BOC 2014 - Civil Law Reviewer

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UP LAW BOC PERSONS AND FAMILY RELATIONS CIVIL LAW
FAMILY DOMICILE ...................................... 33

PERSONS AND FAMILY SUPPORT ................................................... 33
RELATIONS MANAGEMENT OF HOUSEHOLD .............. 34
EFFECT OF NEGLECT OF DUTY ................. 34
Effect and Application of Laws........... 1 EXERCISE OF PROFESSION....................... 34
WHEN LAWS TAKE EFFECT .......................... 1
IGNORANCE OF THE LAW ........................... 1 Property Relations of the Spouses .. 34
RETROACTIVITY OF LAWS .......................... 1 MARRIAGE SETTLEMENT RULES ............. 34
MANDATORY OR PROHIBITORY LAWS ....... 1 DONATIONS BY REASON OF MARRIAGE...35
WAIVER OF RIGHTS ..................................... 1 ABSOLUTE COMMUNITY OF PROPERTY &
REPEAL OF LAWS ........................................2 CONJUGAL PARTNERSHIP OF GAINS ........ 37
JUDICIAL DECISIONS ...................................2 SEPARATION OF PROPERTY OF THE
DUTY TO RENDER JUDGMENT ....................2 SPOUSES AND ADMINISTRATION OF
PRESUMPTION AND APPLICABILITY OF COMMON PROPERTY BY ONE....................47
CUSTOM ......................................................2 PROPERTY REGIME OF UNIONS WITHOUT
LEGAL PERIODS ..........................................2 MARRIAGE ................................................ 49
APPLICABILITY OF PENAL LAWS ................2
SPECIAL CONFLICT OF LAW RULES ............ 6
The Family ....................................... 50
THE FAMILY AS AN INSTITUTION ............. 50
Human Relations ............................. 10 THE FAMILY HOME.................................... 50
ABUSE OF RIGHT........................................ 10
ACTS CONTRARY TO LAW ......................... 10
ACTS CONTRA BONUS MORES .................. 10
Paternity and Filiation...................... 52
PRINCIPLE OF UNJUST ENRICHMENT ....... 10 LEGITIMATE CHILDREN ............................ 52
PROOF OF FILIATION ................................ 54
ILLEGITIMATE CHILDREN ......................... 54
Persons and Personality .................. 10 LEGITIMATED CHILDREN .......................... 56
CAPACITY TO ACT ...................................... 10
DOMICILE AND RESIDENCE OF PERSON ... 14
Adoption ...........................................56
RA 8552 DOMESTIC ADOPTION LAW ..... 57
Marriage .............................................15 RA 8043 THE LAW ON INTER-COUNTRY
REQUISITES................................................ 15 ADOPTION.................................................. 61
EFFECT OF MARRIAGE CELEBRATED
ABROAD AND FOREIGN DIVORCE ............. 18 Support ............................................ 63
VOID AND VOIDABLE MARRIAGES ............ 19 WHAT IT COMPRISES .................................63
WHO ARE OBLIGED ....................................63
Legal Separation .............................. 29 SUPPORT DURING MARRIAGE LITIGATION
GROUNDS ................................................. 29 ................................................................... 64
DEFENSES ................................................. 30 AMOUNT ................................................... 64
WHEN TO FILE ........................................... 30 WHEN DEMANDABLE ............................... 64
COOLING-OFF PERIOD AND OPTIONS ................................................... 64
RECONCILIATION EFFORTS ...................... 30 ATTACHMENT ........................................... 64
CONFESSION OF JUDGMENT ..................... 31
EFFECTS OF FILING PETITION ................... 31 Parental Authority ...........................65
EFFECTS OF PENDENCY ............................. 31 GENERAL PROVISIONS ............................. 65
EFFECTS OF LEGAL SEPARATION ............. 31 SUBSTITUTE AND SPECIAL PARENTAL
RECONCILIATION ....................................... 31 AUTHORITY ............................................... 66
EFFECT OF PARENTAL AUTHORITY UPON
Rights and Obligations Between THE PERSONS OF THE CHILDREN ............. 67
Spouses ............................................. 33 EFFECTS OF PARENTAL AUTHORITY UPON
ESSENTIAL OBLIGATIONS ......................... 33 THE PROPERTY OF THE CHILDREN .......... 68
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SUSPENSION OR TERMINATION OF
PARENTAL AUTHORITY ............................ 69 PROPERTY
Emancipation, as amended by Characteristics .................................. 83
RA6809.............................................. 71 Classification .................................... 83
HIDDEN TREASURE .............................. 83
BASED ON MOBILITY [IMMOVABLE OR
Summary Judicial Proceedings in the MOVABLE] .......................................... 83
Family Law ......................................... 71 BASED ON OWNERSHIP ........................ 87
PROCEDURAL RULES ................................ 71 BASED ON CONSUMABILITY ................. 89
SEPARATION IN FACT ................................ 61 BASED ON SUSCEPTIBILITY TO
INCIDENTS INVOLVING PARENTAL SUBSTITUTION ..................................... 89
AUTHORITY ................................................ 72 BASED ON THE CONSTITUTION ............. 89
OTHER CLASSIFICATIONS...................... 89
Retroactive Effect ............................. 73
Ownership ........................................ 90
Funeral .............................................. 73 DEFINITION AND CONCEPT ...................... 90
RELATIVES DUTY AND THE RIGHT TO TYPES OF OWNERSHIP ............................. 90
ARRANGE FUNERALS .................................. 73 RIGHT IN GENERAL ................................... 90
NATURE OF FUNERAL ................................... 73 LIMITATIONS ON OWNERSHIP ................. 92
FUNERAL EXPENSES .................................... 73
GUIDELINES IN MAKING FUNERAL
ARRANGEMENTS ......................................... 73
Accession ..........................................94
CLASSIFICATION OF ACCESSION .............. 94
Use of Surnames .............................. 74 Quieting of Title .............................. 101

SURNAMES OF CHILDREN .............................74
IN GENERAL .............................................101
WIFE AFTER AND DURING MARRIAGE ...........74
PURPOSE ..................................................101
CONFUSION AND CHANGE OF NAMES ...........74
NATURE: QUASI IN REM .......................... 102
JUSTIFICATIONS FOR QUIETING OF TITLE
Absence............................................. 74 .................................................................. 102
PROVISIONAL MEASURES IN CASE OF THE ACTION TO QUIET TITLE DOES NOT
ABSENCE ....................................................75 APPLY ....................................................... 102
SUBSEQUENT MARRIAGE CONTRACTED REQUIREMENTS ....................................... 102
WHEN ONE SPOUSE IS ABSENT ................75 QUIETING OF TITLE V. REMOVAL OF CLOUD
DECLARATION OF ABSENCE......................75 .................................................................. 103
ADMINISTRATION OF THE PROPERTY OF PRESCRIPTION/NON-PRESCRIPTION OF
THE ABSENTEE .......................................... 77 ACTION ..................................................... 103
PRESUMPTION OF DEATH ......................... 77
Co-ownership ................................. 103
Civil Registrar ................................... 78 DEFINITION .............................................. 103
ART. 407-413 ..............................................78 REQUISITES.............................................. 103
RA 9048 AS AMENDED BY RA 10172..........78 WHAT GOVERNS CO-OWNERSHIP .......... 103
RULE 108, RULES OF COURT .................... 80 CHARACTERISTICS OF CO-OWNERSHIP . 103
SOURCES OF CO-OWNERSHIP .............. 104
RIGHTS OF CO-OWNERS....................... 105
RULES ...................................................... 106
TERMINATION/ EXTINGUISHMENT.......... 107
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Possession ...................................... 108 NO PRESCRIPTION APPLICABLE ............. 157

DEFINITION ............................................. 108 PRESCRIPTION DISTINGUISHED FROM
CONCEPT OF POSSESSION ...................... 108 LACHES .................................................... 158
CHARACTERISTICS ................................... 108 PRESCRIPTION OR LIMITATION OF
ACQUISITION OF POSSESSION ..................110 ACTIONS................................................... 158
EFFECTS OF POSSESSION......................... 112
LOSS/TERMINATION OF POSSESSION .....118
OBLIGATIONS AND
Usufruct ........................................... 119 CONTRACTS
CONCEPT .................................................. 119
OBJECTS OF USUFRUCT ........................... 119
CHARACTERISTICS .................................... 119 Obligations ...................................... 161
CLASSIFICATION ....................................... 119 IN GENERAL .............................................. 161
RIGHTS AND OBLIGATIONS OF NATURE AND EFFECT OF OBLIGATIONS . 162
USUFRUCTUARY ....................................... 121 DIFFERENT KINDS OF CIVIL OBLIGATIONS
SPECIAL CASES OF USUFRUCT................ 125 .................................................................. 169
RIGHTS OF THE OWNER ....................... 127 NATURAL OBLIGATIONS .......................... 181
EXTINGUISHMENT/ TERMINATION ....... 127 EXTINGUISHMENT OF OBLIGATIONS ...... 182
CONDITIONS NOT AFFECTING USUFRUCT ESTOPPEL ................................................. 191
.................................................................. 129
Contracts.......................................... 191
Easement ........................................ 129 ESSENTIAL REQUISITES ........................... 191
CHARACTERISTICS .............................. 129 FORM OF CONTRACTS ............................. 196
KINDS OF CONTRACTS ............................ 196
CLASSIFICATION.................................. 130
REFORMATION OF INSTRUMENTS ......... 197
GENERAL RULES....................................... 131
RESCISSIBLE CONTRACTS ....................... 197
RELEVANCE OF CLASSIFICATIONS ............ 131
VOIDABLE CONTRACTS ........................... 199
CREATION ................................................ 132
UNENFORCEABLE CONTRACTS............... 199
RIGHTS AND OBLIGATIONS OF OWNERS OF
VOID OR INEXISTENT CONTRACTS ........ 200
DOMINANT AND SERVIENT ESTATES ...... 133
EFFECT OF CONTRACTS.......................... 204
KINDS OF LEGAL EASEMENTS ................. 134
MODES OF ACQUIRING EASEMENT......... 140
EXTINGUISHMENT OF EASEMENTS ........ 140 Quasi-Contracts ............................ 204
NEGOSTIORUM GESTIO .......................... 204
Nuisance ............................................. 71 SOLUTIO INDEBITI ............................ 205
NUISANCE V. TRESPASS .............................. 141 OTHER QUASI-CONTRACTS ................. 205
NUISANCE V. NEGLIGENCE .......................... 142
CLASSES .................................................... 142
DOCTRINE OF ATTRACTIVE NUISANCE ........ 142
LIABILITY IN CASE OF NUISANCE ................. 142 SALES
REGULATION OF NUISANCES ...................... 143
Definition and Essential Requisites
Modes of Acquiring Ownership .... 144 ........................................................ 208
OCCUPATION ........................................... 145 DEFINITION OF SALES ........................... 208
DONATION .......................................... 145 ESSENTIAL REQUISITES OF A CONTRACT
TRADITION ............................................... 156 OF SALE ................................................... 208
STAGES OF CONTRACT OF SALE ............ 208
Prescription ..................................... 156 OBLIGATIONS CREATED ......................... 209
DEFINITION .............................................. 156
RATIONALE .............................................. 156 Parties to a Contract of Sale........... 211
KINDS OF PRESCRIPTION ........................ 156 CAPACITY OF PARTIES .............................. 211
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Subject Matter .................................213 Remedies of an Unpaid Seller...... 230

REQUISITES OF A VALID SUBJECT MATTER DEFINITION OF UNPAID SELLER ............ 230
.................................................................. 213 REMEDIES OF UNPAID SELLER .............. 230
Obligations of the Seller to Transfer Performance of Contract ............... 232

Ownership ....................................... 215 DELIVERY OF THING SOLD....................... 232
OBLIGATIONS OF THE VENDOR IN PAYMENT OF PRICE ................................. 233
GENERAL.................................................. 215
SALE BY A PERSON NOT THE OWNER AT Warranties.......................................234
TIME OF DELIVERY ................................... 215 EXPRESS WARRANTIES ...........................234
SALE BY A PERSON HAVING A VOIDABLE IMPLIED WARRANTIES ............................235
TITLE ........................................................ 215 EFFECTS OF WARRANTIES ...................... 237
EFFECTS OF WAIVERS ............................. 237
Price................................................. 216 BUYERS OPTIONS IN CASE OF BREACH OF
MEANING OF PRICE ................................. 216 WARRANTY ............................................. 237
REQUISITES FOR A VALID PRICE ............. 216
Breach of Contract .........................239
Formation of Contract of Sale ........ 218 GENERAL REMEDIES ...............................239
PREPARATORY ........................................ 218 REMEDIES OF THE SELLER [ARTS. 1636,
PERFECTION ........................................... 220 1594] ........................................................239
CONSUMMATION ..................................... 221 REMEDIES OF THE BUYER .......................243
Transfer of Ownership ....................222 Extinguishment of Sale................. 245

OBLIGATIONS OF THE VENDOR: .............222 CAUSES ................................................... 245
MANNER OF TRANSFER ..........................222 EQUITABLE MORTGAGE ......................... 246
PERIOD OF REDEMPTION ........................247
EXERCISE OF THE RIGHT TO REDEEM .... 248
Risk of Loss ....................................... 27 LEGAL REDEMPTION ............................... 248
GENERAL RULE ........................................ 227 AGE REDEMPTION ................................... 251
WHEN LOSS OCCURRED BEFORE
PERFECTION ............................................ 227
WHEN LOSS OCCURRED AT TIME OF The Law on Sale of Subdivision and
PERFECTION ........................................... 227 Condominium (PD 957) ................ 251
WHEN LOSS OCCURRED AFTER DEFINITIONS ............................................ 251
PERFECTION BUT BEFORE DELIVERY ..... 227
AFTER DELIVERY ..................................... 227 The Condominium Act (RA 4726) 255
WHEN OWNERSHIP IS TRANSFERRED.... 227
Documents of Title ........................ 228

DEFINITION ............................................. 228 SUCCESSION
PURPOSE OF DOCUMENTS OF TITLE ..... 228
NEGOTIABLE DOCUMENTS OF TITLE ..... 228 General Provisions......................... 260
NON-NEGOTIABLE DOCUMENTS OF TITLE DEFINITION ............................................. 260
................................................................. 228
WARRANTIES OF SELLER OF DOCUMENTS
OF TITLE .................................................. 229 Testamentary Succession .............. 261
RULES ON LEVY/GARNISHMENT OF GOODS WILLS ....................................................... 261
................................................................. 229 INSTITUTION OF HEIRS ........................... 269
SUBSTITUTION OF HEIRS ........................ 271
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TESTAMENTARY DISPOSITIONS WITH A RIGHT TO RETURN OF CREDIT RECEIVED

CONDITION, A TERM, AND A MODE ......................................................... 304
LEGITIME .................................................. 272 RIGHT TO INDEMNITY FOR DAMAGES .. 304
DISINHERITANCE ..................................... 277 SUIT FOR DAMAGES ........................... 304
LEGACIES AND DEVISES ......................... 280 RESPONSIBILITY TO PARTNERS........... 304
Legal or Intestate Succession........283
GENERAL PROVISIONS ............................283 Rights and Obligations of Partners
ORDER OF INTESTATE SUCCESSION .......287 Inter Se ........................................... 304
OUTLINE OF INTESTATE SHARES ........... 288 RIGHT TO ASSOCIATE ANOTHER IN SHARE
......................................................... 304
Provisions Common to Testate and RIGHT TO INSPECT PARTNERSHIP BOOKS
Intestate Succession ..................... 289 ......................................................... 304
RIGHT OF ACCRETION ............................ 289 RIGHT TO FORMAL ACCOUNT .............. 305
CAPACITY TO SUCCEED BY WILL OR PROPERTY RIGHTS OF PARTNERS ....... 305
INTESTACY .............................................. 290
OWNERSHIP OF CERTAIN PROPERTIES 305
ACCEPTANCE AND REPUDIATION OF THE
INHERITANCE .......................................... 291 RIGHTS IN SPECIFIC PROPERTY ........... 305
COLLATION ............................................. 292 INTEREST IN PARTNERSHIP ................ 306
PARTITION AND DISTRIBUTION OF ESTATE . RIGHT TO PARTICIPATE IN MANAGEMENT
................................................................. 294 ......................................................... 306
RIGHT TO PROFITS AND OBLIGATIONS FOR
LOSSES .............................................. 307
OBLIGATION TO RENDER INFORMATION
......................................................... 308
AGENCY AND OBLIGATION TO ACCOUNT AND ACT AS
PARTNERSHIP TRUSTEE ........................................... 308
AGENCY ......................................... 298 Obligations of the

Partnership/Partners to Third
Contract of Partnership ................ 298 Persons........................................... 308
DEFINITION........................................ 298 OBLIGATION TO OPERATE UNDER A FIRM
ESSENTIAL FEATURES ........................ 298 NAME ................................................ 308
PARTIES ............................................ 298 LIABILITY OF PARTNERS FOR
OBJECT .............................................. 298 PARTNERSHIP CONTRACTS ................. 308
FORM ................................................ 299 LIABILITY OF PARTNERS FOR
DURATION ......................................... 299 PARTNERSHIP CONTRACTS ................. 309
RULES TO DETERMINE EXISTENCE ....... 299 CONVEYANCE OF PARTNERSHIP REAL
KINDS................................................ 300 PROPERTY .......................................... 310
KINDS OF PARTNERS .......................... 300 LIABILITY OF PARTNERSHIP FOR
PARTNERSHIP AND OTHER CONTRACTS ADMISSION BY A PARTNER .................. 310
DISTINGUISHED .................................. 301 LIABILITY OF PARTNERSHIP FOR
WRONGFUL ACTS OF A PARTNER ......... 310
LIABILITY OF THE PARTNERSHIP FOR
Rights and Obligations of the MISAPPLICATION OF MONEY OR PROPERTY
Partnership .....................................303 .......................................................... 310
RIGHT TO CONTRIBUTION ................... 303 LIABILITY OF THE OTHER PARTNERS
RIGHT TO APPLY PAYMENT RECEIVED TO UNDER ART. 1822 AND 1823 .................. 311
PARTNERSHIP CREDIT ........................ 303 LIABILITY IN CASE OF PARTNERSHIP BY
ESTOPPEL ............................................ 311
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LIABILITY OF AN INCOMING PARTNER .. 312 Kinds of Agency ..............................329

NOTICE TO OR KNOWLEDGE OF THE IN GENERAL ....................................... 329
PARTNERSHIP..................................... 312 AS TO MANNER OF CREATION ............. 329
AS TO EXTENT OF BUSINESS COVERED 329
Dissolution and Winding Up...........312 AS TO AUTHORITY CONFERRED ........... 329
CONCEPTS .......................................... 312 SPECIAL KINDS .................................. 329
CAUSES OF DISSOLUTION .................... 312 KINDS OF AGENTS ............................... 333
EFFECTS OF DISSOLUTION ................... 314
WINDING UP PARTNERS ...................... 315 Powers of the Agent ...................... 333
RIGHTS OF PARTNERS IN CASE OF AUTHORITY OF AN AGENT.................... 333
DISSOLUTION...................................... 315 KINDS OF AUTHORITY .......................... 333
RIGHTS OF PARTNERS IN CASE OF SCOPE OF AUTHORITY ........................ 334
RESCISSION ........................................ 316
POWER TO BIND THE PRINCIPAL ......... 334
SETTLING OF ACCOUNTS BETWEEN
EFFECTS OF THE ACTS OF AN AGENT ... 334
PARTNERS .......................................... 316
RIGHTS OF CREDITORS OF DISSOLVED
PARTNERSHIP..................................... 317 Obligations of Agent ...................... 335
RIGHTS OF A RETIRED PARTNER OR A IN GENERAL ........................................335
REPRESENTATIVE OF DECEASED PARTNER OBLIGATION TO CARRY OUT AGENCY ....335
.......................................................... 318 OBLIGATION WHEN AGENT DECLINES ...335
RIGHT TO AN ACCOUNT ....................... 318 OBLIGATION TO ADVANCE NECESSARY
FUNDS................................................335
Limited Partnership ....................... 318 OBLIGATION TO ACT IN ACCORDANCE
WITH INSTRUCTIONS ...........................336
DEFINITION......................................... 318
OBLIGATION TO PREFER INTEREST OF
CHARACTERISTICS .............................. 318
PRINCIPAL ..........................................336
GENERAL AND LIMITED PARTNERS
OBLIGATION FOR THINGS RECEIVED .....336
DISTINGUISHED .................................. 318
RESPONSIBILITY FOR ACTS OF SUBSTITUTE
GENERAL AND LIMITED PARTNERSHIP
DISTINGUISHED .................................. 318
.......................................................... 337
RESPONSIBILITY OF TWO OR MORE
FORMATION....................................... 320
AGENTS .............................................. 337
MANAGEMENT ................................... 320
OBLIGATION FOR SUMS APPLIED TO HIS
OBLIGATIONS OF A LIMITED PARTNER .. 321
OWN USE ............................................ 337
RIGHTS OF A LIMITED PARTNER ...........322
OBLIGATIONS TO THIRD PERSONS....... 338
DISSOLUTION......................................323 OBLIGATIONS OF A COMMISSION AGENT
SETTLEMENT OF ACCOUNTS ............... 324 ......................................................... 339
AMENDMENT OR CANCELLATION OF RESPONSIBILITY FOR FRAUD AND
CERTIFICATE ...................................... 324 NEGLIGENCE ...................................... 340
Contract of Agency .........................325 Obligations of the Principal .......... 340

DEFINITION........................................ 325 IN GENERAL ....................................... 340
CHARACTERISTICS ............................. 325 OBLIGATION TO COMPLY WITH
FORMATION....................................... 325 CONTRACTS ....................................... 340
EFFECT ............................................... 327 OBLIGATION FOR COMPENSATION OF
AGENCY AND OTHER CONTRACTS AGENT ............................................... 340
DISTINGUISHED .................................. 327 LIABILITY FOR EXPENSES AND DAMAGES
......................................................... 340
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Modes of Extinguishment ..............342 FORECLOSURE [NCC 2112, 2115] ............. 361

IN GENERAL ....................................... 342 EFFECT OF THE SALE OF THE THING
REVOCATION BY PRINCIPAL ................ 342 PLEDGED [ART. 2115] .............................. 361
LEGAL PLEDGE / PLEDGE BY OPERATION
WITHDRAWAL BY AGENT .................... 343
OF LAW (ARTS. 2121-2122) ....................... 361
DEATH, CIVIL INTERDICTION, INSANITY OR
PLEDGE AS DISTINGUISHED FROM
INSOLVENCY ...................................... 344 CHATTEL MORTGAGE [ARTS. 2140, 1484]
ACCOMPLISHMENT OF OBJECT OR ..................................................................362
PURPOSE ........................................... 344 PACTUM COMMISSORIUM.......................362
DISSOLUTION OF FIRM OR CORPORATION EQUITABLE MORTGAGE ..........................362
EXPIRATION OF TERM......................... 344
Real Mortgage ................................ 363
MORTGAGE .............................................. 363
JUDICIAL FORECLOSURE ........................ 365
EXTRAJUDICIAL FORECLOSURE [ACT NO.
CREDIT TRANSACTIONS 3135] ........................................................365
REDEMPTION ...........................................366
Credit Transactions .......................346
SECURITY ............................................... 346 Antichresis ...................................... 367
TYPES OF CONTRACTS OF SECURITY .... 346 CHARACTERISTICS .................................. 367
SPECIAL REQUISITES ............................... 367
AS DISTINGUISHED FROM OTHER
Loan.................................................346 CONTRACTS ............................................. 367
COMMODATUM [NCC 1935-1952] .............. 347 OBLIGATIONS OF ANTICHRETIC CREDITOR
INTEREST AND SUSPENSION OF USURY .................................................................. 367
LAW ......................................................... 348 REMEDIES OF CREDITOR IN CASE OF NON-
PAYMENT OF DEBT ................................. 368
Deposit ........................................... 350
VOLUNTARY DEPOSIT ............................ 350 Chattel Mortgage ...........................368
NECESSARY DEPOSIT .............................. 351 CHATTEL MORTGAGE ............................. 368
JUDICIAL DEPOSIT ...................................352 CHARACTERISTICS ................................. 368
OBLIGATIONS SECURED ......................... 368
Guaranty and Suretyship ...............352 PROPERTY COVERED .............................. 368
GUARANTY ...............................................352 VALIDITY OF CHATTEL MORTGAGE ........ 368
SURETYSHIP ............................................352 FORMAL REQUISITES ............................. 368
GUARANTY DISTINGUISHED FROM REGISTRATION OF CHATTEL MORTGAGE
SURETYSHIP [ZOBEL, INC. VS. CA, 1998] 352 ................................................................. 368
NATURE AND EXTENT OF GUARANTY ....353 FORECLOSURE ........................................ 368
NATURE AND EXTENT OF SURETYSHIP 355
EFFECT OF GUARANTY ........................ 356 Quasi-Contracts ............................. 370
EXTINGUISHMENT OF GUARANTY ........ 359 NEGOTIORUM GESTIO (UNAUTHORIZED
MANAGEMENT) .......................................370
Pledge .............................................359 SOLUTIO INDEBITI (UNDUE PAYMENT) .. 371
CHARACTERISTICS ................................. 360 OTHER QUASI-CONTRACTS ..................... 372
KINDS ...................................................... 360
ESSENTIAL REQUISITES ......................... 360 Concurrence and Preference of
PROVISIONS APPLICABLE ONLY TO PLEDGE
................................................................. 360 Credits ............................................. 373
OBLIGATIONS OF PLEDGEE .................... 360 WHEN RULES ON PREFERENCE ARE
RIGHTS OF PLEDGOR............................... 361 APPLICABLE ............................................. 373
REQUISITES FOR PERFECTION [ARTS. CLASSIFICATION OF CREDITS ................. 373
2093, 2096] ............................................. 361
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SPECIAL PREFERRED CREDITS ON SPECIFIC Regalian Doctrine ..........................382

MOVABLE PROPERTY [ART. 2241] .......... 374 CONCEPT ..................................................382
SPECIAL PREFERRED CREDITS ON SPECIFIC EFFECTS ...................................................382
IMMOVABLE PROPERTY AND REAL RIGHTS CONCEPT OF NATIVE TITLE, TIME
[ART. 2242] ............................................. 374 IMMEMORIAL POSSESSION.....................383
ORDINARY PREFERRED CREDITS [ART.
2244] ....................................................... 375
COMMON CREDITS [ART. 2245] ............. 375 Citizenship Requirement ............... 383
INDIVIDUALS............................................383
CORPORATIONS ..................................... 384
LAND TITLES AND DEEDS Original Registration......................384

CONCEPT ................................................. 384
WHO MAY APPLY .................................... 385
Land Title ........................................ 378 WHERE TO FILE ....................................... 385
CONCEPT .................................................. 378 PROCEDURE IN ORDINARY LAND
REGISTRATION ....................................... 386
EVIDENCE NECESSARY ........................... 390
Deed ................................................ 378 REMEDIES ............................................... 390
CONCEPT .................................................. 378 PETITIONS AND MOTIONS AFTER ORIGINAL
ELEMENTS OF A DEED ............................. 378 REGISTRATION ....................................... 390
Estate .............................................. 378 Judicial Confirmation of Imperfect or

CONCEPT .................................................. 378
TYPES OF ESTATE .................................... 378 Incomplete Titles ............................392
CONCEPT ..................................................392
WHEN APPLICABLE..................................392
Land Registration ........................... 378 WHO MAY APPLY .....................................392
CONCEPT .................................................. 378 FILING OF THE APPLICATION .................. 393
NATURE OF LAND REGISTRATION .......... 378 PROCEDURE IN JUDICIAL CONFIRMATION
LAWS IMPLEMENTING LAND .................................................................. 393
REGISTRATION ........................................ 379 EVIDENCE NECESSARY TO SUBSTANTIATE
PURPOSES OF LAND REGISTRATION ...... 379 APPLICATION ........................................... 393
OBJECT OF REGISTRATION...................... 379
CLASSIFICATION OF LANDS .................... 379
Cadastral Registration ...................394
CONCEPT ................................................. 394
Torrens System ............................... 379 PROCEDURE IN CADASTRAL
CONCEPT .................................................. 379 REGISTRATION ...................................... 394
HISTORY .................................................. 380 DISALLOWANCE OF REOPENING
ADVANTAGES ......................................... 380 CADASTRAL CASES................................. 395
NATURE .................................................. 380
PURPOSE ................................................ 380
ADMINISTRATION OF THE TORRENS Subsequent Registration ...............395
SYSTEM ................................................... 380 CONCEPT ................................................. 395
CERTIFICATE OF TITLE ............................ 380 NECESSITY AND EFFECTS OF
EFFECT OF REGISTRATION UNDER THE REGISTRATION TWO TYPES OF DEALINGS
TORRENS SYSTEM ................................... 381 ................................................................. 395
EFFECT OF NON-REGISTRATION .............382 TWO TYPES OF DEALINGS ...................... 395
DEALINGS IN LAND BEFORE ISSUANCE OF
DECREE ....................................................382 Non-Registrable Properties.......... 400
LACHES ....................................................382 CONCEPT ................................................. 400
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CIVIL CODE PROVISIONS DEALING WITH LEGAL CAUSE ........................................... 417

NON-REGISTRABLE PROPERTIES .......... 400 DOCTRINE OF LAST CLEAR CHANCE ....... 418
SPECIFIC KINDS OF NON-REGISTRABLE CONTRIBUTORY NEGLIGENCE................. 419
PROPERTIES OR LANDS ......................... 400
Legal Injury ..................................... 419
Dealings with Unregistered Lands.. 42 CLASSES OF INJURY ................................ 419
EFFECTS OF TRANSACTIONS COVERING
UNREGISTERED LAND ............................ 402
PRIMARY ENTRY BOOK AND
Intentional Torts ............................ 420
CONCEPT ................................................. 420
REGISTRATION BOOK ............................. 402
VIOLATIONS OF A PERSONS SECURITY
PROCESS OF REGISTRATION.................. 402
AND PHYSICAL INJURIES ....................... 420
THIRD PARTY WITH A BETTER RIGHT NOT
MALICIOUS PROSECUTION......................423
PREJUDICED............................................ 402
DEFAMATION, FRAUD AND PHYSICAL
INVOLUNTARY DEALINGS IN
INJURIES ................................................. 424
UNREGISTERED LANDS .......................... 402
UNJUST DISMISSAL ................................ 425
INTERFERENCE WITH RELATIONS ......... 425
Negligence ..................................... 429

TORTS AND DAMAGES TEST OF NEGLIGENCE............................. 429
STANDARD OF CARE .............................. 430
TORTS .......................................... 404 STANDARD OF CARE NEEDED IN SPECIFIC
CIRCUMSTANCES .................................... 430
EVIDENCE .................................................432
Principles ....................................... 404 PRESUMPTION OF NEGLIGENCE .............432
ABUSE OF RIGHT..................................... 404
ACTS CONTRARY TO LAW....................... 405
ACTS CONTRARY TO MORALS ................ 405 Special Liability in Particular Cases
UNJUST ENRICHMENT ............................ 406 ......................................................... 437
PRODUCTS LIABILITY .............................. 437
CONSUMER ACT...................................... 438
Classification of Torts .....................407 NUISANCE ............................................... 440
ACCORDING TO MANNER OF COMMISSION VIOLATION OF CONSTITUTIONAL RIGHTS
................................................................. 407 ................................................................. 442
ACCORDING TO SCOPE ........................... 407
Strict Liability ................................. 446

The Tortfeasor ................................407 POSSESSOR AND USER OF AN ANIMAL. 446
THE DIRECT TORTFEASOR ..................... 407 NUISANCE ............................................... 446
PERSONS MADE LIABLE FOR OTHERS ... 407 PRODUCTS LIABILITY (SUPRA) .............. 447
JOINT TORTFEASORS .............................. 415 CONSUMER ACT...................................... 447
Acts of Omission and Its Modalities DAMAGES ................................... 450

......................................................... 415
Definition........................................ 450
Classification.................................. 450
Proximate Cause ............................ 416 ACCORDING TO PURPOSE ...................... 450
CONCEPT OF PROXIMATE CAUSE ........... 416 ACCORDING TO MANNER OF
DEFINITION .............................................. 416 DETERMINATION .................................... 450
TESTS TO DETERMINE PROXIMATE CAUSE SPECIAL AND ORDINARY ....................... 450
.................................................................. 417
CAUSE vs. CONDITION ............................. 417
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Actual and Compensatory Damages

........................................................ 450
ALLEGED AND PROVED WITH CERTAINTY
.................................................................. 451
COMPONENTS.......................................... 451
EXTENT OR SCOPE OF ACTUAL DAMAGES
................................................................. 453
Moral Damages ............................. 456

WHEN AWARDED .................................... 456
GENERAL PRINCIPLES OF RECOVERY .... 456
WHEN RECOVERABLE............................. 458
Nominal Damages ........................ 460

WHEN AWARDED .................................... 460
Temperate Damages .................... 460
Liquidated Damages...................... 461

RULES GOVERNING BREACH OF CONTRACT
.................................................................. 461
Exemplary or Corrective Damages 461

WHEN RECOVERABLE............................. 462
GENERAL PRINCIPLES ............................ 462
DAMAGES IN CASE OF DEATH CAUSED BY
CRIMES AND QUASI-DELICTS ................. 463
Graduation of Damages ................463

DUTY OF THE INJURED PARTY ............... 463
BURDEN OF PROOF ................................ 464
RULES ..................................................... 464
GROUNDS FOR MITIGATION OF DAMAGES
................................................................. 464
Miscellaneous Rules ..................... 465

DAMAGES THAT CANNOT CO-EXIST ...... 465
DAMAGES THAT MUST CO-EXIST ........... 465
DAMAGES THAT MUST STAND ALONE .. 465
14
PAGE 15
Effect and Application of RETROACTIVITY OF LAWS

Laws Art. 4, CC. Laws shall have no retroactive effect,
The Civil Code took effect on August 30, 1950. unless the contrary is provided.
WHEN LAWS TAKE EFFECT General rule: All statutes are to be construed as
having only prospective operation
Art. 2, CC. Laws shall take effect after fifteen Exception: When the law itself expressly
days following the completion of their provides
publication either in the Official Gazette, or in a
newspaper of general circulation in the Exceptions to Exception:
Philippines, unless it is otherwise provided. (as (1) Ex post facto law
amended by E.O. 200) (2) Impairment of contract
(3) In case of remedial statutes
General rules: (4) In case of curative statutes
The clause "unless it is otherwise provided" (5) In case of laws interpreting others
refers to the date of effectivity and not to the (6) In case of laws creating new rights [(Bona v.
requirement of publication itself, which Briones (1918)]
cannot in any event be omitted. [Tanada v. (7) Penal laws favorable to the accused
Tuvera (1986)]
Publication is indispensable in every case, but ACTS CONTRARY TO LAW
the legislature may in its discretion provide
that the usual fifteen-day period shall be
Art. 5, CC. Acts executed against the provisions
shortened or extended. [Tanada v. Tuvera
of mandatory or prohibitory laws shall be void,
(1986)]
except when the law itself authorizes their
validity.
Exception: Interpretative regulations and those
internal in nature [Tanada v. Tuvera (1986)]
WAIVER OF RIGHTS
IGNORANCE OF THE LAW
Art. 6, CC. Rights may be waived, unless the
Art. 3, CC. Ignorance of the law excuses no waiver is contrary to law, public order, public
one from compliance therewith. policy, morals, or good customs, or prejudicial to
a third person with a right recognized by law.
Conclusive Presumption That everyone knows
the law, even if they have no actual knowledge Waiver the relinquishment of a known right
of the law with both knowledge of its existence and an
intention to relinquish it. [Portland v. Spillman]
Mistake of Fact & Difficult Questions of Law -
These may excuse a party from the legal Exceptions:
consequences of his conduct; but not ignorance (1) If the waiver is contrary to law, public order,
of law. public policy, morals or good customs;
In specific instances provided by law, mistake (2) If the waiver prejudices a third person;
as to difficult legal questions has been given (3) If the alleged rights do not yet exist;
the same effect as a mistake of fact. (4) If the right is a natural right.
[Tolentino]
The laws referred to by this article are those of
the Philippines. There is no conclusive
presumption of knowledge of foreign laws.
[Tolentino]
PAGE 1
REPEAL OF LAWS Exception:

This article does not apply to criminal
Art. 7, CC. Laws are repealed only by prosecutions because where there is no law
subsequent ones, and their violation or non- punishing an act, the case must be dismissed.
observance shall not be excused by disuse, or [Tolentino]
custom or practice to the contrary.
PRESUMPTION AND APPLICABILITY
When the courts declared a law to be OF CUSTOM
inconsistent with the Constitution, the former
Art. 10, CC. In case of doubt in the interpretation
shall be void and the latter shall govern
or application of laws, it is presumed that the
lawmaking body intended right and justice to
Administrative or executive acts, orders and
prevail.
regulations shall be valid only when they are not
contrary to the laws or the Constitution
Art. 11, CC. Customs which are contrary to law,
public order or public policy shall not be
TWO KINDS OF REPEAL OF LAW countenanced.
[Tolentino]
(1) Express or Declared contained in a special
Art. 12, CC. A custom must be proved as a fact,
provision of a subsequent law
according to the rules of evidence.
(2) Implied or Tacit takes place when the
provisions of the subsequent law are
incompatible or inconsistent with those of LEGAL PERIODS
an earlier law.
Art. 13, CC. When the laws speak of years,
JUDICIAL DECISIONS months, days or nights, it shall be understood
that years are of three hundred sixty-five days
each; months, of thirty days; days, of twenty-
Art. 8, CC. Judicial decisions applying or
four hours; and nights from sunset to sunrise.
interpreting the laws or the Constitution shall
form a part of the legal system of the If months are designated by their name, they
Philippines. shall be computed by the number of days which
they respectively have.
Jurisprudence cannot be considered as an
independent source of law; it cannot create law. In computing a period, the first day shall be
[1 Camus 38 as cited in Tolentino] excluded, and the last day included
But the Courts interpretation of a statute POLICY ON LAST DAY BEING A

constitutes part of the law as of the date it was LEGAL HOLIDAY/SUNDAY
originally passed since the Courts construction If the period arises by statute or orders by the
merely establishes contemporaneous legislative government, the last day will automatically be
intent that the interpreted law carried into considered the next working day
effect. [Senarillos v. Hermosisima (1956)] If the period arises from a contractual
relationship, the act will still be due on that
DUTY TO RENDER JUDGMENT Legal Holiday/Sunday
General Rule: APPLICABILITY OF PENAL LAWS
Art. 9, CC. No judge or court shall decline to Art. 14, CC. Penal laws and those of public
render judgment by reason of the silence, security and safety shall be obligatory upon all
obscurity or insufficiency of the laws. who live or sojourn in the Philippine territory,
subject to the principles of public international
law and to treaty stipulations.
PAGE 2
EXEMPTIONS UNDER It is the nationality or citizenship of the

INTERNATIONAL LAW (THEORY OF individual, which regulates the following
(1) Civil status
EXTRATERRITORIALITY): (2) Capacity
(1) When the offense is committed by a foreign
(3) Condition
sovereign while in Philippine territory
(4) Family rights and duties
(2) When the offense is committed by
(5) Laws on Succession
diplomatic representatives
(6) Capacity to succeed
(3) When the offense is committed in a public
or armed vessel of a foreign country. According to the Supreme Court, it is a conflict
of laws theory by virtue of which jurisdiction over
CONFLICT OF LAWS the particular subject matter affecting a person
is determined by the latters nationality. [Ellis vs.
CONFLICT OF LAWS/ PRIVATE Republic (1963)]
INTERNATIONAL LAW
(1) It is a branch or part of Philippine Law which Art. 16, CC. Real property as well as personal
regulates the application of foreign law property is subject to the law of the country
within Philippine jurisdiction in the where it is situated.
resolution of cases involving foreign
elements. However, intestate and testamentary
(2) It is that part of municipal law which succession, both with respect to the order of
governs cases involving a foreign element. succession and to the amount of successional
(3) Private International Law is more commonly rights and to the intrinsic validity of
known in other jurisdictions as conflict of testamentary provisions, shall be regulated by
laws the national law of the person whose succession
is under consideration, whatever may be the
nature of the property and regardless of the
SOURCES country wherein the property may be found.
(1) Codes and statutes
(2) Treaties and international conventions
(3) Treatises, commentaries, and studies of RULE ON PROPERTY
learned societies Controlling Law: Lex Situs/Lex ReiSitae
(4) Judicial decisions General Rule: Real and Personal Property is
subject to the law of the country where it is
situated [Art. 16, CC]
EXAMPLES OF CONFLICT OF LAW
RULES IN THE PHILIPPINES APPLICATION OF THE DOCTRINE OF LEX
(1) Lex Patriae [Art. 15, CC] SITUS/LEX REISITAE
(2) Lex Domicili [Art. 1251 (par. 3), CC] (1) The capacity to transfer or acquire property
(3) Lex Situs/ Lex Rei Sitae [Art. 16, CC] is governed by Lex Situs.
(4) Lex Loci Contractus [Art. 17 (par. 1), CC]
(5) Lex Loci Celebrationis [Art. 71, CC] Note: Transfer of property to a foreigner who
(6) Lex Loci Celebrationis [Art. 26 (par. 1), FC] subsequently became a Filipino citizen shall be
(7) Lex Loci Intentionis [Art. 1306, CC] recognized [Llantino vs. Co Liong Chong]
Art. 15. Laws relating to family rights and duties, (2) The formalities of a contract to convey
or to the status, condition and legal capacity of property are governed by Lex Situs
persons are binding upon citizens of the
Philippines, even though living abroad. EXCEPTIONS TO LEX SITUS
Most civil law countries such as the Philippines (1) Transactions Not Affecting Transfer of Title
follow the NATIONAL LAW THEORY: or Ownership of Land: Lex Intentionis or Lex
Voluntatis
PAGE 3
(2) Contracts where Real Property Offered as RULE ON SUCCESSION

Security: The principal contract is the loan
while the mortgage of the land is only an EXTRINSIC VALIDITY [ARTS. 17, 815-817, CC]
accessory
(a) Mortgage Lex Situs Place of Execution Applicable Law
(b) Loan Contract Rules on ordinary
contracts Filipino Testator
Philippines Philippine Law
(3) Intestate and Testamentary Succession:
Intestate and testamentary successions Foreign Country (1) Law of the place
shall be regulated by the national law of the where he may be
decedent, with respect to the following (Art. (lex loci
16(2), CC; Art. 1039, CC) celebrationis) [Art
(a) Order of succession 815, CC]
(2) Philippine law [III
(b) Amount of successional rights
(c) Intrinsic validity of the testamentary Tolentino 117]
provisions Alien Testator
(d) Capacity to succeed Philippines (1) Philippine Law [Art.
17, CC]
(4) Under a Policy-centered Approach: Forum (2) Law of the country
court is not bound to look to the law of the in which he is a
situs when the situs of the movable property citizen or subject
is insignificant or accidental (lex nationali) [Art.
817, CC]
Questions relating to the validity and effect of
the transfer of the movable property are Foreign Country [Art. (1) Law of the place in
governed by the law of the place of principal 816, CC; Art. 17, CC] which he resides
use (lex domicilii)
(2) Law of his country
Where the issue involves considerations other
(lex nationali)
than the validity and effect of the transfer
(3) Philippine law
itself, governing law is the law of the state
(4) Law of the place
which has real interest
where they were
executed (lex loci
celebrationis)
RULE RE: JOINT WILLS

(1) Joint wills prohibited under Art. 818
executed by Filipinos in a foreign country
shall not be valid in the Philippines even
though authorized by the laws of the
country where they were executed. (Art. 819)
(2) Civil Code is silent as to the validity of a joint
will executed by an alien in the Philippines.
It is suggested that it should not be
probated if it would affect the heirs in the
Philippines.
INTRINSIC VALIDITY
Intestate and testamentary successions shall be
regulated by the national law of the decedent,
PAGE 4
with respect to the following [Art. 16(2), CC; Art. (b) The testator had his domicile in the
1039, CC]: foreign country and not in the
(1) Order of succession Philippines
(2) Amount of successional rights (c) The will has been admitted to probate in
(3) Intrinsic validity of the testamentary such country
provisions (d) The fact that the foreign tribunal is a
(4) Capacity to succeed probate court
(e) The laws of the foreign country on
INTERPRETATION OF WILLS procedure and allowance of wills
Governed by the National Law of the decedent.
ADMINISTRATION OF ESTATES
REVOCATION Territorial: governed by the law of the place
where the administration takes place, and that
Testator Applicable Law is the law of the country from which the
administrator derives his authority.
Will is revoked in the Philippines
TRUSTS
Philippine Domiciliary Philippine Law Extrinsic validity: Rule governing wills apply.
Intrinsic validity: lex situs since a trust involves
Non-domiciliary [Art. property [Art. 17, CC]
Philippine Law
829, CC]
Will is revoked in a Foreign Country Art. 17, CC. The forms and solemnities of
(1) Philippine Law contracts, wills, and other public instruments
(2) Law of the place of shall be governed by the laws of the country in
Philippine Domiciliary which they are executed.
revocation (lex loci
actus)
(1) Law of the place When the acts referred to are executed before
where the will was the diplomatic or consular officials of the
made Republic of the Philippines in a foreign country,
Non-domiciliary [Art. (2) Law of the place in the solemnities established by Philippine laws
829, CC] which the testator shall be observed in their execution.
had his domicile at
the time of the Prohibitive laws concerning persons, their acts
revocation or property, and those which have, for their
object, public order, public policy and good
PROBATE OF WILLS customs shall not be rendered ineffective by
Controlling Law: The probate of a will being laws or judgments promulgated, or by
essentially procedural in character, the law of determinations or conventions agreed upon in a
the forum (lex fori) governs. foreign country.
Wills Proved and Allowed in a Foreign RULE ON EXTRINSIC VALIDITY OF

Country: CONTRACTS
(1) A will proved and allowed in a foreign
country in accordance with the laws of that GENERAL RULE: LEX LOCI CELEBRATIONIS
country may be allowed, filed, and recorded The forms and solemnities of contracts xxx shall
in the proper Regional Trial Court in the be governed by the laws of the country in which
Philippines [Rule 77, Sec.1, Rules of Court] they are executed [Art. 17, CC]
(2) Requisites for Reprobate [Vda. de Perez vs.
Tolete (1994)] The following must be
proved by competent evidence:
(a) Due execution of the will in accordance
with the foreign laws
PAGE 5
CONTRACTS BEFORE unless there are cogent reasons for not

DIPLOMATIC/CONSULAR OFFICIALS doing so.
The solemnities established by Philippine laws (b) Implied Based on the
shall be observed with respect to contracts contemporaneous and subsequent acts
executed before diplomatic or consular officials of the parties; often upheld with
of the Republic of the Philippines in a foreign reference to the rule of validity of
country [Art. 17(2), FC] contracts which presumes that the
parties contemplate to enter into a valid
CONTRACTS ENTERED INTO BY LETTER/ contract
CABLEGRAM, ETC.
A contract accepted by letter or cablegram is Art. 18, CC. In matters which are governed by
presumed to have been entered into at the the Code of Commerce and special laws, their
place where the offer was made. (Art. 1319(2)) deficiency shall be supplied by the provisions of
this Code.
THREE POSSIBLE LAWS
Exceptions to the article: Those where special
(1) Lex Loci Contractus Law of the place where laws are made to apply suppletorily to the Civil
the contract is made Code.
(a) Advantages
(i) Relative ease in establishing e.g. Contract of transportation by common
(ii) Certainty and stability carriers: In all matters not regulated by this
(b) Disadvantage: Unjust results when Code, the rights and obligations of common
place of making is entirely incidental carriers shall be governed by the Code of
Commerce and by special laws.[Art. 1766, CC]
Note: To determine where the contract is
made, we look to the place where the last SPECIAL CONFLICT OF LAW
act is done which is necessary to bring the
binding agreement into being so far as the RULES
acts of the parties are concerned.
MARRIAGE
(2) Lex Loci Solutionis Law of the place of
performance governs DEFINITION
(a) Advantage Always connected to the
contract in a significant way Art. 1, FC. Marriage is a special contract of
(b) Disadvantage Not helpful when the permanent union between a man and a woman
contract is performed in 2 or more entered into in accordance with law for the
states with conflicting laws establishment of conjugal and family life. It is
the foundation of the family and an inviolable
(3) Lex Loci Intentionis Law intended by the social institution whose nature, consequences,
parties and incidents are governed by law and not
subject to stipulation, except that marriage
Basis: The contracting parties may establish settlements may fix the property relations
such stipulations, clauses, terms and during the marriage within the limits provided
conditions as they may deem convenient, by this Code.
provided they are not contrary to law,
morals, good customs, public order, or EXTRINSIC VALIDITY OF MARRIAGE
public policy [Art. 1306, CC]
Formal Requisites of Marriage under
May be express or implied Philippine Law [Art. 3, FC] extraneous to
(a) Express when the parties stipulate the parties
that the contract be governed by a (1) Authority of the solemnizing officer
specific law, such law will be recognized
PAGE 6
(2) Valid marriage license except in the cases (a) Marriages between ascendants and
provided for in Chapter 2 of Title I ascendants of any degree, whether
(marriages of exceptional character) legitimate or illegitimate; and
(3) A marriage ceremony which takes place (b) Marriages between brothers and sisters,
with the appearance of the contracting whether of the full or half-blood
parties before the solemnizing officer and (7) Void marriages for reasons of public policy
their personal declaration that they take [Art. 38, FC]
each other as husband and wife in the (a) Marriages between collateral blood
presence of not less than two witnesses of relatives, whether legitimate or
legal age. illegitimate, up to the 4th civil degree
(b) Marriages between step-parents and
Determination of Extrinsic Validity step-children.
(c) Marriages between the adopting parent
Art. 26, FC. All marriages solemnized outside and adopted child
the Philippines in accordance with the laws in (d) Marriages between the surviving spouse
force in the country where they were of the adopting parent and the adopted
solemnized, and valid there as such, shall also child
be valid in this country. xxx (e) Marriages between the surviving spouse
of the adopted child and the adopter
Art. 2, Hague Convention. Formal requirements (f) Marriages between an adopted child
for marriage are governed by the law of the and a legitimate child of the adopter
state of celebration. (g) Marriages between adopted children of
the same adopter
General rule: Lex Loci Celebrationis (h) Marriages between parties where one,
with the intention to marry the other,
Exceptions: The following marriages are void killed that other person's spouse, or his
even if valid in the country where celebrated or her own spouse.
[Art. 26, FC]:
(1) Those contracted by any party below 18 These exceptions put into issue the capacity of
years of age even with the consent of the parties to enter into the marriage and
parents or guardians [Art. 35(1), FC] therefore relate to the substantive requirement
(2) Bigamous or polygamous marriages not for marriage and is governed by lex nationalii.
falling under Art. 41, FC [Art. 35 (4), FC]
(3) Those contracted thru mistake of one INTRINSIC VALIDITY OF MARRIAGE
contracting party as to the identity of the Refers to capacity of a person to marry
other [Art. 35(5), FC]
(4) Those subsequent marriage without Intrinsic validity is determined by the parties
recording in the civil registry the judgment of personal law, which may be their domiciliary or
annulment or declaration of nullity, national law.
partition and distribution of properties and Laws relating to Family rights and duties,
the delivery of the childrens presumptive Status, Condition or Legal capacity of persons
legitimes [Art. 35(6), FC] are binding on citizens of the Philippines, even
(5) A marriage contracted by any party who, at though living abroad [Art. 15, CC]
the time of the celebration, was When either or both contracting parties are
psychologically incapacitated to comply with citizens of a foreign country, it shall be
the essential marital obligations of necessary for them to submit a certificate of
marriage, even if such incapacity becomes legal capacity to contract marriage, issued by
manifest only after solemnization [Art. 36, their respective diplomatic or consular officials,
FC] before they can obtain a marriage license [Art.
(6) Incestuous marriages [Art. 37, FC] 21, FC]
Marriages enumerated under Art. 26(2), FC
are void even if valid in the country where
PAGE 7
celebrated. This is in relation to Art. 5, CC, Under Philippine law, personal relations
where acts executed against the provisions of between the spouses include [Arts. 68, 70-71,
mandatory or prohibitory laws are void. FC]:
(1) Mutual fidelity
Essential Requisites of Marriage under Philippine (2) Respect
Law [Art. 2, FC] concerns parties themselves (3) Cohabitation
(1) Legal capacity of the contracting parties (4) Support
who must be male and female (5) Right of the wife to use the husbands
(2) Consent freely given in the presence of the family name
solemnizing officer
Property relations
The Hague Convention on Validity of Marriages (1) The Hague Convention declares that the
allows a contracting state to refuse recognition governing law on matrimonial property is:
of the marriage in the ff. cases: (a) The internal law designated by the
(1) One of the parties did not freely Consent spouses before the marriage
(2) Spouses were Related, by blood or adoption (b) In the absence thereof, the internal law
(3) One of the parties did not have the Mental of the state in which the spouses fix
capacity to consent their habitual residence
(4) One of the spouses was already Married (2) Rule under Philippine law (Art. 80, FC)
(5) One of the parties has not attained the (a) In the absence of a contrary stipulation
Minimum age, nor acquired the necessary in the marriage settlements, the
dispensation property relations of the spouses shall
be governed by Philippine laws,
Rule on Proxy Marriages regardless of the place of the
Proxy marriages, where permitted by the law of celebration of the marriage and their
the place where the proxy participates in the residence.
marriage ceremony, are entitled to recognition
in countries adhering to the lex loci celebrationis Rule is inapplicable:
rule, at least insofar as formal validity is (i) If both spouses are aliens
concerned. (ii) With respect to the extrinsic validity
of the contracts affecting property
Internal Philippine law, however, does not not situated in the Philippines and
sanction proxy marriages. Arts. 2 and 3 FC both executed in the country where the
require that the contracting parties personally property is located
appear before the solemnizing officer for the (iii) With respect to the extrinsic validity
marriage to be valid. of contracts entered into in the
Philippines but affecting property
Consular Marriages situated in a foreign country whose
Marriages between Filipino citizens abroad may laws require different formalities for
be solemnized by a consul-general, consul or its extrinsic validity.
vice consul of the Republic of the Philippines (3) Doctrine of Immutability of Matrimonial
(Art. 10, FC). Property Regime The change of nationality
on the part of the husband or wife does not
EFFECTS OF MARRIAGE affect the original property regime except
when the law of the original nationality
Personal relations between the spouses itself changes the marital regime, hence,
Governed by the national law of the parties the property regime has to change
accordingly.
If the spouses have different nationalities,
generally the national law of the husband may
prevail as long as it is not contrary to law,
customs and good morals of the forum.
PAGE 8
DIVORCE AND SEPARATION obtained abroad by the alien spouse of a

Filipino citizen before the FC became effective.
RULE UNDER THE HAGUE CONVENTION
The granting of divorce or separation must Paragraph 2 of Article 26 should be interpreted
comply with the national law of the spouses and to include cases involving parties who, at the
lex fori (law of the place where the application time of the celebration of the marriage were
for divorce is made). Filipino citizens, but later on, one of them
becomes naturalized as a foreign citizen and
DIVORCE DECREES OBTAINED BY FILIPINOS obtains a divorce decree. The Filipino spouse
General rule: Decrees of absolute divorce should likewise be allowed to remarry as if the
obtained by Filipinos abroad have no validity other party were a foreigner at the time of the
and are not recognized in Philippine solemnization of the marriage. The reckoning
Jurisdiction. point is not the citizenship of the parties at the
time of the celebration of the marriage, but their
Statutory bases: citizenship at the time a valid divorce is obtained
(1) Laws relating to Family rights and duties, or abroad by the alien spouse capacitating the
to the Status, Condition and Legal capacity latter to remarry. [Republic v. Orbecido (2005)]
of persons are binding upon citizens of the
Philippines, even though living abroad [Art. VALIDITY OF FOREIGN DIVORCE BETWEEN
15, CC] FOREIGNERS
(2) Prohibitive laws concerning persons, their A foreign divorce will be recognized in all
acts or property, and those which have for contracting states if, at the date of the
their object public order, public policy and institution of the proceedings:
good customs, shall not be rendered (1) Either spouse had his habitual residence
ineffective by laws or judgments, or by there;
determinations or conventions agreed upon (2) Both spouses were nationals of that state;
in a foreign country. [Art. 17(3), CC] or
(3) If only the petitioner was a national, he
Exception: should have his habitual residence there
(Hague Convention on the Recognition of
Art. 26(2), FC. Where a marriage between a Divorce and Legal Separation)
Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly While there is no provision of law requiring
obtained abroad by the alien spouse Philippine courts to recognize a foreign divorce
capacitating him or her to remarry, the Filipino decree between non-Filipinos such will be
spouse shall have capacity to remarry under recognized under the principle of international
Philippine law comity, provided that it does not violate a
strongly held policy of the Philippines. The
Owing to the Nationality Principle, only divorce decree obtained by a foreign citizen may
Philippine nationals are covered by the policy be given recognition in Philippine jurisdiction
against absolute divorces, the same being upon proof of existenceof the divorce decree
considered contrary to our concept of public and the foreign law governing the divorce.
policy and morality. However, aliens may obtain [Garcia v. Recio (2001)]
divorces abroad, provided they are valid
according to their national law. And the ANNULMENT AND DECLARATION OF
marriage tie, when thus severed as to one party, NULLITY
ceases to bind the other (allowing the Filipino to
remarry). [Van Dorn v. Romillo, Jr. (1985)] JURISDICTION TO ANNUL
(1) Lex loci celebrationis; or
Note: The Van Dorn case was decided prior to (2) Place of matrimonial domicile
the effectivity of the FC. It can thus serve as a
basis for the recognition of divorce decree
PAGE 9
GOVERNING LAW The conduct of a woman of adult age,

(1) Lex loci celebrationis determines the maintaining intimate sexual relations with
consequences of any defect as to form appellant, with repeated acts of intercourse is
(2) In general, the same applies with reference incompatible with the idea of seduction.
to substantive or intrinsic validity. But with [Tanjanco v. Court of Appeals (1966)]
regard to capacity of the parties to marry,
national law is determinative. PRINCIPLE OF UNJUST
ENRICHMENT
Human Relations Art. 22, CC. Every person who through an act of
performance by another, or any other means,
ABUSE OF RIGHT acquires or comes into possession of something
at the expense of the latter without just or legal
ground, shall return the same to him.
Art. 19, CC. Every person must, in the exercise of
his rights and in the performance of his duties,
Art. 22 Art. 2154
act with justice, give everyone his due, and
(Accion in Rem Verso) (Solutio Indebiti)
observe honesty and good faith.
Not necessarily a Payment should be
mistake in payment made by mistake
ACTS CONTRARY TO LAW
Art. 20, CC. Every person who, contrary to law,
wilfully or negligently causes damage to
Persons and Personality
another, shall indemnify the latter for the same.
CAPACITY TO ACT
ACTS CONTRA BONUS MORES
CIVIL PERSONALITY
Art. 21, CC. Any person who wilfully causes loss
or injury to another in a manner that is contrary Art. 37, CC. Juridical capacity, which is the fitness
to morals, good customs or public policy shall to be the subject of legal relations, is inherent in
compensate the latter for the damage. every natural person and is lost only through
death. Capacity to act, which is the power to do
Mere breach of promise to marry is not an acts with legal effect, is acquired and may be
actionable wrong. But to formally set a wedding lost.
and go through all the above-described
preparation and publicity, only to walk out of it Juridical Capacity Capacity to Act
Fitness of man to be the Power to do acts with
when the matrimony is about to be solemnized,
subject of legal relations legal effect
is quite different. This is palpably and
Passive Active
unjustifiably contrary to good customs for which Aptitude for the Holding Aptitude for the
defendant must be held answerable in and Enjoyment of rights Exercise of rights
damages in accordance with Article 21 Inherent in natural persons Must be acquired
aforesaid. [Wassmer v. Velez (1964)] Lost through death
Lost upon death
and other causes
Article 21 may also be applied in a breach of Can exist without capacity Must exist with
promise to marry where the woman is a victim to act juridical capacity
of moral seduction. Award of damages pursuant Cannot be limited or May be restricted or
to Article 21 is justified not because of such restricted limited
promise to marry but because of the fraud and
deceit behind it and the willful injury to her Juridical capacity can exist even without capacity
honor and reputation which followed thereafter. to act; the existence of the latter implies that of
[Baksh vs. Court of Appeals (1993)] the former.
PAGE 10
BIRTH DEATH
Art. 40, CC. Birth determines personality; but the Art. 42, CC. Civil personality is extinguished by
conceived child shall be considered born for all death. The effect of death upon the rights and
purposes favorable to it, provided that it be born obligations of the deceased is determined by
later with the conditions specified in the law, by contract and by will.
following article.
Criminal liability ends with death but civil
Art. 41, CC. For civil purposes, the fetus is liability may be charged against the estate
considered born if it is alive at the time it is [People v. Tirol, (1981)].
completely delivered from the mothers womb.
However, if the fetus had an intra-uterine life of Art. 43, CC. If there is a doubt, as between two
less than seven months, it is not deemed born if or more persons who are called to succeed each
it dies within twenty-four hours after its other, as to which of them died first, whoever
complete delivery from the maternal womb. alleges the death of one prior to the other, shall
prove the same; in the absence of proof, it is
Birth complete removal of the fetus from the presumed that they died at the same time and
mothers womb; before birth, a fetus is merely there shall be no transmission of rights from
part of the mothers internal organs. one to the other.
Proof that the fetus was alive upon separation is Article 43 provides a statutory presumption
complete respiration test/sign of independent when there is doubt on the order of death
life between persons who are called to succeed each
other (only).
Intra-Uterine Life When Considered Born
7 months or more Alive upon delivery
The statutory presumption of Article 43 was not
Alive only after
applied due to the presence of a credible
Less than 7 months completion of 24
eyewitness as to who died first. [Joaquin v.
hours from delivery
Navarro, (1948)]
PERSONALITY OF CONCEIVED CHILD
COMPARE ART. 43 WITH RULE 131, SEC. 3
(1) Limited only for purposes favorable to it.
(JJ), PRESUMPTION OF SURVIVORSHIP
(2) Conditional it depends upon the child
being born alive later.
Art. 43 Rule 131, Sec. 3 (jj)
Period of conception the first 120 days of the Only use the presumptions when there are no
300 days preceding the birth of the child. facts to get inferences from
Only use for Cannot be used for
A conceived child can acquire rights while still in succession purposes succession purposes
the mothers womb. It can inherit by will or by Only during death in
intestacy. In any circumstance calamities, wreck,
battle or conflagration
An aborted fetus had conditional personality
but never acquired legal rights/civil personality
because it was not alive at the time of delivery
from the mothers womb. No damages can be
claimed in behalf of the unborn child. [Geluz v
CA, (1961)]
PAGE 11
PRESUMPTION OF SURVIVORSHIP IN THE MINORITY

RULES OF COURT [RULE 131, SEC. 3, (JJ), RA 6809 (1989) An act lowering the age of
RULES OF COURT] majority from twenty-one to eighteen years.
Age Presumed Survivor Effects on Contracts

Both under 15 Older (1) They cannot give consent to a contract [Art.
Both above 60 Younger 1327 (1), CC]
One under 15, the (2) A contract where one of the parties is a
One under 15 minor is voidable [Art. 1390(1), CC]
other above 60
(3) A contract is unenforceable when both of
Both over 15 and
the parties are minors (incapable of giving
under 60; different Male
consent) [Art. 1403(3), CC]
sexes
(4) Minority cannot be asserted by the other
Both over 15 and party in an action for annulment [Art. 1397,
Older
under 60; same sex CC]
One under 15 or over (5) Not obliged to make restitution except
One between 15 and
60, the other between insofar as he has been benefited [Art. 1399,
60
those ages CC]
(6) Minor has no right to demand the
RESTRICTIONS ON CAPACITY TO ACT thing/price voluntarily returned by him [Art.
1426, CC]
Art. 38, CC. Minority, insanity or imbecility, the (7) Minor has no right to recover voluntarily
state of being a deaf-mute, prodigality and civil paid sum or delivered thing, if consumed in
interdiction are mere restrictions on capacity to good faith [Art. 1427, CC]
act, and do not exempt the incapacitated (8) Must pay reasonable amount for
person from certain obligations, as when the necessaries delivered to him [Art. 1489, CC]
latter arise from his acts or from property
relations, such as easements. Estoppel works against minors who
misrepresent their ages in a contract and are
compelled to comply with its terms. (active
Art. 39, CC. The following circumstances, among misrepresentation done by minors). [Mercado v.
others, modify or limit capacity to act: age, Espiritu, (1918)]
insanity, imbecility, the state of being a deaf-
mute, penalty, prodigality, family relations, When a minor made no active
alienage, absence, insolvency and trusteeship. misrepresentation as to his minority and such
The consequences of these circumstances are minority is known to the other party, the
governed in this Code, other codes, the Rules of contract is voidable [Art. 1403, CC] as to the
Court, and in special laws. minor. [Bambalan v. Maramba, (1928)]
Capacity to act is not limited on account of Minors are obliged to make restitution insofar as
religious belief or political opinion. they have been benefited. [Art. 1399, CC].
[Braganza v. Villa Abrille, (1959)]
A married woman, twenty-one years of age or
over, is qualified for all acts of civil life, except in
cases specified by law. Effects on Marriage
May not yet contract marriage [Art. 5, FC].
General rule: Incapacitated persons are not
exempt from certain obligations arising from his Marriages, where one of the parties is below 18,
acts or property relations. even with the consent of parents/guardians, are
void [Art. 35, FC].
PAGE 12
Effect on Crimes or otherwise communicated to him by 2 persons

General rule: Exempted from criminal liability. [Art. 807, CC]
Exception: Acted with discernment, and the Cannot be a witness to the execution of a will
minor is between 15 and 18 years of age. [Art. 820, CC]
INSANITY PRODIGALITY
Insanity includes many forms of mental disease, A spendthrift or a prodigal is a person, who, by
either inherited or acquired. A person may not excessive drinking, gambling, idleness or
be insane but only mentally deficient (idiocy, debauchery of any kind shall so spend, waste or
imbecility, feeble-mindedness). lessen his estate as to expose himself or his
family to want or suffering. The acts of
Effect on Contracts prodigality must show a morbid state of mind.
(1) Incapacity to give consent to a contract [Art. [Martinez v. Martinez, (1902)]
1327(2), CC]
(2) Contracts entered into during lucid intervals It is not the circumstance of prodigality, but the
are valid [Art. 1328, CC] fact of being under guardianship that restricts
(3) Restitution of benefits [Art. 1399, CC] capacity to act.
(4) Voidable if one of the parties is insane [Art.
1390, CC] CIVIL INTERDICTION
(5) Unenforceable if both of the parties are
insane [Art. 1403 (3), CC] Civil interdiction It is an accessory penalty
imposed upon persons who are sentenced to a
Effect on Crimes principal penalty not lower than reclusion
General rule: Exempted from criminal liability temporal [Art. 41, RPC].
Offender is deprived of rights of parental
Exception: Acted during lucid interval authority, or guardianship, of marital authority,
of the right to manage his property and of the
Effect on Marriage right to dispose of such by any act inter vivos
May be annulled if either party was of unsound [Art. 34, RPC]
mind unless the such party after coming to
reason, freely cohabited with the other [Art. For the validity of marriage settlements, the
45(2), FC] participation of the guardian shall be
indispensable [Art. 79, CC]
Action for annulment of marriage must be filed
by the sane spouse who had no knowledge of FAMILY RELATIONS
the others insanity, or by any relative/guardian Justifying circumstance if acted in defense of
of the insane before the death of either party; or person/rights of spouse, ascendants,
by the insane spouse during a lucid interval or descendants, brothers/sisters, and other
after regaining sanity [Art. 47(2), FC] relatives up to the 4th civil degree [Art. 11(2),
RPC]
STATE OF BEING DEAF-MUTE
Cannot give consent to a contract if he/she also Mitigating circumstance if acted in the
does not know how to write [Art. 1327(2), CC] immediate vindication of a grave offense/felony
Voidable if one of the parties is deaf-mute and committed against his spouse, ascendants or
does not know how to write relatives of the same civil degree [Art. 13(5),
Unenforceable if both of the parties are deaf- RPC]
mutes and does not know how to write
Incestuous and void marriages:
Can make a valid will, provided: he must (1) Between ascendants and descendants of
personally read the will. The contents of the any degree;
same have either been read personally by him
PAGE 13
(2) Between brothers and sisters, whether full (3) A person who has been in danger of death
or half-blood. [Art. 37, FC] under other circumstances and his existence
has not been known for four years.
Donations/grants of gratuitous advantage
between spouses during the marriage shall be Art. 41, FC. A marriage contracted by any person
VOID, except moderate gifts during family during subsistence of a previous marriage shall
occasions [Art. 87, FC] be null and void, unless before the celebration
of the subsequent marriage, the prior spouse
Prescription does not run between spouses, had been absent for four consecutive years and
parent and child, guardian and ward (Art. 1109) the spouse present has a well-founded belief
that the absent spouse was already dead. In
General rule: Descendants cannot be compelled case of disappearance where there is danger of
to testify in a criminal case, against his parents death under the circumstances set forth in the
and grandparents provisions of Article 391 of the Civil Code, an
absence of only two years shall be sufficient.
Exception: crime was against the descendant
OR by one parent against the other [Art. 215, FC] For the purpose of contracting the subsequent
marriage under the preceding paragraph the
Spouses cannot sell property to each other, spouse present must institute a summary
except: proceeding as provided in this Code for the
(1) Absolute separation is agreed upon in the declaration of presumptive death of the
marriage settlements absentee, without prejudice to the effect of
(2) Judicial separation of property [Art. 1490, reappearance of the absent spouse.
CC]
Art. 42, FC. The subsequent marriage referred to
ABSENCE in the preceding Article shall be automatically
terminated by the recording of the affidavit of
Art. 390, CC. After an absence of seven years, it reappearance of the absent spouse, unless there
being unknown whether or not the absentee is a judgment annulling the previous marriage
still lives, he shall be presumed dead for all or declaring it void ab initio.
purposes, except for those of succession.
A sworn statement of the fact and
The absentee shall not be presumed dead for circumstances of reappearance shall be
the purpose of opening his succession till after recorded in the civil registry of the residence of
an absence of ten years. If he disappeared after the parties to the subsequent marriage at the
the age of seventy-five years, an absence of five instance of any interested person, with due
years shall be sufficient in order that his notice to the spouses of the subsequent
succession may be opened. marriage and without prejudice to the fact of
reappearance being judicially determined in
Art 391, CC. The following shall be presumed case such fact is disputed.
dead for all purposes, including the division of
the estate among the heirs: DOMICILE AND RESIDENCE OF
(1) A person on board a vessel lost during a sea PERSON
voyage, or an aeroplane which is missing,
who has not been heard of for four years FOR NATURAL PERSONS
since the loss of the vessel or aeroplane; The place of their habitual residence [Art. 50,
CC]
(2) A person in the armed forces who has taken
part in war, and has been missing for four FOR JURIDICAL PERSONS
years; The place where their legal representation is
established, or where they exercise their primary
PAGE 14
functions, unless there is a law or other provision subject to stipulation, except that marriage
that fixes the domicile [Art. 51, CC] settlements may fix the property relations
during the marriage within the limits provided
DOMICILE VS. RESIDENCE by this Code.
While domicile is permanent (there is intent to
remain), residence is temporary and may be Marriage is a special contract of permanent
changed anytime (there is no necessary intent union between a man and a woman entered
to remain). into in accordance with law for the
establishment of conjugal and family life.
Requisites of domicile: It is the foundation of the family and an
(1) Physical presence in a fixed place inviolable social institution
(2) Intent to remain permanently (animus Its nature, consequences, and incidents are
manendi) [Callejo v. Vera] governed by law and not subject to stipulation
However, marriage settlements may fix the
property relations during the marriage within
KINDS OF DOMICILE the limits provided by the FC.
(1) Domicile of Origin Domicile of parents of
a person at the time he was born. KINDS OF REQUISITES
(2) Domicile of Choice Domicile chosen by a (1) Essential Requisites [Art. 2, FC]
person, changing his domicile of origin. (a) Legal Capacity of the contracting
parties, who must be a male and a
A 3rd requisite is necessary: intention not to female
return to ones domicile as his permanent (b) Consent (of the parties) freely given in
place. the presence of a solemnizing officer.
(2) Formal Requisites [Art. 3, FC]
(3) Domicile by Operation of Law (i.e., Article (a) Authority of solemnizing officer
69, domicile of minor) (b) A valid marriage license
Except:
A married woman does not lose her (i) Marriages in articulo mortis or when
domicile to her husband. [Romualdez- one or both parties are at the point
Marcos vs. Comelec (1995)] of death,
(ii) Marriage in isolated places with no
available means of transportation,
Family Code (iii) Marriage among Muslims or other
ethnic cultural communities,
The Family Code took effect on August 3, 1988. (iv) Marriages of those who have lived
together as husband and wife
Marriage without any legal impediment for at
least 5 years
(c) Marriage Ceremony:
REQUISITES (i) Appearance of contracting parties
in the presence of a solemnizing
NATURE OF MARRIAGE officer
(ii) Personal declaration that they take
Art. 1, FC. Marriage is a special contract of each other as husband and wife in
permanent union between a man and a woman the presence of not less than 2
entered into in accordance with law for the witnesses
establishment of conjugal and family life. It is
the foundation of the family and an inviolable
social institution whose nature, consequences,
and incidents are governed by law and not
PAGE 15
EFFECT OF ABSENCE OF REQUISITES Fraud here refers to matters which relate to the
marital relation:
Absence Defect or Irregularity Non-disclosure of previous conviction by final
Void Voidable judgment of a crime involving moral
turpitude;
ESSENTIAL REQUISITES Concealment of pregnancy by another man;
Concealment of a sexually transmitted
AGE disease;
Legal Capacity Male or female 18 years old Concealment of drug addiction, alcoholism,
and above, not under any of the impediments lesbianism, or homosexuality
mentioned in Art. 37 (incestuous marriages) &
Art. 38 (marriages against public policy), may CEREMONY
contract marriage. [Art. 5, FC] No prescribed form or religious rite for the
solemnization of marriage is required. [Art. 6,
MUST BE MALE AND FEMALE FC]
Changing of sex in ones birth certificate on the
basis of sex reassignment was denied; The couple's written agreement where they
otherwise, it would result in confusion and declare themselves as husband and wife, signed
would allow marriage between persons of the by them before a judge and two capable
same sex which is in defiance of the law, as witnesses, even though it was independently
marriage is a union between a man and a made by them, still counts as a valid ceremony.
woman. [Silverio v. Republic, (2007)] [Martinez v. Tan, (1909)]
Note: The best source for citing the requirement Minimum requirements prescribed by law:
of male/female is still statutory, as provided (1) Appearance of contracting parties
explicitly in the Family Code. personally before the solemnizing officer
[Art. 3, FC]
CONSENT FREELY GIVEN (2) Personal declaration that they take each
Consent here refers to the consent of the other as husband and wife. [Art. 3, FC]
contracting parties; not of the parent/guardian (3) Presence of at least two witnesses of legal
in those cases where such consent is required age. [Art. 3, FC]
(when either party is between 18 to 21 years of (4) The declaration shall be contained in the
age). Marriage Certificate. [Art. 6, FC]
(5) Marriage certificate shall be signed by the
Absence contracting parties and their witnesses and
A marriage entered into by a person whose real attested by the solemnizing officer. [Art. 6,
intent is to avoid prosecution for rape is void for FC]
total lack of consent. The accused did not
intend to be married. He merely used such In a marriage in articulo mortis, when one or
marriage to escape criminal liability. [People v. both parties are unable to sign the marriage
Santiago, (1927)] certificate, it shall be sufficient for one of the
witnesses to write the name of said party, which
Defect shall be attested by the solemnizing officer. [Art.
6, par. 2, FC]
Art. 45, FC. A marriage may be annulled for any
of the following causes existing at the time of Places where marriage SHALL be publicly
the marriage: xxx (3) that the consent of either solemnized:
party was obtained by fraud, unless such party (1) Chambers of the judge or in open court
afterwards, with full knowledge of the facts (2) Church, chapel, or temple
constituting the fraud, freely cohabited with the (3) Office of the consul-general, consul, or vice-
other as husband and wife. consul [Art. 8, FC]
PAGE 16
Exceptions: marriages unless either or both parties

(1) Marriages performed in articulo mortis or in believed in good faith that the solemnizing
remote places. [Art. 29, FC] officer had legal authority to do so. [Art. 35
(2) Where both parties request in writing that (2)]
marriage be solemnized at a place (2) Absence & Irregularity of Authority of a
designated by them. solemnizing officer
Non-compliance with this requirement does not Where a judge solemnizes a marriage outside
invalidate the marriage (premise: more his jurisdiction, there is a resultant irregularity in
witnesses = more people can notify officer of the formal requisite laid down in Article 3, which
impediments to marriage). while it may not affect the validity of the
marriage, may subject the officiating official to
WHO MAY SOLEMNIZE MARRIAGES administrative liability. [Navarro v. Domagtoy
(1) Incumbent member of the Judiciary within (1996); Aranes v. Occiano (2002)]
his jurisdiction. [Art. 7, FC]
(2) Priest, Rabbi, Imam or Minister of any A marriage which preceded the issuance of the
Church or Religious Sect. Must be: marriage license is void and the subsequent
(a) Duly authorized by his church or issuance of such license cannot render valid the
religious sect marriage. Except in cases provided by law, it is
(b) Registered with the civil registrar the marriage license that gives the solemnizing
general officer the authority to solemnize a marriage.
(c) Acting within the limits of the written [Aranes v. Occiano (2002)].
authority granted to him by his church
or religious sect. LICENSE REQUIRED
(d) At least one of the contracting parties
belongs to the solemnizing officers General rule
church or religious sect. [Art. 7, FC] License required
Issued by local registrar of city or municipality
Absence Effect where either contracting party habitually resides
Authority by church/sect VOID [Art. 9, FC]
Registered w/ civil registrar VOID
Acting w/in written authority IRREGULARITY Each contracting party should file separately.
Either party belong to that [Art. 11, FC]
IRREGULARITY
church/sect
License valid in any part of the Philippines for
(3) Ship Captain or Airplane Chief may 120 days from date of issue, automatically
solemnize a marriage in articulo mortis cancelled at the expiration of such period. [Art.
between passengers or crew members [Art. 20, FC]
7, 31, FC]
(4) A Military commander of a unit may Foreign National
solemnize marriages in articulo mortis When either or both parties are foreign
between persons w/in the zone of military nationals: Certificate of legal capacity to contract
operation. [Art. 7, 32, FC] marriage, issued by a diplomatic or consular
(5) Consul-general, consul or vice-consul may official, shall be submitted before a marriage
solemnize marriages between Filipino license can be obtained [Art. 21, FC]
citizens abroad. [Art. 7, 10, FC]
(6) Municipal and City Mayors [LGC sec. 444- Stateless persons or refugees from other
455] countries: affidavit stating circumstances
showing capacity to contract marriage, instead
Exceptions [Art. 35, FC]: of certificate of legal capacity [Art. 21, FC]
(1) Marriage is void when solemnized by any
person not legally authorized to perform
PAGE 17
its inexistence, rendering the marriage VOID.

