on contractual relation NOTa defense

Defendant in possession ofdangerous weapons/ substancessuch as firearms and poison

death or injury results from suchpossession

possession or use thereof isindispensable in his occupation orbusiness

Provinces, Cities and Municipalities the death or injuries suffered by anyperson by reason of the defectivecondition of roads, streets, bridges,public buildings, and other publicworks

Public works must be under theirsupervisions

Proprietor of building/ structure total or partial collapse ofbuilding or structure if due tolack of necessary repairs

explosion of machinery whichhas not been taken cared ofwith due diligence, and theinflammation of explosivesubstances which have notbeen kept in a safe andadequate place

by excessive smoke, whichmay be harmful to persons orproperty

by falling of trees situated at ornear highways or lanes, if notcaused by force majeure

by emanations from tubes,canals, sewers or deposits ofinfectious matter, constructedwithout precautions suitable tothe place

Responsibility for collapse should bedue to the lack of necessary repairs

Engineer, Architect or Contractor if damage of building or structure iscaused by defect in constructionwhich happens within 15 years fromconstruction; action must bebrought within 10 years fromcollapse

Head of the Family that lives in abuilding or any part thereof

Liable for damages caused bythings thrown or falling from thesame


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BAR QUESTION: MOTOR VEHICLE MISHAPSA van owned by Orlando and driven by Diego,while negotiating a downhill slope of a city road,suddenly gained speed, obviously beyond theauthorized limit in the area, and bumped a car infront of it, causing severe damage to the car andserious injuries to its passengers. Orlando wasnot in the car at the time of the incident. The carowner and the injured passengers sued Orlandoand Diego for damages cause by Diego’snegligence. In their defense, Diego claims thatthe downhill slope caused the van to gain speedand that, as he stepped on the brakes to checkthe acceleration, the brakes locked, causing thevan to go even faster and eventually to hit thecar in front of it. Orlando and Diego contend thatthe sudden malfunction of the van’s brakesystem is a fortuitous event and that, therefore,they are exempt from any liability.(a) Is this contention tenable? Explain.(b) Explain the concept of vicarious

liability in quasi-delicts.(c) Does the presence of the owner

inside the vehicle causing damageto a third party affect his liabilityfor his driver’s negligence? Explain.

Suggested Answer:

(a) No. Mechanical defects of a motor vehicledo not constitute fortuitous event, since thepresence of such defects would have beenreadily detected by diligence maintenancecheck. The failure to maintain the vehicle insafe running condition constitutesnegligence.

(b) The doctrine of vicarious liability is thatwhich renders a person liable for thenegligence of others for whose acts oromission the law makes him responsible onthe theory that they are under his controland supervision.

(c) In motor vehicle mishaps, the owner is madesolidarily liable with his driver if he (theowner) was in the vehicle and could have,by the use of due diligence, prevented themishap (Caedo vs. Yu Khe Thai, 26 SCRA410 [1968]). However, this question has nofactual basis in the problem given, in view ofthe express given fact that “Orlando was notin the car at the time of the incident.”

D. Joint and Solidary Liability

Art. 2194. The responsibility of two or more personswho are liable for quasi-delict is solidary. (n)

E. Civil Liability Arising From Crime

Art. 2177. Responsibility for fault or negligence underthe preceding article is entirely separate and distinctfrom the civil liability arising from negligence under thePenal Code. But the plaintiff cannot recover damagestwice for the same act or omission of the defendant.(n)

1. Distinguished from Independent CivilActions and Liability for QD

(Arts. 31-34, 2176)

Rule 111, Rules of CourtSec. 3. When civil action may proceed independently.– In the cases provided in Articles 32, 33, 34 and2176 of the Civil Code of the Philippines, theindependent civil action may be brought by theoffended party. It shall proceed independently of thecriminal action and shall require only a preponderanceof evidence. In no case, however, may the offendedparty recover damages twice for the same act oromission charged in the criminal action.

Sec. 5. Judgment in civil action not a bar. – A finaljudgment rendered in a civil action absolving thedefendant from civil liability is not a bar to a criminalaction against the defendant for the same act oromission subject of the civil action.

2. Effect of Acquittal

Art. 29. When the accused in a criminal prosecution isacquitted on the ground that his guilt has not beenproved beyond reasonable doubt, a civil action fordamages for the same act or omission may beinstituted. Such action requires only a preponderanceof evidence. Upon motion of the defendant, the courtmay require the plaintiff to file a bond to answer fordamages in case the complaint should be found to bemalicious.

If in a criminal case the judgment of acquittal is basedupon reasonable doubt, the court shall so declare. Inthe absence of any declaration to that effect, it may beinferred from the text of the decision whether or notthe acquittal is due to that ground.

3. Prejudicial Questions

Art. 36. Pre-judicial questions which must be decidedbefore any criminal prosecution may be instituted ormay proceed, shall be governed by rules of courtwhich the Supreme Court shall promulgate and whichshall not be in conflict with the provisions of this Code.

Rule 111, Rules of CourtSec. 6. Suspension by reason of prejudicial question.– A petition for suspension of the criminal actionbased upon the pendency of a prejudicial question ina civil action may be filed in the office of theprosecutor or the court conducting the preliminaryinvestigation. When the criminal action has been filed


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in court for trial, the petition to suspend shall be filedin the same criminal action at any time before theprosecution rests.

Sec. 7. Elements of prejudicial question. – Theelements of a prejudicial questions are: (a) thepreviously instituted civil action involves an issuesimilar or intimately related to the issue raised in thesubsequent criminal action, and (b) the resolution ofsuch issue determines whether or not the criminalaction may proceed.

Zapanta vs. Montesa (1962): A civil case for theannulment of marriage is an example of aprejudicial question for a criminal charge ofbigamy.

F. Prescription

Art. 1146. The following actions must be institutedwithin four years:

(1) Upon an injury to the rights of the plaintiff;(2) Upon a quasi-delict;

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Chapter VI. Tortious Interference WithContract

Art. 1314. Any third person who induces another toviolate his contract shall be liable for damages to theother contracting party. (n)

Elements:a) existence of a valid contractb) knowledge of the third person of the

existence of the contractc) interference of the third person WITHOUT

legal justification or excuse(So Ping Bun vs. CA, 1999)

So Ping Bun vs. CA (1999): Bad faith/Malice isrequired to make the defendant liable forDAMAGES in cases of tortuous interference.

Gilchrist vs. Cuddy (1915): Injunction is theproper remedy to prevent wrongful interferencewith contracts by strangers, where other legalremedies are insufficient and the resulting injuryis irreparable.

Lagon vs. CA (2005): Proper business interestprovides a legal justification to negate thepresence of the third element.

CIVIL LAW REVIEWER Chapter VII. TORTS with INDEPENDENT CIVIL ACTION

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Chapter VII. Torts with Independent CivilAction

A. VIOLATION OF CIVIL AND POLITICAL RIGHTSB. DEFAMATION, FRAUD, PHYSICAL INJURIES

1. DEFAMATION2. FRAUD3. PHYSICAL INJURIES

A. Violation of Civil and Political Rights

Art 32. Any public officer or employee, or any privateindividual, who directly or indirectly obstructs, defeats,violates or in any manner impedes or impairs any ofthe following rights and liberties of another personshall be liable to the latter for damages:

1. Freedom of religion2. Freedom of speech3. Freedom to write for the press or to maintain

a periodical publication4. Freedom from arbitrary or illegal detention5. Freedom of suffrage6. The right against deprivation of property

without due process of law7. The right to just compensation when property

is taken for public use8. The right to equal protection of the laws9. The right to be secure in one’s person,

house, papers and effects againstunreasonable searches and seizures

10. The liberty of abode and of changing thesame

11. The right to privacy of communication andcorrespondence

12. The right to become a member ofassociations and societies for purposes notcontrary to law

13. The right to take part in a peaceableassembly and petition the government forredress of grievances

14. The right to be free from involuntaryservitude in any form

15. The right of the accused against excessivebail

16. The right of the accused to be heard byhimself and counsel, to be informed of thenature and the cause of the accusationagainst him, to have a speedy and publictrial, to meet the witnesses face to face, tohave compulsory process to secure theattendance of witnesses on is behalf;

17. Freedom form being compelled to be awitness against one’s self, or from beingforced to confess his guilt, or from beinginduced by a promise of immunity or rewardto make such confession, except when theperson confessing becomes a State witness.

18. Freedom from excessive fines, or cruel andunusual punishment, unless the same isimposed or inflicted in accordance with astatute which has not been judiciallydeclared unconstitutional;

19. Freedom of access to the courts

In any of the cases referred to in this article, whetheror not the defendant’s act or omission constitutes acriminal offense, the aggrieved party has a right tocommence an entirely separate and distinct civilaction for damages, and for other relief. Such civilaction shall proceed independently of any criminalprosecution (if the latter be instituted) and may beproved by a preponderance of evidence. Theindemnity shall include moral damages. Exemplarydamages may also be adjudicated. The responsibilityherein set forth is not demandable from a judgeunless his act or omission constitutes a violation ofthe Penal code or any other penal statute.

Cojuangco vs. CA (1999): The purpose of article32 is to remind us that basic rights areimmutable. Thus, absence of bad faith or maliceis not a defense.

Vinzons- Chato vs. Fortune (2007): A publicofficer may be sued under Art. 32 even if hisacts were not so tainted with malice, as long asthere is a violation of a constitutional right. Itsprecise object is to put an end to official abuse,done on the plea of good faith.

B. Defamation, Fraud, Physical Injuries

Art. 33: In case of defamation, fraud, and physicalinjuries, a civil action for damages, entirely separateand distinct from the criminal action, may be broughtby the injured party. Such civil action shall proceedindependently of the criminal prosecution, and shallrequire only a preponderance of evidence.

Marcia vs. CA (1983): Reckless imprudence isnot one of the three crimes mentioned in Art. 33;no independent civil action may be filed becausewhat is punished is reckless imprudence is thenegligent or careless act, not the result thereof.

(However, in the contrary ruling in People vs.Faller, court discussed reckless imprudenceunder art. 33 not as a crime, but as a way ofcommitting it, such that it punishes BOTH the actand the resulting damage, wherein anindependent action could be allowed.)

1. Defamation

Cojuangco vs. CA (1991): Separate civil actionmay be consolidated with the criminal action.

MVRS vs. Islamic Da'wah (2003): Defamation isthat which tends to injure reputation or diminishesteem, respect, good will, or confidence of theplaintiff, or excite derogatory feelings about him.


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It must be personal. (What is definitive is not thelevel of hurt, but the effect of the statement onthe reputation or standing of the person.)

2. Fraud

Salta vs. De Veyra (1982): Independent civilactions are permitted to be filed separatelyregardless of the result of the criminal action.

Samson vs. Daway (2004): Unfair competitionunder the Intellectual Property Code and fraudunder Art. 33 are independent actions. Art. 33does not operate as a prejudicial question tojustify the suspension of the criminal cases atbar.

3. Physical Injuries

Capuno vs Pepsi (1965): The institution ofcriminal action cannot have an effect ofinterrupting the running of the period for the filingof independent civil actions.

Dulay vs. CA (1995): Homicide is included in Art.33, where a separate action is availing.

NOTE:

Civil liability arising from crime

Art. 2177. Responsibility for fault or negligence isentirely separate and distinct from the civil liabilityarising from negligence under the RPC. But doublerecovery is not allowed.

Art. 100 of the Revised Penal Code providesthat every person who is criminally liable for afelony is also civilly liable. This general rulehowever presupposes that the felony hadresulted in damage or injury to another’s personor property. To create an obligation or give riseto civil liability, an act or omission, whetherintentional or negligent, must have causeddamage or injury to another, otherwise onlycriminal liability will attach. Though the generalrule provides that one who is not criminally liablecannot be civilly liable, RPC Arts. 101-103provide exceptions as they provide for vicariousliability for certain types of offenders andsubsidiary liability in case of default of theoffender.

The civil liability established by RPC Arts. 100-103 include:

a. Restitution;b. Reparation of the damage caused;

andc. Indemnification for consequential

damages.

Neplum vs. Orbeso (2002): Deemed instituted inevery criminal prosecution is the civil liabilityarising from the crime or delict per se (civilliability ex delicto), but not those liabilities fromquasi-delicts, contracts or quasi-contracts.

Sps. Benito Lo Bun Tiong etc. vs. VicenteBalboa (2008): The criminal action for violationof Batas Pambansa Blg. 22 shall be deemed toinclude the corresponding civil action and that noreservation to file such civil action separatelyshall be allowed. But a separate proceeding forthe recovery of civil liability in cases of violationsof B.P. No. 22 is allowed when the civil case isfiled ahead of the criminal case.

For independent civil actions: Physical injuries unqualifiedly refer to an

independent cause of action, whethercaused by a deliberate or negligent act.

Jurisprudence is mixed, but Sangcodiscusses that the reservationrequirement should only be for civilactions based on crime. What willprevent double recovery is the electionof any of the civil actions, being animplicit waiver of the others.

Madeja vs. Caro (1983): Article 33 is exdelicto, but it is an exception to thereservation requirement, as it allows thecitizen to enforce his right to damagesindependent of the prosecutor. “Physicalinjuries, fraud and defamation” are usedin their ordinary, generic sense (and notwithin RPC context).

BAR QUESTIONAs a result of a collision between a taxicab owned byA and another taxicab owned by B, X, a passenger ofthe first taxicab, was seriously injured. X later filed acriminal action against both drivers.

(a) Is it necessary for X to reserve his right to institutea civil action for damages against both taxicab ownersbefore he can file a civil action for damages againstthem? Why?(b) May both taxicab owners raise the defense of duediligence in the selection and supervision of theirdrivers to be absolved from liability for damages to X?Reason.Suggested Answer:(a) It depends. If the separate civil action is to

recover damages arising from the criminal act,reservation is necessary. If the civil actionagainst the taxicab owners is based on culpacontractual or on quasi-delict, there is no need forreservation.

(b) It depends. If the civil action is based on quasi-delict, the taxicab owners may raise the defense


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of diligence of a good father of a family in theselection and supervision of the driver; if theaction against them is based on culpa contractualor civil liability arising from a crime, they cannotraise the defense.

Alternative Answer:No such reservation is necessary. Under Section 1Rule 111 of the 2000 Rules on Criminal Procedure,what is “deemed instituted” with the criminal action isonly the action to recover civil liability arising from thecrime or ex delicto. All the other civil actions underArticles 32, 33, 34, 2176 of the New Civil Code are nolonger “deemed instituted,” and may be filedseparately and prosecuted independently evenwithout any reservation in the criminal action (Section3, Rule 111, 2000 Rules on Criminal Procedure). Thefailure to make a reservation the criminal action is nota waiver of the right to file a separate andindependent civil action based on these articles of theNew Civil Code (Casupanan vs. Laroya, G.R. No.145391, August 26, 2002)

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Chapter VIII. Human RelationsProvisions

A. ABUSE OF RIGHTSB. ACTS CONTRA BONUS MORES

1. ELEMENTS2. EXAMPLES

i. BREACH OF PROMISE TO MARRY,SEDUCTION AND SEXUAL ASSAULT

ii. MALICIOUS PROSECUTIONiii. PUBLIC HUMILIATIONiv. UNJUSTIFIED DISMISSAL

OTHER TORTSC. DERELICTION OF DUTYD. UNFAIR COMPETITIONE. VIOLATION OF HUMAN DIGNITY

Art. 19. Every person must, in the exercise of hisrights and in the performance of his duties, act withjustice, give everyone his due, and observe honestyand good faith.

A. Abuse of Rights

Velayo vs. Shell (1959): It may be said that Art19 only contains a mere declaration of principlesand while such statement may be essentiallycorrect, yet we find that such declaration isimplemented by Art 21. There is no belief ofmore baneful consequences upon the socialorder than that a person may with impunitycause damage to his fellowmen so long as hedoes not break the law though he may bedefying the most sacred postulates of morality.

Globe vs. CA (1989): A right, though by itselflegal because recognized or granted by law assuch, may nevertheless become the source ofsome illegality. When a right is exercised in amanner which does not conform with the normsenshrined in Article 19 and results in damage toanother, a legal wrong is thereby committed forwhich the wrongdoer must be held responsible.

Albenson vs. CA (1993): The elements of anabuse of right under Article 19 are the following:(1) There is a legal right or duty;(2) Which is exercised in bad faith;(3) For the sole intent of prejudicing or injuring

another.

University of the East vs. Jader (2000): Educationalinstitutions are duty-bound to inform the students oftheir academic status and not wait for the latter toinquire from the former. The consciousindifference of a person to the rights or welfareof the person/persons who may be affected byhis act or omission can support a claim fordamages.