Exceptions [Republic v. CA and Castro (1994)]
(1) Marriage in Articulo mortis [Art. 27, FC]
The marriage may be solemnized without Before a marriage can be solemnized, a valid
the necessity of a marriage license. marriage license must be presented first,
It remains valid even if ailing party otherwise, it is VOID. [Moreno v. Bernabe (1995)]
survives.
(2) Between passengers or crew members in a Non-existence of a marriage contract does not
ship or airplane [Art. 31, FC] invalidate the marriage as long as all the
(3) Persons within a military zone [Art. 32, FC] requisites for its validity are properly complied
(4) Marriage in Remote and inaccessible places with. [People v. Borromeo (1984)]
[Art. 28, FC]
(5) Marriages by Muslims and Ethnic cultural Marriage Certificate Where parties declare that
minorities provided they are solemnized in they take each other as husband and wife;
accordance with their customs, rites or contains the following:
practices. [Art. 33, FC] (1) Full name, sex, age of party
(6) Marriage by parties who have Cohabited for (2) Citizenship, religion, habitual residence
at least 5 years without any legal (3) Date and precise time of celebration of
impediment to marry each other. [Art. 34, marriage
FC; Ninal vs. Badayog (2000)] (4) That marriage license was properly issued
(except in marriages of exceptional
Requisites for the 5-year cohabitation to be valid character)
for the exemption from acquiring a marriage (5) That parental consent was secured, when
license: required
(1) The man and woman must have been living (6) That requirement as to parental advice was
together as husband and wife for at least complied with, when required
five years before the marriage; (7) That parties have entered into marriage
(2) The parties must have no legal impediment settlements, if any (Art. 22)
to marry each other;
(3) The fact of absence of legal impediment Not an essential or formal requisite without
between the parties must be present at the which the marriage will be void [Madridejo v. de
time of marriage; Leon (1930)]
(4) The parties must execute an affidavit
stating that they have lived together for at Best evidence that a marriage does exist.
least five years [and are without legal [Tenebro v. CA (2004)]
impediment to marry each other]; and
(5) The solemnizing officer must execute a EFFECT OF MARRIAGES
sworn statement that he had ascertained
the qualifications of the parties and that he
CELEBRATED ABROAD AND
had found no legal impediment to their FOREIGN DIVORCE
marriage. [Borja-Manzano v. Judge Sanchez
(2001)] MARRIAGES CELEBRATED ABROAD
General rule: Marriages solemnized abroad in
MARRIAGE CERTIFICATE accordance with the laws in force in that country
shall be valid in the Philippines. [Art 26, FC]
Absence and irregularity of marriage license
and contract Exceptions:
There is a presumption of regularity of official (1) Marriage between persons below 18 years
acts, and the issuance of the Civil Registrar of a old [Art. 35(1), FC]
Certificate of Due Search and Inability to Find (2) Bigamous or polygamous marriage [Art.
the application for a marriage license certifies 35(4), FC]
(3) Mistake in identity [Art. 35 (5), FC]
PAGE 18
(4) Marriages void under Article 53 [Art. 35 (6), Citizenship at the time the divorce is obtained
FC] determines its validity. Since H was no longer a
(5) Psychological incapacity [Art. 36, FC] Filipino citizen when he divorced W, the
(6) Incestuous marriages [Art. 37, FC] nationality principle did not apply to him
(7) Marriage void for reasons of public policy anymore and the divorce is valid. [Llorente v. CA
[Art. 38, FC] (2000)]
A divorce decree obtained by the foreign spouse

Essential requisites Formal requisites is recognized under Phil law if it is executed in
Requirements accordance with the foreigners national law.
Inherent in the parties,
independent of the The party must prove divorce as a fact and that
carried everywhere
parties said divorce is obtained in conformity with the
Lex nationalii Laws Lex loci celebrationis if law allowing it, before the Philippine courts can
relating to family rights valid where celebrated,
take judicial notice. [Garcia v. Recio (2001)]
and duties, or to the then valid everywhere;
status, condition, and forms of contracting
legal capacity of persons marriage are to be VOID AND VOIDABLE
are binding upon Phil regulated by the law
citizens even though living where it is celebrated.
MARRIAGES
abroad [Art. 15, CC] [Art. 26, FC]
Foreign marriages void
Foreign marriages may PRESUMPTION OF MARRIAGE
under Phil law due to lack Presumption in favor of a valid marriage [Art
be void under Phil law
of an essential requisite, 220, CC]
due to absence of a
even if valid under foreign
laws, will not be
formal requisite under The presumption that a man and a woman
foreign laws. deporting themselves as husband and wife
recognized.
have entered into a lawful contract of
PROOF OF FOREIGN MARRIAGE marriage is satisfactory if uncontradicted.
[Sec. 3 (aa), Rule 131, ROC]
In order that it may be upheld:
(1) Provisions of the foreign law In marriages of exceptional character, the
(2) Celebration of the marriage in accordance existence of the marriage is presumed, even in
with said provisions the total absence of a marriage license. [Vda.
De Jacob v CA (1999)]
FOREIGN DIVORCES If a marriage certificate is missing, and all
means have not yet been exhausted to find it,
Those obtained by Filipino citizens are void
then the marriage is presumed to exist [Sevilla
under Philippine law.
v. Cardenas (2006)]
If the foreign spouse obtains a valid divorce
Absence of a marriage certificate is not proof of
decree abroad capacitating him/her to remarry,
absence of marriage.
the Filipino spouse shall have capacity to
remarry under Philippine law. [Art. 26, FC]
To prove the fact of marriage, the following
would constitute competent evidence:
A divorce obtained by the foreign spouse in
(1) The testimony of witnesses to matrimony;
accordance with the said spouses national law
(2) Documentary photos or videos of the
is recognized in the Philippines and releases
wedding;
Filipino spouse from their marriage. [Van Dorn v.
(3) The couples public cohabitation; and
Romillo (1985)]
(4) Birth and baptismal certificates of children
born during the union. [Trinidad v CA (1998)]
The citizenship of the spouses at the time of the
divorce determines their capacity to obtain a
valid divorce. [Quita v. Dandan (1998)]
PAGE 19
VOID MARRIAGES Molina Guidelines:

(1) The burden of proof to show the nullity of
TYPES OF VOID MARRIAGES the marriage belongs to the plaintiff. This is
(1) Absence of any formal/essential requisites to be investigated by the OSG for collusion.
(2) Psychologically Incapacitated spouse (2) The root cause of the psychological
(3) Incestuous Marriages incapacity must be: (a) medically or clinically
(4) Marriages contrary to public policy identified, (b) alleged in the complaint, (c)
(5) Void subsequent marriages sufficiently proven by the experts, (d) clearly
explained in the decision.
Absence of requisites (3) The incapacity must be proven to be existing
at the time of the celebration of the
Art. 4(1), FC. The absence of any essential or marriage.
formal requisites shall render the marriage void (4) Such incapacity must also be shown to be
ab initio, except as stated in Article 35 (a). medically or clinically permanent or
incurable.
Art. 5, FC: Any male or female of the age of (5) Such illness must be grave enough to bring
eighteen years or upwards not under any of the about the disability of the party to assume
impediments mentioned in Articles 37 and 38, the essential obligations of marriage.
may contract marriage. (6) The essential marital obligations must be
those embraced by Articles 68 up to 71 of
Void from the Beginning [Art. 35, FC] the Family Code as regards the husband
(1) Marriage where any party is below eighteen and wife as well as Articles 220, 221, and
years of age even with the consent of 225 of the same Code in regard to parents
parents or guardians and their children.
(2) Marriage solemnized by any person not (7) Interpretations given by the National
legally authorized to perform marriages Appellate Matrimonial Tribunal of the
unless such marriages were contracted with Catholic Church in the Philippines, while not
either or both parties believing in good faith controlling/decisive, should be given great
that the solemnizing officer had legal respect by our courts.
authority to do so. (8) The trial court must order the prosecuting
Ones belief in good faith that the attorney or fiscal and the Solicitor General to
solemnizing officer has the required appear as counsel for the state. No decision
authority is a mistake of fact, and not of law. shall be handed down unless the Solicitor
(3) Marriage solemnized without a valid General issues a certification. [Republic v.
marriage license, except in marriages under Molina, (1997)]
exceptional circumstances
(4) Bigamous or polygamous marriages not 3 characteristics for determining psychological
falling under Article 41 (Art. 41: subsequent incapacity: gravity, antecedent, and incurability.
marriage by present spouse who obtained a [Santos v. Bedia-Santos, (1995)]
declaration of presumptive death for absent
spouse prior to the subsequent marriage) Refusal of husband to have sex was interpreted
(5) There is a mistake as to the identity of the as psychological incapacity. A man who can
other contracting party but wont is psychologically incapacitated. [Tsoi
(6) Subsequent marriages that are void under v. CA, (1997)]
Article 53 (Non-compliance with Art. 52)
Psychological incapacity maybe established by
Psychological incapacity the totality of the evidence presented. Personal
Contracted by any party who, at the time of the medical examination could be dispensed with.
celebration, was psychologically incapacitated [Marcos v. Marcos (2000)]
to comply with the essential marital obligations
of marriage, even if such incapacity becomes
manifest only after its solemnization [Art. 36, FC]
PAGE 20
There is no requirement that the respondent be Void subsequent marriages

medically examined first. [Republic v. San Jose
(2007)] No Judicial Declaration of Nullity
A person entered into a subsequent marriage
Pathological liar considered as psychological without first getting a judicial declaration of
incapacity, Molina guidelines met. [Antonio v. nullity of the first void marriage [Art. 40, FC]
Reyes, (2006)]
Presumptive Death
Incestuous marriages Failure of the spouse present to obtain a judicial
(1) Between ascendants and descendants of declaration of presumptive death before
any degree, legitimate or illegitimate entering a subsequent marriage [Art. 41, FC]
(2) Between brothers and sisters, whether full or
half blood, legitimate or illegitimate [Art. 37, Bad Faith of Both Spouses
FC] Both spouses entering a subsequent marriage
after presumptive death, who acted in bad faith
Against public policy [Art. 44, FC]
(1) Between collateral blood relatives,
legitimate or illegitimate, up to the fourth Non-Recording
civil degree. Subsequent marriage of spouses, where the
(2) Between step-parents and step-children. requirements of recording under Art. 52 have
(3) Between parents-in-law and children-in- not have been complied with, shall be null and
law. void. [Art. 53, FC]
(4) Between adopting parent and adopted child.
(5) Between the surviving spouse of the Art. 52, FC. The judgment of annulment or of
adopting parent and the adopted child. absolute nullity of the marriage, the partition
(6) Between the surviving spouse of the adopted and distribution of the properties of the spouses
child and the adopter. and the delivery of the children's presumptive
(7) Between an adopted child and a legitimate legitimes shall be recorded in the appropriate
child of the adopter. civil registry and registries of property;
(8) Between adopted children of the same otherwise, the same shall not affect third
adopter. persons.
(9) Between parties where one, with the
intention to marry the other, killed that other Previous marriage declared void ab initio or
person's spouse, or his or her own spouse. annulled
[Art. 38, FC]
Art. 40, FC. The absolute nullity of a previous
Stepbrothers and stepsisters can marry because marriage may be invoked for purposes of
marriages between them are not among those remarriage on the basis solely of a final
enumerated in Article 38. judgment declaring such previous marriage
void.
Relationships outside of Art. 37 and 38 which
are not impediments to marriage: brother-in- In order to have a subsequent marriage:
law with sister-in-law, stepbrother with (1) The previous marriage should be judicially
stepsister, guardian with ward, adopted with declared void or annulled (final judgment)
illegitimate child of the adopter, adopted son of [Terre v. Terre (1992), Atienza v. Brillantes
the husband with adopted daughter of the wife, (1995)]
parties who have been convicted of adultery. (2) Must comply with the requirements of Art.
52
Under the Civil Code (superseded by the Family

Code), there was no need for a judicial
declaration of nullity of a previous marriage for
PAGE 21
a subsequent marriage to be valid [People v. (b) There is danger of death under the
Mendoza (1954)] circumstances set forth in Art. 391 CC
attendant to the disappearance;
Even if the judges first marriage contracted in (c) The spouse present had a well-founded
1965 was void for not having a marriage license, belief that the missing person is dead;
the requirement for a judicial declaration of and
nullity in Art. 40 still applies for his subsequent (d) Judicial declaration of presumptive
marriage contracted in 1991. [Atienza v. death was secured (no prejudice to the
Brillantes, (1995)] effect of the reappearance of the absent
spouse).
Where both marriages were contracted prior to
the effectivity of the FC, the requirement of Art. Extraordinary circumstances [Art. 391, CC]:
40 does not apply to the second marriage (1) On board vessel lost at sea voyage, airplane,
where a right is already vested and on which the (2) Armed Forces in war, or
FC cannot have retroactive effect. [Apiag v. (3) Danger of death under other circumstances,
Cantero, (1997)] existence not known
The judicial declaration of nullity can be invoked Institution of a summary proceeding is not
for purposes other than remarriage. Article 40 sufficient. There must also be a summary
was interpreted as being a requirement for judgment. [Balane]
purposes of remarriage but not limited for that
purpose. Separation of property is also a valid Only the spouse present can file or institute a
purpose for filing for a judicial declaration of summary proceeding for the declaration of
nullity. [Domingo v. CA, (1993)] presumptive death of the absentee. [Bienvenido
case]
The word solely in Art. 40 referred to
validating subsequent marriages but NOT to There must have been diligent efforts on the
limiting the purposes for which a judicial part of the deserted spouse to locate the absent
declaration of nullity can be invoked. [Domingo spouse. These diligent efforts correspond to the
v. CA, (1993)] requirement of the law for a well-founded
belief.
Subsequent Marriage when one spouse is
absent Effect of Reappearance of Absent Spouse
General rule: The subsequent marriage remains
Requirements for Subsequent Marriage to be valid.
Valid When Prior Spouse is Absent: [Art. 41, FC]
(1) Subsequent marriage due to ordinary Exception: It is automatically terminated by the
absence where: recording of the affidavit of reappearance of the
(a) Absent spouse had been absent for 4 absent spouse at the instance of any interested
consecutive years; person, with due notice to the spouses of the
(b) The spouse present had a well-founded subsequent marriage. [Art. 42, FC]
belief that absent spouse is dead; and
(c) Judicial declaration of presumptive It is the recording of the affidavit of
death was secured (no prejudice to the reappearance that automatically terminates the
effect of the reappearance of the absent subsequent marriage. Hence, if absentee
spouse). spouse reappears without recording affidavit of
(2) Subsequent marriage due to extraordinary reappearance, then there is no legal effect.
absence where: Meanwhile, absentee spouse cannot remarry.
(a) Absent spouse had been missing for 2 [Tolentino]
consecutive years;
PAGE 22
Exception to the exception: If there is a Art. 390, CC. After an absence of 7 years, it
judgment annulling the previous marriage or being unknown whether or not the absentee
declaring it void ab initio. [Art. 42, FC] still lives, he shall be presumed dead for all
purposes, except for those of succession.
Good Faith
Period of absence for Presumptive Death is The absentee shall not be presumed dead for
mandatory thus cannot be shortened by good the purpose of opening his succession till after
faith and if be done so will be void. an absence of 10 years. If he disappeared after
the age of 75 years, an absence of 5 years shall
Difference between Absence in the Civil Code be sufficient in order that his succession may be
and Family Code opened.
Family Code Civil Code Art. 391, CC. The following shall be presumed
As to period the estate among the heirs:
4 years under normal Absent for at least 7 (1) A person on board a vessel lost during a sea
circumstances years voyage, or an aeroplane which is missing,
2 years under 4 years under who has not been heard of for four years
extraordinary extraordinary since the loss of the vessel or aeroplane;
circumstances circumstances
(2) A person in the armed forces who has taken
As to remarriage part in war, and has been missing for four
years;
In order to remarry, Declaration of
summary proceeding presumptive death is not (3) A person who has been in danger of death
is necessary necessary under other circumstances and his
As to who can institute the action existence has not been known for four years.
Can be instituted by Although 7 years is required for the presumption

the spouse present, of death of an absentee in the CC, the FC makes
any interested party, The spouses themselves an exception for the purpose of remarriage by
and the subsequent limiting such requirement to 4 years.
spouse
Effects of Termination of Bigamous Marriage
As to effect on subsequent marriage under Art. 42 [Art. 43, FC; Art. 44, FC]
Subsequent Art. 43:
marriage is (1) Children of subsequent marriage
automatically Upon reappearance, conceived prior to its termination considered
terminated by the judicial proceeding is legitimate; custody and support decided by
recording of an necessary to declare court in a proper proceeding
affidavit of marriage null and void (2) Property regime dissolved and liquidated
reappearance of the (party in bad faith shall forfeit his/her share
absent spouse in favor of the common children or if there
are none, children of the guilty spouse by a
As to ground previous marriage, and in case there are
none, to the innocent spouse)
Well founded belief (3) Donation propter nuptias remains valid,
Generally believed to be
that the absent (but if the donee contracted marriage in bad
dead
spouse is dead faith, donations are revoked by operation of
law)
PAGE 23
(4) Insurance benefits innocent spouse may VOIDABLE OR ANNULLABLE

revoke designation of guilty party as MARRIAGE
beneficiary, even if such designation is In case either or both of the contracting parties,
stipulated as irrevocable not having been emancipated by a previous
(5) Succession rights Party in bad faith shall marriage, are between the ages of eighteen and
be disqualified to inherit from the innocent twenty-one, In addition to the requirements of
spouse, whether testate or intestate the preceding articles:
(1) Exhibit to the local civil registrar the consent
Article 44 (Donations): to their marriage of their father, mother,
If both spouses of the subsequent marriage surviving parent or guardian, or persons
acted in bad faith, all donations by reason of having legal charge of them, in the order
marriage and testamentary dispositions made mentioned
by one party in favor of the other are revoked by (2) Manifested in writing by the interested
operation of law. party, who personally appears before the
proper local civil registrar, or
ACTION OR DEFENSE OF NULLITY (3) In the form of an affidavit made in the
presence of two witnesses and attested
PRESCRIPTION before any official authorized by law to
administer oaths
Art. 39, FC. The action or defense for the (4) The personal manifestation shall be
declaration of absolute nullity of a marriage recorded in both applications for marriage
shall not prescribe. (as amended by RA 8533) license, and the affidavit, if one is executed
instead, shall be attached to said
WHO MAY FILE THE PETITION FOR NULLITY applications. [Art 14, FC]
Only an aggrieved or injured spouse may file a
petition for annulment of voidable marriages or GROUNDS FOR ANNULMENT
declaration of absolute nullity of void marriages. x x x A defect in any of the essential requisites
Such petition cannot be filed by compulsory or shall render the marriage voidable as provided
intestate heirs of the spouses or by the State. in Article 45. [Art. 4, FC)
The Committee is of the belief that they do not
have a legal right to file the petition. Art 45, FC. Marriage may be annulled on the
Compulsory or intestate heirs have only inchoate following grounds existing at time of marriage:
rights prior to the death of their predecessor, (1) One of the parties is 18 or above but below
and, hence, can only question the validity of the 21 years old, and there is no parental
marriage of the spouses upon the death of a consent.
spouse in a proceeding for the settlement of the (2) Either party was of unsound mind (insanity).
estate of the deceased spouse filed in the regular (3) The consent of either party was obtained
courts. [Enrico v. Heirs of Sps. Medinaceli (2007), through fraud (different from mistake in
also reiterated in Carlos v. Sandoval (2008)] identity)
(4) The consent of either party was obtained
through force, intimidation, or undue
HOW TO ATTACK A VOID MARRIAGE influence.
General rule: Void marriages may be attacked (5) Either party is physically incapable of
collaterally or directly. consummating the marriage (impotence;
this is different from sterility, which is the
Exception: A person in a void marriage must first inability to produce offspring).
file for a declaration of nullity in order to (6) Either party has a serious and incurable
subsequently marry. sexually-transmissible disease, even if not
concealed.
PAGE 24
Action to Annul Law presumes sanity, burden of proof on party

Action in rem, concerns status of parties; res is alleging insanity
relation between parties or marriage tie;
jurisdiction depends on nationality or domicile Fraud
not the place of celebration. Only those enumerated in Art. 46:
(1) Non-disclosure of previous conviction by
GROUNDS FOR ANNULMENT EXPLAINED final judgment of a crime involving moral
turpitude
Lack of parental consent (2) Concealment by wife at the time of
18 x < 21 without parental consent marriage, that she was pregnant by another
Ratified by party 18 or above but below 21 man
upon free cohabitation upon reaching 21. (3) Concealment of STD regardless of nature
Parents whose consents were wanting may existing at time of marriage
ratify before 21; this right can be waived; (4) Concealment of drug addiction, habitual
however, the Code Commission believes that alcoholism, homosexuality, lesbianism
no such ratification can be made by the existing at time of marriage
parent. [Tolentino]
No other misrepresentation or deceit of
In defending the requirement of parental character, health, rank, fortune or chastity shall
consent, the Court held that the State has constitute fraud.
power to make adjustments in the
constitutional rights of minors based on the Conviction of crime: requisites are
following grounds: 1) the peculiar vulnerability (1) Moral turpitude
of children, 2) to protect minors from immature (2) Conviction
decision making and prevent unstable
marriages, 3) on the presumption that parents Concealment of pregnancy
act in the best interests of their children in child Fraud against very essence of marriage;
rearing. [Moe v. Dinkins, (1981)] importance of procreation of children; an
assault to the integrity of the union by
Insanity introducing alien blood
Mental incapacity or insanity is a vice of If husband knew of pregnancy, the marriage
consent; insanity cannot be annulled on the ground of
(1) of varying degrees concealment
(2) curable being an illness capable of
ratification or convalidation May be ratified upon free cohabitation after
(3) has lucid intervals knowledge of fraud.
(4) ground only for annulment in many
countries Art. 45 STD Art. 46 STD
Can be ratified by cohabitation after insanity is The STD is a type of
cured or during a lucid interval Ground for annulment fraud which is a
Mere mental weakness is not a ground for ground for annulment
annulment, but if found grave enough, it may Does not have to be
Must be concealed
amount to psychological incapacity. concealed
Intoxication, somnambulism where one had Must be serious and Need not be serious
no mental capacity to give consent is incurable nor incurable
equivalent to insanity It is the concealment
The STD itself is the
Must exist at the time of the celebration of the that gives rise to the
ground for annulment
marriage. Insanity that occurs after the annulment
celebration of marriage does not constitute a
cause for nullity [Katipunan v. Tenorio (1937)]
PAGE 25
Effect of cure to fraud in Art. 46: May be ratified upon cohabitation after force,
Recovery or rehabilitation from STD, drug intimidation, or undue influence has ceased or
addiction, and habitual alcoholism will not bar disappeared.
action for annulment; the defect is not the
disease, but the FRAUD which VITIATED Impotency
CONSENT. Must exist at time of marriage, and be
continuous and incurable. If incapacity can be
W gave birth 3 months after marriage, H filed remedied or is removable by operation, NOT
for annulment: concealment of non-virginity. ANNULLABLE [Sarao v. Guevarra(1940)]
Denied. Court held that it was unbelievable that
husband could not have noticed when wife had Physical condition: sexual intercourse with a
been at least 6 months pregnant prior to person of the opposite sex is impossible, not
marriage. [Buccat v. Mangonon de Buccat, mere sterility
(1941)]
Only the potent spouse can file the action for
The Supreme Court granted annulment annulment and he/she must not have been
because the wife concealed the fact that she aware of the others impotency at the time of
was 4 months pregnant during the time of the marriage [Sempio-Diy]
marriage. Since Delizo was naturally plump,
Aquino could hardly be expected to know, by If he/she was aware, it is implied that he/she
mere looking, whether or not she was pregnant renounced copulation by consenting to the
at the time of the marriage. [Aquino v. Delizo, marriage. [Tolentino]
(1960)]
When both spouses are impotent, marriage
It is the concealment of homosexuality, and not cannot be annulled because neither spouse is
homosexuality per se, that vitiates the consent aggrieved. [Sempio-Diy]
of the innocent party. Such concealment An impotent plaintiff could not have expected
presupposes bad faith and intent to defraud the copulation with the other spouse. [Tolentino]
other party in giving consent to the marriage.
[Almelor v. RTC, (2008)] Potency presumed; party who alleges impotency
has burden of proof [Jimenez v. Canizares
Force, intimidation, Undue influence (1960)]
FORCE must be one as to prevent party from
acting as a free agent; will destroyed by Refusal of wife to be examined DOES NOT
fear/compulsion PRESUME impotency because Filipino women
are inherently shy & bashful; TC must order
INTIMIDATION must be one as to compel the physical examination because w/o proof of
party by a reasonable/well-grounded fear of an impotency, she is presumed potent; to order her
imminent and grave evil upon his to undergo physical exam does not infringe her
person/properties right against self-incrimination [Jimenez v.
Canizares]
DEGREE OF INTIMIDATION: age, sex, condition Note: If she continues to refuse the physical
of person borne in mind exam, she can be held in contempt & ordered
Threat or intimidation as not to act as FREE confined in jail until she does so
AGENT; i.e. threatened by armed
demonstrations [Tiongco v. Matig-a] Absence of cohabitation is not a ground for
annulment. [Villanueva vs. CA (2006)]
Committee added undue influence, may be
compelled to enter out of REVERENTIAL FEAR Relative Impotency may now be invoked
e.g., fear of causing distress to parents, because there are cases where one is impotent
grandparents, etc. with respect to his/her spouse but not with
other men or women.
PAGE 26
Reason: danger to the health of spouse &

Example: penile erection to other women offspring/s
possible; unusually large penis cannot fit with Same as incurable impotency
abnormally small vagina Not subject to ratification cannot be
ratified or convalidated by cohabitation:
Sexually-transmissible disease serious and (1) Affliction of STD is unknown to the other
incurable spouse [Balane]
Should exist at the time of the marriage (2) The other spouse must also be free from a
Should be found serious similar STD. [Balane]
Should appear to be incurable
WHO MAY FILE, PRESCRIPTION, RATIFICATION
Ground Who can file Prescription Ratification

(Art. 45) (Art. 47) (Art. 47) (Art. 45)
Party 18 or above but below Within 5 years after
Lack of
21 attaining 21. Free cohabitation after
parental
Parent or guardian who did Before party below 21 attaining age of 21.
consent
not give consent reaches 21.
Sane spouse with no
knowledge of the others
insanity Any time before the death
of either party Free cohabitation of insane
Insanity Legal guardian of insane party after insane party
party comes to reason
During lucid interval or
Insane party after regaining sanity, and
before death
Free cohabitation after
Injured party (defrauded Within 5 years after
Fraud having full knowledge of
party) discovery of fraud
fraud
Force, Within 5 years after Free cohabitation after the
intimidation, disappearance of force, force or intimidation or
Injured party
undue undue influence, or undue influence has ceased
influence intimidation or disappeared
Within 5 years after Cannot be ratified but
Impotence Potent spouse
marriage action prescribes
Within 5 years after Cannot be ratified but
STD Healthy party
marriage action prescribes
PAGE 27
Marriages Not Subject to Ratification/ EFFECTS OF NULLITY

Convalidation by cohabitation
(1) One spouse is incurably impotent (Art. 47, FC Art. 50(1), FC. The effects provided for by
prescription: 5 years) paragraphs (2), (3), (4) and (5) of Article 43 and by
(2) One spouse has an incurable STD (Art. 47, FC Article 44 shall also apply in the proper cases to
prescription: 5 years) marriages which are declared void ab initio or
annulled by final judgment under Articles 40 and
PRESENCE OF PROSECUTOR 45.
Art. 48, FC. To prevent collusion between the Final judgment in such cases shall provide for the:
parties, fabrication or suppression of evidence, the (1) Liquidation, partition, and distribution of the
prosecuting attorney or fiscal shall appear on properties of the spouses
behalf of the State. (2) Custody and support of the common children
(3) Delivery of their presumptive legitimes
In a legal separation or annulment case, the (a) Unless such matters had been
prosecuting attorney must first rule out collusion adjudicated in previous judicial
as a condition sine qua non for further proceedings (Art. 50(2))
proceedings. A certification by the prosecutor (b) All creditors of the spouses/property
that he was present during the hearing and even regime shall be notified of the
cross-examined the plaintiff does not suffice to proceedings for liquidation [Art. 50(2 and
comply with the mandatory requirement. [Corpuz 3), FC]
v. Ochoterena, (2004)]
In the partition, the conjugal dwelling and lot shall
EFFECT OF PENDING be adjudicated to the spouse with whom majority
ACTIONS/DECREE of the common children remain [Arts. 50(4), 102
(1) The court shall provide for the support of the and 129, FC]
spouses,
(2) The custody and support of the common Presumptive legitimes, computed as of the date of
children, giving paramount consideration to the final judgment, shall be delivered in cash,
their moral and material welfare, their choice property or sound securities:
of parent with whom they wish to remain. Unless the parties, by mutual agreement
(3) The court shall also provide for visitation judicially approved, had already provided for
rights of other parent. [Art. 49, FC] such [Art. 51(1), FC]
The children/guardian/trustee of property may
DECISIONS ON THE NULLIFICATION OF THE ask for the enforcement of the judgment [Art.
MARRIAGE 51(2), FC]
The delivery of the presumptive legitimes shall
Art. 48 (2), FC. In the cases referred to in the not prejudice the ultimate successional rights,
preceding paragraph, no judgment shall be based but the value of the properties already received
upon a stipulation of facts or confession of shall be considered as advances on their
judgment. legitime [Art. 51(3), FC]
Stipulation of facts An admission by both parties General rule: children born or conceived within
after agreeing to the existence of any of the void marriages are illegitimate.
grounds or facts that would constitute a
void/voidable marriage Exceptions:
(1) Children conceived or born before the
Confession of judgment The admission by one judgment under Article 36 has become final
party admitting his/her fault to cause the and executory [Art. 54, FC]
invalidity of the marriage. (2) Children conceived or born of subsequent
marriages under Article 53 Art. 54, FC]
PAGE 28
JURISDICTION legal separation. [People v. Zapata and Bondoc

For marriages celebrated under both civil and (1951)]
Muslim rites, Sharia courts do not have exclusive
jurisdiction. The Judiciary Reorganization Act of For sexual infidelity as a ground for legal
1980 provided that regional trial courts have separation, there is no need for a prior conviction
jurisdiction over all actions involving the contract for concubinage, because legal separation only
of marriage and marital relations. [Tamano v. requires a preponderance of evidence, as opposed
Ortiz, (1998)] to proof beyond reasonable doubt. [Gandioco v.
Pearanda (1989)]
The death of one party in a legal separation case

Legal Separation abates the action. This is because the death of
either spouse automatically dissolves the
GROUNDS FOR LEGAL marriage. An action for legal separation is also
purely personal between the spouses. [Lapuz Sy v.
SEPARATION Eufemio (1972)].
Note: The grounds for legal separation are
exclusive. [Art. 55, FC] Abandonment is not mere physical estrangement
but also financial and moral desertion. There
These must be filed within 5 years after must be an absolute cessation of marital
occurrence of cause [Art. 57, FC]: relations, duties, and rights with the intention of
(1) Repeated physical violence or grossly abusive perpetual separation. [Dela Cruz. v. Dela Cruz
conduct directed against the petitioner, a (1968)]
common child, or a child of the petitioner;
(2) Physical violence or moral pressure to compel
the petitioner to change religious or political
ACTS OF VIOLENCE ACCORDING TO
affiliation; RA 9262:
(3) Attempt of respondent to corrupt or induce (1) Causing physical harm to the woman or her
the petitioner, a common child, or a child of child;
the petitioner, to engage in prostitution, or (2) Threatening to cause the woman or her child
connivance in such corruption or physical harm;
inducement; (3) Attempting to cause the woman or her child
(4) Final judgment sentencing the respondent to physical harm;
imprisonment of more than six years, even if (4) Placing the woman or her child in fear of
pardoned; imminent physical harm;
(5) Drug addiction or habitual alcoholism of the (5) Attempting to compel or compelling the
respondent; woman or her child to engage in conduct
(6) Lesbianism or homosexuality of the which the woman or her child has the right to
respondent; desist from or desist from conduct which the
(7) Contracting by the respondent of a woman or her child has the right to engage in,
subsequent bigamous marriage, whether in or attempting to restrict or restricting the
the Philippines or abroad; woman's or her child's freedom of movement
(8) Sexual infidelity or perversion; or conduct by force or threat of force, physical
(9) Attempt by the respondent against the life of or other harm or threat of physical or other
the petitioner; or harm, or intimidation directed against the
(10) Abandonment of petitioner by respondent woman or child. This shall include, but not
without justifiable cause for more than one limited to, the following acts committed with
year. the purpose or effect of controlling or
restricting the woman's or her child's
Adultery is not a continuing crime; it is movement or conduct:
consummated at every moment of carnal
knowledge. Thus, every sexual act is a ground for
PAGE 29
(a) Threatening to deprive or actually DEFENSES

depriving the woman or her child of
custody to her/his family;
(b) Depriving or threatening to deprive the
GROUNDS FOR DENYING LEGAL
woman or her children of financial support SEPARATION
legally due her or her family, or (1) Condonation by aggrieved party [Art. 56, FC]
deliberately providing the woman's (2) Consent by aggrieved party to the commission
children insufficient financial support; of the offense [Art. 56, FC]
(c) Depriving or threatening to deprive the (3) Connivance between parties in the
woman or her child of a legal right; commission of the offense [Art. 56, FC]
(d) Preventing the woman in engaging in any (4) Mutual guilt or recrimination between
legitimate profession, occupation, spouses in the commission of any ground for
business or activity or controlling the legal separation [Art. 56, FC]
victim's own money or properties, or solely (5) Collusion between parties to obtain decree of
controlling the conjugal or common legal separation [Art. 56, FC]
money, or properties; (6) Prescription of action for legal separation [Art.
(6) Inflicting or threatening to inflict physical 57, FC: 5 years from occurrence of the cause of
harm on oneself for the purpose of controlling action]
her actions or decisions; (7) Reconciliation of parties during pendency of
(7) Causing or attempting to cause the woman or action [Art. 66 (1), FC]
her child to engage in any sexual activity which (8) Death of either party during pendency of
does not constitute rape, by force or threat of action [Lapuz-Sy vs. Eufemio]
force, physical harm, or through intimidation
directed against the woman or her child or WHEN TO FILE/TRY ACTIONS
her/his immediate family; An action for legal separation shall be filed within
(8) Engaging in purposeful, knowing, or reckless five years from the time of the occurrence of the
conduct, personally or through another, that cause. [Art. 57, FC]
alarms or causes substantial emotional or
psychological distress to the woman or her COOLING-OFF PERIOD AND
child. This shall include, but not be limited to,
the following acts: RECONCILIATION EFFORTS
(a) Stalking or following the woman or her Action cannot be tried before six months have
child in public or private places; elapsed from the filing of the petition [Art. 58, FC]
(b) Peering in the window or lingering outside
the residence of the woman or her child; Actions cannot be tried unless the court has
(c) Entering or remaining in the dwelling or attempted to reconcile the spouses, and
on the property of the woman or her child determined that despite such efforts,
against her/his will; reconciliation is highly improbable [Art. 59, FC]
(d) Destroying the property and personal
belongings or inflicting harm to animals Note: This is without prejudice to judicial
or pets of the woman or her child; and determination of custody of children, alimony, and
(e) Engaging in any form of harassment or support pendente lite.
violence;
(9) Causing mental or emotional anguish, public Courts can still resolve other issues, pending the
ridicule or humiliation to the woman or her waiting period or cooling off period. In resolving
child, including, but not limited to, repeated other issues, courts should try not to touch, as
verbal and emotional abuse, and denial of much as possible, on the main issue (i.e. adultery
financial support or custody of minor children if that is the ground used). However, Court must
of access to the woman's child/children. still receive evidence if just to settle incidental
issues of support and custody. [Araneta vs.
Concepcion, (1956)]
PAGE 30
Note: This provision of the Family Code dictating a shall be forfeited in favor the common
mandatory 6-month cooling-off period does not children, previous children, or innocent
apply in cases where violence, as used in RA 9262 spouse, in that order [Art. 63. cf. Art. 43(2),
(Anti-Violence Against Women and their FC].
Children), is alleged. The case should be heard as (3) Custody of the minor children shall be
soon as possible by the court. awarded to the innocent spouse [Art. 63, cf.
Art 213, FC]
CONFESSION OF JUDGMENT (4) Guilty spouse shall be disqualified from
No decree of legal separation shall be based upon inheriting from innocent spouse by intestate
a stipulation of facts or a confession of judgment succession. The provisions in favor of the
[Art. 60, (1). FC] guilty party in the will of the innocent spouse
shall also be revoked by operation of law. [Art.
Note: Art. 60 par. 1 applies only if the judgment 63, FC]
was based solely on the stipulation of facts or (5) Donations in favor of the guilty spouse may be
solely on the confession of judgment. Thus, if revoked [Art. 64, FC] but this action prescribes
other grounds were used, Art. 60 par. 1 is not after 5 years from the decree of legal
applicable. [Balane] separation.
(6) Innocent spouse may also revoke designation
The prohibition on confession of judgment does of guilty spouse as beneficiary in an insurance
not mean that the Court will not grant petition if policy, even if such stipulations are
one party admits to being guilty of the charges of irrevocable. [Art. 64. FC, cf. PD 612, sec. 11]
adultery. The point of this provision is that the (7) Obligation for mutual support ceases, but the
Court should still admit evidence, not decide just court may order the guilty spouse to support
based on an admission of guilt. Because what is the innocent spouse. [Art. 198, FC]
prohibited is handing down a decree of legal (8) The wife shall continue to use the surname of
separation based solely on a confession of the husband even after the decree for legal
judgment. [Ocampo v Florenciano (1960)] separation. [Laperal v. Republic (1992)]
EFFECTS OF FILING PETITION RECONCILIATION

(1) The spouses are entitled to live separately, but Should the spouses reconcile, they should file a
the marital bond is not severed. [Art. 61 (1), FC] corresponding joint manifestation under oath of
(2) Administration of community or conjugal such reconciliation, duly signed by them and filed
property If there is no written agreement with the court in the same proceeding for legal
between the parties, the court shall designate separation. [Art. 65, FC]
one of them or a third person to administer
the ACP or CPG. [Art. 61(2), FC] Effects of reconciliation:
(1) Proceedings for legal separation shall be
terminated at whatever stage. [Art. 66, FC]
EFFECTS OF PENDENCY (2) If there is a final decree of legal separation, it
The Court shall provide for: [Art. 62, cf. Art. 49. FC] shall be set aside. [Art. 66, FC]
(1) Support of spouses (3) The separation of property and forfeiture of
(2) Custody of children the court shall give share of guilty spouse shall subsist, unless the
custody of children to one of them, if there is spouses agree to revive their former property
no written agreement between the spouses. regime or to institute another property
(3) Visitation rights of the other spouse regime. [Art. 66 cf. Art. 67, FC]
(4) Joint custody of children is restored.
EFFECTS OF LEGAL SEPARATION (5) The right to intestate succession by guilty
(1) The spouses can live separately [Art. 63, FC] spouse from innocent spouse is restored.
but the marriage bonds are not severed. The right to testamentary succession
(2) The ACP or CPG shall be dissolved and depends on the will of the innocent spouse.
liquidated, and the share of the guilty spouse
PAGE 31
ANNEX TO VOID AND VOIDABLE MARRIAGES

AND LEGAL SEPARATION
GROUNDS
Void Marriages Voidable Marriages Legal Separation

(1) One is a minor (1) Repeated physical violence
(2) No authority to marry (2) Pressure to compel to change
(3) No valid marriage religious/political affiliations
(1) Lack of parental
license (3) Corruption / inducement to engage in
consent
(4) Bigamous and prostitution
(2) Insanity
polygamous marriages (4) Final judgment with sentence of more than
(3) Fraud
(5) Mistake of identity 6 yrs.
(4) Force, Intimidation
(6) Void subsequent (5) Drug addiction / habitual alcoholism
or Undue Influence
marriage (6) Homosexuality / lesbianism
(5) Impotence
(7) Psychological (7) Bigamous marriage
(6) Serious and
incapacity (8) Sexual Infidelity
Incurable STD
(8) Incestuous Marriages (9) Attempts against the life of petitioner
(9) Marriages against (10) Abandonment without just cause for more
public policy than 1 year
EFFECTS OF FILING / PENDING DECREE
Void/Voidable Marriages Legal Separation

Support for the spouses
Custody and support for the children
Visitation rights to the other spouse
EFFECTS OF AFFIDAVIT OF REAPPEARANCE, JUDICIAL DECLARATION OF

NULLITY, ANNULMENT AND LEGAL SEPARATION
Void Marriages Terminated Marriage Voidable Legal Separation

[Art. 41, FC] Marriages
Status of Marital ties
Severed Severed Severed Not Severed
Status of Marriage
Void ab initio Subsequent marriage Void Valid
is terminated (not
invalidated)
Status of Children born and conceived before termination
Illegitimate Legitimate Legitimate Legitimate
EXCEPT: Art. 36 and 35
conceived and born before
judgment (legitimate)
Custody of Children
Court Proceeding Court Proceeding Court Proceeding Innocent Spouse
PAGE 32
EFFECTS OF AFFIDAVIT OF REAPPEARANCE, JUDICIAL DECLARATION OF

NULLITY, ANNULMENT AND LEGAL SEPARATION [CONTINUATION]
Void Marriages Terminated Marriage Voidable Legal Separation

[Art. 41, FC] Marriages
Property Relations
(1) Dissolution and Liquidation of properties
(a) Guilty/Bad Faith spouse will forfeit his/her share from the Net Profits to the (in order):
(i) Common children
(ii) Children of the guilty spouse by previous marriage
(iii) The innocent spouse
(2) Notification of creditors with the proceedings for liquidation
(3) Conjugal dwelling to be adjudicated to the spouse who has custody of majority of common children
(4) Insurance policy may be revoked only by the innocent spouse (Legal Separation: Only within 5 years)
(5) Spouse in bad faith/guilty shall be disqualified to inherit from innocent spouse (intestate succession
only in legal separation)
Donation Propter Nuptias
Valid, but if donee contracted marriage in bad faith, revoked by operation of May be revoked within 5
law years
Rights and Obligations If the wife abandons the family domicile (vs
obligation of cohabitation) with justifiable
Between Husband and cause i.e. being forced to perform lewd
sexual acts, the husbands obligation to
Wife support her is not terminated. The law will
not permit the husband to terminate the
obligation to support his wife by his own
ESSENTIAL OBLIGATIONS wrongful acts in driving the wife to seek
(1) Live together (cohabitation) [Art. 68, FC] protection in her parents home. [Goitia v.
Campos Rueda (1916)]
Exception: One spouse living abroad or
there are valid and compelling reasons [Art. A court cannot compel a married woman to
69 (2), FC] at the discretion of the court. go back to her husband, but the court may
decree that support be terminated. [Arroyo
Exception to exception: Incompatibility with v. Vasquez de Arroyo (1921)]
the solidarity of the family [Art. 69 (2), FC]
(2) Observe mutual love, respect, and fidelity

FAMILY DOMICILE
The husband and wife shall fix the family
domicile. [Art. 69, FC]
(3) Render mutual help and support [Art. 68,
FC]
In case of disagreement, the court shall decide.
A person has a purely personal right to [Art. 69 (1), FC]
consortium (Constitutional right to liberty).
Court cannot order a man to go back to the SUPPORT
conjugal dwelling. (Shows that what is in From the conjugal property; if none, income or
Family Code is not the former spousal unity the fruits of their separate properties; if none,
doctrine (Old England)). [Ilusorio v. Bildner from their separate properties (liable in
(2000)] proportion to their properties).
PAGE 33
MANAGEMENT OF HOUSEHOLD If BEFORE the objection, enforce resulting

This is the right and duty of both spouses. obligation against the separate property of the
spouse who has not obtained consent. [Art.
73,FC]
EFFECT OF NEGLECT OF DUTY
In case the other spouse neglects his or her
duties or commits acts which tend to bring
danger, dishonor or injury to the family, the Property Relations of the
aggrieved party may apply to the court for relief.
[Art. 72, FC] Spouses
Injury contemplated is physical, moral, MARRIAGE SETTLEMENTS
emotional or psychological, not financial.
Art. 75, FC. Future spouses may agree upon, in
EXERCISE OF PROFESSION the marriage settlement, which property regime
Either spouse may exercise any legitimate will govern their marriage (ACP, CPG, complete
profession, without need for consent of the separation of property, other regimes). However,
other. in the absence of a marriage settlement, or
when the regime agreed upon is void, the
The other spouse may only object on valid, system of absolute community of property as
serious, and moral grounds. established by this Code shall govern.
In case of disagreement, the Court shall decide Marriage settlements are considered accessory
whether: to the marriage, therefore as per Art. 81,
(1) The objection is proper, and stipulations in consideration of future marriage
(2) Benefit has accrued to the family before OR and donations will be void if the marriage does
after the objection. not take place.
MARRIAGE SETTLEMENT RULES

General rule: Before marriage is celebrated [Art. 76, FC]
Property regime is dissolved and liquidated [Art. 63(2), FC]
Reconciliation in case of legal separation [Arts. 66 and 67, FC]
When modifications can
When abandoned spouse petitions the court for judicial separation of property
be made
[Art. 128, FC]
Sufficient cause for judicial separation of property [Art. 135, FC]
Voluntary dissolution of ACP or CPG by the spouses [Art. 136, FC]
Made in writing
Signed by the parties
Executed before the marriage celebration
Not to prejudice third persons unless registered in the local civil registry where
Requirements of
the marriage is recorded and in registries of property
marriage settlements
and any modification If executed by a person below 21 y.o., valid only when persons required to give
thereof [Art. 77, FC] consent to the marriage (father, mother, or guardian, respectively) are made
parties to the agreement [Art. 78, FC]
If executed by a person upon whom civil interdiction has been pronounced or
who is subject to any other disability, valid only when his guardian appointed
by a competent court is made party to the agreement [Art. 79, FC]
PAGE 34
DONATIONS BY REASON OF Mateo v. Lagua (1969): Donations propter

nuptias are without onerous consideration,
MARRIAGE marriage being merely the occasion or motive
Solis v. Barroso (1928): In donations propter for the donation, not its cause. Being liberalities,
nuptias, the marriage is really a consideration, they remain subject to reduction for
but not in the sense of giving birth to the inofficiousness upon the donors death, if they
obligation. There can be a valid donation even if should infringe the legitime of a forced heir.
the marriage never took place, but the absence
of marriage is a ground for the revocation of the
donation.
Made before the celebration of marriage

Requisites of
Made in consideration of marriage
donations propter
In favor of one or both of the future spouses
nuptias
Donor must be one of the betrothed or any third person
Ordinary wedding gifts given after the celebration of the marriage
Donations in favor of future spouses made before marriage but not in
Donations excluded consideration thereof
Donations made in favor of persons other than the spouses even if founded on the
intended marriage
Spouses to each other
Who may donate Parents of one or both spouses
Third persons to either or both spouses
Family code provisions [Arts. 82-87, FC]
Sources of rules
Ordinary donation provisions [Art. 83; Title III of Book III, NCC]
governing donations
Provisions on testamentary succession and the formalities of wills for donations on
propter nuptias
future property [Art. 84, par. 2, FC]
General rule: Future spouses who agree upon a regime other than ACP cannot
donate to each other more than 1/5 of their present property (excess shall be
considered void). [Art. 84, FC]
Rules for donations Donations of property subject to encumbrances
before marriage (1) Are considered valid.
(2) In case of foreclosure:
(a) if property value < obligation, donee shall not be liable for the deficiency
(b) if property value > obligation, donee shall be entitled to the excess [Art. 85,
FC]
(1) If the marriage is not celebrated or judicially declared void ab initio, except
donations made in marriage settlements.
(2) When the marriage takes place without the consent of the parents or
guardians, as required by law.
(3) When the marriage is annulled, and the donee acted in bad faith.
Grounds for (4) Upon legal separation, if the donee is the guilty spouse.
revocation of (5) If there is a resolutory condition, and it is not complied with.
donation propter (6) When donee has committed an act of ingratitude: [Art. 765, CC]
nuptias [Art. 86, FC] (a) An offense against person or property of donor, or his wife or children
under parental authority.
(b) An imputation to the donor of any criminal offense, or any act involving
moral turpitude, even if proven, unless the crime is committed against the
donee, his wife or children under his authority.
(c) Refusing to support the donor, if he/she is legally required to do so.
PAGE 35
Donations by reason of marriage shall remain valid except that if the donee
contracted marriage in bad faith, such donations made to said donee are revoked
by operation of law. [Art. 43 (3), FC]
Revocation by operation of law Thus, even if spouse in good faith condones the
Effects of judicial
donee, the donation propter nuptias is still forfeited.
declaration of nullity
Effects provided for by Art. 43(2), (3), (4), and (5) and by Art. 44 shall also apply to
marriages that are declared void ab initio or annulled by final judgment under
Article 40 (Judicial declaration of nullity) and 45 (Voidable marriages). [Art. 50,
FC]
General rule: Spouses cannot donate to each other, directly or indirectly;
donations made by spouses to each other during the marriage are void. [Art. 87,
FC]
These donations refer to donations inter vivos [Tolentino]
Exception: Moderate gifts on the occasion of any family rejoicing.
The prohibition on donations can only be assailed by persons who bear such
Rules for donations relation to the parties or the property itself, that their rights are being interfered
during marriage with. Here, the insurance company of the donated car cannot assail the validity of
the donation. In addition, the codal exception of moderate gifts depends on the
income class of the spouses and a car could be considered a moderate gift that
does not infringe the prohibition of donation between spouses. [Harding v.
Commercial Union, (1918)]
A spouse cannot donate to persons which the other spouse may inherit from as it
constitutes an indirect donation. [Nazareno v. Birog, (1947)]
The donation between common-law spouses falls within the provision prohibiting
Rules for donations donations between spouses during marriage. [Matabuena v Cervantes, (1971)]
between common- The donation made by a man to a woman was held valid because no proof was
law spouses shown that they were still living in a common-law relationship at the time of the
donation. [Sumbad v. CA, (1999)]
DISTINGUISHED FROM ORDINARY DONATIONS

Donations propter nuptias Ordinary donations
Does not require express acceptance Express acceptance necessary
May be made by minors [Art. 78, FC] Cannot be made by minors
May include future property Cannot include future property
If present property is donated and property is not No limit to donation of present property provided
absolute community, limited to 1/5 [Art. 84, FC] legitimes are not impaired
Grounds for revocation in Art. 86 Grounds for revocation in donation laws
PAGE 36
ABSOLUTE COMMUNITY OF
PROPERTY AND CONJUGAL
PARTNERSHIP OF GAINS
Art. 80, FC. In absence of a contrary stipulation in
a marriage settlement, property relations between
Filipino spouses are governed by Philippine laws,
regardless of the place of marriage and their
residence.
General rule: By the Nationality Rule [Art. 15, FC],

the rule that Absolute Community Property (ACP)
is the default mode of property relations absent
any marriage settlement applies to all Filipinos,
regardless of the place of the marriage and their
residence.
Exceptions:
(1) Where both spouses are aliens
(2) As to the extrinsic validity of contracts
affecting property not situated in the
Philippines and executed in the country where
the property is located
(3) As to the extrinsic validity of contracts entered
into in the Philippines but affecting property
situated in a foreign country whose laws
require different formalities for its extrinsic
validity
Art. 81, FC. Everything stipulated in marriage

settlements in consideration of a future marriage
are void if marriage does not take place. However,
stipulations that do not depend upon the
celebration of marriage (e.g. recognition of
paternity of illegitimate child) remain valid.
Art. 89, FC. Waiver of rights, interests, shares and

effects of the absolute community of property is
allowed, except in the following cases:
(1) When there is judicial separation of property
(2) When the marriage is dissolved by death of
one of the spouses
(3) When the marriage is annulled
Regarding Art. 89: The creditors of the spouse

who made such waiver may petition the court to
rescind the waiver to the extent of the amount
sufficient to cover the amount of their credits.
Art. 90, FC. Co-ownership rules shall apply to ACP
in matters not provided by the Family Code.
PAGE 37
COMPARISON OF ACP AND CPG

ABSOLUTE COMMUNITY PROPERTY CONJUGAL PARTNERSHIP OF GAINS
Default property regime for marriages
celebrated before the Family Code took effect
When it At the precise moment of the celebration of the (August 3, 1988)
commences marriage [Art. 88, FC] For marriages after the Family Code, if agreed
to by the parties through a marriage
settlement.
Proceeds, products, fruits, and income of their
All the property owned by the spouses at the time
separate properties
of the celebration of the marriage or acquired
Everything acquired by them within marriage
thereafter [Art. 91, FC]
through their own efforts
Under the ACP, spouses cannot exclude specific
Everything acquired by them by chance
properties from the regime.
Specific properties [Art. 117, FC]
(1) Acquired by onerous title during the
marriage at the expense of the common
fund;
(2) Acquired through the labor, industry, work,
or profession of either or both spouses
(3) Fruits from common property and net
fruits of the exclusive property of each
spouse
(4) Share of either spouse in hidden treasure,
whether as finder or owner of property
where treasure was found
(5) Acquired through occupation such as
What it
fishing or hunting
consists of
(6) Livestock existing at dissolution of
partnership in excess of what is brought
Winnings from gambling shall accrue to the by either spouse to the marriage
community property [Art. 95, FC] (7) Acquired by chance, such as winnings
from gambling or betting
Moral damages arising from a contract paid
from the CPG [Zulueta v. Pan Am (1973)]
Loans contracted during the marriage are
conjugal, and so is any property acquired
therefrom [Mendoza v. Reyes (1983)]
Property purchased by installment, paid partly
with conjugal funds and partly with exclusive
funds, if full ownership was vested during the
marriage; the CPG shall reimburse the owner-
spouse [Art. 118, FC]
If a winning ticket is bought by conjugal funds,
the prize is conjugal (otherwise, the prize is
exclusive property of the spouse who owns the
ticket)
PAGE 38

Improvement on exclusive property: if original
value < new value, where
then land becomes conjugal property, subject

to the reimbursement of the value of the
property of the owner-spouse at the
What it
dissolution of the CPG
consists of
(continued) Property belonging to one spouse converted
into another kind totally different in nature
from its original form during marriage
becomes conjugal in the absence of proof that
the expenses of the conversion were
exclusively for the account of the original
owner-spouse, subject to reimbursement of
the value of the original property from the
conjugal partnership
Properties acquired before the marriage, for those
Property brought into the marriage by each
with legitimate descendants with a former marriage
spouse as his/her own
(to protect rights of children by a former marriage)
General rule: Properties acquired during the
marriage by a gratuitous title, i.e. donation,
inheritance by testate and intestate succession,
including the fruits of such properties Property acquired by either spouse during the
marriage by gratuitous title
Exception: When expressly provided by the donor
or testator that the property shall form part of the
ACP
Property acquired by right of redemption, by
barter, or by exchange with property
What
belonging to either spouse
remains
exclusive
Plata purchased property when she was
property
single. When married, she and her husband
Bergosa co-signed a mortgage on the
property. Upon foreclosure, Bergosa was sued
General rule: Properties for personal use
for illegal detainer. A writ of execution on the
property was carried out but Plata refused to
Exception: Jewelry
leave the premises. SC ruled that Plata
cannot be held in contempt. Property is not
conjugal. Her husband signing as co-
mortgagor does not convert it to CPG. She
could ignore execution because the decision
was for her husband alone. [Plata v. Yatco]
Property purchased with exclusive money of
either spouse
PAGE 39

Property purchased by installment, paid partly
with conjugal funds and partly with exclusive
funds, if full ownership was vested before the
marriage [Art. 118, FC]
Even if the installment is completed after the

marriage, the property is exclusive if
ownership was vested in one spouse before
the marriage [Lorenzo v. Nicolas (1952)]
Improvement on exclusive property: if original
value > new value where
then land remains exclusive property of the

owner-spouse, subject to the reimbursement
What of the cost of improvement
remains
exclusive Money received under the Social Security Act
property is not conjugal, although the employee-
(continued) spouse contributes to the SS with his salaries,
but belongs to the designated beneficiary
1. under the Social Security Law. SSA governs,
not FC.
Intellectual property, like copyright or patent,
should, according to Tolentino, be considered
separate property
Business property (e.g. trademarks, trade
names, service marks, business goodwill) are
merely accessories to some commercial
establishment or product, so that if such
establishment or product is separate property
of one spouse, then all the business property
is separate property; but all benefits or
earnings derived from these during the
marriage should belong to the conjugal
property [Tolentino]
Collection of credits belonging to one spouse
exclusively but the interests shall belong to
the CPG [Art. 119, FC]
Proceeds from sale of separate property of a
spouse
Indemnity paid in case of expropriation of
separate property or under an insurance policy
covering separate property
All property acquired during the marriage,
whether made, contracted, or registered in the
name of one spouse, are presumed conjugal
All properties acquired during the marriage form
unless the contrary is prove. [Art 116, FC]
Presumption part of the ACP, unless it be proven that they are
excluded. [Art. 93, FC]
The party who invokes the presumption must
first prove that the property was acquired
during the marriage [Acabal v. Acabal (2005)]
PAGE 40

Art. 94, FC Arts. 121-123, FC
(1) Support of the following:
(a) Spouses;
(1) Support of the following:
(b) Common children;
(a) Spouses;
(c) Legitimate children of previous
(b) Common children;
marriage;
(c) Legitimate children of previous
(d) Illegitimate children follow the
marriage;
provisions on Support; Partnership
(d) Illegitimate children follow the
assets liable in case responsibilities
provisions on Support; ACP liable in case
under Art. 121 have been covered and
of absence or insufficiency of the
there is absence or insufficiency of the
exclusive property of the debtor-spouse
exclusive property of the debtor-
but the payment shall be considered as
spouse but the payment shall be
advance to the share of the debtor-
considered as advance to the share of
spouse.
the debtor-spouse.
(2) Expenses to enable either spouse to
(2) Expenses to enable either spouse to
commence/ complete a
commence/complete a
professional/vocational course or activity for
professional/vocational course or activity
self-improvement;
for self-improvement;
(3) Value donated or promised by both spouses
(3) Value donated or promised by both
in favor of common legitimate children for
spouses in favor of common legitimate
the exclusive purpose of commencing/
children for the exclusive purpose of
completing a professional/vocational course
commencing/completing a
or activity for self-improvement
professional/vocational course or activity
for self-improvement
Debts and obligations:
(1) Contracted during the marriage by
Charges and Debts and obligations: administrator-spouse for the benefit of
obligations (1) Contracted during the marriage by the CPG;
administrator-spouse for the benefit of the (2) Contracted during the marriage by both
community; spouses;
(2) Contracted during the marriage by both (3) Contracted during the marriage by one
spouses; spouse with the consent of the other;
(3) Contracted during the marriage by one (4) Contracted by either spouse without the
spouse with the consent of the other; consent of the other to the extent that the
(4) Contracted by either spouse without the family may have been benefitted;
consent of the other to the extent that the (5) Contracted before marriage by either
family may have been benefitted; spouse insofar as they redounded to the
(5) Contracted before marriage by either spouse benefit of the family;
insofar as they redounded to the benefit of (6) Contracted before marriage by either
the family; spouse which have not redounded to the
(6) Contracted before marriage by either spouse benefit of the family when the
which have not redounded to the benefit of responsibilities under Art. 121 should have
the family in case of absence or insufficiency been covered and there is absence or
of the exclusive property of the debtor- insufficiency of the exclusive property of
spouse but the payment shall be considered the debtor-spouse but the payment shall
as an advance to the share of the debtor- be considered as an advance to the share
spouse. of debtor-spouse;
(7) Incurred by either spouse by reason of a (7) Incurred by either spouse by reason of a
crime or quasi-delict in case of absence or crime or quasi-delict when the
insufficiency of the exclusive property of the responsibilities under Art. 121 should have
debtor-spouse but the payment shall be been covered and there is absence or
considered as an advance to the share of the insufficiency of the exclusive property of
debtor-spouse. the debtor-spouse but the payment shall
be considered as an advance to the share
of the debtor-spouse.
PAGE 41

Taxes and expenses:
Taxes and expenses:
(1) Taxes, liens, charges and expenses,
(1) Taxes, liens, charges and expenses, including
including major and minor repairs, upon
major and minor repairs, upon the
the conjugal partnership property;
community property;
(2) Taxes and expenses for mere preservation
(2) Taxes and liens for mere preservation made
during the marriage upon the separate
during the marriage upon the separate
property of either spouse;
property of either spouse used by the family;
(3) Expenses of litigation between the
(3) Expenses of litigation between the spouses
spouses unless the suit is found to be
unless the suit is found to be groundless.
groundless.
If community property is insufficient, the spouses If conjugal partnership property is insufficient,
are solidarily liable for the unpaid balance from the spouses are solidarily liable for the unpaid
their separate properties except for: balance from their separate properties except
(1) Debts contracted by either spouse before for:
marriage which have not redounded to the (1) Debts contracted by either spouse before
benefit of the family; marriage which have not redounded to
(2) Support of illegitimate children; and the benefit of the family;
(3) Liabilities incurred by either spouse arising (2) Support of illegitimate children; and
Charges from crime or quasi-delict. (3) Liabilities incurred by either spouse arising
from crime or quasi-delict.
and
Obligations Gambling losses of any kind (i.e. legal or illegal) Gambling losses of any kind (i.e. legal or
(continued) shall be borne by the losing spouses separate illegal) shall be borne by the losing spouses
property [Art. 95, FC] separate property [Art. 123, FC]
Loan contracts signed by both spouses are

conjugal, and they are jointly liable for
payment, even if only one spouse signs a
subsequent promissory note. [DBP v. Adil
(1988)]
The Supreme Court ruled that the indirect
benefits that might accrue to a husband in
signing as a surety or guarantee in an
agreement not in favor of the family but in
favor of his employer corporation are not
benefits that can be considered as giving a
direct advantage accruing to the family.
Hence, the creditors cannot go against the
conjugal partnership property in satisfying the
obligation subject of the surety agreement. A
contrary view would put in peril the conjugal
partnership by allowing it to be given
gratuitously as in cases of donation of
conjugal partnership property, which is
prohibited. [Ayala Investment v. Ching (1998)]
PAGE 42

Administration of property belongs to both
spouses, jointly. In case of disagreement, the
husbands decision shall prevail, subject to
recourse by the wife for proper remedy, which
must be availed of within 5 years from the
date of the contract implementing such
decision. [Art. 124, par(1)]
Sale by the husband of property belonging to
the conjugal partnership without the consent
of the wife, when there is no showing that the
latter is incapacitated, is void ab initio. [Abalos
v. Macatangay (2004)]
General rule: Administration of property Art. 124 contemplates a situation where one
belongs to both spouses, jointly. If they spouse is absent, or separated in fact or has
disagree, the husbands decision prevails. abandoned the other or consent is withheld or
However, the wife has 5 years to seek recourse cannot be obtained. Such rules do not apply
from the court. Otherwise, it is presumed she to cases where the non-consenting spouse is
agreed to his decision. [Art. 96, FC] incapacitated or incompetent to give consent
i.e. in coma. The proper remedy is to file for
Ownership, Exception: When the other spouse is guardianship under the ROC. Even assuming
administration, incapacitated, or unable to participate in the that the rules on summary proceedings apply,
enjoyment, and administration, e.g. when abroad. Capacitated the power of the administrator is the same as
disposition spouse may assume sole powers of a guardian. So a spouse who desires to sell
administration. However, power is limited to conjugal property as administrator must still
administration. observe the procedure for the sale of the
wards estate required of judicial guardians
under ROC not the summary judicial
proceedings under FC. [Uy v. CA (2000)]
Spouses are not co-owners of CPG during the
marriage and cannot alienate the supposed
interest of each in the said properties. The
interest of the spouses in the CPG is only
inchoate or a mere expectancy and does not
ripen into title until it appears after the
dissolution and liquidation of the partnership
that there are net assets. [De Ansaldo v. Sheriff
of Manila (1937)]
Disposition or encumbrance of conjugal
Either spouse may, through a will, dispose of his
property requires the following:
or her interest in the community property. [Art.
(1) Consent or approval by both spouses, or
97, FC] However, the will should refer only to his
(2) Judicial authority secured in court
or her share in the community property.
[Art. 124, (2) FC]
PAGE 43

General rule: Donation of one spouse without
the consent of the other is not allowed. [Art. 98,
FC]
Exceptions:
(1) Moderate donations to charity due to
family rejoicing or distress
Donation of CPG must be with the consent of
(2) Moderate gifts by each spouse to the other
the other spouse except moderate donations
due to family rejoicing
for charity, on occasions of family rejoicing, or
Moderation depends on the familys socio-
Ownership, family distress [Art. 125; cf. Art. 98, FC]
economic status.
administration,
2.
enjoyment, and ACP allows donations in excess of one-fifth of
disposition present property of future spouses because the
(continued) donation would form part of the community
property once the marriage is celebrated. [Art.
84]
Mere awareness of a transaction is NOT consent. [Jader-Manalo v. Camaisa(2002)]
In the absence of (court) authority or written consent of the other spouse, any disposition or
encumbrance of the conjugal property shall be void. [Homeowners Savings & Loan Bank v.
Dallo(2005)]
If however, one of the spouses is an alien, the Filipino spouse may encumber or dispose of the
property w/o the consent of the former. The property is presumed to be owned exclusively by the
Filipino spouse. [Cheeseman v. IAC (1991)]
Terminates upon [Art. 99, FC]:
(1) Death of either spouse follow rules in Art.
Terminates upon [Art. 126; cf. Art. 99]:
103
(1) Death
(2) Legal separation follow rules in Arts. 63
(2) Legal separation
Dissolution of and 64
(3) Annulment or judicial declaration of
the regime (3) Annulment or judicial declaration of nullity
nullity
follow rules in Arts. 50 and 52
(4) Judicial separation of property
(4) Judicial separation of property during
marriage follow rules in Arts. 134 to 138
PAGE 44

Rules on de facto separation [Art. 127]
Rules on de facto separation [Art. 100]
De facto separation does not affect the CPG,
De facto separation does not affect the ACP,
except that:
except that:
1. Spouse who leaves the conjugal home
1. Spouse who leaves the conjugal home
without just cause shall not be entitled to
without just cause shall not be entitled to
support; however, he/she is still required
support; however, he/she is still required to
to support the other spouse and the family
support the other spouse and the family
2. If consent is necessary for transaction but is
2. If consent is necessary for transaction but is
withheld or otherwise unobtainable,
withheld or otherwise unobtainable,
authorization may be obtained from the
authorization may be obtained from the
court
court
Effect of de 3. Support for family will be taken from the
3. Support for family will be taken from the
facto partnership property.
ACP
separation 4. If partnership property is insufficient,
4. If ACP is insufficient, spouses shall be
spouses shall be solidarily liable
solidarily liable
5. If it is necessary to administer or encumber
5. If it is necessary to administer or encumber
separate property of spouse who left,
separate property of spouse who left,
spouse present may ask for judicial
spouse present may ask for judicial
authority to do this
authority to do this
6. If partnership property is not enough and
6. If ACP is not enough and one spouse has no
one spouse has no separate property,
separate property, spouse who has property
spouse who has property is liable for
is liable for support, according to provisions
support, according to provisions on
on support.
support.
Abandonment [Art. 128, FC]
Present/aggrieved spouse may petition the
court for:
Abandonment [Art. 101, FC] (1) Receivership
Present/aggrieved spouse may petition the (2) Judicial separation of property
court for: (3) Authority to be the sole administrator of
(1) Receivership the partnership property, subject to
(2) Judicial separation of property precautionary conditions that the court
(3) Authority to be the sole administrator of may impose
the absolute community, subject to
precautionary conditions that the court A spouse is deemed to have abandoned the
may impose other when he or she has left the conjugal
Rules on dwelling without any intention of returning.
Abandonment A spouse is deemed to have abandoned the
other when he or she has left the conjugal Spouse is prima facie considered to have
dwelling without any intention of returning. abandoned the other spouse and the family if
he or she has:
Spouse is prima facie considered to have (1) Left for a period of 3 months
abandoned the other spouse and the family if (2) Failed to inform the other spouse of his or
he or she has: her whereabouts for a period of 3 months
(1) Left for a period of 3 months Physical separation of the spouses, coupled
(2) Failed to inform the other spouse of his or with the husbands refusal to give support to
her whereabouts for a period of 3 months the wife, sufficed to constitute abandonment
as a ground for an action for the judicial
separation of their conjugal property.
[Partosa-Jo v. CA (1992)]
PAGE 45

Procedure [Art. 129, FC]
(1) Prepare an inventory of all properties
(2) Amounts advanced by CPG in payment of
Procedure [Art. 102, FC]
personal debts and obligations shall be
(1) Inventory of assets of ACP and of spouses,
credited to the CPG
with market values
(3) Reimburse each spouse for the use of
(2) Obligations are paid with community
his/her exclusive funds in the acquisition
property, and separate obligations not
of property or for the value of his or her
charged to ACP paid by respective assets
exclusive property, the ownership of which
of spouses
has been vested by law in the conjugal
partnership
If obligations exceed the assets of the ACP,
(4) Debts and obligations of CPG shall be
nothing is divided. Creditors can go after
paid out of the conjugal assets, otherwise
the separate properties of the spouses,
both spouses are solidarily liable with
which are solidarily liable for the deficiency
their exclusive property
(5) Remains of the exclusive properties shall
(3) Delivery of whatever remains in their
be delivered to respective owner-spouses
exclusive property
(6) Indemnify loss/deterioration of movables
(4) Balance, or net remainder is divided
belonging to either spouse, even due to
equally between the spouses, irrespective
fortuitous event, used for the benefit of
of how much each brought into the
the family
community
(7) Net remainder of CPG shall constitute the
(5) If personal obligations of a spouse exceed
profits which shall be divided equally
his/her separate property, creditor can go
between husband and wife except when:
after the share of the spouse on the net
(a) A different proportion or division was
remainder of the ACP, without prejudice to
Liquidation of agreed upon in the marriage
the provisions of law on forfeitures and
assets and settlements
delivery of presumptive legitimes
liabilities (b) There has been a voluntary waiver or
(6) After covering all community obligations
forfeiture of such share as provided in
and obligations of spouses, balance of
the FC
separate properties shall be delivered to
(8) Presumptive legitimes are delivered to
respective spouses or their heirs, and they
common children
will also divide into two equal shares
(9) Conjugal dwelling goes to:
whatever is left of the community assets,
(a) Spouse with whom majority of
without prejudice to the provisions of law
common children choose to remain
on forfeitures and delivery of presumptive
(below 7 y.o. = deemed to have
legitimes
chosen the mother)
(b) Whoever the court chooses in case of
lack of majority
Rules in case of termination of marriage by death of one of the spouses [Art. 104, FC]:
(1) The community property shall be liquidated in the same proceeding for the settlement of the
estate of the deceased spouse.
(2) If no such judicial settlement proceeding is instituted, surviving spouse shall liquidate the
community property either judicially or extra-judicially within one year from the death of the
deceased spouse.
(a) If no liquidation is made within the period, any disposition or encumbrance involving
community property of the terminated marriage shall be void.
(b) Non-compliance with liquidation procedures would mean that a subsequently contracted
marriage will follow a regime of complete separation of property.
Procedure for liquidation of properties of two marriages [Art. 104, FC]:
(1) Determine the capital, fruits, and income of each community upon such proof as may be
considered according to the rules of evidence.
(2) In case of doubt as to which community the existing properties belong, they shall be divided
between two communities in proportion to the capital and duration of each.
PAGE 46
SEPARATION OF PROPERTY OF
THE SPOUSES AND
ADMINISTRATION OF COMMON
PROPERTY BY ONE SPOUSE
DURING THE MARRIAGE
Art. 134, FC. In the absence of an express
declaration in the marriage settlements, the
separation of property between spouses during
the marriage shall not take place except by
judicial order. Such judicial separation of property
may either be voluntary or for sufficient cause
Judicial separation of property may either be:

(1) voluntary or
(2) for sufficient cause
SUFFICIENT CAUSES AND GROUNDS FOR RETURN TO PREVIOUS REGIME
Sufficient Causes for Judicial Separation of Property Grounds for Return to Previous Regime
[Art. 135, FC] [Art. 141, FC]
(1) Spouse of petitioner has been sentenced to a
penalty which carries with it the penalty of (1) Termination of the civil interdiction
civil interdiction
(2) Spouse of petitioner is judicially declared an
(2) Reappearance of absentee spouse
absentee
(3) Loss of parental authority of the spouse of (3) Restoration of parental authority to the spouse
petitioner has been decreed by the court previously deprived of it
(4) Spouse of petitioner has abandoned the (4) When the spouse who left the conjugal home
latter or failed to comply with his or her without legal separation resumes common life
obligations to the family with the other
(5) When the court, being satisfied that the spouse
(5) The spouse granted the power of
granted the power of administration in will not
administration in the marriage settlements
again abuse that power, authorizes the
has abused that power
resumption of said administration
(6) At the time of the petition, the spouses have (6) Reconciliation and resumption of common life
been separated in fact for at least 1 year and of the spouses who had been separated in fact
reconciliation is highly improbable. for at least 1 year
(7) When after voluntary dissolution of the ACP or
CPG has been judicially decreed upon the joint
petition of the spouses, they agree to the
revival of the former property regime. No
voluntary separation of property may thereafter
be granted.
PAGE 47
SEPARATION OF PROPERTY
Agreed upon in the marriage settlements by the spouses
Mandatory under Arts. 103 & 130 (subsequent marriages contracted by a surviving
When it
spouse without judicial settlement of previous property regime)
applies
Default property regime when there is reconciliation between spouses after judicial
separation of property
Present or future property or both
Each spouses earnings from his or her own profession, business, or industry
What it Natural, industrial or civil fruits of spouses separate properties
consists of May be total or partial
If partial, property not considered separate is presumed to pertain to the ACP

Family expenses: Both spouses are liable in proportion to their income; if insufficient,
Liabilities based on the current value of their separate properties
Creditors for family expenses: Spouses solidarily liable
Spouses may own, dispose, possess, and administer separate estates without the
consent of the other
Ownership,
Administration of exclusive properties may be transferred between spouses when:
administration,
(1) One spouse becomes the other spouses guardian
enjoyment,
(2) One spouse is judicially declared an absentee
and
(3) One spouse is given the penalty of civil interdiction
disposition
(4) One spouse becomes a fugitive
Conveyance between the spouses is allowed under Art. 1490, NCC.
A voluntary separation of properties is not

perfected by mere consent but upon the decree of
the court approving the same. The petition for
voluntary separation of property was denied
because the children of the 1st and 2nd marriages
were not informed; the separation of property may
prejudice the rights and shares of the children. [In
Re: voluntary dissolution of CPG of Sps. Bernas
(1965)]
A compromise agreement with judicial

recognition is valid, pending petition for
declaration of nullity of marriage. [Maquilan v.
Maquilan (2007)]
PAGE 48
PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE

[Arts. 147-148, FC]
Art. 147 Art. 148

Applicability
Man and woman living together as husband and
wife, with capacity to marry [Art. 5, FC] without any Man and woman living together as husband and
legal impediment) wife, NOT capacitated to marry
(1) at least 18 years old (1) Under 18 years old
(2) not Art. 37 (incestuous void marriage) (2) Adulterous relationship
(3) not Art. 38 (void marriage by reason of public (3) Bigamous /polygamous marriage
policy) (4) Incestuous marriages under Art. 37
(4) not bigamous (5) Void marriages by reason of public policy under
Other void marriages due to absence of formal Art. 38
requisite
Salaries and wages
Owned in equal shares Separately owned by parties
Properties acquired through exclusive funds
Remains exclusive
Remains exclusive, provided there is proof
Properties acquired by both through work and industry