B. Acts Contra Bonus Mores

Art. 21. Any person who willfully causes loss or injuryto another in a manner that is contrary to morals,good customs or public policy shall compensate thelatter for the damage.

1.Elements

Albenson vs. CA ((1993): This provision hasbroadened the scope of civil wrongs; it is moresupple and adaptable than tort. Elements:

1. legal action;2. contrary to morals, public policy, good

customs;3. intent to injure.

2. Examples

i. Breach of Promise to Marry,Seduction and Sexual Assault

Wassmer vs. Velez (1964): Mere breachof promise to marry is not an actionablewrong. But to formally set a weddingand go through all the above-describedpreparation and publicity, only to walkout of it when the matrimony is about tobe solemnized, is quite different. This ispalpably and unjustifiably contrary togood customs for which defendant mustbe held answerable in damages inaccordance with Article 21.

Baksh vs. CA (1993): Where a man'spromise to marry is in fact the proximatecause of the acceptance of his love by awoman and his representation to fulfillthat promise thereafter becomes theproximate cause of the giving of herselfunto him in a sexual congress, proof thathe had, in reality, no intention ofmarrying her and that the promise wasonly a subtle scheme or deceptivedevice to entice or inveigle her to accepthim and to obtain her consent to thesexual act, could justify the award ofdamages pursuant to Article 21 notbecause of such promise to marry butbecause of the fraud and deceit behindit and the willful injury to her honor andreputation which followed thereafter. It isessential, however, that such injuryshould have been committed in amanner contrary to morals, goodcustoms or public policy.

ii. Malicious Prosecution

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Que vs. IAC (1989): To constitutemalicious prosecution, there must beproof that the prosecution was promptedby a sinister design to vex and humiliatea person that it was initiated deliberatelyby the defendant knowing that hischarges were false and groundless.Concededly, the mere act of submittinga case to the authorities for prosecutiondoes not make one liable for maliciousprosecution.

Drilon vs. CA: Malicious Prosecutiondefined: An action for damages broughtby one against whom a criminalprosecution, civil suit, or other legalproceeding has been institutedmaliciously and without probable cause,after the termination of suchprosecution, suit or other proceeding infavor of the defendant herein. The gist ofthe action is the putting of legal processin force, regularly, for the mere purposeof vexation or injury.

Concurring requisites:1. The fact of the prosecution and the

defendant was himself the prosecutorand then action was terminated withan acquittal;

2. The prosecutor acted withoutprobable cause;

3. That the prosecutor was impelled bylegal malice, that is by improper orsinister motive.

iii. Public Humiliation

Grand Union vs. Espino: It is againstmorals, good customs and public policyto humiliate, embarrass and degrade thedignity of a person. Everyone mustrespect the dignity, personality, privacyand peace of mind of his neighbors andother persons (Article 26, Civil Code).

iv. Unjustified Dismissal

Quisaba vs. Sta. Ines: The complaint inthis case is not grounded on hisdismissal per se, as in fact he does notask for reinstatement, but on the mannerof his dismissal and the consequenteffects of such dismissal. If the dismissalwas done anti-socially or oppressively,as the complaint alleges, then therespondents violated Art. 1701 of theCC and Art 21 of the CC.

Other Torts

C. Dereliction of Duty

Art. 27: Any person suffering material or moral lossbecause a public servant or employee refuses orneglects, without just cause, to perform his officialduty may file an action for damages and other reliefagainst he latter, without prejudice to any disciplinaryadministrative action that may be taken.

Amaro vs. Samanguit: Requisites:(1) Defendant is a public officer charged with a

performance of a duty in favor of the plaintiff;(2) He refused or neglected without just cause to

perform the duty;(3) Plaintiff sustained material or moral loss as a

consequence of such non-performance;(4) The amount of such damages, if material.

D. Illegal Acts

Art. 20. Every person who, contrary to law, willfully ornegligently causes damage to another, shallindemnify the latter for the same

E. Unfair Competition

Art. 28: Unfair competition in agricultural, commercialor industrial enterprises or in labor through the use offorce, intimidation, deceit, machination or any otherunjust, oppressive or highhanded method shall giverise to a right of action by the person who therebysuffers damage.

F. Violation of Human Dignity

Art. 26. Every person shall respect the dignity,personality, privacy and peace of mind of hisneighbors and other persons. The following andsimilar acts, though they may not constitute a criminaloffense, shall produce a cause of action for damages,prevention and other relief:1. Prying into the privacy of another's residence2. Meddling with or disturbing the private life or

family relations of another3. Intriguing to cause another to be alienated from

his friends4. Vexing or humiliating another on account of his

religious beliefs, lowly station in life, place ofbirth, physical defect, or other personal condition.

St. Louis Realty Corporation vs. CA (Illustration ofa “similar act”): The acts and omissions of thefirm fall under Article 26. Persons who know theresidence of Doctor Aramil, were confused by thedistorted, lingering impression that he was rentinghis residence from Arcadio or that Arcadio hadleased it from him. Either way, his private life wasmistakenly and unnecessarily exposed.

CIVIL LAW REVIEWER Chapter IX. DAMAGES

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Chapter IX. Damages

A. DEFINITION AND CONCEPTB. KINDS OF DAMAGES

1. ACTUAL/COMPENSATORY DAMAGESi. KINDS OF ACTUAL DAMAGESii. GENERAL PRINCIPLES FOR

RECOVERYiii. DAMAGES FOR PERSONAL INJURY &

DEATHiv. ATTORNEY’S FEES

2. MORAL DAMAGESi. GENERAL PRINCIPLES OF

RECOVERYii. MORAL DAMAGES IN MALICIOUS

PROSECUTIONiii. MORAL DAMAGES IN RAPEiv. MORAL DAMAGES IN MURDERv. LABOR CASES

3. NOMINAL DAMAGESi. REQUISITES

4. TEMPERATE/MODERATE DAMAGESi. REQUISITES

5. LIQUIDATED DAMAGES6. EXEMPLARY/CORRECTIVE DAMAGES

i. REQUISITES TO RECOVEREXEMPLARY DAMAGES ANDLIQUIDATED DAMAGES AGREEDUPON IN ADDITION TO EXEMPLARY

ii. GENERAL PRINCIPLES

A. Definition and Concept

People vs. Ballesteros (supra): Damages maybe defined as the pecuniary compensation,recompense, or satisfaction for an injurysustained, or as otherwise expressed, thepecuniary consequences which the law imposesfor the breach of some duty or the violation ofsome right.

Ocena vs. Icamina: The obligation to repair thedamages exists whether done intentionally ornegligently and whether or not punishable bylaw.

Elements for recovery of damages:1. Right of action2. For a wrong inflicted by the defendant3. Damage resulting to the plaintiff

B. Kinds of Damages

(1) ACTUAL/COMPENSATORY- for lossactually suffered

(2) MORAL- mental anguish, etc.(3) NOMINAL- for rights recognized and

violated(4) TEMPERATE/MODERATE- for damages

proved but the amount was not proven(5) LIQUIDATED- stipulated damages in the

contract(6) EXEMPLARY/CORRECTIVE- to serve as

an example for the common good

1. Actual or Compensatory

When is a person entitled to actual orcompensatory damages? (Art. 2199)

When there is a pecuniary loss sufferedby him;

When he has alleged and prayed forsuch relief (Manchester Dev’t Corp vs.CA);

When he has duly proved it; When provided by law or by stipulation.

No proof of pecuniary loss is necessary for:moral, nominal, temperate, liquidated orexemplary damages. The assessment of suchdamages is discretionary upon the court, exceptliquidated ones. (Art. 2216)

i. Kinds of Actual Damages

CCArt.

2200 A. Damnum emergente- value of theloss suffered

B. Lucro cessante- profits which theobligee failed to obtain

2205 A. Loss of earning capacity due toinjury (temporary or permanent)

B. Damage to Business Standing orCommercial Credit

2206 A. Fixed indemnity for death = Php50,000 (as of 2005)

B. Loss of Earning Capacity of theDeceased

2209 Interest2208 Attorney’s Fees & Expenses of Litigation

ii. General Principles for Recovery

(1) The amount of damages must be fairand just and commensurate to the loss.- In case of contracts, only those

injuries which could have beenreasonably foreseen by the partiesby the parties at the time thecontract was entered into arerecoverable.


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(2) The damages must be proximate andnot remote or speculative.

(3) The damages must be proven bycompetent evidence (admissible orprobative)- Integrated Packaging Corp. vs. CA;

Fuentes vs. CA: It is necessary toprove with a reasonable degree ofcertainty, premised upon competentproof and on the best evidenceobtainable by the injured party, theactual amount of loss.

(4) Circ. No. 7, Mar. 24, 1988; ManchesterDev’t. Corp. vs. CA, 1987: Complaintand prayer must specify amount ofdamages and pay filing fees before itmay be accepted and admitted for filing.

(5) The requirement of certainty does notprevent the drawing of reasonableinferences from the fact andcircumstance in evidence.

(6) Events which occur after the wrongcomplained of may serve to render thedamage sufficiently certain.

(7) The damages must be susceptible ofascertainment in some manner otherthan by mere speculation, conjecture orsurmise and by reference to some fairlydefinite standard, such as market value,established experience or directinference from known circumstances.

Talisay-Silay vs. Associacion: Where,however, it is reasonably certain thatinjury consisting of failure to realizeotherwise reasonably expected profitshad been incurred, uncertainty as to theprecise amount of such unrealizedprofits will not prevent recovery or theaward of damages.

The extent of recovery:Recovery of all proximately traceable to theprimary negligence, including subsequentaggravations, the probability of which the lawregards as a consequence and natural resultlikely to flow form the original injury. However,note that if the subsequent aggravations are dueto his own negligence then the tortfeasor shallnot be liable for such since Art. 2203 imposes aduty on the injured party to avoid loss orminimize resulting damages.

Art.2201

Contracts andquasi contracts

Liability extends to those:1. natural and probable consequencesof the breach2. those that have been foreseen3. those that could have beenreasonably foreseen

Provided: obligor in good faith

Note:Liability extends to all damages which may bereasonably attributed to the non-performanceof the obligation in case of fraud, bad faith,malice or wanton attitude(FBM-WA).

Art.2202

Crimes andquasi-delicts

Liability extends to all damages whichare the natural and probableconsequence

Note:WON damage is foreseen is irrelevant

Algarra vs. Sandejas: Actual damages for anegligent act or omission are confined to thosewhich "were foreseen or might have beenforeseen," or those which were "the natural andprobable consequences" or "the direct andimmediate consequences" of the act oromission. (Asked eight times from 1990 to 2008)

Daywalt vs. Recoletos et al.: The damagesrecoverable upon breach of contract are,primarily, the ordinary, natural and in a sensethe necessary damage resulting from thebreach. Other damages, known as specialdamages, are recoverable where it appears thatthe particular conditions which made suchdamages a probable consequence of the breachwere known to the delinquent party at the timethe contract was made.

What must be proved:

Proof

Fact ofInjury

Reasonable certainty – only that the factand cause of injury must be taken out ofthe area of speculation. Usual burden ofproof required in a negligence case,prove the substantive right, its breach andthe amount of damages flowing from thebreach.

Cause Proximate cause – the cause, which, in anatural and continuous sequence,unbroken by any efficient interveningcause, produces the injury, and withoutwhich the injury would not have occurred.(“without which test of cause in fact”)

Amount Need not be proved with the samedegree of certainty. Fair and reasonableestimate of the amount of damage.


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When pecuniary loss need not be proved1) Liquidated damages previously agreed

upon2) If damages other than actual are sought

(Art. 2216)3) Loss is presumed (ex: loss of a child or

spouse)4) Forfeiture of bonds in favor of the

government for the purpose ofpromoting public interest or policy (ex:bond for temporary stay of alien

iii. Damages for Personal Injury & Death(Art. 2206)

Recoverable damages for deathcaused by a crime or quasi-delict:(a) At least three thousand pesos, even

though there may have beenmitigating circumstances.- (People vs. Robert Brodett y

Pajaro, Jan. 18, 2008: so as of2008, it is P75,000

(b) Loss of the earning capacity of thedeceased,- paid to his heirs- unless the deceased on account

of permanent physical disabilitynot caused by the defendant,had no earning capacity at thetime of death;

(c) Support according to the provisionsof Article 291- the recipient who is not a testate

or intestate heir may demandsupport from the person causingthe death, for a period notexceeding five years

(d) Moral damages- demanded by the spouse,

legitimate and illegitimatedescendants and ascendants ofthe deceased

Factors:1. Earning Capacity2. Obligation to Support3. Moral Damages to heirs

Compensation should be allowed forloss of earning capacity resulting fromthe death of a minor who has not yetcommenced employment or training fora specific profession if sufficientevidence is presented to establish theamount thereof.

The argument for allowingcompensation for loss of earning

capacity of a minor is even stronger if heor she was a student, whether alreadytraining for a specific profession or stillengaged in general studies. Formulaestablished in decided cases forcomputing net earning capacity:

MMTC v. CA: Net earning capacity (X) =life expectancy * [gross annual income –reasonable, necessary living expenses]

Life expectancy = 2/3 (80- age ofdeceased)

iv. Attorney’s Fees

Attorney’s Fees is the exception NOTthe general rule.

Art. 2208: can be recovered:(1) If there is a stipulation to that effect(2) When exemplary damages are

awarded;(3) When the defendant's act or omission

has compelled the plaintiff to litigate withthird persons or to incur expenses toprotect his interest;

(4) In criminal cases of maliciousprosecution against the plaintiff;

(5) In case of a clearly unfounded civilaction or proceeding against the plaintiff;

(6) Where the defendant acted in gross andevident bad faith in refusing to satisfythe plaintiff's plainly valid, just anddemandable claim;

(7) In actions for legal support;(8) In actions for the recovery of wages of

household helpers, laborers and skilledworkers;

(9) In actions for indemnity underworkmen's compensation andemployer's liability laws;

(10) In a separate civil action to recover civilliability arising from a crime;

(11) When at least double judicial costs areawarded;

(12) In any other case where the courtdeems it just and equitable thatattorney's fees and expenses oflitigation should be recovered.

In all cases, the attorney's fees and expensesof litigation must be reasonable.

Kinds:(1) Retainer’s agreement between the

lawyer and the client (in writing).(2) Award as an indemnity to the client.

Quirante vs. IAC: BELONGS to theclient hence the litigant is the judgmentcreditor who may enforce the judgmentby execution.


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INTEREST accrues when:- the obligation consists in the payment of

a sum of money- debtor incurs in delay- there being no stipulation to the contrary

If there is no stipulated interest thelegal interest of 6%. (Art. 2209)

Interestdue

From

Art. 2210 Breach ofcontract

Discretionof the court

Interestimposedondamagesawarded

Art. 2211 Crimes andquasi-delicts

Discretionof the court

Interest isawardedas part ofdamages

When shall interest earn legalinterest?

- from judicial demand- even if the obligation is silent upon this

point. (Art. 2212)

When is interest not recovered?- When claims/ damages are unliquidated- EXCEPT when the demand can be

established with reasonably certainty.(Art. 2213)

Determination of legal interest:1. When an obligation, regardless of its

source (i.e., law, contracts, quasi-contracts, delicts or quasi-delicts) isbreached, the contravenor can be heldliable for damages.

2. With regard particularly to an AWARDOF INTEREST in the concept of actualand compensatory damages, the RATEof interest, as well as the ACCRUALthereof, is imposed, as follows(EasternShipping Lines vs. CA, 1994):

BASE RATE ACCRUALa. When the obligation is breached,and it consists in the PAYMENT OFA SUM OF MONEY, i.e., a loan orforbearance of money, the interestdue should be

a) That which may have beenstipulated in writing.b) In the absence of stipulation,the rate of interest shall be 12%per annum (legal interest)

to be computed from default, i.e., fromJUDICIAL or EXTRAJUDICIAL demandunder and subject to the provisions ofArticle 1169 of the Civil Code.

b. Furthermore, the INTERESTDUE shall itself earn

legal interest from the time it is JUDICIALLY demanded.

c. When an obligation, NOTconstituting a loan or forbearanceof money, is breached, an intereston the AMOUNT OF DAMAGESawarded may be imposed at thediscretion of the court.

The actual base for thecomputation of legal interest shallbe on the amount finally adjudged.

at the rate of 6% per annum. If claim or damages are LIQUIDATED,from default, i.e., from judicial orextrajudicial demand. (Art. 1169, CivilCode)

If UNLIQUIDATED, from the time thedemand can be established withreasonable certainty. Hence, the interestshall begin to run only FROM THE DATETHE JUDGMENT OF THE COURT ISMADE (at which time the quantification ofdamages may be deemed to have beenreasonably ascertained).

d. When the JUDGMENT of thecourt awarding a sum of moneybecomes final and executory,

the rate of legal interest, whetherthe case falls under a,b, or c,above, shall be 12% per annum

from FINALITY UNTIL ITSSATISFACTION, this period beingdeemed to be an equivalent to aforbearance of credit.