Owned in common in proportion to respective
Governed by rules on co-ownership
contribution
Properties acquired while living together
Owned in equal shares since it is presumed to have
been acquired through joint efforts No presumption of joint acquisition. When there is
evidence of joint acquisition but none as to the
If one party did not participate in acquisition, extent of actual contribution, there is a
presumed to have contributed through care and presumption of equal sharing.
maintenance of family and household
Forfeiture
If one party is validly married to another his/her
share in the co-owned properties will accrue to the
(1) In favor of their common children
ACP/CPG of his/her existing valid marriage
(2) In case of default of or waiver by any or all of
the common children or their descendants,
If the party who acted in bad faith is not validly
each vacant share shall belong to the
married to another, his/her share shall be forfeited
respective surviving descendants
in the same manner as that provided in Art 147.
(3) In the absence of such descendants, such
share belongs to the innocent party
The same rules on forfeiture shall apply if both
parties are in bad faith.
Application of Article 148; there was no proof of actual contribution, while there was a subsisting
marriage apart from the union without marriage, therefore, the N. Forbes house goes to the CPG of
subsisting marriage. [Yaptinchay v. Torres (1969)]
Transfer of certificate and tax declarations are not sufficient proof of joint contribution. [Villanueva v. CA
(2004)]
Marriages that have been declared void come under the rules of co-ownership under FC147/148
regardless of the reason. [Valdez v. QC-RTC (1996)]
PAGE 49
The Family Exceptions to the general rule cannot be

subject of compromise [Art 2035, CC]
(1) Civil status of persons,
Art. 149, FC. The family, being the foundation of (2) Validity of marriage or a legal separation,
the nation, is a basic social institution which (3) Any ground for legal separation,
public policy cherishes and protects. (4) Future support (as it is presumed to be
Consequently, family relations are governed by needed for the survival of the one receiving
law and no custom, practice or agreement support),
destructive of the family shall be recognized or (5) Jurisdiction of courts,
given effect. (6) Future legitime
THE FAMILY AS AN Whenever a stranger is a party in a case

involving family members, the requisite showing
INSTITUTION of earnest efforts to compromise is no longer
ASPECTS OF FAMILY RELATIONS mandatory, as such inclusion of a stranger takes
(1) External Aspect the case out of the ambit of Art. 151. [Hontiveros
(a) Governed by law [Art. 149, FC] v. RTC (1999)]
(b) Only in this aspect can third persons
and the public interest be concerned
(2) Internal Aspect
THE FAMILY HOME
(a) Sacred to the family and inaccessible to
law because law must respect the CONSTITUTED
freedom of action of man (1) Jointly by the husband and the wife
(b) e.g. spiritual relations, sexual relations (2) By an unmarried head of a family;
of spouses, profession and career of
spouses, practices and customs of INCLUDES
family (1) Dwelling house where they and their family
reside
FAMILY RELATIONS INCLUDE: (2) The land on which it is situated [Art. 152, FC]
(1) Between husband and wife
(2) Between parents and children Art. 157, FC. The actual value of the family home
(3) Among other ascendants and descendants shall not exceed, at the time of the constitution,
(4) Among brothers and sisters, full or half the amount of Three hundred thousand pesos
blood (P300,000.00) in urban areas, and Two
hundred thousand pesos (P200,000.00) in
General rule [Art. 151, FC]: No suit between rural areas or such amounts as may hereafter be
members of the same family shall prosper. fixed by law.
Exception: If it should appear in a verified A person may constitute and be the beneficiary
complaint or petition that: of only one family home [Art. 161, FC]
(1) Earnest efforts towards a compromise have
been made; The provisions of the Chapter on Family Home
(2) Such efforts have failed; and shall govern existing family residences insofar
(3) Such earnest efforts and the fact of failure as said provisions are applicable [Art. 162, FC]
must be alleged.
GUIDELINES
Note: The case will be dismissed if it is shown (1) It is deemed constituted from time of actual
that no such efforts were made. occupation as a family residence
(2) It must be owned by person constituting it
The rule shall not apply to cases which may not (3 It must be permanent
be the subject of compromise.
PAGE 50
(4) Rule applies to valid and voidable and even REQUIREMENTS FOR THE SALE,
to common-law marriages under Arts.147 ALIENATION, DONATION,
and 148
(5) It continues despite death of one or more
ASSIGNMENT, OR ENCUMBRANCE
spouses or unmarried head of family for 10 OF THE FAMILY HOME
years or as long as there is a minor (1) The written consent of the person
beneficiary [Art.159, FC] constituting it,
(2) That of the spouse of the person
RULES ON EXEMPTION OF FAMILY constituting it, and
(3) That of majority of the beneficiaries of legal
HOME age. [Art. 158, FC]
General rule: The family home is exempt from
the following from the time of its constitution If there is a conflict, the Court will decide.
and so long as any of its beneficiaries actually
resides therein [Art. 153, FC]:
(1) Execution
IN CASE OF DEATH OF ONE OR BOTH
(2) Forced sale SPOUSES OR THE UNMARRIED
(3) Attachment HEAD OF THE FAMILY
The family home shall continue despite the
Exceptions [Art. 155, FC]: death of one or both spouses or of the
(1) Nonpayment of taxes. unmarried head of the family for a period of 10
(2) Debts incurred prior to the constitution of years, or for as long as there is a minor
the family home. beneficiary. [Art. 159, FC]
(3) Debts secured by mortgages on the
premises before or after such constitution. The heirs cannot partition the home unless the
(4) Debts due to laborers, mechanics, court finds compelling reasons therefore. [Art.
architects, builders, materialmen and others 159, FC]
who have rendered service or furnished
material for the construction of the building. REQUISITES FOR CREDITOR TO
EXECUTE UPON THE FAMILY HOME
BENEFICIARIES OF THE FAMILY (1) He must be a judgment creditor;
HOME (2) His claim is not among those exempted
(1) Husband and wife, or an unmarried person under Article155, and
who is the head of the family (3) He has reasonable grounds to believe that
(2) Parents (may include parent-in-laws), the family home is worth more than the
ascendants, descendants, brothers and maximum amount fixed in Art. 157.
sisters (legitimate/illegitimate), who are
living in the family home and who depend PROCEDURE TO AVAIL OF RIGHT UNDER
on the head of the family for support. [Art. ART. 160
154, FC] (1) The creditor must file a motion in the court
proceeding where he obtained a favorable
REQUISITES TO BE A BENEFICIARY decision for a writ of execution against the
(1) The relationship is within those family home.
enumerated; (2) There will be a hearing on the motion where
(2) They live in the family home; and the creditor must prove that the actual
(3) They are dependent for legal support on the value of the family home exceeds the
head of the family. maximum amount fixed by the FC either at
the time of its constitution or as a result of
improvements introduced thereafter.
(3) If the creditor proves that the actual value
exceeds the maximum amount the court
will order its sale in execution.
PAGE 51
(4) If the family home is sold for more than the

value allowed, the proceeds shall be Paternity and Filiation
applied as follows:
(a) First, the obligation enumerated in Kinds of Filiation [Arts. 163, 164, 165, FC]:
Article 157 must be paid (1) Natural
(b) Then the judgment in favor of the (a) Legitimate
creditor will be paid, plus all the costs of (b) Illegitimate
execution (2) Legal Fiction (Adoption)
(c) The excess, if any, shall be delivered to
the judgment debtor
LEGITIMATE CHILDREN
The proof that the house is the family home
must be alleged against creditors; applied the WHO ARE LEGITIMATE CHILDREN
rule in Art. 160, FC. [Versola v. Mandolaria Those conceived or born during the marriage of
(2006)] parents either by natural means or by artificial
insemination [Art. 164, FC]
WON the grandson of the deceased is a
beneficiary according to Art. 154 FC. The NATURAL/BIOLOGICAL
beneficiary should satisfy all requisites; he must A child conceived or born during a valid
be dependent on the head of the family. Since marriage is presumed to belong to that
the grandson still had parents who are legally marriage, regardless of the existence of
obliged for his support, he was not deemed a extramarital relationships. [Liyao v. Liyao
beneficiary. [Patricio v. Dario III (2006)] (2002)]
Article 159 imposes the proscription against the ARTIFICIAL INSEMINATION

immediate partition of the family home Requisites to be considered legitimate:
regardless of its ownership. This signifies that (1) Artificial insemination made on wife
even if the family home has passed by (2) Sperm comes from any of the following:
succession to the co-ownership of the heirs, or (a) Husband
has been willed to any one of them, this fact (b) Third person donor
alone cannot transform the family home into an (c) Husband and third person donor
ordinary property, much less dispel the (3) In case of donor sperm, husband and wife
protection cast upon it by law. The rights of the must authorize/ratify insemination in a
individual co-owner or owner of the family home written instrument:
cannot subjugate the rights granted under (a) Executed & signed by husband and wife
Article 159 to the beneficiaries of the family before the birth of the child.
home. [Arriola v. Arriola (2008)] (b) Recorded in the civil registry together
with the birth certificate of the child.
[Art. 164, FC]
Dual consent is required whether the semen

used comes from the husband or a third person
donor [Tolentino]
WHO ARE ILLEGITIMATE CHILDREN

General rule: Those conceived and born outside
of a valid marriage. [Art. 165, FC]
Exceptions:
(1) Children of marriages void under Art.36
(psychological incapacity); and
(2) Under Art. 53 (subsequent marriages which
PAGE 52
did not comply with Art. 52). [Sempio-Dy] Only the man (and his heirs in certain situations)
can impugn the legitimacy of the child. [Benitez-
Common children born before the annulment Badua v. CA (1994)]
are legitimate, and therefore entitled to support
from each of the spouses. [De Castro v. Assidao- LEGITIMACY WITH REGARD TO THE
De Castro, (2008)] MOTHER
Child considered legitimate although [Art. 167,
IMPUGNING LEGITIMACY FC]:
Grounds for impugning legitimacy of a child are: (1) Mother may have declared against its
(1) Physical impossibility for the husband to legitimacy
have sexual intercourse with his wife within (2) Mother may have been sentenced as an
the first 120 days of the 300 days which adulteress (also applies to wife who was
immediately preceded the child's birth due raped)
to:
(a) Physical incapacity of the husband to If the marriage is terminated and the mother
have sexual intercourse with his wife contracted another marriage within 300 days
(b) Husband and wife were living after the termination of the former marriage,
separately as to make sexual the following rules shall govern in the absence
intercourse impossible of proof to the contrary [Art 168, FC]:
(c) Serious illness of the husband (1) If born before 180 days after the
absolutely preventing sexual solemnization of the subsequent marriage
intercourse child is considered conceived during the
(2) Other biological or scientific reasons, except former marriage, provided it be born within
artificial insemination 300 days after termination of the former
(3) And in case of artificial insemination, the marriage
written consent of either parent was vitiated (2) If born after 180 days following the
through fraud, violence, mistake, celebration of the subsequent marriage
intimidation, or undue influence. [Art. 166, child is considered conceived during such
FC] marriage, even if it be born within 300 days
after the termination of the former marriage
Mere proximate separation between the
spouses is not sufficient physical separation to The legitimacy or illegitimacy of a child born
constitute as ground for impugning legitimacy. after 300 days following the termination of the
[Macadangdang v. CA (1980)] marriageburden of proof upon whoever
alleges the status. [Art. 169, FC]
Serious illness of the husband which absolutely
prevented him from having sexual intercourse If nobody asserts the legitimacy or illegitimacy
with his wife, like if the husband was already in of the child described in Art. 169, the child
comatose or a vegetable, or sick with syphilis in should be considered illegitimate unless
the tertiary stage so that copulation was not legitimacy is proved. Legitimacy cannot be
possible. But tuberculosis, even in its most presumed here since the birth was beyond the
crucial stage, does not preclude copulation 300-day period of gestation. While it goes
between the sick husband and his wife. [Andal v. against the policy of law to lean in favor of
Macaraig (1951)] legitimacy, this interpretation is better than the
anomalous situation created by Art. 169, which
Blood-type matching is an acceptable means of is a child without a status. [Tolentino]
impugning legitimacy, covered by Art. 166(2),
under biological or other scientific reasons. ACTION FOR IMPUGNING LEGITIMACY [Arts.
But this is only conclusive of the fact of non- 170 and 171, FC]
paternity. [Jao v. CA (1987)] May be brought within 1, 2, or 3 years from the
knowledge of the birth, or the knowledge of
registration of birth.
PAGE 53
(1) Within 1 year if husband or any heirs reside possession of status as legitimate child
in the same city or municipality where the (b) Any other means stated by the rules of
child was born or his birth was recorded. court or special laws
(2) Within 2 years if the husband or all heirs
live in the Philippines but do not reside in Only in the absence of primary evidence can
the same city or municipality where the secondary evidence be admitted.
child's birth took place or was recorded
(3) Within 3 years if the husband or all heirs ACTION FOR CLAIMING FILIATION
live outside the Philippines when the child's (LEGITIMATE CHILDREN) [Art. 173, FC]
birth took place or was recorded in the (1) The child can bring the action during his or
Philippines her lifetime
(2) If the child dies during minority or in a state
If the birth of the child has been concealed or of insanity, such action shall be transmitted
was unknown to the husband, the above periods to his heirs, who shall have a period of five
shall be counted: years within which to institute the action.
(1) From the discovery or knowledge of the birth (3) The action commenced by the child shall
of the child, or survive notwithstanding the death of either
(2) From the discovery or knowledge of its or both of the parties
registration, whichever is earlier.
General rule: Only the husband can impugn the

RIGHTS OF LEGITIMATE CHILDREN
[Art. 174, FC]
legitimacy of a child. If he does not bring an
(1) To bear the surnames of the father and the
action within the prescribed periods, he cannot
mother, in conformity with the provisions of
file such action anymore thereafter, and this is
the Civil Code on surnames
also true with his heirs.
(2) To receive support from their parents, their
ascendants, and in proper cases, their
Exception: That the heirs of the husband may
brothers and sisters, in conformity with the
file the action or continue the same within the
provisions of the Code on support
periods prescribed in Art. 170 [Art. 171, FC]:
(3) To be entitled to the legitimate and other
(1) If the husband died before the expiration of
successional rights granted to them by the
the period fixed for bringing his action
Civil Code
(2) If he should die after the filing of the
complaint without having desisted
therefrom ILLEGITIMATE CHILDREN
(3) If the child was born after the death of the Illegitimate children may establish their
husband. illegitimate filiation in the same way and on the
same evidence (primary or secondary) as
Legitimacy can only be attacked directly. legitimate children. [Art. 175, FC]
[Sayson v. CA (1992)]
ACTION FOR CLAIMING FILIATION
PROOF OF FILIATION [Art. 175, FC]
Legitimate children may establish their filiation (1) For actions based on primary evidence, the
by any of the following [Art. 172, FC]: same periods stated in Art. 173 apply.
(1) Primary Evidence (2) For actions based on secondary evidence,
(a) Their record of birth appearing in the the action may only be brought during the
civil registry. lifetime of the alleged parent.
(b) An admission of his filiation by his
parent in a public document or a private Baptismal certificates are given probative value
handwritten instrument and signed by only for births before 1930. Birth certificates
said parent must be signed by the parents and sworn for it
(2) Secondary Evidence to be admitted as evidence. [Mendoza v. Melia
(a) Proof of open and continuous (1966)]
PAGE 54
Mere possession of status as an illegitimate

Unsigned birth certificates are not evidence of child does not make a recognized illegitimate
recognized filiation. [Baluyut v. Baluyut (1990)] child but is only a ground for bringing an action
to compel judicial recognition by the assumed
Baptismal certificates are only conclusive of the parent. [Gono-Javier vs. Court of Appeals (1994)]
sacrament administered, and cannot be used as
proof of filiation. [Acebedo v. Arquero (2003)] DNA evidence can still be used even after the
death of the parent. [Estate of Rogelio Ong v.
Marriage certificates cannot be used as proof of Diaz (2007)]
filiation. [Lim v. CA (1975)]
There are four significant procedural aspects of
Rule 130, Sec. 40 is limited to objects commonly a traditional paternity action that parties have
known as family possessions reflective of a to face: a prima facie case, affirmative defenses,
family's reputation or tradition regarding presumption of legitimacy, and physical
pedigree like inscriptions on tombstones, resemblance between the putative father and
monuments, or coffin plates. [Jison v. CA (1998)] the child. A prima facie case exists if a woman
declaressupported by corroborative proof
Signature of the father on the birth certificate is that she had sexual relations with the putative
considered as an acknowledgement of paternity father; at this point, the burden of evidence
and mere presentation of a duly authenticated shifts to the putative father. Further, the two
copy of such certificate will successfully affirmative defenses available to the putative
establish filiation. [Eceta v. Eceta (2004)] father are: (1) incapability of sexual relations
with the mother due to either physical absence
Su padre (Your father) ending in a letter is or impotency, or (2) that the mother had sexual
only proof of paternal solicitude and not of relations with other men at the time of
actual paternity. Signature on a report card conception. [Gotardo v. Buling (2012)]
under the entry of Parent/Guardian is likewise
inconclusive of open admission. [Heirs of To prove open and continuous possession of the
Rodolfo Baas v. Heirs of Bibiano Baas (1985)] status of an illegitimate child, there must be
evidence of the manifestation of the permanent
By open and continuous possession of the intention of the supposed father to consider the
status of a legitimate child is meant the child as his, by continuous and clear
enjoyment by the child of the position and manifestations of parental affection and care,
privileges usually attached to the status of a which cannot be attributed to pure charity.
legitimate child, like bearing the paternal [Perla v. Baring and Perla (2012)]
surname, treatment by the parents and family
of the child as legitimate, constant attendance Meanwhile, the lack of participation of the
to the child's support and education, and giving supposed father in the preparation of a
the child the reputation of being a child of his baptismal certificate renders this document
parents. [De Jesus v. Syquia (1933)] incompetent to prove paternity. Baptismal
certificates are per se inadmissible in evidence
DNA evidence can be used as proof of paternity. as proof of filiation and they cannot be admitted
[Agustin v. CA (2005)] indirectly as circumstantial evidence to prove
the same. [Perla v. Baring and Perla (2012)]
The due recognition of an illegitimate child in a
record of birth, a will, a statement before a court RIGHTS OF ILLEGITIMATE CHILDREN
of record, or in any authentic writing, is in itself a [Art. 176, FC]
consummated act of acknowledgement of the (1) Use the surname and be under the parental
child, and no further court action is required. [De authority of the mother
Jesus v. Estate of Decedent Juan Gamboa Dizon (2) However, may use the surname of their
(2001)] father if
PAGE 55
(a) Their filiation has been expressly (3) Legitimation of children who died before the
recognized by the father through the celebration of the marriage shall benefit
record of birth appearing in the civil their descendants [Art. 181, FC]
register; or
(b) There is an admission in a public GROUNDS FOR IMPUGNING
document or private handwritten LEGITIMATION
instrument made by the father. (1) The subsequent marriage of the child's
(c) Provided, the father has the right to parents is void.
institute an action before the regular (2) The child allegedly legitimated is not
courts to prove non-filiation during his natural.
lifetime [RA 9255] (3) The child is not really the child of the
alleged parents. [Sempio-Dy]
The use of the word may in Art. 176 readily
shows that an acknowledged illegitimate
child is under no compulsion to use the
RIGHTS
The same as those of legitimate children [Art.
surname of his illegitimate father. The word
179, FC]
may is permissive and operates to confer
discretion upon the illegitimate children.
[Grande v. Antonio (2014)] IMPUGNING LEGITIMATION [Art. 182,
FC]
(3) Shall be entitled to support in conformity (1) May be made only by those who are
with the Family Code prejudiced in their rights
(4) Legitime shall consist of one-half of the (2) Within five years from the time their cause
legitime of a legitimate child. of action accrues
LEGITIMATED CHILDREN Adoption

Legitimated children are illegitimate children
who because of the subsequent marriage of Legitimation Adoption
their parents are, by legal fiction, considered Legal effect
legitimate. The law merely makes The law creates by
legal what exists by fiction a relation which
TO BE CAPABLE OF LEGITIMATION nature did not in fact exist
(1) The child must have been conceived and Persons affected
born outside of wedlock; and Natural children Strangers (generally)
(2) The parents, at the time of the child's Procedure
conception, were not disqualified by any Extrajudicial acts of Always by judicial
impediment to marry each other, or parents decree
disqualified only because either or both of Who should apply
them were below 18 y.o. [Art. 177 as Both parents, with
amended by RA 9858] exceptions allowing
Both parents
only one of them to
apply [RA 8552]
PROCEDURE AND EFFECTS Effect on parent-child relationship
(1) Legitimation shall take place by a Same status and
subsequent valid marriage between the rights with that of a
parents. The annulment of a voidable Creates a relationship
legitimate child not
marriage shall not affect the legitimation. only between the child
only in relation to the
[Art. 178, FC] and the adopting
legitimizing parents
(2) Effects of legitimation shall retroact to the parents
but also to other
time of the childs birth [Art. 180, FC] relatives
PAGE 56
Adoption a juridical act, which creates (5) Has submitted all the necessary clearances
between two persons a relationship similar to and such certifications as may be required
that which results from legitimate paternity and
filiation. **Items 3, 4 and 5 may be waived under the
following circumstances:
It requires a proceeding in rem, and may only be (1) Adopter is a former Filipino Citizen who
proven by a judicial decree issued by a court of seeks to adopt a relative within the 4th
competent jurisdiction, not by open and degree of consanguinity or affinity
continuous cohabitation. (2) Adopter seeks to adopt the legitimate or
illegitimate child of his/her Filipino spouse
REPUBLIC ACT NO. 8552 (3) Adopter is married to a Filipino Citizen and
seeks to adopt jointly with his/her spouse a
DOMESTIC ADOPTION LAW relative within the 4th degree of
(FEBRUARY 25, 1998) consanguinity or affinity of the Filipino
spouse
WHO CAN ADOPT
GUARDIANS
FILIPINO CITIZENS [Sec. 7a] With respect to their wards, after the
(1) Of legal age termination of the guardianship and clearance
(2) With full civil capacity and legal rights of his/her accountabilities.
(3) Of good moral character and has not been
convicted of any crime involving moral JOINT ADOPTION
turpitude General rule: Husband and wife shall adopt
(4) Emotionally and psychologically capable of jointly.
caring for children
(5) At least sixteen (16) years older than Exceptions:
adoptee, except when adopter is biological (1) If one spouse seeks to adopt the legitimate
parent of the adoptee or is the spouse of the child of the other
adoptees parent (2) If one of the spouses seeks to adopt his/her
(6) In a position to support and care for his/her illegitimate child provided that the other
children in keeping with the means of the spouse has signified his/her consent
family (3) If spouses are legally separated from each
(7) Has undergone pre-adoption services other
ALIENS [Sec. 7b] If spouses jointly adopt, parental authority shall

Same for Filipinos provided further that: be jointly exercised by them.
(1) His/her country has diplomatic relations
with the Philippines WHO CAN BE ADOPTED [Sec. 8]
(2) Has been living in the Philippines for 3 (1) Minor who has been administratively or
continuous years prior to the filing of judicially declared available for adoption
application and maintains such residence (2) Legitimate child of one spouse by another
until the decree is entered (provided that (3) Illegitimate child by a qualified adopter to
absences not exceeding 60 days per 1 year improve the childs status to that of
for professional, business, or emergency legitimacy
reasons are allowed) (4) A person of legal age if, prior to the
(3) Has been certified by his/her diplomatic or adoption, said person has been consistently
consular office or any appropriate considered and treated by the adopter(s) as
government agency that he/she has the his/her child since minority
legal capacity to adopt in his/her country (5) A child whose previous adoption has been
(4) His/her government allows the adoptee to rescinded
enter his/her country as his/her adoptee (6) A child whose biological or adoptive
parent(s) has died, provided that no
PAGE 57
proceedings shall be initiated within 6 PRE-ADOPTION PROCEDURES

months from the time of death of said
parent(s) VOLUNTARY COMMITMENT OF BIOLOGICAL
MOTHER WANTING TO PUT HER CHILD UP
EXCEPTIONS TO THE REQUIREMENT OF A FOR ADOPTION
CERTIFICATION THAT THE CHILD IS
AVAILABLE FOR ADOPTION [Sec. 4] Counseling on her options other than
(1) Adoption of an illegitimate child by his/her adoption
biological parent;
(2) Adoption of a child by his/her stepparent;
(3) Adoption by a relative within the 4th civil
degree by consanguinity or affinity Explaining to her the implications of losing
her parental authority over the child
PERSONS WHOSE WRITTEN CONSENT IS
NECESSARY FOR ADOPTION [Sec. 9]
(1) The prospective adoptee if 10 years or older Continuing services shall be provided after
(2) The prospective adoptees biological relinquishment to cope with feelings of
parents, legal guardian or the government loss, etc. and other services for his/her
instrumentality or institution that has reintegration to the community
custody of the child
(3) The prospective adopters legitimate and
adopted children who are 10 years or older
(4) The prospective adopters illegitimate Biological parent(s) who decide to keep the
children, if any, who are 10 years or older child shall be provided with adequate
and living with them services and assistance to fulfill their
(5) The spouse, if any, of the person adopting or parental responsibilities
to be adopted.
A decree of adoption shall be effective as of the

Biological parent(s) who decide to put the
date the original petition was filed. It also child for adoption shall sign the Deed of
applies in case the petitioner dies before the Voluntary Commitment (DVC) which shall
issuance of the decree of adoption to protect be rescissible within 3 months from signing
the interest of the adoptee. of the same
PAGE 58
INVOLUNTARY COMMITMENT OF ADOPTION PROCEDURES

ABANDONED OR NEGLECTED CHILD
Inquiry of prospective adopters at DSWD
Filing of a petition at Regional DSWD in
the form of an affidavit and with the
required supporting documents Attendance of DSWD Adoption For a and
Seminars (include counseling)
Posting of the petition, then

recommendation by the Regional Application for Adoption
Director of the DSWD (5 days each)
Case Study Report

Issuance of certification by DSWD
Secretary declaring the child legally
available for adoption Certificate of Availability for Adoption
Matching
REQUIRED SUPPORTING DOCUMENTS FOR
A PETITION FOR THE DECLARATION OF
INVOLUNTARY COMMITMENT Placement
(1) Social Case Study Report by
DSWD/LGU/institution charged with childs
custody Supervised Trial Custody
(2) Proof of efforts to locate the childs
parents/known relatives
(a) Written certification that a Home Study Report
local/national radio/TV case was aired
on 3 different occasions
(b) Publication in 1 newspaper of general Recommendation and Consent of DSWD
circulation
(c) Police report / barangay certification of
due diligence File Petition for Adoption within 30 days
(d) Returned registered mail to last known from Receipt of Consent from DSWD
address of parents
(3) Birth certificate, if available
(4) Recent photo and photo upon
abandonment of child Adoption Decree
After the decree of adoption, the court may also

issue a travel authority, if needed; DSWD to
provide post adoption services.
The case study report by the DSWD/LGU is

indispensable. Without it, the adoption decree
shall be void. [DSWD v. Judge Belen (1997)]
PAGE 59
WHO MAY NOT ADOPT/ BE (5) When only collateral blood relatives survive,
ADOPTED ordinary rules of legal or intestate succession
shall apply
Art. 184 (as amended by RA 8552), FC.
The following may not adopt: NAME
(1) The guardian, with respect to the ward, prior
to the approval of the final accounts Art. 365, CC. An adopted child shall bear the
rendered upon the termination of the surname of the adopter.
guardianship
(2) Any person convicted of a crime of moral RA 8552 allows the change of first name to be
turpitude instituted in the same proceeding as the
RIGHTS OF AN ADOPTED CHILD adoption: the decree of adoption shall state
the name by which the child is to be known.
PARENTAL AUTHORITY
NATIONALITY
Except in cases where the biological parent is
Adoption does not confer citizenship: Philippine
the adopters spouse, all legal ties between
citizenship may be lost/acquired [only] in the
biological parent and adoptee shall be severed,
manner provided by law. [Sec. 3, Art. 4,
and the same shall then be vested on the
Constitution]
adopters. [Sec. 16]
The right to confer citizenship belongs to the
LEGITIMACY
State (political) and cannot be granted by a
The adoptee shall be considered the legitimate
citizen through adoption. Adoption creates a
son/daughter of the adopters for all intents and
relationship between the adopter and adoptee,
purposes, and as such is entitled to all rights
not between the State and the adoptee.
and obligations provided by law to legitimate
children born to them without discrimination of
any kind. [Sec. 17] RESCISSION OF ADOPTION
Adoptee may file action for rescission, with the
SUCCESSION assistance of DSWD if he/she is a minor or over
In legal and intestate succession, the adopter 18 but incapacitated, based on the following
and the adoptee shall have reciprocal rights of grounds [Sec. 19]:
succession without distinction from legitimate (1) Repeated physical and verbal maltreatment
filiation. However, if the adoptee and his/her by adopters despite having undergone
biological parents had left a will, the law on counseling
testamentary succession shall govern. [Sec. 18] (2) Attempt on life of adoptee
(3) Sexual assault or violence
Art. 190, FC as amended. Rules on legal or (4) Abandonment or failure to comply with
intestate succession to the estate of the parental obligations
adoptee:
(1) Legitimate and illegitimate children, Adoption, being in the best interest of the child,
descendants and the surviving spouse of the shall not be subject to rescission by the adopter.
adoptee shall inherit in accordance with the However, the adopter may disinherit the child
ordinary rules of legal/intestate succession based on these causes [Art. 919, CC]:
(2) When the surviving spouse OR illegitimate (1) Conviction of an attempt on the life of the
children AND adopters concur, they shall adopter
inherit on a 50-50 basis (2) Having accused, without grounds, the
(3) When the surviving spouse AND illegitimate adopter of a crime punishable by
children AND adopters concur, they shall imprisonment for more than 6 years
inherit on a 1/3-/1/3-1/3 basis (3) Conviction of adultery/concubinage with
(4) When only adopters survive, they shall the adopters spouse
inherit 100% of the estate
PAGE 60
(4) Having caused the adopter to make or punished for such act, PROVIDED [Sec. 22 (RA
change a will by force, intimidation or undue 8552)]:
influence (1) The simulation was for the childs best
(5) Refusal without just cause to support the interest
adopter (2) Child has been treated consistently as his
(6) Maltreatment of the adopter by word/deed own
(7) Living a dishonorable/disgraceful life (3) Petition filed within 5 years of RA 8552s
(8) Conviction of a crime which carries with it effectivity (2003)
the penalty of civil interdiction
THREE-IN-ONE PROCEDURE
EFFECTS OF RESCISSION [Sec. 20]: (1) Correction of entries in birth certificate
(1) Parental authority of the adoptee's (2) Deed of Voluntary Commitment or
biological parents, if known, OR the legal Declaration of abandonment
custody of the DSWD shall be restored if the (3) Adoption decree
adoptee is still a minor or incapacitated
(2) Reciprocal rights and obligations of the REPUBLIC ACT NO. 8043
adopters and the adoptee shall be
extinguished THE LAW ON INTER-COUNTRY
(3) Court shall order the Civil Registrar to ADOPTION
cancel the amended certificate of birth of (JUNE 7, 1995)
the adoptee and restore his/her original
birth certificate
Inter-country Adoption the socio-legal process
(4) Succession rights shall revert to its status
of adopting a Filipino child by a foreigner or a
prior to adoption, but only as of the date of
Filipino citizen permanently residing abroad
judgment of judicial rescission
where the petition is filed, the supervised trial
(5) Vested rights prior to judicial rescission
custody is undertaken, and the decree of
shall be respected
adoption is issued outside the Philippines.
Rescission contemplates a situation where the
adoption decree remains valid until its WHO CAN ADOPT
termination. Any foreign national or a Filipino citizen
permanently residing abroad who has the
qualifications and none of the disqualifications
RECTIFICATION OF SIMULATED under the Act may file an application if he/she:
BIRTH (1) Is at least 27 years of age and at least 16
Simulation of birth is the tampering of LCR years older than the child to be adopted, at
records to make it appear that a certain child the time of application unless the adopter is
was born to a person who is not his/her the parent by nature of the child to be
biological parent, causing said child to lose adopted or the spouse of such parent;
his/her true identity/status. (2) If married, his/her spouse must jointly file
for the adoption;
Sec. 21-b (RA 8552). Any person who shall cause (3) Has the capacity to act and assume all
the fictitious registration of the birth of a child rights and responsibilities of parental
under the name(s) of a person(s) who is not authority under his national laws, and has
his/her biological parent(s) shall be guilty of undergone the appropriate counseling from
simulation of birth, and shall be punished by an accredited counselor in his/her country;
prision mayor in its medium period and a fine (4) Has not been convicted of a crime involving
not exceeding P50,000.00. moral turpitude;
(5) Is eligible to adopt under his/her national
A person who has, prior to the effectivity of RA law;
8552, simulated the birth of a child shall not be (6) Is in a position to provide the proper care
and support and to give the necessary
PAGE 61
moral values and example to all his advantage in favor of the adopted child. In the
children, including the child to be adopted; instant case, however, to hold that parental
(7) Agrees to uphold the basic rights of the authority had been retroactively lodged in the
child as embodied under Philippine laws, adopting parents so as to burden them with
the U.N. Convention on the Rights of the liability for a tortuous act that they could not
Child, and to abide by the rules and have foreseen and which they could not have
regulations issued to implement the prevented would be unfair and unconscionable.
provisions of this Act; [Tamargo v. CA (1992)]
(8) Comes from a country with whom the
Philippines has diplomatic relations and Adoption is a juridical act, proceeding in rem.
whose government maintains a similarly Because it is artificial, the statutory
authorized and accredited agency and that requirements in order to prove it must be strictly
adoption is allowed under his/her national carried out. Petition must be announced in
laws; publications and only those proclaimed by the
(9) Possesses all the qualifications and none of court are valid. Adoption is never presumed.
the disqualifications provided in applicable [Lazatin v. Campos (1979)]
Philippine laws.
Validity of facts behind a final adoption decree
WHO CAN BE ADOPTED cannot be collaterally attacked without
Only a legally-free child may be the subject of impinging on that courts jurisdiction. [Santos v.
inter-country adoption. Aranzanso (1966)]
Legally-free child one who has been Participation of the appropriate government
voluntarily or involuntarily committed to the instrumentality in performing the necessary
DSWD of the Philippines, in accordance with the studies and precautions is important and is
Child and Youth Welfare Code. indispensable to assure the childs welfare.
[DSWD v. Belen (1997)]
No child shall be matched to a foreign adoptive
family unless it is satisfactorily shown that the Consent for adoption must be written and
child cannot be adopted locally (last resort). notarized. [Landingin v. Republic (2006)]
In order that such child may be considered for Adopted children do not have a right to
placement, the following documents must be represent their adopters in successional
submitted to the Board: interests. Although an adopted child is deemed
(1) Child study to be a legitimate child and have the same
(2) Birth Certificate / Foundling Certificate rights as the latter, these rights do not include
(3) Deed of Voluntary Commitment/ Decree of the right of representation (because the
Abandonment/ Death Certificate of parents adopted child has no right to inherit from the
(4) Medical Evaluation / History grandparent). The relationship created by the
(5) Psychological Evaluation, as necessary adoption is between only the adopting parents
(6) Recent photo of the child and the adopted child. It does not extend to the
blood relatives of either party. [Sayson v. CA
Where the petition for adoption was granted (1992)]
after the child had shot and killed a girl, the
Supreme Court did not consider the retroactive
effect given to the decree of adoption so as to
impose a liability upon adopting parents at a
time when adopting parents had no actual or
physically custody over the child. Retroactive
effect may perhaps be given to the granting of
the petition for adoption where such is essential
to permit the accrual of some benefit or
PAGE 62
Support The order of liability among ascendants and

descendants would be:
(1) Legitimate children and descendants,
WHAT IT COMPRISES (2) Legitimate parents and ascendants,
Consists of everything indispensable for (3) Illegitimate children and their descendants.
sustenance, dwelling, clothing, medical [Tolentino]
attendance, education and transportation, in
keeping with the financial capacity of the family. When two or more are obliged to give support,
[Art. 194, FC] the payment shall be divided between them in
Education includes a persons schooling or proportion to their resources;
training for some profession, trade or
vocation, the right to which shall subsist Also, in case of urgent need and by special
beyond the age of majority. [Art. 194, FC] circumstances, judge may order only one
Transportation includes expenses in going to obligor to furnish support without prejudice to
and from school, or to and from place of work. reimbursement from other obligors of the share
[Art. 194, FC] due from them [Art. 200, FC].
If there are multiple recipient sand only one

WHO ARE OBLIGED obligor, and the latter has no sufficient means to
To support each other: satisfy all claims:
(1) Spouses; (1) Observe order in Article 199 as to whose
(2) Legitimate ascendants and descendants; claim shall be satisfied first;
(3) Parents and their children (legitimate and (2) But if the concurrent obligees are the
illegitimate) and the children of the latter spouse and a child subject to parental
(legitimate and illegitimate); authority, the child shall be preferred. [Art.
(4) Legitimate brothers and sisters, whether of 200, FC]
full or half-blood; [Art. 195, FC]
(5) Illegitimate brothers and sisters, whether of The above preference given to a child under
full or half-blood, except when the need for parental authority over the spouse should
support of one (of age) is due to a cause prevail only if the person obliged to support
imputable to his/her fault or negligence. pays it out of his separate property. So if the
[Art. 196, FC] support comes from ACP or CPG, the above rule
of preference for the child does not apply.
Both legitimate and illegitimate children are [Tolentino]
entitled to support.
Even if the parents-in-law were the ones who
PROPERTIES ANSWERABLE FOR called for the physicians services for the
SUPPORT childbirth of their daughter-in-law, it is the
From the separate property of the obligor. If no womans husband who is bound to pay the fees
separate property, the ACP/CPG (if financially due to the physician. [Pelayo v. Lauron (1909)]
capable) shall advance the support, to be
deducted from the obligors share upon Man is still liable for support in arrears since the
liquidation of such regime. [Art. 197, FC] mother advanced it from a stranger (the uncle
of the daughters). [Lacson v. San Jose-Lacson
ORDER OF SUPPORT (1968)]
If there are multiple obligors [Art. 199, FC]:
Acknowledgment of and commitment to
(1) Spouse
comply with support obligation through a note
(2) Descendants, nearest in degree
in his own handwriting is proof that a demand
(3) Ascendants, nearest in degree
was made. [Lacson v. Lacson (2006)]
(4) Brothers and Sisters
PAGE 63
The amount of support is variable and, for this spouses ceases. (But in legal separation, court
reason, no final judgment on the amount of may order guilty spouse to give support to
support is made as the amount shall be in innocent spouse.) [Art. 198, FC]
proportion to the resources or means of the
giver and the necessities of the recipient. Note: De facto separation does not affect the
[Gotardo v. Buling (2012)] ACP and the CPG, except that the spouse who
leaves the conjugal home without just cause
STRANGER GIVES SUPPORT shall not be entitled to support. [Art. 100, FC]
When, without the knowledge of the person
obliged to give support, it is given by a stranger, AMOUNT
the stranger has the right to claim the same The amount of support is in proportion to the
from the person obliged, unless it appears that means of the provider and the needs of the
he gave it without intention of being receiver, and can be reduced or increased if such
reimbursed. [Art. 206, FC] circumstances change. [Arts. 201, 202, FC]
PERSON OBLIGED REFUSES OR WHEN DEMANDABLE

FAILS TO GIVE SUPPORT The obligation to give support shall be
When the person obliged to give support demandable from the time the person who has
unjustly refuses or fails to give support when a right to receive the same needs it for
urgently needed, any third person may furnish maintenance, but it shall not be paid except
support to the needy individual, with right of from the date of judicial or extra-judicial
reimbursement from the person obliged to give demand. [Art. 203, FC]
support. This particularly applies when the
father or mother of a minor child unjustly Support pendente lite may be claimed in
refuses to support or fails to give support to the accordance with the Rules of Court. [Art. 203,
child when urgently needed. [Art. 207, FC] FC]
CONTRACTUAL SUPPORT OR THAT Payment shall be made within the first 5 days of
GIVEN BY WILL each corresponding month. When the recipient
The excess in amount beyond that required for dies, his heirs shall not be obliged to return
legal support shall be subject to levy on what he has received in advance. [Art. 203, FC]
attachment or execution. [Art. 208, FC]
OPTIONS
Reason: The amount of support agreed upon in (1) Payment of the amount; or
the contract or given in the will can be more (2) Receiving and maintaining the recipient in
than what the recipient needs [Sempio-Diy]. the home of the provider, unless there is a
legal or moral obstacle for doing so.
Furthermore, contractual support shall be
subject to adjustment whenever modification is
necessary due to changes in circumstances
ATTACHMENT
The right to receive support as well as any
manifestly beyond the contemplation of the
money or property obtained as such support
parties. [Art. 208, FC]
shall not be levied upon on attachment or
execution. [Art. 205, FC]
SUPPORT DURING MARRIAGE
LITIGATION This is to protect that which the law gives to the
Pending legal separation or annulment, and for recipient against want and misery. [Tolentino]
declaration of nullity, support pendente lite for
spouses and children will come from the
ACP/CPG. After final judgment granting the
petition, mutual support obligation between
PAGE 64
Parental Authority (2) Cannot be renounced, transferred or

waived, except in cases authorized by law
[Art. 210, FC]
GENERAL PROVISIONS (3) Jointly exercised by the father and the
Parental authority is the mass of rights and mother [Art. 211, FC]
obligations which parents have in relation to the (4) Purely personal and cannot be exercised
person and property of their children until their through agents
emancipation, and even after this under certain (5) Temporary
circumstances [Manresa].
PARENTAL PREFERENCE RULE
PARENTAL AUTHORITY INCLUDES The natural parents, who are of good character
[Art. 209]: and who can reasonably provide for the child,
(1) The caring for and rearing of children for are ordinarily entitled to custody as against all
civic consciousness and efficiency; persons. [Santos v. CA (1995)]
(2) The development of the moral, mental and
physical character and well-being of said WHO EXERCISES AUTHORITY IN
children CASES OF DEATH, ABSENCE,
UNSUITABILITY, REMARRIAGE, OR
Parental authority and responsibility may not be
renounced or transferred except in the cases
SEPARATION OF PARENTS
(1) In case one parent is absent or already dead,
authorized by law. [Art. 210, FC]
the present or surviving parent [Art. 212, FC]
Remarriage of the surviving parent shall
CASES WHEN PARENTAL not affect his/her parental authority over
AUTHORITY AND RESPONSIBILITY the children, unless the court appoints
MAY BE TRANSFERRED OR another person to be the guardian of the
RENOUNCED children or their property [Art. 212, FC]
(1) Adoption; (2) In case of a void/annulled marriage, and
(2) Guardianship; or there is no agreement between spouses, the
(3) Commitment of the child in an entity or parent designated by the court [Art. 43(1),
institution engaged in childcare or in a FC; Art. 49, FC]
childrens home. (3) Innocent spouse gets custody of minor
children in legal separation [Art. 63(3), FC]
RULES AS TO THE EXERCISE OF (4) The court shall take into account all
PARENTAL AUTHORITY relevant considerations, especially the
(1) Jointly exercised by the father and mother choice of the child over seven years of age,
overt heir common children, but in case of unless the parent chosen is unfit [Art. 213(1),
FC]
disagreement, the father's decision shall
(5) Substitute parental authority [Art. 214, FC]
prevail, unless there is a judicial order to the
(a) In case of death, absence or
contrary [Art. 211, FC]
unsuitability of the parents, substitute
(2) Exercised by the mother if the child is
parental authority shall be exercised by
illegitimate [Art.176, FC]
the surviving grandparent
(3) Children under parental authority shall
always observe respect and reverence (b) When several grandparents survive, the
towards their parents and are obliged to one designated by the court shall
exercise parental authority, taking into
obey them [Art. 211, FC]
account all relevant considerations,
especially the choice of the child over
CHARACTERISTICS OF PARENTAL seven years of age, unless the
AUTHORITY grandparent chosen is unfit
(1) Natural right and duty of parents [Art. 209,
FC]
PAGE 65
DESCENDANTS PRIVILEGE OF SUBSTITUTE PARENTAL AUTHORITY

REFUSAL TO TESTIFY [Art. 215, FC] OVER DISADVANTAGED CHILDREN
General rule: No descendant shall be [Art. 217, FC]
compelled, in a criminal case, to testify against Entrusted in summary judicial proceedings to:
his parents and grandparents. (1) Heads of childrens homes
(2) Orphanages
Exception: When such testimony is (3) Similar institutions duly accredited by the
indispensable in: proper government agency (such as the
(1) a crime against the descendant, or DSWD)
(2) a crime by one parent against the other.
WHO ARE DISADVANTAGED CHILDREN
TENDER YEARS PRESUMPTION (1) Foundlings
No child under 7 years of age shall be separated (2) Abandoned
from the mother, unless the court finds (3) Neglected
compelling reasons to order otherwise. [Art. (4) Abused
213(2); Gamboa v. CA (2007)] (5) Others similarly situated
Examples of compelling reasons are: PERSONS EXERCISING SPECIAL

(1) When the mother is insane; PARENTAL AUTHORITY [Art. 218, FC]
(2) With a communicable disease that might (1) School, its administrators and teachers; or
endanger the life or health of the child; (2) The individual, entity or institution engaged
(3) Is maltreating the child; or in childcare
(4) Has another child by another man who lives
with her. [Cervantes v. Fajardo (1989)] Note: Exercised over minor child while under
their supervision, instruction or custody.
Alleged lesbianism [Gualberto v. Gualberto
(2005)], prostitution or infidelity to husband Substitute Parental Special Parental
does not necessarily make a mother unfit as Authority Authority
parent. It must be shown that such lesbianism, It is exercised
prostitution or infidelity adversely affects the concurrently with the
child. parental authority of
the parents and rests
SUBSTITUTE AND SPECIAL It is exercised in case
on the theory that
PARENTAL AUTHORITY while the child is in the
of death, absence, or
custody of the person
in case of unsuitability
exercising special
PERSONS EXERCISING SUBSTITUTE of parents.
parental authority, the
PARENTAL AUTHORITY IN DEFAULT parents temporarily
OF PARENTS OR JUDICIALLY relinquish parental
APPOINTED GUARDIAN authority over the
In order: child to the latter.
(1) The surviving grandparent [Art. 214, FC]
(2) Oldest brother or sister, over 21 years old, The special parental authority and responsibility
unless unfit or unqualified. applies to all authorized activities, whether
(3) Childs actual custodian, over 21 years old, inside or outside the premises of the school,
unless unfit or unqualified. entity or institution. [St. Marys Academy v.
Carpitanos (2002)
The same order applies to the appointment of
judicial guardian over the property of the child.
PAGE 66
LIABILITY OF THOSE EXERCISING (4) To administer their property and to use the
SPECIAL PARENTAL AUTHORITY fruits and income for the support of the
children and collective daily needs of the
OVER THE CHILD [Art. 219, FC] family [Art. 225 and 226, FC]
(1) Principal and solidary liability for damages
(5) To give or withhold consent to their
caused by the acts or omissions of the minor
marriage, their marriage settlements, their
child while under their special parental
donations by reason of marriage, adoption,
authority
and employment [Tolentino]
(2) Subsidiary liability for the parents and
(6) To disinherit them for just cause [Tolentino]
judicial guardians of the minor, or those
exercising substitute parental authority over
Art. 220 which states that the parent has a right
such minor for his acts and omissions
to impose necessary discipline on the child does
not authorize the parent to invade or disregard
Both groups can use the defense that they
the childs honor and dignity under the mask of
exercised proper diligence to avoid liability
discipline. Such acts can never be justified as
parental punishment. [People v. Silvano (1999)]
DOCTRINE OF VICARIOUS LIABILITY
[Art. 2180 (2, 3, 7, 8), CC] DUTIES OF PARENTS UPON THE
(1) The father, and in case of his death, the
mother are responsible for the damages PERSON OF THE CHILDREN
caused by their minor children who live in (1) To support them, providing for their
their company upbringing in accordance with their means
(2) Guardians are liable for damages caused by [Art. 220, FC]
the minors or incapacitated persons who (2) To educate, instruct, and provide them with
are under their authority and live in their moral and spiritual guidance and love and
company understanding [Art. 220, FC]
(3) Teachers or heads of establishments of arts (3) To furnish them with good and wholesome
and trades shall be liable for damages educational materials, supervise their
caused by their pupils and students or activities, recreation and association with
apprentices, so long as they remain in their others, protect them from bad company,
custody and prevent them from acquiring habits
detrimental to their health [Art. 220, FC]
Responsibility in Art. 2180 shall cease when the (4) To perform such other duties as are
persons responsible mentioned prove that they imposed by law [Art. 220, FC]
observed all the diligence of a good father of (5) To give their lawful inheritance [Tolentino]
the family (6) To protect them from unlawful aggression
[Tolentino]
(7) To answer for damages caused by their fault
EFFECT OF PARENTAL or negligence and for the civil liability for
AUTHORITY UPON THE crimes committed by them. [Art. 221, FC]
PERSONS OF THE CHILDREN
SUBSTITUTE REPRESENTATION
RIGHTS OF PARENTS UPON THE The courts may appoint a guardian of the childs
property, or a guardian ad litem when the best
PERSON OF THE CHILDREN interests of the child so requires. [Art. 222, FC]
(1) To keep them in their company [Art. 220,
FC]
(2) To represent them in all matters affecting
COURT ASSISTANCE IN THE
their interests [Art. 220, FC] DISCIPLINE OF THE CHILD
(3) To demand from them respect and (1) The parents or, in their absence or
obedience and impose necessary discipline incapacity, the individual, entity or
on them [Art. 220, FC] institution exercising parental authority,
may petition the proper court of the place
PAGE 67
where the child resides, for an order bond of not less than 10% of the value of
providing for disciplinary measures over the the childs property or annual income.
child. [Art. 223, FC]
(2) The child shall be entitled to the assistance PROCEDURE IN THE APPROVAL OF
of counsel, either of his choice or appointed THE PARENTS BOND [Art. 225, FC]
by the court, and a summary hearing shall (1) A verified petition for approval of the bond
be conducted wherein the petitioner and shall be filed in the proper court of the place
the child shall be heard. [Art. 223, FC] where the child resides.
(3) If the court finds the petition meritorious, (2) If the child resides in a foreign country, the
disciplinary measures may include the petition shall be filed in the proper court of
commitment of the child for not more than the place where the property or any part
30 days in entities or institutions engaged in thereof is situated.
childcare or in childrens homes duly (3) The petition shall be docketed as a
accredited by the proper government summary special proceeding. The court
agency. [Art. 224, FC] shall determine the amount of the bond,
The parent exercising parental authority but shall not be less than 10% of the market
shall not interfere with the case of the value of the childs property or of his annual
child whenever committed but shall income.
provide for his support. [Art. 224, FC]
Upon proper petition or at its own OWNERSHIP OF CHILDS
instance, the court may terminate the
commitment of the child whenever just
ACQUISITIONS
The property of the unemancipated child earned
and proper. [Art. 224, FC]
or acquired with his work or industry or by
(4) If the court finds the petitioner at fault,
onerous or gratuitous title shall belong to the
irrespective of the merits of the petition, or
child in ownership and shall be devoted
when the circumstances so warrant, the
exclusively to the latters support and education,
court may also order the deprivation or
unless the title or transfer provides otherwise.
suspension of parental authority or adopt
[Art. 226, FC]
such other measures as it may deem just
and proper. [Art. 223, FC]
PARENTS USUFRUCT
The right of the parents over the fruits and
EFFECTS OF PARENTAL income (not the property itself) of the childs
AUTHORITY UPON THE property shall be limited primarily to the childs
PROPERTY OF THE CHILDREN support and secondarily to the collective daily
[Art. 225, FC] needs of the family. [Art. 226, FC]
(1) The father and mother shall jointly exercise
legal guardianship over the property of the WHEN PARENTS ENTRUST THE
minor common child without court MANAGEMENT OF THEIR
appointment. PROPERTIES TO A CHILD [Art. 227, FC]
(2) In case of disagreement, the fathers If the parents entrust the management or
decision shall prevail, unless there is judicial administration of any of their properties to an
order to the contrary. unemancipated child, the net proceeds of
(3) The ordinary rules on guardianship shall be such property shall belong to the owner.
merely suppletory except when the child is The child shall be given a reasonable monthly
under substitute parental authority, or the allowance in an amount not less than that
guardian is a stranger, or a parent has which the owner would have paid if the
remarried, in which case the ordinary rules administrator were a stranger, unless the
on guardianship shall apply. owner grants the entire proceeds to the child.
(4) If the market value of the property or the
annual income of the child exceeds
P50,000, the parent is required to furnish a
PAGE 68
In any case, the proceeds thus given in whole (5) Subjects the child or allows him to be
or in part shall not be charged to the childs subjected to acts of lasciviousness
legitime.
The aforesaid grounds are to include cases
SUSPENSION OR TERMINATION which resulted from culpable negligence of the
parent or the person exercising parental
OF PARENTAL AUTHORITY; authority.
RA 7610, CHILD ABUSE LAW
If the degree of seriousness or the welfare of the
PARENTAL AUTHORITY child so demands, the court may deprive the
guilty party of parental authority or adopt such
PERMANENTLY TERMINATES other measures as may be proper.
(1) Upon death of parents [Art. 228, FC]
(2) Upon death of child [Art. 228, FC]
(3) Upon emancipation of child [Art. 228, FC] PERMANENT DEPRIVATION OF
(4) If the parents exercising parental authority PARENTAL AUTHORITY ON
has subjected the child or allowed him to be GROUNDS OF SEXUAL ABUSE [Art. 232,
subjected to sexual abuse [Art. 232, FC] FC]
If the person exercising parental authority has
In the case of death of parents, there is no subjected or has allowed the child to be
absolute termination of parental authority subjected to sexual abuse, such person shall be
because while the child is still a minor, the permanently deprived of authority over the
grandparents, brothers and sisters, or a child.
guardian may exercise substitute parental
authority over the child [Art. 216, FC] SCOPE OF SUBSTITUTE AND
SPECIAL PARENTAL AUTHORITY [Art.
TERMINATION OF PARENTAL 233, FC]
AUTHORITY WHICH CAN BE REVIVED The person exercising substitute parental
BY FINAL JUDGMENT [Art. 229, FC] authority shall have the same authority over
(1) Upon adoption of the child; the person of the child as the parents.
(2) Upon the appointment of a general In no case shall the school administrators,
guardian for the child; teacher or individual engaged in childcare
(3) Upon judicial declaration of exercising special parental authority inflict
(a) Abandonment of the child in a case corporal punishment upon the child.
filed for the purpose
(b) Absence or incapacity of the person RA 7610, CHILD ABUSE LAW
exercising parental authority
(4) Upon final judgment of a competent court PERSONS LIABLE
divesting the party concerned of parental (1) Those who engage in or promote, facilitate
authority. or induce child prostitution which include,
but are not limited to, the following:
GROUNDS FOR SUSPENSION OF (a) Acting as a procurer of a child
PARENTAL AUTHORITY [Art. 230 and prostitute;
231, FC] (b) Inducing a person to be a client of a
(1) Conviction of parent for crime which carries child prostitute by means of written or
with it the penalty of civil interdiction oral advertisements or other similar
(2) Treats child with excessive harassment and means;
cruelty (c) Taking advantage of influence or
(3) Gives corrupting orders, counsel, or relationship to procure a child as
example prostitute;
(4) Compels child to beg (d) Threatening or using violence towards a
child to engage him as a prostitute; or
PAGE 69
(e) Giving monetary consideration, goods (10) Any person who engages in the act of
or other pecuniary benefit to a child finding children among low-income
with intent to engage such child in families, hospitals, clinics, nurseries, day-
prostitution. care centers, or other child-caring
(2) Those who commit the act of sexual institutions who can be offered for the
intercourse of lascivious conduct with a purpose of child trafficking
child exploited in prostitution or subject to (11) Any pregnant mother who executes an
other sexual abuse affidavit of consent for adoption for a
(3) Those who derive profit or advantage consideration
therefrom, whether as manager or owner of (12) Any person who shall hire, employ, use,
the establishment where the prostitution persuade, induce or coerce a child to
takes place, or of the sauna, disco, bar, perform in obscene exhibitions and indecent
resort, place of entertainment or shows, whether live or in video, or model in
establishment serving as a cover or which obscene publications or pornographic
engages in prostitution in addition to the materials or to sell or distribute the said
activity for which the license has been materials
issued to said establishment. (13) Any person who shall commit any other acts
(4) Any person who, not being a relative of a of child abuse, cruelty or exploitation or to
child, is found alone with the said child be responsible for other conditions
inside the room or cubicle of a house, an prejudicial to the child's development
inn, hotel, motel, pension house, apartelle (14) Any person who shall keep or have in his
or other similar establishments, vessel, company a minor, 12 years or under or who
vehicle or any other hidden or secluded area is 10 years or more his junior in any public or
under circumstances which would lead a private place, hotel, motel, beer joint,
reasonable person to believe that the child discotheque, cabaret, pension house, sauna
is about to be exploited in prostitution and or massage parlor, beach and/or other
other sexual abuse. tourist resort or similar places
(5) Any person who is receiving services from a Exception: Any person who is related
child in a sauna parlor or bath, massage within the fourth degree of consanguinity
clinic, health club and other similar or affinity or any bond recognized by law,
establishments. local custom and tradition or acts in the
(6) Any person who shall engage in trading and performance of a social, moral or legal
dealing with children including, but not duty
limited to, the act of buying and selling of a (15) Any person who shall induce, deliver or offer
child for money, or for any other a minor to any one prohibited by RA 7610 to
consideration, or barter keep or have in his company a minor.
(7) Any person who lets a child to travel alone (16) Any person, owner, manager or one
to a foreign country without valid reason entrusted with the operation of any public
therefor and without clearance issued by or private place of accommodation, whether
the Department of Social Welfare and for occupancy, food, drink or otherwise,
Development or written permit or including residential places, who allows any
justification from the child's parents or legal person to take along with him to such place
guardian or places any minor herein described.
(8) Any person, agency, establishment or child- (17) Any person who shall use, coerce, force or
caring institution who recruits women or intimidate a street child or any other child
couples to bear children for the purpose of to:
child trafficking (a) Beg or use begging as a means of living;
(9) Any doctor, hospital or clinic official or (b) Act as conduit or middlemen in drug
employee, nurse, midwife, local civil registrar or trafficking or pushing; or
any other person who simulates birth for the (c) Conduct any illegal activities.
purpose of child trafficking
PAGE 70
Emancipation [as amended by RA SEPARATION IN FACT

A verified petition alleging the following facts is
6809]
required when [Art. 239]:
(1) A husband and wife are separated in fact;
Art. 234, FC. Emancipation takes place by the
or,
attainment of majority. Unless otherwise
(2) One has abandoned the other
provided, majority commences at the age of
eighteen years.
SITUATION
Art. 236, FC. Emancipation shall terminate Where one of them seeks judicial authorization
parental authority over the person and property for a transaction where the consent of the other
of the child who shall then be qualified and spouse is required by law but such consent is
responsible for all acts of civil life, save the withheld or cannot be obtained
exceptions established by existing laws in
special cases. The petition shall:
(1) Attach the proposed deed, if any,
Contracting marriage shall require parental embodying the transaction, if none, shall
consent until the age of twenty-one. describe in detail the said transaction and
state the reason why the required consent
Nothing in this Code shall be construed to thereto cannot be secured.
derogate from the duty or responsibility of (2) The final deed duly executed by the parties
parents and guardians for children and wards shall be submitted to and approved by the
below twenty-one years of age mentioned in the court.
second and third paragraphs of Article 2180 of
the Civil Code. SEPARATE CLAIM FOR DAMAGES
Claims for damages by either spouse, except
costs of the proceedings, may be litigated only
REPUBLIC ACT NO. 6809 in a separate action. [Art. 240,FC]
By virtue of this law, emancipation can no
longer take place by virtue of the minors
marriage or by the concession of the parents to
JURISDICTION
a minor in a recorded public instrument. Jurisdiction over the petition shall, upon proof of
notice to the other spouse, be exercised by the
proper court authorized to hear family cases, if
one exists, or in the regional trial court or its
Summary Judicial equivalent sitting in the place where either of
the spouses resides. [Art. 241, FC]
Proceedings in the Family
Law NOTIFICATION TO OTHER SPOUSE
[Art. 242, FC]
PROCEDURAL RULES (1) Upon the filing of the petition, the court
PROVIDED FOR IN THIS TITLE shall notify the other spouse, whose consent
to the transaction is required, of said
SHALL APPLY TO [Art. 238, FC] petition, ordering said spouse to show cause
(1) Separation in fact between husband and why the petition should not be granted, on
wife or before the date set in said notice for the
(2) Abandonment by one of the other initial conference.
(3) Incidents involving parental authority (2) The notice shall be accompanied by a copy
of the petition and shall be served at the
last known address of the spouse
concerned.
PAGE 71
PROCEDURE INCIDENTS INVOLVING

(1) A preliminary conference shall be
conducted by the judge personally without
PARENTAL AUTHORITY
the parties being assisted by counsel.
(2) After the initial conference, if the court PROCEDURE
deems it useful, the parties may be assisted (1) Such petitions shall be verified and filed in
by counsel at the succeeding conferences the proper court of the place where the
and hearings. [Art. 243, FC] child resides. [Art. 250, FC]
(3) If the petition is not resolved at the initial (2) Upon the filing of the petition, the court
conference, said petition shall be decided in shall notify the parents or, in their absence
a summary hearing. or incapacity, the individuals, entities or
Basis of summary hearing (at the sound institutions exercising parental authority
discretion of the court): over the child. [Art. 251, FC]
(a) Affidavits
(b) Documentary evidence Petitions filed under Articles 223, 225 and 235
(c) Oral testimonies at the courts sound of this Code involving parental authority shall
discretion. If testimony is needed, the be verified. [Art. 249, FC]
court shall specify the witnesses to be
heard and the subject-matter of their The rules in Chapter 2 hereof shall also govern
testimonies, directing the parties to summary proceedings under this Chapter
present said witnesses. [Art. 246(a), insofar as they are applicable [Art. 253, FC]
FC]
The foregoing rules in Chapter 2 (Separation in
WHEN APPEARANCE OF SPOUSES Fact) and (Incidents Involving Parental
REQUIRED Authority) hereof shall likewise govern summary
(1) In case of non-appearance of the spouse proceedings filed:
whose consent is sought, the court shall (1) Declaration of presumptive death [Art. 41,
inquire into the reasons for his failure to FC]
appear, and shall require such appearance, (2) Delivery of presumptive legitime [Art. 51, FC]
if possible. [Art. 244, FC] (3) Fixing of family domicile [Art. 69, FC]
(2) If, despite all efforts, the attendance of the (4) Disagreements regarding one spouses
non-consenting spouse is not secured, the profession, occupation, business, or activity
court may proceed ex parte and render [Art. 73, FC]
judgment as the facts and circumstances (5) Disposition or encumbrance of common
may warrant. In any case, the judge shall property in ACP where one spouse is
endeavor to protect the interests of the non- incapacitated or unable to participate in the
appearing spouse. [Art. 245, FC] administration; administration of absolute
community in a disagreement and the wife
NATURE OF JUDGMENT takes recourse within five years [Art. 96, FC]
(6) Disposition or encumbrance of common
The judgment of the court shall be immediately
property in CPG where one spouse is
final and executory. [Art 247]
incapacitated or unable to participate in the
administration; administration of
RULES APPLICABLE FOR partnership property in a disagreement and
ADMINISTERING OR ENCUMBERING the wife takes recourse within five years,
SEPARATE PROPERTY OF SPOUSE [Art. 124, FC]
The petition for judicial authority to administer
or encumber specific separate property of the When wife and husband are de facto separated
abandoning spouse and to use the fruits or and the CPG is insufficient, the spouse present
proceeds thereof for the support of the family shall, upon a petition, be given judicial authority
shall also be governed by these rules. [Art. 248, to administer or encumber any specific property
FC] of the other spouse and use the fruits and
PAGE 72
proceeds thereof to satisfy the latters share. No human remains shall be retained, interred,
[Art. 127, FC] disposed of or exhumed without the consent of
the persons mentioned in articles 294 and 305.
Retroactive Effect DAMAGES

Any person who shows disrespect to the dead,
This Code shall have retroactive effect insofar as
or wrongfully interferes with a funeral shall be
it does not prejudice or impair vested or
liable to the family of the deceased for
acquired rights in accordance with the Civil
damages, material and moral [Art. 309, CC]
Code or other laws. [Art 256, FC]
FUNERAL EXPENSES
The construction of a tombstone or mausoleum
Funeral shall be deemed a part of the funeral expenses,
and shall be chargeable to the conjugal
RELATIVES DUTY AND RIGHTS partnership property, if the deceased is one of
the spouses [Art. 310, CC].
TO ARRANGE FUNERALS
The duty and the right to make arrangements
for the funeral of a relative shall be in GUIDELINES IN MAKING
accordance with the order established for FUNERAL ARRANGEMENTS
support, under Article 294 [Art. 305, CC]: (1) The persons who are preferred in the right
(1) Spouse to make funeral arrangements may waive
(2) Descendants in the nearest degree. In case the right expressly or impliedly in which
of descendants of the same degree, the case the right and duty immediately
oldest shall be preferred. descend to the person next in the order.
(3) The ascendants in the nearest degree. In (2) It must be in keeping with the social
case of ascendants, the paternal shall have position of the deceased.
a better right. (3) Law shall prevail over the will of the persons
(4) The brothers and sisters, the oldest shall be who have the right to control the burial of
preferred. deceased exhumation, evidential purpose,
(5) Municipal authorities, if there are no disposition of corpse by deceased,
persons who are bound to support or if such mutilation of corpses and autopsies.
persons are without means. (4) Corpses which are to be buried at public
expenses may also be used for scientific
NATURE OF FUNERAL purposes under certain conditions.
Every funeral shall be in keeping with the social (5) Expressed wishes of the deceased is given
position of the deceased. [Art. 306] priority provided that it is not contrary to law
and must not violate the legal and
The funeral shall be [Art. 307, CC]: reglementary provisions concerning
(1) In accordance with the expressed wishes of funerals and disposition of the remains
the deceased. (time, manner, place or ceremony)
(2) In the absence of such expression, his (6) In the absence of expressed wishes, his
religious beliefs or affiliation shall religious beliefs or affiliation shall
determine the funeral rites. determine the funeral rights.
(3) In case of doubt, the form of the funeral (7) In case of doubt, the persons in Art. 199
shall be decided upon by the person obliged shall decide.
to make arrangements for the same, after (8) Any person who disrespects the dead or
consulting the other members of the family interferes with the funeral shall be liable for
material and moral damages.
PAGE 73
Use of Surnames (b) She or the former husband is married

again to another person.
(3) When legal separation has been granted,
SURNAMES OF CHILDREN the wife shall continue using her name and
(1) Legitimate and legitimated children shall surname employed before the legal
principally use the surname of the father. separation. [Art. 372, CC]
[Art. 364, CC] (4) A widow may use the deceased husband's
(2) An adopted child shall bear the surname of surname as though he were still living, in
the adopter. [Art. 365, CC] accordance with Article 370. [Art 373, CC]
(3) A natural child acknowledged by both
parents shall principally use the surname of CONFUSION AND CHANGE OF
the father. If recognized by only one of the
parents, a natural child shall employ the
NAMES
In case of identity of names and surnames, the
surname of the recognizing parent. [Art 366,
younger person shall be obliged to use such
CC]
additional name or surname as will avoid
(4) Natural children by legal fiction shall
confusion. [Art. 374, CC]
principally employ the surname of the
father. [Art. 367, CC]
In case of identity of names and surnames
(5) Illegitimate children referred to in Article 287
between ascendants and descendants, the word
shall bear the surname of the mother. [Art
"Junior" can be used only by a son. Grandsons
368, CC]
and other direct male descendants shall either
(6) Children conceived before the decree
[Art. 375, CC]:
annulling a voidable marriage shall
(1) Add a middle name or the mother's
principally use the surname of the father.
surname, or
[Art. 369, CC]
(2) Add the Roman Numerals II, III, and so on.
WIFE AFTER AND DURING Usurpation of a name and surname may be the
MARRIAGE subject of an action for damages and other
(1) A married woman may use [Art. 370, CC]: relief. [Art. 377, CC]
(a) Her maiden first name and surname
and add her husband's surname, or The unauthorized or unlawful use of another
(b) Her maiden first name and her person's surname gives a right of action to the
husband's surname or latter [Art. 378, CC]
(c) Her husband's full name, but prefixing a
word indicating that she is his wife, such The employment of pen names or stage names
as "Mrs." is permitted, provided it is done in good faith
The wife cannot claim an exclusive and there is no injury to third persons. Pen
right to use the husbands surname. names and stage names cannot be usurped.
She cant be prevented from using it; [Art. 379, CC]
but neither can she restrain others
from using it. [Tolentino] Except as provided in the preceding article, no
(2) In case of annulment of marriage, and the person shall use different names and surnames.
wife is the guilty party, she shall resume her [Art 380, CC]
maiden name and surname. If she is the
innocent spouse, she may resume her
maiden name and surname. However, she
may choose to continue employing her
former husband's surname, unless [Art. 371,
CC]:
(a) The court decrees otherwise, or
PAGE 74
Absence had been absent for four consecutive years and

the spouse present has a well-founded belief
that the absent spouse was already dead. In
PROVISIONAL MEASURES IN case of disappearance where there is danger of
CASE OF ABSENCE death under the circumstances set forth in the
provisions of Article 391 of the Civil Code, an
absence of only two years shall be sufficient.
Art. 43, CC. If there is a doubt, as between two
or more persons who are called to succeed each
other, as to which of them died first, whoever SUBSEQUENT MARRIAGE
alleges the death of one prior to the other, shall CONTRACTED WHEN ONE
prove the same; in the absence of proof, it is
presumed that they died at the same time and
SPOUSE IS ABSENT
there shall be no transmission of rights from General rule: Marriage contracted by any person
one to the other. during the subsistence of a previous marriage is
void.
Article 43 provides a statutory presumption
Exceptions:
when there is doubt on the order of death
The following subsequent marriage of the
between persons who are called to succeed each
present spouse is valid:
other (only).
(1) Subsequent marriage due to ordinary
absence where:
The statutory presumption of Article 43 was not
(a) The prior spouse had been absent for 4
applied due to the presence of a credible
consecutive years;
eyewitness as to who died first. [Joaquin v.
(b) The spouse present had a well-founded
Navarro (1948)]
belief that absent spouse is dead; and
(c) Judicial declaration of presumptive
PRESUMPTION IN THE RULES OF death was secured (no prejudice to the
COURT (RULE 131, SEC. 3, (JJ.) effect of the reappearance of the absent
(PRESUMPTION OF SURVIVORSHIP) spouse).
(2) Subsequent marriage due to extraordinary
Age Presumed Survivor absence where:
Both under 15 Older (a) The prior spouse had been missing for 2
Both above 60 Younger consecutive years;
One under 15, the other One under 15 (b) There is danger of death attendant to
above 60 the disappearance [Art. 391, Civil Code];
Both over 15 and under Male (c) The spouse present had a well-founded
60; different sexes belief that the missing person is dead;
Both over 15 and under Older and
60; same sex (d) Judicial declaration of presumptive
One under 15 or over 60, One between 15 and 60
death was secured (no prejudice to the
the other between those
ages effect of the reappearance of the absent
spouse).
Applicable only to two or more persons who
perish in the same calamity, and it is not shown Institution of a summary proceeding is not
who died first, and there are no particular sufficient. There must also be a summary
circumstances from which it can be inferred. judgment. [Balane]
Art. 41, CC. A marriage contracted by any person Only the deserted spouse can file or institute a
summary proceeding for the declaration of
during subsistence of a previous marriage shall
presumptive death of the absentee. [Bienvenido
be null and void, unless before the celebration
case]
of the subsequent marriage, the prior spouse
PAGE 75
There must have been diligent efforts on the WHO MAY BE APPOINTED AS
part of the deserted spouse to locate the absent REPRESENTATIVE
spouse. These diligent efforts correspond to the (1) Spouse present shall be preferred when
requirement of the law for a well-founded there is no legal separation.
belief. (2) If no spouse or spouse is incapacitated, any
competent person.
Exception to the Exception:
Art. 381, CC. When a person disappears from his DECLARATION OF ABSENCE
domicile, his whereabouts being unknown, and
without leaving an agent to administer his Art. 384, CC. Two years having elapsed without
property, the judge, at the instance of an any news about the absentee or since the
interested party, a relative, or a friend, may receipt of the last news, and five years in case
appoint a person to represent him in all that the absentee has left a person in charge of the
may be necessary. administration of his property, his absence may
be declared
This same rule shall be observed when under
similar circumstances the power conferred by Art. 385, CC. The following may ask for the
the absentee has expired. declaration of absence:
(1) The spouse present;
Art. 382, CC. The appointment referred to in the (2) The heirs instituted in a will, who may
preceding article having been made, the judge present an authentic copy of the same;
shall take the necessary measures to safeguard (3) The relatives who may succeed by the law of
the rights and interests of the absentee and intestacy;
shall specify the powers, obligations and (4) Those who may have over the property of
remuneration of his representative, regulating the absentee some right subordinated to
them, according to the circumstances, by the the condition of his death.
rules concerning guardians.
Article 386, CC. The judicial declaration of
Art. 383, CC. In the appointment of a absence shall not take effect until six months
representative, the spouse present shall be after its publication in a newspaper of general
preferred when there is no legal separation. circulation.
If the absentee left no spouse, or if the spouse WHEN MAY ABSENCE BE DECLARED
present is a minor, any competent person may (1) Two years without any news about the
be appointed by the court. absentee
(2) Five years if the absentee left a person in
REQUISITES TO APPOINT charge of administration of his property
REPRESENTATIVE (3) Declaration takes effect only after six
The judge may appoint a person to represent months after publication in a newspaper of
general circulation
absentee when:
(1) Person disappears from his domicile WHO MAY ASK FOR A DECLARATION
(2) His whereabouts are unknown OF ABSENCE
(3) No agent to administer his property
(1) Spouse present
(4) An interested party, a relative, or a friend
(2) Heirs instituted in a will, who may present an
files the action
authentic copy of the same;
(3) Relatives who may succeed by the law of
intestacy;
(4) Those who may have some right over the
property of the absentee, subordinated to the
condition of his death.
PAGE 76
ADMINISTRATION OF THE PRESUMPTION OF DEATH

PROPERTY OF THE ABSENTEE
Art. 390, CC. After an absence of 7 years, it
Art. 387, CC. An administrator of the absentee's being unknown whether or not the absentee
property shall be appointed in accordance with still lives, he shall be presumed dead for all
Article 383. purposes, except for those of succession.
Art. 388, CC. The wife who is appointed as an The absentee shall not be presumed dead for
administratrix of the husband's property cannot the purpose of opening his succession till after
an absence of 10 years. If he disappeared after
alienate or encumber the husband's property, or
that of the conjugal partnership, without judicial the age of 75 years, an absence of 5 years shall
authority. be sufficient in order that his succession may be
opened.
Art. 389, CC. The administration shall cease in
Art. 391, CC. The following shall be presumed
any of the following cases:
(1) When the absentee appears personally or
the estate among the heirs:
by means of an agent;
(2) When the death of the absentee is proved (1) A person on board a vessel lost during a sea
and his testate or intestate heirs appear; voyage, or an aeroplane which is missing,
(3) When a third person appears, showing by a who has not been heard of for four years
proper document that he has acquired the since the loss of the vessel or aeroplane;
absentee's property by purchase or other (2) A person in the armed forces who has taken
title. part in war, and has been missing for four
years;
(3) A person who has been in danger of death
In these cases the administrator shall cease in
the performance of his office, and the property under other circumstances and his
shall be at the disposal of those who may have a existence has not been known for four years.
right thereto.
General rule: A person shall be presumed dead
for all purposes after absence for a period of 7
WHO MAY ADMINISTER THE years.
PROPERTY
(1) Spouse present shall be preferred when Exception: Succession
there is no legal separation In succession, 10 years is required for
(2) If no spouse or spouse is incapacitated, any presumption of death.
competent person If absentee disappeared after age of 75, 5
years shall be sufficient.
WHEN WILL THE ADMINISTRATION
OF PROPERTY CEASE? EXTRAORDINARY ABSENCE
Administrator shall cease in performance of his Only 4 years is required for presumption to arise
office, and property shall be disposed in favor of if:
those who have a right thereto when: (1) A person on board a vessel lost during a sea
(1) Absentee appears personally or by means of voyage, or an aeroplane which is missing,
an agent who has not been heard of for four years
(2) Testate or intestate heirs appear, upon proof since the loss of the vessel or aeroplane;
of death of absentee (2) A person in the armed forces who has taken
(3) Third person appears, with a proper part in war, and has been missing for four
document showing he has acquired years;
absentees property by purchase or other
title
PAGE 77
(3) A person who has been in danger of death

under other circumstances and his Art. 409, CC. In cases of legal separation,
existence has not been known for four years. adoption, naturalization and other judicial
orders mentioned in the preceding article, it
Although 7 years is required for the presumption shall be the duty of the clerk of the court which
of death of an absentee in the Civil Code, Art. 41 issued the decree to ascertain whether the same
of the Family Code makes an exception for the has been registered, and if this has not been
purpose of remarriage by limiting such done, to send a copy of said decree to the civil
requirement to 4 years. registry of the city or municipality where the
court is functioning.
Art. 41 also limits the required 4 years in Art. 391
for absence under exceptional circumstances to Art. 410, CC. The books making up the civil
only 2 years. register and all documents relating thereto
shall be considered public documents and shall
Art. 392, CC. If the absentee appears, or without be prima facie evidence of the facts therein
appearing his existence is proved, he shall contained.
recover his property in the condition in which it
may be found, and the price of any property that Art. 411, CC. Every civil registrar shall be civilly
may have been alienated or the property responsible for any unauthorized alteration
acquired therewith; but he cannot claim either made in any civil register, to any person
fruits or rents. suffering damage thereby. However, the civil
registrar may exempt himself from such liability
if he proves that he has taken every reasonable
Civil Registrar precaution to prevent the unlawful alteration.
Art. 413, CC. All other matters pertaining to the

ARTICLES 407-413 registration of civil status shall be governed by
special laws.
Art. 407, CC. Acts, events and judicial decrees
concerning the civil status of persons shall be RA 9048 AS AMENDED BY RA
recorded in the civil register. 10172
AN ACT AUTHORIZING THE CITY OR
Art. 408, CC. The following shall be entered in MUNICIPAL CIVIL REGISTRAR OR THE
the civil register: CONSUL GENERAL TO CORRECT A CLERICAL
(1) Births; OR TYPOGRAPHICAL ERROR IN AN ENTRY
(2) Marriages; AND/OR CHANGE OF FIRST NAME OR
(3) Deaths; NICKNAME IN THE CIVIL REGISTER WITHOUT
(4) Legal Separations; NEED OF A JUDICIAL ORDER, AMENDING FOR
(5) Annulments of marriage; THIS PURPOSE ARTICLES 376 AND 412 OF
(6) Judgments declaring marriages void from THE CIVIL CODE OF THE PHILIPPINES
the beginning;
(7) Legitimations; General rule: No entry in a civil register shall be
(8) Adoptions; changed or corrected without a judicial order
(9) Acknowledgments of natural children;
(10) Naturalization; Exception:
(11) Loss, or Clerical or typographical errors;
(12) Recovery of citizenship; Change of: first name or nickname, day and
(13) Civil interdiction; month in the date of birth, or sex of a person
(14) Judicial determination of filiation; This exception applies where it is patently clear
(15) Voluntary emancipation of a minor; and that there was a clerical or typographical error
(16) Changes of name. or mistake in the entry, which can be corrected
PAGE 78
or changed by the concerned city or municipal

civil registrar or consul general in accordance Citizens of the Philippines who are presently
with the provisions of this Act and its residing or domiciled in foreign countries may
implementing rules and regulations file their petition, in person, with the nearest
Philippine Consulates.
Clerical or typographical error to a mistake
committed in the performance of clerical work in The petitions filed with the city or municipal civil
writing, copying, transcribing or typing an entry registrar or the consul general shall be
in the civil register that is harmless and processed in accordance with this Act and its
innocuous (i.e. misspelled name, misspelled implementing rules and regulations.
place of birth, mistake in the entry of day and
month in the date of birth or the sex of the All petitions for the clerical or typographical
person or the like, which is visible to the eyes or errors and/or change of first names or
obvious to the understanding, and can be nicknames may be availed of only once.
corrected or changed only by reference to other
existing record or records) GROUNDS
Before the amendment by RA 10172, no
WHO MAY FILE THE PETITION AND WHERE?
correction must involve the change of sex, (1) Any person having direct personal interest in
nationality, age or status of the petitioner. After the correction of a clerical or typographical
the amendment, change of sex can now be error in an entry and/or change of first
subjected to correction without judicial order name or nickname in the civil register
under the rules of this Act. (2) Verified petition with the local civil registry
office of the city or municipality
Civil Register the various registry books and
(a) where the record being sought to be
related certificates and documents kept in the
corrected or changed is kept
archives of the local civil registry offices, (b) where the interested party is presently
Philippine Consulates and of the Office of the residing or domiciled, if it will be
Civil Registrar General. impractical to submit in the place where
record is kept (i.e. when party has
Sec. 3. Who May File the Petition and Where. Any migrated to another place in the
person having direct and personal interest in country)
the correction of a clerical or typographical error (c) nearest Philippine Consulates, if the
in an entry and/or change of first name or petitioner is presently residing or
nickname in the civil register may file, in person, domiciled in foreign countries
a verified petition with the local civil registry
office of the city or municipality where the All petitions for the clerical or typographical
record being sought to be corrected or changed errors and/or change of first names or
is kept. nicknames may be availed of only once.
In case the petitioner has already migrated to Sec. 4. Grounds for Change of First Name or
another place in the country and it would not be Nickname. The petition for change of first name
practical for such party, in terms of
or nickname may be allowed in any of the
transportation expenses, time and effort to following cases:
appear in person before the local civil registrar (1) The petitioner finds the first name or
keeping the documents to be corrected or nickname to be ridiculous, tainted with
changed, the petition may be filed, in person, dishonor or extremely difficult to write or
with the local civil registrar of the place where
pronounce.
the interested party is presently residing or
(2) The new first name or nickname has been
domiciled. The two (2) local civil registrars habitually and continuously used by the
concerned will then communicate to facilitate petitioner and he has been publicly known
the processing of the petition.
PAGE 79
by that first name or nickname in the weeks in a newspaper of general circulation.

community: or
(3) The change will avoid confusion. Furthermore, the petitioner shall submit a
certification from the appropriate law
Sec. 5. Form and Contents of the Petition. The enforcement agencies that he has no pending
petition for correction of a clerical or case or no criminal record.
typographical error, or for change of first name
or nickname, as the case may be, shall be in the The petition and its supporting papers shall be
form of an affidavit, subscribed and sworn to filed in three (3) copies to be distributed as
before any person authorized by the law to follows: first copy to the concerned city or
administer oaths. The affidavit shall set forth municipal civil registrar, or the consul general;
facts necessary to establish the merits of the second copy to the Office of the Civil Registrar
petition and shall show affirmatively that the General; and third copy to the petitioner
petitioner is competent to testify to the matters
stated. The petitioner shall state the particular RULE 108, RULES OF COURT
erroneous entry or entries, which are sought to CANCELLATION OR CORRECTION OF
be corrected and/or the change sought to be ENTRIES IN THE CIVIL REGISTRY
made.
Sec. 1. Who may file petition. Any person
The petition shall be supported with the interested in any act, event, order or decree
following documents: concerning the civil status of persons which has
(1) A certified true machine copy of the been recorded in the civil register, may file a
certificate or of the page of the registry book verified petition for the cancellation or
containing the entry or entries sought to be correction of any entry relating thereto, with the
corrected or changed. Court of First Instance of the province where the
(2) At least two (2) public or private documents corresponding civil registry is located.
showing the correct entry or entries upon
which the correction or change shall be Sec. 2. Entries subject to cancellation or
based; and
correction. Upon good and valid grounds, the
(3) Other documents which the petitioner or following entries in the civil register may be
the city or municipal civil registrar or the cancelled or corrected:
consul general may consider relevant and
(a) births;
necessary for the approval of the petition. (b) marriages;
(c) deaths;
No petition for correction of erroneous entry
(d) legal separations;
concerning the date of birth or the sex of a
(e) judgments of annulments of marriage;
person shall be entertained except if the (f) judgments declaring marriages void from
petition is accompanied by earliest school the beginning;
record or earliest school documents such as, but (g) legitimations;
not limited to, medical records, baptismal (h) adoptions;
certificate and other documents issued by (i) acknowledgments of natural children;
religious authorities; nor shall any entry (j) naturalization
involving change of gender corrected except if
(k) election, loss or recovery of citizenship
the petition is accompanied by a certification
(l) civil interdiction;
issued by an accredited government physician (m) judicial determination of filiation;
attesting to the fact that the petitioner has not (n) voluntary emancipation of a minor; and
undergone sex change or sex transplant. The (o) changes of name.
petition for change of first name or nickname, or
for correction of erroneous entry concerning the
Sec. 3. Parties. When cancellation or correction
day and month in the date of birth or the sex of
of an entry in the civil register is sought, the civil
a person, as the case may be, shall be published
registrar and all persons who have or claim any
at least once a week for two (2) consecutive
PAGE 80
interest which would be affected thereby shall (3) Deaths

be made parties to the proceeding. (4) Legal separations
(5) Judgments of annulments of marriage
Sec. 4. Notice and publication. Upon the filing of (6) Judgments declaring marriages void from
the petition, the court shall, by an order, fix the the beginning
time and place for the hearing of the same, and (7) Legitimations
cause reasonable notice thereof to be given to (8) Adoptions
the persons named in the petition. The court (9) Acknowledgments of natural children
shall also cause the order to be published once (10) Naturalization
a week for three (3) consecutive weeks in a (11) Election, loss or recovery of citizenship
newspaper of general circulation in the (12) Civil interdiction
province. (13) Judicial determination of filiation
(14) Voluntary emancipation of a minor
Sec. 5. Opposition. The civil registrar and any (15) Changes of name
person having or claiming any interest under
the entry whose cancellation or correction is
sought may, within fifteen (15) days from notice
of the petition, or from the last date of
publication of such notice, file his opposition
thereto.
Sec. 6. Expediting proceedings. The court in

which the proceeding is brought may make
orders expediting the proceedings, and may
also grant preliminary injunction for the
preservation of the rights of the parties pending
such proceedings.
Sec. 7. Order. After hearing, the court may either

dismiss the petition or issue an order granting
the cancellation or correction prayed for. In
either case, a certified copy of the judgment
shall be served upon the civil registrar
concerned who shall annotate the same in his
record.
WHO MAY FILE PETITION

Any person interested in any act, event, order or
decree concerning the civil status of persons
which has been recorded in the civil register.
WHERE FILED
Verified petition for cancellation or correction of
entry in the civil registry may be filed with the
Regional Trial Court of the province where the
corresponding civil registry is located.
ENTRIES SUBJECT TO
CANCELLATION/CORRECTION
(1) Births
(2) Marriages
PAGE 81
PAGE 82
UP LAW BOC PROPERTY CIVIL LAW
(4) Statues, reliefs, paintings or other

Property objects for use or ornamentation, placed in
All things which are, or may be, the object of buildings or on lands by the owner of the
appropriation. [NCC 414] immovable in such a manner that it reveals
the intention to attach them permanently to
Characteristics the tenements;
(5) Machinery, receptacles, instruments or
(1) Utility capacity to satisfy human wants implements intended by the owner of the
(2) Substantivity and Individuality separate and tenement for an industry or works which
autonomous existence may be carried on in a building or on a piece
(3) Susceptibility of being appropriated what of land, and which tend directly to meet the
cannot be appropriated because of their needs of the said industry or works;
distance, depth, or immensity cannot be (6) Animal houses, pigeon-houses,
considered things (i.e. stars, ocean)
beehives, fish ponds or breeding places of
similar nature, in case their owner has
Classification placed them or preserves them with the
intention to have them permanently
HIDDEN TREASURE attached to the land, and forming a
Hidden treasure any hidden and unknown permanent part of it; the animals in these
deposit of money jewels or other precious places are included;
objects, the lawful ownership of which does not (7) Fertilizer actually used on a piece of
appear. [NCC 439] land;
(8) Mines, quarries, and slag dumps, while
Owner of the land, building or other property on the matter thereof forms part of the bed,
which the hidden treasure was found, also owns and waters either running or stagnant;
it, subject to:
(9) Docks and structures which, though
(1) Right of a finder by chance who is not a
trespasser/intruder: of treasure floating, are intended by their nature and
(2) Right of a usufructuary who finds treasure: object to remain at a fixed place on a river,
of treasure lake, or coast;
(3) Right of State to acquire things of interest to (10) Contracts for public works, and
science or the arts [NCC 438] servitudes and other real rights over
immovable property.
BASED ON MOBILITY
CATEGORIES OF IMMOVABLES
[IMMOVABLE OR MOVABLE] (1) By nature
(2) By incorporation
REAL OR IMMOVABLE PROPERTY (3) By destination
(4) By analogy
NCC 415.
(1) Land, buildings, roads and constructions Immovables by Nature: cannot be moved from
place to place; their intrinsic qualities have no
of all kinds adhered to the soil;
utility except in a fixed place (Par. 1 & 8)
(2) Trees, plants, and growing fruits, while
they are attached to the land or form an (1) Par. 1
integral part of an immovable; (a) Building - their adherence to the land
(3) Everything attached to an immovable in must be permanent and substantial.
a fixed manner, in such a way that it cannot (b) Buildings have been considered as
be separated therefrom without breaking immovables, despite:
the material or deterioration of the object;
PAGE 83
(i) Treatment by the parties e.g. they Immovables by Destination: are essentially
constitute a separate mortgage on the movables but by the purpose for which they
building and the land [Punzalan v. have been placed in an immovable, partake of
Lacsamana] the nature of an immovable [Par. 4, 5, 6 & 9]
(ii) Separate Ownership i.e. a building on
rented land is still considered an (1) Par. 4
immovable. [Tolentino] (a) Requisites:
(i) Placed by the owner or by the
(2) Par. 8 tenant (as agent);
(a) Mineral Deposits (ii) With intention of attaching them
(i) Minerals still deposited in the soil permanently even if adherence
(ii) When minerals have been will not involve breakage or injury.
extracted, they become chattel. (b) Where the improvement or ornaments
(b) Slag Dump: dirt and soil taken from a placed by the lessee are not to pass to
mine and piled upon the surface of the the owner at the expiration of the lease,
ground. Minerals can be found inside they remain movables for chattel
the dump. mortgage purposes. [Davao Sawmill v.
(c) Waters: those still attached to or running Castillo(1935)]
thru the soil or the ground.
Par. 3 v. Par. 4
Immovables by Incorporation: are essentially Par. 3 Par. 4
movables but are attached to an immovable in
Cannot be separated Can be separated
such a way as to be an integral part [Par. 2, 3, &
from immovable from immovable
7]
without breaking or without breaking or
deterioration deterioration
(1) Par. 2
(a) Trees and plants: only immovables when Must be placed by
they are attached to the land or form an Need not be placed by the owner, or by his
integral part of an immovable the owner agent, expressed or
(i) When they have been cut or implied
uprooted, they become movables. Real property by
Real property by
(b) By special treatment of Act 1508 incorporation and
incorporation
(Chattel Mortgage Law), growing crops destination
may be subject of a Chattel Mortgage.
(c) For the purpose of attachment: growing (2) Par. 5
(a) Immovability depends upon their being
crops are to be attached in the same
manner as realty. (Rule 59, Sec. 7) destined for use in the industry or work
in the tenement;
(2) Par. 3 (i) The moment they are separated,
(from the immovable or from the
(a) Res vinta in Roman Law
industry or work in which they are
(b) Attachment in a fixed manner:
utilized) they recover their condition
breakage or injury in case of separation
will be substantial e.g. wells, sewers, as movables.
(ii) If it is still needed for the industry
aqueducts and railways
(i) Whether attached by the owner but separated from the tenement
himself or some other person temporarily, the property continues
to be immovable.
(b) Requisites for Immovability in Par. 5:
(3) Par. 7
Actually used (it has been spread over the (i) Placed by the owner or the tenant
land) (as agent);
(ii) The machine, receptacle,
instrument, implement must also
PAGE 84
be ESSENTIAL to the business in Parties may by agreement treat as, but

order to be considered realty. effective only as to them.
[Mindanao Bus Co. v City Assessor
(1962)] It is based, partly, upon the principle of
(c) Except: Estoppel estoppel. [Evangelista vs. Alto Surety(1958)]
(d) Parties may, by agreement, treat as
personal property that which by nature For purposes of taxation, improvements on
would be real, as long as no third land are commonly taxed as realty, even
parties would be prejudiced. That though for some purposes, they might be
characterization is effective between the considered as personalty.
parties. [Makati Leasing v. Wearever
(1983)] It is a familiar phenomenon to see things
(e) Effect of Attachment classified as real property for purposes of
(i) Machinery becomes part of the taxation, which on general principle, might
immovable. be considered personal property. [Manila
(ii) The installation of machinery and Electric v. Central Bank (1962)]
equipment in a mortgaged sugar
central for the purpose of carrying out PERSONAL OR MOVABLE
the industrial functions and
increasing production, constitutes a
permanent improvement on said NCC 416 & 417.
sugar central and subjects said (1) Those movables susceptible of
machinery and equipment to the appropriation which are not included in
mortgage constituted thereon. the preceding article;
[Berkenkotter v. Cu Unjieng(1935)] (2)Real property which by any special
provision of law is considered as
(3) Par. 6 personalty;
Requisites: (3) Forces of nature which are brought under
(a) Placed by the owner or the tenant (as control by science; and
agent);
(4)In general, all things which can be
(b) With the intention of permanent
attachment; transported from place to place without
(c) Forming a permanent part of the impairment of the real property to which
immovable. they are fixed.
(5)Obligations and actions which have for
(4) Par. 9: their object movables or demandable
A floating house tied to a shore and used sums; and
as a residence is considered real property, (6)Shares of stock of agricultural,
considering that the waters on which it commercial and industrial entities,
floats are considered immovables. although they may have real estate.
But if the floating house makes it a point
to journey from place to place, it assumes TESTS TO DETERMINE MOVABLE CHARACTER
the category of a vessel, and is considered
a movable. (1) By exclusion
Everything NOT included in Article 415
Immovables by Analogy: Contracts for public Parties cannot by agreement treat as
works, servitudes, other real rights over immovable that which is legally movable.
immovable property e.g. usufruct and lease of
real property for a period of 1 year and (2) By description
registered [Par. 10] (a) Ability to change location whether it
can be carried from place to place;
Note: Enumeration in Art. 415 not absolute.
PAGE 85
(b) Without substantial injury to the but a donation of a movable may be

immovable to which it is attached. made orally or in writing. [NCC 748]
The steel towers built by MERALCO are not (3) For ACQUISITIVE PRESCRIPTION:
buildings or constructions since they are Real property can be acquired by
removable and merely attached to a square prescription in 30 years (bad faith) and 10
metal frame by means of bolts, which when years (good faith). (NCC 1137, 1134)
unscrewed could easily be dismantled and Movables can be acquired by prescription
moved from place to place, without breaking in 8 years (bad faith) and 4 years (good
the material or causing deterioration to the faith). (NCC 1132)
object they are attached. [Board of (4) Actions for RECOVERY OF POSSESSION:
Assessment Appeals v. Meralco] Possession of real property - recovered
through accion reivindicatoria, accion
(3) By special provision of law publiciana, forcible entry and unlawful
Growing crops under the Chattel Mortgage detainer.
Law Possession of movable property -
Machinery installed by a lessee not acting recovered through replevin.
as agent of the owner [Davao Sawmill v.
Castillo] (5) VENUE of actions:
Intellectual property considered personal Real actions - Actions concerning real
property; it consists in the pecuniary property are commenced in the court that
benefit which the owner can get by the has jurisdiction over the area where the
reproduction or manufacture of his work. real property is situated. [Rules of Court
Rule 4 Sec. 1]
(4) By forces of nature Personal actions - Commenced where the
e.g. electricity, gas, heat, oxygen plaintiff or any of the principal plaintiffs,
or where the defendant or any of the
IMPORTANCE AND SIGNIFICANCE OF principal defendants resides, or if a non-
CLASSIFICATION UNDER THE CIVIL CODE resident defendant, where he may be
found, at the election of the plaintiff. [Rule
(1) In CRIMINAL LAW: 4 Sec. 2]
Usurpation of property can take place only
(6) The GOVERNING LAW (Private International
with respect to real property. [RPC 312]
Law):
Robbery and theft can be committed only
Immovables - governed by the law of the
against personal property. [RPC 293, 308]
country where they are located.
(2) In the FORM OF CONTRACTS Involving Movables - governed by the personal laws
Movables and Immovables: of the owner. (which in some cases is the
law of his nationality and in other cases,
(a) Subject matter of specific contracts: the law of his domicile)
Only real property can be the subject
(7) In affecting THIRD PERSONS:
of real mortgage [NCC 2124] and
antichresis. [NCC 2132] In transactions involving real property
Only personal property can be the must be recorded in the Registry of
Property to affect third persons.
subject of voluntary deposit [NCC
1966], pledge [NCC 2094] and chattel In transactions involving personal
mortgage. [Act 1508] property registration is not required,
except for chattel mortgages. [Chattel
(b) Donations of real property are required Mortgage Register, NCC 2140]
to be in a public instrument [NCC 749]
PAGE 86
BASED ON OWNERSHIP
e.g. fortresses, unleased mines and civil
buildings.
NCC 419. Property is part of either the
public dominion or private ownership. (3) Those for the development of the national
wealth.
Churches and other consecrated objects are
considered outside the commerce of man; they Includes natural resources such as minerals,
are considered neither public nor private coal, oil and forest.
property.
(4) Patrimonial property:
PUBLIC DOMINION (a) Owned by the State over which it has
Property of public dominion is outside the the same rights as private individuals in
commerce of man. They cannot be the subject relation to their own property.
matter of private contracts, cannot be acquired (b) Subject to the administrative laws and
by prescription and they are not subject to regulations on the procedure of
attachment and execution nor burdened with a exercising such rights. E.g. friar lands,
voluntary easement. escheated properties and commercial
buildings.
Public As defined by NCC 420 (c) Purpose:
Dominion (i) Enables the State to attain its
Public Domain Used in Art XII, Section 2, economic ends.
1987 Constitution (ii) Serves as a means for the States
Public Lands Public Land Act subsistence and preservation.
(iii) Enables the State to fulfill its
primary mission.
CHARACTERISTICS (d) Conversion of Property of Public
Not owned by the State but pertains to Dominion for Public Use to Patrimonial
it as territorial sovereign; to hold in trust Property:
for the interest of the community. (i) Property of public dominion, when
Purpose: For public use, and not for use no longer intended for public use or
by the State as a juridical person. for public service, shall form part of
Cannot be the subject of appropriation the patrimonial property of the
either by the State or by private State [NCC 422, Civil Code]
persons. (ii) An express Declaration by the State
(either by the Congress or by the
CLASSIFICATIONS President, if the power was provided
by law) that the public dominion
Administered by the State [NCC 420] property has been converted into
patrimonial property, even though it
(1) Those intended for public use. (roads, canals, was classified as alienable or
rivers, torrents, ports and bridges disposable. [Heirs of Malabanan v.
constructed by the State, banks, shores, Republic (2009)]
roadsteads, and others of similar character)
Administered by Municipal Corporations
May be used by everybody, even by [NCC 424]
strangers or aliens but nobody can exercise
over it the rights of a private owner. (1) Property for public use, in the provinces,
cities, and municipalities, consist of the
(2) Those intended for some public service: provincial roads, city streets, municipal
may be used only by authorized persons but streets, the squares, fountains, public
exists for the benefit of all. waters, promenades, and public works for
PAGE 87
public service paid for by said provinces, (2) Property belonging to private persons, either
cities, or municipalities. individually or collectively [NCC 425]
Property of private ownership, besides the
(2) Patrimonial property of Municipal patrimonial property of the State,
Corporations: provinces, cities, and municipalities,
The province or municipality, as a juridical consists of all property belonging to
entity, also possesses private property to private persons, either individually or
answer for its economic necessities. collectively.
Classification of Properties of provinces, Refers to all property belonging to private
cities, and municipalities [Salas v. persons, natural or juridical, either
Jarencio, (1972)] individually or collectively (co-owned
(i) Properties acquired with their own property)
funds in their private or corporate
capacity over which the political Determination (two different views)
subdivision has ownership and
control. (1) Determined by how the property was used
(ii) Properties of public dominion held in In Province of Zamboanga v. City of
trust for the States inhabitants are Zamboanga (1968), property was
subject to the control and supervision considered patrimonial for they were not for
of the State. public use.
A municipal corporation must prove that (2) Determined by how the property was
they acquired the land with their own acquired
corporate funds According to Salas v. Jarencio (1972), the
absence of a title deed to any land, showing
o Presumption: that land comes from the that it was acquired with its private or
State upon the creation of the corporate funds, the presumption is that
municipality. All lands in the possession such land came from the State upon the
of the municipality creation of the municipality.
o Except for those acquired with its private
funds, are deemed to be property of public Conversion
dominion, held in trust for the State for
the benefit of its inhabitants. Alienable Public Land converted to Private
Property through Prescription
Congress has paramount power to dispose Alienable public land held by a
of lands of public dominion in a possessor personally/through
municipality, the latter being a subdivision predecessors-in-interest, openly,
only for purposes of local administration. continuously and exclusively for 30
[Salas v. Jarencio, (1972)] years is CONVERTED to private
property by the mere lapse or
Private Ownership completion of the period. The
Can be exercised by the State in its private application for confirmation is mere
capacity or by private persons. formality, because land had already
been converted, giving rise to a
Kinds registrable title. [Director of Lands v.
(1) Patrimonial property - Property owned by the IAC(1986)]
State and its political subdivisions in their
private capacity; all property of the State Private Land converted to Property of Public
not included in NCC 420 (on public Dominion through abandonment and
dominion) [NCC 421-424] reclamation
PAGE 88
Through the gradual encroachment or BASED ON THE CONSTITUTION

erosion by the ebb and flow of the tide,
private property may become public IF [ARTICLE XII, SEC 3]
the owner appears to have (1) Public Agricultural Land;
ABANDONED the land, and permitted (2) Mineral Land;
it to be totally destroyed so as to (3) Timber Land;
become part of the shore. The land (4) National Parks.
having disappeared on account of the
gradual erosion, and having remained OTHER CLASSIFICATIONS
submerged until they were reclaimed by
the government, they are public land. BY THEIR PHYSICAL EXISTENCE
[Government v. Cabangis(1929)] (1) Corporeal
All property the existence of which can be
BASED ON CONSUMABILITY determined by the senses. (res qui tangi
possunt)
[NCC 418] (2) Incorporeal
(a) Things having abstract existence,
Only applies to movable property, determined by created by man and representing value.
nature.
(b) Includes rights over incorporeal things,
credits, and real rights other than
CONSUMABLE ownership over corporeal things.
(1) Movables which cannot be used in a
manner appropriate to their nature without BY THEIR AUTONOMY OR DEPENDENCE
their being consumed. (e.g. food)
(1) Principal
(2) Consumable goods cannot be the subject
Those to which other things are considered
matter of a commodatum unless the
dependent or subordinated, such as the
purpose of the contract is not the land on which a house is built.
consumption of the object, as when it is (2) Accessory
merely for exhibition.
Those which are dependent upon or
subordinated to the principal. They are
NON-CONSUMABLE destined to complete, enhance or ornament
All others not falling under consumable e.g. another property.
money in coin.
BY SUSCEPTIBILITY TO DETERIORATION
BASED ON SUSCEPTIBILITY TO (1) Deteriorable
SUBSTITUTION Those that deteriorate through use or by
time.
Only applies to movables, determined by the
(2) Non-deteriorable.
intention of the parties.
BY REASON OF THEIR SUSCEPTIBILITY TO
FUNGIBLES
Things that, because of their nature or the will DIVISION
of the parties, are capable of being substituted (1) Divisible
by others of the same kind, not having a distinct Those which can be divided physically or
individuality. juridically without injury to their nature. E.g.:
piece of land or an inheritance.
NON-FUNGIBLES (2) Indivisible
Those which cannot be divided without
(1) Things that cannot be substituted for
destroying their nature or rendering
another;
impossible the fulfillment of the juridical
(2) If the parties agreed that the same thing be
relation of which they are object.
returned, it is not fungible.
PAGE 89
BY REASON OF DESIGNATION RIGHT IN GENERAL

(1) Generic
That which indicates its homogenous RIGHTS INCLUDED IN OWNERSHIP [NCC
nature, but not the individual such as a
horse, house, dress, without indicating it.
428]
(1) Right to enjoy and dispose of a thing,
(2) Specific
without other limitations than those
That which indicates the specie or its nature
established by law.
and the individual, such as the white horse
(2) Right of action against the holder and
of X.
possessor of the thing in order to recover it.
EXISTENCE IN POINT OF TIME
(1) Present BUNDLE OF RIGHTS
Those which exist in actuality, either (1) Jus Utendi: Right to enjoy and receive what
physical or legal, such as, the erected the property produces.
building. (2) Jus Fruendi: Right to receive the fruits.
(2) Future (3) Jus Accessiones: Right to the accessories.
Those which do not exist in actuality, but (4) Jus Abutendi: Right to consume a thing by
whose existence can reasonably be use.
expected with more or less probability, such (5) Jus Disponendi: Right to alienate,
as ungathered fruits. encumber, transform or even destroy the
thing owned.
(6) Jus Vindicandi: Right to recover possession
of property based on a claim of ownership.
Ownership (7) Jus Possidendi: Right to possess the
property. (Implied from all the other rights)
DEFINITION AND CONCEPT
Independent right of exclusive PROTECTING PROPERTY
enjoyment and control of a thing.
Has the purpose of deriving all BASIC DISTINCTIONS
advantages required by the reasonable
needs of the owner/holder of right and REAL RIGHT v. PERSONAL RIGHT
promotion of general welfare.
Real Rights
A complete subjection to an owners
Rights that confer upon its holder an
will.
autonomous power to derive directly from a
May be exercised in everything not thing certain economic advantages
prohibited by public law or the rights of independently of whoever the possessor of the
another. thing.
TYPES OF OWNERSHIP Personal Rights
(1) Full Ownership: With complete rights over Rights of a person to demand from another as a
the property. definite passive subject, the fulfillment of a
(2) Naked Ownership: Absence of jus fruendi prestation to give, to do or not to do.
and jus utendi.
(3) Sole Ownership: Ownership vested only in Real Rights Personal Rights
one person. Definite active subject Definite active subject
(4) Co-Ownership: Ownership vested in 2 or who has a right against (creditor) and a
more persons. ALL persons generally definite passive
as an indefinite passive subject (debtor).
subject.
PAGE 90
Real Rights Personal Rights ACTIONS TO RECOVER OWNERSHIP AND

Object is generally a Subject matter is POSSESSION OF PROPERTY
corporeal thing. always an incorporeal
thing. Actions to Recover Possession
Generally extinguished Personal right Immovable Property
by the loss or survives the subject Accion Reivindicatoria
destruction of the thing matter. Recovery of ownership of real property.
over which it is Including but not limited to possession.
exercised. Prescription of Action: 30 years.
It is directed against It is binding or
the whole world, giving enforceable only Accion Publiciana
rise to real actions against a particular Recovery of a better right to possess (de jure).
against 3rd persons. person giving rise to Judgment as to who has the better right
personal actions of possession.
against such debtor. Also, actions for ejectment not filed
within 1 year must be filed as accion
publiciana.
REAL ACTION v. PERSONAL ACTION (ROC, Prescription: 10 years.
Rule 4 Sec 1-2)
Accion Interdictal
Real action A summary action for recovery of physical
Actions affecting title to or possession of real possession through either an action for Forcible
property or any interest therein. Entry or Unlawful Detainer.
Prior physical possession by the plaintiff
Personal action
is not required.
All other actions.
The action must be filed within 1 year
ACTION IN REM v. ACTION IN PERSONAM v. AFTER dispossession/unlawful
ACTION QUASI IN REM possession/demand to vacate.
Action in rem Distinction between forcible entry and unlawful

Action against a property, judgment binding detainer
against the whole world. (1) Forcible Entry: Lawful possessor deprived
through FISTS:
Action in personam FISTS (Force, Intimidation, Strategy,
Action against a specific person, judgment Threats, Stealth)
binding against that particular person. Prescription: 1 year from dispossession
(force, intimidation, threats) or from
Action quasi in rem knowledge of dispossession (strategy,
Action against a specific property with respect stealth).
to a person.
(2) Unlawful Detainer: Possessor refused to
REMEDIES vacate upon demand by owner.
DOCTRINE OF SELF-HELP [NCC 429-430] Legal possession (by permission/
The owner may use such force as may be tolerance) becomes unlawful upon failure
reasonably necessary to repel or prevent an to vacate.
actual or threatened unlawful physical Prescription of action: 1 year from last
invasion or usurpation of his property. notice to vacate.
Every owner may enclose or fence his land or
tenements by any other means without
detriment to servitudes constituted thereon.
PAGE 91
Movable property TAXATION

Forced contribution to the operation of
Replevin government.
For manual delivery of property
Prescription of Right: 4 years (GF) or 8 years EMINENT DOMAIN
(BF) Property taken for public use/purpose, but
subject to due process and payment of just
Requisites for recovery of property [NCC 434] compensation.
(1) Property must be identified;
Through a relocation survey and a title Requisites: To justify the exercise of the right of
properly identifying boundaries and eminent domain, the following requisites must
location. all be present:
(a) Private property as the object of the
(2) Plaintiff must rely on the strength of his title expropriation;
and not on weakness of defendants title. (b) The property is taken by the State or by
Right must be founded on positive title competent authority;
and not on lack or insufficiency of (c) The purpose of the taking is for public use;
defendants. (d) The taking must be attended with due
Ei incumbit probatio qui dicit, non qui process of law; and
negat: He who asserts, not he who denied (e) There is payment of just compensation.
must prove.
SPECIFIC LIMITATIONS
Imposed by law, sic utere tuo, nuisance, state of
LIMITATIONS ON OWNERSHIP necessity, easements, and those voluntarily
imposed by the owner: servitudes, mortgages
LIMITATIONS ON THE RIGHT OF imposed by contract.
OWNERSHIP PROVIDED BY THE LAW
(1) Legal Servitudes: once requisites are satisfied,
GENERAL LIMITATIONS the servient owner may ask the Court to
declare the existence of an easement.
Taxation, eminent domain, police power (a) Art. 644 & 678: Aqueduct
(b) Art. 679: Planting of trees
POLICE POWER (c) Art. 670: Light and View
Property taken with no compensation for (d) Art. 649 & 652: Right of Way
general welfare. (e) Art. 637: Passage of water from upper to
When any property is condemned or seized by lower tenements
competent authority in the interest of health, (f) Art. 676: Drainage of buildings
safety or security, the owner thereof shall not (g) Art. 684-687: Lateral and subjacent
be entitled to compensation, unless he can support
show that such condemnation or seizure is
unjustified. [Art. 436, Civil Code] (2) Must not injure the rights of a third person
(a) Sic Utere Tuo Ut Alienum Non Laedas
Requisites: To justify the exercise of police (b) The owner of a thing cannot make use
power, the following must appear [US v thereof in such manner as to injure the
Toribio(1910)]: rights of a third person. [NCC 431]
(a) The interests of the public generally, require
such interference (as distinguished from (3) Actions in a State of Necessity
those of a particular class); and The owner of a thing has no right to prohibit
(b) The means are reasonably necessary for the the interference of another with the same, if
accomplishment of a purpose, and not the interference is necessary to avert an
unduly oppressive. imminent danger and the threatened
damage, compared to the damage arising to
PAGE 92
the owner from the interference, is much

greater. The owner may demand from the
person benefited, indemnity for the damage
to him. [NCC 432]
(4) Nuisance
A nuisance is any act, omission, establishment,
business, condition of property, or anything else
which:
(a) Injures or endangers the health or safety
of others;
(b) Annoys or offends the senses;
(c) Shocks, defies or disregards decency or
morality;
(d) Obstructs or interferes with the free
passage of any public highway or street,
or any body of water; or
(e) Hinders or impairs the use of property.
[NCC 694]
Summary of Actions:
Action Venue Summon Prayer Basis Prescription

Real Action In personam Possession Prior 1 year
Forcible Entry/Unlawful
physical
Detainer
possession
Real Action In personam Possession Real right of 10 years
Accion Publiciana
Possession [NCC 555(4)]
Real Action In personam Possession Ownership GF: 10 years
BF: 30 years
[NCC 1137]
Accion Reividicatoria Unless---

Torrens Title --
- Unless
laches
Real Action In personam Title Ownership 10 years

Reconveyance
(NCC 1456)
Real Action Quasi-in rem Quieting Ownership Imprescriptible
Quieting of Title
of Title
Personal In personam Possession Ownership GF: 4 years
Replevin
Action BF: 8 years
PAGE 93
Accession In cases where there is a clear and convincing

evidence to prove that the principal and the
accessory are not owned by one and the same
Accession the right by virtue of which the person or entity, the presumption shall not be
owner of a thing becomes the owner of applied and the actual ownership shall be upheld.
everything that is produced thereby, or which is In a number of cases, we recognized the separate
incorporated or attached thereto, either ownership of the land from the building and
naturally or artificially. [NCC 440] brushed aside the rule that accessory follows the
principal. [Villasi v. Garcia (2014)]
Accessories things joined to or included with
the principal thing for the latters Fruits: all periodical additions to a principal thing
embellishment, better use, or completion. produced by forces inherent to the thing itself.
CLASSIFICATION OF Kinds of Fruits

(1) Natural spontaneous products of soil and the
ACCESSION young and other products of animals [NCC 442
(1)].
(1) Accession Discreta (fruits) the right
pertaining to the owner of a thing over Under the rule partus sequitur ventrem, to the
everything produced thereby (by internal owner of female animals would also belong the
forces). young of such animals although this right is lost
when the owner mixes his cattle with those of
(2) Accession Continua the right pertaining to another.
the owner of a thing over everything that is
incorporated or attached thereto either (2) Industrial produced by lands of any kind
naturally or artificially; by external forces (by through cultivation or labor [NCC 442 (2)].
external forces).
(a) Over Immovables Standing trees are not fruits since they are
(i) Industrial considered immovables although they produce
(ii) Natural fruits themselves. However, they may be
(1) Alluvion considered as industrial fruits when they are
(2) Avulsion cultivated or exploited to carry on an industry.
(3) Change of Course of River
(4) Formation of Islands (3) Civil Fruits easily prorated for under NCC 544
(b) Over Movables they are deemed to accrue daily and belong to
(i) Conjunction and Adjunction the possessor in good faith in that proportion.
(ii) Commixtion and Confusion
(iii) Specification Note:
(a) Natural and Industrial Fruits are real
WITH RESPECT TO IMMOVABLES property while still ungathered.
(b) Only those that are manifest or born are
Accession Discreta considered as natural or industrial fruits.
Right of ownership to the fruits. [NCC 441]
Principles Applicable to Accession Discreta
General Rule: To the owner of the principal
belongs the natural, industrial and civil fruit. (1) Time of Accrual depending on kind:
Annuals: from the time seedlings appear on
Exceptions: the ground.
(1) Possession in good faith Perennials: from the time fruits actually
(2) Usufruct appear on the plants.
(3) Lease
(4) Antichresis
PAGE 94
Young of animals: from the time they are On the part of owner of materials: Allows the use of
in the womb, although unborn his materials without protest.
beginning of maximum ordinary period of
gestation. On the part of the builder, planter and sower: Knows
Fowls: from the time of incubation. that he does not have title to the land, nor the right
to build thereon OR no permission of the owner of
(2) A receiver of fruits has the obligation to pay the materials to pay their value.
the expenses incurred by a third person in
the production, gathering and preservation. Note:
[NCC 443] Bad faith leads to liability for damages and the
Exception: Receiver does not have to pay if loss of the works or the improvement without
fruits are recovered before gathering from reimbursement.
a possessor in bad faith, receiver does NOT Bad faith of one party neutralizes the bad faith of
have to pay indemnity. the other.
But if recovered after fruits have been
gathered, receiver must pay since the (2) Accession Continua Natural: Land deposits, etc.
fruits have been separated from
immovable, hence accession principles (a) Alluvium: Soil is gradually deposited on
will not apply. banks adjoining the river.
Principles Applicable to Accession Continua Requisites:

(1) Deposit of soil or sediment is gradual
(1) Accession Continua Artificial or Industrial: and imperceptible;
Building, planting or sowing on land owned (2) As a result of the action of the currents
by another (over immovables). of the waters of the river;
(3) Land where the accretion takes place is
General Rule: Whatever is built, planted or adjacent to the banks of the rivers; and
sown on the land of another + (4) Deemed to Exist: When the deposit of
improvements or repairs made thereon, the sediment has reached a level higher
belong to the owner of the land subject to than the highest level of the water
the rules on BPS. during the year.
Presumptions: Effect:
(a) All works, sowing and planting are The riparian owner automatically owns the
presumed made by the owner. Alluvion BUT it does not automatically
(b) All works are presumed made at the become registered property. [Reynante v CA
owners expense, unless the contrary is (1992)]
proved.
(c) The owner of the principal thing owns Rationale
the natural, industrial and civil fruits, To offset the owners loss from possible
except when the following persons exist: erosion due to the current of the river;
(i) Possessor in Good Faith To compensate for the subjection of the
(ii) Usufructuary land to encumbrances and legal
(iii) Lessee easements.
(iv) Antichretic creditor
(b) Avulsion: A portion of land is segregated
Meaning of bad faith from one estate by the forceful current of a
On the part of the landowner: Whenever the river, creek or torrent and transferred to
building, planting or sowing was done with the another.
knowledge and without opposition on his part.
PAGE 95
Requisites: (d) Formation of Islands

(1) Segregation and transfer of land is
sudden and abrupt; They belong to the State if:
(2) Caused by the current of the water; (i) Formed on the SEAS within the jurisdiction
and of the Philippines.
(3) The portion of land transported (ii) Formed on LAKES.
must be known and identifiable. (iii) Formed on NAVIGABLE or FLOATABLE
OR RIVERS:
(4) Can also apply to sudden transfer (1) Capable of affording a channel or
by other forces of nature such as passage for ships and vessels;
land transferred from a mountain (2) Must be sufficient not only to float
slope because of an earthquake. bancas and light boats, but also bigger
watercraft;
Effect: (3) Deep enough to allow unobstructed
The ownership of the detached property movements of ships and vessels.
is retained by the owner subject to
removal within 2 years from the TEST: can be used as a highway of
detachment. commerce, trade and travel.
(c) Change Of Course Of River They belong to the Owners of the nearest margins
or banks if:
Requisites: (i) Formed through successive accumulation of
(1) Change in the natural course of the alluvial deposits
waters of the river; and (ii) On NON-NAVIGABLE and NON-
(2) Such change causes the FLOATABLE RIVERS
abandonment of the river beds. (iii) If island is in the middle: divided
longitudinally in half.
Natural Bed: ground covered by its
waters during ordinary floods.
(3) Such change is sudden or abrupt
Results:
(i) Owners whose lands are occupied
by the new course automatically
become owners of the old bed, in
proportion to the area they lost
(ii) Owners of the lands adjoining the
old bed are given the right to
acquire the same by paying the
value of the land.
*Not exceeding the value of the land
invaded by the new bed (the old
property of the owner)
(iii) The new bed opened by the river on
a private estate shall become of
public dominion.
PAGE 96
Landowner
Good Faith Bad Faith
Rights of Landowner [NCC 448] Absolute Duties of Landowner [NCC

447]:
Options:
(1) Pay damages; and
(a) Buy (only after payment of indemnity (2) Allow removal; or
Good Faith
for necessary, useful and ornamental (3) Buy or pay for value of
Builder, expenses [NCC 546 and 548]); improvement.
Planter,
Sower (b) Sell to BP (unless the value of the land
[BPS] is considerably more than that of the
building or trees); or
Remedy: Rent to BP if L does not want
to buy
(c) Rent to S.
Rights of Landowner [NCC 449-452]
Options: SAME AS
Bad Faith
(a) Appropriate the improvements without GF: GF

paying indemnity;
(b) Demolish/Removal of the work of BPS
at the expense of BPS;
(c) Sell to BP; or
(d) Rent to the S
Absolute right to Damages from BPS.
PAGE 97
Landowner
Good Faith Bad Faith
Rights of Landowner: [NCC 447] Absolute Duties of Landowner: [NCC

Good 447]
Material Faith To buy the improvements unless M (1) Pay damages; and
Man can remove without damage. (2) Allow removal in any event; or
(3) Pay for value.
Bad Absolute Rights of Landowner [NCC SAME AS

Faith 447] GF: GF
(1) To appropriate the materials
without payment.
(2) Right to damages from M.
Landowner BPS Owner of Material

Good faith Good faith Good faith
Options: (1) Right of retention until (1) Collect value of material
(a) Right to acquire necessary and useful expenses primarily from BPS and
improvements and pay are paid; subsidiarily to landowner if
indemnity to BPS; subsidiarily (2) To pay value of materials to BPS is insolvent; and
liable to OM; OM. (2) Limited right of removal (if
(b) Sell the land to BP except if the removal will not cause
the value of the land is any injury)
considerably more; or
(c) Rent to sower.
Good faith Good faith Bad faith
Options: (1) Right of retention until (1) Lose the material without
(a) Right to acquire necessary and useful right to indemnity.
improvements and pay expenses are paid. (2) Must pay for damages to
indemnity to BPS; (2) Keep BPS without indemnity BPS.
(b) Sell land to BP except if the to OM and collect damages
value of the land is from him.
(c) Rent to sower.
Good faith Bad faith Bad faith
(1) Landowner has right to collect Recover necessary expenses for (1) Recover value from BPS (as if
damages from BPS in any preservation of land from both are in good faith)
case and the option to either: landowner unless landowner (2) If BPS acquires improvement,
(a) Acquire improvements sells land. remove materials if feasible
w/o paying for indemnity; w/o injury
(b) Demolition or restoration; (3) No action against landowner
or but may be liable to
(c) Sell to BP, or to rent to landowner for consequential
sower damages
(2) Pay necessary expenses to
BPS.
PAGE 98
Landowner BPS Owner of Material

Bad faith Bad faith Bad faith
Same as when all acted in good Same as when all acted in good Same as when all acted in good
faith under Article 453 faith under Article 453 faith under Article 453
Bad faith Good faith Good faith
(1) Acquire improvement after (1) May remove improvements. (1) Remove materials if possible
paying indemnity and (2) Be indemnified for damages w/o injury
damages to BPS unless the in any event. (2) Collect value of materials
latter decides to remove. (3) Pay OM the value of the from BPS; subsidiarily from
(2) Subsidiarily liable to OM for materials. landowner
value of materials.
Bad faith Bad faith Good faith
Options: (a) Right of retention until (a) Collect value of materials
(a) Acquire improvements after necessary expenses are paid. primarily from BPS and
indemnity; subsidiarily liable (b) Pay value of materials to OM subsidiarily from landowner.
to OM for value of materials; and pay him damages. (b) Collect damages from BPS.
(b) Sell the land to BP except if (c) Absolute right to remove
the value of the land is materials in any event.
(c) Rent to sower.
Good faith Bad faith Good faith
(1) Landowner has right to collect (1) Right to necessary expenses. (1) Collect value of materials
damages from BPS in any (2) Pay value of materials to OM. primarily from BPS and
case and the option to either: (3) Pay damages to OM/LO. subsidiarily from landowner
(a) Acquire improvements (2) Collect damages from BPS
w/o paying for indemnity; (3) If BPS acquires
(b) Demolition or restoration; improvements, absolute right
or of removal in any event.
(c) Sell to BP, or to rent to
sower
(2) Pay necessary expenses to
BPS.
(3) Subsidiarily liable to OM.
Bad faith Good faith Bad faith
Acquire improvements and pay (1) Receive indemnity for (1) No right to indemnity.
indemnity and damages to BPS damages. (2) Loses right to material.
unless the latter decides to (2) Absolute right of removal of
remove materials. improvements in any event.
PAGE 99
WITH RESPECT TO MOVABLE owner of the accessory for its value in its
PROPERTY uncontroverted state.
Three Types (2) If union was in bad faith, NCC 470 applies:
(1) Conjunction or Adjunction - process where 2 Owner of accessory in bad faith loses the
movables belonging to different owners are thing incorporated and has the obligation to
attached to each other to form a single object. indemnify the owner of the principal thing
for damages.
(2) Mixture the union of material where the If owner of principal is in bad faith, owner of
components lose their identity. the accessory has a right to choose between
the owner of principal paying him its value
Kinds: or that the thing belonging to him be
(a) Commixtion mixture of solids separated, even though for this purpose it
(b) Confusion mixture of liquids and gases be necessary to destroy the principal thing;
and in both cases, there shall be indemnity
(3) Specification transforming/giving of a new for damages
form to anothers material through labor.
Test to determine the principal thing
Adjunction In the order of application, the principal is that:
(1) To which the other has been united as an
Requisites: ornament or for its use or perfection (Rule of
(1) There are 2 movables belonging to 2 different importance and purpose).
owners; (2) Of greater value.
(2) They are united in such a way that they form a (3) Of greater volume.
single object; and (4) That of greater merits, taking into
(3) They are so inseparable that their separation consideration all the pertinent legal
would impair their nature or result in provisions, as well as the comparative merits,
substantial injury to either component. utility and volume of their respective things.
[Manresa]
Kinds of Adjunction:
(1) Inclusion or engraftment e.g. a diamond is When separation allowed
set on a gold ring (1) When separation will not cause any injury; or
(2) Soldadura or soldering e.g. when lead is (2) When the accessory is much more precious:
united or fused to an object made of lead (a) Owner of accessory may demand
(a) It is ferruminacion if both the accessory and separation even though the principal
principal objects are of the same metal; thing may suffer.
and (b) Owner who caused the union shall bear
(b) Plumbatura, if they are of different metals the expenses for separation even if he
(3) Escritura or writing e.g. when a person writes acted in good faith.
on paper belonging to another; (3) When the owner of the principal is in bad
(4) Pintura or painting e.g. when a person faith.
paints on canvas belonging to another;
(5) Tejido or weaving e.g. when threads Mixture
belonging to different owners are used in Kinds of Mixtures:
making textile (1) Commixtion: mixture of solid things
(2) Confusion: mixture of liquid things
Ownership of new object formed by adjunction Rules:

(1) If union was made in good faith (1) Mixture by will of the owners:
The owner of principal thing acquires the (a) Primarily governed by their stipulations.
accessory, with obligation to indemnify the
PAGE 100
(b) In the absence of stipulation, each owner (b) To demand indemnity for the material.
acquires a right or interest in the mixture
in proportion to the value of his material. If the owner was in bad faith, maker may
appropriate the new thing without paying the
(2) Mixture caused by an owner in good faith or by owner OR require the owner to pay him the value
chance of the thing or his work, with right to indemnity
(a) Share of each owner shall be proportional
to the value of the part that belonged to (2) Person in bad faith
him.
(b) If things mixed are exactly the same kind, General rule:
quality and quantity, divide the mixture (a) Owner may either appropriate the new
equally. thing to himself without paying the maker
(c) If things mixed are of different kind or OR
quality, a co-ownership arises. (b) Owner may demand value of material plus
(d) If they can be separated without injury, damages
the owners may demand separation.
(e) Expenses are borne by the owners pro Exception:
rata. The first option is not available in case the
(f) NOTE: Good faith does not necessarily value of the work, for artistic or scrientific
exclude negligence, which gives rise to reasons, is considerably more than that of the
damages. material
(3) Mixture caused by an owner in bad faith (3) Person made use of material with consent and
(a) Actor forfeits the thing belonging to him. without objection of owner
(b) Actor also becomes liable for damages.
Rights shall be determined as though both
(4) Mixture made with knowledge and without acted in good faith
objection of the other owner
Rights to be determined as though both acted
in good faith.
Quieting of Title or Interest
Specification
in and Removal or
Definition:
Takes place when the work of a person is done on
Prevention of Cloud over
the material of another, such material, in Title to or Interest in Real
consequence of the work itself, undergoes a
transformation. Property
Rules: IN GENERAL
A remedy or form of proceeding originating in
(1) Person in good faith equity jurisprudence. Equity comes to the aid of
General rule: the plaintiff who would suffer if the instrument
Worker becomes the owner but must (which appear to be valid but is in reality void,
indemnify the owner (who was also in good ineffective, voidable or unenforceable) was to be
faith) for the value of the material. enforced.
Exception:
If the material is more valuable than the new PURPOSE
thing, the owner of the material may choose: (1) To declare:
(a) To take the new thing but must pay for (a) The invalidity of a claim on a title; or
the work or labor; or (b) The invalidity of an interest in property.
PAGE 101
(2) To free the plaintiff and all those claiming (3) Plaintiff must return the benefits received
under him from any hostile claim on the from the defendant.
property.
There is a CLOUD on title to real property or
NATURE: QUASI IN REM any interest to real property
A suit against a particular person or persons in Cloud on title means a semblance of title, either
legal or equitable, or a claim or a right in real
respect to the res and the judgment will apply
property, appearing in some legal form but which
only to the property in dispute.
is, in fact, invalid or which would be inequitable to
The action to quiet title is characterized as
enforce.
proceeding quasi in rem. Technically, it is neither
in rem nor in personam. In an action quasi in
A cloud exists if:
rem, an individual is named as a defendant.
(1) There is a claim emerging by reason of:
However, unlike suits in rem, a quasi in rem
(a) Any instrument e.g. a contract, or any
judgment is conclusive only between the parties.
deed of conveyance, mortgage,
[Spouses Portic v. Cristobal] assignment, waiver, etc. covering the
property concerned;
JUSTIFICATIONS FOR QUIETING (b) Any record, claim, encumbrance e.g. an
OF TITLE attachment, lien, inscription, adverse
(1) To prevent future or further litigation on the claim, lis pendens, on a title; or
ownership of the property. (c) Any proceeding e.g. an extrajudicial
(2) To protect the true title and possession. partition of property.
(3) To protect the real interest of both parties. (2) The claim should appear valid or effective and
(4) To determine and make known the precise extraneous evidence is needed to prove their
state of the title for the guidance of all. validity or invalidity;
(a) Test: Would the owner of the property in
an action for ejectment brought by the
THE ACTION TO QUIET TITLE adverse party be required to offer
DOES NOT APPLY: evidence to defeat a recovery?
(1) To questions involving interpretation of (b) As a general rule, a cloud is not created by
documents; mere verbal or parole assertion of
(2) To mere written or oral assertions of claim, ownership or an interest in property.
unless made in a legal proceeding or (3) Such instrument, etc. is, in truth and in fact,
asserting that an instrument or entry in invalid, ineffective, voidable, or unenforceable,
plaintiffs favor is not what it purports to be; or has been extinguished or terminated, or
(3) To boundary disputes; has been barred by extinctive prescription;
(4) To deeds by strangers to the title unless and
purporting to convey the property of the (4) Such instrument, etc. may be prejudicial to
plaintiff; the true owner or possessor.
(5) To instruments invalid on their face; or
(6) Where the validity of the instrument involves a The plaintiff must have legal or equitable title
pure question of law. to, or interest in the real property [NCC 477]
(1) Legal title: the party is the registered owner of
REQUIREMENTS the property.
(2) Equitable title: the person has the beneficial
ownership of the property.
REQUISITES OF AN ACTION TO QUIET
TITLE The plaintiff must return the benefits received
(1) There is a CLOUD on title to real property or from the defendant [NCC 479]
any interest to real property;
(2) The plaintiff must have legal or equitable title
to, or interest in the real property; and
PAGE 102
QUIETING OF TITLE V. REMOVAL Co-ownership

OF CLOUD
REQUISITES OF AN ACTION TO DEFINITION
The form of ownership when the ownership of an
PREVENT A CLOUD: undivided thing or right belongs to different
(1) Plaintiff has a title to a real property or
persons. [NCC 484]
interest therein;
(2) Defendant is bent on creating a cloud on the
title or interest therein. The danger must not REQUISITES
be merely speculative or imaginary but (1) Plurality of owners ;
imminent; and (2) Object must be an undivided thing or right ;
(3) Unless the defendant is restrained or stopped, and
the title or interest of the plaintiff will be (3) Each co-owners right must be limited only to
prejudiced or adversely affected. his ideal or abstract share of the physical
whole.
PRESCRIPTION/NON-
PRESCRIPTION OF ACTION WHAT GOVERNS CO-
OWNERSHIP
PRESCRIPTION OF ACTION (1) Contracts ;
(1) When the plaintiff is in possession of the (2) Special laws; and
property, the action to quiet title does not (3) The Civil Code
prescribe.
CHARACTERISTICS OF CO-
The rationale for this rule has been aptly
stated thus: OWNERSHIP
(1) There are 2 or more co-owners.
The owner of real property who is in (2) There is a single object which is not materially
possession thereof may wait until his or physically divided and over which and his
possession is invaded or his title is attacked ideal share of the whole.
before taking steps to vindicate his right. A (3) There is no mutual representation by the co-
person claiming title to real property, but not owners.
in possession thereof, must act affirmatively (4) It exists for the common enjoyment of the co-
and within the time provided by the statute. owners.
Possession is a continuing right as is the right (5) It has no distinct legal personality.
to defend such possession. So it has been (6) It is governed first of all by the contract of the
determined that an owner of real property in parties; otherwise, by special legal provisions,
possession has a continuing right to invoke a and in default of such provisions, by the
court of equity to remove a cloud that is a provisions of Title III on Co-ownership.
continuing menace to his title. Such a menace
is compared to a continuing nuisance or There are ideal shares defined but not
trespass which is treated as successive physically identified [NCC 485]
nuisances or trespasses, not barred by statute (1) The share of the co-owners, in the benefits as
until continued without interruption for a well as in the charges, shall be proportional to
length of time sufficient to affect a change of their respective interests.
title as a matter of law." [Pingol v. CA] (2) Any stipulation in a contract to the contrary
shall be void.
(2) When the plaintiff is not in possession of the (3) The portions belonging to the co-owners in
property, the action to quiet title may the co-ownership shall be presumed equal,
prescribe. unless the contrary is proved.
(a) 10 yrs. ordinary prescription
(b) 30 yrs. extraordinary prescription
PAGE 103
Each co-owner has absolute control over his Article 90: if matter is not provided in the FC
ideal share Chapter on ACP, then rules on co-
Every co-owner has absolute ownership of his ownership will apply
undivided interest in the co-owned property and is
free to alienate, assign or mortgage his interest (2) Purchase creating implied trust:
except as to purely personal rights. While a co- If two or more persons agree to purchase
owner has the right to freely sell and dispose of property and by common consent, the legal
his undivided interest, nevertheless, as a co- title is taken in the name of one of them for
owner, he cannot alienate the shares of his other the benefit of all, a trust is created by force of
co-owners nemo dat qui non habet. [Acabal v. law in favor of the others in proportion to the
Acabal] interest of each. [NCC 1452]
Mutual respect among co-owners with regard (3) Easement of Party Wall: co-ownership of part-
to use, enjoyment, and preservation of the owners of a party wall (NCC 658)
things as a whole
(1) The property or thing held pro-indiviso is (4) Condominium Law: co-ownership of the
impressed with a fiduciary character: each co- common areas by holders of units
owner becomes a trustee for the benefit of his
co-owners and he may not do any act
Sec. 6, RA 4726. The Condominium Act. Unless
prejudicial to the interest of his co-owners.
otherwise expressly provided in the enabling or
(2) Until a judicial division is made, the respective
master deed or the declaration of restrictions, the
part of each holder cannot be determined. incidents of a condominium grant are as follows:
The effects of this would be: (c) Unless otherwise, provided, the common
(a) Each co-owner exercises, together with areas are held in common by the holders of
the others, joint ownership over the pro
units, in equal shares, one for each unit.
indiviso property, in addition to his use
and enjoyment of the same
(b) Each co-owner may enjoy the whole CONTRACT
property and use it.
By Agreement of Two or More Persons
Only limitation: a co-owner cannot use or enjoy the Article 494, Civil Code. No co-owner shall be obliged to
property in a manner that shall injure the interest remain in the co-ownership. Each co-owner may
of his other co-owners. [Pardell v. Bartolome] demand at any time the partition of the thing owned
in common, insofar as his share is concerned.
SOURCES OF CO-OWNERSHIP Nevertheless, an agreement to keep the thing
Law, contract, succession, testamentary undivided for a certain period of time, not exceeding
disposition or donation inter vivos, fortuitous ten years, shall be valid. This term may be extended by
event or chance, and by occupancy a new agreement.
LAW A donor or testator may prohibit partition for a period

(1) Cohabitation: co-ownership between common which shall not exceed twenty years.
law spouses Neither shall there be any partition when it is
prohibited by law.
The Family Code, in the following provisions,
made the rules on co-ownership apply: No prescription shall run in favor of a co-owner or co-
Article 147: between a man and a woman heir against his co-owners or co-heirs so long as he
capacitated to marry each other expressly or impliedly recognizes the co-ownership.
Article 148: between a man and a woman
not capacitated to marry each other
PAGE 104
By the creation of a Universal Partnership BY FORTUITOUS EVENT OR BY

of all present property CHANCE
NCC 1778. A partnership of all present property is (1) Co-ownership between owners of 2 things
that in which the partners contribute all the that are mixed by chance or by will of the
property which actually belongs to them to a owners:
common fund, with the intention of dividing the
same among themselves, as well as all the profits
[NCC 472] Each owner shall acquire a right
which they may acquire therewith.
proportional to the part belonging to him, bearing
in mind the value of the things mixed or confused.
NCC 1779. In a universal partnership of all present
property, the property which belonged to each of (2) Hidden Treasure [NCC 438]
the partners at the time of the constitution of the When the discovery is made on the property of
partnership, becomes the common property of all another, or of the State or any of its
the partners, as well as all the profits which they subdivisions, and by chance, one-half shall be
may acquire therewith. allowed to the finder.
A stipulation for the common enjoyment of any BY OCCUPANCY

other profits may also be made; but the property Harvesting and Fishing: Co-ownership by two or
which the partners may acquire subsequently by more persons who have seized a res nullius thing
inheritance, legacy, or donation cannot be
included in such stipulation, except the fruits
thereof.
BY ASSOCIATIONS AND SOCIETIES
WITH SECRET ARTICLES
Articles are kept secret among the members and
SUCCESSION any one of the members may contract in his own
name with third persons are governed by the
Intestate succession: co-ownership between the provisions relating to co-ownership.
heirs before partition of the estate
NCC 1078. Where there are two or more heirs, the

RIGHTS OF CO-OWNERS
whole estate of the decedent is, before its
partition, owned in common by such heirs, subject RIGHT TO SHARE IN THE BENEFITS AS
to the payment of debts of the deceased. WELL AS THE CHARGES [NCC 485]
For as long as the estate is left undivided the Proportional to their interests;
heirs will be considered co-owners of the Stipulation to the contrary is void;
inheritance. Portion belonging to the co-owners is presumed
If one of the heirs dies, his heirs will in turn be equal.
co-owners of the surviving original heirs.
RIGHT TO USE THE THING OWNED IN
TESTAMENTARY DISPOSITION OR COMMON [NCC 486]
DONATION INTER VIVOS Limitations:
(1) When a donation is made to several persons That he use the thing in accordance with the
jointly, it is understood to be in equal shares, purpose for which it is intended.
and there shall be no right of accretion
among them, unless the donor has otherwise That he uses it in such a way as to not injure the
provided. [NCC 753] interest of the co-ownership or prevent the other
(2) A donor or testator may prohibit partition for a co-owners from using it.
period which shall not exceed 20 years.
PAGE 105
RIGHT TO BRING AN ORDER IN (4) Donor or testator may prohibit partition, period
EJECTMENT [NCC 487] NOT to exceed 20 years.
(5) No partition may be made if prohibited by
law.
RIGHT TO COMPEL OTHER CO-OWNERS TO
(6) Right does not prescribe.
CONTRIBUTE TO THE EXPENSES OF
PRESERVATION AND TO THE TAXES [NCC 488] RIGHT TO REDEMPTION [NCC 1619]
(1) Any one of the other co-owners may exempt (1) May exercise this in case the shares of other
himself by renouncing so much of his co-owners are sold to a third person
undivided interest as may be equivalent to his (2) If 2 or more co-owners wish to exercise this
share of the expenses and taxes. right, redemption will be made in proportion
(2) No waiver if it is prejudicial to the co- to their share in the thing
ownership
Note: Rules on Co-Ownership Not Applicable to
RIGHT TO REPAIR [NCC 489] CPG or ACP.
(1) Repairs for preservation may be made at the (1) These are governed by the Family Code.
will of one of the co-owners but he must first (2) Even void marriages and cohabitation of
notify his co-owners. incapacitated persons are governed by FC 50,
(2) Expenses to improve or embellish, decided 147, and 148.
upon by a majority.
RIGHT TO OPPOSE ALTERATIONS [NCC

RULES
491]
(1) Consent of all the others is needed to make ON RENUNCIATION
alterations, even if the alteration benefits all. (1) Other co-owners may choose not to
(2) If the withholding of the consent is clearly contribute to the expenses by renouncing so
prejudicial to the common interest, the courts much of his undivided interest as may be
may afford relief equivalent to his share of the necessary
(3) Reason for the rule: alteration is an act of expenses and taxes.
ownership, not of mere administration. (2) Renunciation must be express; thus, failure to
pay is not a renunciation of the right.
(3) Requires the consent of other co-owners
RIGHT TO FULL OWNERSHIP OF HIS PART AND
because it is a case of dacion en pago
OF THE FRUITS AND BENEFITS PERTAINING (cessation of rights) involving expenses and
THERETO [NCC 493] taxes already paid. (J.B.L. Reyes)
(1) Therefore he may alienate, assign or (4) Cannot renounce his share if it will be
mortgage it, and even substitute another prejudicial to another co-owner.
person in its enjoyment except when personal
rights are involved. REPAIRS FOR PRESERVATION
(2) The effect of the alienation or the mortgage, (1) First, notify other co-owners, as far as
with respect to the co-owners, shall be limited practicable.
to the portion which may be allotted to him in (2) Co-owner may advance expenses for
the division upon the termination of the co- preservation even without prior consent; he is
ownership. entitled to reimbursement.
RIGHT TO PARTITION [NCC 494] EMBELLISHMENTS OR
(1) Each may demand at any time the partition of
the thing, insofar as his share is concerned. IMPROVEMENTS
(2) An agreement to keep the thing undivided for (1) Notify co-owners of improvements and
a certain period NOT exceeding 10 years is embellishments to be made.
valid.
(3) Term may be extended by a new agreement. If no notification is made, the co-owner who
advanced the expenses will only have the
PAGE 106
right to be reimbursed if he proves the Registration under the Torrens system is

necessity of such repairs and the constructive notice of title but it NOT SUFFICIENT
reasonableness of the expenses. NOTICE of the act of repudiation. [Adille v CA]
Exception: If proven that had there been a PARTITION OR DIVISION

notification, they could have hired another
who would charge less or that they know of a Procedure for Partition
store that sells the needed material at a Governing rule: Rule 69 of the Rules of Court.
cheaper price How: By agreement of parties or by judicial
decree.
The reimbursement will be limited to the
Form: Oral or Written (Statute of Frauds does
amount that should have been spent had he
not operate here because it is not a conveyance
notified the others, and the difference shall be
of property but a mere segregation or
borne by him alone.
designation of which parts belong to whom)
The Rules of Court do not preclude agreements
(2) Decisions by the majority must be followed.
or settlements.
TERMINATION/ Action for Partition will determine:
EXTINGUISHMENT (1) Whether or not the plaintiff is indeed a co-
owner of the property
TOTAL DESTRUCTION OF THING OR LOSS OF (2) HOW will the property be divided between the
plaintiff and defendant.
THE PROPERTY CO-OWNED
Is there still co-ownership if a building is
Effect:
destroyed?Yes, over the land and the debris.
(1) Confers exclusive ownership of the property
adjudicated to a co-heir.
MERGER OF ALL INTERESTS IN ONE PERSON (2) Co-heirs shall be reciprocally bound to
warrant the title to and the quality of each
ACQUISITIVE PRESCRIPTION property adjudicated.
(3) Reciprocal obligation of warranty shall be
By whom proportionate to the respective hereditary
(1) A third person. [NCC 1106] shares of co-heirs.
(2) A co-owner against the other co-owners. (4) An action to enforce warranty must be
brought within 10 years from the date the
Requisites for acquisitive prescription against co- right accrues.
owners [Adille v CA (1988)]: (5) The co-heirs shall not be liable for the
(1) A co-owner repudiates the co-ownership; subsequent insolvency of the debtor of the
(2) The act of repudiation is clearly made known estate.
to other co-owners;
(3) The evidence thereon is clear and conclusive; Unless partition is effected, each heir cannot
and claim sole ownership over a definite portion of the
(4) The co-owner has been in possession thru land. Heirs become the undivided owner of the
open, continuous, exclusive and notorious whole estate. Until said partition, he cannot
possession of the property for the period alienate a specific part of the estate. Until then,
required by law. they can only sell their successional rights.
[Carvaria v. CA]
Note: there is a presumption that possession of a
co-owner is NOT adverse Rights against individual co-owners in case of
partition [NCC 497]
(1) The creditors are allowed to take part in the
partition.
PAGE 107
(2) Reason for the rule: They own part of the Right of Possession Right to possess
interest of the co-owners who made the (jus possessionis) (jus possidendi)
assignment or alienation. Independent right Incident to
ownership
Intervention of creditors and assignees
General Rule: Creditors may take part in the Possession includes the idea of occupation. It
division. They need to establish the existence of cannot exist without it. (Exceptions: NCC 537)
the credit during co-ownership.
Exception: If the partition was already executed

CHARACTERISTICS
Exception to the exception: If there was fraud, or a ESSENTIAL REQUISITES OF

previous formal opposition to the partition. POSSESSION
(1) Corpus possessionis: Holding (actual or
Rules on notice to creditors and assignees: constructive) of a thing or exercise of a right, if
(1) The law does not expressly require previous right is involved.
notice to the creditors and assignees before a (a) General Rule: Possession and cultivation
partition, but the right of creditors and of a portion of a tract under claim of
assignees to take part in the division ownership of all is a constructive
presupposes the duty to notify. possession of all, if the remainder is not in
(2) If notice is not given, the partition will not be adverse possession of another. [Ramos v.
binding on them. Director of Lands (1918)]
(3) Once notice has been given, it is the duty of (b) Doctrine of constructive possession applies
creditors and assignees to intervene and when the possession is under title calling
make known their stand. for the whole. It does not apply where
(a) If they fail, they cannot question the possession is without title.
division made, except in cases of fraud.
(b) If they formulate a formal question, they (2) Animus possidendi: Intention to possess
can contest such partition (a) There is no possession if the holder does
not want to exercise the rights of a
Partition in case co-owners cannot agree on the possessor.
partition of an indivisible thing (NCC 498) (b) Implied from the acts of the possessor.
(c) May be contradicted and rebutted by
evidence to prove that the person who is
in possession does not in fact exercise
Possession power or control and does not intend to
do so.
DEFINITION
The holding of a thing or the enjoyment of a right. DEGREES OF POSSESSION
[NCC 523] (1) Mere holding or possession without title and in
violation of the right of the owner
CONCEPT OF POSSESSION (a) e.g. possession of a thief or usurper of
land
To possess, in a grammatical sense, means to (b) Here, both the possessor and the public
have, to physically and actually occupy a thing, know that the possession is wrongful.
with or without right. [Sanchez Roman]
It is the holding of a thing or a right, whether by (2) Possession with juridical title but not that of
material occupation or by the fact that the thing ownership
or the right is subjected to the action of our will. (a) e.g. possession of a tenant, depository
[Manresa] agent, bailee trustee, lessee, antichretic
It is an independent right apart from ownership. creditor.
(b) This possession is peaceably acquired.
PAGE 108
(c) This degree of possession will never ripen Possession in the Concept of an Owner, and
into full ownership as long as there is no Possession in the Concept of a Holder with the
repudiation of concept under which Ownership Belonging to Another [NCC 525]
property is held. (1) Possession in Concept of Holder:
(a) One who possesses as a mere holder, not
(3) Possession with just title or title sufficient to in the concept of owner, acknowledges in
transfer ownership, but not from the true another a superior right which he believes
owner to be ownership, whether his belief be
(a) e.g. possession of a vendee from a vendor right or wrong.
who pretends to be the owner. (b) e.g. tenant, usufructuary, borrower in
(b) This degree of possession ripens into full commodatum.
ownership by lapse of time.
(2) Possession in Concept of Owner:
(4) Possession with a just title from the true owner (a) May be exercised by the owner himself or
(a) This is possession that springs from one who claims to be so.
ownership. (b) When a person claims to be the owner of a
thing, whether he believes so or not,
CASES OF POSSESSION acting as an owner, and performing acts
of ownership, and he is or may be
Possession for Oneself, or Possession considered as the owner by those who
Exercised in Ones Own Name and Possession witness his exercise of proprietary rights,
in the Name of Another [NCC 524] then he is in the possession of an owner.
(1) In ones own name the fact of possession and This is the kind of possession that ripens
the right to such possession is found in the into ownership under Article 540, when
same person. such possession is public, peaceful and
(2) In the name of another the one in actual uninterrupted. [see Art. 1118].
possession is without any right of his own, but
is merely an instrument of another in the Effects of Possession in Concept of an Owner
exercise of the latters possession. (1) Converted into ownership by the lapse of time
necessary for prescription.
Kinds of possession in the name of another (2) Possessor can bring all actions necessary to
(a) Necessary arises by operation of law protect his possession, availing himself of any
e.g. representatives who exercise possession action which an owner can bring, except
in behalf of a conceived child, juridical accion reivindicatoria which is substituted by
persons, persons not sui juris and the conjugal accion publiciana.
partnership (3) He can ask for the inscription of possession in
the registry of property.
(b) Voluntary effected through the mutual (4) Upon recovering possession from one who has
consent of the parties unlawfully deprived him of it, he can demand
(i) e.g. agents or administrators appointed fruits and damages.
by the owner or possessor. (5) He can do on the thing possessed everything
(ii) Third person may also voluntary exercise that the law authorizes an owner to do; he can
possession in the name of another, but it exercise the right of pre-emption and is
does not become effective unless ratified entitled to the indemnity in case of
by the person in whose name it is appropriation.
exercised.
Possession in Good Faith and Possession in
Bad Faith [NCC 526]
(1) Possessor in good faith one who is unaware
that there exists a flaw which invalidates his
acquisition.
PAGE 109
(a) Good faith consists in the possessors the law excuses no one from compliance
belief that the person from whom he therewith, will be defeated.
received a thing was the owner of the
same and could convey his title. What Things May be Possessed [NCC 530]
(b) It implies freedom from knowledge and Only things and rights which are susceptible of
circumstances which ought to put a being appropriated may be the object of
person on inquiry. possession.
(c) The belief of a possessor that he is the
owner of the thing must be based upon What May Not Be Possessed by Private
the title or mode of acquisition, such as a Persons
sale, a donation, inheritance or other (1) Res Communes
means of transmitting ownership; for (2) Property of Public Dominion
without this, there can be no real, well- (3) Right under discontinuous and/or non-
grounded belief of ones ownership. apparent easement
(d) Error in the application of the law, in the
legal solutions that arise from such ACQUISITION OF POSSESSION
application, in the appreciation of legal
consequence of certain acts, and in the
interpretation of doubtful provisions or
WAYS OF ACQUIRING POSSESSION
doctrines, may properly serve as basis for [NCC 531]
good faith. (1) By material occupation
(e) A misconception of the law, no matter (a) Material occupation used in its ordinary
how honest cannot have the effect of meaning and not in its technical meaning
making one a possessor in good faith under NCC 712, which defines occupation
when he does not hold a title valid in form as a mode of acquiring ownership.
or a deed sufficient in terms to transfer (b) Possession acquired by material
property. occupation is only possession as a fact,
not the legal right of possession.
(2) Possessor in bad faith one who knows his (c) Constructive delivery is considered as an
title is defective. equivalent of material occupation in two
(a) Only personal knowledge of the flaw in situations where such occupation is
the title or mode of acquisition can make essential to the acquisition of possession:
him a possessor in bad faith for bad faith (i) Tradicion brevi manu takes place
is not transmissible from one person to when one who possess a thing by title
another. other than ownership, continues to
(b) Mistake upon a doubtful or difficult possess the same under a new title,
question of law as a basis of good faith. that of ownership.
(c) Mistake or ignorance of the law, by itself, (ii) Tradicion constitutum possessorium
cannot become the basis of good faith. takes place when the owner alienates
What makes the error or ignorance a basis the thing, but continues to possess
of good faith is the presence of an the same under a different title.
apparent doubt or difficulty in the law.
In other words, the law is complex, (2) By subjection to the action of ones will
ambiguous, or vague such that it is open (a) This mode refers more to the right of
to two or more interpretations. possession than to possession as a fact.
(d) When the ignorance of the law is gross The action of our will must be juridical,
and inexcusable, as when a person of in the sense that it must be according to
average intelligence would know the law, law.
such ignorance cannot be the basis of (b) It includes:
good faith. Otherwise, the intendment of (i) Tradicion symbolica by delivering
Article 3 which states that, Ignorance of some object or symbol placing the
PAGE 110
thing under the control of the intention of possessing such thing or

transferee. exercising such right,
(ii) Tradicion longa manu by the
transferor pointing out to the Note:
transferee the things that are being (a) Bad faith is personal and intransmissible.
transferred. Only the person who acted in bad faith
must suffer its effects; his heir should not
(3) By execution of proper acts under legal be saddled with the consequences.
formalities (b) Good faith can only benefit the person
(a) This mode refers to juridical acts or the who has it; and the good faith of the heir
acquisition of possession by sufficient title cannot erase the effects of bad faith of his
evidenced by the performance of required predecessor.
formalities.
(b) Examples: By any person without any power whatsoever
(i) Donations; but subject to ratification, without prejudice to
(ii) Succession; proper case of negotiorum gestio [NCC 2144,
(iii) Contracts (like a sale with right to 2149, 2150]
repurchase); (a) Whoever voluntarily takes charge of the agency
(iv) Judicial possession; or management of the business or property of
(v) Execution of judgments; another, without any power from the latter, is
(vi) Execution and registration of public obliged to continue until the termination of
instruments; the affair and its incidents, or to require the
(vii) Inscription of possessory information person concerned to substitute him, if the
titles. owner is in a position to do so.
(c) The execution of the required formalities (b) This juridical relation does not arise in either
is equivalent to delivery of the property. of these instances:
(i) When the property or business is not
BY WHOM MAY POSSESSION BE neglected or abandoned;
ACQUIRED [NCC 532] (ii) If in fact the manager has been tacitly
(1) By the same person authorized by the owner.
(2) By his legal representative
(3) By his agent Qualifiedly, minors and incapacitated persons
(4) By any person without any power whatsoever [NCC 535]
but subject to ratification, without prejudice (1) Incapacitated all those who do not have the
to proper case of negotiorum gestio [Arts. capacity to act (insane, lunatic, deaf-mutes
2144, 2149, 2150] who cannot read and write, spendthrifts and
(5) Qualifiedly, minors and incapacitated persons those under civil interdiction).
(2) Object of possession things only, not rights.
By the same person (3) Method of acquisition material occupation;
Elements of personal acquisition: acquisition by means for which the
(1) Must have the capacity to acquire possession; incapacitated person has the capacity, such as
(2) Must have the intent to possess; and acquisition by succession, testate or intestate,
(3) The possibility to acquire possession must be or by donations propter nuptias, pure and
present. simple donations.
By his legal representative WHAT DO NOT AFFECT POSSESSION