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Start of Delay(1) Extrajudicial: demand letter(2) Judicial: Filing of complaint(3) Award

When damages mitigated:1. In quasi-delicts contributory

negligence (Art. 2214)2. Doctrine of avoidable consequences

a) This refers to the duty tominimize damages once acause of action has accrued.Standard: good father of afamily (Art. 2203)

3. In contracts, quasi-contracts and quasi-delict (C-BELL):

a) plaintiff has contravened theterms of contract

b) plaintiff derived some benefit asresult of contract

c) in case where exemplarydamages are to be awarded,that the defendant acted uponthe advise of counsel

d) that the loss would haveresulted in any event

e) that since the filing of the action,the defendant has done his bestto lessen the plaintiff's loss orinjury (Art. 2215)

4. In crimes → mitigating circumstances (Art. 2204) (increased, for aggravating)

2. Moral Damages

Visayan Sawmill vs. CA: Moral damages areemphatically not intended to enrich acomplainant at the expense of the defendant. Itsaward is aimed at the restoration, within thelimits of the possible, of the spiritual status quoante, and it must be proportional to the sufferinginflicted.

Art. 2217: Awarded when injury consists of:(PBMF-MWSSS)

a. Physical sufferingb. Besmirched reputationc. Mental anguishd. Frighte. Moral shockf. Wounded feelingsg. Social humiliationh. Serious anxietyi. Similar injury

- Though incapable of pecuniarycomputation

- If such is the proximate result ofdefendant’s act or omission.

Villanueva vs. Salvador: Requisites for awardingmoral damages:

(1) there must be an injury, whetherphysical, mental or psychological,clearly sustained by the claimant;

(2) there must be a culpable act or omissionfactually established;

(3) the wrongful act or omission of thedefendant must be the proximate causeof the injury sustained by the claimant;and

(4) the award of damages is predicated onany of the cases stated in ART. 2219NCC.

i. General Principles of Recovery1. Moral damages must somehow be

proportional to the suffering inflicted.

2. In culpa contractual or breach ofcontract, moral damages may berecovered when the defendant acted inbad faith or was guilty of grossnegligence (amounting to bad faith) or inwanton disregard of his contractualobligation and, exceptionally, when theact of breach of contract itself isconstitutive of tort resulting in physicalinjuries.

3. By special rule in Article 1764, in relationto Article 2206, moral damages mayalso be awarded in case the death of apassenger results from a breach ofcarriage.

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 mayaptly be recovered. This rule alsoapplies to contracts when breachedby tort.

5. In culpa criminal, moral damages couldbe lawfully due when the accused isfound guilty of physical injuries,lascivious acts, adultery or concubinage,illegal or arbitrary detention, illegalarrest, illegal search, or defamation.

6. Malicious prosecution can also give riseto a claim for moral damages. The term"analogous cases," referred to in Article2219, following the ejusdem generisrule, must be held similar to thoseexpressly enumerated by the law.


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7. Although the institution of a clearlyunfounded civil suit can at times be alegal justification for an award ofattorney's fees, such filing, however, hasalmost invariably been held not to be aground for an award of moral damages.(Expertravel& Tours vs. CA, 1 to 7)

8. The burden rests on the person claimingmoral damages to show convincingevidence for good faith is presumed. Ina case involving simple negligence,moral damages cannot be recovered.(Villanueva vs. Salvador)

9. Failure to use the precise legal terms or"sacramental phrases" of "mentalanguish, fright, serious anxiety,wounded feelings or moral shock" doesnot justify the denial of the claim fordamages. It is sufficient that these exactterms have been pleaded in thecomplaint and evidence has beenadduced (Miranda-Ribaya vs. Bautista)

10. Even if the allegations regarding theamount of damages in the complaint arenot specifically denied in the answer,such damages are not deemedadmitted. Raagas, et al. vs. Traya et al.

11. An appeal in a criminal case opens thewhole case for review and this 'includesthe review of the penalty, indemnity anddamages. Even if the offended party hadnot appealed from said award, and theonly party who sought a review of thedecision of said court was the accused,the court can increase damagesawarded. Sumalpong vs. CA

Cases where recovery of moral damages areallowed

(1) A criminal offense of physicalinjuries;(2) Quasi-delicts causing physicalinjuries;(3) Seduction, abduction, rape, or otherlascivious acts;(4) Adultery or concubinage;(5) Illegal or arbitrary detention or arrest;(6) Illegal search;(7) Libel, slander, defamation;(8) Malicious prosecution;(9) Article 309;(10) Articles 21, 26, 27, 28, 29, 30, 32,34, and 35. (Art. 2219)(11) wilful injury to property (Art. 2220)(12) breach of contract (Art. 2220)

(13) death of passenger from breach abreach of carriage (Art. 1764 in relationto Art. 2206 and (Expertravel & Toursvs. CA)

Art. 2219. Moral damages may be recovered inthe following and analogous cases: (not anexclusive list; 2PI-SALAMI-309-Others)

(1) A criminal offense resulting in physicalinjuries;

(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;

(disrespect for the dead)(10) Acts and actions referred to in Articles

21, 26, 27, 28, 29, 30, 32, 34, and 35.

Who else can recover moral damages?- Parents of the female seduced,

abducted, raped, or abused, referred toin No. 3

- The spouse, descendants, ascendants,and brothers and sisters (SDABS) maybring the action mentioned in No. 9 inthe order named.

What are the other legal grounds forawarding moral damages?

- Willful injury to property if suchdamages are justly due.

- Breaches of contract where thedefendant acted fraudulently or in badfaith. (Art. 2220)(asked five times from 1990 to 2008)

BAR QUESTION

Ortillo contracts Fabricato, Inc. to supply and installtile materials in a building he is donating to hisprovince. Ortillo pays 50% of the contract price as peragreement. It is also agreed that the balance wouldbe payable periodically after every 10% performanceuntil completed. After performing about 93% of thecontract, for which it has been paid an additional 40%as per agreement, Fabricato, Inc. did not complete theproject due to its sudden cessation of operations.Instead, Fabricato, Inc. demands payment of the last10% of the contract despite its non-completion of theproject. Ortillo refuses to pay, invoking the stipulationthat payment of the last amount of 10% shall be uponcompletion. Fabricato, Inc. brings suit for the entire10% plus damages. Ortillo counters with claims for(a) moral damages for Fabricato, Inc.’s unfounded suitwhich has damaged his reputation as a philanthropist


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and respected businessman in his community, and (b)attorney’s fees.

(a) Does Ortillo have a legal basis for his claim formoral damages?

(b) How about his claim for attorney’s fees, havinghired a lawyer to defend him?

Suggested Answer:(a) There is no legal basis to Ortillo’s claim for moral

damages. It does not fall under the coverage ofArticle 2219 of the New Civil Code.

(b) Ortillo is entitled to attorney’s fees becauseFabricato’s complaint is a case of maliciousprosecution or a clearly unfounded civil action(Art. 2208 [4] and [11], NCC).

ii. Moral Damages in MaliciousProsecution

Mijares vs. CA: Moral damages cannotbe recovered from a person who hasfiled a complaint against another in goodfaith, or without malice or bad faith. Ifdamage results from the filing of thecomplaint, it is damnum absque injuria.

Castillo vs. Castillo: The adverse resultof an action does not per se make theact wrongful and subject the actor to thepayment of moral damages. The lawcould not have meant to impose apenalty on the right to litigate; such rightis so precious that moral damages maynot be charged on those who mayexercise it erroneously.

iii. Moral Damages in Rape

People vs. Calongui: Anent the award ofdamages, civil indemnity ex delicto ismandatory upon finding of the fact ofrape while moral damages is awardedupon such finding without need offurther proof because it is assumed thata rape victim has actually suffered moralinjuries entitling the victim to suchaward. If without factual and legalbases, no award of exemplary damagesshould be allowed.

iv. Moral Damages in Murder

People vs. Barcena: TC correctlyawarded P75K as civil indemnity whichis awarded if the crime is qualified bycircumstances which warrant theimposition of the death penalty.However, the award of P50K as moraldamages must be increased to P75K in

line with prevailing jurisprudence. Inaddition, the presence of the qualifyingcircumstances of minority andrelationship entitles the offended party toexemplary damages in the amount ofP25K.

People vs. Teodorico Cleopas andPirame (2000): The award of P50,000from each accused as moral andexemplary damages, however, isunsupported. The widow of the victimdid not testify on any mental anguish oremotional distress, which she sufferedas a result of her husband's death.

Arcona vs. CA: As borne out by humannature and experience, a violent deathinvariably and necessarily brings aboutemotional pain and anguish on the partof the victim’s family. Such violent deathor brutal killing not only steals from thefamily of the deceased his precious life,deprives them forever of his love,affection and support, but often leavesthem with the gnawing feeling that aninjustice has been done to them. For thisreason, moral damages must beawarded even in the absence of anyallegation and proof of the heirs’emotional suffering.

v. Labor Cases

Triple Eight Interated Services, Inc. vs.NLRC: Moral damages are recoverablewhere the dismissal of the employeewas attended by bad faith or fraud orconstituted an act oppressive to labor, orwas done in a manner contrary tomorals, good customs, or public policy.Likewise, exemplary damages may beawarded if the dismissal was effected ina wanton, oppressive or malevolentmanner. Factors in determining amount:(1) Political, social, financial status, of

the person offended as well as thebusiness and financial standing ofthe offender.

(2) Degree of anguish(3) Sentimental value where applicable

ILLUSTRATIONS:

Kierulf et al. vs. CA : The social and financialstanding of a claimant of moral damages may beconsidered in awarding moral damages only ifhe or she was subjected to contemptuous


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conduct despite the offender's knowledge of hisor her social and financial standing.

PNB vs. CA: Petitioner has not presentedadequate evidence to show that privaterespondent is indeed a big time gambler.Petitioner has besmirched private respondent'sreputation and has considerably caused himundue humiliation. The records further show thatplaintiff is a prominent businessman, licensedand engaged in the real estate business. He isat the same time a consultant of Dizon-EsguerraReal Estate Company. Defendant treated him asa valued and VIP client. Because of the bank'srefusal to encash the entire one million faceamount of his manager's checks, he was soembarrassed for he was not able to purchase ahouse and lot in Baguio City.Lopez, et al. vs. Pan American World Airways:International carriers like defendant know theprestige of such an office. For the Senate is notonly the Upper Chamber of the PhilippineCongress, but the nation's treaty-ratifying body.And he was former Vice-President of thePhilippines. An award of P100,000,000 isappropriate. Mrs. Maria J. Lopez, as wife ofSenator Lopez, shared his prestige andtherefore his humiliation. Mr. and Mrs. AlfredoMontelibano, Jr. were traveling as immediatemembers of the family of Senator Lopez. Assuch they likewise shared his prestige andhumiliation.Producers Bank vs. CA: In the case of LeopoldoAraneta v. Bank of America, we held that: "Thefinancial credit of a businessman is a prized andvaluable asset, it being a significant part of thefoundation of his business. Any adversereflection thereon constitutes some financial lossto him.” The damage to private respondents'reputation and social standing entitles them tomoral damages.

Strebel vs. Figueras, et al.: As a general rule,the right of recovery for mental sufferingresulting from bodily injuries is restricted to theperson who has suffered the bodily hurt, andthere can be no recovery for distress caused bysympathy for another's suffering, or for fright dueto a wrong against a third person. A husband orwife cannot recover for mental suffering causedby his sympathy for the other's suffering.

For Corporations:

ABS-CBN vs. CA: The award of moral damagescannot be granted in favor of a corporationbecause, being an artificial person and havingexistence only in legal contemplation, it has nofeelings, no emotions, no senses, It cannot,

therefore, experience physical suffering andmental anguish, which call be experienced onlyby one having a nervous system. The statementin People vs. Manero and Mambulao LumberCo. vs. PNB that a corporation may recovermoral damages if it "has a good reputation thatis debased, resulting in social humiliation" is anobiter dictum.NAPOCOR vs. Philipp Brothers: While it is truethat besmirched reputation is included in moraldamages, it cannot cause mental anguish to acorporation, unlike in the case of a naturalperson, for a corporation has no reputation in thesense that an individual has, and besides, it isinherently impossible for a corporation to suffermental anguish.

BAR QUESTION

Rosa was leasing an apartment in the city. Becauseof the Rent Control Law, her landlord could notincrease the rental as much as he wanted to, norterminate her lease as long as she was paying herrent. In order to force her to leave the premises, thelandlord stopped making repairs on the apartment,and cause the water and electricity services to bedisconnected. The difficulty of living without electricityand running water resulted in Rosa’s suffering anervous breakdown. She sued the landlord for actualand moral damages. Will the action prosper?Explain.

Answer:Yes, based on quasi-delict under the human relationsprovisions of the New Civil Code (Articles 19, 20 and21) because the act committed by the lessor iscontrary to morals. Moral damages are recoverableunder Article 2219 (10) in relation to Article 21.Although the action is based on quasi-delict and noton contract, actual damages may be recovered if thelessee is able to prove the losses and expenses shesuffered.

Alternative Answers:(a) Yes, based on breach of contract. The lessor

has the obligation to undertake repairs to makethe apartment habitable and to maintain thelessee in the peaceful and adequate enjoymentof the lease for the entire duration of the contract(Article 1654, NCC). Since there was willfulbreach of contract by the lessor, the lessee isentitled to moral damages under Article 2220,NCC. She is also entitled to actual damages,e.g. loss of income, medical expenses, etc.,which she can prove at trial.

(b) Yes, based on contract and/or on tort. The lessorwillfully breached his obligations under Article1654, NCC, hence, he is liable for breach ofcontract. For such breach, the lessee mayrecover moral damages under Art. 2220 of theNCC, and actual damages that she may havesuffered on account thereof. And since theconduct of the lessor was contrary to morals, he


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may also be held liable for quasi-delict. Thelessee may recover moral damages under Article2219 (10) in relation to Article 21, and all actualdamages which she may have suffered by reasonof such conduct under Articles 9, 20 and 21.

(c) Yes, the action should prosper for both actualand moral damages. In fact, even exemplarydamages and attorney’s fees can be claimed byRosa, on the authority of Magbanua vs. IAC (137SCRA 328), considering that, as given, thelessor’s willful and illegal act of disconnecting thewater and electric services resulted in Rosa’ssuffering a nervous breakdown. Art. 20 NCC andArt. 21 NCC authorize the award of damages forsuch willful and illegal conduct.

3. Nominal Damages

Art. 2221. Nominal damages are adjudicated in orderthat a right of the plaintiff, which has been violated orinvaded by the defendant, may be vindicated orrecognized, and not for the purpose of indemnifyingthe plaintiff for any loss suffered by him.

Art. 2222. The court may award nominal damages:- in every obligation in Article 1157, or- where any property right has been invaded.

Art. 2223. Adjudication of nominal damagesprecludes:

- further contest upon the right involved- all accessory questions between the parties

or their respective heirs and assigns.

i. Requisites:(1) A legal right has been violated.(2) There is no loss or damage suffered or

such cannot be proven or was notproved.

(3) The award is to vindicate the rightviolated.

General Rule: One does not ask for nominaldamages, and it is in lieu of the actual, moral,temperate, or liquidated damages.

Nominal damages are incompatible with: actual,temperate and exemplary damages.

Armovit vs. CA: Nominal damages cannot co-exist with actual or compensatory damages.

Francisco v. Ferrer: No moral or exemplarydamages was awarded. Nevertheless, whenconfronted with their failure to deliver on thewedding day the wedding cake ordered and paidfor, petitioners gave the lame excuse thatdelivery was probably delayed because of thetraffic, when in truth, no cake could be deliveredbecause the order slip got lost. For suchprevarication, petitioners must be held liable for

nominal damages for insensitivity, inadvertenceor inattention to their customer's anxiety andneed of the hour.

4. Temperate Damages

Temperate or moderate damages are more thannominal but less than compensatory damages.It may be recovered when some pecuniary losshas been suffered but its amount can not beprovided with certainty. (Art. 2224)

Temperate damages must be reasonable underthe circumstances. (Art. 2225)

i. Requisites:(1) There is actual damage.(2) The pecuniary amount of the damage

cannot be proved.(3) Amount must be reasonable.

In cases where the resulting injury might becontinuing and possible future complicationsdirectly arising from the injury, while certain tooccur are difficult to predict, temperate damagescan and should be awarded on top of actual orcompensatory damages; in such cases there isno incompatibility between actual and temperatedamages.

Citytrust Bank vs. IAC: Temperate damages areincompatible with nominal damages hence,cannot be granted concurrently.

Pleno vs. CA: Temperate damages are includedwithin the context of compensatory damages(RCPI vs. CA). ". . . There are cases where fromthe nature of the case, definite proof ofpecuniary loss cannot be offered, although thecourt is convinced that there has been such loss.For instance, injury to one's commercial credit orto the goodwill of a business firm is often hard toshow certainty in terms of money. (NOTE: In thiscase actual and temperate damages wereawarded. It is postulated that the actualdamages is for the car while the temperatedamages is for the lost actual income notsufficiently proved.)5. Liquidated Damages

Those agreed upon by the parties to a contract,to be paid in case of breach thereof. (Art. 2226)

Grounds for equitable reduction:- iniquitous or- unconscionable. (Art. 2227)

Stipulation is not controlling:


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When the breach of the contract is not the onecontemplated by the parties in agreeing uponthe liquidated damages. In this case, the lawshall determine the measure of damages. (Art.2228)

These damages are agreed upon in acontract in case of breach thereof.

There is no need to prove the amount,only the fact of the breach.

The amount can be reduced if:- unconscionable as determined by

the court- partial or irregular performance.

General Rule: The penalty shall substitute theindemnity for damages and the payment of theinterests in case or 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.

6. Exemplary/Corrective Damages

Art. 2229. Nature of exemplary or correctivedamages

- Imposed by way of example- or correction for the public good- in addition to the moral, temperate,

liquidated or compensatory damages.

Exemplary damages cannot be recovered as amatter of right; discretion of the court. (Art.2233)

i. Requisites to recover exemplarydamages and liquidated damagesagreed upon in addition to exemplary(Art.2234):

The plaintiff must show that he isentitled to moral, temperate orcompensatory damages:

If arising from When exemplarydamages are granted

Art.2230

Crimes the crime wascommitted with anaggravatingcircumstance/s

Art.2231

Quasi-delicts defendant acted withgross negligence

Art.2232

Contracts andQuasi- contracts

defendant acted in awanton, fraudulent,reckless, oppressive, ormalevolent manner(WFROMM)

A stipulation whereby exemplarydamages are renounced in advanceshall be null and void. (Art. 2235)

ii. General Principles(1) Amount need not be proven.(2) Cannot be recovered as a matter or

right; may be waived.(3) An employer may be subsidiarily liable

to pay moral, actual, temperate orliquidated damages arising from anemployee’s criminal offense, but NOT asto exemplary damages becauseaggravating circumstances are personalto the accused.

PNB vs. CA: However, the award ofP1,000,000 exemplary damages is alsofar too excessive and should likewise bereduced to an equitable level.Exemplary damages are imposed not toenrich one party or impoverish anotherbut to serve as a deterrent against or asa negative incentive to curb sociallydeleterious actions.

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PRIVATE INTERNATIONAL LAWTable of Contents

Chapter I. Introduction.................................427

Chapter II. Jurisdiction ................................429I. Bases of Exercise of Judicial Jurisdiction

429II. Exercise of Jurisdiction .....................429III. Ways of Dealing with Jurisdiction in aConflicts Problem.......................................430

Chapter III. Choice of Law ...........................431I. Approaches to Choice of Law ...........431

Chapter IV. Characterization.......................433I. Types of Characterization .................433II. Depecage..........................................433

Chapter V. Renvoi ........................................434I. Definition ...........................................434II. Ways of Dealing with Renvoi ............434

Chapter VI. Notice and Proof of Foreign Law.......................................................................435

I. Proof of Foreign Law.........................435II. Exceptions to the Application of ForeignLaw 435

Chapter VII. Nationality................................436I. Determination of Nationality ..............436II. Procedure for Naturalization .............436III. Loss of Philippine Citizenship ...........437IV. Problems in Applying the NationalityPrinciple .....................................................438

Chapter VIII. Domicile ..................................439I. Domicile ............................................439II. Comparative Merits and Demerits ofDomicile and Nationality ............................440

Chapter IX. Principles on Personal Statusand Capacity.................................................441

I. Definition ...........................................441II. Beginning and End of Personality.....441III. Absence ............................................441IV. Name.................................................442V. Age of Majority ..................................442VI. Capacity ............................................442

Chapter X. Family Relations........................443I. Marriage ............................................443II. Divorce and Separation.....................445III. Annulment and Declaration of Nullity445IV. Parental Relations.............................446V. Adoption ............................................446

Chapter XI. Property ....................................447I. Controlling Law—Lex Situs/Lex ReiSitae447II. Exceptions to Lex Situs.....................447III. Situs of Certain Properties ................447

Chapter XII. Contracts .................................449I. Extrinsic Validity of Contracts ...........449II. Extrinsic Validity of Contracts ...........449III. Capacity to Enter Into Contracts.......449IV. Choice of Law Issues in ConflictsContracts Cases ........................................449V. Limitation Choice of Law...................450VI. Applicable Law in the Absence ofEffective Choice.........................................450

Chapter XIII. Succession .............................451I. Extrinsic Validity (Arts. 17, 815-817, CC)

451II. Intrinsic Validity .................................451III. Interpretation of Wills ........................451IV. Revocation ........................................451V. Probate..............................................451VI. Administration of Estates ..................452VII. Trusts............................................452

Chapter XIV. Torts and Crimes...................453I. Torts ..................................................453II. Crimes...............................................454

Chapter XV. Torts and Crimes....................455I. Personal Law of Corporations ..........455II. Domicile/Residence of Corporations 455III. Jurisdiction Over Foreign Corporations

455IV. Right of Foreign Corporations to BringSuit 456

Chapter XVI. Foreign Judgments ...............457I. Recognition v. Enforcement..............457II. Bases of Recognition and Enforcement

457III. Policy of Preclusion UnderlyingRecognition and Enforcement ...................457IV. Requisites for Recognition orEnforcement ..............................................457V. Procedures for Enforcement .............457VI. Effect of Foreign Judgment in thePhilippines .................................................458

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Chapter I. Introduction

PRIVATE INTERNATIONAL LAW:

It is a branch or part of Philippine Law which

regulates the application of foreign law

within Philippine jurisdiction in the resolution

of cases involving foreign elements.

It is that part of municipal law which governs

cases involving a foreign element.

more commonly known in other jurisdictions

as conflict of laws

General Nature of Private International Law

It is a method or technique. It is not a

system of substantive rules. It has no

material content in terms of rights and

duties, and hence it does not provide

immediate solution to the issue at hand. It

only points out the legal system which rules

are to be applied to a particular dispute.

It is a modus vivendi among the private law

systems of the world by which they may

apply one another’s laws.

The principles of conflict of laws

incorporated in municipal laws of many

states are based on comity of nations.

COMITY: is neither a matter of absolute

obligation nor of mere courtesy and good

will, it is the recognition which one nation

allows within its territory to the legislative,

executive, or judicial acts of another nation

having due regard both to international duty

and convenience, and to the rights of its own

citizens or of other persons who are under

the protection of its laws (Hilton v. Guyot,

1895)

FOREIGN ELEMENT may refer to parties,

property, events, or transactions.

PRIVATE INTERNATIONAL LAW vs.PUBLICINTERNATIONAL LAW

Basis PRIL PILParties

Individuals orcorporations

Primarily statesand internationalorganizations

Exception:Human rightscases

Transactions state-to-state orgovernment-to-governmentmatters

privatetransactionsbetweenindividuals

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PRIVATE INTERNATIONAL LAW TEAM

Lyvette San DiegoLead Writer

Viktor FontanillaWriter

CIVIL LAW


ACADEMICS COMMITTEE




Kae Guerrero

DESIGN & LAYOUT



LECTURES COMMITTEE


Heads


Arianne Cerezo


Volunteers

MOCK BAR COMMITTEE

Lilibeth Perez


Dahlia Salamat

LOGISTICS

Charisse Mendoza


Jill HernandezHead


Faye CelsoJoie Bajo

Members

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Sources Custom Treaty general

principles oflawrecognized bycivilizednations

judicialdecisions

teachings ofthe mosthighlyqualifiedpublicists

Nationalconflict rule

Internationalconflict rules

Remedies

resort to forumcourt oradministrativetribunals (asprovided bymunicipal lawsof the state)

diplomaticprotest

negotiation,conciliation,arbitration

adjudicationbeforeinternationaltribunal

use of force war

PRIL v. Municipal law: presence of foreign

element

SOURCES1. Codes and statutes2. Treaties and international conventions3. Treatises, commentaries, and studies of

learned societies4. Judicial decisions

Examples of Conflict of Law Rules in thePhilippines1. Art. 15 CC: Lex Patriae2. Art. 1251 (par. 3) CC: Lex Domicili3. Art. 16 CC: Lex Situs/ Lex Rei Sitae4. Art. 17 (par. 1) CC: Lex Loci Contractus5. Art. 71 CC: Lex Loci Celebrationis6. Art. 26 (par. 1) FC: Lex Loci Celebrationis7. Art. 1306 CC: Lex Loci Intentionis

General Process in the Resolution of ConflictProblem1. Jurisdiction

Where can or should litigation beinitiated?

2. Characterization of Cause of Action Which legal category does the case fall

into?3. Choice of law Which law will the court apply?

4. Recognition and enforcement ofjudgments Where can the resulting judgment be

enforced?

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Chapter II. Jurisdiction

I. BASES OF JURISDICTIONII. EXERCISE OF JURISDICTIONIII. WAYS OF DEALING WITH JURISDICTION IN

A CONFLICTS PROBLEM

JURISDICTION1. Judicial jurisdiction - the power or

authority of a court to try a case, renderjudgment and execute it in accordancewith law.

2. Legislative jurisdiction- the ability ofthe state to promulgate laws andenforce them on all persons andproperty within its territory.

I. Bases of Exercise of JudicialJurisdiction

A. Jurisdiction over the PERSON

Acquisition—1. Over plaintiff: filing of suit2. Over defendant:

a. entry of appearance, orb. service of legal process/summons

In rem proceeding: service of summons bypublication Asiavest Limited v. CA, 1998: Jurisdiction

over the person of the defendant is not aprerequisite to confer jurisdiction on thecourt provided that the court acquiresjurisdiction over the res. Nonethelesssummons must be served upon thedefendant not for the purpose of vesting thecourt with jurisdiction but merely forsatisfying the due process requirement.

In personam proceeding:1. General Rule: Personal service of

summons or substituted service,PROVIDED, the defendant is within theterritorial jurisdiction of the court

2. Exception: In Gemperle v. Schenkerwherein a non-resident was served withsummons through his wife, who was aresident of the Philippines and who was hisrepresentative and attorney-in-fact in a priorcivil case filed by him; moreover, the secondcase was a mere offshoot of the first case.

B. Jurisdiction over the PROPERTY1. Acquisition

a. seizure of property under a legalprocess

b. institution of legal proceedings whereinthe court’s power over the property isrecognized and made effective

2. Basis of jurisdiction: the presence of theproperty within the territorial jurisdiction ofthe forum

C. Jurisdiction over the SUBJECT MATTER

Acquisition—1. competence of the court to hear, try and

decide the case is conferred by law2. necessary that said power be properly

invoked by the filing of petition3. cannot be conferred by mere consent of

parties

II. Exercise of Jurisdiction

TRADITIONAL BASIS:1. State’s PHYSICAL POWER over persons

and property within its territory2. This explains the distinctions made between

actions in personam1

and actions in rem orquasi in rem

2, dating back to the case of

Pennoyer v. Neff (1878).

In the US: The conceptual basis for the exerciseof jurisdiction has shifted from territorial power toconsiderations of MINIMUM CONTACTS andFUNDAMENTAL FAIRNESS.1. International Shoe Co. v. Washington

(1945): Due process only requires that thedefendant who is not present within theterritory of the forum have minimum contactswith it such that the maintenance of the suitdoes not offend traditional notions of fairplay and substantial justice.

2. Mullane v. Central Hanover Bank & TrustCo. (1950): The standard for adequatenotice is WON it is reasonably certain toinform those affected or, where conditionsdo not reasonably permit such notice, WONthe form chosen is not substantially lesslikely to bring home notice than other of thefeasible and customary substitutes.

3. Shaffer v. Heitner (1977): The minimumcontacts and fundamental fairness testshould be satisfied regardless of whetherthe proceedings are in rem, quasi in rem, orin personam, and the minimum contacts

1Actions in personam are directed against specific

persons and seek personal judgments.2

Actions in rem or quasi in rem are directed againstthe thing or property or status of a person and seekjudgments with respect thereto as against the wholeworld and against particular persons, respectively.

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must exist among the forum, defendant, andthe cause of action.

4. Long-arm statutes: statutes that allow theforum state to exercise jurisdiction over anon-resident defendant, provided that theprospective defendant has sufficientminimum contacts with the forum state.

III. Ways of Dealing with Jurisdiction in aConflicts Problem

A. Dismiss the Case

Grounds—1. For Lack of jurisdiction over the subject

matter or over the parties to the suit2. On the ground of FORUM NON

CONVENIENS

Doctrine of Forum Non Conveniens—(Asked in 94, 04 BAR EXAMINATIONS)1. This literally means “the forum is

inconvenient.”2. This doctrine requires the court to dismiss

the case on the ground that the controversymay be suitably tried elsewhere. The doctrine of forum non conveniens

should NOT be used as a ground for amotion to dismiss because Sec. 1, Rule16 of the Rules of Court does notinclude said doctrine as a ground.

The propriety of dismissing a casebased on the principle of forum nonconveniens requires a factualdetermination; hence it is more properlyconsidered as a matter of defense.(Bank of America NT&SA v. CA, 2003)

3. Reasons for applying forum non conveniens:a. To prevent abuse of court’s processesb. Burdensome on the court or taxpayersc. Local machinery is inadequate to

effectuate a right (no way for the court tosecure evidence and attendance ofwitnesses)

d. Avoid global forum shopping

B. Assume Jurisdiction

1. Proceed to Characterization (discussedunder CHARACTERIZATION)

2. Apply either: Forum Law or Foreign Law (willbe discussed more on the CHOICE OFLAW) When the court assumes jurisdiction, it

may apply forum law or foreign law. Forum law should be applied whenever

there is good reason to do so becauseforum law is the basic law.

Factors which justify the application of forum law1. A specific law of the forum decrees that

internal law should apply.2. The proper foreign law was not properly

pleaded and proved.3. The case falls under any of the exceptions

to the application of foreign law:a. The foreign law is contrary to an

IMPORTANT PUBLIC POLICY of theforum

b. The foreign law is PROCEDURAL innature

c. The foreign law is PENAL in natured. The case involves real or personal

PROPERTY SITUATED IN THEFORUM (Lex Situs)

e. The issue involved in the enforcement offoreign claim is FISCAL orADMINISTRATIVE

f. The foreign law is contrary to GOODMORALS (contra bonus mores)

g. The application of foreign law will workUNDENIABLE INJUSTICE to citizens ofthe forum

h. The application of foreign law mightendanger the VITAL INTERESTS of thestate

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Chapter III. Choice of Law

I. APPROACHES TO CHOICE OF LAWA. TRADITIONL; APPROACHESB. MODERN APPROACHES

CHOICE OF LAW The determination by the court of whether to

apply forum law or foreign law The factors that justify exercise of judicial

jurisdiction may be the same factors used todetermine choice of law.

BUT, jurisdiction and choice of law are twodifferent concepts. A court may exercisejurisdiction but apply foreign law OR notexercise jurisdiction, although its internal lawmay be applied as the proper law.

I. Approaches to Choice of Law

Ideally, all choice of law theories should advancethe notions of JUSTICE and PREDICTABILITY.

A. Traditional Approaches: emphasizesimplicity, convenience and uniformity

1. Vested Rights Theory An act done in a foreign jurisdiction

gives rise to the existence of a right ifthe laws of that state provide so. Thisright vests in the plaintiff and he carriesit with him to be enforced in any forumhe chooses to bring suit

The applicable law is the law of theplace of occurrence of the LAST ACTnecessary to complete the cause ofaction.

If the place of the last act creates nolegal right, there is nothing for the forumto recognize and enforce, even if its ownlaw creates such a right.

Illustration: Carroll is an employee ofAlabama Corp. Both EE and ER areresidents of Alabama. Carroll wasinjured in the course of work inMississippi due to negligent conduct ofco-employees in Alabama. Mississippibars recovery. Alabama makes ERliable. Carroll files suit in Alabama.There can be no recovery in this case.Although it is claimed that the negligentconduct was done in Alabama, the lawof Mississippi should be applied whichbars recovery since the injury wassustained in that state and such injurycreated the cause of action. It is the lawof the place of the LAST ACT necessaryto complete the cause of action.