Requisites of acquisition through another: [NCC 537]
(1) That the representative or agent has the (1) Acts merely tolerated
intention to acquire the thing or exercise the (a) Those which because of neighborliness or
right for another, and not for himself; and familiarity, the owner of property allows
(2) That the person for whom the thing has been another person to do on the property;
acquired or the right exercised, has the
PAGE 111
(b) Those services or benefits which ones (2) If there are two or more possessors, the one
property can give to another without longer in possession;
material injury or prejudice to the owner, (3) If the dates of possession are the same, the
who permits them out of friendship or one who presents a title; or
courtesy; (4) If all conditions are equal, the thing shall be
(c) Acts of little disturbances, which a person, placed in judicial deposit pending
in the interest of neighborliness or friendly determination of possession or ownership
relations permits others to do on his through proper proceedings.
property, although continued for a long
time, no right will be acquired by EFFECTS OF POSSESSION
prescription.
Note: Permissive use merely tolerated by the RIGHTS OF A POSSESSOR IN GOOD

possessor cannot affect possession and FAITH
cannot be the basis of acquisitive prescription. (1) Right to be protected and respencted in
Possession to constitute the foundation of possession; (NCC 539)
prescriptive right must be possession under (2) Right to bring action to restore possession;
claim of title; it must be adverse. [Cuaycong v. (3) Right to the fruits already received; (NCC.
Benedicto] 544)
(4) Right to a share in pending fruits and the
(2) Acts executed clandestinely and without the production, gathering, and preservation of
knowledge of the possessor [NCC 1108] such; (NCC. 545)
Possession has to be in the concept of an (5) Right to necessary expenses; (NCC. 546)
owner, public, peaceful and uninterrupted. (6) Right to retain the thing until reimbursed;
(NCC. 546)
(3) Acts of violence as long as the possessor (7) Right to remove useful improvements
objects thereto (i.e. he files a case) [NCC 536] removable without damage to the principal
(a) Possession cannot be acquired through thing or to refund its value; (upon election by
force or intimidation. the owner) (NCC. 547)
(8) Right to recover removable ornaments. (NCC.
Includes forcibly taking away the property 548)
from another and also when one occupied
the property in the property in the OBLIGATIONS OF A POSSESSOR IN
absence of another, and repels the latter GOOD FAITH
upon his return.
(1) Pay in proportion to the charges, expenses of
cultivation and the net proceeds upon
(b) Effect on Possession: Acts mentioned do cessation of good faith; (NCC 545)
not constitute true possession. They do
(2) Costs of litigation; (NCC 550)
not interrupt the period of prescription
(3) Liability to the deterioration/loss of a thing
nor affect the rights to the fruits.
possessed if acted through fraudulent
intent/negligence. (NCC 552)
RULES TO SOLVE CONFLICTS OF
POSSESSION [NCC 538] RIGHTS OF A POSSESSOR IN BAD
General Rule: Possession cannot be recognized in FAITH
two different personalities, except in cases of co-
(1) Right to be respencted in possession; (NCC
possession by co-possessors without conflict of
539)
claims of interest.
(2) Right to necessary expenses and the
production, gathering, and preservation of
In case of conflicting possession preference is fruits; (NCC. 545 and 546)
given to:
(3) Does not have right to reimbursement of
(1) Present possessor or actual possessor;
expenses for luxury but may remove them as
PAGE 112
long as the principal thing suffers no injury, or (b) Action for the recovery of possession of
may sell them to the owner. real property upon mere allegation and
proof of a better title.
OBLIGATIONS OF A POSSESSOR IN (c) This must be instituted within 10/30 years
GOOD FAITH (or else acquisitive prescription will deny
(1) Reimburse the value of the fruits received and recovery).
which the legitimate possessor could receive; (3) Accion Reivindicatoria
(NCC 549) (a) This action is for the recovery of
(2) Pay in proportion to the charges, expenses of possession based on a claim of
cultivation and the net proceeds upon ownership.
cessation of good faith; (NCC 545) (b) It is an action setting up title and the right
(3) Costs of litigation; (NCC 550) to possession.
(4) Liability to the deterioration/loss of a thing (c) This action is not barred by a judgment in
possessed in every case, including fortuitous an action for forcible entry and unlawful
events. (NCC 552) detainer.
(4) Action for Replevin
(a) This is a prayer to recover possession of
RIGHT TO BE PROTECTED IN HIS movable property
POSSESSION [NCC 539]
(1) Every possessor has a right to be respected in Rules:
his possession; if disturbed, possessor has a (1) Lawful possessor can employ self-help (NCC
right to be protected in or restored to said 429)
possession. (2) To consolidate title by prescription, the
(2) Every possessor includes all kinds of possession must be under claim of ownership,
possession, from that of an owner to that of a and it must be peaceful, public and
mere holder, except that which constitutes a uninterrupted.
crime. (3) It is only the conviction of ownership
(3) Reason for the rule: To prevent anyone from externally manifested, which generates
taking the administration of justice into his ownership.
own hands. Even the owner cannot forcibly (4) Acts of possessory character done by virtue of
eject the possessor, but must resort to the a license or mere tolerance by the real owner
courts. are not sufficient and will not confer title by
prescription or adverse possession.
Actions to Recover Possession: (5) The following cannot acquire title by
(1) Forcible entry and Unlawful detainer (Summary prescription:
proceedings) (a) Lessees, trustees, pledges, tenants on
(a) Action by a person deprived of the shares or planters and all those who hold
possession of any land or building by in the name or representation of another;
force, intimidation, strategy, threat, or (b) Mere holders placed in possession of the
stealth (FISTS) at any time within 1 year property by the owner, such as agents,
after such unlawful deprivation (Rule 70) employees;
(b) May ask for writ of preliminary mandatory (c) Those holding in a fiduciary character, like
injunction within 10 days from filing of receivers, attorneys, depositaries and
complaint in forcible entry (NCC 539). antichretic creditors;
(c) The same writ is available in unlawful (d) Co-owner, with regard to common
detainer actions upon appeal. (NCC 1674) property; Except: When he holds the same
(2) Accion Publiciana adversely against all of them with notice
(a) This action is based on the superior right to them of the exclusive claim of
of possession; no issue of ownership is ownership.
settled. (i) Possession of real property presumes
possession of the movables therein
(NCC 542);
PAGE 113
(ii) Each co-owner is deemed to have Legal interruption of possession in good faith
exclusive possession of the part which Takes place when an action is filed against him
may be allotted to him upon the from the time he learns of the complaint, from the
division, for the entire period during time he is summoned to the trial.
which the co-possession lasted.
Interruption in the possession of the Effect of cessation of good faith (NCC 545)
whole or a part of a thing possessed in (a) If at the time the good faith ceases, there
common shall be to the prejudice of all should be any natural or industrial fruits, the
the possessors. (NCC 543) possessor shall have a right to a part of the
expenses of cultivation, and to a part of the
ENTITLEMENT TO FRUITS net harvest, both in proportion to the time of
POSSESSOR IN GOOD/BAD FAITH the possession.
(b) The charges divided on the same basis by the
[NCC 544, 549] two possessors.
(1) Possessor in good faith is entitled to the fruits
Charges Those which are incurred, not
received before the possession is legally
interrupted. on the thing itself but because of it (e.g.
taxes, contributions in favor of the
(2) Natural and industrial fruits are considered
government)
received from the time they are gathered or
(c) The owner of the thing may give the possessor
severed.
in good faith the right to finish the cultivation
(3) Civil fruits are deemed to accrue daily and
and gathering of the growing fruits, as an
belong to the possessor in good faith in that
indemnity for his part of the expenses of
proportion.
cultivation and the net proceeds.
Provision is based on the following reasons of The possessor in good faith who refuses to
equity: accept this concession shall lose the right to
The fruits received are generally used for the be indemnified in any other manner.
consumption and livelihood of the possessor,
When fruits are insufficient
and his life and expenses may have been
There should only be reimbursement of expenses;
regulated in view of such fruits.
but each possessor should suffer a proportionate
The owner has been negligent in not
reduction due to the insufficiency of the harvest.
discovering or contesting the possession of the
possessor; it would be unjust after the possessor
has been thus allowed to rely on the efficacy of REIMBURSEMENT FOR EXPENSES
the title, to require him to return the fruits he POSSESSOR IN GOOD/BAD FAITH
has received on the basis of that title. [NCC546-552]
Between the owner, who has abandoned his
property and left it unproductive, and the NECESSARY EXPENSES
possessor, who has contributed to the social (1) Imposed by the thing itself for its preservation
wealth, by the fruits he has produced, the law and have no relation to the desire or purpose
leans toward the latter. of the possessor.
(2) They are the cost of living for the thing and
RIGHT OF THE POSSESSOR IN GOOD FAITH must be reimbursed to the one who paid
Only limited to the fruits of the thing. He must them, irrespective of GF or BF.
restore the fruits received from the time such (a) Only the possessor in GF may retain the
good faith ceased. He has no rights to the objects thing until he has been reimbursed
which do not constitute fruits. therefor.
(3) The expenses are not considered
improvements; they do not increase the value
of the thing, but merely prevent them from
becoming useless.
PAGE 114
USEFUL EXPENSES Note:

(1) Incurred to give greater utility or productivity (1) Costs of litigation over the property shall be
to the thing, e.g. Wall surrounding an estate, borne by every possessor. [NCC 550]
an irrigation system, planting in an (2) Improvements caused by nature or time shall
uncultivated land, a fishpond, an elevator in always inure to the benefit of the person who
the building, electric lighting system has succeeded in recovering possession [NCC
(2) They are reimbursed only to the possessor in 551]
GF as a compensation or reward for him. A Includes all the natural accessions referred
possessor in BF cannot recover such to by articles 457-465, and all those that do
expenses. not depend upon the will of the possessor.
(3) If the useful improvements can be removed (e.g. widening of the streets, rising of
without damage to the principal thing, the fountains of fresh or mineral water, increase
possessor in good faith may remove them, of foliage of trees)
unless the person who recovers the
possession refunds the expenses or pays the Possessor in GF Possessor in BF
increase in value which the thing may have
acquired by reason thereof. Fruits Received
Entitled to the fruits
EXPENSES FOR LUXURY Must reimburse the
while possession is in
(1) They do not affect the existence or the legitimate possessor
GF and before legal
substance of the thing itself, but only the (549)
interruption (544)
comfort, convenience or enjoyment of the
possessor. Pending Fruits
(2) They are not the subject of reimbursement, Entitled to part of the
because the law does not compensate expenses of cultivation,
personal whims or caprices, e.g. Opening of a and to a part of the net
garden, placing fountains and statues in it, harvest, in proportion
adorning the ceilings with paintings, and the to the time of the
walls with reliefs. possession.
Must reimburse the
legitimate possessor
Useful Expenses Expenses for Luxury Indemnity may be, at
(549)
the owners option,
Those which increased 1. In money, OR
Those which merely
the income derived 2. By allowing full
embellished the thing
from the thing cultivation and
Result: Increase in the gathering of the fruits
products, either (545)
absolutely, or because Charges
of greater facilities for Result: Benefit or
producing them advantage is only for Must share with the
the convenience of legitimate possessor, in
Same as with GF (545)
Includes expenses definite possessors proportion to the time
resulting in real benefit of the possession (545)
or advantage to the Necessary Expenses
thing
Right to
Result: Benefit or The utility is for the reimbursement and
advantage is only for possessor or particular Reimbursement only
retention in the
the convenience of persons alone and is (546)
meantime (546)
definite possessors therefore accidental.
PAGE 115
Possessor in GF Possessor in BF When the owner can recover

(a) Has lost the thing; or
Useful Expenses (b) Has been unlawfully deprived thereof.
Right of retention until
reimbursed; Owners (3) If the current possessor has acquired it in
option to reimburse good faith at a public sale, owner must
him either for expenses reimburse the price paid in order to recover
or for increase in value the property.
which the thing may
have acquired (546) No right to PERIOD TO RECOVER [NCC 1140, 1132, 1133]
reimbursement and no (1) Actions to recover movable properties prescribe
Limited right of right of removal (547) after 8 years from the time the possession
removal should not thereof is lost, unless the possessor has
damage principal and acquired the ownership by prescription for a
owner does not lesser period.
exercise option of (2) Ownership of movable properties prescribes
paying the expenses or through uninterrupted possession for 4 years
increase in value (547) in good faith.
(3) Ownership of personal property also
Ornamental Expenses prescribes through uninterrupted possession
Limited right of Limited right of for 8 years, without need of any other
removal (548) removal (549) condition.
(4) Movable properties possessed through a
Deterioration or Loss
crime can never be acquired through
No liability unless due prescription.
to fraud or negligence Liable in every case
after becoming in BF (552) FINDER OF LOST MOVABLE [NCC 719-720]
(552) (1) Whoever finds a movable, which is not a
Costs of Litigation treasure, must return it to its previous
possessor.
Bears cost (550) Bears cost (550) (2) If the previous possessor is unknown, the
finder shall immediately deposit it with the
LOSS OR UNLAWFUL DEPRIVATION mayor of the city or municipality where the
OF A MOVABLE PROPERTY finding has taken place.
(3) The finding shall be publicly announced by
POSSESSION OF MOVABLE ACQUIRED IN the mayor for two consecutive weeks in the way
GOOD FAITH (IN CONCEPT OF OWNER) IS he deems best.
EQUIVALENT TO TITLE [NCC 559] (4) If the movable cannot be kept without
(1) Possessor has actual title which is defeasible deterioration, or without expenses which
only by true owner. considerably diminish its value, it shall be sold
at public auction eight days after the
Requisites of Title publication.
(a) Possession in GF; (5) Six months from the publication having
(b) The owner has voluntarily parted with the elapsed without the owner having appeared,
possession of the thing; and the thing found, or its value, shall be awarded
(c) The possession is in the concept of an to the finder. The finder and the owner shall
owner. be obliged, as the case may be, to reimburse
the expenses.
(2) Nevertheless, one who has lost any movable (6) If the owner should appear in time, he shall be
or has been unlawfully deprived thereof may obliged to pay, as a reward to the finder, one-
recover it from the person in possession. tenth of the sum or of the price of the thing
found.
PAGE 116
DISTINGUISHED FROM VOIDABLE TITLE [NCC (5) Generally, he can do on the things possessed
1506] everything that the law authorizes the owner
(1) A seller of goods with a voidable title not to do until he is ousted by one who has a
avoided at the time of the sale: The buyer better right.
acquires a good title to the goods, provided he (6) This is whether possession is in good faith or
buys them in good faith, for value, and in bad faith [NCC. 528]
without notice of the seller's defect of title.
(2) A movable lost or which the owner has been PRESUMPTION IN FAVOR OF THE
unlawfully deprived acquired by a possessor POSSESSORFOR ACQUISITIVE
in good faith at a public sale: The owner can
always recover the movable provided he
PRESCRIPTION
(1) Of good faith until contrary is proved (NCC
reimburses the price paid.
527)
(a) Presumption is only juris tantum because
EFFECTS OF POSSESSION IN THE possession is the outward sign of
CONCEPT OF AN OWNER ownership. Unless such proof of bad faith
Possession may lapse and ripen into full is presented, the possessor will be held to
ownership. be in good faith.
(b) So long as the possessor is not actually
General Rule: Presumption of just title and cannot aware of any defect invalidating his title,
be obliged to show or prove it. [NCC 541] he is deemed a possessor in good faith.
Basis: Possession is presumed ownership,
unless the contrary is proved. This presumption (2) Of continuity of initial good faith in which
is prima facie and it prevails until contrary is possession was commenced; possession in
proved. good faith does not lose this character except
Just title that which is legally sufficient to in case and from the moment possessor
transfer the ownership or the real right to which became aware or is not unaware of improper
it relates. or wrongful possession (NCC 528)
For the purposes of prescription, there is just (a) Good faith ceases from the date of the
title when the adverse claimant came into summons to appear at the trial. [Cordero v
possession of the property through one of the Cabral (1983)]
modes recognized by law for the acquisition of (b) Good faith ceases when there is:
ownership or other real rights, but the grantor (i) Extraneous evidence; or
was not the owner or could not transmit any (ii) A suit for recovery of the property by
right. [NCC 1129] the true owner.
Exception: For the purposes of prescription, just (2) Of enjoyment of possession in the same
title must be proved; it is never presumed. [NCC character in which possession was required
1131] until contrary is proved [NCC 529]
(1) Possessor may bring all actions necessary to
protect his possession except accion (3) Of non-interruption of possession in favor of
reivindicatoria. present possessor who proves possession at a
(2) May employ self-help under Art. 429. previous time until the contrary is proved [NCC
Possessor may ask for inscription of such real 554]
right of possession in the registry of property. (a) Possession is interrupted for the purposes
(3) Has right to the fruits and reimbursement of of prescription, naturally or civilly. [NCC
expenses (assuming he is possessor in good 1120]
faith) (b) Possession is naturally interrupted when
(4) Upon recovery of possession which he was through any cause it should cease for
unlawfully deprived of, may demand fruits more than one year [NCC 1121]
and damages.
PAGE 117
(c) Old possession is not revived if a new (4) By the possession of another, subject to the
possession should be exercised by the provisions of Art. 537, if the new possession
same adverse claimant [NCC 1121] has lasted longer than 1 year. But the real
(d) If the natural interruption is for only one right of possession is not lost till after the
year or less, the time elapsed shall be lapse of 10 years.
counted in favor of the prescription [NCC
1122] ABANDONMENT
(e) Civil interruption is produced by judicial Includes the giving up of possession, and not
summons to the possessor. [NCC 1123] necessarily of ownership by every possessor.
(f) Judicial summons shall be deemed not to It is the opposite of occupation. It consists of the
have been issued and shall not give rise to voluntary renunciation of all the rights which
interruption [NCC 1124]: the person may have in a thing, with intent to
(i) If it should be void for lack of legal lose such a thing. To be effective, it is necessary
solemnities; that it be made by a possessor in the concept of
(ii) If the plaintiff should desist from the an owner.
complaint or should allow the
It must be clearly appear that the spes
proceedings to lapse;
recuperandi is gone and the animus revertendi is
(iii) If the possessor should be absolved
finally given up.
from the complaint
(g) In all these cases, the period of the
interruption shall be counted for the ASSIGNMENT, EITHER GRATUITOUS
prescription OR ONEROUS
Complete transmission of ownership rights to
(4) Non-interruption of possession of property another person, gratuitously or onerously.
unjustly lost but legally recovered [NCC. 561]
POSSESSION BY ANOTHER; IF
(5) Other presumptions with respect to specific POSSESION HAS LASTED LONGER
properties of property rights THAN ONE YEAR; REAL RIGHT OF
(a) Of extension of possession of real property
to all movables contained therein so long
POSSESSION NOT LOST AFTER 10
as in is not shown that they should be YEARS SUBJECT TO NCC 537
excluded (NCC 542) (1) Acts merely tolerated, and those executed
(b) Non-interruption of possession of clandestinely and without the knowledge of
hereditary property (NCC 553) the possessor of a thing, or by violence, do not
(i) Possession of hereditary property is affect possession.
deemed transmitted to the heir (2) Possession that is lost here refers only to
without interruption and from the possession as a fact (de facto), not the legal
moment of the death of the decedent right of possession (de jure). It is the
(c) Of just title in favor of possessor in concept possession that the new possessor acquires.
of owner (NCC 541) (3) Real right of possession is lost only after 10
(d) Exclusive Possession of Common Property years.
(NCC. 543) (4) After 1 year, the actions for forcible entry and
unlawful detainer can no longer be brought.
But accion publiciana may still be instituted to
LOSS/TERMINATION OF recover possession de jure.
POSSESSION [NCC 555]
(1) By the abandonment of the thing; RULES FOR LOSS OF MOVABLES
(2) By an assignment made to another either by (1) The possession of movables is not deemed
onerous or gratuitous title; lost so long as they remain under the control
(3) By the destruction or total loss of the thing, or of the possessor, even though for the time
because it goes out of commerce; being he may not know their whereabouts.
(NCC 556)
PAGE 118
(2) Control judicial control or right, or that the CHARACTERISTICS

thing remains in ones patrimony. (1) It is a real right;
(3) Wild animals are possessed only while they (2) Of temporary duration;
are under one's control. (NCC 560) (3) The purpose is to derive all advantages from
(a) Domesticated or tamed animals if they the thing due to normal exploitation.
retain the habit of returning to the
premises of the possessor.
NATURAL CHARACTERISTICS
(1) Includes only the right to use (jus utendi) and
KINDS OF ANIMALS the right to the fruits (jus fruendi).
(1) Wildthose which live naturally independent (2) Usufructuary must preserve the form or
of man. substance of the thing.
(2) Domesticatedthose which, being wild by (a) Preservation is a natural requisite, not
nature, have become accustomed to essential because the title constituting it or
recognize the authority of man. When they the law may provide otherwise.
observe this custom, they are placed in the (b) Reason for preserving form and substance
same category as domestic and when they (i) To prevent extraordinary
lose it, they are considered as wild. exploitation;
(3) Domestic or Tamethose which are born and (ii) To prevent abuse, which is
reared ordinarily under the control and care of frequent;
man; they are under the ownership of man, (iii) To prevent impairment.
and do not become res nullius unless they are (c) Exception: In an abnormal usufruct,
abandoned. alteration is allowed.
(3) Usufruct is extinguished by the death of the
usufructuary.
Usufruct (a) Natural because a contrary intention may
prevail.
CONCEPT [NCC 562] CLASSIFICATION
Usufruct gives a right to enjoy the property of
another with the obligation of preserving its form
and substance, unless the title constituting it or BY ORIGIN
the law otherwise provides. (1) Voluntary: created by the will of private
persons
(a) By act inter vivos such as contracts and
OBJECTS OF USUFRUCT donations:
(1) Independent Rights (i) By alienation of the usufruct;
A servitude which is dependent on the (ii) By retention of the usufruct;
tenement to which it attaches cannot be the (iii) Where a usufruct is constituted inter
object of usufruct. vivos and for valuable consideration,
the contract is unenforceable unless
(2) Things in writing.
Non-consumable things. (b) By act mortis causa such as testament.
Consumable things, but only as to their (2) Legal: as provided by law.
value if appraised, or on an equal quantity Usufruct of parents over the property of
and quality if they were not appraised. unemancipated children. (now limited to the
collective daily needs of the family, FC 26)
(3) Unproductive things (3) Mixed: created both by law and the acts of
e.g. sterile or absolutely unproductive land, or persons.
things for mere pleasure, such as promenades, (a) The rights and duties of the usufructuary
statues or paintings, even if they do not provided by law may be modified or
produce any utility. eliminated by the parties.
PAGE 119
(b) The title constituting the usufruct may (b) In case they were not appraised, he has
validly authorize the usufructuary to the right to return the same quantity and
alienate the thing itself held in usufruct. quality, or pay their current price at the
(i) If the usufructuary is authorized to time the usufruct ceases. [NCC 574]
alienate the thing in case of necessity, (c) In reality, the usufruct is not upon the
it is the usufructuary who determines consumable things themselves, but upon
the question of necessity. the sum representing their value or upon
a quantity of things of the same kind and
BY PERSON ENJOYING THE RIGHT OF quality.
USUFRUCT (d) The usufructuary, in effect, becomes the
(1) Simple: only one usufructuary enjoys the owner of the things in usufruct, while the
property. grantor becomes a mere creditor entitled
(2) Multiple: several usufructuaries enjoy the to the return of the value or of the things
property. of the same quantity and quality (as if
(a) Simultaneous: at the same time. converted into a simple loan).
(b) Successive: one after the other.
BY THE EXTENT OF THE USUFRUCT
LIMITATIONS ON SUCCESSIVE USUFRUCT AS TO THE FRUITS
(1) If usufruct is by donation, ALL donees must be (1) Total: all consumed by the usufruct.
alive. [NCC 756] (2) Partial: only on certain aspects of the
(2) Fiduciary or first heir and the second heir must usufructs fruits.
be alive at the time of the death of the
testator. [NCC 863] AS TO THE OBJECT
(3) If by testamentary succession, there must be (1) Singular: only on particular property of the
only 2 successive usufructuaries, and both owner.
must be alive or at least already conceived at (2) Universal: pertains to the whole property;
the time of the testators death. [NCC 869] A universal usufructuary must pay the debts
of the naked owner, if stipulated. Article 758
BY OBJECT OF USUFRUCT and 759 on donations apply.
Usufruct may be constituted on the whole or a
part of the fruits of the thing or on a right,
NCC 758: When the donation imposes upon
provided it is not strictly personal or
intransmissible. [NCC 564] the donee the obligation to pay the debts of
the donor, if the clause does not contain any
RIGHTS declaration to the contrary, the former is
(1) Must not be strictly personal or understood to be liable to pay only the debts
intransmissible. which appear to have been previously
(2) Usufruct over a real right is by itself a real
contracted. In no case shall the donee be
right.
(a) Right to receive present or future support responsible for the debts exceeding the value
cannot be the object of the usufruct. of the property donated, unless a contrary
intention clearly appears.
THINGS
(1) Normal: involves non-consummable things
where the form and substance are preserved. NCC 759: There being no stipulation
(2) Abnormal or irregular: when the usufruct regarding the payment of debts, the donee
includes things which cannot be used without shall be responsible therefor only when the
being consumed. donation has been made in fraud of creditors.
(a) The usufructuary has right to make use of
them under the obligation of paying their The donation is always presumed to be in
appraised value at the termination of the fraud of creditors, when at the time thereof
usufruct, if they were appraised when the donor did not reserve sufficient property
delivered.
to pay his debts prior to the donation.
PAGE 120
BY THE TERMS OF THE USUFRUCT Right to fruits pending at the beginning of

(1) Pure: no terms or conditions. usufruct
(2) Conditional: either suspensive or resolutory. Fruits pending at the Fruits pending at the
(3) With a term or period beginning of the termination of the
(a) Ex die: from a certain day. usufruct usufruct
(b) In diem: up to a certain day. Belong to the Belong to the naked
(c) Ex die in diem: from a certain day up to a usufructuary owner
certain day.
Without need to The owner shall
RIGHTS AND OBLIGATIONS OF reimburse the expenses reimburse to the
USUFRUCTUARY to the owners usufructuary ordinary
cultivation expenses
RIGHTS from the proceeds of
the fruits (not to exceed
AS TO THE THING AND ITS FRUITS the value of the fruits)
Without prejudice to the Rights of innocent 3rd
Right to enjoy the property to the same extent right of 3rd persons e.g. parties should not be
as the owner, but only with respect to its use if the fruits had been prejudiced.
and the receipt of its fruits. planted by a possessor
(1) Usufructuary cannot extract products which in good faith, the
do not constitute fruits because he is bound to pending crop expenses
preserve the form and substance of the thing. and charges shall be
(2) Usufructuary rights may be transferred, prorated between said
assigned or otherwise disposed of by the possessor and the
usufructuary. usufructuary
(3) Not exempt from execution and can be sold at
public auction. Fruits already matured at the time of the
termination of the usufruct, which ordinarily
As to hidden treasure, usufructuary is would have already been gathered by the
considered a stranger without a right to a usufructuary, may remain ungathered for no fault
share, unless he is also the finder of the imputable to him, but because of malice or an act
treasure imputable to the naked owner or a 3rd person, or
(1) With respect to hidden treasure which may be even due to force majeure or fortuitous event.
found on the land or tenement, he shall be
considered a stranger. Right to civil fruits
(2) Hidden treasure belongs to the owner of the (1) Civil fruits deemed to accrue daily, and
land, building, or other property on which it is belong to the usufructuary in proportion to
found. the time the usufruct may last.
(3) Nevertheless, when the discovery is made on (2) Whenever a usufruct is constituted on the
the property of another, or of the State or any right to receive a rent or periodical pension,
of its subdivisions, and by chance, one-half whether in money or in fruits, or in the interest
thereof shall be allowed to the finder. on bonds or securities payable to bearer, each
payment due shall be considered as the
proceeds or fruits of such right.
(3) Whenever it consists in the enjoyment of
benefits accruing from a participation in any
industrial or commercial enterprise, the date
of the distribution of which is not fixed, such
benefits shall have the same character.
(a) In either case they shall be distributed as
civil fruits.
PAGE 121
Right to enjoy any increase through accessions as the obligations she had assumed
and servitudes, including products of hunting towards the owner are fulfilled. [Fabie v.
and fishing. Gutierrez David(1945)]
(4) A lease executed by the owner before the
Right to lease the thing creation of the usufruct is not extinguished by
General rule: The usufructuary may lease the thing such usufruct.
to another but this shall terminate upon the
expiration of the usufruct, saving leases of rural Limitations on the Right to Lease the Property
lands, which shall be considered as subsisting (1) Usufructuary cannot alienate a thing in
during the agricultural year. usufruct:
(a) Cannot alienate or dispose of the objects
Exceptions: included in the usufruct;
(1) Legal usufructs cannot be leased. (b) Cannot renounce a servitude;
(2) Caucion juratoria (lease would show that the (c) Cannot mortgage or pledge a thing.
usufructuary does not need the property (d) EXCEPT:
badly) (i) When the right of usufruct is
converted into the right of ownership;
Effect of the transfer of right: (ii) When the things are consumable;
(1) The transfer or lease of the usufruct does NOT (NCC 574);
terminate the relation of the usufructuary with (iii) When the things by their nature are
the owner. intended for sale, such as the
(2) Death of the transferee does not terminate merchandise in a commercial
the usufruct but it terminates upon the death establishment; and
of the usufructuary who made the transfer. (iv) When the things, whatever their
nature, are delivered under appraisal
Rules as to Lease as equivalent to their sale.
(1) The property in usufruct may be leased even (2) Future crops may be sold but such sale would
without the consent of the owner. be void if not ratified by the owner.
(2) The lease should be for the same period as (a) The buyers remedy is to recover from the
the usufruct. usufructuary.
(a) EXCEPT: leases of rural lands continues for (3) Only voluntary usufruct can be alienated.
the remainder of the agricultural year. (4) The usufructuary-lessor is liable for the act of
(b) A lease executed by the usufructuary the substitute.
before the termination of the usufruct and (a) A usufructuary who alienates or leases his
subsisting after the termination of the right of usufruct shall answer for any
usufruct must be respected, but the rents damage which the things in usufruct may
for the remaining period will belong to the suffer through the fault or negligence of
owner. the person who substitutes him. [NCC,
(c) If the usufructuary has leased the lands or 590]
tenements given in usufruct, and the
usufruct should expire before the Right to improve the thing, but improvement
termination of the lease, he or his heirs inures to the benefit of the naked owner
and successors shall receive only the (1) Usufructuary is not entitled to
proportionate share of the rent that must reimbursement.
be paid by the lessee. [NCC, 568] (2) Whenever the usufructuary can remove the
(3) It is the usufructuary and not the naked owner improvements without injury to the property
who has the right to choose the tenant. in usufruct, he has the right to do so, and the
(a) As corollary to the right of the owner cannot prevent him from doing so even
usufructuary to all the rent, to choose the upon payment of their value.
tenant, and to fix the amount of the rent, (3) This right does not involve an obligation if
she necessarily has the right to choose the usufructuary does not wish to exercise it,
herself as the tenant thereof; and, as long
PAGE 122
he cannot be compelled by the owner to the property, which shall contain an appraisal
remove the improvements. of the movables and a description of the
(4) This right to remove improvements can be condition of the immovables; and
enforced only against the owner, not against a (2) To give security, binding himself to fulfill the
purchaser in good faith to whom a clean title obligations imposed upon him in accordance
has been issued. with this Chapter.
(5) Usufructuary may set off the improvements
against any damage to the property. Note: These requirements are NOT conditions
(a) The improvements should have increased precedent to the commencement of the right of
the value of the property, and that the the usufruct but merely to the entry upon the
damages are imputable to the possession and enjoyment of the property.
usufructuary.
(b) Increase in value and the amount of To Make An Inventory:
damages are set off against each other. (1) Requisites:
(c) If the damages exceed the increase in (a) Immovables must be described; and
value, the difference should be paid by the (b) Movables must be appraised because
usufructuary as indemnity. they are easily lost or deteriorated.
(d) If the increase in value exceeds the (2) Concurrence of the owner in the making of the
damages, and the improvements are of inventory.
such nature that they can be removed (3) Expenses for the making of the inventory are
without injury to the thing in usufruct, the borne by the usufructuary.
settlement of the difference must be (4) The inventory may be in a private document,
agreed upon by the parties. except when immovables are involved. (a
(e) If the improvements cannot be removed public instrument is prescribed to affect 3rd
without injury, the excess in value accrues persons)
to the owner. (5) Failure to make an inventory does not affect
(6) Registration of improvements to protect the rights of the usufructuary to enjoy the
usufructuary against 3rd persons property and its fruits.
(a) A prima facie presumption arises that the
AS TO THE LEGAL RIGHT OF USUFRUCT property was received by the usufructuary
ITSELF in good condition.
(b) Even if he is already in possession, he may
Right to mortgage right of usufruct still be required to make an inventory.
(1) The usufructuary may alienate his right of (6) Exception to the requirement of inventory
usufruct, even by a gratuitous title; but all the (a) When no one will be injured, the
contracts he may enter into as such usufructuary may be excused from this
usufructuary shall terminate upon the obligation.
expiration of the usufruct. [NCC. 572]
(2) Does not include parental usufruct because of To give a bond for the faithful performance of
personal and family considerations. duties as usufructuary:
(1) Any kind of sufficient security is allowed, e.g.
Right to alienate the usufruct except in purely cash, personal bond, mortgage.
personal usufructs or when title constituting it (2) No bond is required in the following:
prohibits the same (a) No prejudice would result; [Art. 585]
Parental usufruct is inalienable. (b) Usufruct is reserved by a donor; [Art. 584]
(i) Gratitude on the donees part
OBLIGATIONS demands that the donor be excused
from filing the bond.
AT THE BEGINNING OF THE USUFRUCT OR (c) Title constituting usufruct excused
BEFORE EXERCISING THE USUFRUCT usufructuary.
(1) To make, after notice to the owner or his (3) A usufructuary may take possession under a
legitimate representative, an inventory of all caucion juratoria (bond by oath): [Art. 587]
PAGE 123
(a) It is only by way of exception that a (6) To shoulder the costs of litigation regarding
caucion juratoria is allowed, and only the usufruct; and
under the special circumstances: (7) To answer for fault or negligence of alienee,
(i) Proper court petition; lessee or agent of usufructuary.
(ii) Necessity for delivery of furniture,
implements or house included in the To take care of the thing like a good father of a
usufruct; family
(iii) Approval of the court; and (1) When damages are caused to the property by
(iv) Sworn promise. the fault or negligence of the usufructuary,
(b) A usufructuary under this can neither the naked owner need not wait for the
alienate his right nor lease the property, for termination of the usufruct before bringing
that would mean that he does not need the action to recover proper indemnity.
the dwelling or the implements and (2) The bad use of a thing, which causes
furniture. considerable injury, entitles the owner to
(4) Effect of filing a bond demand the delivery and administration of
(a) Retroactivity: upon giving the security, the the thing.
usufructuary will be entitled to all the (3) The exercise of this remedy does NOT
benefits accruing since the time when he extinguish the usufruct.
should have begun to receive them.
(5) Effect of failure to give bond: [NCC 586] To undertake ordinary repairs
(a) The owner may demand that the The usufructuary is obliged to make the ordinary
immovable properties be placed under repairs needed by the thing given in usufruct.
administration; [NCC 592]
(i) That the movable properties be sold;
(ii) That the public bonds, instruments of (1) Ordinary repairs:
credit payable to order or to bearer be (a) Such as are required by the wear and tear
converted into registered certificates due to the natural use of the thing and
or deposited in a bank or public are indispensable for its preservation;
institution; and (b) Deteriorations or defects arise from the
(iii) That the capital or sums in cash and natural use of the thing;
the proceeds of the sale of the (c) Repairs are necessary for the preservation
movable property be invested in safe of the thing.
securities.
(b) The owner may, until the usufructuary (2) The usufructuary is bound to pay only for the
gives security, retain in his possession the repairs made during the existence of the
property in usufruct as administrator, usufruct.
subject to the obligation to deliver to the (a) If the defects existed already at the time
usufructuary the net proceeds, after the usufruct began, the obligation to
deducting the sums, which may be agreed defray the ordinary repairs falls upon the
upon or judicially allowed him for such owner.
administration.
(3) If the defects are caused by the ordinary use of
DURING THE USUFRUCT the thing, the usufructuary may exempt
(1) To take care of the thing like a good father of himself from making the repairs by returning
a family; to the owner the fruits received during the
(2) To undertake ordinary repairs; time that the defects took place.
(3) To notify owner of need to undertake
extraordinary repairs; Except: When the ordinary repairs are due to
(4) To pay for annual charges and taxes on the defects caused by the fault of the usufructuary
fruits;
(5) To notify owner of any act detrimental to
ownership;
PAGE 124
(4) If the usufructuary fails to make the repairs To notify owner of any act detrimental to
even after demand, the owner may make ownership (NCC 601)
them at the expense of the usufructuary
To shoulder the costs of litigation regarding
To notify owner of need to undertake the usufruct (NCC 602)
extraordinary repairs
(1) Extraordinary repairs To answer for fault or negligence of the
(a) Those caused by exceptional alienee, lessee or agent of the usufructuary
circumstances, whether or not they are (NCC 590)
necessary for the preservation of the The usufructuary is made liable for the acts of the
thing; or substitute. While the substitute answers to the
(b) Those caused by the natural use of the usufructuary, the usufructuary answers to the
thing, but are not necessary for its naked owner.
preservation.
AT THE TIME OF THE TERMINATION
(2) General Rule: Naked owner must make the
extraordinary repairs.
OF THE USUFRUCT
To deliver the thing in usufruct to the owner in the
The usufructuary is obliged to pay legal
condition in which he has received it, after
interest on the amount while usufruct lasts.
undertaking ordinary repairs.
(3) If the extraordinary repairs are indispensable,
Exception: Abnormal usufruct A thing of the
and the naked owner fails to undertake them,
same kind, quantity and quality is returned; if with
the usufructuary may make such repairs.
appraised value, must return value appraised.
(a) Requisites:
(i) There must be due notification to the
naked owner of the urgency if it is SPECIAL CASES OF USUFRUCT
not urgent, there is no obligation to
give notice; USUFRUCT OVER A PENSION OR A
(ii) The naked owner failed to make them; PERIODICAL INCOME [NCC 570]
and (1) Each payment due shall be considered as the
(iii) The repair is needed for preservation. proceeds or fruits of such right.
(b) The usufructuary that has made the (2) The usufruct shall be distributed as civil fruits.
extraordinary repairs necessary for
preservation is entitled to recover from USUFRUCT OF PROPERTY OWNED IN
the owner the increase in value, which the
tenement acquired by reason of such COMMON [NCC 582]
works. (1) The usufructuary takes the place of the owner
(c) Usufructuary may retain until he is paid. as to:
(a) Management;
To pay for annual charges and taxes on the (b) Fruits; and
fruits (c) Interest.
It is well settled that a real tax, being a burden (2) Effect of partition:
upon the capital, should be paid by the owner of (a) The right of the usufructuary is not
the land and not by a usufructuary. There is no affected by the division of the property in
merit in the contention of distinguishing public usufruct among the co-owners.
lands into alienable and indisposable. All (b) After partition, the usufruct is transferred
properties owned by the government, without any to the part allotted to the co-owner.
distinction, are exempt from taxation. [Board of
Assessment Appeals of Zamboanga del Sur v.
Samar Mining Company, Inc.(1971)]
PAGE 125
USUFRUCT CONSTITUTED ON A FLOCK USUFRUCT ON MORTGAGED

OR HERD OF LIVESTOCK [NCC 591] PROPERTY [NCC 600]
(1) When the usufruct is universal and some
(1) On sterile stock: same rules on consumable objects are mortgaged, apply Art. 598.
property govern. (i.e. replacement upon (2) If the usufructuary mortgaged the usufruct
termination) himself, he is liable to pay his own debt.
(2) On fruitful stock:
(a) Must replace ordinary losses of the stock USUFRUCT OVER AN ENTIRE
with the young if: PATRIMONY [NCC 598]
(i) Some animals die from natural Applies when:
causes; or (1) The usufruct is a universal one
(ii) Some animals are lost due to rapacity (2) And the naked owner Has debts or is
of beasts of prey. obliged to make periodical payments
(b) No obligation to replace if: (whether or not there be known capital)
(i) There is a total loss of animals
because of some unexpected or General rule: The usufructuary is not liable for the
unnatural loss (like contagious owners debts.
disease or any other uncommon Exceptions:
event, provided the usufructuary has (1) When it is so stipulated; in which case the
no fault); or usufructuary shall be liable for the debt
(1) If all perish, the usufructuary specified;
should deliver the remains to the (2) If there is no specification, he is liable only for
owner. debts incurred by the owner before the
(ii) There is a partial loss. usufruct was constituted; or
(1) If a part of the stock perishes, the (3) When the usufruct is constituted in fraud of
usufruct subsists on the creditors.
remainder.
In no case shall the usufructuary be responsible
USUFRUCT OVER FRUIT BEARING for debts exceeding the benefits under the
TREES AND SPROUT AND usufruct. (except when the contrary intention
WOODLANDS [NCC575-576] appears)
The usufructuary can:
(1) Use dead trunks and those cut off or uprooted USUFRUCT OVER DETERIORABLE
by accident; PROPERTY [NCC 753]
(2) Make usual cuttings that owner used to do; (1) The usufructuary shall have the right to make
and use thereof in accordance with the purpose for
(3) Cut the trees that are not useful. which they are intended.
(2) It is sufficient if the usufructuary returns the
USUFRUCT ON A RIGHT OF ACTION things in the condition in which they may have
[NCC 578] been found at the time of the expiration of the
(1) The action may be instituted in the usufruct despite ordinary defects caused by
usufructuarys name. As the owner of the use and deterioration produced by age and
usufruct, he is properly deemed a proper time.
party-in-interest.
(2) If the purpose is the recovery of the property Except: when sucgh defects were caused
or right, he is still required under Art. 578 to through the usufructuarys fraud and
obtain the naked owners authority. negligence.
(3) If the purpose is to object to or prevent
disturbances over the property, no special (3) If the usufructuary does not return the things
authority from the naked owner is needed. upon the expiration of the usufruct, he should
PAGE 126
pay an indemnity equivalent to the value of DEATH OF USUFRUCTUARY

the things at the time of such expiration.
EXCEPTIONS
USUFRUCT OVER CONSUMABLE (1) In multiple usufructs: it ends at the death of
PROPERTY [NCC 574] the last survivor (NCC 611)
(1) The usufructuary shall have the right to make (a) If simultaneously constituted: all the
use of them under the obligation of paying usufructuaries must be alive (or at least
their appraised value at the termination of the conceived) at the time of constitution.
usufruct, if they were appraised when (b) If successively constituted:
delivered. (i) If by virtue of donation all the
(2) If not appraised, he shall have the right to donees-usufructuaries must be living
return at the same quantity and quality, or at the time of the donation;
pay their current price at the time the usufruct (ii) If by will there should only be 2
ceases. successive usufructuaries and both
must have been alive at the time of
testators death.
RIGHTS OF THE OWNER
(1) At the beginning of the usufruct (see
(2) If the period is fixed by reference to the life of
obligations of usufructuary at the beginning of
another or there is a resolutory condition.
the usufruct)
(2) During the usufruct
Death does not affect the usufruct and the
(a) Retains title to the thing or property.
right is transmitted to the heirs of the
(b) He may alienate the property: he may not
usufructuary until the expiration of the term
alter the form or substance of the thing;
or the fulfillment of the condition.
nor do anything prejudicial to the
usufructuary.
(3) When a contrary intention clearly appears:
(c) He may construct buildings, make
(a) If the usufructuary dies before the
improvements and plantings, provided:
happening of a resolutory condition, the
(1) The value of the usufruct is not
usufruct is extinguished.
impaired; and (b) Usufruct is personal and it CANNOT be
(2) The rights of the usufructuary are not
extended beyond the lifetime of the
prejudiced.
usufructuary. [Sanchez Roman and SC]
EXTINGUISHMENT/ EXPIRATION OF PERIOD OR

TERMINATION [NCC 603] FULFILLMENT OF RESOLUTORY
(1) By the death of the usufructuary, unless a CONDITION IMPOSED ON USUFRUCT
contrary intention clearly appears;
(2) By the expiration of the period for which it was BY PERSON CONSTITUTING
constituted, or by the fulfillment of any USUFRUCT
resolutory condition provided in the title (1) In favor of juridical persons [NCC. 605]
creating the usufruct; (a) Usufruct cannot be constituted in favor of
(3) By merger of the usufruct and ownership in a town, corporation, or association for
the same person; more than fifty years.
(4) By renunciation of the usufructuary; (b) If before the expiration of such period the
(5) By the total loss of the thing in usufruct; town is abandoned, or the corporation or
(6) By the termination of the right of the person association is dissolved, the usufruct shall
constituting the usufruct; or be extinguished.
(7) By prescription. (2) Time that may elapse before a 3rd person
attains a certain age. [NCC. 606]
(a) Usufruct subsists for the number of years
specified, even if the 3rd person should die
before the period expired unless the
PAGE 127
usufruct has been expressly granted only Situation Effect

in consideration of the existence of the
person. Art. 608
If destroyed property is insured before termination of
MERGER OF RIGHTS OF USUFRUCT the usufruct
AND NAKED OWNERSHIP IN ONE When insurance If owner rebuilds,
PERSON premium paid by owner usufruct subsists on
Illustration: H was the usufructuary of land owned and usufructuary (par. 1) new building.
by X. x dies, leaving in his will, the naked If owner does not
ownership of the land to H. the usufruct is rebuild, interest upon
extinguished because now H is both the naked insurance proceeds
owner and the usufructuary. paid to usufructuary.
When the insurance Owner entitled to
RENUNCIATION OF USUFRUCT taken by the naked insurance money (no
(1) Waiver: A voluntary surrender of the rights of owner only because interest paid to
the usufructuary, made by him with the intent usufructuary refuses to usufructuary).
to surrender them. contribute to the If he does not rebuild,
(2) Limitations: premium (par. 2) usufruct continues over
(a) Must be express: tacit renunciation is not remaining land and/or
sufficient; owner may pay interest
(b) Does not need the consent of naked on value of both
owner; and materials and land
(c) If made in fraud of creditors, they may (607).
rescind the waiver through an action If owner rebuilds,
under Article 1381 (accion pauliana). usufruct does not
continue on new
EXTINCTION OR LOSS OF PROPERTY [NCC building, but owner
608] must pay interest on
Situation Effect value of land and old
materials.
Art. 607 When insurance taken Insurance proceeds
If destroyed property is not insured by usufructuary only goes to the
If the building forms Usufruct continues over depends on value of usufructuary.
part of an immovable the land and materials usufructuarys insurable No obligation to
under usufruct (plus interests), if owner interest rebuild.
does not rebuild. Usufruct continues on
If usufruct is on the Usufruct continues over the land.
building only the land and materials Owner has no share in
(plus interests), if owner insurance proceeds.
does not rebuild.
If owner rebuilds, TERMINATION OF THE RIGHT OF
usufructuary must PERSON CONSTITUTING THE
allow owner to occupy USUFRUCT
the land and to make Example: usufructs constituted by a vendee a retro
use of materials; but terminate upon redemption.
the owner must pay
interest on the value of
both the land and the
PRESCRIPTION
materials. (1) Adverse possession against the owner or the
usufructuary.
PAGE 128
(2) It is not the non-use which extinguishes the

usufruct by prescription, but the use by a 3rd Easement
person. (1) An encumbrance imposed upon an
(3) There can be no prescription as long as the immovable for the benefit of another
usufructuary receives the rents from the lease immovable belonging to a different owner.
of the property, or he enjoys the price of the [NCC. 613]
sale of his right. (2) A real right which burdens a thing with a
prestation of determinate servitudes for the
exclusive enjoyment of one who is NOT an
CONDITIONS NOT AFFECTING owner of a tenement.
USUFRUCT (3) A real right by virtue of which the owner has
to ABSTAIN from doing or ALLOW somebody
EXPRORPIATION OF THING IN else to do something to his property for the
benefit of another.
USUFRUCT [NCC 609]
Dominant Estate the immovable in favor of
3 SITUATIONS which the easement is established.
(1) If naked owner alone was given the indemnity,
he has the option: Servient Estate the immovable which is subject
(a) To replace with equivalent thing; or to the easement .
(b) To pay to the usufructuary legal interest
on the indemnity. This requires a security
to be given by the naked owner for the CHARACTERISTICS
payment of the interest.
(2) If both the naked owner and the usufructuary ESSENTIAL FEATURES:
were separately given indemnity, each owns (1) It is a real right it gives an action in rem or
the indemnity given to him, the usufruct being real action against any possessor of the
totally extinguished. servient estate
(3) If usufructuary alone was given the indemnity, (a) Owner of the dominant estate can file a
he must give it to the naked owner and real action for enforcement of right to an
compel the latter to return either the interest easement
or to replace the property. He may even (b) Action in rem: an action against the thing
deduct the interest himself, if the naked itself, instead of against the person.
owner fails to object.
(2) It is a right enjoyed over another property (jus
BAD USE OF THING IN USUFRUCT [NCC in re aliena) it cannot exist in ones property
610] (nulli res sua servit)
Bad use does not extinguish the usufruct but: When the dominant and the servient estates
(1) Entitles the owner to demand delivery and have the same owner, the easement is
administration of the thing. extinguished. Separate ownership is a
(2) The bad use must cause considerable injury prerequisite to an easement.
not to the thing, but to the owner.
(3) It is a right constituted over an immovable by
nature (land and buildings), not over movable
properties. [NCC 613]
Immovable: used in its common and not in the
legal sense, meaning only property
immovable BY NATURE can have easements.
(4) It limits the servient owners right of ownership

for the benefit of the dominant estate.
PAGE 129
(a) Right of limited use but no right to portions unaffected can be alienated without
possess the servient estate. the servitude.
(b) There exists a limitation on ownership: the
dominant owner is allowed to enjoy or use (9) It is indivisible (NCC 618)
part of the servient estate, or imposes on (a) If the servient estate is divided between
the owner a restriction as to his enjoyment two or more persons, the easement is not
of his own property. modified, and each of them must bear it
(i) Being an abnormal limitation of on the part that corresponds to him.
ownership, it cannot be presumed. (b) If the dominant estate is divided between
two or more persons, each of them may
(5) It creates a relation between tenements use the easement in its entirety, without
There is no transfer of ownership, but a changing the place of its use, or making it
relationship is created, depending on the type more burdensome in any other way.
of easement.
(10) It has permanence once it attaches, whether
(6) Generally, it may consist in the owner of the used or not, it continues and may be used
dominant estate demanding that the owner of anytime
the servient estate refrain from doing Perpetual: exists as long as property exists,
something (servitus in non faciendo) or that the unless it is extinguished.
latter permit that something be done over the
servient property (servitus in patendo), but not CLASSIFICATION
in the right to demand that the owner of the
servient do something (servitus in faciendo)
except if such act is an accessory obligation to AS TO RECIPIENT OF BENEFITS
a praedial servitude (obligation propter rem) (1) Real or Praedial: exists for the benefit of a
Servient owner merely allows something to be particular tenement.
done to his estate. (2) Personal: exists for the benefit of persons
without a dominant tenement e.g. usus
Exceptions: Praedial servitudes habitatio (right to reside in a house) and
(a) Right to place beams in an adjoining wall operae servorum (right to the labor of slaves)
to support a structure. in Roman law.
(b) Right to use anothers wall to support a
building. AS TO CAUSE OR ORIGIN
(1) Legal: created by law, whether for public use
(7) It is inherent or inseparable from estate to or for the interest of private persons.
which they actively or passively belong (NCC Once requisites are satisfied, the owner of
617) the dominant estate may ask the Court to
(a) Easements are merely accessory to the declare that an easement is created.
tenements, and a quality thereof. They Example: Natural drainage of waters,
cannot exist without tenements. Abutment of land, Aqueduct, etc.
(b) Easements exist even if they are not (2) Voluntary: Created by the will of the owners of
expressly stated or annotated as an the estate through contract.
encumbrance on the titles.
Note: There is no such thing as a JUDICIAL
(8) It is intransmissible it cannot be alienated EASEMENT. The Courts cannot create easements,
separately from the tenement affected or they can only declare the existence of one, if it
benefited exists by virtue of the law or will of the parties.
Any alienation of the property covered carries
with it the servitudes affecting said property. AS TO ITS EXERCISE [NCC 615]
But this affects only the portion of the
(1) Continuous: Use is or may be incessant,
tenement with the easement, meaning the
without the intervention of any man
PAGE 130
(2) Discontinuous: Used at intervals, and (3) Servitus servitutes esse non potes: There can be
dependent upon the acts of man. no servitude over another servitude.
(4) A servitude must be exercised civiliter in a
Note: This classification is important in way least burdensome to the owner of the
determining prescription: only continuous and land.
apparent easements can be created by (5) A servitude must have a perpetual cause
prescription.
AS INDICATION OF ITS EXISTENCE RELEVANCE OF

(1) Apparent: Made known and continually kept in CLASSIFICATIONS
view by external signs that reveal the use and
enjoyment of the same. DETERMINES WHAT EASEMENTS CAN
(2) Non-apparent: No external indication of their BE ACQUIRED BY PRESCRIPTION
existence.
Continuous and apparent easements may be
acquired by prescription of 10 years [NCC. 620]
Note: Also important for purposes of prescription.
BY THE OBJECT OR OBLIGATION DETERMINES WHAT EASEMENTS CAN

IMPOSED [NCC 616] BE ACQUIRED BY TITLE
(1) Positive: Imposes upon the owner of the (1) Continuous nonapparent easements, and
servient estate the obligation of allowing discontinuous ones, whether apparent or not,
something to be done, or doing it himself. may be acquired only by virtue of a title. [NCC.
(2) Negative: Prohibits the owner of the servient 622]
estate from doing something that he could (2) The existence of an apparent sign of
lawfully do if the easement did not exist. easement between two estates, established or
e.g. Negative Easement of Light and View: An maintained by the owner of both, shall be
opening is made on the wall of the dominant considered, as a title in order that the
estate, and the easement consists of imposing easement may continue actively and
upon the servient estate the obligation to not passively.
build anything that would obstruct the light.
Unless: At the time the ownership of the two
Note: Prescription starts to run from service of estates is divided, the contrary should be
notarial prohibition. provided in the title of conveyance of either of
them, or the sign aforesaid should be
removed before the execution of the deed.
GENERAL RULES This provision shall also apply in case of the
(1) Nulli res sua servi: No one can have a servitude division of a thing owned in common by two or
over ones own property. more persons. [NCC. 624]
(2) Servitus in faciendo consistere nequit: A
servitude cannot consist in doing. DETERMINES HOW TO COMPUTE THE
(a) Although some easements seem to
impose a positive prestation upon the PRESCRIPTIVE PERIOD [NCC 621]
owner of the servient estate, in reality, the (1) In positive easements, from the day on which
primary obligation is still negative. the owner of the dominant estate, or the
(b) Illustration: Under Article 680: the owner person who may have made use of the
of a tree whose branches extend over to a easement, commenced to exercise it upon the
neighboring property is required to cut off servient estate.
the extended branches, but the real (2) In negative easements, from the day on which
essence of the easement is the obligation the owner of the dominant estate forbade, by
NOT TO ALLOW the branches of the tree an instrument acknowledged before a notary
to extend beyond the land. public, the owner of the servient estate from
PAGE 131
executing an act which would be lawful the law does not prohibit it or no injury is
without the easement. suffered by a third person. [NCC 636]
DETERMINES HOW EASEMENT IS LOST BY WILL OF THE OWNERS

BY PRESCRIPTION [NCC 631 (2)] (VOLUNTARY EASEMENTS)
By nonuser for 10 years: Every owner of a tenement or a piece of land may
(1) With respect to discontinuous easements, this establish the easements that he may deem
period shall be computed from the day on suitable and best. [NCC 688]
which they ceased to be used.
(2) With respect to continuous easements, from BY PRESCRIPTION
the day on which an act contrary to the same Continuous and apparent easements may be
took place. acquired by prescription of 10 years. [NCC 620]
CREATION LEGAL EASEMENTS

LAW GOVERNING LEGAL EASEMENTS
BY TITLE For public easements
(1) Continuous and apparent easements may be (1) Special laws and regulations relating thereto.
acquired by virtue of a title. [NCC 620] (ex: PD 1067 and PD 705)
(2) Continuous nonapparent easements, and (2) By the provisions of Chapter 2, Title VII, Book
discontinuous ones, whether apparent or not, II, NCC.
are acquired only by virtue of a title. [NCC
622] For private legal easements
(3) The absence of a document or proof showing (1) By agreement of the interested parties
the origin of an easement which cannot be whenever the law does not prohibit it and no
acquired by prescription may be cured by a injury is suffered by a 3rd person.
deed of recognition by the owner of the (2) By the provisions of Chapter 2, title VII, Book
servient estate or by a final judgment. [NCC II.
623]
(4) The existence of an apparent sign of VOLUNTARY EASEMENTS
easement between two estates, established or (1) Every owner of a tenement or piece of land
maintained by the owner of both, shall be may establish thereon the easements which
considered as a title in order that the he may deem suitable, and in the manner and
easement may continue actively and form which he may deem best. [NCC 688]
passively. (2) The owner of a thing, the usufruct of which
belongs to another, may impose, without the
Unless: at the time the ownership of the two consent of the usufructuary, any servitudes
estates is divided, the contrary should be which will not injure the right of usufruct.
provided in the title of conveyance of either of [NCC 689]
them, or the sign aforesaid should be (3) Whenever the naked ownership belongs to
removed before the execution of the deed. one person and the beneficial ownership to
This provision shall also apply in case of the another, no perpetual voluntary easement
division of a thing owned in common by two or may be established thereon without the
more persons. [NCC 624] consent of both owners. [NCC 690]
(4) Consent of all co-owners is required to impose
BY LAW (LEGAL EASEMENTS) an easement on an undivided tenement. [NCC
(1) Easements imposed by law have for their 691]
object either public use or the interest of
private persons. [NCC 634]
(2) These easements may be modified by
agreement of the interested parties, whenever
PAGE 132
RIGHTS AND OBLIGATIONS OF (a) The owner of the dominant estate may
make repairs at his expense, but he
OWNERS OF DOMINANT AND cannot alter the easement or make it
SERVIENT ESTATES more burdensome. [NCC 627]
RIGHTS OF DOMINANT ESTATE (4) To contribute to expenses of works necessary

OWNER for use and preservation of servitude, if there
are several dominant estates, unless he
(1) To use the easement and exercise all rights
renounces his interest [NCC 628]
necessary for it [NCC 625, 626]
(a) The contribution is in proportion to the
(a) The owner of the dominant estate is
benefits which each may derive from the
granted the right to use the principal
work.
easement, and all accessory servitudes.
(b) Anyone who does not wish to contribute
(b) Example: Easement of drawing water
may exempt himself by renouncing the
carries with it the easement of right of way
easement for the benefit of the others.
to the place where water is drawn.
(c) If the owner of the servient estate should
(c) Limitation: Only for the original
make use of the easement in any manner
immovable and the original purpose.
whatsoever, he shall also be obliged to
(2) To do at his expense all necessary works for
contribute to the expenses in the
the use and preservation of the easement
proportion stated, saving an agreement to
[NCC 627]
the contrary.
The necessity of the works determines extent
of such works.
(3) In a right of way, to ask for change in width of RIGHTS OF THE SERVIENT ESTATE
easement sufficient for needs [NCC 651] OWNER
(4) To renounce totally the easement, if he desires (1) To retain ownership and use of his property
to be exempt from contributing to the (a) The owner of the servient estate retains the
expenses. ownership of the portion on which the
easement is established, and may use the
The needs of the dominant property same in such a manner as not to affect the
ultimately determine the width of the exercise of the easement. [NCC 630]
passage. And these needs may vary from time (b) The servient owner must respect the use of
to time. [Encarnacion v. Court of Appeals] the servitude, but retains ownership and use
of the same, in a manner not affecting the
OBLIGATIONS OF DOMINANT ESTATE easement.
OWNER (2) To change the place and manner of the use of
the easement [NCC 629]
(1) To use the easement for the benefit of
General rule: The owner of the servient estate
immovable and in the manner originally
cannot impair the use of the servitude.
established [NCC 626]
Exceptions:
If established for a particular purpose, the
(a) By reason of either:
easement cannot be used for a different one.
However, if established in a general way, (i) The place/manner originally assigned,
the use of such easement has become
without specific purpose, the easement can be
VERY INCONVENIENT to the owner; or
used for all the needs of the dominant estate.
(ii) The easement should prevent him from
making any important works, repairs or
(2) To notify the owner of the servient estate
improvements thereon;
before making repairs and to make repairs in a
(b) The change must be done at his expense;
manner least inconvenient to the servient
(c) He offers another place or manner equally
estate [NCC 627(2)]
convenient; and
(d) The change is done in such a way that no
(3) Not to alter the easement or render it more
injury is caused to the dominant owner or to
burdensome
PAGE 133
those who may have a right to use the (2) Estates adjoining the banks of navigable or
easement. floatable rivers are subject to the easement of
(3) To use the easement towpath for the exclusive service of river
May use the easement but must also navigation and floatage.
contribute proportionately to the expenses. (3) If it be necessary to occupy lands of private
ownership, the proper indemnity shall first be
OBLIGATIONS OF SERVIENT ESTATE paid.
OWNER
DRAINAGE OF BUILDINGS
(1) The owner of a building is obliged to construct
(1) Not to impair the use of the easement [NCC
its roof or covering in such manner that the
629(1)]
rain water shall fall on his own land or on a
(2) To contribute proportionately to expenses if he
street or public place, and NOT on the land of
uses the easement [NCC 628(2)]
his neighbor, even though the adjacent land
Unless there is an agreement to the contrary
may belong to two or more persons, one of
(3) To pay for the expenses incurred for the change
whom is the owner of the roof.
of location or form of the easement
(2) Even if it should fall on his own land, the owner
shall be obliged to collect the water in such a
KINDS OF LEGAL EASEMENTS way as not to cause damage to the adjacent
(1) Natural drainage [NCC 637] land or tenement.
(2) Riparian banks [NCC 638]
(3) Drainage of buildings [NCC 674] DAM
(4) Dam [NCC 639] Whenever it should be necessary to build a dam,
(5) Drawing water [NCC 640-41] and the person who is to construct it is not the
(6) Aqueduct [NCC 642-646] owner of the banks, or lands which must support
(7) Sluice gate [NCC 647] it, he may establish the easement of abutment of
(8) Right of way [NCC 649-657] a dam, after payment of the proper indemnity.
(9) Party wall [NCC 658-666]
(10) Light and view [NCC 667-681] DRAWING WATER
(11) Intermediate distances [NCC 677-681]
(1) Compulsory easements for drawing water or for
(12) Nuisance [NCC 682-683]
watering animals can be imposed only for
(13) Lateral and subjacent support [NCC 684-687]
reasons of public use in favor of a town or
village, after payment of the proper indemnity.
NATURAL DRAINAGE (2) Easements for drawing water and for watering
(1) Lower estates are obliged to receive the waters animals carry with them the obligation of the
which naturally and without the intervention of owners of the servient estates to allow passage
man descend from the higher estates (as well to persons and animals to the place where
as the stones or earth which they carry with such easements are to be used, and the
them). indemnity shall include this service.
(2) The owner of the lower estate cannot do any (3) The width of the easement must not exceed 10
works that will impede this easement. meters.
(3) The owner of the higher estate cannot do any
works that will increase the burden. AQUEDUCT
(1) Any person who may wish to use upon his own
RIPARIAN BANKS estate any water of which he can dispose shall
(1) The banks of rivers and streams are subject have the right to make it flow through the
throughout their entire length and within a intervening estates, with the obligation to
zone of 3 meters along their margins, to the indemnify their owners, as well as the owners
easement of public use in the general interest of the lower estates upon which the waters
of navigation, floatage, fishing, and salvage. may filter or descend.
PAGE 134
(2) Person desiring to make use of this right is (2) There must absolutely be no access to a public
obliged to: road or highway;
(a) To prove that he can dispose of the water (a) Even if there is access, it is difficult or
and that it is sufficient for the use for which dangerous to use, or grossly insufficient;
it is intended; (b) Mere inconvenience in the use of an outlet
(b) To show that the proposed right of way is does not render the easement a necessity;
the most convenient and the least onerous (c) An adequate outlet is one that is sufficient
to third persons; and for the purpose and needs of the dominant
(c) To indemnify the owner of the servient owner, and can be established at a reasonable
estate in the manner determined by the expense;
laws and regulations (d) Does not necessarily have to be by land
(3) Easement of aqueduct for private interest an outlet through a navigable river if suitable
cannot be imposed on buildings, courtyards, to the needs of the tenement is sufficient;
annexes, or outhouses, or on orchards or (3) The isolation of the immovable is NOT due to
gardens already existing. the dominant owners own acts e.g. if he
(4) This easement does not prevent the owner of constructs building to others obstructing the
the servient estate from closing or fencing it, or old way; and
from building over the aqueduct in such (4) There is payment of indemnity;
manner as not to cause the latter any damage, (a) If right of way is permanent and continuous
or render necessary repairs and cleanings for the needs of the dominant estate = value
impossible. of the land + amount of damage caused to
(5) This easement is considered as continuous and the servient estate;
apparent, even though the flow of the water (b) If right of way is limited to necessary
may not be continuous, or its use depends passage for cultivation of the estate and for
upon the needs of the dominant estate, or gathering crops, without permanent way =
upon a schedule of alternate days or hours. damage caused by encumbrance.
SLUICE GATE RULES FOR ESTABLISHING RIGHT OF WAY

(1) The construction of a stop lock or sluice gate in (1) Must be established at the point LEAST
the bed of the stream from which the water is prejudicial to the servient estate. [NCC 650]
to be taken, for the purpose of improving an (2) Insofar as consistent with the first rule, where
estate. the distance from the dominant estate to a
(2) Such person may demand that the owners of public highway is shortest.
the banks permit its construction, after (a) The criterion of least prejudice to the
payment of damages, including those caused servient estate must prevail over the
by the new easement to such owners and to criterion of shortest distance although this is
the other irrigators. a matter of judicial appreciation. While
shortest distance may ordinarily imply least
RIGHT OF WAY prejudice, it is not always so as when there
are permanent structures obstructing the
WHO MAY DEMAND shortest distance; while on the other hand,
(1) The owner of the dominant estate; or the longest distance may be free of
(2) Any person with the real right to cultivate or obstructions and the easiest or most
use the dominant estate e.g. a usufructuary. convenient to pass through. [Quimen v. CA
(1996)]
Note: a lessee cannot demand such easement, (b) The fact that LGV had other means of
because the lessor is the one bound to egress to the public highway cannot
maintain him in the enjoyment of the property. extinguish the said easement, being
voluntary and not compulsory. The free
REQUISITES ingress and egress along Mangyan Road
(1) The dominant estate is surrounded by other created by the voluntary agreement
immovables owned by other persons; between the parties is thus legally
PAGE 135
demandable with the corresponding duty Notes on extinguishment:

on the servient estate not to obstruct the (1) Extinguishment is NOT automatic. The owner
same. [La Vista Association v. CA] of the servient estate must ask for such
(3) The width of the easement of right of way shall extinguishment.
be that which is sufficient for the needs of the (2) Indemnity paid to the servient owner must be
dominant estate, and may accordingly be returned:
changed from time to time. [NCC 651] (a) If easement is permanent: value of the land
must be returned
OBLIGATIONS IN PERMANENT AND (b) If easement is temporary: nothing is to be
TEMPORARY EASEMENTS OF RIGHT OF WAY returned
Permanent right of way Temporary right of way
SPECIAL RIGHTS OF WAY
Indemnity (1) Right of way to carry materials for the
Consists of the Consists of the construction, repair, improvement, alteration or
damages and the damages only. beautification of a building through the estate
value of the land. of another.
(2) Right of way to raise on anothers land
Necessary repairs scaffolding or other objects necessary for the
Dominant owner to Servient owner to work.
spend on such. spend on such. (a) If it be indispensable for the construction,
repair, improvement, alteration or
Share in taxes
beautification of a building, to carry
The dominant owner Servient owner to materials through the estate of another, or
shall reimburse a spend on such. to raise therein scaffolding or other objects
proportionate share of necessary for the work, the owner of such
taxes to the proprietor estate shall be obliged to permit the act,
of the servient estate. after receiving payment of the proper
indemnity for the damage caused him. [NCC
Rules on indemnity for estates enclosed through a 656]
sale, exchange, partition or donation. (3) Right of way for the passage of livestock
Sale, exchange or known as animal path, animal trail, watering
Donation places, resting places, animal folds. [NCC 657]
partition
(a) Easements of the right of way for the
Buyer, grantee or donee as dominant owners passage of livestock known as animal path,
The buyer or grantee The donee shall pay animal trail or any other, and those for
shall grant the right of the donor indemnity. watering places, resting places and animal
way without indemnity. folds, shall be governed by the ordinances
and regulations relating thereto, and, in the
Seller, grantor or donor as dominant owners
absence thereof, by the usages and customs
The seller or grantor The donee shall grant of the place.
shall pay indemnity. the right of way (b) Without prejudice to rights legally acquired,
without indemnity. the animal path shall not exceed in any case
the width of 75 meters, and the animal trail
EXTINGUISHMENT that of 37 meters and 50 centimeters.
(1) The owner has joined the dominant estate to (c) Whenever it is necessary to establish a
another abutting the public road. compulsory easement of the right of way or
(2) A new road is opened giving access to the for a watering place for animals, the
isolated estate. provisions of this Section and those of
Articles 640 and 641 shall be observed. In
this case the width shall not exceed 10
meters
PAGE 136
PARTY WALL (3) In fences, walls and live hedges dividing rural
Refers to all those mass of rights and obligations lands.
emanating from the existence and common
enjoyment of wall, fence, enclosures or hedges, by Note: A title or an exterior sign, or any other
the owners of adjacent buildings and estates proof showing that the entire wall in
separated by such objects. controversy belongs exclusively to one of the
adjoining property-owners may rebut these
NATURE presumptions.
(1) A common wall which separates two estates,
built by common agreement at the dividing WHEN EXISTENCE OF AN EXTERIOR SIGN IS
line such that it occupies a portion of both PRESUMED [NCC 660]
estates on equal parts. (1) Whenever in the dividing wall of buildings there
(2) A party wall is a special form of co-ownership is a window or opening.
(a kind of compulsory co-ownership). (2) Whenever one side is straight and plumb on all
(a) Each owner owns part of the wall but it its facement, and on the other, it has similar
cannot be separated from the other conditions on the upper part, but the lower
portions belonging to the others. A party part slants or projects outward.
wall has a special characteristic that makes (3) Whenever the entire wall is built within the
it more of an easement as it is called by law. boundaries of one of the estates.
(b) An owner may use a party wall to the extent (4) Whenever the dividing wall bears the burden
of the portion on his property. of the binding beams, floors and roof frame of
one of the buildings, but not those of the
others.
Co-Ownership Party Wall
(5) Whenever the dividing wall between
Before division of Shares of the co- courtyards, gardens, and tenements is
shares, a co-owner owners cannot be constructed in such a way that the coping
cannot point to any physically segregated sheds the water upon only one of the estates.
definite portion of the but they can be (6) Whenever the dividing wall, being built of
property as belonging to physically identified. masonry, has stepping stones, which at certain
him. intervals project from the surface on one side
None of the co-owners There is no such only, but not on the other.
may use the community limitation (7) Whenever lands enclosed by fences or live
property for his hedges adjoin others that are not enclosed.
exclusive benefit
because he would be Note: The deposit of earth or debris on one side
invading the rights of alone is an exterior sign that the owner of that
the others. side is the owner of the ditch or drain. The
presumption is an addition to those
In a co-ownership, Any owner may free enumerated in NCC 660.
partial renunciation is himself from
allowed. contributing to the cost RIGHT OF OWNERS OF A PARTY WALL
of repairs and Generally, part-owners may use the wall in
construction of a party proportion to their respective interests, provided
wall by renouncing all that:
his rights thereto. (i) The right to use by the other party is not
interfered with;
WHEN EXISTENCE OF EASEMENT OF PARTY (ii) The consent by the other owner is needed if
WALL IS PRESUMED a party wants to open a window; and
(1) In dividing walls of adjoining buildings up to (iii) The condition of the building is determined
the point of common elevation. by experts.
(2) In dividing walls of gardens or yards situated in (1) To increase the height of the wall.
cities, or towns, or in rural communities.
PAGE 137
He does this at his expense, including the (b) It is possible to have light only without a
thickening of the wall on his land. view.
He shall indemnify the other party for any
damages. NATURE
(2) To acquire a half-interest in any increase in (1) Positive: Opening a window through a party
height or thickness of the wall, paying a wall
proportionate share in the cost of the work and (a) When a part owner of a party wall opens a
the value of the land covered. window therein, such act implies the
Note that the value of the land must be exercise of the right of ownership by the use
appraised at the time of acquisition. of the entire thickness of the wall.
(3) To renounce his part ownership of a party wall (b) The easement is created only after the
if he desires to demolish his building supported by lapse of the prescriptive period.
the wall.
He shall bear all the expenses of repairs and (2) Negative: Formal prohibition upon the owner
work necessary to prevent any damage which of the adjoining land or tenement.
the demolition may cause to the party wall. (a) When a person opens a window on his own
building, he is exercising his right of
OBLIGATIONS OF OWNERS OF A PARTY WALL ownership on his property, which does not
(1) To contribute proportionately to the repair and establish an easement.
maintenance of the party wall unless he (b) Coexistent is the right of the owner of the
renounces his part-ownership. adjacent property to build on his own land,
(a) This includes the renunciation of the share even if such structures cover the window.
in the wall + the land (c) If the adjacent owner does not build
(b) He cannot renounce his part if his building structures to obstruct the window, such is
is being supported by the party wall considered mere tolerance and NOT a
(2) If he raises the height of the wall, he must: waiver of the right to build.
(a) Bear the cost of maintenance of the (d) An easement is created only when the
additions; owner opens up a window and subsequently
(b) Bear the cost of construction, if the wall prohibits or restrains the adjacent owner
cannot support the additional height; from doing anything that may tend to cut
(c) Give additional land, if necessary to thicken off or interrupt the light and the prescriptive
the wall; period has lapsed.
(d) Pay for damages, if necessary, even if
temporary; and RULES AND RESTRICTIONS ON OPENINGS
(e) Bear the increased expenses for AND STRUCTURES
preservation
Openings for light:
(1) When the wall is 2 meters or more away from
EASEMENT OF LIGHT AND VIEW anothers tenement:
(a) An owner may build any kind of opening
DEFINITION without restriction.
(1) Easement of light (jus luminum) is the right to (2) When the wall is contiguous (less than 2
admit light from the neighboring estate by meters) to anothers tenement:
virtue of the opening of a window or the (a) Openings are made at the height of the
making of certain openings. ceiling joists (horizontal beams) or
(2) Easement of view (jus prospectus) is the right to immediately under the ceiling;
make openings or windows, to enjoy the view (b) Size: 30 cm square;
through the estate of another and the power to (c) With iron grating imbedded in the wall;
prevent all constructions or works which would
(d) With a wire screen.
obstruct such view or make the same difficult.
(a) Necessarily includes the easement of light.
PAGE 138
Openings for view: INTERMEDIATE DISTANCES [NCC 677]

(1) The following structures cannot be built NCC 677, in effect, establishes an easement in
without following the prescribed distances: favor of the State. The general prohibition is
(a) Window, apertures, balconies and other dictated by the demands of national security.
projections with a direct view upon or
towards an adjoining land must have a The following must comply with the regulations or
distance of 2 METERS between the wall and customs of the place:
the contiguous property. (1) Construction of aqueduct, well, sewer, etc. (678)
(b) For structures with a side or oblique view (at Constructions, which by reason of their nature
an angle from the boundary line), there or products are dangerous or noxious.
should be a distance of 60 centimeters.
(c) Measured from: (2) Planting of trees (NCC 679)
(i) The outer line of the wall if the openings (a) No trees shall be planted near a tenement
do not project. or piece of land belonging to another except
(ii) The outer line of the openings if they at the distance authorized by the
project. ordinances or customs of the place.
(iii)The dividing line between the two (b) In the absence of regulations:
properties in cases of oblique views. (i) At least 2 meters from the dividing line of
the estates if tall trees are planted.
Effect if distances are not complied with (ii) At least 50 centimeters if shrubs or small
(1) Windows are considered unlawful openings trees are planted.
and may be ordered by the Court to be closed. (c) In case of violation, a landowner shall have
(2) Even if the adjoining owner does not object to the right to demand the uprooting of the
the construction of such structures at first, he plant even if it has grown spontaneously.
cannot be held to be in estoppel, unless the 10-
year period of acquisitive prescription has BRANCHES, ROOTS AND FRUITS
passed. (1) If the branches of any tree should extend over a
neighboring estate, tenement, garden or yard,
Note: the owner of the latter shall have the right to
(1) In buildings separated by a public way or alley, demand that they be cut-off.
not less than 3 meters wide, the distances (2) If it be the roots of a neighboring tree, which
required (2 m, 60 cm) do not apply. should penetrate into the land of another, the
(2) If an easement is acquired to have direct views, latter may cut them off himself within his
balconies or belvederes, the owner of the property.
servient estate must not build at less than 3 (3) Fruits naturally falling upon adjacent land
meters from the boundary line of the two belong to the owner of said land.
tenements.
(a) The distances may be stipulated by the
parties, but should not be less than what is
LATERAL AND SUBJACENT SUPPORT
(1) The proprietor is prohibited from making
prescribed by the law (2 meters and 60 cm).
dangerous excavations upon his land as to
deprive any adjacent land or building of
Notes on the acquisition of the easement
sufficient lateral or subjacent support.
(1) Period of acquisitive prescription will only start
to run from the time the owner asserting the (2) Easement of lateral and subjacent support is
deemed essential to the stability of buildings.
servitude has forbidden the owner of the
(3) Support is lateral when a vertical plane divides
adjoining tenement from doing something he
the supported and supporting lands.
could lawfully do.
(4) Support is subjacent when the supported land
(2) THUS, although the action to compel the
is above the supporting land.
closure might have prescribed, the owner of
the adjoining estate may still build on his own
land a structure that might obstruct the view.
PAGE 139
MODES OF ACQUIRING MERGER