(Alabama Great Southern Railroad v.Carroll, 1892)

Criticism: Failure to resolve conflictscases with considerations of policy andfairness as it is too technical.

2. Cook’s Local Law Theory Treats conflicts cases as a purely

domestic case that does not involve aforeign element

Criticism: narrow-minded by favoring anexaggerated local policy

3. Caver’s Principle of Preference Choice of law should be determined by

considerations of justice and socialexpediency and should not be the resultof mechanical application of the rule orprinciple of selection.

B. Modern Approaches: relate to reachingappropriate results in particular cases

1. Place of the Most Significant Relationship Factual contacts evaluated depending

on their relative importance andrelevance to the issue at hand

Identifies a plurality of factors that mustbe considered in the light of choice oflaw principles

Among these factors are: needs of theinterstate and international system,relevant policies of the concerned andinterested states, justified expectationsof the parties, basic policies underlying aparticular field of law, certainty,predictability and uniformity of result andease in the determination of law to beapplied

Criticism: No standard to evaluatesignificance of each contact

In applying the grouping of contacts theory,courts, instead of regarding as conclusivethe intention of the parties or the place of themaking or performance, lay emphasis ratheron the law of the place which has the mostsignificant contacts with the matter indispute. (Auten vs. Auten, 1954)

2. Interest Analysis Looks at the policy behind the laws of

the involved states and the interest eachstate has in applying its own law.

Factual contacts alone do not determineoutcome of the case UNLESS theyreflect a state policy which would beadvanced by the application of thesubstantive state law.

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Court determines whether the caseinvolves APPARENT, TRUE or FALSEconflict.a. True Conflict – If there is an

apparent conflict, the court takes asecond look on the policies andinterests of each state. If both havereal interests in applying their law,then apparent conflict is a trueconflict.

b. False Conflict – If only one state hasan actual interest in having its lawapplied and the failure to apply theother state law will not impair itspolicy

Criticisms:a. Conflicts cases were ordinarily

concerned only with private and notgovernmental interests.

b. ii.Not all state legislatures publishreports that explain background andpurpose of laws, thus courts are leftto speculate.

Illustration:B and J, NY residents, met a caraccident in Ontario thru J’s fault. B suedJ in NY for damages. Ontario barsrecovery under a guest statute. NY doesnot have a similar rule. B should beallowed to recover. NY had a greaterand more direct interest than Ontario.NY’s policy is to afford compensation toa guest tortfeasor host while Ontario’spolicy is to prevent fraudulent collusionto the prejudice of Ontario defendantsand insurance companies. Ontario hadno interest in denying a remedy to a NYguest against a NY host. (Babcock vs.Johnson, 1963)

3. Comparative Impairment Court weighs conflicting interests and

apply the law of the state whose interestwould be more impaired it its laws werenot followed

4. Trautman’s Functional Analysis Looks into the general policies of the

state beyond those reflected in itssubstantive law and to policies andvalues relating to effective andharmonious intercourse between states.

Looks at the policies and considers theirrelative weight (“policy-weighing’)

Considers whether the law of a statereflects an “emerging” or “regressing”policy

5. Leflar’s Choice Influencing Considerations(BOPIS)a. Predictability of results;b. Maintenance of interstate and

international order;c. Simplification of the judicial task;d. Application of the better rule of law;e. Advancement of the forum’s

governmental interests

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Chapter IV. Characterization

I. TYPES OF CHARACTERIZATIONII. DEPECAGE

CHARACTERIZATION (Asked in ‘94) The process by which a court at the

beginning of the choice of law processassigns a disputed question to an areaof substantive law.

I. Types of Characterization

A. Subject-Matter Characterization

Classification of a factual situation into alegal category

Illustration: Principal authorizes a person toact as his agent in another country. Agentcommits a negligent act. The law that willdetermine the principal’s liability depends onthe court’s characterization of the case as:a. Contractual: Law of the place where the

contract of agency was entered into; orb. Tortious: Law of the place where tortious

conduct or injury occurred

B. Substance-Procedure Dichotomy

Classification of a factual situation into eitherprocedural or substantive

It directs the court to the extent it will applyforeign law.

1. If issue substantive: court MAY applyforeign law or forum law

2. If issue procedural: court will apply forumlaw REASON: It would be too burdensome

and inconvenient on the part of theforum to apply procedural laws ofanother country

3. Two issues whose classification (asprocedural or substantive) is debatable:a. Statute of Frauds

Substantive: if it forbids the creation ofobligation (e.g., void contracts)

Procedural: if it forbids the enforcementof the obligation(e.g., unenforce-ablecontracts, Art. 1403 of Civil Code)

b. Statutes of Limitations Procedural: traditionally classified as

procedural because they only bar thelegal remedy without impairing thesubstantive right involved.

Substantive: when limitation is directedto a newly created liability sospecifically as to warrant saying that itqualified the right. (SPECIFICITY TEST)

A law on prescription of actions is suigeneris in Conflict o Laws in the sensethat it may be viewed either asprocedural or substantive, depending onthe characterization given such a law.(Cadalin v. POEA Administrator, 1994)

BORROWING STATUTE: (Asked in 94BAR EXAMINATIONS) Bars the filing of a suit in the forum

if it is already barred by the statuteof limitations in the place where thecause of action arose

Characterization of a statute intoprocedural or substantive becomesirrelevant when country of forumhas Borrowing Statute

Many states including thePhilippines have passed borrowingstatutes to eliminate forum-shopping

Section 48 of Code of CivilProcedure: “If the laws of the stateor country where the cause ofaction arose, the action is barred, itis also barred in the PhilippineIslands.”

II. Depecage

Literally means “to dissect” Different aspects of a case involving a

foreign element may be governed bydifferent systems of law.

Depecage is the process of cutting up thecase issue by issue and applying thepertinent laws to the different aspects

Merits of Depecage: Allows the otherrelevant interests of the parties to beaddressed; permits the court to arrive at afunctionally sound result without rejectingthe methodology of the traditional approach.

Illustration: A man dies intestate domiciled inState A and with movable properties in State B.The conflict rules of State A refer to the laws ofthe domicile to determine how the man’s estateshould be divided. The intestate law of State Bgives the widow a definite share in the estate ofthe deceased. But the determination of the WONthe woman who claims a share in the estate is a“wife” is referred to family law, not the laws ofsuccession.

Application of Depecage in the case: Law governing movable properties and

successional rights of spouse: embodysubstance of claim

Validity of marriage: affects solutionbecause it answers a preliminary orincidental question.

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Chapter V. Renvoi

(Asked in ‘97 BAR EXAMINATIONS)

I. DEFINITIONII. WAYS OF DEALING WITH RENVOI

I. Definition

A. Definition A procedure whereby a jural matter

presented is referred by the conflict oflaws rules of the forum to a foreignstate, the conflict of laws rule of which,in turn, refers the matter to the law of theforum or third state.

Does not apply to a false conflictproblem

Remission: reference is made back tothe law of the forum

Transmission: reference to a third state

B. Usefulness Used to avoid unjust results

C. Criticisms1. If both courts follow the same theory, there

would be no end to the case since the courtswould be referring it back to each other.

2. Courts may be unnecessarily burdened withthe task of identifying the choice of law rulesof another state.

Illustration:

There is Renvoi through Remission.

II. Ways of Dealing with Renvoi

A. Reject the Renvoi Conflict Rules of the forum court refer

the case only to the INTERNAL LAW ofanother state.

Internal Law of the foreign state isapplied by the forum court.

B. Accept the Renvoi The court may refer not just to another

state’s internal law but to the whole lawwhich includes choice of law rulesapplicable in multi-state cases.

Internal Law of the forum court or a thirdstate is applied.

Has the same effect as applyingSingle Renvoi

Aznar vs. Garcia, (1963): Art. 16 of thePhilippine Civil Code provides that thenational law of the decedent governs thevalidity of his testamentary dispositions.Such national law means the conflict oflaws of the California Code, whichauthorizes the reference or return of thequestion to the law of the testator’sdomicile. The conflict of laws rule inCalifornia refers back the case, when adecedent is not domiciled in California,to the law of his domicile (the Philippinesin CAB). The Philippine court must applyits own law as directed in the conflict oflaws rule of the state of the decedent.

C. Desistance or Mutual Disclaimer The forum court upon reference to

another state’s law sees that such law islimited in application to its own nationaland has no provision for application to anon-national.

The same result as the acceptance ofrenvoi but the process used by theforum court is to desist applying theforeign law.

Internal Law of the forum court or a thirdstate is applied.

D. Foreign Court TheoryThe forum court would assume the sameposition the foreign court would take were itlitigated in the foreign state.

STATE A STATE B

InternalLaw

InternalLaw

ConflictLaws

ConflictLaws

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Chapter VI. Notice and Proof of ForeignLaw

I. PROOF OF FOREIGN LAWII. EXCEPTIONS TO THE APPLICATION OF

FOREIGN LAW

I. Proof of Foreign Law

General Rule: Foreign law must be pleaded andproved as a fact

The party whose cause of action ordefense depended on the foreign lawhas the burden of proving the foreignlaw.

Exception: Court may take judicial notice offoreign laws which are already within itsACTUAL KNOWLEDGE such as when:

they are well and generally known OR they have been actually ruled upon in

other cases before it and none of theparties concerned claim otherwise(PCIB v. Escolin, 1974)

Foreign law proved by—1. an OFFICIAL PUBLICATION of the law; OR2. a COPY of the law attested by the officer

having the legal custody of the record, or byhis deputy. If such record is not kept in the

Philippines, it must be accompanied bya certificate that such officer has thecustody

3 Alternatives in case of failure to plead andprove foreign law—1. DISMISS the case for failure to establish a

cause of action2. Apply FORUM LAW, conclude that parties

acquiesce to its application.3. PROCESSUAL PRESUMPTION (Asked in

’85, ’86, ’87, ’88,‘89, ’90, ’91, ’92, ’93 and‘94) Forum presumes that the foreign law is

the same as the forum law.

Factors in deciding whether to applydomestic law or decide against the party whohas the burden of proving the contents offoreign law—1. degree of PUBLIC INTEREST involved2. ACCESSIBILITY of the foreign law

materials to the parties3. probability that the plaintiff is merely

FORUM-SHOPPING4. SIMILARITIES between the forum law and

foreign law

II. Exceptions to the Application ofForeign Law

1. Local law expressly so provides2. Failure to plead and prove the foreign law or

judgment3. Exceptions to the rule of comity (4P-FAG-

UV):o The foreign law is contrary to an

IMPORTANT PUBLIC POLICY of theforum

o The foreign law is PROCEDURAL innature

o The foreign law is PENAL in natureo The case involves real or personal

PROPERTY SITUATED IN THEFORUM (Lex Situs)

o The issue involved iin the enforcementof foreign claim is FISCAL orADMINISTRATIVE

o The foreign law is contrary to GOODMORALS (contra bonus mores)

o The application of foreign law will workUNDENIABLE INJUSTICE to citizens ofthe forum

o The application of foreign law mightendanger the VITAL INTERESTS of thestate

CIVIL LAW REVIEWER Chapter VII. NATIONALITY

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Chapter VII. Nationality

I. DETERMINATION OF NATIONALITYII. PROCEDURE FOR NATURALIZATIONIII. LOSS OF PHILIPPINE CITIZENSHIPIV. PROBLEMS IN APPLYING THE NATIONALITY

PRINCIPLE

Most civil law countries such as thePhilippines follow the NATIONAL LAWTHEORY: (Asked in 98, 04, BAREXAMINATIONS)

It is the nationality or citizenship of theindividual, which regulates the following: Civil status Capacity Condition Family rights and duties Laws on Succession Capacity to succeed

According to the Supreme Court, it is aconflict of laws theory by virtue of whichjurisdiction over the particular subject matteraffecting a person is determined by thelatter’s nationality. (Ellis vs. Republic, 1963)

In the Philippines, the nationality principle isexpressed in Art. 15 of the Civil Code asfollows:

Article 15, Civil Code. Laws relating to family rightsand duties, or to status, condition and capacity ofpersons are binding upon citizens of the Philippineseven though living abroad.

I. Determination of Nationality

Each state has the prerogative and authority todetermine by its own municipal law who are itsnationals or citizens.

The Hague Convention on Conflict of NationalLaws states this principle in the followingprovisions:1. Article 1. It is for each State to determine

who are its nationals. This law shall berecognized by other States insofar as it isconsistent with international convention,international customs, and the principles oflaw generally recognized with regard tonationality.

2. Article 2. Any question as to whether aperson possesses the nationality of aparticular State shall be determined inaccordance with the law of that State.

The Constitution enumerates who areFILIPINO CITIZENS—

Sec.1, Art IV. The following are citizens of thePhilippines:(1) Those who are citizens of the Philippines at the

time of the adoption of this Constitution;(2) Those whose fathers or mothers are citizens of

the Philippines;(3) Those born before January 17, 1973, of Filipino

mothers, who elect Philippine citizenship uponreaching the age of majority; and

(4) Those who are naturalized in accordance withlaw.

1. Natural-Born Citizens DEFINITION: Those who are citizens of

the Philippines without having to performany act to acquire or perfect citizenship.

Two principles: JUS SOLI – looks to the PLACE of

BIRTH to determine one’snationality

JUS SANGUINIS- means rule of DESCENT OR

BLOOD- Principle followed in the

Philippines2. Citizens by Naturalization

NATURALIZATION: confers to analien a nationality after birth by anymeans provided by law.

In the Philippines, this is done byjudicial method under CA No. 73 asamended by RA 530.

II. Procedure for Naturalization

[NOTE: N.B. This is a proper subject matter ofPolitical Law but is important to know asbackground if the Conflicts question asks you todecide the Choice of Law involving nationality.This was asked in the bar exams as part ofPRIL.]

Qualifications for Naturalization—1. Must not be less than 21 years old on the

date of the hearing of the petitions2. Resided in the Philippines for a continuous

period of not less than 10 years

EXCEPTION: may be reduced to 5 years inthe ff. cases:a. Honorably held office under the

Government or any of its subdivisionsb. Established a new industry or introduced

a useful inventionc. Married to a Filipino woman/man


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d. Engaged as a teacher in a public/privateschool, not exclusive for a particularnationality, for 2 years

e. Born in the Philippines

3. Of good moral character, believes in theConstitution, and conducted himself in aproper and irreproachable manner duringthe entire period of his residence

4. Own real estate in the Phils. worth not lessthan P5,000 or have a lucrative trade,profession or lawful occupation

5. Must be able to speak and write English orSpanish and any one of the principalPhilippine languages

6. Enrolled his minor children in any of thepublic or private schools recognized by theBureau of Private Schools where Phil.history, government and civics are taughtduring the entire period of the residencerequired of him, prior to the hearing of hispetition

Disqualifications for Naturalization—1. Convicted of a crime involving moral

turpitude2. That the applicant’s state of origin does

not grant reciprocal rights to Filipinocitizens at the time of the hearing of hisapplication

Procedure for Naturalization—1. DECLARATION OF INTENT 1 year prior to

the filing of the petition, unless the applicantis exemptedEXEMPTIONS:a. Persons born in the Philippines and who

have received their primary andsecondary education in schoolsrecognized by the Government here andare not limited to any race or nationality

b. Resided continuously in the Philippinesfor 30 years or more

c. Widow and minor children of an alienwho declared his intention to become acitizen and dies before he is actuallynaturalized

2. PETITION FOR NATURALIZATION3. PUBLICATION in the Official Gazette or

newspaper of general circulation4. HEARING5. If the petition is approved, there will be a

REHEARING two years after thepromulgation of the judgment awardingnaturalization

6. Taking of the OATH of ALLEGIANCE

III. Loss of Philippine Citizenship

A Filipino citizen may lose his citizenship in thefollowing ways:1. By NATURALIZATION in foreign countries;2. By EXPRESS RENUNCIATION of

citizenship;3. By subscribing to an OATH of

ALLEGIANCE to support the constitution orlaws of a foreign country upon reaching 21years of age or more, subject to certainexceptions;

4. By rendering service to, or acceptingCOMMISSION IN THE ARMED FORCES ofa foreign country, subject to certainexceptions;

5. By having been declared by competentauthority, a DESERTER of the Phil. armedforces in time of war, unless pardoned orgranted amnesty

6. A WOMAN, who upon her MARRIAGE TOA FOREIGNER, if by virtue of the laws inforce in her husband’s country, sheACQUIRES HIS NATIONALITY; and

7. By CANCELLATION of the certificate ofnaturalization for the ff. reasons:i. Certificate was obtained fraudulently or

illegallyii. Within 5 years of issuance of certificate,

returns to his native country or foreigncountry to establish a permanentresidence therein;- Remaining for more than 1 year in

his native country; or- Two years in any foreign country,

considered prima facie evidence ofintention of taking up his permanentresidence

iii. Petition made on an invalid declaration ofintention

iv. Minor children failed to graduate from apublic or private schools recognized bythe Bureau of Private Schools where Phil.history, government and civics aretaught, through the fault of their parents

v. Naturalized citizens has allowed himselfto be used as a dummy

NOTE: A judgment directing the issuance ofcertificate of NATURALIZATION IS A MEREGRANT OF POLITICAL PRIVILEGE, and thatneither estoppel nor res judicata may be invokedto bar the State from initiating an action for itscancellation


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IV. Problems in Applying the NationalityPrinciple

1. Dual or Multiple Citizenship Since each state determines its own

nationals, it is possible that an individualmay be CLAIMED AS A NATIONALOF TWO OR MORE STATES.