Must be absolute, perfect and definite, and not
EASEMENT merely temporary.
(1) Absolute: Ownership of the property must be
BY TITLE absolute, thus not applicable to lease,
A juridical act which gives rise to the servitude usufruct, etc.
(e.g. law, donations, contracts or wills) (2) Perfect: Merger must not be subject to a
(1) If the easement has been acquired but no proof condition.
of existence of easement available, and the (3) If the merger is temporary, there is at most a
easement is one that cannot be acquired by suspension of the easement, but no
prescription, the defect may be cured by: extinguishment.
(a) Deed of recognition by owner of servient
estate: By an affidavit or a formal deed BY A NON-USER FOR 10 YEARS
acknowledging the servitude; or
(1) Owner of dominant estate does not exercise
(b) By final judgment: Owner of the dominant
right over easement.
estate must file a case in Court to have the (2) This is inaction, and not outright renunciation.
easement declared by proving its existence
(3) This is due to the voluntary abstention by the
through other evidence.
dominant owner, and not due to a fortuitous
event.
(2) The existence of an apparent sign is
(4) Computation of the period:
considered as title.
(a) Discontinuous easements: counted from the
Illustration: The presence of 4 windows was
day they ceased to be used.
considered an apparent sign that created a
(b) Continuous easements: counted from the
negative easement of light and view (altius non
day an act adverse to the exercise of the
tollendi) i.e. not to build a structure that will
easement took place.
cover the windows. [Amor v. Florentino (1943)].
(i) E.g. in an easement of light and view, the
erection of works obstructing the
BY PRESCRIPTION servitude would commence the period of
Requisites prescription.
(1) The easement must be continuous and (3) The use by a co-owner of the dominant estate
apparent; bars prescription with respect to the others.
(2) The easement must have existed for 10 years; (4) Non-user cannot extinguish servitudes not yet
and exercised.
(3) There is NO NEED for good faith or just title.
EXTINGUISHMENT BY IMPOSSIBILITY
EXTINGUISHMENT OF OF USE
EASEMENTS (1) Impossibility referred to must render the entire
(1) By merger in the same person of the ownership easement unusable for all time.
of the dominant and servient estates; (2) Impossibility of using the easement due to the
(2) By nonuser for ten years; condition of the tenements (e.g. flooding) only
(3) When either or both of the estates fall into suspends the servitude until it can be used
such condition that the easement cannot be again.
used; (3) Except: If the suspension exceeds 10 years, the
(4) By the expiration of the term or the fulfillment easement is deemed extinguished by non-user.
of the condition, if the easement is temporary
or conditional; EXPIRATION OF THE TERM OR
(5) By the renunciation of the owner of the FULFILLMENT OF RESOLUTORY
dominant estate; or CONDITION
(6) By the redemption agreed upon between the
Applicable only to voluntary easements.
owners of the dominant and servient estates.
PAGE 140
RENUNCIATION OF THE OWNER OF (a) Requisite: the public highway must

THE DOMINANT ESTATE substantially meet the needs of the
Must be specific, clear, express (distinguished dominant estate in order that the easement
from non-user). may be extinguished
(b) Owner of the servient estate may demand
that the easement be extinguished.
OTHER CAUSES NOT MENTION IN NCC (c) Owner of the servient estate must return
631 indemnity he received (value of the land)
(1) Annulment and rescission of the title
constituting the voluntary easement;
(2) Termination of the right of grantor of the
voluntary easement; Nuisance
(3) Abandonment of the servient estate; A nuisance is any act, omission, establishment,
(a) Owner of the servient estate gives up business, condition of property, or anything else
ownership of the easement (e.g. the strip of which:
land where the right of way is constituted) in (1) Injures or endangers the health or safety of
favor of the dominant estate. others;
(b) The easement is extinguished because (2) Annoys or offends the senses;
ownership is transferred to the dominant (3) Shocks, defies or disregards decency or
owner, who now owns both properties. morality;
(4) Eminent domain; or (4) Obstructs or interferes with the free passage of
(a) The governments power to expropriate any public highway or street, or any body of
property for public use, subject to the water; or
payment of just compensation. (5) Hinders or impairs the use of property.
(5) Special cause for extinction of legal rights of
way; if right of way no longer necessary. Note: To constitute a nuisance there must be an
(a) NCC 655 arbitrary or abusive use of property or disregard of
(i) If the right of way granted to a commonly accepted standards set by society.
surrounded estate ceases to be
necessary because its owner has joined it A municipal body has the power to declare and
to another abutting on a public road, the abate nuisances. BUT it has no power to find as
owner of the servient estate may fact that a particular thing is a nuisance. The
demand that the easement be determination of whether or not a nuisance exists
extinguished, returning what he may is a judicial function, because to declare
have received by way of indemnity. The something a nuisance is to deprive its use. [Iloilo
interest on the indemnity shall be Cold Storage v Mun. Council of Iloilo (1913)]
deemed to be in payment of rent for the
use of the easement. NUISANCE V. TRESPASS
(ii) The same rule shall be applied in case a
Nuisance Trespass
new road is opened giving access to the
isolated estate. Use of ones own Direct infringement of
(iii) In both cases, the public highway must property in such a anothers right of
substantially meet the needs of the manner as to cause property.
dominant estate in order that the injury to the property or
easement may be extinguished. right or interest of
(6) Right of way ceases to be necessary: another, and generally
(i) Owner of the of the dominant estate has results from the
joined to another abutting on a public commission of an act
road. beyond the limits of the
(ii) A new road is opened giving access to property affected.
the isolated estate. Injury is consequential. Injury is immediate.
PAGE 141
NUISANCE V. NEGLIGENCE ACCORDING TO SCOPE OF INJURIOUS

Nuisance Negligence EFFECTS
Test: not the number of persons annoyed but the
Whether it was Whether the possibility of annoyance to the public by the
unreasonable for the defendants use of his invasion of its rights the fact that it is in a public
defendant to act as he property was place and annoying to all who come within its
did in view of the unreasonable as to sphere.
threatened danger or plaintiff, without regard (1) Public
harm to one in to foreseeability of The doing of or the failure to do something
plaintiffs position. injury. that injuriously affects the safety, health or
Liability for the Liability is based on a morals of the public.
resulting injury to want of proper care It causes hurt, inconvenience or injury to the
others regardless of the public, generally, or to such part of the public
degree of care or skill as necessarily comes in contact with it.
exercised to avoid such (2) Private
injury. One which violates only private rights and
Principles ordinarily Principles ordinarily produces damages to but one or a few
apply where the cause apply where the cause specific persons.
of action is for of action is for harm
continuing harm caused resulting from one act (3) Mixed
by continuing or which created an
recurrent acts which unreasonable risk of DOCTRINE OF ATTRACTIVE
cause discomfort or injury. NUISANCE
annoyance to plaintiff in One who maintains on his premises dangerous
the use of his property. instrumentalities or appliances of a character
likely to attract children in play, and who fails to
CLASSES exercise ordinary care to prevent children from
playing therewith or resorting thereto, is liable to
ACCORDING TO NATURE a child of tender years who is injured thereby, even
(1) Nuisance per se or at law if the child is technically a trespasser in the
An act, occupation or structure which is a premises. [Jarco Marketing Corp. v. CA (1999)]
nuisance at all times and under any
circumstances, regardless of location or Basis of liability The attractiveness is an
surroundings. invitation to children. Safeguards to prevent
danger must therefore be set up.
(2) Nuisance per accidens or in fact
(a) One that becomes a nuisance by reason of Note: A swimming pool or water tank is not an
circumstances and surroundings. attractive nuisance, for while it is attractive, it
(b) It is not a nuisance by its nature but it may cannot be a nuisance, being merely an imitation
become so by reason of the locality, of the work of nature. [Hidalgo Enterprises v.
surrounding, or the manner in which it is Balandan (1952)]
conducted, managed, etc.
LIABILITY IN CASE OF NUISANCE
Per se Per accidens
WHO ARE LIABLE
The wrong is Proof of the act and its Every successive owner or possessor of property
established by proof of consequences are who fails or refuses to abate a nuisance in that
the mere act. It necessary. property started by a former owner or possessor is
becomes a nuisance as liable therefor in the same manner as the one who
a matter of law. created it. (NCC. 696)
PAGE 142
LIABILITY OF CREATOR OF NUISANCE must have concurred in their effects as one single
He who creates a nuisance is liable for the act to produce the injury complained of.
resulting damages and his liability continues as
long as the nuisance continues. RIGHT TO RECOVER DAMAGES
(1) There must be a breach of some duty on the The abatement of a nuisance does not preclude
part of the person sought to be held liable for the right of any person injured to recover damages
damages resulting from a nuisance before an for its past existence. [NCC 697]
action will lie against him.
(2) No one is to be held liable for a nuisance which Abatement and damages are cumulative
he cannot himself physically abate without remedies.
legal action against another for that purpose.
(3) Where several persons, acting independently, NO PRESCRIPTION
cause damage by acts which constitute a The action to abate a public or private nuisance is
nuisance, each is liable for the damage which NOT extinguished by prescription. [NCC. 1143(2)]
he has caused or for his proportionate share of
the entire damage.
REGULATION OF NUISANCES
LIABILITY OF TRANSFEREES
The grantee of land upon which there exists a
PUBLIC NUISANCE
Remedies
nuisance created by his predecessors in title is
The remedies against a public nuisance are:
NOT responsible therefore merely because he
(1) A prosecution under the Penal Code or any
becomes the owner of the premises, or merely
local ordinance:
because he permits it to remain.
(2) A civil action; or
(3) Extrajudicial abatement.
He shall be liable if he knowingly continues the
(a) It must be reasonably and efficiently
nuisance. Generally, he is not liable for continuing
exercised
it in its original form, unless he has been notified
(b) Means employed must not be unduly
of its existence and requested to remove it, or has
oppressive on individuals, and
actual knowledge that it is a nuisance and
(c) No more injury must be done to the
injurious to the rights of others.
property or rights of individuals than is
If the transferee cannot physically abate the necessary to accomplish the abatement.
(d) No right to compensation if property taken
nuisance without legal action against another
or destroyed is a nuisance.
person, then he shall not be liable for such
nuisance.
Action for Abatement
(1) The district health officer shall take care that
NATURE OF LIABILITY one or all of the remedies against a public
All persons who participate in the creation or nuisance are availed of.
maintenance of a nuisance are jointly and severally (2) If a civil action is brought by reason of the
liable for the injury done. maintenance of a public nuisance, such action
shall be commenced by the city or municipal
If 2 or more persons who create or maintain the mayor.
nuisance act entirely independent of one another, (3) The district health officer shall determine
and without any community of interest, concert of whether or not abatement, without judicial
action, or common design, each is liable only so proceedings, is the best remedy against a
far as his acts contribute to the injury. public nuisance.
(4) A private person may file an action on account
For solidary liability, there must be some joint or of a public nuisance if it is especially injurious
concurrent act or community of action or duty, or to him.
the several wrongful acts done at several times
PAGE 143
General rule: An individual has no right of action PRIVATE NUISANCE

against a public nuisance. The abatement Remedies
proceedings must be instituted in the name of the The remedies against a private nuisance are:
State or its representatives. (1) A civil action; or
(2) Extrajudicial abatement.
Exception: An individual who has suffered some (a) The procedure for extrajudicial abatement
special damage different from that sustained by of a public nuisance by a private person will
the general public may maintain a suit in equity also be followed.
for an injunction to abate it, or an action for (b) The person extrajudicially abating a
damages which he has sustained. nuisance liable for damages if:
(i) If he causes unnecessary injury; or
The action becomes a tort if an individual has (ii) If an alleged nuisance is later declared
suffered particular harm, in which case the by the courts to be not a real nuisance.
nuisance is treated as a private nuisance with
respect to such person. Remedies of the property owner
A person whose property is seized or destroyed as
Requisites of the right of a private individual to a nuisance may resort to the courts to determine
abate a public nuisance whether or not it was in fact a nuisance.
(1) That demand be first made upon the owner or (1) An action for replevin;
possessor of the property to abate the (2) To enjoin the sale or destruction of the
nuisance; property;
(2) That such demand has been rejected; (3) An action for the proceeds of its sale and
(3) That the abatement be approved by the district damages if it has been sold; or
health officer and executed with the assistance (4) To enjoin private parties from proceeding to
of the local police; and abate a supposed nuisance.
(4) That the value of the destruction does not
exceed P3000.
Rules: Modes of Acqiring

(1) The right must be exercised only in cases of
urgent or extreme necessity. The thing alleged Ownership
to be a nuisance must be existing at the time
that it was alleged to be a nuisance. (1) Occupation
(2) A summary abatement must be resorted to (2) By operation of Law
within a reasonable time after knowledge of (3) Donation
the nuisance is acquired or should have been (4) Tradition
acquired by the person entitled to abate. (5) Intellectual Property
(3) The person who has the right to abate must (6) Prescription
give reasonable notice of his intention to do so, (7) Succession
and allow thereafter a reasonable time to
enable the other to abate the nuisance himself. Mode is a specific cause which produces dominion
(4) The means employed must be reasonable and and other real rights as a result of the co-
for any unnecessary damage or force, the actor existence of special status of things, capacity and
will be liable. The right to abate is not greater intention of persons and fulfillment of the
than the necessity of the case and is limited to requisites of law.
the removal of only so much of the
objectionable thing as actually causes the Title is every juridical right which gives a means to
nuisance. the acquisition of real rights but in itself is
(5) The property must not be destroyed unless it is insufficient to produce them.
absolutely necessary to do so.
Ownership is not transferred by contract merely
but by tradition or delivery. Contracts only
PAGE 144
constitute titles or rights to transfer or acquisition SPECIAL RULES

of ownership, while delivery is the mode of
accomplishing the same. OCCUPATION OF A SWARM OF BEES
The owner of a swarm of bees shall have a right to
Mode Title pursue them to anothers land, indemnifying the
possessor of the latter for the damage.
Directly and Serves merely to give
immediately produces a the occasion for its If the owner has not pursued the swarm, or ceases
real right. acquisition or existence. to do so within 2 consecutive days, the possessor
Cause Means of the land may occupy or retain the same.
Proximate cause Remote cause
The 20 days to be counted from their occupation
Essence of the right, Means whereby that by another person. This period having expired,
which is to be created or essence is they shall pertain to him who has caught and kept
transmitted. transmitted. them.
OCCUPATION OCCUPATION OF DOMESTICATED ANIMALS

Note: Ownership of land cannot be acquired by Wild animals are possessed only while they are
occupation. under one's control; domesticated or tamed
animals are considered domestic or tame if they
retain the habit of returning to the premises of the
REQUISITES possessor.
(a) The property must be a corporeal personal
property susceptible of appropriation; PIGEONS AND FISH
(b) The property is either res nullius (no owner) or Pigeons and fish which from their respective
res derelict (abandoned property); breeding places pass to another pertaining to a
(c) There is seizure or apprehension with the different owner shall belong to the latter,
intent to appropriate; and provided they have not been enticed by some
(d) There is an observance of requisites or artifice or fraud.
conditions prescribed by law.
HIDDEN TREASURE
KINDS He who by chance discovers hidden treasure in
Of Animals anothers property: shall be allowed to the
(1) Wild or feral animals seizure (hunting/fishing) finder.
in open season by means NOT prohibited.
(2) Tamed/domesticated animals General Rule: If the finder is a trespasser, he shall not be
belong to the tamer, but upon recovering entitled to any share of the treasure.
freedom, are susceptible to occupation
UNLESS claimed within 20days from seizure If the things found be of interest to science or the
by another. arts, the State may acquire them at their just
(3) Tame/domestic animals not acquired by price, which shall be divided in conformity with the
occupation EXCEPT when ABANDONED. rule stated.
Of Other Personal Property LOST MOVABLES; PROCEDURE AFTER
(1) Abandoned may be acquired FINDING LOST MOVABLES
(2) Lost Whoever finds a movable, which is not treasure,
(3) Hidden treasure finder gets by occupation; must return it to its previous possessor.
landowner gets by accession; EXCEPT in
CPG system, share goes to the partnership. If unknown, the finder shall immediately deposit it
with the mayor of the city or municipality where
the finding has taken place.
PAGE 145
The finding shall be publicly announced by the WHAT MAY BE DONATED

mayor for two consecutive weeks in the way he All present property or part thereof of the
deems best. donor
(1) Provided he reserves, in full ownership or
If the movable cannot be kept without usufruct, sufficient means for support of
deterioration, or without expenses which himself and all relatives entitled to be
considerably diminish its value, it shall be sold at supported by donor at the time of acceptance.
a public auction eight days after the publication. (2) Provided that no person may give or receive by
way of donation, more than he may give or
Six months from the publication having elapsed receive by will (NCC 752); also, reserves
without the owner having appeared, the thing property sufficient to pay donors debts
found, or its value, shall be awarded to the finder. contracted before donation, otherwise,
The finder and the owner shall be obliged, as the donation is in fraud of creditors (NCC 759,
case may be, to reimburse the expenses. 1387).
(3) If donation exceeds the disposable or free
If the owner should appear in time, he shall be portion of his estate, the donation is inofficious.
obliged to pay, as a reward to the finder, one- (4) EXCEPTIONS:
tenth of the sum or of the price of the thing found. (a) Donations provided for in marriage
settlements between future spouses
DONATION must be not more than 1/5 of present
Donation is an act of liberality whereby a person property.
disposes gratuitously of a thing or right in favor of (b) Donation propter nuptias by an ascendant
another, who accepts it. consisting of jewelry, furniture or clothing
not to exceed 1/10 of disposable portion.
OTHER INSTANCES CONSIDERED AS
DONATION WHAT MAY NOT BE DONATED
(1) When a person gives to another a thing or right Future property
on account of the latter's merits or of the (1) Donations cannot comprehend future property.
services rendered by him to the donor, (2) Future property is understood anything
provided they do not constitute a demandable which the donor cannot dispose of at the time
debt. of the donation.
(2) When the gift imposes upon the donee a
burden that is less than the value of the thing KINDS OF DONATIONS
given.
AS TO ITS TAKING EFFECT
NATURE (1) Donation Inter Vivos [NCC 729]
(1) BILATERAL contract creating UNILATERAL Donation which shall take effect during the
obligations on the donors part. lifetime of the donor, though the property shall
(2) Requires CONSENT of BOTH donor and donee not be delivered till after the donor's death.
though it produces obligations only on the side
of the DONOR, unless it is an onerous Irrevocable EXCEPT for the ff grounds:
donation. (a) Subsequent birth of the donors children;
(b) Donors failure to comply with imposed
conditions;
REQUISITES (c) Donees ingratitude; or
(1) CONSENT and CAPACITY of the parties;
(d) Reduction of donation by reason of
(2) ANIMUS DONANDI (intent to donate);
inofficiousness.
(3) DELIVERY of thing donated;
(4) FORM as prescribed by law; and
(5) IMPOVERISHMENT of donors patrimony and
ENRICHMENT on part of donee.
PAGE 146
(2) Donation by Reason of Marriage/ Donation Donation between spouses

Propter Nuptias [FC 86] General Rule: Every donation or grant of
Requisites gratuitous advantage, direct or indirect, between
(a) Must be made BEFORE the celebration of the spouses during the marriage shall be VOID.
marriage; The prohibition applies to persons living together
(b) Made in CONSIDERATION of the marriage; as husband and wife without a valid marriage.
and
Exception: Moderate gifts which the spouses may
(c) Made in FAVOR of ONE or BOTH of the
give each other on the occasion of any family
future spouses.
rejoicing.
Ordinary Donations v. Donations Propter (3) Donation Mortis Causa [NCC 728]
Nuptias (a) It only becomes effective upon the death of
Ordinary Propter Nuptias the donor.
(b) The donors death ahead of the donee is a
Express acceptance suspensive condition for the existence of
Necessary Not required the donation.
As to minors Characteristics:
(a) The transferor retains ownership and control of
Cant be made by May be made by minors
the property while alive;
minors (FC 78)
(b) The transfer is revocable at will before his
As to future property death; and
Cannot include future May include future (c)The transfer will be VOID if the transferor
property property (same rule as should survive the transferee.
wills)
Inter Vivos v. Mortis Causa
Limit as to donation of present property
Inter vivos Mortis causa
No limit to donation of If present property is
present property donated and property As to formalities
provided legitimes are regime is ACP, limited Executed and accepted Must be in the form of
not impaired. to 1/5. with formalities a will, with all the
Grounds for revocation prescribed by CC. formalities for the
validity of wills.
Law on donations See below (FC 86)
As to effectivity
Causes for revocation of donation propter Effective during the Effective after the
nuptias: lifetime of the donor. death of the donor.
(1) If the marriage is not celebrated or judicially
As to acceptance
declared void ab initio, except donations made
in the marriage settlements; Acceptance must be
(2) When the marriage takes place without the made after the death
consent of the parents or guardian, as required of the donor, the
by law; donation being
(3) When the marriage is annulled, and the donee effective only after the
acted in bad faith; Acceptance must be death of donor.
(4) Upon legal separation, the 147one being the made during the Acceptance during the
guilty spouse; lifetime of the donor. donors lifetime is
(5) If it is with a resolutory condition and the premature and
condition is complied with; or ineffective because
(6) When the donee has committed an act of there can be no
ingratitude as specified by the provisions of the contract regarding
Civil Code on donations in general. future inheritance.
PAGE 147
Inter vivos Mortis causa AS TO EFFECTIVITY OR EXTINGUISHMENT

(1) Pure donation is without conditions or
As to transfer of ownership for right of disposition periods,
Ownership is Upon acceptance by (2) Conditional donation is subject to suspensive
immediately the donee, but the or resolutory conditions.
transferred. Delivery of effect of such retroacts (3) With a term
possession is allowed to the time of death of
after death. the donor. FORMALITIES REQUIRED
As to revocation
HOW MADE AND ACCEPTED
Irrevocable may be Revocable upon the Movable properties [NCC 748]
revoked only for the exclusive will of the (1) The donation of a movable may be made orally
reasons provided in CC donor. or in writing.
760, 764, 765. (2) Oral donation: requires the simultaneous
As to reduction or suppression delivery of the thing or of the document
representing the right donated.
When it is excessive or When it is excessive or (3) If the value of the movable donated exceeds
inofficious, being inofficious, it is reduced P5,000, the donation and the acceptance
preferred, it is reduced first, or even should be in writing, otherwise, the donation is
only after the donations suppressed. void.
mortis causa had been
reduced or exhausted. Immovable properties [NCC 749]
(1) Must be made in a public instrument specifying
Notes: the donated property and the burdens
The NATURE of the act, whether its one of assumed by the donee.
disposition or of execution, is CONTROLLING to (2) The acceptance must be either:
determine whether the donation is mortis causa (a) In the same instrument; or
or inter vivos. (b) In another public instrument notified to the
What is important is the TIME of TRANSFER of donor in authentic form and noted in both
ownership even if transfer of property donated deeds.
may be subject to a condition or a term. (3) Exceptions:
Whether the donation is inter vivos or mortis (a) Donations propter nuptias need no
causa depends on whether the donor intended express acceptance.
to transfer ownership over the properties upon (b) Onerous donations form governed by the
the execution of the deed. [Gestopa v. CA rules of contracts.
(2002)]
PERFECTION
AS TO CAUSE OR CONSIDERATION Acceptance
(1) Simple - made out of pure liberality or because (1) Donation is perfected upon the donors learning
of the merits of the donee. of the acceptance.
(2) Remuneratory - made for services already (2) Acceptance may be made during the lifetime of
rendered to the donor. both donor and donee.
(3) Onerous - imposes a BURDEN inferior in value
to property donated. Who May Accept
(a) Improper - burden EQUAL in value to Donee: must accept personally or through an
property donated authorized person with special power for the
(b) Sub-modo or modal - imposes a prestation purpose. [NCC 745]
upon donee as to how property donated will
be applied. Time Of Acceptance
(c) Mixed donations e.g. sale for price lower Acceptance must be done during the lifetime of
than value of property. the donor and the donee.
PAGE 148
QUALIFICATIONS OF DONORS AND DONEES report it to an officer of the law within a month,
Who May Give Donations unless the authorities have already taken
All persons who may contract and dispose of their action; this prohibition shall not apply to cases
property may make a donation. [NCC 735] wherein, according to law, there is no
obligation to make an accusation;
Note: (5) Any person convicted of adultery or
(1) Donors capacity shall be determined as of the concubinage with the spouse of the testator;
time of the making of the donation. [NCC 737] (6) Any person who by fraud, violence,
(2) Capacity to donate is required for donations intimidation, or undue influence should cause
inter vivos and NOT in donations mortis causa. the testator to make a will or to change one
(3) Donors capacity is determined as of the time already made;
of the donation. Subsequent incapacity is (7) Any person who by the same means prevents
immaterial. another from making a will, or from revoking
one already made, or who supplants, conceals,
Who May Receive Donations or alters the latters will;
(1) All who are not specially disqualified by law. (8) Any person who falsifies or forges a supposed
(NCC 738) will of the decedent.
(2)Minors and others who cannot enter into a
contract: acceptance may be made through NCC 1027:
their parents or legal representatives. [NCC (1) The priest who heard the confession of the
741] testator during his last illness, or the minister
(3) Donations made to conceived and unborn of the gospel who extended spiritual aid to him
children: those who would legally represent during the same period;
them if they were already born may accept the (2) The relatives of such priest or minister of the
donations. [NCC 737] gospel within the fourth degree, the church,
order, chapter, community, organization, or
Who May Not Give or Receive Donations institution to which such priest or minister may
By reason of public policy (NCC 739) belong;
(1) Those made between persons guilty of adultery (3) A guardian with respect to testamentary
or concubinage at the time of the donation; dispositions given by a ward in his favor before
(2) Those made between persons guilty of the the final accounts of the guardianship have
same criminal offense if the donation is made been approved, even if the testator should die
in consideration thereof; or after the approval thereof; nevertheless, any
(3) Those made to a public officer, his spouse, provision made by the ward in favor of the
descendants, and/or ascendants by reason of guardian when the latter is his ascendant,
the office. descendant, brother, sister, or spouse, shall be
valid;
By reason of the donees unworthiness [NCC 1032 (4) Any physician, surgeon, nurse, health officer or
and 1027 except (4)] druggist who took care of the testator during
NCC 1032: his last illness; or
(1) Parents who have abandoned their children or (5) Individuals, associations and corporations not
induced their daughters to lead a corrupt or permitted by law to inherit.
immoral life, or attempted against their virtue;
(2) Any person who has been convicted of an By reason of prejudice to creditors or heirs
attempt against the life of the testator, his or (voidable)
her spouse, descendants, or ascendants;
(3) Any person who has accused the testator of a EFFECTS OF DONATION /
crime for which the law prescribes LIMITATIONS
imprisonment for six years or more, if the
accusation has been found groundless; IN GENERAL
(4) Any heir of full age who, having knowledge of (1) The donee may demand actual delivery of thing
the violent death of the testator, should fail to donated;
PAGE 149
(2) The donee is SUBROGATED to the rights of the value of the property donated unless
the donor in the property donated; clearly intended.
(3) The donor is NOT obliged to warrant the things (2) If theres no stipulation the donee will be
donated EXCEPT in onerous donations where answerable only for the donors debt only in
the donor is liable for eviction up to the extent case the donation is in fraud of creditors.
of the burden; [NCC 754]
(4) The donor is liable for EVICTION or HIDDEN Illegal or impossible conditions [NCC 1183]
DEFECTS in case of bad faith on his part; [NCC (1) Impossible conditions: those contrary to good
754] customs or public policy and those prohibited
(5) In donation propter nuptias, the donor must by law shall annul the obligation, which
RELEASE the property donated from depends upon them.
mortgages and other encumbrances UNLESS (2) If the obligation is divisible, that part thereof
the contrary has been stipulated; and which is not affected by the impossible or
(6) Donations to several donees jointly: NO right unlawful condition shall be valid.
of accretion EXCEPT: (3) The condition not to do an impossible thing
(a) When the donor provides otherwise; or shall be considered as not having been agreed
(b) When the donation to husband and wife is upon.
joint with the right of accretion UNLESS
the donor provides otherwise. Double donations
Rule: Priority in time, priority in right.
SPECIAL PROVISIONS (1) If movable: one who first took possession in
Reservation by donor of power to dispose (in whole good faith.
or in part) or to encumber property donated [NCC (2) If immovable: one who recorded in registry of
755] property in good faith
(1) The donor may reserve the right to dispose of (a) If there is no inscription, the one who first
some things donated, or of some amount, took possession in good faith.
which shall be a charge thereon. (b) If there is no possession, one who can
(2) But if he should die without having made use present the oldest title.
of this right, the property or amount reserved
shall belong to the donee. Excessive/Inofficious Donations
A type of donation in which a person gives or
Donation of naked ownership to one donee and receives more than what he may give or receive by
usufruct to another [NCC 756] will. [NCC 752]
The naked ownership and the usufruct may be
donated separately, provided that all the donees Donation inter vivos, made by a person having no
are living at the time of the donation. children or descendants, legitimate or legitimated
by subsequent marriage, or illegitimate, may be
Conventional reversion in favor of donor or other revoked or reduced by the happening of any of
person [NCC 757] these events:
(1) If made in favor of the donor: Reversion may be (a) If the donor, after the donation, should have
for any case and circumstance. legitimate or legitimated or illegitimate
(2) If made in favor of other persons: Such persons children, even though they be posthumous;
must be living at the time of the donation. (b) If the child of the donor, whom the latter
(3) If the rule is violated, the stipulation on believed to be dead when he made the
reversion is void but the donation is still valid. donation, should turn out to be living; or
(c) If the donor subsequently adopt a minor child.
Payment of donors debt [NCC 758]
(1) If expressly stipulated: the donee must pay only The donation shall be revoked or reduced insofar
the debts contracted before the donation as it exceeds the portion that may be freely
unless specified otherwise. But in no case shall disposed of by will, taking into account the whole
the donee be responsible for debts exceeding estate of the donor at the time of the birth,
appearance or adoption of a child.
PAGE 150
Inofficious Donations proved by preponderance of evidence in the

(1) The donation shall be reduced with regard to same action.
the excess.
(2) But this reduction shall not prevent the (2) Those made between persons found guilty of
donations from taking effect during the life of the same criminal offense, in consideration
the donor, nor shall it bar the donee from thereof;
appropriating the fruits. (3) Those made to a public officer or his wife,
(3) Only those who, at the time of the donor's descendants and ascendants, by reason of his
death, have a right to the legitime and their office; and
heirs and successors-in-interest may ask for (4) Those made to persons incapacitated to
the reduction or inofficious donations. succeed by will. [NCC. 1027]
(4) If, there being two or more donations, the
disposable portion is not sufficient to cover all REVOCATION V. REDUCTION
of them, those of the more recent date shall be Revocation Reduction
suppressed or reduced with regard to the
excess. Total withdrawal of
Amount is only insofar
amount, whether the
as the legitime is
Scope of amount [NCC 750-752] legitime is impaired or
prejudiced
(1) The donations may comprehend all the present not
property of the donor, or part thereof. Benefits the donors
heirs (except when
Provided he reserves, in full ownership or in Benefits the donor made on the ground of
usufruct, sufficient means for the support of the appearance of a
himself, and of all relatives who, at the time of child)
the acceptance of the donation, are by law
entitled to be supported by the donor Grounds for Reduction
(1) Inofficiousness
(2) Donations cannot comprehend future A donation where a person gives or receives
property. more than what he may give or receive by will
is inofficious. [NCC 752]
Future property is understood anything which (2) Subsequent birth, reappearance of child or
the donor cannot dispose of at the time of the adoption of minor by donor
donation.
Effects of subsequent birth, reappearance or
In fraud of creditors [NCC 759] adoption:
(1) Donation is always presumed to be in fraud of (1) A donation is VALID if it does not exceed the
creditors, when at the time thereof the donor free part computed as of the birth, adoption or
did not reserve sufficient property to pay his reappearance of the child.
debts prior to the donation. (2) The donee must return the property or its
(2) The donee shall be responsible therefor only value at the time of the donation.
when the donation has been made in fraud of (3) The fruits must be returned from the filing of
creditors. the action.
(4) Mortgages by the donee are valid but may be
VOID DONATIONS [NCC 739-740, 1027] discharged subject to reimbursement from the
(1) Those made between persons who were guilty donee.
of adultery or concubinage at the time of the
donation; Extent of revocation: only to the extent of the
presumptive legitime of the child.
NOTE: The spouse of the donor or donee may
bring the action for declaration of nullity and (1) Insufficient means of support
the guilt of the donor and donee may be (2) In fraud of creditors
PAGE 151
(3) Prescription 4 years from either:

(i) Birth of first legitimate child; Notes:
(ii) Legitimation, adoption, recognition of first (1) Founded on moral duty: one who received a
child; donation must be grateful to his benefactor.
(iii) Judicial declaration of filiation; or (2) Conviction is NOT necessary.
(iv) Knowledge of information on the existence (3) Time to file action for revocation within 1yr
of a child believed to be dead. from knowledge of the offense.
REVOCATION Who may file

(1) Failure to comply with any of the conditions Donor must bring action himself; not
imposed by the donor upon the donee transmissible to his heirs.
(2) For additional legitime for subsequent birth,
reappearance or adoption Effect of revocation on alienations and
(3) Ingratitude encumbrances [NCC 766]
The following cases are forms of ingratitude: (1) Alienations and mortgages effected before the
(1) If the donee should commit some offense notation of the complaint for revocation in the
against the person, the honor or the Registry of Property shall subsist.
property of the donor, or of his wife or (2) Later ones shall be void.
children under his parental authority;
(2) If the donee imputes to the donor any Effect as to fruits [NCC 768]
criminal offense, or any act involving moral When the donation is revoked for any of the
turpitude, even though he should prove it, causes stated in NCC 760, or by reason of
unless the crime or the act has been ingratitude, or when it is reduced because it is
committed against the donee himself, his inofficious, donee shall not return the fruits except
wife or children under his authority; or from the filing of the complaint.
(3) If he unduly refuses him support when the If the revocation is based upon noncompliance
donee is legally or morally bound to give with any of the conditions imposed in the
support to the donor. donation, the donee shall return not only the
property but also the fruits thereof which he
Applies to all donations EXCEPT: may have received after having failed to fulfill
(1) Mortis causa the condition.
(2) Propter nuptias
(3) Onerous donations
PAGE 152
What may be donated

All present property of the donor or part thereof Limitation:
(1) He reserves in full ownership or in usufruct,
sufficient means for his support and for all
relatives who are at the time of the acceptance
of the donation are, by law, entitled to be
supported
Effect of non-reservation: reduction of the
donation
(2) He reserves sufficient property at the time of the

donation for the full settlement of his debts
Effect of non-reservation: considered to be a
donation in fraud of creditors, and donee may
be liable for damages
What may not be donated
(1) Future property; those which the donor cannot
dispose of at the time of the donation [NCC 751]
(2) More than what he may give or receive by will
[NCC 752]
If exceeds: inofficious
Donations made to several persons jointly
No accretion one donee does not get the share of Exception: those given to husband and wife, except
the other donees who did not accept [Article 753] when the donor otherwise provides
Donor
Who are allowed: All persons who may contract (of Who are not allowed:
legal age) and dispose of their property [NCC 735] (1) Guardians and trustees with respect to the
property entrusted to them [NCC 736]
Donors capacity is determined at the time of the (2) Made between person who are guilty of adultery
making of donation [NCC 737] or concubinage [NCC 739]
Made between persons found guilty of the same
criminal offense, in consideration thereof [NCC 739]
Donee
Who are allowed to accept donations: Those who Who are not allowed:
are not specifically disqualified by law (Article 738) (1) Made between person who are guilty of adultery
or concubinage [NCC 739]
Those who are allowed, with qualifications: (2) Made between persons found guilty of the same
(1) Minors and others who are incapacitated (see criminal offense, in consideration thereof [NCC
Article 38), provided that their acceptance is 739]
done through their parents or legal (3) Made to a public officer or his wife, descendant
representatives [NCC 741] and ascendants, by reason of his office [NCC
(2) Conceived and unborn children, provided that 739]
the donation is accepted by those who would (4) Those who cannot succeed by will [NCC 740]
legally represent them if they were already born
Those made to incapacitated persons, although
simulated under the guise of another contract [NCC
743]
PAGE 153
Acceptance of the donation

Who may accept [NCC 745] When to accept: during the lifetime of the donor or
(1) Donee personally donee [NCC 746]
(2) Authorized person with a special power for the
purpose or with a general sufficient power
What the donee acquires with the thing
He shall be subrogated to all the rights and actions
that would pertain to the donor in case of eviction
[NCC 754]
Obligation of the donor
No obligation to warrant [NCC 754] Exception: when the donation is onerous
Obligation of the donee
If the donation so states, the donee may be obliged Exception: when contrary intention appears
to pay the debts previously contracted by the donor
and in no case shall he be responsible for the debts
exceeding the value of the thing donated [NCC 758]
What may be reserved by the donor
Right to dispose of some of the things donated, or If the donor dies without exercising this right
of some amount which shall be a charge thereon
Reversion
The property donated may be restored or returned Limitation to (2): the third person would be living at
to the time of the donation
(1) Donor or his estate; or
(2) Another person
Revocation/Reduction
Time of Action Transmissibility Effect Liability (Fruits)
Birth, appearance, adoption
Within 4 years from birth, Transmitted to children Property is returned Fruits returned from the
legitimation and and descendants upon If the property has been filing of the complaint
adoption the death of donor sold, its value at the time
of donation shall be
returned.
If the property was
mortgaged, the donor
may redeem the
mortgage, with right to
recover the amount from
the donee
Non-compliance with condition
Within 4 years from non- May be transmitted to Property returned, Fruits received after
compliance donors heirs and may be alienations and having failed to fulfill
exercised against mortgages void subject condition returned
donees heirs to rights of third persons
in good faith
PAGE 154
Time of Action Transmissibility Effect Liability (Fruits)

Ingratitude
Within 1 year after Generally not Property returned, but Fruits received from the
knowledge of the fact transmitted to heirs of alienations and filing of the complaint
and it was possible for donor/ donee mortgages effected returned
him to bring the action before the notation of
the complaint for
revocation in the registry
of property subsist
Failure to reserve sufficient means for support
At any time, by the donor Reduced to the extent Donee entitled
or relatives entitled to Not transmissible necessary to provide
support support
Inofficiousness for being in excess of what the donor can give by will
Within 5 years from the Transmitted to donors Donation takes effect on Donee entitled
death of the donor heirs the lifetime of donor.
Reduction only upon his
death with regard to the
excess
Fraud against creditors
Rescission within 4 years Transmitted to creditors Returned for the benefit Fruits returned/ if
from the perfection of heirs or successors-in- of the creditor who impossible, indemnify
donation/ knowledge of interest brought the action creditor for damages
the donation
PAGE 155
TRADITION sense when the owner alienates a

thing but remains in possession in
another concept as lesee or depositary.
CONCEPT (3) Quasi tradition: delivery of incorporeal things
It is a derivative mode of acquiring ownership or rights by the use by the grantee of his
and other real rights by virtue of which, there rights with the grantors consent.
being intention and capacity on the part of the (4) Tradicion by operation of law: delivery which
grantor and grantee and the pre-existence of is not included in the foregoing modes of
said rights in the estate of the grantor, they are delivery and where the delivery is effected
transmitted to the grantee through a just title. solely by virtue of an express provision of
law.
REQUISITES
(1) Pre-existence in the estate of the grantor of
the right to be transmitted;
(2) Just cause or title for the transmission; Prescription
Intention on the part of the grantor to grant and
on the part of the grantees to acquire; DEFINITION
(3) Capacity to transmit and to acquire; and By prescription, one acquires ownership and
(4) An act that gives it outward form, physically, other real rights through the lapse of time in the
symbolically, or legally. manner and under the conditions laid down by
law.
PURPOSE
(1) Ownership is transferred, among other In the same way, rights and conditions are lost
means, by tradition. by prescription.
(2) The delivery of a thing constitutes a
necessary and indispensable requisite for the It is a means of acquiring ownership and other
purpose of acquiring the ownership of the same real rights or losing rights or actions to enforce
by virtue of a contract. such rights through the lapse of time.
KINDS RATIONALE
(1) Real Tradition: physical delivery It is purely statutory in origin. It is founded on
(2) Constructive Tradition: when the delivery of grounds of public policy which requires for the
the thing is not real or material but consists peace of society, that juridical relations
merely in certain facts indicative of the same susceptible of doubt and which may give rise to
(a) Symbolical Tradition: done through the disputes, be fixed and established after the
delivery of signs or things which lapse of a determinate time so that ownership
represent that which is being and other rights may be certain for those who
transmitted. (e.g. keys or title itself) have claim in them.
(b) Tradition by public instrument: consists in
the substitution of real delivery of
possession by a public writing with the KINDS OF PRESCRIPTION
delivery of a document which evidences (1) Acquisitive prescription
the transaction. (2) Extinctive prescription
(c) Tradicio longa manu: made by the grantor
pointing out to the grantee the thing to ACQUISITIVE PRESCRIPTION
be delivered. (1) The acquisition of ownership and other real
(d) Tradicio brevi manu: takes place when the rights through possession of a thing in the
grantee is already in possession of the manner and condition provided by law.
thing. (e.g. when the lessee buys the (2) May be ordinary or extraordinary:
thing leased to him) (a) Ordinary: requires possession of things in
(e) Tradicion constitutum possessorium: good faith and with just title for the time
similar to brevi manu but in the opposite fixed by law.
PAGE 156
(b) Extraordinary: acquisition of ownership Acquisitive Prescription Extinctive Prescription

and other real rights without need of title
or of good faith or any other condition. Requires positive Requires inaction of
action of the possessor the owner out of
Prescription where possession in good faith (a claimant) who is not possession or neglect
converted into possession in bad faith: the of one with a right to
Ordinary Owner bring his action
(1) Movable properties - 4 years Applicable to Applicable to all kinds
(2) Immovable properties - 10 years ownership and other of rights, whether real
real rights or personal
Extraordinary:
(1) Movable properties - 8 years Vests the property and Vests the property and
(2) Immovable properties - 30 years raise a new title in the raise a new title in the
occupant occupant
As a mode of acquisition, prescription Results in the Merely results in the
requires existence of following: acquisition of loss of a real or
(1) Capacity of the claimant to acquire by ownership or other real personal right, or bars
prescription; rights in a person as the cause of action to
(2) A thing capable of acquisition by well as the loss of said enforce said right
prescription; ownership or real rights
(3) Adverse possession of the thing under in another
certain conditions; and Can be proven under Should be affirmatively
(4) Lapse of time provided by law. the general issue pleaded and proved to
without its being bar the action or claim
The following are only required in ordinary affirmatively pleaded of the adverse party
prescriptions:
(1) Good faith of the possessor; and
(2) Proof of just title NO PRESCRIPTION APPLICABLE
Note: BY OFFENDER
For extraordinary prescription, only first 4 are The offender can never acquire, through
required prescription, movable properties possessed
Possession has to be in the concept of an through a crime.
owner, public, peaceful, and uninterrupted.
REGISTERED LANDS
EXTINCTIVE PRESCRIPTION PD 1529 (AMENDING AND CODIFYING THE LAWS
The loss or extinguishment of property rights or RELATIVE TO REGISTRATION OF PROPERTY AND FOR
actions through the possession by another of a OTHER PURPOSES)
thing for the period provided by law or through No title to registered land in derogation of the
failure to bring the necessary action to enforce title of the registered owner shall be acquired by
ones right within the period fixed by law. prescription or adverse possession.
RIGHTS NOT EXTINGUISHED BY

PRESCRIPTION [NCC 1143]
(1) To demand a right of way, regulated by NCC
649;
(2) To bring an action to abate a public or
private nuisance.
PAGE 157
ACTION TO QUIET TITLE IF PLAINTIFF Prescription Laches

IS IN POSSESSION
unless it is especially equity, need not be
(1) When plaintiff is in possession of the
pleaded as an specifically pleaded
property: the action to quiet title does not
affirmative allegation
prescribe.
(2) The reason is that the owner of the property Based on a fixed time NOT based on a fixed
or right may wait until his possession is time
disturbed or his title is assailed before
taking steps to vindicate his right. PRESCRIPTION OR LIMITATION
VOID CONTRACTS OF ACTIONS
(1) The action or defense for the declaration of
the inexistence of a contract does not TO RECOVER MOVABLE PROPERTIES
prescribe. [NCC 1410] (1) The action rescribes in 8 years from the time
(2) The title is susceptible to direct as well as to the possession thereof is lost. [NCC 1140]
collateral attack. [Ferrer v. Bautista, 1994] (2) However, the action shall not prosper if it is
brought after 4 years when the possessor has
ACTION TO DEMAND PARTITION already acquired title by ordinary acquisitive
No prescription shall run in favor of a co-owner prescription. [NCC 1132]
or co-heir against his co-owners or co-heirs so (3) If the possessor acquired the movable in
long as he expressly or impliedly recognizes the good faith at a public sale, the owner cannot
co-ownership. [NCC 494] obtain its return without reimbursing the
price paid.
PROPERTY OF PUBLIC DOMINION
Prescription, both acquisitive and extinctive, TO RECOVER IMMOVABLES
does not run against the State in the exercise of (1) Real actions prescribe after 30 years [NCC
its sovereign function to protect its interest 1141]
EXCEPT with respect to its patrimonial property (2) UNLESS the possessor has acquired
which may be the object of prescription. (NCC ownership of the immovable by ordinary
1113) acquisitive prescription through possession
of 10 years. [NCC 1134]
(3) Action for reconveyance
PRESCRIPTION DISTINGUISHED (a) Based on fraud: Prescribes 4 years from
FROM LACHES the discovery of fraud.
Prescription Laches (b) Based on implied or constructive trust: 10
years from the alleged fraudulent
Concerned with the Concerned with the registration or date of issuance of
fact of delay effect of delay certificate of title over the property.
A question or a matter Principally a question
of time of inequity of OTHER ACTIONS
permitting a claim to (1) Action to foreclose mortgage: prescribes after
be enforced, this 10 years from the time the obligation secured
inequity being founded by the mortgage becomes due and
on some subsequent demandable
change in the condition (2) Actions that Prescribe in 10 Years [NCC 1144]
or the relation of the (a) Upon a written contract
parties (b) Upon an obligation created by law
Statutory NOT statutory (c) Upon a judgment
Applies at law Applies at equity The computation of the period of
Cannot be availed of Being a defense of prescription of any cause or right of action,
PAGE 158
which is the same as saying prescription of (c) When there is any written
the action, should start from the date the acknowledgment of the debt by the
cause of action accrues or from the day the debtor
right of the plaintiff is violated. [Nabus v. CA,
1991] Civil actions are deemed commenced from
the date of the filing and docketing of the
(3) Actions that Prescribe in 6 Years [NCC 1145] complaint with the Clerk of Court. [Cabrera
(a) Upon an oral contract v. Riano (1963)]
(b) Upon a quasi-contract
A written extrajudicial demand wipes out the
(4) Actions that Prescribe in 4 Years [NCC 1145] period that has already elapsed and starts
(a) Upon an injury to the rights of the plaintiff anew the prescriptive period [The Overseas
(b) Upon a quasi-delict Bank of Manila v. Geraldez, (1979)]
BUT when the action arises from any act of
any public officer involving the exercise of Not all acts of acknowledgement of a debt
powers arising from Martial Law including interrupt prescription. To produce such
the arrest, detention and/or trial of the effect, the acknowledgment must be
plaintiff, the same must be brought within 1 written, so that the payment, if not coupled
year. with the communication signed by the payor
would interrupt the running of the period of
(5) Actions that Prescribe in One Year or Less prescription [PNB v. Osete (1968)
[NCC 1147]
(a) For forcible entry or unlawful detainer
(b) For defamation
(6) Other Actions that Prescribe in 1 Year under

the Civil Code
(a) To recover possession de facto [NCC 554
(4)]
(b) To revoke a donation on the ground of
ingratitude [NCC 769]
(c) To rescind or recover damages if
immovable is sold with non-apparent
burden or servitude [NCC 1560 (3,4)]
(d) To enforce warranty of solvency in
assignment credits [NCC 629]
(7) Where Periods of Other Actions Not Fixed in

the Civil Code and in Other Laws
All other actions whose periods are not fixed
in the Civil Code or in other laws must be
brought within 5 years from the time the
right of action accrues. [NCC 1149]
(8) Interruption [NCC 1155]

The prescription of actions is interrupted
when:
(a) They are filed before the court
(b) When there is a written extrajudicial
demand by the creditors
PAGE 159
UP LAW BOC OBLIGATIONS AND CONTRACTS CIVIL LAW
PAGE 160
Obligations AS TO THE AFFIRMATIVENESS OR

NEGATIVENESS OF THE OBLIGATION
(1) Positive/Affirmative obligation to give or to
IN GENERAL do
(2) Negative obligation not to give or not to do
DEFINITION
AS TO PERSONS OBLIGED
(1) Unilateral only one of the parties is bound
Art. 1156. An obligation is a juridical necessity to (2) Bilateral both parties are bound
give, to do or not to do. (a) Reciprocal performance by one is
dependent on the performance by the
ELEMENTS OF AN OBLIGATION (DE other
LEON) (b) Non-reciprocal performance by one is
(1) Active Subject (Obligee/Creditor) The independent of the other [Paras]
person who has the right or power to
demand the prestation. SOURCES OF OBLIGATIONS
(2) Passive Subject (Obligor/Debtor) The
person bound to perform the prestation. Art. 1157. Obligations arise from:
(3) Prestation (Object) The conduct required to (1) Law;
be observed by the debtor/obligor (to give, to (2) Contracts;
do, or not to do). (3) Quasi-contracts;
(4) Vinculum Juris (Juridical Or Legal Tie; (4) Acts or omissions punished by law; and
Efficient Cause) That which binds or (5) Quasi-delicts.
connects the parties to the obligation.
A SINGLE ACT OR OMISSION MAY GIVE RISE
DIFFERENT KINDS OF PRESTATIONS TO DIFFERENT CAUSES OF ACTION
(1) To Give real obligation; to deliver either A concurrence of scope in regard to negligent
a specific or determinate thing, or acts does not destroy the distinction between
a generic or indeterminate thing. the civil liability arising from a crime and the
(2) To Do positive personal obligation; responsibility for cuasi-delitos or culpa extra-
includes all kinds of work or service. contractual. The same negligent act causing
(3) Not To Do negative personal obligation; to damages may produce civil liability arising from
abstain from doing an act; includes the a crime... or create an action for cuasi-delito or
obligation not to give. culpa extra-contractual. [Barredo vs. Garcia
(1942)]
CLASSIFICATION OF OBLIGATIONS
AS TO SANCTION
(1) Civil Obligation (or perfect obligation) the
sanction is judicial process
(2) Natural Obligation the sanction is the law
(3) Moral Obligation (or imperfect obligation)
the sanction is conscience or morality
AS TO SUBJECT MATTER
(1) Real obligation to give
(2) Personal obligation to do or not to do
PAGE 161
NATURE AND EFFECT OF Duties of the Debtor Rights of the Creditor

To Give a Generic Thing
OBLIGATIONS (1) To take care of (1) To ask that the
the thing [Art. 1163] obligation be
OBLIGATION TO GIVE (2) To deliver a complied with [Art.
thing of the quality 1165]
Limited intended by the (2) To ask that the
Specific Thing Generic Thing
Generic Thing parties taking into obligation be
Particularly Object is When the consideration the complied with by a
designated or designated generic purpose of the third person at the
physically only by its objects are obligation and other expense of the debtor
segregated class/ genus/ confined to a circumstances [Art. (3) To recover
from all species. particular 1246] damages in case of
others of the class. (3) Creditor breach [Art. 1165]
same class cannot demand a (4) Not to be
[Art. 1460]; thing of superior compelled to receive a
Identified by quality; neither can different one,
individuality. the debtor deliver a although of the same
Cannot be Can be thing of inferior value as, or more
substituted substituted by quality. valuable than that
any of the (4) To pay which is due [Art. 1244]
same class damages in case of
and same breach [Art. 1170]
kind.
OBLIGATION TO DO OR NOT TO DO
RIGHTS AND DUTIES OF PARTIES RIGHTS AND DUTIES OF PARTIES
Duties of the Debtor Rights of the Creditor Duties of the Debtor Rights of the Creditor
To Give a Specific Thing To Do
(1) To preserve or take (1) To compel delivery (1) To do it [Art. 1167] (1) To compel
care of the thing [Art. 1165] (2) To shoulder the performance
due [Art. 1163] (2) To recover cost of execution (2) To recover
(2) To deliver the thing damages in case of should he fail to do damages in case of
itself [Art. 1165] breach, exclusive or it [Art. 1167] breach [Art. 1170]
(3) To deliver the fruits in addition to (3) To undo what has
of the thing [Art. specific been poorly done
1164] performance [Art. [Art. 1167]
(4) To deliver its 1165; 1170] (4) To pay damages in
accessions and (3) Entitlement to case of breach [Art.
accessories [Art. fruits from the time 1170]
1166] the obligation to Not To Do
(5) To pay damages in deliver arises [Art. (1) Not to do what (1) To ask to undo
case of breach [Art. 1164] should not be done what should not be
1170] (4) Not to be (2) To shoulder cost of done
compelled to undoing what (2) To recover
receive a different should not have damages, where it
one, although of been done [Art. would be physically
the same value as, 1168] or legally
or more valuable (3) To pay damages in impossible to undo
than that which is case of breach [Art. what should not
due [Art. 1244] 1170] have been done,
because of :
PAGE 162
Duties of the Debtor Rights of the Creditor Unilateral Obligations Reciprocal Obligations
Not To Do (Continued) Those obliged to No delay if neither
(a) the very nature of deliver or to do performs.
the act itself; something incur in
(b) rights acquired by delay from the time
third persons who the obligee judicially
acted in good faith; or extrajudicially
(c) when the effects of demands from them
the acts prohibited the fulfillment of their
are definite in obligation. [Art. 1169
character and will par 1]
not cease even if
the thing Demand may be judicial or extrajudicial.
prohibited be
undone. When demand is necessary in order that
delay may exist [Art. 1169 par 2]
BREACH (1) When the obligation or the law expressly so
declare
Art. 1170. Those who in the performance of their (2) When from the nature and the circumstances
obligations are guilty of fraud, negligence, or of the obligation it appears that the
delay, and those who in any manner contravene designation of the time when the thing is to
the tenor thereof, are liable for damages. be delivered or the service is to be rendered
was a controlling motive for the
COMPLETE FAILURE TO PERFORM establishment of the contract; OR
(3) When demand would be useless, as when
Substantial Breach Slight or Casual Breach the obligor has rendered it beyond his power
(1) Total breach (1) Partial breach to perform.
(2) Amounts to (2) There is
non-performance, partial/ substantial Kinds of delay; requisites and effects
basis for rescission performance in good (1) Mora Solvendi
(resolution) under Art. faith (2) Mora Accipiendi
1191 and payment of (3) Gives rise to (3) Compensatio Morae
damages liability for damages
only [Art. 1234] Mora solvendi Delay on the part of the debtor
to fulfil his obligation either to give (ex re) or to
DEFAULT, DELAY, OR MORA do (ex persona).
Failure to perform an obligation on time which
constitutes breach of the obligation. [De Leon] Requisites:
Rules on default, delay, or mora (1) Obligation must be liquidated, due and
Unilateral Obligations Reciprocal Obligations demandable.
General Rule: Neither party incurs in (2) Non-performance by the debtor within the
No demand, no delay if the other does period agreed upon.
delay. not comply or is not (3) Demand, judicial or extra-judicial, by the
ready to comply in a creditor.
The mere expiration of proper manner with
the period fixed by the what is incumbent There is no mora solvendi in:
parties is not enough upon him. From the (1) Negative obligations because delay is
in order that the moment one of the impossible [De Leon]
debtor may incur in parties fulfills his (2) Natural obligations [Tolentino]
delay. obligation, delay by
the other begins. [Art.
1169 par 3]
PAGE 163
Effects: FRAUD (DOLO) IN THE PERFORMANCE OF

(1) The debtor is liable for damages. THE OBLIGATION
(2) The debtor is liable even if the loss is due to
fortuitous events. Art. 1171. Responsibility arising from fraud is
(3) For determinate objects, the debtor shall demandable in all obligations. Any waiver of an
bear the risk of loss. action for future fraud is void.
Mora accipiendi Delay on the part of the Fraud (dolo) is the deliberate or intentional
creditor to accept the performance of the evasion of the normal fulfilment of an
obligation. obligation. [De Leon]
Requisites: A waiver of future fraud is void but a past fraud
(1) Debtor offers performance. may be subject of a valid waiver by the
(2) Offer must be in compliance with the aggrieved party. [De Leon]
prestation.
(3) Creditor refuses performance without just Distinguished from Casual Fraud
cause.
Fraud in the
Effects: Casual Fraud
Performance
(1) The responsibility of the debtor is reduced to (dolo causante)
(dolo incidente)
fraud and gross negligence. [Arts. 1338, 1344]
[Art. 1170]
(2) The debtor is exempted from risk of loss of Present during the Present during the
the thing which is borne by the creditor. performance of a pre- time of birth or
(3) The expenses incurred by the debtor for the existing obligation perfection of the
preservation of the thing after the mora shall obligation
be chargeable to the creditor.
Purpose is to evade Purpose is to secure
(4) If the obligation bears interest, the debtor
normal fulfilment of consent of another to
does not have to pay from the time of delay.
obligation enter the contract
(5) The creditor is liable for damages.
Results in breach Results in vitiation of
(6) The debtor may relieve himself of the
consent
obligation by consigning the thing.
Obligee may recover Innocent party may
damages [Art. 1344] annul the contract
Compensatio morae Delay of both parties in
reciprocal obligations. Valid obligation Voidable obligation
Effects: In order that fraud may vitiate consent, it must

(1) Delay of the obligor cancels delay of obligee be the dolo causante and not merely the dolo
(and vice versa) hence it is as if there is no incidente, inducement to the making of the
default. contract. The false representation was used by
(2) The liability of the first infractor shall be plaintiff to get from defendant a bigger share of
equitably tempered by the courts. If it cannot net profits. This is just incidental to the matter
be determined which of the parties first in agreement. Because despite plaintiffs deceit,
violated the contract, the same shall be respondent would have still entered into the
deemed extinguished, and each shall bear contract. [Woodhouse vs. Halili (1953)]
his own damages. [Art. 1192]
PAGE 164
NEGLIGENCE (CULPA) IN THE Hotel and Inn-keepers

PERFORMANCE OF THE OBLIGATION
Art. 1998. The deposit of effects made by
Art. 1172. Responsibility arising from negligence travellers in hotels or inns shall also be
in the performance of every kind of obligation is regarded as necessary. The keepers of hotels or
also demandable, but such liability may be inns shall be responsible for them as
regulated by the courts, according to the depositaries, provided that notice was given to
circumstances. them, or to their employees, of the effects
brought by the guests and that, on the part of
The fault or negligence of the obligor consists in the latter, they take the precautions which said
the omission of that diligence which is required hotel-keepers or their substitutes advised
by the nature of the obligation and corresponds relative to the care and vigilance of their effects.
with the circumstances of the persons, of the
time and of the place. [Art. 1173] Art. 1999. The hotel-keeper is liable for the
vehicles, animals and articles which have been
Diligence Required [De Leon] introduced or placed in the annexes of the
(1) By stipulation of the parties hotel.
(2) By law, in the absence of stipulation
Diligence of a good father of a family, if both the
contract and law are silent. [Art. 1173 par 2] Art. 2000. The responsibility referred to in the
(3) Future negligence may be waived except in two preceding articles shall include the loss of,
cases where the nature of the obligation or or injury to the personal property of the guests
the public requires another standard of care caused by the servants or employees of the
(i.e. common carriers) keepers of hotels or inns as well as strangers;
but not that which may proceed from any force
Exceptions: majeure. The fact that travellers are constrained
to rely on the vigilance of the keeper of the
Common Carriers hotels or inns shall be considered in
determining the degree of care required of him.
Art. 1733. Common carriers, from the nature of

Art. 2001. The act of a thief or robber, who has
their business and for reasons of public policy,
entered the hotel is not deemed force majeure,
are bound to observe extraordinary diligence in
unless it is done with the use of arms or through
the vigilance over the goods and for the safety
an irresistible force.
of the passengers transported by them,
according to all the circumstances of each case.
Art. 2002. The hotel-keeper is not liable for
Such extraordinary diligence in the vigilance compensation if the loss is due to the acts of the
over the goods is further expressed in articles guest, his family, servants or visitors, or if the
1734, 1735, and 1745, Nos. 5, 6, and 7, while the loss arises from the character of the things
extraordinary diligence for the safety of the brought into the hotel.
passengers is further set forth in articles 1755
and 1756. Test of Negligence
Did the defendant in doing the alleged
negligent act use the reasonable care and
caution, which an ordinary and prudent person
would have used in the same situation? If not,
then he is guilty of negligence. [Mandarin Villa
Inc. vs. CA (1996)]
PAGE 165
Kinds of Civil Negligence

In any manner contravenes the tenor means
any illicit act, which impairs the strict and
Culpa Contractual Culpa Aquiliana
faithful fulfillment of the obligation, or every
Negligence is merely Negligence is kind of defective performance. [Tolentino]
incidental in the substantive and
performance of an independent. LEGAL EXCUSE FOR BREACH:
obligation. FORTUITOUS EVENT
There is always a pre- There may or may not
existing contractual be a pre-existing
relation. contractual obligation. Art. 1174. Except in cases expressly specified by
The source of The source of the law, or when it is otherwise declared by
obligation of obligation is the stipulation, or when the nature of the obligation
defendant to pay defendants requires the assumption of risk, no person shall
damages is the breach negligence itself. be responsible for those events which could not
or non-fulfillment of be foreseen, or which, though foreseen, were
the contract. inevitable.
Proof of the existence The negligence of the
of the contract and of defendant must be A happening independent of the will of the
its breach or non- proved. debtor and which makes the normal fulfillment
fulfillment is sufficient of the obligation impossible. [De Leon]
prima facie to warrant (1) Act of God: An accident, due directly or
recovery. exclusively to natural causes without human
Proof of diligence in Proof of diligence in intervention, which by no amount of
the selection and the selection and foresight, pains or care, reasonably to have
supervision of the supervision of the been expected, could have been prevented.
employees is NOT employee is a defense. (2) Act of Man: Force majeure is a superior or
available as defense. irresistible force, which is essentially an act of
man; includes unavoidable accidents, even if
Extent of Damages to be Awarded [Art. 2201] there has been an intervention of human
element, provided that no fault or negligence
Good Faith Bad Faith can be imputed to the debtor.
Obligor is liable for Obligor shall be
those that are the responsible for all LIABILITY IN CASE OF FORTUITOUS EVENT
natural and probable damages which may No person shall be responsible for fortuitous
consequences of the be reasonably events, UNLESS:
breach of the attributed to the non- (1) expressly specified by law [Arts. 552 par. 2,
obligation, and which performance of the 1942, 2147, 2148, 2159]
the parties have obligation. (2) liability specified by stipulation
foreseen or could have (3) the nature of the obligations requires
assumption of risk [Art. 1174]
reasonably foreseen at Any waiver or
the time the obligation renunciation made in (4) debtor is guilty of concurrent or contributory
negligence
was constituted. the anticipation of
such liability is null (5) debtor has promised to deliver the same
and void. thing to two or more persons who do not
have the same interest [Art. 1165 par. 3]
CONTRAVENTION OF THE TENOR OF THE (6) the thing is lost due to the obligors fraud,
negligence, delay or contravention of the
OBLIGATION
This refers to a violation of the terms and tenor of the obligation [Art. 1170]
(7) the obligation to deliver a specific thing
conditions stipulated in the obligation, which
arises from a crime [Art. 1268]
must not be due to a fortuitous event or force
majeure. [De Leon]
PAGE 166
(8) the object is a generic thing, i.e. the genus DISTINGUISHED FROM RESCISSION UNDER
never perishes ART. 1380
REQUISITES OF EXEMPTION BASED ON Rescission / Resolution

Rescission [Art. 1380]
FORCE MAJEURE [Art. 1191]
(1) The event must be independent of the Based on non- Based on lesion or
debtors will (fraud or negligence). performance or non- fraud upon creditors.
(2) The event must be unforeseeable or fulfillment of obligation.
inevitable. Action is instituted only Action is instituted by
(3) The event renders it impossible for debtor to by the injured party. either party or by a
fulfill his obligation in a normal manner. third person.
(4) The debtor must be free from any In some cases, court Court cannot grant a
participation in the aggravation of the injury may grant a term. period or term within
to the creditor [Tolentino (1987); De Leon which one must
(2003)] comply.
(5) It must be the only and sole cause, not Non-performance by the Non-performance by
merely a proximate cause. other party is important. the other party is
immaterial.
REMEDIES AVAILABLE IN CASE OF
BREACH DAMAGES, IN ANY EVENT
SPECIFIC PERFORMANCE Art. 1170. Those who in the performance of their

The creditor has a right to compel the debtor to obligations are guilty of fraud, negligence, or
perform the prestation. delay, and those who in any manner contravene
SUBSTITUTED PERFORMANCE the tenor thereof, are liable for damages.
A third person may perform anothers obligation
to deliver a generic thing or an obligation to do, SUBSIDIARY REMEDIES OF CREDITORS
unless it is a purely personal act, at the expense
of the debtor. Accion Subrogatoria Right of the creditor to
exercise all of the rights and bring all the
RESCISSION (RESOLUTION IN RECIPROCAL actions which his debtor may have against third
OBLIGATIONS) persons.
Art. 1191. The power to rescind obligations is The creditors, after having pursued the property
implied in reciprocal ones, in case one of the in possession of the debtor to satisfy their
obligors should not comply with what is claims, may exercise all the rights and bring all
incumbent upon him. the actions of the latter for the same purpose,
The injured party may choose between the save those which are inherent in his person.
fulfilment and the rescission of the obligation, [Art.1177]
with the payment of damages in either case. He
may also seek rescission, even after he has Requisites:
chosen fulfilment, if the latter should become (1) The person to whom the right of action
impossible. pertains must be indebted to the creditor
The court shall decree the rescission claimed, (2) The debt is due and demandable
unless there be just cause authorizing the fixing (3) The creditor must be prejudiced by the
of a period. failure of the debtor to collect his debts due
him from third persons, either through
This is understood to be without prejudice to the malice or negligence
rights of third persons who have acquired the (4) The debtors assets are insufficient (debtor is
thing, in accordance with articles 1385 and 1388 insolvent)
and the Mortgage Law.
PAGE 167
(5) The right of action is not purely personal to Payments of rent in advance by the sublessee
the debtor shall be deemed not to have been made, so far
as the lessor's claim is concerned, unless said
Accion Pauliana Rescission, which involves the payments were effected in virtue of the custom
right of the creditor to attack or impugn by of the place.
means of rescissory action any act of the debtor
which is in fraud and to the prejudice of his Vendor has right of action against possessor
rights as creditor. whose right is derived from the vendee
Creditors may also impugn the acts which the
debtor may have done to defraud them. [Art. Art. 1608. The vendor may bring his action
1177] against every possessor whose right is derived
from the vendee, even if in the second contract
Requisites: no mention should have been made of the right
(1) There is a credit in favour of the plaintiff prior to repurchase, without prejudice to the
to the alienation by the debtor provisions of the Mortgage Law and the Land
(2) The debtor has performed a subsequent Registration Law with respect to third persons.
contract conveying patrimonial benefit to
third person/s. Laborer/ materialsman has right of action
(3) The debtors acts are fraudulent to the against owner of piece of work up to the amount
prejudice of the creditor. owed by the latter to the contractor
(4) The creditor has no other legal remedy to
satisfy his claim. Art. 1729. Those who put their labor upon or
(5) The third person who received the property is furnish materials for a piece of work undertaken
an accomplice to the fraud. by the contractor have an action against the
owner up to the amount owing from the latter
Accion Subrogatoria Accion Pauliana to the contractor at the time the claim is made.
However, the following shall not prejudice the
Not necessary that Credit must exist laborers, employees and furnishers of materials:
creditors claim is prior before the fraudulent (1) Payments made by the owner to the
to the acquisition of act contractor before they are due;
the right by the debtor (2) Renunciation by the contractor of any
No need for fraudulent Fraudulent intent is amount due him from the owner.
intent required if the contract
rescinded is onerous This article is subject to the provisions of special
No period for Prescribes in 4 years laws. (1597a) Article 1730. If it is agreed that the
prescription from the discovery of work shall be accomplished to the satisfaction
the fraud of the proprietor, it is understood that in case of
disagreement the question shall be subject to
Accion Directa expert judgment.
Subsidiary liability of sublessee to the lessor for If the work is subject to the approval of a third
rent due from the lessee person, his decision shall be final, except in case
of fraud or manifest error.
Art. 1652. The sublessee is subsidiarily liable to
the lessor for any rent due from the lessee.
However, the sublessee shall not be responsible
beyond the amount of rent due from him, in
accordance with the terms of the sublease, at
the time of the extra-judicial demand by the
lessor.
PAGE 168
Principal has right of action against substitute of (3) Potestative (casual or mixed)
agent in cases when the agent is liable for acts of
appointed substitute Suspensive Obligation shall only be effective
upon the fulfilment of the condition [Art. 1181].
Art. 1893. In the cases mentioned in Nos. 1 and 2 The obligee acquires a mere hope or
of the preceding article, the principal may expectancy, protected by law, upon the
furthermore bring an action against the constitution of the obligation.
substitute with respect to the obligations which
the latter has contracted under the substitution. Before Fulfillment After Fulfillment
The demandability and The obligation arises or
Petitioner cannot invoke the credit of a different acquisition or effectivity becomes effective.
creditor to justify the rescission of the subject of the rights arising from The obligor can be
deed of donation, because the only creditor who the obligation is compelled to comply
may benefit from the rescission is the creditor suspended. Anything with what is incumbent
who brought the action; those who are paid by mistake during upon him.
strangers to the action cannot benefit from its such time may be
effects. [Siguan vs. Lim (1999)] recovered.
DIFFERENT KINDS OF CIVIL Doctrine of Constructive Fulfillment of

Suspensive Conditions
OBLIGATIONS
Art. 1186. The condition shall be deemed
PURE OBLIGATIONS fulfilled when the obligor voluntarily prevents its
Art. 1179. Every obligation whose performance fulfillment.
does not depend upon a future or uncertain
event, or upon a past event unknown to the The condition shall be deemed fulfilled when
parties, is demandable at once. the obligor actually prevented the obligee from
complying with the condition, and that such
Every obligation which contains a resolutory prevention must have been voluntary or willful
condition shall also be demandable, without in character.
prejudice to the effects of the happening of the
event. Applicable to suspensive conditions but not to
Its effectivity or extinguishment does not resolutory conditions.
depend upon the fulfillment or non-fulfillment
of a condition or upon the expiration of a term The article can have no application to an
or period and characterized by the quality of its external contingency which is lawfully within the
being immediately demandable. control of the obligor.
CONDITIONAL OBLIGATIONS The mere intention of the debtor to prevent,

without actually preventing fulfillment is not
sufficient. Constructive fulfillment will not hold
Art. 1181. In conditional obligations, the when the debtor acts pursuant to a right. There
acquisition of rights, as well as the is constructive fulfillment when:
extinguishment or loss of those already (1) Intent of the obligor is to prevent fulfillment;
acquired, shall depend upon the happening of and
the event which constitutes the condition. (2) There is actual prevention of compliance.
A condition is a future and uncertain event.
KINDS OF CONDITIONS; EFFECTS

(1) Suspensive
(2) Resolutory
PAGE 169
Principle of Retroactivity in Suspensive Resolutory The obligation is demandable at

Conditions once, without prejudice to the effects of the
happening of the event [Art. 1179 par 2]. The
Art. 1187, par 1. The effects of a conditional rights are immediately vested to the creditor but
obligation to give, once the condition has been always subject to the threat or danger of
fulfilled, shall retroact to the day of the extinction by the happening of the resolutory
constitution of the obligation. Nevertheless, condition [Tolentino].
when the obligation imposes reciprocal
prestations upon the parties, the fruits and Before Fulfillment After Fulfillment
interests during the pendency of the condition
shall be deemed to have been mutually Preservation of Whatever may have
compensated. If the obligation is unilateral, the creditors rights [Art. been paid or delivered
debtor shall appropriate the fruits and interests 1187 par. 1] also applies by one or both of the
received, unless from the nature and to obligations with a parties upon the
circumstances of the obligation it should be resolutory condition. constitution of the
inferred that the intention of the person obligation shall have
constituting the same was different. to be returned upon
the fulfillment of the
The condition which is imposed is only condition [Art. 1190
accidental, not an essential element of the par. 1]. There is no
obligation. return to the status
quo. However, when
This is applies to consensual contracts only. the condition is not
There is no application to real contracts which fulfilled, rights are
can only be perfected by delivery. consolidated and they
become absolute in
Effects of the Happening of Suspensive character.
Conditions
Potestative (casual or mixed)
(1) Casual The fulfilment of the condition
To Give To Do/Not To Do depends upon chance or upon the will of a
third person. [Art. 1182]
If reciprocal, the fruits In obligations to do or
(2) Mixed The fulfilment of the condition
and interests shall be not to do, the court
depends partly upon the will of a party to the
deemed to have been shall determine the
contract and partly upon chance and/or will
mutually compensated retroactive effect of
of a third person.
as a matter of justice the condition that has
and convenience been complied with Exclusively
[Art. 1187, par. 1] [Art. 1187, par. 2] Condition and obligation are
upon the
If unilateral, the The power of the court valid.
Creditors Will
debtor shall includes the Condition and obligation are
appropriate the fruits determination of void because to allow such
and interests received, whether or not there Exclusively
condition would be equivalent
unless from the nature will be any retroactive upon the
to sanctioning obligations
and circumstance it effect. This rule shall Debtors Will in
which are illusory. It also
should be inferred that likewise apply in case of a
constitutes a direct
the intention of the obligations with a Suspensive
contravention of the principle
persons constituting resolutory condition Condition
of mutuality of contracts.
the same was [Art. 1190 par. 3] [Art. 1182]
There is nothing to demand
different. [Art. 1187 par. until the debtor wishes to.
1]
PAGE 170
Exclusively Condition and obligation are (4) If it deteriorates through the fault of the
upon the valid because in such situation, debtor, the creditor may choose between the
Debtors Will in the position of the debtor is rescission of the obligation and its
case of a exactly the same as the fulfillment, with indemnity for damages in
Resolutory position of the creditor when
either case;
Condition the condition is suspensive. It
(5) If the thing is improved by its nature, or by
[Art. 1179 par. does not render the obligation
time, the improvement shall inure to the
2] illusory.
benefit of the creditor;
Defendant executed an endorsement saying (6) If it is improved at the expense of the debtor,
that shell pay her debt if the house in which she he shall have no other right than that
granted to the usufructuary.Rule 8.02. A
lives is sold. Such condition depended upon her
exclusive will; thus, it is void. [Osmea vs. Rama lawyer shall not directly or indirectly,
(1909)] encroach upon the professional employment
of another lawyer; however it is the right of
The condition that payment should be made by any lawyer without fear or favor to give
Hermosa as soon as he receives funds from the proper advice and assistance to those
sale of his property in Spain is a mixed seeking relief against unfaithful or neglectful
condition. The condition implies that the obligor counsel.
already decided to sell the house and all that
was needed to make the obligation Art. 1190, par 3. As for the obligations to do and
demandable is that the sale be consummated not to do, the provisions of the second
and the price thereof remitted to the islands. paragraph of article 1187 shall be observed as
There were still other conditions that had to regards the effect of the extinguishment of the
concur to effect the sale, mainly that of the obligation.
presence of a buyer, ready, able and willing to
purchase the property under the conditions set Without Debtors
With Debtors Fault/Act
by the intestate. [Hermosa vs. Longara (1953)] Fault/Act
Loss
Loss, Deterioration, or Improvement of a Specific Obligation is Obligation is converted
Thing Before Fulfillment of Suspensive Condition extinguished. into one of indemnity
[Art. 1189] or of Resolutory Condition in for damages.
Obligations to Do or Not to Do [Art. 1190 par 3] Deterioration
Impairment to be Creditor may choose
Art. 1189. When the conditions have been borne by the creditor. between bringing an
imposed with the intention of suspending the action for rescission of
efficacy of an obligation to give, the following the obligation OR
rules shall be observed in case of the bringing an action for
improvement, loss or deterioration of the thing specific performance,
during the pendency of the condition: with damages in either
(1) If the thing is lost without the fault of the case.
debtor, the obligation shall be extinguished; Improvement
(2) If the thing is lost through the fault of the Improvement at the Improvement by the
debtor, he shall be obliged to pay damages; debtors expense, the things nature or by
it is understood that the thing is lost when it debtor shall ONLY time shall inure to the
perishes, or goes out of commerce, or have usufructuary benefit of the creditor.
disappears in such a way that its existence is rights.
unknown or it cannot be recovered;
(3) When the thing deteriorates without the fault
of the debtor, the impairment is to be borne
by the creditor;
PAGE 171
IMPOSSIBLE CONDITIONS If the uncertainty consists in whether the day

will come or not, the obligation is conditional,
Art. 1183. Impossible conditions, those contrary and it shall be regulated by the rules of the
to good customs or public policy and those preceding Section.
prohibited by law shall annul the obligation
which depends upon them. If the obligation is Art. 1180. When the debtor binds himself to pay
divisible, that part thereof which is not affected when his means permit him to do so, the
by the impossible or unlawful condition shall be obligation shall be deemed to be one with a
valid. period, subject to the provisions of Article 1197.
The condition not to do an impossible thing Period or Term: Interval of time, which either
shall be considered as not having been agreed suspends demandability or produces
upon. extinguishment.
POSITIVE AND NEGATIVE CONDITIONS The period must be: future, certain, and
possible. [Tolentino]
Positive [Art. 1184] Negative [Art. 1185]
The condition that The condition that A fortuitous event does not interrupt the
some event happen at some event will not running of the period. It only relieves the
a determinate time happen at a contracting parties from the fulfillment of their
shall extinguish the determinate time shall respective obligations during the period.
obligation render the obligation
(a) as soon as the effective from the TERM/PERIOD AND CONDITION
time expires or moment DISTINGUISHED
(b) if it has become (a) the time indicated
indubitable that has elapsed, or
the event will not (b) if it has become Term/Period Condition
take place. evident that the Interval of time which Fact or event which is
event cannot is future and certain future and uncertain
occur. Must necessarily come, May or may not
although it may not be happen
The intention of the parties, taking into known when
consideration the nature of the obligation shall
Exerts an influence Exerts an influence
govern if no time has been fixed for the
upon the time of upon the very
fulfilment of the condition.
demandability or existence of the
extinguishment of an obligation itself
OBLIGATIONS WITH A PERIOD OR obligation
TERM No retroactive effect Has retroactive effect
unless there is an
Art. 1193. Obligations for whose fulfillment a day agreement to the
certain has been fixed, shall be demandable contrary
only when that day comes. When it is left When it is left
exclusively to the will exclusively to the will
Obligations with a resolutory period take effect of the debtor, the of the debtor, the very
at once, but terminate upon arrival of the day existence of the existence of the
certain. obligation is not obligation is affected
affected
A day certain is understood to be that which
must necessarily come, although it may not be
known when.
PAGE 172
KINDS OF PERIOD [Art 1193] If the period is for the benefit of the debtor
(1) Ex die period with a suspensive effect. alone, he shall lose every right to make use
Obligation becomes demandable after the of it
lapse of the period. (1) When after the obligation has been
(2) In diem period with a resolutory effect. contracted, he becomes insolvent, unless he
Obligation becomes demandable at once but gives a guaranty or security for the debt
is extinguished after the lapse of the period. (2) When he does not furnish to the creditor the
guaranties or securities which he has
EFFECT OF ADVANCE PAYMENT OR promised
DELIVERY (3) When by his own acts he has impaired said
Art. 1195. Anything paid or delivered before the guaranties or securities after their
arrival of the period, the obligor being unaware establishment, and when through a
of the period or believing that the obligation has fortuitous event they disappear, unless he
become due and demandable, may be immediately gives new ones equally
recovered, with the fruits and interests. satisfactory
(4) When the debtor violates any undertaking, in
LOSS, DETERIORATION, OR IMPROVEMENT consideration of which the creditor agreed to
OF THE THING BEFORE PERIOD EXPIRES the period;
When the debtor attempts to abscond [Art.
Art. 1194. In case of loss, deterioration or 1198]
improvement of the thing before the arrival of (5) When required by law or stipulation;
the day certain, the rules in Article 1189 shall be (6) If parties stipulated an acceleration clause
observed. [Tolentino]
BENEFIT OF THE PERIOD The obligation immediately becomes due and