In the case of Nottebohm (1955), theICJ applied the principle of EFFECTIVENATIONALITY to determine the rightsof an individual who may claim multiplenationality DEFINITION: a genuine bond of

attachment between the individualand the State

NOTE: The Philippine Constitutiondiscourages dual or multiple citizenship asinimical to the national interest and shall bedealt with by law.

2. StatelessnessTwo senses:a. DE JURE statelessness: A person has

been stripped of his nationality by hisformer government without having anopportunity to acquire another

b. DE FACTO statelessness: A personpossessed of a nationality but whosecountry does not give him protectionoutside its own territory (refugees)

NOTE: the 1951 Geneva Convention of theStatus of Refugees and the UN Conference onthe Elimination or Reduction of FutureStatelessness was convened to reducestatelessness. It provides: Conditions such as marriage, divorce,

adoption, naturalization, expatriation,would not cause an individual to lose hisnationality upon the risk of being stateless

States cannot deprive their nationals oftheir identity as punishment or asinstrument of discrimination

Jus sanguinis country shall grant itsnationality to a person born within itsterritory, if he would otherwise be stateless

Jus soli country shall grant its nationalityto a person who would otherwise beconsidered stateless when one of hisparents is a citizen of the contractingstate.

NOTE: As long as stateless persons possess allof the qualifications, they can be naturalized asPhilippine citizens without the requirement ofreciprocity.

CIVIL LAW REVIEWER Chapter VIII. DOMICILE

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Chapter VIII. Domicile

I. DOMICILEII. COMPARATIVE MERITS AND DEMERITS OF

DOMICILE AND NATIONALITY

I. Domicile

A. Municipal Law/Philippine Law Definition:

PERSON DOMICILENatural persons Art. 50. For the exercise

of civil rights and thefulfillment of civilobligations, the domicileof natural persons is thePLACE OF THEIRHABITUAL REDENCE.

Juridical persons Domicile is determinedby the LAW CREATINGOR RECOGNIZING IT. In the absence

thereof, place wherelegal representationor place of businessis.

CONFLICTS of LAW DEFINITION(Restatement):The place with which a person has aSETTLED CONNECTION for certainlegal purposes, either because: His home is there; or Place is assigned to him by law

To acquire a domicile, there must be aconcurrence of TWO ELEMENTS:i. INTENTION to make it one’s

domicile; andii. PHYSICAL PRESENCE

Residence, on the other hand, simplyrequires bodily presence of an inhabitantin a given place.

B. General Rules on Domicile1. No person shall be without domicile

A person’s domicile of origin prevailsuntil he acquires anew domicile

2. A person cannot have two simultaneousdomiciles for a given purpose or a giventime under the law of a particular state

3. Domicile establishes a connectionbetween a person and a particularterritorial unit

4. The burden of proving a change ofdomicile is on the person alleging it

C. Kinds of Domicile1. Domicile of Origin

A person’s DOMICILE AT BIRTH

LEGITIMATE CHILD ILLEGITIMATE CHILDFollow the FATHER’sdomicile

Follow the MOTHER’sdomicile

2. Domicile of Choicei. A person’s VOLUNTARY

DOMICILE The place freely chosen by a

person sui juris (of full age andcapacity)

ii. To acquire it, there must be aconcurrence of: ACTUAL RESIDENCE; and ANIMO MANENDI - intent to

make it one’s home

DISTINCTIONDomicile of

OriginDomicile of

ChoiceAs to:conditionnecessary foritsabandonment

Strongerpresumption infavor of itscontinuance

NOT lost bymereabandonmentand remains untilreplaced by adomicile ofchoice

As compared todomicile oforigin, lesspresumption infavor of itscontinuance

As to: capacityfor revival

Presumed to berevived once thedomicile ofchoice is givenup and before anew one isacquired(reverter orrevival doctrine)

Deemedextinguished byremoval ofintent even priorto theacquisition of anew domicile

3. Constructive Domicile Domicile assigned by operation of

law to persons legally incapable ofchoosing their own domicile: Minors Domicile automatically

changes when their father’sdomicile changes

Take the domicile of theirmother upon their father’sdeath

Mentally disabled If capable of understanding

his act and itsconsequences, he may beable to acquire a domicile ofchoice although he may not

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be considered competentenough to enter into allaspects of civil life.

Married women

D. Special Problems in Domicile

1. People kept under physical or legalcompulsion Military personnel Prisoners Persons with disabilities who are

confined in institutions

MODERN VIEW: A person undercompulsion should not be barred fromproving that he intended to establishpermanent abode in the same place,even after compulsion has beenremoved

2. Married women seeking to acquire aseparate domicile from her husband

Art. 69, Family Code. The husband and wife shall fixthe family domicile. In case of disagreement, the courtshall decide. The court may exempt one spouse fromliving with the other if the latter should live abroad orthere are other valid and compelling reasons for suchexemption…

MODERN VIEW: Dispenses with anypresumption that the wife’s domicile isthe same as her husband’s.

II. Comparative Merits and Demerits ofDomicile and Nationality

A. Nationality1. Merits

a. logical since lawmakers considered thequalities of its citizens in making thelaws

b. easily verifiable from documents

2. Demeritsa. does not provide solution with respect to

stateless persons those with multiple nationalities states with diverse legal systems

b. person’s ties to his nation may be soattenuated if he has lived in anothercountry most of his life

B. Domicile1. Merits

a. genuine link—adequate basis for him toexercise rights therein and the state toimpose duties on him

b. suitable for countries with a federalsystem

2. Demeritsa. not ascertainable without first resorting

to the courts to establish whether or notthere is animo manendi

b. concept not clear-cut--- differs widelywith some states distinguishing betweenresidence and domicile or attributingdifferent meanings of domicile fordifferent purposes

c. if domicile of origin given much weight,connection attenuated

CIVIL LAW REVIEWER Chapter IX. PRINCIPLES on PERSONAL STATUS and CAPACITY

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Chapter IX. Principles on PersonalStatus and Capacity

I. DEFINITIONII. BEGINNING AND END OF PERSONALITYIII. ABSENCEIV. NAMEV. AGE OF MAJORITYVI. CAPACITY

I. Definition

Includes CONDITION and CAPACITY andmore specifically embraces:1. beginning and end of human personality2. juridical capacity3. capacity to act4. family relations5. succession

Applicable Law1. If Filipino: Philippine Law2. If Alien: Law of nationality or domicile,

depending on the law applicable in thealien’s country

NOTE:1. Laws relating to Family rights and

duties, Status, Condition or Legalcapacity of persons are binding oncitizens of the Philippines, even thoughliving abroad [Art. 15, CC]

2. Status, once established by the personallaw of the party, is given universaljurisdiction. Hence, aliens can sue andbe sued in our courts subject toPhilippine procedural law even onmatters relating to their status, but thelaw to be applied is their personal law.

II. Beginning and End of Personality

A. Governing Law—The determination of the exact momentpersonality begins is governed by thePERSONAL LAW of the individual.

B. Rule under Philippine Law—1. Beginning of personality: BIRTH

a. Birth determines personality; but theconceived child shall be considered bornfor all purposes that are favorable to it,provided it be born later with theconditions specified by Art. 41, FC. [Art.40, FC]

b. For civil purposes, the fetus isconsidered born if it is alive at the time itis delivered from the mother’s womb.

However, if the fetus had an intra-uterine life of less than 7 months, it isnot deemed born if it dies within 24hours after its complete delivery fromthe maternal womb. [Art. 41, FC]

2. End of personality: DEATHa. A declaration of death issued by a

competent court is considered valid forall purposes.

b. Upon death, some of the decedent’srights and obligations are totallyextinguished, while others are passedon to his successors

III. Absence

A. Governing Law—Determined by the PERSONAL LAW of theindividual

B. Three Ways of Dealing with Absence1. Rebuttable Presumption that a person is

dead when he has been absent for anumber of years

2. Judicially Instigated and established whichresults in legal effect similar to those ofdeath

3. A Judicial Decree shall have to be issueddeclaring the person dead before legaleffects of death take place

NOTE: Philippine laws follow the rebuttablepresumption.

C. Rule under Philippine Law1. Ordinary Absence [Art. 391, CC]

a. After the absence of 7 years, it being

unknown whether the absentee still

lives, s/he shall be presumed dead for

all purposes.

b. EXCEPTIONS

i. For the purpose of opening hissuccession, the absentee ispresumed dead after 10 years.

ii. If s/he disappeared after the age of75 years, 5 years will be sufficient

c. Computation of Period—The computation of the 7 year periodbegins not from the declaration ofabsence, but from the date on which thelast news concerning the absentee isreceived [Jones v. Hortiguela, 44 Phil149]

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2. Extraordinary Absence [Art. 391, CC]—

The following are presumed dead for ALLpurposes, including the division of estateamong the heirs: (VA-A-D)a. A person on board a Vessel during a

sea voyage, or an Aeroplane which ismissing, who has not been heard of for4 years since the loss of the vessel oraeroplane;

b. A person in the Armed forces who hastaken part in war, and has been missingfor 4 years;

c. A person who has been in Danger ofdeath under other circumstances andexistence has not been known for 4years. [Art. 391, CC]

3. Rule for purposes of remarriage [Art. 41, FC]a. For purposes of remarriage, the spouse

present must first institute a summaryproceeding for the declaration ofpresumptive death of the absenteespouse, without which the subsequentmarriage is void ab initio.

b. The periods under Arts. 390 and 391,CC have been reduced to 4 and 2 years.

IV. Name

A. Governing Law—Determined by PERSONAL LAW

B. Rule under Philippine Law1. No person can change his name or surname

without judicial authority [Art. 376, CC]2. Recognized justifiable causes for change of

name:a. when the name is ridiculous, tainted with

dishonour, or is extremely difficult towrite or pronounce

b. when the request for change is aconsequence of change of status

c. when the change is necessary to avoidconfusion

d. a sincere desire to adopt a Filipino nameto erase signs of a former nationalitywhich unduly hamper social andbusiness life.

NOTE: RA 9048 (Change of first name andcorrection of clerical/typographical errors)

V. Age of Majority

A. Governing Law—Determined byPERSONAL LAW

B. Age of Majority under Philippine Law—Age of majority is 18 years old [RA 6809]

VI. Capacity

A. General Rule—Determined by PERSONAL LAW; itattaches to a person wherever he is

B. Exceptions1. Liability on Tort—subject to the law of the

place of tort2. Restrictions on the contracting capacity

of a married woman—in some jurisdictions,subject to the law governing the personalrelations between spouses

CIVIL LAW REVIEWER Chapter X. FAMILY RELATIONS

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Chapter X. Family Relations

I. MARRIAGEII. DIVORCE AND SEPARATIONIII. ANNULMENT AND DECLARATION OF

NULLITYIV. PARENTAL RELATIONSV. ADOPTION

I. Marriage

A. Definition

Art. 1, FC. Marriage is a special contract ofpermanent union between a man and a womanentered into in accordance with law for theestablishment of conjugal and family life. It is thefoundation of the family and an inviolable socialinstitution whose nature, consequences, and incidentsare governed by law and not subject to stipulation,except that marriage settlements may fix the propertyrelations during the marriage within the limits providedby this Code.

B. Extrinsic Validity of Marriage1. Formal Requisites of Marriage under

Philippine Law [Art. 3, FC]a. authority of the solemnizing officerb. valid marriage license except in the

cases provided for in Chapter 2 of Title Ic. a marriage ceremony which takes place

with the appearance of the contractingparties before the solemnizing officerand their personal declaration that theytake each other as husband and wife inthe presence of not less than twowitnesses of legal age.

2. Determination of Extrinsic Validity

Art. 26, FC. All marriages solemnized outside thePhilippines in accordance with the laws in force in thecountry where they were solemnized, and valid thereas such, shall also be valid in this country. xxx

Art. 2, Hague Convention. Formal requirements formarriage are governed by the law of the state ofcelebration.

a. GENERAL RULE—LEX LOCI CELEBRATIONIS (law of theplace of celebration) [Art. 26, FC; Art. 2,Hague Convention on Celebration andRecognition of the Validity of Marriages]

b. EXCEPTIONS: The following marriagesare void even if valid in the countrywhere celebrated [Art. 26, FC]:

i. those contracted by any party below18 years of age even with theconsent of parents or guardians [Art.35(1), FC]

ii. bigamous or polygamousmarriages not falling under Art. 41,FC [Art. 35 (4), FC]

iii. those contracted thru mistake ofone contracting party as to theidentity of the other [Art. 35(5), FC]

iv. those subsequent marriage withoutrecording in the civil registry thejudgment of annulment ordeclaration of nullity, partition anddistribution of properties and thedelivery of the children’spresumptive legitimes [Art. 35(6),FC]

v. a marriage contracted by any partywho, at the time of the celebration,was psychologically incapacitatedto comply with the essential maritalobligations of marriage, even if suchincapacity becomes manifest onlyafter solemnization [Art. 36, FC]

vi. incestuous marriages [Art. 37, FC] marriages between ascendants

and ascendants of any degree,whether legitimate orillegitimate; and

marriages between brothers andsisters, whether of the full orhalf-blood

vii. void marriages for reasons ofpublic policy [Art. 38, FC] marriages between collateral

blood relatives, whetherlegitimate or illegitimate, up tothe 4

thcivil degree

marriages between step-parentsand step-children.

marriages between the adoptingparent and adopted child

marriages between the survivingspouse of the adopting parentand the adopted child

marriages between the survivingspouse of the adopted child andthe adopter

marriages between an adoptedchild and a legitimate child ofthe adopter

marriages between adoptedchildren of the same adopter

marriages between partieswhere one, with the intention tomarry the other, killed that otherperson's spouse, or his or herown spouse.


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NOTE: These exceptions put into issue thecapacity of the parties to enter into the marriageand therefore relate to the substantiverequirement for marriage. Since the personal lawof the parties, e.g. the national law of Filipinos,governs the questions of intrinsic validity ofmarriages between Filipinos abroad, the aboveenumerations are exceptions to lex locicelebrationis precisely because they arecontrolled by lex nationalii

C. Intrinsic Validity of Marriage [refers tocapacity of a person to marry]

1. Intrinsic validity is determined by the parties’personal law, which may be theirdomiciliary or national law.

NOTE:a. Laws relating to Family rights and

duties, Status, Condition or Legalcapacity of persons are binding oncitizens of the Philippines, even thoughliving abroad [Art. 15, NCC]

b. When either or both of the contractingparties are citizens of a foreign country,it shall be necessary for them before amarriage license can be obtained tosubmit a certificate of legal capacity tocontract marriage, issued by theirrespective diplomatic or consularofficials [Art. 21, FC]

c. Marriages enumerated under Art. 26(2),FC are void even if valid in the countrywhere celebrated.

2. Intrinsic requirements of marriage underPhilippine Law [Art. 2, FC]a. legal capacity of the contracting parties

who must be male and female; andb. consent freely given in the presence of

the solemnizing officer3. The Hague Convention on Validity of

Marriages allows a contracting state torefuse recognition of the marriage in the ff.Cases [CR-M

3]:

a. one of the parties did not freely Consentb. spouses were Related, by blood or

adoptionc. one of the parties did not have the

Mental capacity to consentd. one of the spouses was already Marriede. one of the parties has not attained the

Minimum age, nor acquired thenecessary dispensation

NOTE:1. Rule on Proxy Marriages (Asked in 85-89

BAR EXAMINATIONS)—a. proxy marriages, where permitted by the

law of the place where the proxyparticipates in the marriage ceremony,are entitled to recognition in countriesadhering to the lex loci celebrationisrule, at least insofar as formal validity isconcerned

b. internal Philippine law, however, doesnot sanction proxy marriages.

2. Consular Marriages—Marriages between Filipino citizens abroadmay be solemnized by a consul-general,consul or vice consul of the Republic of thePhilippines [Art. 10, FC].

D. Effects of Marriage1. Personal relations between the spouses

a. governed by the national law of theparties

NOTE: If the spouses have differentnationalities, generally the national law ofthe husband may prevail as long as it is notcontrary to law, customs and good morals ofthe forum.

b. Under Philippine law, personal relationsbetween the spouses include [Arts. 68,70-71, FC]i. mutual fidelityii. respectiii. cohabitationiv. supportv. right of the wife to use the

husband’s family name

2. Property relationsa. The Hague Convention declares that the

governing law on matrimonial propertyis:i. the internal law designated by the

spouses before the marriageii. in the absence thereof, the internal

law of the state in which thespouses fix their habitual residence

b. Rule under Philippine law [Art. 80, FC](Asked in ’03 BAR EXAMINATIONS)i. In the absence of a contrary

stipulation in the marriagesettlements, the property relations ofthe spouses shall be governed byPhilippine laws, regardless of theplace of the celebration of themarriage and their residence.


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ii. Rule is inapplicable: if both spouses are aliens with respect to the extrinsic

validity of the contracts affectingproperty not situated in thePhilippines and executed in thecountry where the property islocated

with respect to the extrinsicvalidity of contracts entered intoin the Philippines but affectingproperty situated in a foreigncountry whose laws requiredifferent formalities for itsextrinsic validity.

c. Doctrine of Immutability ofMatrimonial Property Regime—Thechange of nationality on the part of thehusband or wife does not affect theoriginal property regime EXCEPT whenthe law of the original nationality itselfchanges the marital regime, hence, theproperty regime has to changeaccordingly.

II. Divorce and Separation

A. Rule under the Hague Convention (Askedin 94 BAR EXAMINATIONS)—The granting of divorce or separation mustcomply with the national law of the spousesand lex fori (law of the place were theapplication for divorce is made)

B. Divorce Decrees Obtained by Filipinos1. General Rule: Decrees of absolute divorce

obtained by Filipinos abroad have no validityand are not recognized in PhilippineJurisdiction.

NOTE: Statutory Basesa. Laws relating to Family rights and

duties, or to the Status, Condition andLegal capacity of persons are bindingupon citizens of the Philippines, eventhough living abroad [Art. 15, CC]

b. Prohibitive laws concerning persons,their acts or property, and those whichhave for their object public order, publicpolicy and good customs, shall not berendered ineffective by laws orjudgments, or by determinations orconventions agreed upon in a foreigncountry. [Art. 17(3), CC]

2. EXCEPTION: Art. 26(2), FC—

Where a marriage between a Filipino citizenand a foreigner is validly celebrated and adivorce is thereafter validly obtained abroadby the alien spouse capacitating him or herto remarry, the Filipino spouse shall havecapacity to remarry under Philippine law

NOTE: In the case of Republic v Obrecido,G.R. No. 154380 (2005), the Supreme Courtinterpreted the exception in Art. 26(2), FC asapplying to valid marriages between two Filipinocitizens, where one party is later naturalized as aforeign citizen and obtains a valid divorce decreecapacitating him or her to remarry.

C. VALIDITY OF FOREIGN DIVORCEBETWEEN FOREIGNERS (Asked in 75-79,80-84, 85-89, 95-99,00-04, 05-08 BAREXAMINATIONS)—

1. A foreign divorce will be recognized in allcontracting states if, at the date of theinstitution of the proceedings [HagueConvention on the Recognition of Divorceand Legal Separation]:a. either spouse had his habitual residence

there;b. both spouses were nationals of that

state; orc. if only the petitioner was a national, he

should have his habitual residence there

2. While there is no provision of law requiringPhilippine courts to recognize a foreigndivorce decree between non-Filipinos suchwill ne recognized under the principle ofinternational comity, provided that it doesnot violate a strongly held policy of thePhilippines.

III. Annulment and Declaration of Nullity

A. Jurisdiction to Annul1. vested in the court of the domicile of the

parties2. jurisdiction over the non-resident defendant

is not essential

B. Governing Law1. Lex loci celebrationis—determines the

consequences of any defect as to form2. In general, the same applies with reference

to substantive or intrinsic validity. But withregard to capacity of the parties to marry,national law is determinative.


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IV. Parental Relations

A. Determination of Legitimacy of a Child1. Legitimacy: personal law of the parents,

which may either be their domicile ornationality

2. In the Philippinesa. the legitimacy of the child is governed by

the national law of the parentsb. if parents belong to different

nationalities, legitimacy of the child isgoverned by the national law of thefather

c. personal law of the illegitimate child isthe mother’s personal law

B. Parental Authority Over the Child—Personal law of the father controls andrights and duties of parents and child

NOTE: Reference to the personal law of thefather may result in joint exercise of parentalauthority over the property of the child by thefather and mother; or, in the case on theillegitimate child, to the mother alone

V. Adoption

(Asked in 75-79, 95-99, 00-04, 05-08 BAREXAMINATIONS)

A. DefinitionThe act by which relations of paternity andfiliation are recognized as legally existingbetween persons not so related by nature

B. Domestic Adoption Act of 19981. An alien may adopt, provided he is:

a. of legal ageb. in possession of all civil capacity and

legal rightsc. of good moral characterd. no conviction of any crime involving

moral turpitudee. emotionally and psychologically capable

of caring for childrenf. at least 16 years older than the adopteeg. in a position to support and care for his

childrenh. his country has diplomatic relationsi. residence in the Philippines for at least 3

continuous years prior to the filing of theapplication for adoption and maintainssuch residence until the adoption decreeis entered

j. certificate of legal capacity to adopt inhis country to be issued by hisdiplomatic or consular office; and

k. his government allows the adoptee toenter his country as his adoptedson/daughter

2. The requirement on residence andcertificate of qualification may be waived forthe following:a. A former Filipino citizen who seeks to

adopt a relative within the 4th

degree ofconsanguinity or affinity; or

b. One who seeks to adopt the legitimateson/daughter of his/her Filipino spouse;or

c. One who is married to a Filipino citizenand seeks to adopt jointly with his/herspouse a relative within 4

thdegree of

consanguinity or affinity of the Filipinospouse

3. The requirement of 16 years differencebetween the adopter and the adoptee maybe waived if the adopter is:a. The biological parent of the adopteeb. The spouse of the adoptee’s parent

C. Inter-country Adoption1. Definition—

A socio-legal process of adopting a Filipinochild by a foreigner or a Filipino citizenpermanently residing abroad where thepetition is filed, the supervised trial custodyis undertaken, and the decree of adoption isissued outside the Philippines.

2. This is an alternative means of childcare ifthe child cannot be cared for in any suitablemanner in the Philippines

NOTE: Adoption is one of the ways prescribedby law for the acquisition of Filipino citizenship

D. Effects of AdoptionTwo different legal orders:1. If the adopters’ personal law applied—same

law governs the effects of the adoption2. If the personal law of the child determined

the creation of the legal relationship—suchlaw will cease and yield to the personal lawof the adopting parents

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Chapter XI. Property

I. CONTROLLING LAW—LEX SITUS/LEX REISITAE

II. EXCEPTIONS TO LEX SITUS/LEX REI SITAEA. TRANSACTIONS NOT AFFECTING

TRANSFER OF TITLE OR OWNERSHIPOF LAND

B. CONTRACTS WHERE REAL PROPERTYOFFERED AS SECURITY

C. INTESTATE AND TESTAMENTARYSUCCESSION

D. POLICY-CENTERED APPROACHIII. SITUS OF CERTAIN PROPERTIES

A. SITUS OF PERSONAL PROPERTY FORTAX PURPOSES

B. SITUS OF MONEYC. SITUS OF DEBTSD. SITUS OF CORPORATE SHARESE. PATENTS, TRADEMARKS, TRADE NAME

AND COPYRIGHTF. GOODS TRANSPORTED BY COMMON

CARRIERS

I. Controlling Law—Lex Situs/Lex ReiSitae

A. General Rule: Real as well as personalproperty is subject to the law of the countrywhere it is situated [Art. 15, NCC]

B. Application of the Doctrine of LexSitus/Lex Rei Sitae

1. The capacity to transfer or acquire propertyis governed by Lex Situs.

NOTE: Transfer of property to a foreignerwho subsequently became a Filipino citizenshall be recognized [Llantino v Co LiongChong] [Asked in 00-04, BAREXAMINATIONS]

2. The formalities of a contract to conveyproperty are governed by Lex Situs

II. Exceptions to Lex Situs

A. Transactions Not Affecting Transfer ofTitle or Ownership of Land—Where the transaction does not affecttransfer of title to or ownership of the land:Lex Intentionis or Lex Voluntatis

B. Contracts where Real Property Offeredas Security—In contracts where real property is offered byway of a security for the performance of anobligation such as loan, the principal

contract is the loan while the mortgage ofthe land is only an accessorya. Mortgage—Lex Situsb. Loan Contract—rules on ordinary

contracts

C. Intestate and Testamentary Succession—Intestate and testamentary successionsshall be regulated by the national law of thedecedent, with respect to the following [Art.16(2); Art. 1039, NCC]a. Order of successionb. Amount of succession rightsc. Intrinsic validity of the testamentary

provisionsd. Capacity to succeed

D. Under a Policy-centered Approach Forum court is not bound to look to the law

of the situs when the situs of the movableproperty is insignificant or accidental

Questions relating to the validity and effectof the transfer of the movable property aregoverned by the law of the place ofprincipal use

Where the issue involves considerationsother than the validity and effect of thetransfer itself, governing law is the law ofthe state which has real interest

III. Situs of Certain Properties

A. Situs of Personal Property for TaxPurposes—The principle of mobilia sequuntur personamcannot be applied to limit the right of thestate to tax property within its jurisdiction. Ityields to established facts of legalownership, actual presence and controlelsewhere, and cannot be applied if it wouldresult in patent injustice [Wells Fargo Bankand Union Trust Co. v. CIR, 70 Phil 325(1940)]

B. Situs of Money—In Leon v. Manufacturers Life Insurance Co.,90 Phil 459 (1951), the Supreme Court heldthat the funds in question were outside thejurisdiction of Philippine courts, it havingbeen endorsed in an annuity in Canadaunder a contract executed in that country.

C. Situs of Debts—The debt is located where the debtor islocated because it is where he can be suedand the debt collected.

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D. Situs of Corporate Shares—1. The situs of shares of stock of a corporation

is considered to be at the domicile of thecorporation.

2. There is a distinction between the situs ofshares of stock and the situs of the incomederived from the sale or exchange of such.[CIR v Anglo California Bank, G.R. No. L-12476(1960)]

E. Patents, Trademarks, Trade Name andCopyright—

1. Union Convention for the Protection ofIndustrial Property: a trade name shall beprotected in all countries of the Union,without the obligation of filing of registration,whether or not it forms part of the tradename.

2. RA 8923 (Intellectual Property Code): Anyforeign corporation which is a national ordomiciliary of a country which is a party to aconvention, treaty or agreement relating tointellectual property rights to which thePhilippines is also a party or extendsreciprocal rights to our nationals by law shallbe entitled to benefits to the extentnecessary to give effect to any provision ofsuch convention.

F. Liability of the Common Carrier for Loss,Destruction and Deterioration of GoodsTransported—Law of Destination1. The law of the country to which the

goods are to be transported shall governthe liability of the common carrier fortheir loss, destruction or deterioration[Art. 1753, NCC]

2. The law of the country of destinationapplies even if the goods never reachthe destination, but does not apply if thegoods were never transported

3. If the country of destination is thePhilippines, it is Philippine internal lawon loss, destruction, or deterioration thatmust govern—the Civil Code principally,and the Code of Commerce and speciallaws like the Carriage of Goods by SeaAct, suppletorily.

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Chapter XII. Contracts

I. EXTRINSIC VALIDITY OF CONTRACTSII. INTRINSIC VALIDITY OF CONTRACTS

A. LEX LOCI CONTRACTUSB. LEX LOCI SOLUTIONISC. LEX LOCI INTENTIONIS

III. CAPACITY TO ENTER INTO CONTRACTSIV. CHOICE OF LAW ISSUES

A. CHOICE OF FORUM CLAUSEB. CONTRACTS WITH ARBITRATION

CLAUSEC. ADHESION CONTRACTSD. SPECIAL CONTRACTS

V. LIMITATIONS TO CHOICE OF LAWVI. APPLICABLE LAW IN THE ABSENCE OF

EFFECTIVE CHOICE

I. Extrinsic Validity of Contracts

General Rule: Lex Loci CelebrationisThe forms and solemnities of contracts xxxshall be governed by the laws of the countryin which they are executed [Art. 17, CC]

NOTE:1. Contracts Before Diplomatic/ Consular

Officials: The solemnities established byPhilippine laws shall be observed withrespect to contracts executed beforediplomatic or consular officials of theRepublic of the Philippines in a foreigncountry [Art. 17(2), FC]

2. Contracts Entered Into by Letter/Cablegram, etc.: A contract accepted byletter or cablegram is presumed to havebeen entered into the place where the offerwas made. [Art. 1319(2),CC]

II. Extrinsic Validity of Contracts

Three possible laws:

A. Lex Loci Contractus (Asked in 95, 02 BAREXAMINATIONS)

1. Law of the place where the contract is made2. Merits

a. Relative ease in establishingb. Certainty and stability

3. Demerit—Unjust results when place ofmaking entirely incidental

NOTE: To determine where the contract ismade, we look to the place where the last act isdone which is necessary to bring the bindingagreement into being so far as the acts of theparties are concerned.

B. Lex Loci Solutionis1. Law of the place of performance governs2. Merit—Always connected to the contract in a

significant way3. Demerit—Not helpful when the contract is

performed in 2 or more states withconflicting laws

C. Lex Loci Intentionis1. Law intended by the parties2. Basis—

The contracting parties may establish suchstipulations, clauses, terms and conditionsas they may deem convenient, providedthey are not contrary to law, morals, goodcustoms, public order, or public policy [Art.1306, CC]

3. May be express or implieda. Express—when the parties stipulate that

the contract be governed by a specificlaw, such law will be recognized unlessthere are cogent reasons for not doingso.

b. Impliedi. Based on the contemporaneous and

subsequent acts of the partiesii. Often upheld with reference to the

rule of validity of contracts whichpresumes that the partiescontemplate to enter into a validcontract

III. Capacity to Enter Into Contracts

Determined by the personal laws of thecontracting parties

NOTE: Laws relating to Family rights andduties, Status, Condition or Legal capacityof persons are binding on citizens of thePhilippines, even though living abroad [Art.15, NCC]

IV. Choice of Law Issues in ConflictsContracts Cases

A. Choice of Forum Clause1. A case arising from a contract will be

litigated in the forum chosen by the parties ifthe choice of forum clause specificallyidentifies it as the only venue

2. When there is no fraud or overreaching, andthere is no showing that the choice-of-forumclause would be unreasonable and unjust,the clause must be given effect

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B. Contracts with Arbitration Clause—An arbitration clause, stipulating that thearbitral award of an arbitral panel in aforeign country is FINAL and BINDING, isnot contrary to public policy. It does not oustour courts of jurisdiction as the internationalarbitral award, the award of which is notabsolute and without exceptions, is stilljudicially reviewable under certain conditionsprovided for by the INCITRAL Model Law onICA as applied and incorporated in RA 9285(Korea Technologies Co., Ltd. V Lerma,2008)

C. Adhesion Contracts1. Adhesion contracts are not entirely

prohibited. The one who agrees to thecontract is in reality free to reject it entirely; ifhe adheres, he gives his consent.

2. It is void if there is UNDUE ADVANATGE onthe part of the dominant party

3. Any ambiguity is construed strictly againstthe drafter

D. Special Contracts1. Sale or barter of goods: lex situs2. Simple loan granted by financial institutions:

law of the permanent place of business3. Loan granted by a private individual or

where the subject matter of the loan ispersonal: law of the place where the loanwas obtained

4. Pledge, Chattel Mortgage, Antichresis: LexSitus

5. Carriage of Goods by Seaa. The law of the country to which the

goods are to be transported shall governthe liability of the common carrier fortheir loss, destruction or deterioration[Art. 1753, NCC]

b. The law of the country of destinationapplies even if the goods never reachthe destination, but does not apply if thegoods were never transported

c. If the country of destination is thePhilippines, it is Philippine internal lawon loss, destruction, or deterioration thatmust govern—the Civil Code principally,and the Code of Commerce and speciallaws like the Carriage of Goods by SeaAct, suppletorily.

6. International Air Transportation: WarsawConvention

V. Limitation Choice of Law

(Asked in 90-94 BAR EXAMINATIONS)

1. Cannot be a law which has NOCONNECTION at all with the transaction orthe parties

2. LAW AS CHANGED will govern EXCEPT ifthe change is so revolutionary that it wasnever contemplated by the parties

3. Choice of law should not be interpreted toOUST THE JURISDICTION which the courthas already acquired over the parties andthe subject matter.