Art. 1196. Whenever in an obligation a period is demandable even if the period has not yet
designated, it is presumed to have been expired. The obligation becomes a pure one.
established for the benefit of both the creditor [Tolentino]
and the debtor, unless from the tenor of the
same or other circumstances it should appear When Courts May Fix Period
that the period has been established in favor of Art. 1197. If the obligation does not fix a period,
one or of the other. but from its nature and the circumstances it can
be inferred that a period was intended, the
Period for the benefit of either creditor or courts may fix the duration thereof.
debtor
The courts shall also fix the duration of the
Creditor Debtor
period when it depends upon the will of the
Creditor may demand Debtor may oppose debtor.
the fulfillment or any premature
performance of the demand on the part of In every case, the courts shall determine such
obligation at any time the obligee for the period as may under the circumstances have
but the obligor performance of the been probably contemplated by the parties.
cannot compel him to obligation, or if he so Once fixed by the courts, the period cannot be
accept payment desires, he may changed by them.
before the expiration renounce the benefit of
of the period. the period by General rule: The court is not authorized to fix a
performing his period for the parties [De Leon]
obligation in advance.
Two-Step Rule in Determining Period By The
Court
(1) The Court shall determine:
PAGE 173
(a) If the obligation does not fix a period, but Alternative Obligations Facultative Obligations
from its nature and circumstances, it can
be inferred that a period was intended. The loss/impossibility
(b) If the period is void, such as when it of one of the things
depends upon the will of the debtor. does not extinguish
(c) If the debtor binds himself when his the obligation.
means permit him to do so. Culpable loss of any of Culpable loss of the
(2) The Court must decide what period was the objects object which the
probably contemplated by the parties. alternatively due debtor may deliver in
[Araneta v. Phil. Sugar Estates] before the choice is substitution before the
made may give rise to substitution is effected
Art. 1197 does not apply to contract of services liability on the part of does not give rise to
and to pure obligations. the debtor. any liability on the part
of the debtor.
The court, however, to prevent unreasonable
interpretations of the immediate demandability Alternative obligations: Several prestations are
of pure obligations, may fix a reasonable time in due but the performance of one is sufficient. [De
which the debtor may pay [Tolentino] Leon]
The only action that can be maintained by the RIGHT OF CHOICE [ART. 1200]
creditor under Art. 1197 is the action to ask the Belongs to the debtor, UNLESS
courts to fix the term within which the debtor (1) it is expressly granted to the creditor
must comply with his obligation. The fulfillment (2) it is expressly granted to a third person
of the obligation itself cannot be demanded
until after the court has fixed the period for LIMITATIONS TO THE RIGHT OF CHOICE
compliance therewith, and such period has (1) impossible prestations
arrived. (2) unlawful prestations
(3) those which could not have been the object
ALTERNATIVE OR FACULTATIVE of the obligation
OBLIGATIONS
WHEN CHOICE SHALL PRODUCE EFFECT
Alternative Obligations Facultative Obligations Choice shall produce no effect except from the
Several objects are Only one object is due. time it has been communicated. [Art. 1201]
due.
May be complied with May be complied with The effect of the notice is to limit the obligation
by delivery of one of by the delivery of to the object or prestation selected. Notice of
the objects or by another object or by selection or choice may be in any form provided
performance of one of the performance of it is sufficient to make the other party know that
the prestations which another prestation in the selection has been made. It can be:
are alternatively due.substitution of that (a) oral
which is due. (b) in writing
Choice may pertain to Choice pertains only to (c) tacit
debtor, creditor, or the debtor. (d) any other equivocal means
third person.
Choice of the debtor when communicated to the
Loss/impossibility of Loss/impossibility of creditor does not require the latters
all object/prestation the object/prestation concurrence.
due to fortuitous event due to fortuitous event
shall extinguish the is sufficient to If through the creditor's acts the debtor cannot
obligation. extinguish the make a choice according to the terms of the
obligation. obligation, the latter may rescind the contract
with damages. [Art 1203]
PAGE 174
INSTANCES WHEN OBLIGATION IS Fortuitous Event Debtors Fault

CONVERTED INTO A SIMPLE OBLIGATION One Remains
(1) The person with the right of choice has Creditor may claim the Creditor may claim the
communicated his choice [Arts. 1201, 1205 remaining thing remaining thing
par 1] without a right to without a right to
(2) Only one prestation is practicable [Art. 1202] damages OR the damages OR the
price/value of the price/value of the
LOSS OF SPECIFIC THINGS OR thing lost with right to thing lost with right to
IMPOSSIBILITY OF PERFORMANCE OF damages. damages.
ALTERNATIVE
Facultative obligations: Only one prestation is
Art. 1204: Debtors Choice agreed upon, but the obligor may render
Fortuitous Event Debtors Fault another in substitution. [Art. 1206]
All Lost
Debtor is released Creditor shall have a Loss of Substitute in Facultative Obligations
from the obligation. right to indemnity for [Art. 1206]
damages based on the Before Substitution is After Substitution is
value of the last thing Made Made
which disappeared or If due to bad faith or The loss or
service which become fraud of obligor: obligor deterioration of the
impossible. is liable. substitute on account
Some of the obligors delay,
Debtor to deliver that Debtor to deliver that negligence, or fraud,
which he shall choose which the creditor renders the obligor
from among the shall choose from liable because once
remainder. among the remainder If due to the negligence the substitution is
without damages. of the obligor: obligor is made, the obligation
One Remains not liable. is converted into a
Debtor to deliver that Debtor to deliver that simple one with the
which remains. which remains. substituted thing as
the object of the
Art. 1205: Creditors Choice obligation.
Fortuitous Event Debtors Fault
All Lost JOINT OBLIGATIONS
Debtor is released Creditor may claim the The whole obligation, whether capable of
from the obligation. price/value of any of division into equal parts or not, is to be paid or
them with indemnity performed by several debtors and/or demanded
for damages. by several creditors.
Some
Debtor to deliver that Creditor may claim PRESUMPTION OF JOINT OBLIGATION
which he shall choose any of those subsisting An obligation is presumed joint if there is a
from among the without a right to concurrence of several creditors, or of several
remainder. damages OR debtors, or of several creditors and debtors in
price/value of the one and the same obligation [Art. 1207]
thing lost with right to
damages. Exceptions:
(1) When the obligation expressly states that
there is solidarity
(2) When the law requires solidarity, i.e. quasi-
delicts
(3) When the nature of the obligation requires
solidarity
PAGE 175
(4) When a charge or condition imposed upon Joint Indivisible Obligations

heirs or legatees, and the testament Art. 1209. If the division is impossible, the right
expressly makes the charge or condition in of the creditors may be prejudiced only by their
solidum collective acts, and the debt can be enforced
(5) When the solidary responsibility is imputed only by proceeding against all the debtors. If
by a final judgment upon several defendants one of the latter should be insolvent, the others
shall not be liable for his share.
PRESUMPTION OF DIVISIBILITY IN JOINT
OBLIGATIONS (JOINT DIVISIBLE WHEN INDIVISIBLE [ART. 1225]
OBLIGATIONS) (1) Obligations to give definite things
Credit or debt shall be presumed to be divided (2) Obligations not susceptible of partial
into as many equal shares as there are creditors performance
or debtors, the credits or debts being considered (3) Indivisibility is provided by law or intended by
distinct from one another. [Art.1208] the parties, even though object or service
One where a concurrence of several creditors, or may be physically divisible
of several debtors, or of several creditors and (4) In obligations not to do, when character of
debtors, by virtue of which, each of the creditors prestation requires indivisibility
has a right to demand, and each of the debtors Plurality of CreditorsIf one or some of the
is bound to render compliance with his creditors demands the prestation, the debtor
proportionate part of the prestation which may legally refuse to deliver to them, he can
constitute the object of the obligation insist that all the creditors together receive the
(obligacion mancomunada). thing, and if any of them refuses to join the
others, the debtor may deposit the thing in
Joint creditor cannot act in representation of the court by way of consignation [Tolentino]
others, neither can a joint debtor be compelled
to answer for the liability of others. Plurality of DebtorsIf there are two or more
debtors, the fulfillment of or compliance with
PRINCIPAL EFFECTS OF JOINT LIABILITY the obligation requires the concurrence of all
(1) Demand by one creditor upon the debtor, the debtors, although each for his own share
produces the effects of default only with and for the enforcement of the obligation.
respect to the creditor who demanded and
the debtor on whom the demand was made, Failure of one debtor to perform in a joint
but not with respect to others. indivisible obligation gives rise to indemnity for
(2) Interruption of prescription by the judicial damages
demand of one creditor upon a debtor does
not benefit the other creditors nor interrupt
the prescription as to other debtors. Art. 1224. A joint indivisible obligation gives rise
(3) Vices of each obligation arising from the to indemnity for damages from the time anyone
personal defect of a particular debtor or of the debtors does not comply with his
creditor do not affect the obligation or right undertaking. The debtors who may have been
of the others. ready to fulfill their promises shall not
(4) Insolvency of a debtor does not increase the contribute to the indemnity beyond the
responsibility of his co-debtors, nor does it corresponding portion of the price of the thing
authorize a creditor to demand anything or of the value of the service in which the
from his co-debtors. obligation consists.
(5) Defense of res judicata is not extended from
one debtor to another.
PAGE 176
Joint Divisible Joint Indivisible Solidarity Indivisibility

Obligations Obligations Each creditor may Each creditor cannot
In case of breach of In case of breach demand the entire demand more than his
obligation by one of where one of the joint prestation and each share and each debtor
the debtors, damages debtors fails to comply debtor is bound to pay is not bound to pay
due must be borne by with his undertaking, the entire prestation more than his share
him alone. the obligation can no Effect of breach: Effect of breach:
longer be fulfilled or Solidarity remains Obligation is
performed. Thus, the converted to
action must be indemnity for
converted into one for damages
indemnity for All debtors are liable Only the debtors guilty
damages. for breach committed of breach of obligation
by a co-debtor is liable for damages
Joint Indivisible Obligations and Prescription All debtors are Other debtors are not
The act of a joint creditor which would ordinarily proportionately liable liable if one debtor is
interrupt the period of prescription would not for insolvency of one insolvent
have no effect on prescription because the debtor
indivisible character of the obligation requires
collective action of the creditors. KINDS OF SOLIDARY OBLIGATIONS
As to Source
Solidary Obligations (1) Legal imposed by law
An obligation where there is concurrence of (2) Conventional agreed upon by parties
several creditors, or of several debtors, or of (3) Real imposed by the nature of the
several creditors and several debtors, by virtue obligation
of which, each of the creditors has the right to
demand, and each of the debtors is bound to As to Parties Bound
render, entire compliance with the prestation (1) Active (solidarity among creditors) Each
which constitutes the object of the obligation creditor has the authority to claim and
(obligacion solidaria). enforce the rights of all, with the resulting
obligation of paying everyone of what
Solidarity may exist although the creditors and belongs to him.
the debtors may not be bound in the same (2) Passive (solidarity among debtors) Each
manner and by the same periods and debtor can be made to answer for the others,
conditions. [Art. 1211] with the right on the part of the debtor-payor
to recover from the others their respective
DISTINGUISHED FROM INDIVISIBILITY shares.
(3) Mixed (solidarity among creditors and
debtors) Solidarity is not destroyed by the
Art. 1210. The indivisibility of an obligation does
fact that the obligation of each debtor is
not necessarily give rise to solidarity. Nor does
subject to different conditions or periods. The
solidarity of itself imply indivisibility.
creditor can commence an action against
anyone of the debtors for the compliance
Solidarity Indivisibility with the entire obligation minus the portion
Refers to the legal tie Refers to the or share which corresponds to the debtor
(vinculum juris), and prestation that is not affected by the condition or period.
consequently to the capable of partial
subjects or parties of performance As to Uniformity
the obligation (1) Uniform Parties are bound by the same
More than one creditor Exists even if there is stipulation
or more than debtor only one creditor (2) Non-uniform Parties are bound by different
(plurality of subjects) and/or one debtor conditions or terms
PAGE 177
ACTIVE SOLIDARY OBLIGATION Art. 1222. A solidary debtor may, in actions filed
by the creditor, avail himself of all defenses
Art. 1214. The debtor may pay any one of the which are derived from the nature of the
solidary creditors; but if any demand, judicial or obligation and of those which are personal to
extrajudicial, has been made by one of them, him, or pertain to his own share. With respect to
payment should be made to him. those which personally belong to the others, he
may avail himself thereof only as regards that
A relationship of mutual agency is created part of the debt for which the latter are
among co-creditors. responsible.
The creditor who may have executed any A relationship of mutual guaranty is created
novation, compensation, confusion, or remission among co-debtors.
of the debt, as well as he who collects the debt,
shall be liable to the others for the share in the The interruption of prescription as to one debtor
obligation corresponding to them. [Art. 1215, par affects all the others; but the renunciation by
2] one debtor of prescription already had does not
prejudice the others.
A solidary creditor cannot assign his rights
without the consent of the others. [Art. 1213] Defenses Available to a Solidary Debtor [Art.
1222]
PASSIVE SOLIDARY OBLIGATION (1) Those derived from the nature of the
obligation
Art. 1216. The creditor may proceed against any (2) Those personal to him
one of the solidary debtors or some or all of (3) Those pertaining to his own share
them simultaneously. The demand made (4) Those personally belonging to other co-
against one of them shall not be an obstacle to debtors but only as regards that part of the
those which may subsequently be directed debt for which the latter are responsible.
against the others, so long as the debt has not
been fully collected. Demand Upon a
Payment by a Debtor
Solidary Debtor
The demand made Full payment made by
Art. 1217. Payment made by one of the solidary against one of them one of the solidary
debtors extinguishes the obligation. If two or shall not be an debtors extinguishes
more solidary debtors offer to pay, the creditor obstacle to those the obligation [Art.
may choose which offer to accept. which may 1217].
subsequently be
He who made the payment may claim from his directed against the
co-debtors only the share which corresponds to others so long as the
each, with the interest for the payment already debt has not been
made. If the payment is made before the debt is fully collected [Art.
due, no interest for the intervening period may 1216].
be demanded. The creditor may If two or more solidary
proceed against any debtors offer to pay,
When one of the solidary debtors cannot, one of the solidary the creditor may
because of his insolvency, reimburse his share to debtors or all choose which offer to
the debtor paying the obligation, such share simultaneously [Art. accept [Art. 1217].
shall be borne by all his co-debtors, in 1216].
proportion to the debt of each.
PAGE 178
Demand Upon a debtors, shall extinguish the obligation, without

Payment by a Debtor
Solidary Debtor prejudice to the provisions of article 1219.
A creditors right to The solidary debtor
proceed against the who made the The creditor who may have executed any of
surety exists payment shall have these acts, as well as he who collects the debt,
independently of his the right to claim from shall be liable to the others for the share in the
right to proceed his co-debtors the obligation corresponding to them.
against the principal share which
corresponds to them
with interest, UNLESS Art. 1219. The remission made by the creditor of
barred by prescription the share which affects one of the solidary
or illegality [Art. 1218]. debtors does not release the latter from his
responsibility towards the co-debtors, in case
Debtors obligated themselves solidarily, so the debt had been totally paid by anyone of
creditor can bring its action against any of them. them before the remission was effected.
Remission of any part of the debt, made by the
creditor in favor of one of the solidary debtors, Art. 1220. The remission of the whole obligation,
inures to the benefit of the rest of them. obtained by one of the solidary debtors, does
[Inchausti vs. Yulo (1914)] not entitle him to reimbursement from his co-
debtors.
Loss of the thing or impossibility of performance
of the passive/mixed solidary obligation [Art. Each one of the solidary creditors may do
1221] whatever may be useful or beneficial to the
others, but not anything which may be
Without prejudicial to the latter.
The obligation shall be
fault of the
extinguished.
debtors As far as the debtors are concerned, a
All debtors shall be responsible to prejudicial act performed by a solidary creditor
the creditor, for the price and the is binding.
With fault
payment of damages and interest, As between the solidary creditors, the creditor
of any of
without prejudice to their action who performed such act shall incur the
the debtors
against the guilty or negligent obligation of indemnifying the others for
debtor. damages.
Through a All debtors shall be responsible to
fortuitous the creditor, for the price and the DIVISIBLE AND INDIVISIBLE
event after payment of damages and interest, OBLIGATIONS
one without prejudice to their action
incurred in against the guilty or negligent DIVISIBLE OBLIGATIONS
delay debtor. Ones which are susceptible to partial
performance, that is, the debtor can legally
EFFECTS OF PREJUDICIAL AND BENEFICIAL perform the obligation by parts and the creditor
ACTS cannot demand a single performance of the
entire obligation [Tolentino]
Art. 1212. Each one of the solidary creditors may
do whatever may be useful to the others, but INDIVISIBLE OBLIGATIONS
not anything which may be prejudicial to the Ones which cannot be validly performed in parts
latter. [Tolentino]
Art. 1215. Novation, compensation, confusion or Rules

remission of the debt, made by any of the (1) Divisibility/indivisibility refers to the
solidary creditors or with any of the solidary performance of the prestation and not to
PAGE 179
the thing which is the object thereof. The If the principal obligation is void, the penal
thing may be divisible, yet the obligation clause shall also be void. However, the nullity of
may be indivisible. the penal clause does not carry with it the
(2) When the obligation has for its object the nullity of the principal obligation [Art.1230].
execution of a certain number of days of
work, the accomplishment of work by PURPOSES OF PENALTY
metrical units, or analogous things which by (1) Funcion coercitiva de garantia - to insure the
their nature are susceptible of partial performance of the obligation.
performance, it shall be divisible [Art.1225, (2) Funcion liquidatoria - to liquidate the
par. 2]. amount of damages to be awarded to the
(3) Even though the object or service may be injured party in case of breach of the
physically divisible, an obligation is principal obligation (compensatory).
indivisible if so provided by law or intended (3) Funcion estrictamente penal - to punish the
by the parties. obligor in case of breach of the principal
(4) In obligations not to do, divisibility or obligation (punitive).
indivisibility shall be determined by the
character of the prestation in each CHARACTERISTICS OF PENALTY
particular case. (1) The penalty shall substitute the indemnity
(5) When there is plurality of debtors and for damages and payment of interest in
creditors, the effect of case of non-compliance [Art. 1226],
divisibility/indivisibility of the obligation UNLESS:
depend upon whether the obligation is joint (a) There is a stipulation to the contrary
or solidary. (b) The obligor refuses to pay the penalty
(6) A joint indivisible obligation gives rise to (c) The obligor is guilty of fraud
indemnity for damages from the time any (2) Debtor cannot exempt himself from the
one of the debtors does not comply with his performance of the principal obligation by
undertaking [Art. 1224]. paying the stipulated penalty unless this
right has been expressly reserved for him
Effect [Art. 1227].
Creditor cannot be compelled to receive (3) Creditor cannot demand the fulfillment of
partially the prestation in which the obligation the principal obligation and demanding the
consists; neither may the debtor be required to satisfaction of the penalty at the same time
make the partial payment [Art. 1248], UNLESS: unless the right has been clearly granted to
(1) The obligation expressly stipulates the him [Art. 1227]. Tacit or implied grant is
contrary. admissible.
(2) The different prestations constituting the (a) If the creditor has chosen fulfillment of
objects of the obligation are subject to the principal obligation and the
different terms and conditions. performance thereof becomes
(3) The obligation is in part liquidated and in impossible without his fault, he may still
part unliquidated. demand the satisfaction of the penalty.
(b) If there was fault on the part of the
OBLIGATIONS WITH A PENAL debtor, creditor may demand not only
CLAUSE the satisfaction of the penalty but also
Penal Clause: An accessory undertaking to the payment of damages.
assume greater liability in case of breach. It is (c) If the creditor chooses to demand the
attached to an obligation in order to ensure satisfaction of the penalty, he cannot
performance. The enforcement of the penalty afterwards demand the fulfillment of
can be demanded by the creditor only when the the obligation.
non-performance is due to the fault or fraud of
the debtor. PROOF OF ACTUAL DAMAGE
Art. 1228: That proof of actual damages is not
necessary is applicable only to the general rule
PAGE 180
stated in Art. 1226, but not to the exceptions. Art. 1425. When without the knowledge or
The penalty is exactly identical with what is against the will of the debtor, a third person
known as liquidated damages in Art. 2226. pays a debt which the obligor is not legally
bound to pay because the action thereon has
WHEN PENALTY MAY BE REDUCED [ART. prescribed, but the debtor later voluntarily
1229]: reimburses the third person, the obligor cannot
(1) If the principal obligation has been partly recover what he has paid.
complied with.
(2) If the principal obligation has been (1) There is a debt
irregularly complied with. (2) Action upon the debt has prescribed
(3) If the penalty is iniquitous or (3) A third person, without the knowledge or
unconscionable even if there has been no against the will of the debtor, pays the debt
performance. (4) Debtor voluntarily reimburses the third
person
NATURAL OBLIGATIONS
Consequence: Obligor cannot recover what he
Art. 1423. Obligations are civil or natural. Civil has paid.
obligations give a right of action to compel their
performance. Natural obligations, not being Art. 1426. When a minor between eighteen and
based on positive law but on equity and natural twenty-one years of age who has entered into a
law, do not grant a right of action to enforce contract without the consent of the parent or
their performance, but after voluntary guardian, after the annulment of the contract
fulfillment by the obligor, they authorize the voluntarily returns the whole thing or price
retention of what has been delivered or received, notwithstanding the fact that he has
rendered by reason thereof. Some natural not been benefited thereby, there is no right to
obligations are set forth in the following articles. demand the thing or price thus returned.
EXAMPLES OF NATURAL OBLIGATIONS Art. 1427. When a minor between eighteen and
twenty-one years of age, who has entered into a
Art. 1424. When a right to sue upon a civil contract without the consent of the parent or
obligation has lapsed by extinctive prescription, guardian, voluntarily pays a sum of money or
the obligor who voluntarily performs the delivers a fungible thing in fulfillment of the
contract cannot recover what he has delivered obligation, there shall be no right to recover the
or the value of the service he has rendered. same from the obligee who has spent or
consumed it in good faith.
(1) There is a civil obligation
(2) The right to sue upon it has already lapsed Art. 1428. When, after an action to enforce a civil
by extinctive prescription obligation has failed the defendant voluntarily
(3) Obligor performs contract voluntarily performs the obligation, he cannot demand the
return of what he has delivered or the payment
Consequence: Obligor cannot recover what he of the value of the service he has rendered.
has delivered or value of the service he
rendered. (1) There is a civil obligation
(2) An action to enforce such has failed
(3) Defendant voluntarily performs the
obligation
Consequence: Defendant cannot demand return

of what he has delivered or the payment of the
value of the service.
PAGE 181
Art. 1429. When a testate or intestate heir PAYMENT OR PERFORMANCE

voluntarily pays a debt of the decedent (1) The delivery of money OR
exceeding the value of the property which he (2) The performance of an obligation [Art.1232]
received by will or by the law of intestacy from
the estate of the deceased, the payment is valid PRINCIPLE OF INTEGRITY OF PAYMENT
and cannot be rescinded by the payer.
Art. 1233. A debt shall not be understood to
(1) Decedent incurred in debt during his lifetime have been paid unless the thing or service in
(2) Heir voluntarily pays debt which the obligation consists has been
(3) Value of debt exceeds value of heirs completely delivered or rendered, as the case
inheritance may be.
Consequence: Payment is valid and heir cannot

Art. 1248. Unless there is an express stipulation
rescind it. to that effect, the creditor cannot be compelled
partially to receive the prestations in which the
Art. 1430. When a will is declared void because it obligation consists. Neither may the debtor be
has not been executed in accordance with the required to make partial payments.
formalities required by law, but one of the
intestate heirs, after the settlement of the debts However, when the debt is in part liquidated
of the deceased, pays a legacy in compliance and in part unliquidated, the creditor may
with a clause in the defective will, the payment demand and the debtor may effect the payment
is effective and irrevocable. of the former without waiting for the liquidation
of the latter.
(1) There is a will providing for a legacy
(2) The will is declared void because it was not Art. 1235. When the obligee accepts the
executed in accordance with the formalities performance, knowing its incompleteness or
required by law irregularity, and without expressing any protest
(3) Heir pays legacy or objection, the obligation is deemed fully
complied with.
Consequence: Payment is effective and
irrevocable. BY WHOM
Payor must have free disposal of the thing due
EXTINGUISHMENT OF and capacity to alienate it. [Art. 1239]
OBLIGATIONS
Payment by a third person
Art. 1231. Obligations are extinguished:
(1) By payment or performance; Art. 1236. The creditor is not bound to accept
(2) By the loss of the thing due; payment or performance by a third person who
(3) By the condonation or remission of the has no interest in the fulfillment of the
debt; obligation, unless there is a stipulation to the
(4) By the confusion or merger of the rights of contrary.
creditor and debtor;
(5) By compensation; Whoever pays for another may demand from
(6) By novation. the debtor what he has paid, except that if he
paid without the knowledge or against the will
Other causes of extinguishment of of the debtor, he can recover only insofar as the
obligations, such as annulment, rescission, payment has been beneficial to the debtor.
fulfillment of a resolutory condition, and
prescription, are governed elsewhere in this
Code.
PAGE 182
Art. 1237. Whoever pays on behalf of the debtor PLACE OF PAYMENT

without the knowledge or against the will of the (1) In the place designated in the obligation.
latter, cannot compel the creditor to subrogate (2) In the absence of stipulation
him in his rights, such as those arising from a (a) If obligation is to deliver a determinate
mortgage, guaranty, or penalty. thing: wherever the thing might be at
the moment the obligation was
constituted.
Art. 1238. Payment made by a third person who (b) In any other case: Domicile of debtor
does not intend to be reimbursed by the debtor [Art. 1251]
is deemed to be a donation, which requires the
debtor's consent. But the payment is in any case Form of Payment
valid as to the creditor who has accepted it.
Art. 1249. The payment of debts in money shall
TO WHOM be made in the currency stipulated, and if it is
(1) The person in whose favor the obligation has not possible to deliver such currency, then in the
been constituted; or currency which is legal tender in the Philippines.
(2) His successor in interest; or
(3) Any person authorized to receive it [Art. 1240] The delivery of promissory notes payable to
order, or bills of exchange or other mercantile
Payment to a person who is incapacitated to documents shall produce the effect of payment
administer his property shall be valid if he has only when they have been cashed, or when
kept the thing delivered, or insofar as the through the fault of the creditor they have been
payment has been beneficial to him. [Art. 1241 impaired.
par 1]
In the meantime, the action derived from the
Payment made in good faith to any person in original obligation shall be held in the
possession of the credit shall release the debtor. abeyance.
[Art. 1242]
Extraordinary Inflation or Deflation
Payment made to the creditor by the debtor Art. 1250. In case an extraordinary inflation or
after the latter has been judicially ordered to deflation of the currency stipulated should
retain the debt shall not be valid. [Art. 1243] supervene, the value of the currency at
the time of the establishment of the obligation
Payment to a third person [Art. 1241 par 2] shall be the basis of payment, unless there is an
Payment made to a third person shall also be agreement to the contrary.
valid insofar as it has redounded to the benefit
of the creditor. APPLICATION OF PAYMENTS
Designation of the debt to which should be
General rule: That payment has redounded to applied a payment made by a debtor who owes
the benefit of the credit must be proved, several debts to the same creditor.
Exception: Requisites:
(1) If after the payment, the third person (1) There is a plurality of debts
acquires the creditor's rights; (2) Debts are of the same kind
(2) If the creditor ratifies the payment to the (3) Debts are owed to the same creditor and by
third person; the same debtor
(3) If by the creditor's conduct, the debtor has (4) All debts must be due, UNLESS parties so
been led to believe that the third person stipulate, or when application is made by
had authority to receive the payment. the party for whose benefit the term has
been constituted
(5) Payment made is not sufficient to cover all
debts [Art. 1252]
PAGE 183
Rules on Application Requisites:

(1) Preferential right of debtor - debtor has the (1) There is a plurality of debts
right to select which of his debts he is (2) Partial or relative insolvency of debtor
paying. (3) Acceptance of the cession by the creditors
(2) The debtor makes the designation at the [Art. 1255]
time he makes the payment.
(3) If not, the creditor makes the application, by Debtor is released only for the net proceeds
so stating in the receipt that he issues, unless there is a stipulation to the contrary.
unless there is cause for invalidating the Cession and Dacion en pago Distinguished
contract.
(4) If neither the creditor nor debtor exercises Cession Dacion en pago
the right to apply, or if the application is not Plurality of creditors One creditor
valid, the application is made by operation Debtor must be Debtor not necessarily
of law. partially or relatively in state of financial
(5) If debt produces interest, the payment is not insolvent difficulty
to be applied to the principal unless the Universality of Thing delivered is
interests are covered. property is ceded equivalent of
(6) When no application can be inferred from performance
the circumstances of payment, it is applied: Merely releases debtor Extinguishes
(a) to the most onerous debt of the debtor; for the net proceeds of obligation to the
or (b) if debts due are of the same nature things ceded or extent of the value of
and burden, to all the debts in proportion assigned, unless there the thing delivered, as
(7) Rules of application of payment may not be is contrary intention agreed upon, proved
invoked by a surety or solidary guarantor. or implied from the
conduct of the creditor
Rules on application of payment cannot be Involves all properties Does not involve all
made applicable to a person whose obligation of debtor properties of debtor
as a mere surety is both contingent and Creditor does not Creditor becomes
singular. There must be full and faithful become owner of the owner
compliance with the terms of the contract. ceded property
[Reparations Commission vs. Universal Deep Sea
Fishing Corp (1978)] TENDER OF PAYMENT AND CONSIGNATION
Tender of payment: Manifestation made by the
DATION IN PAYMENT debtor to the creditor of his desire to comply
Delivery and transmission of ownership of a with his obligation, with offer of immediate
thing by the debtor to the creditor as an performance.
accepted equivalent of the performance of the (1) Preparatory act to consignation
obligation (dacion en pago). (2) Extrajudicial in character
Requisites: Consignation: Deposit of the object of obligation
(1) Existence of a money obligation in a competent court in accordance with the
(2) Alienation to the creditor of a property by rules prescribed by law whenever the creditor
the debtor with the creditors consent unjustly refuses payment or because of some
(3) Satisfaction of the money obligation circumstances which render direct payment to
the creditor impossible or inadvisable.
PAYMENT BY CESSION (1) Principal act which constitutes a form of
Special form of payment where the debtor payment
assigns/abandons ALL his property for the (2) Judicial in character
benefit of his creditors in order that from the
proceeds thereof, the latter may obtain
payment of their credits.
PAGE 184
Requisites of Consignation Who Bears the Expenses

(1) There is a debt due The expenses of consignation, when properly
(2) Consignation is made because of some made, shall be charged against the creditor.
legal cause [Art. 1259]
(a) There was tender of payment and creditor Effects of Consignation
refuses without just cause to accept it If accepted by the creditor or declared properly
(b) Instances when consignation alone would made by the Court:
suffice as provided under Art. 1256 (1) Debtor is released in same manner as if he
(3) Previous notice of consignation was given to had performed the obligation at the time of
those persons interested in the performance consignation
of the obligation (2) Accrual of interest is suspended from the
(4) Amount or thing due was placed at the moment of consignation.
disposal of the court (3) Deterioration or loss of the thing or amount
(5) After the consignation has been made, the consigned, occurring without the fault of
persons interested were notified thereof debtor, must be borne by creditor from the
moment of deposit
When Tender and Refusal Not Required [Art.
1256] Any increment or increase in the value of the
(1) Creditor is absent or unknown, or does not thing after consignation inures to the benefit of
appear at the place of payment. the creditor
(2) Creditor is incapacitated to receive the thing
due at the time of payment. Effects of Withdrawal by Debtor [Arts. 1260- 1261]
(3) Without just cause, creditor refuses to give Before approval of the court - Obligation
receipt. remains in force.
(4) Two or more persons claim the same right
to collect. After approval of the court or acceptance by the
(5) Title of the obligation has been lost. creditor, with the consent of the latter -
Obligation remains in force, but guarantors and
What Constitutes Valid Consignation co-debtors are liberated. Preference of the
In order that the consignation of the thing due creditor over the thing is lost.
may release the obligor, it must first be
announced to the persons interested in the After approval of the court or acceptance by the
fulfilment of the obligation. creditor, and without creditors consent -
Obligation subsists, without change in the
The consignation shall be ineffectual if it is not liability of guarantors and co-debtors, or the
made strictly in consonance with the provisions creditors right of preference.
which regulate payment. [Art. 1257]
LOSS OF THE THING DUE OR
How Consignation is Made IMPOSSIBILITY OR DIFFICULTY OF
Consignation shall be made by depositing the
things due at the disposal of judicial authority,
PERFORMANCE
before whom the tender of payment shall be
Loss - A thing is lost when it perishes, goes out
proved, in a proper case, and the announcement
of the consignation in other cases. of commerce or disappears in such a way that
its existence is unknown or it cannot be
recovered [Art. 1189 no. 2]
The consignation having been made, the
interested parties shall also be notified thereof.
PAGE 185
EFFECTS OF LOSS [ARTS. 1262-1263] Partial loss

Art. 1264: Partial loss due to a fortuitous event
Obligation to Deliver a Obligation to Deliver a does not extinguish the obligation; thing due
Specific Thing Generic Thing shall be delivered in its present condition,
Extinguishment of the Loss of a generic thing without any liability on the part of the debtor,
obligation if the thing does not extinguish an UNLESS the obligation is extinguished when
was destroyed without obligation, EXCEPT in the part lost was of such extent as to make the
fault of the debtor and case of delimited thing useless.
before he has incurred generic things, where
delay. the kind or class is IMPOSSIBILITY OF PERFORMANCE [ARTS.
limited itself, and the 1266-1267]
whole class perishes. When prestation becomes legally or physically
impossible (by fortuitous event or force
Action against third persons - creditor shall majeure), the debtor is released. Impossibility
have all the rights of action the debtor may have must have occurred without fault of debtor, and
against third persons by reason of the loss. [Art. after the obligation has been constituted.
1269]
Subjective Impossibility
OTHER CASES WHERE LOSS IS Where there is no physical or legal loss, but the
ATTRIBUTED TO DEBTOR thing belongs to another, the performance by
(1) Law provides that the debtor shall be liable the debtor becomes impossible. The debtor
even if the loss is due to fortuitous events must indemnify the creditor for damages.
[Arts. 1942, 1979, 2147, 2159].
(2) Obligor is made liable by express stipulation. Partial Impossibility
(3) Nature of the obligation requires an Courts shall determine whether it is so
assumption of risk. important as to extinguish the obligation.
(4) Fault or negligence concurs with the (1) If debtor has performed part of the
fortuitous event. obligation when impossibility occurred,
(5) Loss occurs after delay. creditor must pay the part done as long as
(6) Debtor has promised to deliver the same he benefits from it.
thing to two or more different parties. (2) If debtor received full payment from
(7) Obligation arises from a criminal act. creditor, he must return excess amount
(8) Borrower in commodatum: saves his own corresponding to part which was impossible
things and not the thing of the creditor to perform.
during a fortuitous event.
Doctrine of Unforeseen Events
Loss of the thing when in possession of the When the service has become so difficult as to
debtor be manifestly beyond the contemplation of all
Loss was due to the debtors fault. Burden of the parties, the obligor may be released in
explaining the loss of the thing falls upon him, whole or in part. [De Leon]
UNLESS due to a natural calamity: earthquake,
flood, storm, etc Requisites:
(1) Event could not have been foreseen at the
In Reciprocal Obligations time of the constitution of the contract.
Extinguishment of the obligation due to loss of (2) Event makes performance extremely
the thing or impossibility of performance affects difficult but not impossible.
both the creditor and debtor; the entire juridical (3) Event is not due to any act of the parties.
relation is extinguished. (4) Contract is for future prestation.
PAGE 186
CONDONATION OR REMISSION OF debtor in the obligation/ in the part

THE DEBT affected.
An act of liberality, by virtue of which, without
receiving any equivalent, creditor renounces the EFFECTS [ARTS. 1275- 1277]
enforcement of the obligation. The obligation is (1) The obligation is extinguished from the time
extinguished either in whole or in such part of the characters of the debtor and creditor are
the same to which remission refers. merged in the same person.
(2) In joint obligations, confusion does not
REQUISITES extinguish the obligation except as regards
(1) Debt must be existing and demandable. the corresponding share of the creditor or
(2) Renunciation must be gratuitous; without debtor in whom the two characters concur.
any consideration. (3) In solidary obligations, confusion in one of
(3) Debtor must accept the remission. [Art. the solidary debtors extinguishes the entire
1270] obligation.
Obligation is not extinguished when confusion
EFFECT takes place in the person of subsidiary debtor
Renunciation of the principal debt shall (e.g. guarantor), but merger in the person of the
extinguish the accessory obligations, but principal debtor shall benefit the former.
remission of the latter leaves the principal
obligation in force. [Art. 1273] COMPENSATION
Compensation: Offsetting of two obligations
EXPRESS CONDONATION which are reciprocally extinguished if they are of
Made formally; in accordance with forms of the same value, or extinguished to the
ordinary donations. [Art. 1270] concurrent amount if of different values.
REQUISITES [ART. 1279]
IMPLIED CONDONATION
(1) Each obligor is bound principally, and at the
(1) Whenever the private document in which
same time a principal creditor of the other
the debt is found is in the possession of the
(2) Both debts must consist in a sum of money,
debtor, it shall be presumed that the
or if the things due are FUNGIBLE, of the
creditor delivered it voluntarily, unless the
same kind & quality
contrary is proved. [Art. 1272]
(3) Both debts are due
(2) Delivery of a private document evidencing
(4) Debts are liquidated and demandable
credit made voluntarily by the creditor to (5) There must be no retention or controversy
the debtor implies the renunciation of the
over either of the debts, commenced by
action of creditor against the latter. [Art.
third persons and communicated in due
1272]
time to the debtor
(3) Accessory obligation of pledge has been
(6) Compensation is not prohibited by law
remitted when thing after its delivery is
found in the possession of the debtor or EFFECTS
third person. [Art. 1274] (1) Both debts are extinguished to the
concurrent amount, even though the
CONFUSION OR MERGER OF RIGHTS creditors and debtors are not aware of the
Confusion: The meeting in one person of the compensation.
qualities of creditor and debtor of the same (2) Accessory obligations are also extinguished.
obligation. Effects rise from the moment all the requisites
concur.
REQUISITES
(1) It should take place between principal Debtor claiming its benefits must prove
debtor and creditor. compensation; once proven, effects retroact
(2) It must be complete and definite Parties from the moment when the requisites
must meet all the qualities of creditor and concurred.
PAGE 187
Compensation and Confusion Distinguished Art. 1283. If one of the parties to a suit over an
obligation has a claim for damages against the
Compensation Confusion other, the former may set it off by proving his
right to said damages and the amount thereof.
There must always be Involves only one
two obligations. obligation.
(4) Facultative Compensation - When it can be
claimed by one of the parties who, however,
There are two persons There is only one
has the right to object to it.
who are mutually person whom the
debtors and creditors characters of the
Compensation which can only be set up at the
of each other in two creditor and debtor
option of a creditor, when legal compensation
separate obligations, meet.
cannot take place because some legal requisites
each arising from the
in favor of the creditor are lacking. Creditor may
same cause.
renounce his right to compensation, and he
himself may set it up. As opposed to
KINDS OF COMPENSATION
conventional compensation, facultative
As to extent
compensation is unilateral and does not depend
(1) Total when two debts are of the same
upon the agreement of the parties.
amount [Art. 1281]
(2) Partial
Obligations which cannot be compensated
[Arts. 1287-1288]
As to cause
(1) Contracts of depositum
(1) Legal
(2) Contracts of commodatum
(2) Voluntary
(3) Future support due by gratuitous title
(3) Judicial
(4) Civil liability arising from a penal offense
(4) Facultative
(5) Obligations due to the government
(6) Damage caused to the partnership by a
KINDS:
partner
(1) Legal Compensation takes place by
operation of law from the moment all
Right of a Guarantor
requisites are present.
A guarantor may set up compensation as
regards what the creditor may owe the principal
Art. 1290. When all the requisites mentioned in debtor. (Art. 1280)
article 1279 are present, compensation takes
effect by operation of law, and extinguishes Effect of Assignment of Rights by the Creditor to
both debts to the concurrent amount, even a Third Person [Art. 1285]
though the creditors and debtors are not aware
of the compensation. Debtor cannot set up against
With assignee compensation pertaining
(2) Voluntary Compensation takes place when debtors to him against assignor UNLESS
parties who are mutually creditors and consent he reserved such right at the time
debtors of each other agree to compensate he gave his consent
their respective obligations even though one With Debtor may set up compensation
of the requisites of compensation may be debtors of debts previous to the
lacking knowledge assignment but not of subsequent
but without ones
Art. 1282. The parties may agree upon the consent
compensation of debts which are not yet due. Debtor may set up compensation
Without
of all credits prior and also later to
debtors
(3) Judicial Compensation takes place by the assignment until he had
knowledge
judicial decree knowledge of the assignment
PAGE 188
NOVATION the novation OR those who may be affected,

Extinguishment of an obligation by the upon agreement between the parties.
substitution or change of the obligation by a
subsequent one which extinguishes or modifies ORIGINAL OR NEW OBLIGATION WITH
the first either by changing the object or SUSPENSIVE OR RESOLUTORY CONDITION
principal conditions, or by substituting the If original obligation was subject to a suspensive
person of the debtor, or by subrogating a third or resolutory condition, the new obligation shall
person in the rights of the creditor. A juridical be under the same condition, unless it is
act of dual functionit extinguishes an otherwise stipulated. [Art. 1299]
obligation, and at the same time, it creates a
new one in lieu of the old. Incompatible
Compatible Conditions
Conditions
REQUISITES (a) Fulfillment of both (a) Original
(1) A previous valid obligation conditions: new obligation is
(2) Agreement of all the parties to the new obligation becomes extinguished,
obligation demandable while new
(3) Animus novandi or intent to novate (b) Fulfillment of obligation
(4) Substantial difference between old and new condition concerning exists
obligations and, consequently, the original obligation: (b) Demandability
extinguishment of the old obligation old obligation is shall be subject
(5) Validity of the new obligation revived; new obligation to fulfillment/
loses force nonfulfillment
EFFECT (c) Fulfillment of of the condition
Old obligation is extinguished and condition concerning affecting it
In General replaced by the new one the new obligation: no
stipulated. novation; requisite of a
Novation is void if the original previous valid and
obligation was void, except when effective obligation
annulment may be claimed only lacking
by the debtor, or when ratification
If Original validates acts that are voidable KINDS OF NOVATION
Obligation [Art. 1298] As to form
is Void (1) Original obligation is void: No (1) Express declared in an unequivocal terms
novation (2) Implied the old and new obligations are on
(2) Original obligation voidable: every point incompatible with each other
Effective if contract is ratified
before novation. Novation is not presumed
New obligation is void, the old In the absence of an unequivocal declaration of
obligation subsists, unless the extinguishment of the pre-existing obligation,
parties intended that the former only proof of incompatibility between the old
relations shall be extinguished in and new obligation would warrant a novation by
If New implication. [California Bus Line vs. State
any event [Art. 1297]
Obligation Investment (2003)]
(1) New obligation void: No
is Void
novation
(2) New obligation voidable: Test of Incompatibility
Novation is effective Whether or not the old and new obligation can
stand together, each one having an
independent existence. No incompatibility exists
Accessory obligations are also extinguished, but when they can stand together. Hence, there is
may subsist only insofar as they may benefit no novation. Incompatibility exists when they
third persons who did not give their consent to cannot stand together. Hence, there is novation.
PAGE 189
As to effect
(1) Total Expromision Delegacion
(2) Partial Requisites
(1) Consent of the Consent of old debtor,
Total Partial creditor and the new new debtor, and
(1) Transfers to the A creditor, to whom debtor creditor
person subrogated partial payment has (2) Knowledge or
the credit with all been made, may consent of the old
the rights thereto exercise his right for debtor is not
appertaining, either the remainder, and required
against the debtor shall be preferred to Effects
or third persons. the person subrogated (1) Old debtor is (1) Insolvency of the
(2) Obligation is not in his place in virtue of released new debtor revives
extinguished, even the partial payment. (2) Insolvency of the the obligation of
if the intention is to new debtor does the old debtor if it
pay it. not revive the old was anterior and
(3) Defenses against obligation in case public, and known
the old creditor are the old debtor did to the old debtor.
retained, unless not agree to (2) New debtor can
waived by the expromision demand
debtor. (3) If with knowledge reimbursement of
and consent of old the entire amount
As to Essence debtor, new debtor he has paid from
(1) Objective/ Real can demand the original debtor.
(2) Subjective/ Personal reimbursement of He may compel
(a) Substitution of debtors the entire amount creditor to
(i) Expromision paid and with subrogate him to
(ii) Delegacion subrogation of all of his rights.
(b) Subrogation of a third person to the creditors rights.
rights of the creditor (4) If without
(i) Conventional knowledge of the
(ii) Legal old debtor, new
OBJECTIVE NOVATION debtor can demand
(1) Change of the subject matter reimbursement
(2) Change of cause or consideration only up to the
(3) Change of the principal conditions or terms extent that the
latter has been
SUBJECTIVE NOVATION benefited without
subrogation of
Substitution of Debtors
Expromision Delegacion
creditors rights.
Initiative for change Debtor (delegante)
does not emanate from offers or initiates the Subrogation
the debtor, and may change, and the Transfers to the person subrogated the credit
even be made without creditor (delegatorio) with all the rights thereto appertaining, either
his knowledge. accepts a third person against the debtor or against third persons, be
(delegado) as they guarantors or possessors of mortgages,
consenting to the subject to stipulation in a conventional
substitution. subrogation. [Art. 1303]
Conventional Subrogation takes place by

agreement of parties
PAGE 190
Conventional
subrogation
Assignment of credit Contracts
Debtors consent is Debtors consent is not A contract is a meeting of the minds between
necessary. required. two persons whereby one binds himself, with
Extinguishes anRefers to the same respect to the other, to give something or to
obligation and gives right which passes render some service. [Art. 1305]
rise to a new one. from one person to
another, without Autonomy
modifying or
extinguishing the Art. 1306. The contracting parties may establish
obligation. such stipulations, clauses, terms and conditions
Defects/vices in the Defects/vices in the as they may deem convenient, provided they are
old obligation are old obligation are not not contrary to law, morals, good customs,
cured. cured. public order, or public policy.
Legal Subrogation takes place by operation of Mutuality

law
Art. 1308. The contract must bind both
Legal subrogation is not presumed, except in contracting parties; its validity or compliance
the following circumstances: cannot be left to the will of one of them.
(1) When creditor pays another creditor who is
preferred, even without the debtors
Relativity
knowledge
(2) When a third person not interested in the
obligation pays with the express or tacit Art. 1311, par 1. Contracts take effect only
approval of the debtor between the parties, their assigns and heirs,
(3) When, even without the knowledge of the except in case where the rights and obligations
debtor, a person interested in the fulfillment arising from the contract are not transmissible
of the obligation pays, without prejudice to by their nature, or by stipulation or by provision
the effects of confusion as to the latters of law. The heir is not liable beyond the value of
share [Art. 1302] the property he received from the decedent.
ESTOPPEL ESSENTIAL REQUISITES

An admission or representation is rendered There is no contract unless the following
conclusive upon the person making it, and requisites concur:
cannot be denied or disproved as against the (1) Consent of the contracting parties;
person relying thereon. [Art. 1431] (2) Object certain which is the subject matter of
the contract;
Estoppel is effective only as between the parties (3) Cause of the obligation which is
thereto or their successors in interest. [Art. 1439] established.
ELEMENTS OF ESTOPPEL CONSENT

(1) A person makes an admission or The meeting of the minds of the parties on the
representation to another subject matter and cause of the contract.
(2) There is reliance by the other on such
admission or representation Requisites:
(3) The other person acts upon such admission (1) It must be manifested by the concurrence of
or representation the offer and acceptance [Arts. 1319-1326].
(2) The contracting parties must possess the
necessary legal capacity [Arts. 1327-1329].
PAGE 191
(3) It must be intelligent, free, spontaneous, ACCEPTANCE

and real (not vitiated) [Arts. 1330-1346] Requisites of acceptance:
(1) Unqualified and unconditional, i.e. it must
OFFER conform with all the terms of the offer,
A unilateral proposition which one party makes otherwise it is a counter-offer [Art. 1319]
to the other for the celebration of the contract (2) Communicated to the offeror and learned by
[Tolentino] him [Arts. 1319, 1322]. If made through an
agent, the offer is accepted from the time
Requisites of an offer: the acceptance is communicated to such
(1) Definite agent.
(2) Intentional (3) Express/implied, but is not presumed.
(3) Complete
General rule: Contracts are perfected by mere
Invitation to make offers (advertisements) consent and from that moment the parties are
(1) Business advertisements of things for sale bound not only to the fulfillment of what has
are NOT definite offers, just invitations to been expressly stipulated but also to all the
make an offer, UNLESS the contrary consequences which, according to their nature,
appears. [Art. 1325] may be in keeping with good faith, usage and
(2) Advertisements for bidders are invitations to law. [Art. 1315]
make proposals, the advertiser is NOT
bound to accept the lowest or highest bid; Exceptions:
UNLESS the contrary appears. The bidder is (1) Real contracts, such as deposit, pledge and
the offeror. [Art. 1326] commodatum, are not perfected until the
(3) Statements of intention: no contract results delivery of the object of the obligation [Art.
even if accepted. 1316]
(2) Formal contracts, where the law requires
In a letter informing another that the sender that a contract be in some form or be
was in a position and is willing to entertain the proved in a certain way [Art. 1356]
purchase of a yacht under some terms, the word
entertain applied to an act does not mean the OPTION CONTRACT
resolution to perform said act, but simply a A preparatory contract in which one party
position to deliberate for deciding to perform or grants to the other, for a fixed period, the option
not to perform said act. It was merely a position to decide whether or not to enter into a principal
to deliberate whether or not he would purchase contract [Art. 1324]
the yacht and invitation to a proposal being
made to him, which might be accepted by him With consideration Without consideration
or not. [Rosentstock vs. Burke (1924)]
Offeror cannot Offeror may withdraw
Offer terminates upon unilaterally withdraw by communicating
(1) Rejection by the offeree his offer. withdrawal to the
(2) Incapacity (death, civil interdiction, insanity, offeree before
or insolvency) of the offeror or offeree before acceptance.
acceptance is conveyed
(3) Counter-offer CAPACITY TO CONTRACT
(4) Lapse of the time stated in the offer without Persons incapacitated to give consent (Art. 1327)
acceptance being conveyed (1) Minors, except
(5) Revocation of the offer before learning of (a) For necessaries [Art.1427]
acceptance (b) Estoppel where the minor actively
(6) Supervening illegality before acceptance misrepresents his age
[J.B.L. Reyes]
Minors held in estoppel through active
misrepresentation. [Mercado v. Espiritu (1917)]
PAGE 192
There is no estoppel if the minority was known Mutual

Mistake of Fact Mistake of Law
by the other party. [Bambalan v. Maramba Mistake
(1928)] When one or When one or (1) Must be as
both both parties to the
(2) Insane or demented persons, UNLESS they contracting arrive at an legal
contract during a lucid interval. [Art. 1328] parties believe erroneous effect of
(3) Deaf-mutes who do not know how to read that a fact conclusion on an
AND write. exists when in the agreement
reality it does interpretation (2) Must be
Persons disqualified to contract not, or vice of a question mutual
(1) Those under civil interdiction for versa. of law or its (3) Real
transactions inter vivos [Art. 34, RPC]. legal effects. purpose of
(2) Undischarged insolvents [Insolvency Law, the parties
Sec. 24]. must have
(3) Husband and wife cannot donate to each been
other [Art. 123, FC], nor sell if the marriage is frustrated
under ACP [Art.1490].
(4) The ff. cannot purchase [Art. 1491]: Intimidation When one of the contracting
(a) The guardian: his wards property parties is compelled by a reasonable and well-
(b) The agent: the principals property grounded fear of an imminent and grave evil
(c) Executors and administrators: property upon his person or property, or upon the person
under administration or property of his spouse, descendants or
(d) Public officers-state: property under ascendants, to give his consent.
their administration
(e) Justices, judges, prosecutors, clerks of To determine the degree of intimidation, the
court, lawyers: property attached in age, sex and condition of the person shall be
litigation. borne in mind. [Art. 1335]
VICES OF CONSENT The conveyance of several properties by the wife

A contract where consent is given through to her husbands creditors, though reluctant, is
(1) Mistake still consent. She assented to the requirements
(2) Violence of the defendants in order that the civil and
(3) Intimidation criminal actions against them would be
(4) Undue influence dropped. A contract is valid even though one of
(5) Fraud is voidable. [Art. 1330] the parties entered into it against his wishes and
desires, or even against his better judgment.
Mistake - Inadvertent and excusable disregard [Martinez v. HSBC]
of a circumstance material to the contract [J.B.L.
Reyes] Violence Serious or irresistible force used to
extort consent [Art. 1335]
In order that mistake may invalidate consent, it
should refer to the substance of the thing which Undue Influence When a person takes
is the object of the contract, or to those improper advantage of his power over the will of
conditions which have principally moved one or another, depriving the latter of a reasonable
both parties to enter into the contract. [Art. 1331] freedom of choice.
Mistake which vitiates consent is an error of fact, Circumstances to consider:

and not an error of law. Ignorance of the law (1) Relationship of the parties (family, spiritual,
excuses no one from compliance therewith [Art. confidential etc.)
3]; but the modern tendency is to allow an (2) That the person unduly influenced was
excusable mistake of law to be invoked as suffering from infirmity (mental weakness,
vitiating consent. [Tolentino] ignorance etc.) [Art.1337]
PAGE 193
Fraud When, through insidious words or Stipulations must not be contrary to Mandatory
machinations of one of the contracting parties, And Prohibitive Laws.
the other is induced to enter into a contract (1) Pactum commissorium [Arts. 2088, 2130,
which, without them, he would not have agreed 1390]
to. [Art. 1338] A stipulation in a contract of mortgage or
pledge which provides that the mortgagee
In order that fraud may make a contract will automatically own the property
voidable, it should be serious and should not mortgaged in case the mortgagor fails to
have been employed by both contracting pay the loan is void [Art. 2088]
parties. [Art. 1344]
(2) Pactum de non alienando [Art. 2130]
Art. 1339. Failure to disclose facts, when there is A stipulation forbidding the owner from
a duty to reveal them, as when the parties are alienating the immovable mortgaged shall
bound by confidential relations, constitutes be void [Art.2130].
fraud.
(3) Pactum leonina [Art. 1799]
Art. 1340. The usual exaggerations in trade, A stipulation which excludes one or more
when the other party had an opportunity to partners from any share in the profits or
know the facts, are not in themselves losses is void [Art.1799]
fraudulent.
OBJECT OF CONTRACTS
Art. 1341. A mere expression of an opinion does The subject matter; the thing, right or service
not signify fraud, unless made by an expert and which is the subject matter of the obligation
the other party has relied on the former's special arising from the contract. [Tolentino]
knowledge.
Requisites:
Art. 1342. Misrepresentation by a third person (1) Must be within the commerce of men [Art.
does not vitiate consent, unless such 1347]
misrepresentation has created substantial (2) Must not be impossible, legally or physically
mistake and the same is mutual. [Art.1348]
(3) For things as object of contract, must be in
Art. 1343. Misrepresentation made in good faith existence or capable of coming into
is not fraudulent but may constitute error. existence [See Arts. 1461, 1493, 1495]
(4) Must be determinate or determinable,
Simulation of Contracts
without the need of a new contract between
Takes place when the parties do not really want
the parties [Arts. 1349, 1460, par.2]
the contract they have executed to produce the
legal effects expressed by its wordings. It may
General rule: All things or services may be the
be absolute or relative [Arts. 1345-1346]
object of contracts.
Absolute Simulation Relative Simulation
Exceptions:
No real transaction Real transaction is (1) Things which are outside the commerce of
is intended. hidden. men
Fictitious contract. Disguised contract. (2) Intransmissible rights
Void. Bound as to hidden (3) Future inheritance except in cases
agreement, so long as it authorized by law
does not prejudice a (4) Impossible things or services
third person and is not (5) Objects which are indeterminable as to their
contrary to law, morals, kind, the genus should be expressed
good customs, public
order or public policy. In order that a thing, right, or service, may be
the object of a contract, it should be in existence
PAGE 194
at the moment of the celebration of the Moral Obligation as a Cause

contract, or at least, it can exist subsequently or In Villaroel v. Estrada (1940), where a moral
in the future. obligation is based upon a previous civil
obligation, which has already been barred by
A future thing may be the object of a contract, the statute of limitations at the time the
such contract may be interpreted as a: contract is entered into, it constitutes a
(1) Conditional contract, where its efficacy sufficient cause or consideration to support a
should depend upon the future existence of contract (natural obligation).
the thing.
(2) Aleatory contract, where one of the In Fisher v. Robb (1939), if the moral obligation
contracting parties assumes the risk that arises wholly from ethical consideration, it
the thing will never come into existence, e.g. cannot constitute a sufficient cause to support
insurance. an onerous contract, as when the promise is
made on the erroneous belief that one was
CAUSE OF CONTRACTS morally responsible for the failure of an
The essential and impelling reason why a party enterprise (moral obligation).
assumes an obligation [Manresa]. Motive, on the
other hand, is the particular reason for a Effect of Lack of Cause, Unlawful Cause, False
contracting party which does not affect the Cause and Lesion [Arts. 1352 1355]
other. Cause Effect
Lack of Cause If there is no cause
REQUISITES absence or total whatsoever, contract is VOID;
(1) Must exist at the time of the contract is lack of cause a fictitious sale is VOID.
entered into [Arts. 1352, 1409, par. 3] NOTE: Cause must exist at
(2) Must be lawful (ibid). the time of the perfection of
(3) Must be true or real [Art.1353] the contract; it need not exist
later.
Distinguished from Motive Contrary to law, If cause is unlawful,
morals, good transaction is VOID.
Cause Motive customs, public
Proximate reason for Remote reason for the policy and If parts of a contract are
contract contract public order illegal but the rest are
Objective or juridical Psychological and (unlawful supported by lawful cause,
reason purely personal reason cause) claimant of such has the
Always the same for Differs for each burden of showing proof;
each contracting party contracting party otherwise, the whole contract
Illegality affects Illegality does not is VOID.
existence or validity of affect existence or
the contract validity of contract Contract with illegal cause
may still produce effect in
Cause in contracts [Art. 1350] certain cases where parties
are not of equal guilt: (1)
Onerous Remuneratory Pure innocent party cant be
Contracts Contracts Beneficence compelled to perform his
The The service or Mere obligation and he may
undertaking benefit which is liberality of recover what has already
or the remunerated the been given; (2) if both parties
promise of benefactor are guilty, neither can sue
the thing or the other, the law leaving
service by the them as they are (in pari
other party delicto).
PAGE 195
Cause Effect (2) Partnerships where real property is

Falsity of cause Contract with a false cause is contributed [Art. 1771]
cause is merely revocable/voidable. (3) Acts and contracts which have for their
stated but is object the creation, transmission,
untrue Parties are given a chance to modification or extinguishment of real
show that a cause really rights over immovable property;
exists, and that said cause is (4) The cession, repudiation or renunciation of
true and lawful. hereditary rights or of those of the conjugal
partnership of gains;
Lesion or Inadequacy of cause shall (5) The power to administer property, or any
inadequacy of not invalidate the contract other power which has for its object an act
cause cause is except when: (1) there is appearing or which should appear in a
not fraud, mistake, undue public document, or should prejudice a third
proportionate to influence (2) when parties person;
object intended a donation (6) The cession of actions or rights proceeding
from an act appearing in a public
FORM OF CONTRACTS document.
(7) All other contracts where the amount
General rule: Contracts shall be obligatory, in
whatever form they may have been entered into, involved exceeds five hundred pesos [Art.
provided all the essential requisites for their 1358]
validity are present.
Article 1358, which requires the embodiment of
Exception: When the law requires that a certain contracts in a public instrument, is only
contract be in some form in order that it may be for convenience, and registration of the
instrument only adversely affects third parties.
valid or enforceable, or that a contract be
[Fule vs. CA (1998)]
proved in a certain way [Art. 1356]
When Form is Important Art. 1357. If the law requires a document or

(1) For Validity e.g. for formal or solemn other special form, as in the acts and contracts
contracts enumerated in the following article, the
(2) For Enforceability e.g. for agreements contracting parties may compel each other to
enumerated under the Statute of Frauds observe that form, once the contract has been
[Art.1403] perfected. This right may be exercised
(3) For Convenience e.g. for contracts simultaneously with the action upon the
enumerated in Art. 1385 contract.
Contracts Which Must Appear In Writing This article applies only when form is needed for
(1) Donation of personal property where value convenience, not for validity or enforceability.
exceeds P5,000 [Art. 748] Thus, before the contracting parties may be
(2) Authority of agent to sell a piece of land or compelled to execute the needed form, it is
any interest therein [Art. 1874] essential that the contract be:
(3) Agreement to pay interest in a contract of (1) perfected or valid [Art.1357]
loan [Art. 1956] (2) enforceable under the Statute of Frauds
(4) Antichresis [Art. 2134] [Art.1356]
(5) Stipulation limiting common carriers
liability [Art. 1744] KINDS OF CONTRACTS
Consensual Contracts which are perfected by
Contracts Which Must Appear In a Public mere consent of the parties regarding the
Instrument subject matter and the cause of the contract
(1) Donations of immovable property [Art. 749] [Art.1315]
PAGE 196
Real Contracts which are perfected not merely REFORMATION OF

by consent but by delivery, actual or
constructive, of the object of the obligation INSTRUMENTS
[Art.1316]. Example: contract of pledge, Remedy by means of which a written instrument
commodatum, mutuum. is made or construed so as to express or
conform to the true intention of the parties
Formal or Solemn Contracts for which a when some mistake, fraud or error has been
special form is necessary for its perfection [Art. committed.
1356]
REQUISITES
Formal/Solemn Special Form Required by (1) Meeting of the minds of the parties
Contract Law (2) There is a written instrument which,
(1) Donations of real Must be in a public however, does not express their true
property instrument [Art.749] intention
(2) Donations of Must be in a written (3) By reason of mistake, fraud, inequitable
personal property contract if the donation conduct or accident [Art. 1359]
exceeds P500 [Art. 748]
(3) Partnerships Must be in public WHEN REFORMATION IS PROPER
where real instrument; otherwise (1) Mutual mistake of parties caused the failure
property the contract of of the instrument to disclose their real
contributed partnership is void agreement [Art.1361]
[Art.1771, 1773] (2) If one party is mistaken and the other acted
(4) Contracts of The principal loan and fraudulently or inequitably [Art. 1362]
antichresis the interest, if any, must (3) When one party was mistaken and the other
be specified in writing; knew but concealed the fact from the
otherwise, the contract former [Art. 1363]
of antichresis is void [Art. (4) When the failure to express the real
2134] agreement was due to the ignorance, lack of
skill, negligence or bad faith of the person
(5) Agency to sell real Authority of the agent
drafting the instrument or of the clerk or
property or any must be in writing;
typist [Art. 1364]
interest therein otherwise, the sale is
(5) When a mortgage or pledge of real property
null and void [Art.1874]
was agreed upon but the instrument only
(6) Stipulation to pay Must be expressly made
states a sale [Art. 1365]
interest on loans, in writing [Art.1956]
interest for the use
WHEN REFORMATION IS NOT PROPER
of money
(1) Simple donations inter vivos wherein no
(7) Stipulation Must be (1) in writing, condition is imposed
limiting common signed by the shipper or
(2) Wills
carriers duty of owner; (2) supported by
(3) When the real agreement is void
extraordinary a valuable (4) When one of the parties has brought an
diligence to
consideration; and (3) action to enforce the instrument, he cannot
ordinary diligencereasonable, just and not subsequently ask for its reformation
contrary to public policy.
(8) Chattel mortgage Must be recorded in the
Chattel Mortgage RESCISSIBLE CONTRACTS
Register [Art. 2140] Contracts which are valid until rescinded. All
(9) Transfer of large Requires transfer of the essential requisites of a contract exist but there
cattle certificate of registration is injury or damage to one of the parties or to
[Rev. Adm. Code, Sec. third persons external or extrinsic defect
523] consisting of an economic damage or lesion.
[Paras]
PAGE 197
Art. 1381. The following contracts are rescissible: Distinguished from Rescission/Resolution under
(1) Those which are entered into by Art. 1191 [Congregation of the Religious Virgin
guardians whenever the wards whom they Mary vs. Orola (2008)]
represent suffer lesion by more than one-fourth Rescission or Rescission by reason of
of the value of the things which are the object Resolution [Art. 1191] lesion[Art. 1381]
thereof; Applies only to Does not apply to
(2) Those agreed upon in representation of reciprocal reciprocal obligation,
absentees, if the latter suffer the lesion stated in obligations, such that and therefore, action is
the preceding number; a partys breach not based on a breach
(3) Those undertaken in fraud of creditors thereof partakes of a of an obligation.
when the latter cannot in any other manner tacit resolutory
collect the claims due them; condition which
(4) Those which refer to things under entitles the injured
litigation if they have been entered into by the party to rescission.
defendant without the knowledge and approval Predicated on breach Predicated on injury to
of the litigants or of competent judicial of faith. economic interests of
authority; the party
(5) All other contracts specially declared by plaintiff/lesion.
law to be subject to rescission. Principal action that Subsidiary action.
is retaliatory in
character.
Art. 1382. Payments made in a state of
The reparation of The cause of action is
insolvency for obligations to whose fulfillment
damages for the subordinated to the
the debtor could not be compelled at the time
breach is purely existence of an
they were effected, are also rescissible.
secondary. economic prejudice.
Hence, where the
Rescission Process designated to render
defendant makes good
inefficacious a contract validly entered into and
the damages caused,
normally binding, by reason of external
the action cannot be
conditions, causing an economic prejudice to a
maintained or
party or to his creditors [Scaevola].
continued.
Remedy granted by law to the contracting
Effects of Rescission
parties and to third persons in order to secure
It creates an obligation to return the things
reparation for damages caused them by a
which were the object of the contract, together
contract, even if the contract is valid, by means
with their fruits, and the price with its interests.
of the restoration of things to their condition
prior to the celebration of said contract
However, if the object of the contract is in the
[Manresa]
possession of third persons in good faith,
rescission cannot take place and indemnity for
Relief to protect one of the parties or a third
damages may be demanded from the person
person from all injury and damages which the
causing the loss [Art. 1385]
contract may cause, to protect some
preferential right [Aquino v. Taedo (1919)]
Prescription of the Action to Claim Rescission
The action to claim rescission must be
commenced within four years.
For persons under guardianship and for

absentees, the period of four years shall not
begin until the termination of the former's
incapacity, or until the domicile of the latter is
known. [Art. 1389]
PAGE 198
VOIDABLE CONTRACTS Effect of Ratification

Contracts which are valid until annulled, unless It cleanses the contract from all its defects from
ratified. Defect is more or less intrinsic, as in the the moment it was constituted [Art. 1396]
case of vitiated consent [Paras]
Effects of Annulment
The contracting parties shall restore to each
Art. 1390. The following contracts are voidable other the things which have been the subject
or annullable, even though there may have been matter of the contract, with their fruits, and the
no damage to the contracting parties: price with its interest, except in cases provided
(1) Those where one of the parties is incapable by law. [Art. 1398]
of giving consent to a contract;
(2) Those where the consent is vitiated by When the defect of the contract consists in the
mistake, violence, intimidation, undue incapacity of one of the parties, the
influence or fraud. incapacitated person is not obliged to make any
restitution except insofar as he has been
These contracts are binding, unless they are benefited by the thing or price received by him
annulled by a proper action in court. They are [Art. 1399]
susceptible of ratification.
THREE WAYS OR MODES OF UNENFORCEABLE CONTRACTS

CONVALIDATING A VOIDABLE CONTRACT Contracts which cannot be sued upon or
[JURADO] enforced, unless ratified. Intermediate ground
(1) By prescription of the action for annulment between voidable and void contracts [Paras]
[Art.1391] Those that cannot be enforced in court or sued
(2) By ratification or confirmation [Art. 1392- upon by reason of certain defects provided by
1396] law until and unless they are ratified according
(3) By loss of the thing which is the object of to law [De Leon]
the contract through the fraud or fault of
the person who is entitled to institute the
Art. 1403. The following contracts are
action for the annulment [Art.1401]
unenforceable, unless they are ratified:
(1) Those entered into in the name of another
PRESCRIPTION OF THE ACTION FOR
person by one who has been given no
ANNULMENT
authority or legal representation, or who has
The action for annulment shall be brought
acted beyond his powers;
within four years
(2) Those that do not comply with the Statute of
(1) From the time the defect of the content
Frauds as set forth in this number. In the
ceases, in cases of intimidation, violence or
following cases an agreement hereafter
undue influence
made shall be unenforceable by action,
(2) From the time of discovery of the fraud or
unless the same, or some note or
mistake
memorandum, thereof, be in writing, and
(3) From the time guardianship ceases, in
subscribed by the party charged, or by his
actions referring to contracts entered into by
agent; evidence, therefore, of the agreement
minors or incapacitated persons
cannot be received without the writing, or a
secondary evidence of its contents:
RATIFICATION
(a) An agreement that by its terms is not to
(1) Express or
be performed within a year from the
(2) Tacit When the person who has the right to
making thereof;
invoke it, with the knowledge of the reason
(b) A special promise to answer for the debt,
which renders the contract voidable and such
default, or miscarriage of another;
reason having ceased, executes an act
(c) An agreement made in consideration of
implying an intention to waive his right [Art.
marriage, other than a mutual promise to
1393]
marry;
PAGE 199
(d) An agreement for the sale of goods, specific performance of said agreement
chattels or things in action, at a price not [Lim vs. Lim, 10 Phil 635]
less than five hundred pesos, unless the (5) The Statute of Frauds is exclusive, that is, it
buyer accept and receive part of such applies only to the agreements or contracts
goods and chattels, or the evidences, or enumerated therein [See Quintos v. Morata
some of them, of such things in action or (1930)]
pay at the time some part of the purchase (6) The Statute of Frauds is a personal
money; but when a sale is made by defense, that is, a contract infringing it
auction and entry is made by the cannot be assailed by third persons
auctioneer in his sales book, at the time of [Art.1408]
the sale, of the amount and kind of (7) Contracts infringing the Statute of Frauds
property sold, terms of sale, price, names are not void, they are merely unenforceable
of the purchasers and person on whose [Art.1403]
account the sale is made, it is a sufficient (8) The Statute of Frauds does not determine
memorandum; the credibility or weight of evidence. It
(e) An agreement for the leasing for a longer merely concerns itself with the
period than one year, or for the sale of admissibility thereof.
real property or of an interest therein; (9) The Statute of Frauds does not apply if it is
(f) A representation as to the credit of a third claimed that the contract does not express
person. the true agreement of the parties. As long
(3) Those where both parties are incapable of as the true or real agreement is not
giving consent to a contract. covered by the Statute of Frauds, it is
provable by oral evidence [Cayuga v.
Santos]
KINDS OF UNENFORCEABLE
CONTRACTS
(1) Unauthorized contracts those entered into
VOID OR INEXISTENT
by one who has no authority or legal CONTRACTS
representation or who has acted beyond his Contracts which have no effect at all and cannot
powers [Art.1403, par.1] be ratified or validated [Paras]
(2) Those which did not comply with the Statute
of Frauds [Art.1403, par.2] Those which, because of certain defects,
(3) Those where both parties are incapable of generally produce no effect at all. They are
giving consent to a contract [Art.1403, par.3] considered as inexistent from its inception or
from the very beginning [De Leon]
GENERAL RULES OF APPLICATION
OF STATUTE OF FRAUDS Art. 1409. The following contracts are inexistent
(1) The Statute of Frauds is a Rule of Exclusion, and void from the beginning:
i.e. oral evidence might be relevant to the (1) Those whose cause, object or purpose is
agreements enumerated therein and might contrary to law, morals, good customs,
therefore be admissible were it not for the public order or public policy;
fact that the law excludes said oral (2) Those which are absolutely simulated or
evidence. fictitious;
(2) The defense of the Statute of Frauds may be (3) Those whose cause or object did not exist at
waived [Art.1405] the time of the transaction;
(3) Applies only to executory contracts, not (4) Those whose object is outside the commerce
partially or completely executed of men;
(consummated) contracts. (5) Those which contemplate an impossible
(4) The Statute of Frauds cannot apply if the service;
action is neither for damages because of the (6) Those where the intention of the parties
violation of an agreement nor for the relative to the principal object of the contract
cannot be ascertained;
PAGE 200
(7) Those expressly prohibited or declared void

by law.
These contracts cannot be ratified. Neither can

the right to set up the defense of illegality be
waived.
SPECIAL CLASSIFICATION OF VOID

CONTRACTS [PARAS]
(1) Inexistent Contracts: like those where
essential formalities are not complied with.
This produces no effect whatsoever.
Example: A donation of land in a private

instrument
(2) Illegal Or Illicit Contracts: In some way, the

donation produces some effect in that that
he who gave the donation cannot get back
what he has given.
Example: A donation made because of an

immoral condition, such as illicit sexual
intercourse
Non-Existing Cause or Object [Paras] Paragraph

3 speaks of contracts whose object or cause did
not exist at the time of the transaction. This is
not exactly correct because there can be valid
contracts involving future property; example,
sale of future or after-acquired property. Thus,
Mr. Justice J. B. L. Reyes notes: Did not exist at
the time of the transaction should be Could
not come into existence because the object may
legally be a future thing.
PAGE 201
Rescissible Voidable Unenforceable Void