4. Cannot contract away provisions of lawespecially peremptory provisions heavilyimpressed with PUBLIC INTEREST

5. COGNOVIT CLAUSE (confession ofjudgment) valid only if the parties were ofequal bargaining power and the defendantagreed to it voluntarily.

VI. Applicable Law in the Absence ofEffective Choice

1. Law of the place of the MOSTSIGNIFICANT RELATIONSHIP with thecontract as a whole or with a specific issuearising therefrom

2. Factors to considera. Place of contractingb. Place of negotiatingc. Place of performanced. Situs of the subject matter of the

contracte. Parties’ domicile, residence, nationality,

place of incorporation, place of businessf. Place under whose local law the

contract will be most effective

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Chapter XIII. Succession

I. Extrinsic ValidityII. Intrinsic ValidityIII. Interpretation of WillsIV. RevocationV. ProbateVI. Administration of EstatesVII. Trusts

I. Extrinsic Validity (Arts. 17, 815-817, CC)

(Asked in 75-79, 90-94, 95-99 BAREXAMINATIONS)

PLACE OFEXECUTION

APPLICABLE LAW

Fili

pin

oT

esta

tor

Philippines Philippine Law

ForeignCountry

1. law of the place wherehe may be (lex locicelebrationis) [Art815, CC]

2. Philippine law [see IIITolentino 117]

Alie

nT

esta

tor

Philippines 1. Philippine Law [Art. 17,CC]

2. law of the country inwhich he is a citizen orsubject [lex nationali](Art. 817, NCC)

ForeignCountry [Arts.816, 17, NCC]

1. law of the place inwhich he resides [lexdomicilii]

2. law of his country (lexnationali)

3. Philippine law4. law of the place where

they were executed(lex locicelebrationis)

NOTE: Rule re: Joint Wills1. Joint wills prohibited under Art. 818, CC

executed by Filipinos in a foreign countryshall not be valid in the Philippines eventhough authorized by the laws of the countrywhere they were executed. [Art. 819, CC](Asked in 00-04 BAR EXAMINATIONS)

2. Civil Code is silent as to the validity of a jointwill executed by an alien in the Philippines. Itis suggested that that it should not beprobated if it would affect the heirs in thePhilippines.

II. Intrinsic Validity

Intestate and testamentary successions shall beregulated by the national law of the decedent,with respect to the following [Art. 16(2); Art.1039, NCC]1. Order of succession2. Amount of successional rights3. Intrinsic validity of the testamentary

provisions4. Capacity to succeed

III. Interpretation of Wills

Governed by the National Law of thedecedent

IV. Revocation

TESTATOR APPLICABLE LAW

Will

isre

voked

inth

eP

hili

pp

ines Philippine

Domiciliary

Philippine Law

Non-domiciliary[Art. 829, CC]

Will

isre

voked

ina

Fore

ign

Countr

y

PhilippineDomiciliary

1. Philippine Law2. Law of the place of

revocation (lex lociactus)

Non-domiciliary[Art. 829, CC]

1. law of the placewhere the will wasmade

2. law of the place inwhich the testatorhad his domicile atthe time of therevocation

V. Probate

A. Controlling Law—The probate of a will being essentiallyprocedural in character, the law of theforum (lex fori) governs.

B. Wills Proved and Allowed in a ForeignCountry

1. A will proved and allowed in a foreigncountry in accordance with the laws of thatcountry may be allowed, filed, and recordedin the proper Regional Trial Court in thePhilippines [RULES OF COURT, Rule 77,Sec.1]

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2. Requisites for Reprobate (Vda de Perez vTolete, 232 SCRA 722)The following must be proved by competentevidence:a. due execution of the will in accordance

with the foreign lawsb. the testator had his domicile in the

foreign country and not in thePhilippines

c. the will has been admitted to probate insuch country

d. the laws of the foreign country onprocedure and allowance of wills

VI. Administration of Estates

Territorial: governed by the law of the placewhere the administration takes place, and that isthe law of the country from which theadministrator derives his authority.

VII.Trusts

Extrinsic Validity: rules governing wills apply Intrinsic Validity: lex situs since a trust

involves property

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Chapter XIV. Torts and Crimes

I. TortsA. Traditional Approach

1. Controlling Lawa. Matters Concerning Conduct and

Safety: Lex Loci DelictiCommissi

b. Matters Concerning Loss andSafety: Lex Domicilii

2. Characterization of Locus Delictia. Common Law Ruleb. Civil Law Rule

B. Modern Approaches1. Most Significant Relationship2. Interest Analysis3. Caver’s Principle of Preference

C. Foreign Torts Claims1. Transitory Nature of Torts Claims2. Conditions for Enforcement3. Alien Torts Claims Acts (ATCA)4. Rule under Philippine Law

II. CrimesA. General Rule: Lex Loci Delicti

Commissi/Locus Regit ActumB. Exceptions

1. Crimes Committed by DiplomaticOfficials; Doctrine of State Immunity

2. Crimes Committed in ForeignVessels

3. Art. 2, Revised Penal Code

I. Torts

A. Traditional Approach1. Controlling Law

a. Lex Loci Delicti Commissi (law of theplace where the alleged tort wascommitted) applies in mattersconcerning conduct and safety

b. Lex Domicilii of the parties applies inmatters concerning loss distribution orfinancial protection

2. Characterization of the place of wrong(Locus Delicti)a. Common Law: place where the last

event necessary to make an actor liablefor an alleged tort occurs (place ofinjury)

b. Civil Law: place where the tortiousconduct was committed (place ofconduct)

B. Modern Approaches1. Most Significant Relationship

a. The most significant relationshipapproach considers the state’s contactswith the occurrence and the parties

b. In the case of Saudi Arabian Airlines vCA, 297 SCRA 469, the Supreme Courthad the occasion to apply the “mostsignificant relationship” rule. In the saidcase the court laid down the followingfactors which are to be taken intoaccount::i. place where the injury occurredii. place where the conduct causing

the injury occurrediii. the domicile, residence, nationality,

place of incorporation and place ofbusiness of the parties

iv. place where the relationship, if any,between the parties is centered

2. Interest Analysis—This approach considers the relevantconcerns the state may have in the caseand its interest in having its law applied onthat issue

3. Caver’s Principle of Preference—a. Where the State of Injury provides for

higher standard of conduct or financialprotection against injury than the Statewhere the tortious act was done, the lawof the former shall govern

b. Where the State of injury and conductprovides for lower standard of conductand financial protection than the homeState of the person suffering the injury,the law of the State of conduct andinjury shall govern

c. Where the State in which the defendantwas engaged, the special controls andbenefits must be applied although theState has no relationship to thedefendant

d. Where the law in which the relationshiphas its seat imposed higher standards ofconduct or financial protection than thelaw of the State of the injury, the formerlaw shall govern.

C. Foreign Torts Claims1. Tort liability is transitory. Hence, an action

for tort may be brought wherever thetortfeasor is subject to suit.

2. Conditions for enforcement of foreign tortclaims:a. The foreign tort is based on civil action

and not on a crimeb. The enforcement of the tort would not

infringe the public policy of the forumc. The judicial machinery of the forum is

adequate for its proper enforcement3. Alien Tort Claims Act(ATCA) (Asked in 00-

04 BAR EXAMINATIONS)—

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grants US District Courts original jurisdictionover any civil action by an alien for a tortomitted in violation of the law of nations or atreaty of the US.

4. In the Philippines, no specific statutory lawgoverns the enforcement of claims arisingfrom foreign tort.

II. Crimes

A. General Rule—Lex Loci Delicti Commissi/ Locus RegitActum (law of the place where the act wascommitted)

NOTE: Penal laws xxx shall be obligatoryupon all those who live and sojourn inPhilippine territory, subject to the principlesof public international law and to treatystipulations [Art. 14, CC]

B. Exceptions1. Crimes committed by state officials,

diplomatic representatives and officials ofrecognized international organizations(based on the doctrine of state immunityfrom suit.

2. Crimes committed on board a foreign vesseleven if it is within the territorial waters of thecoastal state, as long as the effect of suchcrime does not affect the peace and order ofthe coastal state.

3. Crimes which, although committed byPhilippine nationals abroad are punishableunder Philippine law as provided in Art. 2,Revised Penal Code:b. offenses committed in a Philippine

vessel or airshipc. forging or counterfeiting any coin or

currency note of the Philippines, or anyobligation issued by the government

d. introduction into the country of theobligations and securities mentioned inthe preceding number

e. those committed by public officers oremployees in the exercise of theirfunctions

4. Crimes against national security and the lawof nations.

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Chapter XV. Torts and Crimes

I. Personal Law of CorporationsA. General Law: Law of IncorporationB. Exceptions

1. Constitutional and StatutoryRestrictions

2. Control Test During WarII. Domicile/Residence of Corporations

A. General RuleB. Exceptions

III. Jurisdiction Over Foreign CorporationsA. Consent DoctrineB. Foreign Corporations Doing Business

Bound by Philippine Law1. Art. 129, Corporation Code2. Service Upon Foreign Corporations

Doing Business in the PhilippinesIV. Right of Foreign Corporations to Bring Suit

A. General RuleB. Exceptions

1. Isolated Transactions2. Action to Protect Trademark, Trade

Name, Goodwill, Patent or for UnfairCompetition

3. Agreements Fully TransactedOutside the Philippines

4. Petitions Filed Merely as CorollaryDefense in a Suit Against It

I. Personal Law of Corporations

A. General Rule—Law of the State where it is incorporated[Art. 2, Corporation Code]

NOTE: Hence, if the law creating the corporationdoes not give it authority to enter into certaincontracts, such contracts made by it in anotherstate shall be void despite the expresspermission given by the laws of that other state.

B. Exceptions1. Constitutional and Statutory Restrictions

(e.g. Art. XII, Sec. 2, 1987 Constitution)2. Control Test During War—

In wartime, the courts may pierce the veil ofcorporate identity and look into thenationality of the controlling stockholders todetermine the “citizenship” of thecorporation.

II. Domicile/Residence of Corporations

A. General Rule [Art. 51, CC]—that fixed by the law creating them,recognizing them or any other provision oflaw

B. Rule if the Same Not Fixed by Law—If the law does not fix the same, the domicile ofjuridical persons shall be understood to be [Art.51, CC]:1. place where their legal representation is

established; or2. place where they exercise their principal

functions

NOTE: A foreign corporation granted license tooperate in the Philippines acquires domicilehere.

III. Jurisdiction Over ForeignCorporations

A. Consent Doctrine—A foreign corporation shall be recognizedand will be allowed to transact business inany state which gives it consent. Theconsent doctrine is established in Sections125, 126, 127 and 128 of the CorporationCode.

.B. Foreign Corporations Doing Business in

Philippines Bound by Philippine Law1. Under Art. 129 of the Corporation Code, all

foreign corporations lawfully doing businessin the Philippines shall be bound by all laws,rules, and regulations applicable to domesticcorporations; EXCEPT:a. provisions for the creation, formation,

organization or dissolution ofcorporations

b. those which fix the relations, liabilities,responsibilities, or duties ofstockholders, members, or officers ofcorporations to each other or to thecorporation

2. Service upon foreign corporations doingbusiness in the Philippines may be made on[Rule 14, Sec. 14, RULES OF COURT]:c. its resident agenta. in the absence thereof, process will be

served on the government officialdesignated by law or any of its officersor agent within the Philippines

b. on any officer or agent of saidcorporation in the Philippines

c. thru diplomatic channels (Far EastInternational v. Nankai Kogyo, 6 SCRA725 (1962))

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IV. Right of Foreign Corporations toBring Suit

A. General Rule—License to transact business in thePhilippines is an essential prerequisite forfiling a suit before Philippine courts [Art. 133,Corporation Code]

B. Exceptions—1. isolated transactions2. action to protect trademark, trade name,

goodwill, patent or for unfair competition3. agreements fully transacted outside the

Philippines4. when the petition filed is merely a corollary

defense in a suit against the corporation

EFFECT OF FAILURE TO SECURE ALICENSE TO TRANSACT BUSINESS1. the foreign corporation has no right to sue in

the Philippines but it can still be sued2. although the contracts entered into may be

valid as between the parties, it may not beenforced in Philippine courts

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Chapter XVI. Foreign Judgments

I. RECOGNITION v. ENFORCEMENTII. BASES OF RECOGNITION AND

ENFORCEMENTIII. POLICIES UNDERLYINGIV. REQUISITESV. PROCEDURE FOR ENFORCEMENTVI. EFFECTS OF FOREIGN JUDGMENTS

FOREIGN JUDGMENT: a decision renderedoutside the forum and encompasses judgments,decrees and order of courts of foreign countries.

I. Recognition v. Enforcement

A. Recognition of Foreign Judgment1. Passive act of giving the same effect that it

has in the State where it was rendered withrespect to the parties, the subject matter ofthe action and the issues involved withoutthe necessity of filing an action in the forumgiving effect to the judgment

2. Examples of foreign judgments which canonly be recognized: declaratory judgments,judgments which give no affirmative relief,judgments which determine the parties’interests in a thing or status.

B. Enforcement of Foreign Judgment1. A judgment is enforced when, in addition to

being recognized, a party is given affirmativerelief to which the judgment entitles him; itnecessarily requires the filing of an action.

2. This necessary implies recognition.

II. Bases of Recognition andEnforcement

A. Comity—In order to obtain reciprocal treatment fromthe courts of other countries, we arecompelled to take foreign judgments as theystand and to give them full faith and credit.

B. Doctrine of Obligation—1. Considers a judgment of a foreign court of

competent jurisdiction as imposing a duty orobligation on the losing litigant.

2. This is based on the vested rights theory.

III. Policy of Preclusion UnderlyingRecognition and Enforcement

The policy of preclusion seeks to protectparty expectation resulting from previouslitigation, to safeguard against theharassment of defendants, to insure that thetask of the courts not be increased by never-ending litigation of the same disputes, and—in a larger sense—to promote what LordCoke in the Ferrer’s Case of 1599 stated tobe the goal of all law: “rest and quietness.”(Mijares v Ranada, 2005)

RELATED CONCEPTS1. Res Judicata: once there is a final

judgment, resolution on the issues litigatedis binding on the parties and their privies.

2. Merger: plaintiff’s cause of action is mergedin the judgment so that he may not relitigatethat exact claim.

3. Bar: successful defendant can interpose asdefense the judgment in his favor to avert a2

ndaction by the plaintiff on the same claim.

4. Direct estoppel: relitigation of all mattersdecided are precluded

5. Indirect estoppel: all essential issues offact actually litigated cannot be relitigated.

IV. Requisites for Recognition orEnforcement

1. Foreign court had JURISDICTION over theparties and the case

2. Judgment VALID under the laws of thecountry that rendered it.

3. Judgment FINAL and EXECUTORY toconstitute res judicata in another action

4. RECIPROCITY: state where foreignjudgment was obtained allows recognitionand enforcement of Philippine judgments.

5. Judgment is for a FIXED SUM of money6. Foreign judgment not contrary to PUBLIC

POLICY OR GOOD MORALS of countrywhere it is sought to be enforced

7. Judgment not obtained by EXTRINSICFRAUD, COLLUSION, MISTAKE of fact orlaw.

V. Procedures for Enforcement

Three modes of enforcement:A. Petition1. Followed in most common law countries and

in the Philippines

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2. The rules are silent as to what initiatoryprocedure must be undertaken in order toenforce a foreign judgment in thePhilippines. But there is no question that thefiling of a

B. Summary Proceeding1. Followed in most civil law countries2. A summary proceeding for enforcement is

provided by statute.

C. Judgment RegistrationAn authenticated copy of the foreignjudgment is filed in the registrar’s officetogether with other proofs required bydomestic laws and the foreign judgment isconverted into a local one that isimmediately executory.

VI. Effect of Foreign Judgment in thePhilippines

The effect of a judgment or final order of atribunal of foreign country, having jurisdiction torender such is as follows [Sec. 48, Rule 39,RULES OF COURT]:1. In a judgment or final order upon a specific

thing, the judgment or final order isconclusive upon the title to the thing; and

2. In a judgment or final order against aperson, the judgment or final order ispresumptive evidence of a right as betweenthe parties and their successors-in-interestby a subsequent title.

3. In either case, the judgment or final ordermay be repelled by evidence ofa. want of jurisdictionb. want of notice to the partyc. collusiond. fraude. clear mistake of law or fact

NOTE: It has been recognized that “publicpolicy” as a defense to the recognition ofjudgment serves as an umbrella for a variety ofconcerns in international practice which maylead to a denial of recognition [Mijares vRanada, 2005]

- end of Private International Law –- end of Civil Law -