Defect
Damage to a party or to a Vitiation of consent Without or in excess of Absolute lack of essential
third person. authority, or doesnt requisite in fact or in law.
comply with Statute of
Fraud, or both parties are
incapacitated.
Effect
Valid until rescinded. Valid until annulled. Cannot be enforced by Does not produce any
court action. effect.
Grounds
Arts. 1381 1382 Art. 1390 Art. 1403 Art. 1409
(1) Those which are (1) Those where one of the (1) Those entered into in (1) Those whose cause,
entered into by parties is incapable of the name of another object or purpose is
guardians whenever giving consent to a person by one who has contrary to law,
the wards whom they contract; been given no authority morals, good customs,
represent suffer lesion or legal representation, public order or public
by more than one- (2)Those where the or who has acted policy;
fourth of the value of consent is vitiated by beyond his powers;
the things which are mistake, violence, (2) Those which are
the object thereof; intimidation, undue (2) Those that do not absolutely simulated
(2) Those agreed upon in influence or fraud. comply with the or fictitious;
representation of Statute of Frauds as set
absentees, if the latter forth in this number. In (3) Those whose cause or
suffer the lesion stated the following cases an object did not exist at
in the preceding agreement hereafter the time of the
number; made shall be transaction;
(3) Those undertaken in unenforceable by
fraud of creditors when action, unless the (4) Those whose object is
the latter cannot in any same, or some note or outside the commerce
other manner collect memorandum, thereof, of men;
the claims due them; be in writing, and
(4) Those which refer to subscribed by the party (5) Those which
things under litigation charged, or by his contemplate an
if they have been agent; evidence, impossible service;
entered into by the therefore, of the
defendant without the agreement cannot be (6) Those where the
knowledge and received without the intention of the parties
approval of the writing, or a secondary relative to the principal
litigants or of evidence of its object of the contract
competent judicial contents: cannot be ascertained;
authority; (a) An agreement that by
(5) All other contracts its terms is not to be (7) Those expressly
specially declared by performed within a prohibited or declared
law to be subject to year from the making void by law.
rescission. thereof;
(6) Payments made in a (b) A special promise to
state of insolvency for answer for the debt,
obligations to whose default, or miscarriage
fulfillment the debtor of another;
could not be (c) An agreement made in
compelled at the time consideration of
they were effected, are marriage, other than a
also rescissible. mutual promise to
marry;
PAGE 202
Rescissible Voidable Unenforceable Void

(d) An agreement for the
sale of goods, chattels
or things in action, at
a price not less than
five hundred pesos,
unless the buyer
accept and receive
part of such goods
and chattels, or the
evidences, or some of
them, of such things
in action or pay at the
time some part of the
purchase money; but
when a sale is made
by auction and entry is
made by the
auctioneer in his sales
book, at the time of
the sale, of the
amount and kind of
property sold, terms
of sale, price, names
of the purchasers and
person on whose
account the sale is
made, it is a sufficient
memorandum;
(e) An agreement for the

leasing for a longer
period than one year,
or for the sale of real
property or of an
interest therein;
(f) A representation as to
the credit of a third
person.
(3) Those where both

parties are incapable
of giving consent to a
contract.
Necessity of Damage
Necessary. Not necessary.
Ratification
Cant be ratified. May be ratified. Cant be ratified.
Prescription
Prescriptible. - Imprescriptible.
Assailability by third persons
Assailable by a party or by a third Assailable only by a party. Assailable by a party or by a third
party who is damaged. party who is damaged.
PAGE 203
EFFECT OF CONTRACTS 1404 regarding unauthorized contracts shall

General rule: Contracts are generally effective govern. In the second case, the rules on
only between the parties, their assigns and their agency in Title X of this Book shall be
heirs (principle of relativity) [Art. 1311] applicable.
Exceptions: Requisites:
(1) Obligations arising from the contract are (1) The property or business is abandoned by its
not transmissible by nature, stipulation or owner
law [Art.1311] (2) One voluntarily takes charge of the agency or
(2) Where there is a stipulation pour autrui. management of the business or property
Stipulation Pour Autrui - stipulation in favor (3) Such taking charge was without any
of a third person conferring clear and authorization from the owner, whether
deliberate favor which is merely art of the express or tacit.
contract entered into by parties, neither of
whom acted as agent of third person. LIABILITIES OF THE OFFICIOUS
(3) Third person induces another to violate his MANAGER
contract [Art. 1314]. (1) To pay damages which through his fault or
(4) Where third persons may be adversely negligence may be suffered by the owner
affected by a contract where they did not [Art. 2145]
participate [See Arts. 1312, 2150, 2151]. (2) For the acts of the person to whom he
(5) Where law authorizes creditor to sue on a delegated his duties [Art. 2146]
contract entered into by his debtor (Accion (3) For any fortuitous event
Directa) [Art. 1313] (a) If he undertakes risky operations which
the owner was not accustomed to
Quasi-Contracts embark upon
(b) If he has preferred his own interest to
that of the owner
Art. 2142. Certain lawful, voluntary and (c) If he fails to return the property or
unilateral acts give rise to the juridical relation business after demand by the owner
of quasi-contract to the end that no one shall be (d) If he assumed the management in bad
unjustly enriched or benefited at the expense of faith
another. (e) If he is manifestly unfit to carry on the
management, except when the
NEGOSTIORUM GESTIO management was assumed to save
property or business from imminent
danger
Art. 2144. Whoever voluntarily takes charge of
(f) If by his intervention he prevented a
the agency or management of the business or
more competent person from taking up
property of another, without any power from the
the management, except when the
latter, is obliged to continue the same until the
management was assumed to save
termination of the affair and its incidents, or to
property or business from imminent
require the person concerned to substitute him,
danger [Arts. 2147- 2148]
if the owner is in a position to do so. This
(4) For contracts he has entered into with third
juridical relation does not arise in either of these
persons, except:
instances:
(a) If the owner has expressly or tacitly
ratified the management, or
(1) When the property or business is not
(b) When the contract refers to things
neglected or abandoned;
pertaining to the owner of the business
[Art. 2152]
(2) If in fact the manager has been tacitly
authorized by the owner. In the first case, the
provisions of articles 1317, 1403, No. 1, and
PAGE 204
LIABILITIES OF THE OWNER Art. 2165. When funeral expenses are borne by a
(1) As principal upon the ratification of the third person, without the knowledge of those
management [Art. 2149] relatives who were obliged to give support to
(2) To reimburse the officious manager the the deceased, said relatives shall reimburse the
necessary and useful expenses and third person, should the latter claim
damages suffered in the performance of the reimbursement.
latters duties
(a) If the owner enjoys the advantages of
Art. 2166. When the person obliged to support
the property or business [Art. 2150]
an orphan, or an insane or other indigent person
(b) When the management had for its
unjustly refuses to give support to the latter, any
purpose the prevention of an imminent
third person may furnish support to the needy
and manifest loss, although no benefit
individual, with right of reimbursement from the
may have been derived [Art. 2150]
person obliged to give support. The provisions
(c) When the officious manager has acted
of this article apply when the father or mother of
in good faith, and the property or
a child under eighteen years of age unjustly
business is intact, ready to be returned
refuses to support him.
to the owner [Art. 2151]
EXTINGUISHMENT [ART. 2153] Art. 2167. When through an accident or other

cause a person is injured or becomes seriously
THE MANAGEMENT IS EXTINGUISHED: ill, and he is treated or helped while he is not in
(1) When the owner repudiates it or puts an a condition to give consent to a contract, he
end thereto shall be liable to pay for the services of the
(2) When the officious manager withdraws physician or other person aiding him, unless the
from the management, subject to the service has been rendered out of pure
provisions of Article 2144 generosity.
(3) By the death, civil interdiction, insanity or
insolvency of the owner or the officious Art. 2168. When during a fire, flood, storm, or
manager. other calamity, property is saved from
destruction by another person without the
SOLUTIO INDEBITI knowledge of the owner, the latter is bound to
pay the former just compensation.
Art. 2154. If something is received when there is

Art. 2169. When the government, upon the
no right to demand it, and it was unduly
failure of any person to comply with health or
delivered through mistake, the obligation to
safety regulations concerning property,
return it arises.
undertakes to do the necessary work, even over
his objection, he shall be liable to pay the
Art. 2155. Payment by reason of a mistake in the expenses.
construction or application of a doubtful or
difficult question of law may come within the
Art. 2170. When by accident or other fortuitous
scope of the preceding article.
event, movables separately pertaining to two or
more persons are commingled or confused, the
OTHER QUASI-CONTRACTS rules on co-ownership shall be applicable.
Art. 2164. When, without the knowledge of the Art. 2171. The rights and obligations of the finder
person obliged to give support, it is given by a of lost personal property shall be governed by
stranger, the latter shall have a right to claim articles 719 and 720.
the same from the former, unless it appears
that he gave it out of piety and without
intention of being repaid.
PAGE 205
Art. 2172. The right of every possessor in good

faith to reimbursement for necessary and useful
expenses is governed by article 546.
Art. 2173. When a third person, without the

knowledge of the debtor, pays the debt, the
rights of the former are governed by articles
1236 and 1237.
Art. 2174. When in a small community a majority

of the inhabitants of age decide upon a measure
for protection against lawlessness, fire, flood,
storm or other calamity, anyone who objects to
the plan and refuses to contribute to the
expenses but is benefited by the project as
executed shall be liable to pay his share of said
expenses.
Art. 2175. Any person who is constrained to pay

the taxes of another shall be entitled to
reimbursement from the latter.
PAGE 206
PAGE 207
UP LAW BOC SALES CIVIL LAW
Definition and Essential (3) Determinate subject matter
Requisites Must be determinate or capable of being

determinate
DEFINITION OF SALES Price certain in money or its equivalent

(cause/consideration)
Art. 1458, CC. By the contract of sale one of the
contracting parties obligates himself to transfer Absence of Price vs Non-Payment of Price:
the ownership and to deliver a determinate In the absence of price, the sale is non-existent.
thing, and the other to pay therefor a price Meanwhile, in non-payment, there is a valid sale
certain in money or its equivalent. where one is only given the remedy of rescission
or specific performance.
A contract of sale may be absolute or
conditional. Bad faith and inadequacy of monetary
consideration do not render a conveyance
inexistent, for the assignor's liberality may be
The essence of a contract of sale is the
sufficient cause for a valid contract, whereas
transfer of ownership.
fraud or bad faith may render either rescissible
or voidable, although valid until annulled, a
ESSENTIAL REQUISITES OF A contract concerning an object certain entered
CONTRACT OF SALE into with a cause and with the consent of the
contracting parties. [Ong v. Ong (1985)]
ESSENTIAL ELEMENTS OF A VALID
CONTRACT OF SALE NON-ESSENTIAL ELEMENTS OF A
[Coronel v. Court of Appeals (1996); De Leon CONTRACT OF SALE
(2010)]:
(1) Natural those deemed to exist in certain
(1) Consent or meeting of the minds to transfer contracts in the absence of any contrary
ownership in exchange for the price stipulations.
(2) Accidental those which may be present or
(2) Being a consensual contract, the contract of absent depending on the stipulations of the
sale is perfected at the moment there is a parties.
meeting of the minds upon the thing which
is the object of the contract and upon the
price. [Art. 1475] STAGES OF CONTRACT OF SALE
REQUISITES: PHASES OF A SALE CONTRACT[Villanueva]:
(1) Capacity (1) Preparation, conception, negotiation, or
(2) Offer and acceptance generation stage period of negotiation
(3) No vitiation of consent and bargaining, ending at the moment of
agreement of the parties.
Exceptions to consent being a requisite: (2) Perfection or birth of the contract
(1) Expropriation moment when the parties come to agree on
(2) Ordinary execution sale the terms of the contract; and
(3) Judicial foreclosure sale (3) Consummation or death of the contract
(4) Extra-judicial foreclosure sale process of fulfillment or performance of the
terms agreed upon in the contract.
Special Case: If sale involves the conjugal
property of spouses, consent must be given by
both.
PAGE 208
OBLIGATIONS CREATED which gives greater reciprocity of interests.

[Art. 1378]
Art. 1165, CC. When what is to be delivered is a (5) Commutative because a thing for value is
determinate thing, the creditor, in addition to exchanged for equal value, as contrasted
the right granted him by Article 1170, may from an aleatory contract.
compel the debtor to make the delivery. Test: As long as the party believes in all
honesty that he is receiving equal for what he
If the thing is indeterminate or generic, he may gave up for, then commutative character is
ask that the obligation be complied with at the complied with.
(6) Nominate given a particular name by law
expense of the debtor.
If the obligor delays, or has promised to deliver SALE IS TITLE AND NOT MODE
the same thing to two or more persons who do Delivery or Tradition is the mode to transfer
not have the same interest, he shall be ownership and possession to the buyer.
responsible for any fortuitous event until he has
When a contract of sale is perfected, the seller is
effected the delivery.
merely obligated to transfer ownership and to
deliver the property. Transfer of ownership is
Specific or Determinate Thing capable of effected only upon delivery.
particular designation, e.g. this car, the car with
plate no. XNY 200 Sale is merely title that creates the obligation
on the part of the seller to transfer ownership
Generic or Indeterminate Thing refers only to a and deliver possession, but on its own, sale is
class, to a genus, and cannot be pointed out not a mode that transfers ownership. [Equatorial
with particularity, e.g. a car (genus Realty Dev. v. Mayfair Theater (2001)]
nunquamperit)
SALE DISTINGUISHED FROM OTHER
NATURE OF OBLIGATIONS CREATED PER
CONTRACTS
DEFINITION IN ART. 1458[Villanueva]
(1) For the SELLER: DONATION
(a)To transfer ownership and Sale Donation
(b)To deliver possession of the subject
matter Onerous Gratuitous
(2) For the BUYER: To pay the price Perfected by mere Must comply with the
consent formalities required
CHARACTERISTICS OF A CONTRACT by law. [Art 745, CC]
OF SALE
(1) Consensual perfected by mere consent and When the price of the contract of sale is
without any further acts. simulated, the sale may be void but the act may
(2)Bilateral and Reciprocal imposes be shown to have been in reality a donation or
obligations on both parties to the some other contract. [Art.1471, CC]
relationship. Consequently, power to rescind
BARTER
is implied.
(3) Principal can stand on its own and does Sale Barter
not depend on another contract for validity, Consideration is price Consideration is
as contrasted from an accessory contract. in money or its another thing
(4) Onerous imposes valuable consideration equivalent
as prestation, as distinguished from a
gratuitous contract. Barter is a contract where one of the parties binds
Consequence: all doubts in construing an himself to give one thing in consideration of the
onerous contract shall be resolved in that others promise to give another thing [Art.1638,
CC]
PAGE 209
DACION EN PAGO
If consideration consists partly in money and Sale Dacion en pago
partly in another thing, the intention of the parties
determines whether the contract is one of sale or No pre-existing debt Pre-existing debt
barter. Creates an obligation Extinguishes the
obligation (mode of
If manifest intention is not clear: Barter when the payment)
value of thing is more than the amount of Price is more freely Price is value of the
money or its equivalent; otherwise, sale. agreed upon, fixed by thing given
[Art.1468] the parties
Buyer has to pay the Payment is received
If the local currency is exchanged with other price by the debtor before
denominations of local currency also, there is contract is perfected
barter.
There is a novation of the contract of loan into a
CONTRACT FOR A PIECE OF WORK contract of sale when the creditor agrees to
Contract for a Piece of accept a thing in payment of the debt. Hence, if
Sale the thing given in payment turns out to belong
Work
Goods are Goods are to another, the creditors remedy should be
manufactured or manufactured for governed by the law on sales, not loan. [Baviera]
procured in the customer upon his
ordinary course of special order Bilateral promise to buy and sell [Asked in 80,
business 91]
For the general market, For a specific A promise to buy and sell a determinate thing
whether on hand or not customer for a price certain is reciprocally demandable.
Governed by Statute of Not within Statute of [Art 479, CC]
Frauds Frauds
Like a sale, the thing must be determinate and
The fact that the object were made by the seller the price, certain.
only when customers placed their orders, does
not alter the nature of the contract of sale, for it CONTRACT OF SALE/CONTRACT TO SELL
only accepted such orders as called for the Contract of Sale Contract to sell
employment of such materials as it ordinarily Ownership is Ownership is only
manufactured or was in a position habitually to transferred upon transferred upon full
manufacture such. [Celestino Co & Co vs. delivery payment of price
Collector (1956)] Non-payment is a Full payment is a
When each product or system executed is resolutory condition positive suspensive
always UNIQUE and could not mass-produce condition, hence non-
the product because of its very nature, such is a payment would not
contract for a piece of work. [Commissioner vs. give rise to the
Engineering Equipment and Supply Co. (1975)] obligation to transfer
ownership
Conditional Contract of
Contract to sell
Sale
Sale is already No perfected sale yet
perfected
A subsequent buyer is A subsequent buyer is
presumed to be a presumed to be a
buyer in bad faith buyer in good faith
PAGE 210
ABSOLUTE INCAPACITY
Sale Agency to sell (MIND-CI) [Art. 1327, CC]
(1) Minors
Buyer receives the Agent receives good (2) Insane or Demented
goods as owner as goods of the (3) Deaf-mutes who do not know how to write
principal (4)Civil Interdiction
Agent delivers the (5) Judicially-declared Incompetents (Art. 39)
Buyer pays the price price which he got (a) Prodigals
from his principal (b) Imbeciles
Buyer cannot return Agent cant return the (c) Absence & presumption of death
the object sold as a goods (d) Persons not of unsound mind but by
general rule reason of age, disease, weak mind, and other
similar causes, cannot take care of
Seller warrants the Agent makes no themselves and manage their property
thing sold warranty without outside aid (Easy prey for deceit and
Not unilaterally Essentially revocable exploitation)
revocable
RELATIVE INCAPACITY: MARRIED PERSONS
(1) Husband and Wife[Art. 1490, CC]
Sale Lease General Rule: Cannot sell property to each
Ownership transferred No transfer of other
by delivery ownership Exceptions:
Permanent Temporary (1) Separation of property in marriage
settlement, OR
Seller must be owner Lessor neet not be (2) Judicial separation of property.
at time of delivery owner
Although certain transfers from husband to wife
KINDS OF CONTRACT OF SALE or vice versa are prohibited, such prohibition can
(1) Absolute when sale is not subject to any be taken advantage of only to persons who bear
condition and the title immediately passes to such relation to parties making transfer with
the purchaser upon delivery their rights or interest. Unless such a
(2) Conditional ownership of the object relationship appears, the transfer cannot be
remains with the vendor until fulfillment of the attacked. [Cook v. McMicking (1914)]
condition/s
Sale by husband in favor of a concubine after he
had abandoned his family and left conjugal
home where his wife and children lived and
Parties to a Contract of from whence they derived their support, is void.
[Ching v. Goyanko, Jr. (2006)]
Sale
Similarly, donations are prohibited. This is so
CAPACITY OF PARTIES because if such transfers areallowed during
Art. 1489, CC. All persons who have capacity to marriage, then the same would destroy the
enter into obligations may enter into a contract system of conjugal partnership, a basic policy in
of sale. civil law.
(2) Alienage [Art. 39,CC]
KINDS OF INCAPACITY GeneralRule: Aliens are disqualified from
(1) Absolute incapacity when persons cannot purchasing or acquiring real property.
bind themselves at all Exception: If acquisition is through hereditary
(2)Relative incapacityonly with regards to succession
certain persons and certain class of property
(3) Specific incapacity/Special disqualifications (3) Trusteeship[Art. 39, CC]
PAGE 211
SPECIAL DISQUALIFICATIONS Includes judges and government experts

who, in any manner whatsoever take part in
SPECIFICINCAPACITY/ SPECIAL DISQUALIFICATIONS the sale.
(AGE-PLJ) [Art. 1491, CC]
(5) Lawyers
The sale entered into by agents, guardians, and Cannot acquire or purchase property or
executors and adminsitrators shall be voidable rights in litigation in which they take part by
because it affects only private interests. virtue of their profession
The sale entered into by public officers, lawyers,
justices and judges, and others specially Rationale: Lawyers may have undue
disqualified by lawshallbe void because it influence over client; greed may get the
affects the public interest. better of the sentiments of loyalty and
(1) Agents disinterestedness. [Valencia v Cabanting,
Cannot purchase or acquire property whose 1991]
administration or sale was entrusted to them
Prohibition is definite and permanent and
Exception: Principal gives consent. cannot be cured by ratification. [Rubias v
Batiller, 1973]
(2) Guardian
Cannot purchase property of person under Exceptions:An assignment to a lawyer by his
his guardianship client of an interest in the property does not
violate Art 1491, where:
Rationale: Guardianship is a trust of the (1) A judgment has been rendered and has
highest order, and the trustee cannot be become final; and
allowed to have any inducement or neglect (2) In case of contingency fee arrangements:
his wards interest. [Phil Trust Co v Roldan, the interest of the lawyer may be
1956] annotated as an adverse claim on the
property awarded to his client [Director of
Art. 1491(2) in relation to Art. 1409 does not Lands v Ababa, 1979]
apply where the sale was under a special power
attached to the real estate mortgage, pursuant Contract stipulating a contingent fee is not
law. Under Act No. 3135, a mortgagee-creditor prohibited because payment of such fee is not
is allowed, as an exception, to participate in the made during pendency of litigation but only
bidding under the same condition as any other after judgment. A lawyer may have lien over
bidder. [Fiestan v. CA (1990)] funds and property of client and may apply as
may be necessary to satisfy his lawful fees and
(3) Executors and Administrators disbursements. As long as the lawyer does not
Cannot acquire or purchase property of exert undue influence, and that no fraud is
estate under their administration committed, or no imposition applied, or that
compensation is clearly not excessive as to
The prohibition on executors and administrators amount to extortion, a contract for contingent
does not apply if the principal consents to the fee is valid and enforceable.Also, a reading of
sale. [Distajo v. CA (2000)] contract is 40% of the value of properties.
[Fabillo v. IAC (1991)]
(4) Public Officers and Employees
Cannot acquire or purchase property of (6) Justices, Judges, prosecuting attorneys, clerks
State/any of its subdivisions, GOCC or and other officers and employees connected with
administration, the administration of which the administration of justice
was entrusted to them. Cannot acquire or purchase property or
rights in litigation or levied upon on
execution before the court within whose
PAGE 212
jurisdiction or territory they exercise their (2) To avoid undue advantage of the
respective functions. dominant spouse over the weaker spouse.
(3) To avoid circumvention of the prohibition
Rationale: to prevent fraud and to surround against donations between spouses.
their profession with prestige. [Medina v CIR, 1961]
Prohibition applies only on sales or Such prohibition shall likewise apply to

assignment during the pendency of litigation common law spouses. [Calimlim-Canulas v
involving the property. [Macariola v Asuncion, Fortun, 1984] BUT if already sold to a third
1963] person who relied on the title of his
immediate seller, reconveyance to the seller
(7) Others specially disqualified by law spouse is no longer available [Cruz v CA,
(a) Aliens 1997]
GeneralRule: Aliens are disqualified from (3) Specific Incapacity/ Special Disqualifications
purchasing or acquiring real property. Contracts expressly prohibited by law are
void and cannot be ratified. Neither can the
Exception: If acquisition is through hereditary right to set-up the defense of illegality be
succession waived. [Art. 1409 (7), CC]
(b) Unpaid sellers with goods in transit from Sales entered into by guardians,
buying the goods administrators, and agents (specific
incapacities) in violation of Art. 1491 may be
(c) Officer conducting the execution sale of ratified by means of and in the form of a new
deputies contract when the cause of nullity has ceased
to exist. Ratification is valid only from date of
Art 1492: The prohibitions in the two preceding execution of the new contract and does not
articles (Arts. 1490, 1491) are applicable to sales retroact.
in legal redemption, compromises and
renunciations. Those entered into by public
officers/employees, justices and judges, and
lawyers in violation of Art. 1491 are inexistent
EFFECTS OF INCAPACITY
and void from the beginning. [Rubias v
(1) Absolute Incapacity
Batiller, 1973].
(a)If both parties are incapacitated:
UNENFORCABLE [Art. 1403 (3)]
(b) If only 1 party is incapacitated: VOIDABLE
(c)If necessaries are sold and delivered to an Subject Matter
incapacitated person: pay a reasonable
price therefor. [Art 1489, CC]
Necessaries those which are
REQUISITES OF A VALID
indispensable for sustenance, dwelling, SUBJECT MATTER
clothing, medical attendance, education and
transportation. [Art 194, Family Code] FOR RIGHTS:
(1) Transmisible or personal
(2) Relative Incapacity (2) Licit
Sale between spouses is VOID.
FOR THINGS:
Rationale: (1) Licit
(1) To protect 3rd persons who may have (2) Existing, Future, Contingent
contracted with the spouse (3) Determinate or determinable
PAGE 213
MUST BE LICIT[Art. 1459] (4) Sale of land in violation of Cosntitutional

The thing is licit when prohibition against the transfer of lands to
(1) Within the commerce of man [Art 1347, CC] aliens. [Art XII of Constitution]
Example of properties that are not within the
commerce of man: When the subject matter is illicit, the contract of
(a) Those belonging to the State or its sale is void [Art. 1409 (7)]
political subdivisions intended for public use
or public service. [Art 420, CC]. EXISTING, FUTURE, CONTINGENT
(b) Church The goods which form the subject of a
(c)Narcotics or dangerous drugs except upon contract of sale may either be
prescription [RA 6425, The Dangerous Drugs (1) EXISTING goods owned or possessed by the
Act of 1972] seller;
(2)When right is not intransmissible [Art 1347, CC] (2)Goods to be manufactured, raised, OR
(3) It does not contemplate a future inheritance, acquired by the seller FUTURE GOODS;
unless expressly authorized by law [Art 1462, CC]
It is valid only as an executory contract to be
Kinds of illicit things: fulfilled by acquisition and delivery of goods
(1) Per Se of its nature specified.
(2) Per Accidens due to provision of law. (3) Things having POTENTIAL existence may be
the object of a contract of sale. [Art 1461, CC]
Art 1347, paragraph 2,characterizes a contract The thing sold must be specific and
entered into upon future inheritance as void. identified, and owned by the vendor at that
Art. 1347 applies when the following requisities time.
concur:
Sale of MERE hope or Sale of VAIN hope or
(1) Succession has not yet been opened; expectancy expectancy
(2) The object of the contract forms part of Valid BUT subject to Void
the inheritance; and condition that the thing
The promissor has, with respect to the object, an will come into existence Example: Sale of a
expectancy of a right which is purely hereditary falsified raffle ticket
in nature. [Vda.de Cabatu v. Spouses Tabu Example: Next catch which will never win.
(2012)] of a fisherman.
Examples of Illicit Sale EmptioReiSperatei EmptioSpei

(1) Sale of future inheritance is void. [Art. 1347, Valid Void
CC] Sale of a thing not yet in Sale of the hope itself
existence but will exist that a thing will come
The rights to succession are transmitted into existence
from the moment of the death of the Upon the failure of the Where it is agreed that
decedent [Art. 777, CC]. Thus, one cannot condition, the contract buyer will pay the price
sell or promise to sell what he expects to becomes ineffective even if the thing does
inherit from a living person. [Rivero v. not come into
Serrano, 1950] exsitence
Future thing is certsin as Not certain that the
(2) Sale of animals suffering from contagious to itself, but incertain as thing itself will exist
diseases [Art 1575] to quantity and quality
(3) Sale of animals if the use or service for which Deals with a future thing Thing which exists or is
they are acquired has been stated in the present the hope or
expectancy
contract, and they are found to be unfit
In case of doubt, the presumption is in favor of
therefor [Art 1575]
emptioreisperatae since it is more in keeping with
the commutative character of the contract.
PAGE 214
(4) Sale of SPECIFIC THINGS If the obligation to deliver is a determinate

(a)Sale of things in litigation [Art 1381(4)] thing, the creditor has the right t compel
specific performance and to recover damages
Sale of things under litigation entered for breach of the obligation. [Art. 1165, CC;
into by defendant, without the approval of Jurado]
the litigants or the court is rescissible. [Art
1381 (4)] Failure to state the exact location of the land
does not make the subject matter
NO RESCISSION where the thing is indeterminate, so long as it can be located.
legally in the possession of 3rd persons [Camacho v CA (2007)]
who did not act in bad faith [Art 1385 (2)]
The fact that the exact area of the land specified
(b) Sale of an undivided interest in a thing in the contract of sale is subject to the result of
[Art 1463] a survey does not render the subject matter
indeterminate. [Heirs of Juan San Andres v.
(c)Sale of undivided share of a specific mass Rodriguez (2000)]
[Art 1464]
The sale of an undivided share in a

specific mass of fungible goods makes the
Obligations of the Seller
buyer a co-owner of the entire mass in
proportion to the amount he bought.
to Transfer Ownership
If later on it was discovered that the mass
of fungible goods contain less than what OBLIGATIONS OF THE VENDOR
was agreed upon, the buyer becomes IN GENERAL
owner of whole mass and seller must (1) To transfer ownership of the determinate
make up for the difference. [De Leon] thing [Art 1495]
(2) To deliver the thing with its accessions and
A Co-owner cannot sell more than his accessories [Arts 1164, 1166]
share [Yturralde v CA, 1972] (3) To warrant against eviction and against
hidden defects [Arts 1545-1581]
(4) To take care of the thing, pending delivery,
(d)Sale of things subject to reolutory with proper diligence [Art 1163]
condition [Art 1465] (5) To pay for expenses of the deed of the sale
[Art 1487]
Examples:
Things acquired under legal or SALE BY A PERSON NOT THE
conventional right of redemption;
orsubject to reservatroncal; pacto de retro OWNER AT TIME OF DELIVERY
sale
General Rule: Ownership by a vendor at time of
perfection of the contract is not essential.
DETERMINATE OR DETERMINABLE
A thing is DETERMINATE when it is particularly Ownership is transferred upon delivery. [Art.
1495]
designated or physically segregated from all
others of the same class. [Art 1460, CC]
Ownership is not acquired by the buyer. One
cannot give what one does not have. Nemodat
A thing is DETERMINABLE when it is capable of
quod non habet [Art 1505, CC]
being made determinate at the time the
contract was entered into without the necessity
Transfer of ownership is effected even if the
of a new or further agreement between the
parties. [Art 1460, CC] purchase has been made on credit.
PAGE 215
SALE BY A PERSON HAVING A

Payment of the purchase price is not essential
to the transfer of ownership as long as the VOIDABLE TITLE
property sold was delivered. (1) True owner may recover the thing when the
ff. requisites concur:
In all forms of delivery, it is necessary that the (a) Subject matter is movable
act of delivery, whether actual or constructive, (b) Owner has either lost the thing or has
should be coupled with the intention of been unlawfully deprived. [Art 559, CC]
delivering the thing sold. [De Leon]
(2) Reimbursement is necessary before owner
Exceptions: (RE-ROM) can recover when:
(1) Seller has a Right to transfer ownership (a) Buyer acted in good faith
(a) Seller need not be the owner of the (b) Acquired at a public auction [Art 559]
thing at the time of perfection of the
contract. It is sufficient that seller has (3) Recovery no longer possible when:
a right to transfer ownership thereof (a) Buyer in good faith
at the time it is delivered. [Art. 1459] (b) Acquired it at a merchants store, fair or
(b) One who sells something he does not market. [Art 1506, CC]
own yet is bound by the sale when he
acquires the thing later
[BuctonvsGabar, 1974] Price
(2) Estoppel: Owner is, by his conduct,
precluded from denying the sellers authority to MEANING OF PRICE
sell. [Art. 1434] Price signifies the sum stipulated as the
equivalent of the thing sold and also every
(3) Registered land bought in good faith incident taken into consideration for the fixing
of the price put to the debit of the buyer and
General rule: Buyer need not go beyond the agreed to by him [Inchausti v. Cromwell (1911)]
Torrens title
Exception: When he has actual knowledge of REQUISITES FOR A VALID PRICE
facts and circumstances that would impel a (Ce-MoRe)
reasonably cautious man to make further (1) Certain or ascertainable at the time of
inquiry perfection
(2) In Money or its equivalent
(4) Order of courts; Statutory Sale (a)Example of equivalent: Letters of credit
In execution sale, the buyer merely steps into (b) If price is partly in money and partly in
the shoes of the judgment debtor [Rule 39, sec. another thing: Determine manifest
33, ROC] intention of the parties to see whether it
was barter or sale. [Art 1468,CC]
(5) When goods are purchased in Merchants (c)If intention does not clearly appear, it shall
store, Fair, or Market [Art 1505, CC] be considered a barter if the value of the
thing exceed the amount of money or its
The policy of the law has always been that equivalent. [Art 1468,CC]
where the rights and interest of the vendor clash (3) Real
with that of an innocent buyer for value, the When buyer has an intention to pay and the
latter must be protected. [Sun Brothers and Co. seller has an expectation to receive the price
vs. Velasco, 1958] (a) If simulated: Sale is VOID; BUT act may
be shown to have been a donation or
some other act or contract. [Art 1471, CC]
(b) An admission of non-payment of any
centavo in exchange of a property in a
PAGE 216
contract of sale renders the sale VOID. Exceptions:

[Labagala vs. Santiago, 2001] (1) In Voluntary sales
(c) If Price is false when the real (a) Where low price indicates a vice of
consideration is not the price stated in consent, sale may be annulled.
the contract: (b) Where price is so low to be shocking to
i. Sale is void the conscience, then sale may be set aside.
ii. UNLESSproved to be founded on (c) Where price is simulated such as when
another true and lawful price [Art 1353, the real intention was a donation or some
CC] other contract.
(d) Where the parties did not intend to be
HOW PRICE IS DETERMINED bound at all, sale is void.
(1) Fixed by agreement of the parties
(a) Fixing of price cannot be left to the (2) In Involunatry sales
discretion of one of the parties (a) Where price is so low to be shocking to
(b) BUT if such is accepted by the other, sale is the conscience, then judicial sale will be set
perfected. [Art 1473, CC] aside.
(2) Determination is left to the judgment of a (b) If in event of a resale, a better price can
specified person be obtained.
(a) If unable or unwilling: Sale is inefficacious
UNLESS parties subsequently agree about (3) Rescissible contracts of sale
the price. Inadequacy of price is a ground for
(b) If in bad faith/by mistake: Courts may fix rescission of conventional sale under Art
price 1381 (a-b)
(c) If 3rd person is prevented from fixing price
by fault of seller or buyer: Innocent party may WHEN NO PRICE AGREED
avail of remedies. (1) Sale is inefficacious [Art. 1474, CC]
(3) The price is made in reference to another (2) But if the thing or part thereof has been
thing, or when the price fixed is the price of delivered and appropriated by the buyer, he
the commodity on a definite day, or in a must pay a reasonable price therefor.
particular exchange or market, OR when the (a) What is a reasonable price is a question of
amount fixed is above or below the price on fact dependent on the circumstances of
such day, exchange or market. [Art 1472, CC] each particular case. [Art 1474, CC]
(b) The reasonableness of a price may be
When the price is not certain, the contract is determined on the basis of a companys
without effect and no obligation arises from it. balance sheet showing the book value or
Exception: When the thing is already delivered, fair market value of its shares. [Philippine
the buyer must apy a reasonable price therefor. Free Press vs. CA, 2005]
This exception only arises when the means Generally, the reasonable price is the market
contemplated by the parties for fixing the price price at the time and place fixed by the contract
have become ineffectual. or by law for delivery of goods.
INADEQUACY OF PRICE FALSE PRICE vs SIMULATED PRICE

(1)False Price there is a true price but it was
General Rule: Does not affect a contract of not written down in the contract.
sales validity. [Art. 1470, CC] (2) Simulated Price there was no price at all.
Parties merely said that there was a price and
The stipulation in a contract of sale which states created their own price.
that the consideration is P1 and other valuable
considerations does not make the contract
void. Gross inadequacy of price does not affect
the contract of sale except that it may indicate a
defect in consent. [Bagnas v. C.A., 1989]
PAGE 217
MANNER OF PAYMENT MUST BE

AGREED UPON
Formation of Contract of
Disagreement on the manner of payment is Sale
tantamount to a failure to agree on the price.
[Toyota Shaw vs. CA, 1995]] See Spouses
Buenaventura v. CA (2003)
PREPARATORY
EARNEST MONEY VS.OPTION (1) OFFER

IN GENERAL:
MONEY (a) The contract of sale is perfected at the
Earnest Money Definition: paid in advance of the moment there is meeting of the minds
purchase price agreed upon by the parties in a upon the thing which is the object of the
contract of sale, given by the buyer to the seller, contract and upon the price. [Art. 1475,
to bind the latter to the bargain. [Asked in 93, par.1, CC]
02] (b) From that moment, the parties may
reciprocally demand performance,
Option Money vs. Earnest Money [Limson vs. CA, subject to the provisions of law
2001] governing the form of contracts. [Art.
1475, par. 2, CC]
Option Money Earnest Money (c) A private instrument signed by the
Separate and distinct Part of purchase price defendant reciting that he bought from
consideration from the [Art 1482, CC] the plaintiff a property at a specific
purchase price address for a specific price to be paid as
Given when sale is not Given only when there soon as a bill of sale is signed is not a
yet perfected is already a sale mere draft but a perfected agreement
When given, the would- When given, the buyer and hence, obligatory, even if there was
be-buyer is not required is bound to pay the no statement as to area or price per
to buy, but may even balance meter. [Goyena v. Tambunting, 1902]
forfeit it depending on
the terms of the option General Rule: Offer may be withdrawn at any
Grantee of option is still Buyer manifests his time without even communicating such
undecided whether or earnest desire to buy withdrawal to the interested buyer.
not to buy or sell the the property
property [Baviera] Exception: When the offerer has allowed the
offeree a certain period to accept, the offer may
False Price Non-payment of Price be withdrawn at any time before acceptance by
Real price is not Failure of buyer to pay communicating such withdrawal. [Art 1324, CC]
declared the price
Contract is void if it Contract is not void but Exception to the exception: Cannot be
should not be proved gives rise to a right to withdrawn within a certain period if offer is
that it was founded demand fulfillment or founded upon a consideration. [Art 1324 and
upon another casue cancellation of the 1479, CC]
which is true and lawful obligation
[Art 1353, CC] FORM AND TYPE
(a) Offer must be certain as to the object and
There can be sale even when no price is agreed price [Art. 1319, CC]
upon. When the price cannot be determined in
accordance with Arts 1469-1473, the contract is (b) Business advertisements of things for sale
inefficious. Exception: when the thing or part are not offers but mere invitations to make
thereof has been delivered to and appropriated an offer
by the buyer, in which case the buyer has to pay Exception: If otherwise provided [Art. 1325,
a reasonable price therefor. CC]
PAGE 218
evidenced by some acts or conduct

(c)Advertisements for bidders are simply communicated to the offeror, it may be made
invitations to make proposals (Asked in 80) either in a formal or an informal manner, and
Advertiser is not bound to accept the highest may be shown by acts, conduct, or words of
or lowest bid. accepting party that clearly manifest a present
Exception: Unless the contrary appears [Art. intention to accept offer to buy or sell. [Heirs of
1326, CC] Ignacio v. Home Bankers Savings and Trust
Company (2013)]
Fixing terms of offer: The person making the
offer may fix time, place, and manner of An acceptance may contain a request for certain
acceptance [Art 1321] changes in the terms of the offer and yet still be
a binding acceptance (but the requests should
When ineffective:Offer becomes ineffective upon be mere suggestions only, not counter-offers),
death, civil interdiction, insanity, or insolvency of so long as clear that meaning of acceptance is
either party before acceptance is conveyed [Art positively and unequivocally to accept offer,
1323] whether such request is granted or not, a
contract is formed.[Villonco Realty Company v.
(2) ACCEPTANCE Bormaheco, Inc. (1975)]
(a) The acceptance must be absolute.
(b)The acceptance must be plain and (3) OPTION CONTRACT
unconditional. (a) Definition
(c)To bind the offeror, the offeree must i. An accepted unilateral promise to buy
comply with the conditions of the offer. or sell supported by a consideration
Where the acceptance was not in distinct from the price (Art 1479, CC)
accordance with the terms and ii. An option contract is a privilege
conditions of the offer, the offer lapsed existing in one person, for which he had
even though the offeree later on was paid a consideration, which gives him
willing to accept the terms and the right to buy, for example, certain
conditions of the offer. merchandise or certain specified
property, if he chooses, at any time
The acceptance referred to which determines within the agreed period, at a fixed
consent is the acceptance of the offer, and not price. [De la Cavada vs. Diaz, 1918]
of the goods delivered. [National Grains iii. An option is not of itself a purchase,
Authority v. IAC (1989)] but merely secures the privilege to buy.
iv. A consideration for an optional
For price, fixing cannot be left to only one party, contract is just as important as the
but price fixed by one and accepted, leads to a consideration for any other kind of
perfected sale. For consent, offer without contract. If there was no consideration
acceptance means there is no contract. The for the option, then it cannot be
decision to accept proposal must be enforced any more than any other
communicated to the bidder. But a binding contract where no consideration exists.
contract may exist between parties whose [Baviera]
minds are set, although there are no signatures
anywhere, as acceptance may be expressed ir (b) Elements of an Option Contract
implied, recognizing existence of contract of i. Consent
sale.[Robern Development Corporation v. ii. Subject matter: an option right or
Peoples Landless Association (2013)] accepted unilateral offer to buy, or an
option right or accepted unilateral
Receipt of installment payments is not proof of offer to sell a determinate object for a
acceptance. Except where formal acceptance is price certain, including the mannerof
so required, although the acceptance must be payment thereof
affirmatively and clearly made and must be
PAGE 219
iii. Prestation: a consideration separate Difference from Sale

and distinct from the purchase price Sale Right of 1st Refusal
for the optiongiven
Bilateral Unilateral
(c)Difference from Sale Price and other terms Price and other terms
of payment are certain are yet to be agreed
upon
Sale Option Contract
The thing to be sold must be determinate
Bilateral Unilateral: gives a right
to buy or to sell, but Distinction from Option Contract
imposes no obligation
on the part of the Option Contract Right of 1st Refusal
option-holder, aside Separate consideration No need for a
from the consideration is necessary separate
for the offer consideration
Sale of property Sale of right to Grantee has the right No right to buy or sell,
purchase to buy or sell only a right to match
the 1st offer to buy
(4) RIGHT OF FIRST REFUSAL should the grantor
decide to sell
As to enforceability
If the right to the first offer is embodied in the (5) MUTUAL PROMISE TO BUY AND SELL
contract, it should be executed according to the
terms stipulated. The right should be enforced A promise to buy and sell a determinate thing
according to the law on contracts and not on for a price certain is reciprocally demandable.
the panoramic and indefinite rule on human [Art 1479]
relations. This juridical relation is not
amorphous nor is it merely preparatory. The promise made by one party is the
[Equatorial Realty Development vs. Mayfair, 1996] consideration for the promise made by the
other. [Baviera]
When the grantee fails to exercise the right
Only after the grantee fails to exercise its right
of 1st priority under the same terms and PERFECTION
conditions within the period agreed upon, could
the grantor validly offer to sell the property to a WHEN PERFECTED
3rd person under the same terms as offered to (1) Contract of sale is a consensual contract,
the grantee. [Paranaque Kings vs. CA, 1997] hence perfected at the moment of the
meeting of the minds of the parties as to the
As to the effects of the violation of the right object of the contract and the price. [Art
(a) A sale made in violation of a right of first 1475,CC]
refusal is valid but rescissible, and may be (2) It is the proof of all the essential elements of
the subject ofan action for specific the contract of sale, and not the mere giving
performance. [RosencorDevt. Corp. Vs. of earnest money, which establishes the
Inquing, 2001] existence of a perfected sale. [Platinum
(b) However, before the sale to the 3rd Plans Phils. vs. Cucueco, 2006]
person may be rescinded, he must have
been actually or constructively aware of
the right of 1st refusal at the time he EFFECT OF PERFECTION
bought it. From the moment of the perfection of the
(c) The sanction for the enforcement of the contract of sale, the parties may reciprocally
right of first refusal against third persons demand performance, subject to the provisions
is based on Art. 19 of NCC, as no real of the Statute of Frauds. [Art 1475, CC]
right was created on the property.
PAGE 220
PERFECTION OF SALE BY AUCTION [Art 1476] (e) Ratified when defense fails to object to
(1) Contract is perfected when the auctioneer the introduction of parol evidence, or ask
accepts the bid by the fall of the hammer or questions on cross-examination
gavel or in any other customary manner.
(2) If auction is announced to be without The acceptance of a definite agreement on the
reserve, goods cannot be withdrawn from manner of payment of the price is essential
the sale after the bid is made. determining consent. [Limketkai Sons Milling,
(3) By taking part in the auction and offering Inc. v. CA (1996)]
bidding, the buyer voluntarily submitted to
the terms and conditions of the auction sale Sale is consensual, and thus binding when there
announced in the notice. is meeting of minds as to price. Such sale is
(4) Puffing/by-bidding is illegal means valid despite manner of payment, or even
employed by owner to increase the price of breach as to such manner of payment. If real
the bids; illegal. price is not stated in the contract, then the
remedy would be reformation of the contract.
CONSUMMATION Payment has no effect on the validity of the sale,
When parties fulfill their obligations. for payment merely goes into the performance
of the contract. Failure to pay consideration is
not lack thereof. [Spouses Buenaventura v. CA
FORMALITIES OF THE CONTRACT (2003)]
General rule: No form required as to validity
provided all the essengtial requisites are Continued possession of the object of an oral
present. contract has been held to constitute partial
performance, where accompanied by other acts
The sale may be [Art.1483, CC]: which characterize the continued possession
(1) Written and refer to the contract of sale. A tender of
(2) Oral payment, declined by the vendor, has been said
(3) Partly written and partly oral to be equivalent to actual payment, for
(4) Inferred from the conduct of the parties purposes of determining if there has been
partial performance. [Ortega v. Leonardo (1958)]
Exceptions:
(1) For enforceability: Statute of Frauds [Art,1403 (2) Sale of realty by an agent
(2),CC] Agents authority must be in writing, otherwise
(a) Contract or some memorandum thereof the sale is void [Art.1874, CC]
must be in writing and subscribed by the
party or his agent, otherwise contract is (3) Sale of large cattle
unenforceable; unless ratified by failure To be valid, transfer of large cattle must be
to object to oral evidence or acceptance registered with the municipal treasurer [Sec.
of benefits under the contract 529, Revised Administrative Code]
(b) Statute of Frauds covers:
i. Sale of personal property at price (4) For public convenience: In a public document
not less than 500 pesos to compel third parties [Art 1358]
ii. Sale not to be performed within 1 (a) Acts and contracts which have for their
year object the creation, transmission,
iii. Sale of real property or an interest modification or extinguishment of real
therein [Art 1358, CC] rights over immovable property; sales of
(c) Applies only to executory contracts, not to real property or of an interest therein a
contracts either totally or partially governed by Articles 1403, No. 2, and
performed. [Iigo v. Estate of Maloto, 1967] 1405;
(d) Purpose: to prevent fraud or perjury in the (b) The cession, repudiation or renunciation
enforcement of obligations of hereditary rights or of those of the
conjugal partnership of gains;
PAGE 221
(c)The power to administer property, or any GENERAL CONCEPTS

other power which has for its object an Transfer of ownership is effected even if the
act appearing or which should appear in purchase has been made on credit.
a public document, or should prejudice a
third person; Payment of the purchase price is not essential
(d)The cession of actions or rights proceeding to transfer of ownership as long as the property
from an act appearing in a public sold was delivered.
document.
(e) All other contracts where the amount Intention to transfer ownership
involved exceeds five hundred pesos (1) All forms of delivery shall be coupled with
must appear in writing, even a private intention of delivering the thing sold.
one. But sales of goods, chattels or (2) Seller must be owner or authorized by owner
things in action are governed by Articles, of the thing sold
1403, No. 2 and 1405
When right to transfer ownership must exist: At
the time of delivery and not at the time of
Transfer of Ownership perfection of contract of sale.
Delivery comprises 2 obligations in Art. 1495:

OBLIGATIONS OF THE VENDOR: (1) Actual duty to deliver
(a) To transfer ownership of the thing (2)Transfer of ownership can only be
(b) To deliver the thing, with its accessions and accomplished via delivery
accessories, if any
(c) To warrant against eviction and against CONCEPT OF DELIVERY
hidden defects
(d) To take care of the thing, pending delivery, REQUISITES
with proper diligence (1) Identity must be delivered
(e) To pay for the expenses of the deed of sale (2)Integrity in a consition suitable for
enjoyment
MANNER OF TRANSFER (3) Intentional
General Rule: ownership of the thing sold shall
be transferred to the vendee upon actual or WHAT TO DELIVER
constructive delivery thereof [Art 1477] (1) Thing sold [Art. 1495]
(2) Fruits [Art. 1164 & 1537]
Obligation to transfer ownership and to deliver (3) Accessions and accessories [Art. 1166 & 1537]
is implied in every contract of sale [Arts. 1458- (a) Improvements by seller at his expense
1459] grants him a usufructuary right.
(b) No indemnification
Transfer of ownership requires delivery [Art. (c) But he may remove it to the extent that
1495] there is no damage [Art. 1538]
Exceptions (elaborated later) WHERE TO DELIVER

(1) Contrary stipulation (1) A hierarchy is followed:(STOR)
(2) Contract to sell (a) Stipulation
(3) Contract of insurance (b) Usage of trade
(4)Sale on acceptance/Trial (c) Sellers place of business (office)
(5) When seller is not the owner or has voidable (d) Sellers residence
title
(2) In case of specific goods, which the parties
knew to be at some other place when the
contract was perfected, that place is the place
of delivery
PAGE 222
(3) If goods are at the time of sale possessed by Difference between Sale on Approval and Sale
a third person, then there is no delivery until he on Return
acknowledges to the buyer that he holds the Sale on Approval Sale on Return
goods for the buyer.
Ownership does not Ownership passes
pass upon delivery upon delivery, but
WHEN TO DELIVER
buyer may revest
Absent a stipulation as to time, delivery must be
ownership in the
made within a reasonable time; demand or
seller by returning or
tender of delivery shall be made at a reasonable
tendering the goods
hour.
within the time fixed
in the contract
Hour of delivery: usually during business hours
Depends on the Depends on the will
character or quality of of the buyer
WHEN DELIVERY DOES NOT TRANSFER
goods
TITLE
(1) Sale on Approval or Trial Subject to a suspensive Subject to a
General Rule: Title remains with the seller. condition resolutory condition
Buyer has option to purchase goods if proven Risk of loss remains Risk of loss remains
satisfactory, the approval of the buyer being a with the seller with the buyer
condition precedent. (Same exceptions with sale
on return) Express Reservation
If it was stipulated that ownership in the thing
The relationship between seller and buyer, if no shall not pass to the purchaser until he has fully
absolute sale yet, is that of a bailor and bailee paid the price [Art 1478, CC]
If there is no time for approval specified but with

periof for trial, then approval shall be made Implied Reservation
wuthin a reasonable period after the trial period The following are instances when there is an
expires. implied reservation of ownership:
(a) Goods are shipped, but by the bill of
(2) Sale on Return or Satisfaction lading goods are deliverable to the seller
General Rule: Title remains with the seller for or his agent, or to the order of the seller or
parties agree that buyer shall temporarily take his agent
the goods into his possession to see if they are (b) Bill of lading is retained by the seller or
satisfactory to him (return if unsatisfactory) his agent.
(c) When the seller of the goods draws on the
Exceptions: buyer for the price and transmits the bill
(a) Buyer signifies his approval or acceptance of exchange and bill of lading to the
to the seller buyer, and the latter does not honor the
(b) Buyer does any other act adopting the bill of exchange by returning the bill of
transaction (i.e. sale to a third person) lading to the seller.
(c) Retains the goods without giving notice of
rejection after the time fixed has expired; (3) When sale is not valid
if no time has been fixed, after the eg. When the thing sold is a public property
expiration of a reasonable time [Art 1502,
CC] (4) When seller is not the owner
General Rule: Ownership is not acquired by
Loss or destruction of the property prior to retun the buyer. One cannot give what one does
falls upon the buyer and makes him responsible not have. [Art 1505, CC]
for the purchase price.
Exceptions: (REROM)
(a) Seller has a Right to transfer ownership
PAGE 223
i. Seller need not be the owner of the KINDS OF DELIVERY

thing at the time of perfection of the (1) Actual delivery
contract. It is sufficient that seller has a (a) When deemed made: when the thing sold
right to transfer ownership thereof at is placed in the control and possession of
the time it is delivered. [Art. 1459] the vendee [Art. 1497]
ii. One who sells something he does not (b) Not always essential to passing of title
own yet is bound by the sale when he [Art. 1475]
acquires the thing later (c) Parties may agree when and on what
[Buctonvs.Gabar, 1974] conditions the ownership shall pass to the
buyer [E.g.: Art 1478 where ownership will
(b) Estoppel: Owner is, by his conduct, only pass after full payment of the price]
precluded from denying the sellers authority to
sell. [Art. 1434] (2) Constructive delivery
(a) Execution of public instrument [Art 1498,
(c) Registered land bought in good faith par. 1]
General rule: Buyer need not go beyond
the Torrens title General rule: produces the same legal effects of
Exception: When he has actual actual delivery.
knowledge of facts and circumstances
that would impel a reasonably cautious Exceptions:
man to make further inquiry (i) The intention of the parties is otherwise.
(ii) At the time of execution, the subject matter
(d) Order of courts; Statutory Sale was not subject to the control of the seller
In execution sale, the buyer merely steps which must subsist for a reasonable length
into the shoes of the judgment debtor oftime after execution. [Pasagui v Villablanca,
[Rule 39, sec. 33, ROC] 1975]
(e)When goods are purchased in Merchants Control over thing sold must be such that
store, Fair, or Market [Art 1505, CC] seller is capable of physically transferring it to
The policy of the law has always been that buyer.
where the rights and interest of the
vendor clash with that of an innocent Although parties may stipulate that the
buyer for value, the latter must be execution of a public instrument is equivalent to
protected. [Sun Brothers and Co. vs. delivery, this legal fiction holds true only when
Velasco, 1958] there is no impediment that may prevent the
passing of the property from the vendor to the
(5) Sale by person having a voidable title vendee. [Vda.de Sarmiento v. Lesaca (1960)]
(a) True owner may recover the thing when
the ff. requisites concur: If, notwithstanding execution of the instrument,
i. Subject matter is movable the buyer cannot enjoy material tenancy and
ii. Owner has either lost the thing or has make use of the object himself or through
been unlawfully deprived. [Art 559, CC] another in his name, there is no delivery. [Power
(b) Reimbursement is necessary before Commercial v. CA (1997)]
owner can recover when:
i. Buyer acted in good faith Execution of a public instrument gives rise only
ii. Acquired at a public auction [Art 559] to a prima facie presumption of delivery,
(c) Recovery no longer possible when: negated by failure of the buyer to take actual
i. Buyer in good faith possession of land sold. A person who does not
ii. Acquired it at a merchants store, fair have actual possession cannot transfer
or market. [Art 1506, CC] constructive possession by execution and
delivery of public instrument. [Spouses Santiago
v. Villamor (2012)]
PAGE 224
There is symbolic delivery, unless from the Exceptions

express terms of the instrument, or by clear (i) Seller reserved title by the form of the
inference therefrom, that the same was not the bill of lading, with intent to remain the
intention of the parties, e.g. where the vendor owner, not merely for the purpose of
has no control over the thing sold at the securing payment, OR
moment of the sale, and, therefore, its material (ii) Contrary intention appears in the
delivery could not have been made. [Villamor v. contract (i.e. seller is required to
Mangaoil (2012)] deliver goods to buyer at the point of
destination)
(b) Symbolic Delivery (iii) F.O.B. (Free on Board or Freight on
(i) Delivery of keys of the place or Board):When seller bears the expenses
depositary where the movable is stored of transportation up to the F.O.B.
or kept. [Art 1498, CC] point.
(ii) Unless otherwise agreed, when (iv) C.I.F. (Cost, Insurance, Freight):Price
symbolic delivery has been made, the quoted includes the costs of the goods,
seller is not obliged to remove tenants to insurance, and freight charges on the
place the buyer in actual possession of goods up to the point of destination.
the property as he has already complied (v) F.A.S. (Free Alongside):Seller bears the
with his obligation to transfer ownership expenses of transportation until he
of and deliver the thing sold. [Power delivers the goods alongside a vessel
Commercial and Industrial Corp. v. CA, at a named port.
1997; Sabio v. The International Corporate
Bank, Inc., 2001] DOUBLE SALES
(c) Tradition Longa Manu (Long Hand) General Rule: Prior tempore, potior jure (he who
(i) Delivery of thing by mere agreement. is first in time is preferred in right) applies.
Example: Seller points to the property
without actually transferring physical Requisites [Cheng v Genato, 1998]:
possession thereof. (1) 2 or more valid sales;
(ii) When an employer assigned all its (2) Same subject matter;
rights and title to all surplus property (3) 2 or more buyers with conflicting interests at
salvaged by the contractor, tradition odds over the rightful ownership of the
longa manu takes place. Delivery is thing sold;
upon the moment a thing is salvaged. (4) Same seller
[Board of Liquidators v. Floro, 1960]
RULES GOVERNING SALE OF
(d) Tradition Brevi Manu (Short Hand) MOVABLES, IMMOVABLES AND
MOVABLE is delivered when the buyer UNREGISTERED LANDS
had the thing already in his possession
before the sale took place, not as owner (1) Sale of Movables
but as lessee, borrower, or depositary. Ownership shall be transferred to the person
who may have first taken possession in good
(e) Tradition ConstitutumPossessorium faith.
Seller continues to be in possession of the
property sold, by virtue of a lease contract (2) Immovables
agreement with the vendee. (a) Ownership belongs to the person who:
(i) In good faith first recorded it in the
(f) Delivery to a Common Carrier Registry of Property; OR
General Rule: Delivery to the courier or (ii) If there is no inscription, ownership
carrier is tantamount to delivery to buyer, passes to the person who in good
whether carrier is named by buyer or not. faith was first in possession; OR
The buyer assumes the risk of loss.
PAGE 225
(iii) In the absence thereof, to the person prejudice to a 3rd party with a better
who presents the oldest title, right. [PD 1528 Sec 113]
PROVIDED there is good faith. (b) Art. 1544 applies to unregistered land
subject to a conventional sale (because of
Oldest Title any public document Art. 1358) but NOT to unregistered land
showing acquisition of the land in good subject to judicial sale.
faith. To constitute title, the (c) Unregistered by both buyers, the first
transmission of ownership must appear in buyer is preferred.
a public document [Art. 1358 (1)] (d) If first buyer did not register but second
buyer registerd property, second buyer is
Examples: Deed of Sale, Deed of preferred.
Donation, Deed of Trust
PROPERTY REGISTRATION DECREE
(b) Registration includes any entry made in (1) REQUISITES FOR REGISTRATION OF
the Primary Entry Book of the registry, DEED OF SALE IN GOOD FAITH
including both registration in its
ordinary and strict sense and Purchaser in good faith
cancellation, annotation, and even (a) General Characteristics
marginal notes. [Cheng v. Genato, 1998] i. One who buys the property of another,
i. Pencilled entries on the title are without notice that some other person
not considered registration has a right to or interest in such
[AFPMBAI v. Court of Appeals, property, and who pays a full and fair
1999]. price for the sale, at the time of the
purchase or before he has notice of the
(3) Sale by Virtue of Execution and Attachment claim/interest of some other person in
Art. 1544 does NOT apply to the sale of the property. [Agricultural and Home
unregistered land at an execution sale Extension Development Group v CA,
because a buyer of unregistered land at an 1992]
execution sale only steps into the shoes of
the judgment debtor, and merely acquires (b) Presumption
the latter's interest in the property sold as of General Rule: As a rule, he who asserts
the time the property was levied upon. the status of a purchaser in good faith
[Carumba v. CA, 1970] and for value has the burden of proving
(a) Unregistered by both buyers: the first sale such assertion. This onus probandi cannot
is preferred be discharged by mere invocation of the
(b) Registered by both buyers: the second legal presumption of good faith, i.e., that
sale is preferred everyone is presumed to act in good faith
(c) If the first buyer did not register but the [Mathay v CA, 1998]
second buyer registered property, then
the first buyer is preferred. When buyer is presumed to be in bad faith:
(i) Annotation of adverse claim: Places any
(4) Sale of Unregistered Land subsequent buyer of the registered land
(a) Instrument or deeds establishing, in bad faith. [Balatbat v CA, 1996]
transmitting, acknowledging, modifying (ii) Annotation of Lis Pendens: Buyer
or extinguishing rights with respect to cannot be considered an innocent
lands not registered under the Land purchaser for value where it ignored the
Registration Act or the Spanish lispendens on the title.
Mortgage Law, are required to be (iii) A purchaser of a parcel of land cannot
registered in the Registry of Property to close his eyes to facts which should put
prejudice 3rd persons, although such a reasonable man upon his guard, such
registration is understood to be w/o as when the property subject of the
purchase is in the possession of persons
PAGE 226
other than the seller. A buyer who could

not have failed to know or discover that Risk of Loss
the land sold to him was in the adverse
possession of another is a buyer in bad GENERAL RULE
faith. (Heirs of Ramon Durano v Uy, Res perit domino: Owner bears risk of loss
2010) BASIS: Ownership is not transferred until
delivery.
Annotation of Adverse
LisPendens
Claim WHEN LOSS OCCURRED
May be cancelled even May be cancelled only
before the action is in one instance, i.e., BEFORE PERFECTION
finally terminated for after the claim is Such loss is borne by seller
causes which may not adjudged invalid or
be attributable to the unmeritorious by the WHEN LOSS OCCURRED AT
claimant Court TIME OF PERFECTION
Loss must have occurred before the contract
Both are intended to protect the interest of a was entered into, without the knowledge of both
claimant by notifying and cautioning other parties
persons that said property is subject to a claim.
Partial Loss (Or loss
The two are not contradictory or repugnant to which results in
one another; nor does the existence of one Total Loss
substantial change in
automatically nullify the other, and if any of the character)
registrations should be considered unnecessary Contract is ineffective. Buyer may withdraw
or superfluous, it would be the notice from the contract
of lispendens [A. Doronila Resources Because there can OR
Development Inc v CA, 1988] be no contract without Buy the remainder at
an object a proportionate price
(2) ACCOMPANIED BY VENDORS DUPLICATE
CERTIFICATE OF TITLE, PAYMENT OF WHEN LOSS OCCURRED AFTER
CAPITAL GAINS TAX, AND
DOCUMENTARY TAX REGISTRATION PERFECTION BUT BEFORE
FEES DELIVERY
Must be accompanied by: Seller bears risk of loss
(a) Vendors duplicate certificate of title Buyer does not bear risk of loss until goods are
(b) Payment of capital gains tax 6% of the delivered to him
selling price or zonal value, whichever is
higher
(c) Documentary tax registration fees 1.5%
AFTER DELIVERY
Buyer bears risk of loss
of the selling price or zonal value,
whichever is higher
WHEN OWNERSHIP IS
TRANSFERRED
WHEN OWNERSHIP IS TRANSFERRED TO THE
BUYER, THE GOODS ARE AT THE BUYERS
RISK
(1) Where delivery of the goods has been made
to the buyer or to a bailee for the buyer, in
pursuance of the contract and the ownership
in the goods has been retained by the seller
PAGE 227
merely to secure performance by the buyer of NEGOTIABLEDOCUMENTS OF

his obligations under the contract, the goods
are at the buyers risk from the time of such TITLE
delivery Definition: A document of title which states that
(2) Where actual delivery has been delayed the goods referred to therein will be delivered to
through the fault of either the buyer or seller the bearer, or to the order of any person named
the goods are at the risk of the party in fault. in such document [Art. 1508, CC]
[Art 1504, CC]
Terms of the Document How negotiated
DETERIORATION Goods are deliverable By delivery of the
Impairment is borne by the buyer if the thing to bearer document to another
deteriorates without the fault of the seller [Art
1189 (3)] Endorsed in blank by
the person to whose
If it deteriorates through the fault of the debtor, order the goods were
the creditor may choose between rescission of supposed to be
obligation and fulfillment, either case with delivered
indemnity for damages. Goods are deliverable By indorsement of
to the order of a such person [Art.
Documents of Title specified person 1509, CC]
WHO MAY NEGOTIATE IT? [ART.1512, CC]

DEFINITION (1) Owner
A document used in the ordinary course of (2) Person to whom the possession or custody of
business in the sale or transfer of goods, as the document has beenentrusted by the
proof of the possession or control of the goods, owner
or authorizing or purporting to authorize the (a) If bailee undertakes to deliver the goods
possessor of the document to transfer or to such person
receive, either by endorsement or by delivery, (b) If document is in such form that it may be
goods represented by such document. [Art. negotiated by delivery
1636]
A PERSON TO WHOM A DOCUMENT HAS BEEN
Examples: bill of lading, quedan, warehouse
NEGOTIATED ACQUIRES
receipts, trust receipts, dock warrant
(1) Title of person negotiating the document,
over goods coverd by document
PURPOSE OF DOCUMENTS OF (2) Title of depositor/owner over such goods
TITLE (3) Direct obligation of bailee/carrier to hold
(1) As evidence of possession or control of goods possession of goods for him
described therein
(2)As a medium of transferring title and NON-NEGOTIABLE
possession over the goods described therein
without having to effect actual delivery
DOCUMENTS OF TITLE
Goods described in a non-negotiable document
thereof [Villanueva]
of title are deliverable only to a specified person.
The custody of a negotiable warehouse receipts
Carrier will not deliver the goods to any holder
issued to the order of the owner, or to bearer, is
of the document or to whom such document
a representation of title upon which bona fide
may have been endorsed by the consignee.
purchasers for value are entitled to rely, despite
breaches of trust or violations of agreement on
Must present the deed of sale or donation in his
the part of the apparent owner. [Siy Cong Bieng
favor.
vs. HSBC, 56 Phil 598]
PAGE 228
A PERSON TO WHOM A DOCUMENT HAS BEEN HE DOES NOT WARRANT THAT

NEGOTIATED ACQUIRES (1) Common carrier will fulfill its obligation to
(1) Title to goods as against the transferor deliver the goods
(2) Right to notify the bailee of the transfer (2) Previous indorsers will fulfill their obligation
thereof [Art. 1516-1517, CC]
(3) Right, thereafter, to acquire the obligation of
the to hold goods for him GOODS IN THE HANDS OF THE CARRIER
COVERED BY A NEGOTIABLE DOCUMENT
Negotiation [negotiable document of title] VS. CANNOT BE ATTACHED OR LEVIED UPON,
Transfer [non-negotiable document of title]:
UNLESS
(1) Document is first surrendered to the carrier;
NegotiationArt. 1508) Transfer or
Delivery of a negotiable The assignment of (2) Impounded by the court; or
document of title to rights of the (3)Its negotiation is enjoined. [Art. 1519-1520,CC]
another if by the terms consignee of a
thereof, the goods are non-negotiable RULES ON
deliverable to bearer, or document of title
when the document was to another; or LEVY/GARNISHMENT OF
endorsed in blank by the GOODS
person to whose order the Document of title Goods in the hands of the carrier covered by a
goods are deliverable. was ordered sold negotiable document cannot be attached or
or assigned, levied upon, UNLESS
In a negotiable document without (1) Document is first surrendered to the carrier;
of title, the buyer may indorsement. or
acquire a better title than (2) Impounded by the court; or
his transferor. Transferee does (3)Its negotiation is enjoined. [Art. 1519-1520,CC]
not acquire a
better title than The levy of an attachment of execution upon the
his transferor goods by a creditor of the transferor may defeat
the title of the transferee and the right to
acquire the obligation of such bailee when:
WARRANTIES OF SELLER OF (1) It was done prior to the notification to such
DOCUMENTS OF TITLE bailee by the transferor of a non-negotiable
document of title or
(2) By a notification to such bailee by the
A PERSON WHO NEGOTIATES A DOCUMENT
transferor or a subsequent purchaser from
OF TITLE WARRANTS the transferor of a subsequent sale of the
(1) Genuineness of document goods by the transferor. [Art 1514 (3rd par)]
(2) Legal right to negotiate or transfer
(3) No knowledge of fact which would impair the A creditor whose debtor is the owner of a
validity or worth of the document negotiable document of title shall be entitled to
(4) Right to transfer the title to the goods and such aid from courts in regard to property which
merchantability or fitness for a particular cannot be readily attached or levied by ordinary
purpose, whenever such warranties would legal process [Art 1520]
have been implied
PAGE 229
Remedies of an Unpaid Buyer can set up the defense that seller at

any time before judgment could not or did
Seller not intend to deliver the goods.
Unless the contrary appears, payment and

DEFINITION OF UNPAID SELLER delivery are presumed to be concurrent acts,
A seller is considered to be an unpaid seller if and the obligation of each party to perform
the whole price has not been paid or tendered, the contract is dependent upon the
or when check received as a conditional simultaneous performance by the other party
payment was dishonored by non-payment or
insolvency of the buyer [Baviera] If ownership has not yet passed to the buyer,
the seller cannot maintain an action for the
An seller is unpaid within such definition price, unless it involves (b) or (c).
whether or not title has been passed. Partial
payment of the price does not extinguish the Title to goods passes from the moment the
unpaid sellers lien. [De Leon] goods are placed at the buyers disposal
when refusal to accept is without just cause.
Term also includes:
(1) The agent of the seller to whom the bill of (2) Action for damages for non-acceptance, if
lading was endorsed, buyer wrongfully neglects or refuses to
(2) The consignor or agent who had paid the accept and pay for the goods (Art. 1596)
price or is responsible for the price
(3) Any other person who is in the position of a Measure of damages: Estimated loss directly
seller (i.e. buyer who paid the price and had and naturally resulting in the ordinary course
a right to return the goods). [Baviera] of events from the buyers breach. Not only
actual damages, but also unrealized profits.
REMEDIES OF UNPAID SELLER It is the difference between the contract price
JUDICIAL REMEDIES OF AN UNPAID SELLER and the market or current price. [De Leon]
(1) Action for the price or specific performance
[Art. 1595] (a) Where there is available market for goods:
Instances: Difference between the contract price and
(a) The goods has passed to the buyer and the market price at the time the goods
the buyer wrongfully neglects or refuses ought to have been accepted or if no time
to pay the price was fixed, at the time of refusal to accept
(b) Price is payable on a certain day and the (b) If the resale was made with diligence:
buyer wrongfully neglects or refuses to resale price is evidence of market value,
pay the price, irrespective of delivery of taking into account whether or not the
the goods or transfer of title, or goods could be readily sold
(c) When the goods cannot readily be resold (c) Where labor/expense was necessary for
for a reasonable price, and the buyer seller to fulfill his obligation: Labor
wrongfully refuses to accept the goods performed and expenses made by seller
even before ownership passed, if before receiving notice of buyers
NCC1596, paragraph 4 is inapplicable. repudiation or countermand
(d) Seller was notified by the buyer of his (d) Profit that the seller would have made if
repudiation of the contract after the seller sale had been fully performed
has completed the manufacture of the
goods or had procured the goods to be (3) Rescission by giving the buyer notice of the
delivered and the goods could not readily election to rescind [Art. 1597]
be resold for a reasonable price
Under this rule, rescission would bar an
action on the contract because it means
PAGE 230
cancellation of the contractual obligations balance, and any stipulation to the

between the parties. [Baviera] contrary shall be void
(ii) What Art 1484 (3) prohibits is further
The unpaid sellers right to rescind for non- action against the purchaser to recover any
performance is not absolute. Exceptions: unpaid balance of the price; and although
this Court has construed the word action
(a) 3rd persons possessing the objects of to mean any judicial or extrajudicial
the contract to whom no bad faith is proceeding by virtue of which the vendor
imputable may lawfully be enabled to exact recovery
(b) Casual breach of the supposed unsatisfied balance of the
purchase price from the purchaser or his
The seller cannot unilaterally and extrajudicially privy, there is no occasion at this stage to
rescind a contract absent express stipulation to apply the restrictive provision of the said
do so, except as provided in Art. 1597. article because there has not yet been a
foreclosure sale resulting in a deficiency.
(4) Special rule for sale of movables by The payment of the sum of P1,250 of
installments Recto Law [Arts. 1484, 1485] Sapinoso was a voluntary act on his part
and did not result from a further action
Applies in cases of: instituted by Northern Motors. [Motors vs.
(a) Sale of movables in installment Sapinoso, 1970]
(i) The rule is intended to apply to sales of (iii) The purpose of the law is to remedy the
movables, the price of which is payable abuses committed in foreclosure of chattel
in two or more installments, but not to mortgages. It prevents mortgagees from
straight-term sales where the price is seizing the mortgaged property, buying it
payable in full, after making a down at foreclosure sale for a low price and then
payment because the law aims to bringing the suit against the mortgagor for
protect improvident buyers who may be a deficiency judgment. The almost
tempted to buy beyond their means. invariable result of this procedure was that
[Levy Hermanos vs. Gervacio, 1939] the mortgagor found himself minus the
(b) Lease of personal property with option to property and still owing practically the full
buy amount of his original indebtedness.
(i) When lessor has deprived the lessee of [Bachrach Motor Co., Inc. v. Millan, 1935]
the possession or enjoyment of the (iv) Remedies are ALTERNATIVE, not
thing (Ex.: When lessor files a complaint cumulative, i.e. exercise of one bars
for replevin against lessee) exercise of the others. [Nonato vs. IAC,
(ii) Also applies when seller assigns his 1985]
credit to someone else
Where the mortgagor unjustifiably refused to
ALTERNATIVE REMEDIES OF THE UNPAID surrender the chattel subject of the mortgage
upon failure of two or more installments, or if he
SELLER UNDER RECTO LAW
concealed the chattel to place it beyond the
(a) Specific Performance
reach of the mortgagee, that thereby
(b) Cancellation of sale: If vendee fails to pay 2
constrained the latter to seek court relief, the
or more installments
expenses incurred for the prosecution of the
(i) When the seller cancels the sale by
case, such as attorney's fees, could rightly be
repossessing the property sold, he is
awarded. [Borbon II v. Servicewide (1996)]
barred from exacting payment for its price.
(c)Foreclosure of Chattel Mortgage: If vendee
fails to pay 2 or more installments
(i) If seller chooses this remedy, he shall have
no further action to recover any unpaid
PAGE 231
Performance of Contract (i) Seller bound to deliver entire land, i.e.,

the entire area stated in the contract
(ii) If the area is less than that stated,
DELIVERY OF THING SOLD buyer may rescind or demand a
proportionate reduction in price
(iii) If a part of the land is not of the
(1) SALE OF MOVABLES [Arts. 1522, 1537, 1480]
quality stated in the contract, buyer
(a) When Quantity less than expected
may rescind or demand a
(i) Buyer may reject all
proportionate reduction in price
(ii) Buyer accepts with knowledge of
(iv) Buyer may only avail of rescission if
sellers inability to deliver the rest
the area deficiency is 10% or more of
buyer pays at contract price
total area or if the inferior value of the
(iii) Buyer has used or disposed prior to
part of the land exceeds 10% of the
knowing sellers inability to deliver the
price agreed upon. [Art. 1539]
rest buyer pays fair value
(v) If the area turns out to be greater than
(b) Quantity more than expected
that stated, buyer may accept area
(i) If divisible, buyer may reject excess
included and reject the excess or
(ii) If indivisible, buyer may reject all
accept all and pay a proportionate
increase in price [Art. 1540]
If the buyer accepts all goods delivered, he
(b) Sale for a lump sum
makes himself liable for the price of all of them.
(i) Follows the same rule as the sale of a
specific mass which is explained above
(c) Quality different or different goods
(ii) There is no change in price even if area
(i) If divisible, buyer may accept the goods
or number turns out to be greater or
compliant with contract and reject
lesser than that stated [Art. 1542]
those that are not
(ii) If indivisible, buyer may reject all [Art.
Exception: when the excess or deficiency is
1522]
no longer reasonable [Asian v Jalandoni,
(d) Sale of specific mass of goods
1923: 644 m2 was unreasonable]
(i) In the sale of fungibles where the
measure or weight has not been
Exception to the exception: when buyer
agreed upon nor is there a fixed rate
expressly assumes risk on actual area of
based upon a measurement, the
the land. [Garcia v Veloso, 1941]
subject matter of the sale is a
determinate object the specific mass;
(iii) If the price per unit or measure is not
seller is merely required to deliver such
provided for in the contract, then the
mass even if actual quantity falls short
of parties estimate [Art. 1480] rules of lump sum sale should prevail.
[Sta. Ana v Hernandez, 1966]
(e) Delivery by installments
(i) By default, buyer is not bound to accept If sale for lump sum, the cause of the contract is
delivery of goods by installments the thing sold, independent of
(ii) In a contract of delivery by installment number/measure. The law presumes that the
to be paid by installment as well, delay purchaser had in mind a determinate price for
or breach may not necessarily mean real estate and the ascertained area and quality.
breach of the entire contract; The purchaser intended to buy thing in entirety,
depending on the circumstances, breach not just any unit of measure or number. [De
may be severable and the aggrieved Leon]
party is entitled to damages and not
rescission. [Art. 1583] When there is conflict between the area
stipulated in the contract, the area included
(2) SALE OF IMMOVABLES [Arts. 1539, 1543] within the stipulated boundaries prevails,
(a) Sale at a fixed rate per unit of measure provided such boundaries are certain, and no
alteration thereof has been proven.
PAGE 232
(3) INSPECTIONS AND ACCEPTANCE PAYMENT OF PRICE

Inspections
PAY THE PRICE OF THE THING SOLD
Right of Inspection: The buyer has
reasonable opportunity to examine the (ART. 1582)
goods upon delivery. If there is a stipulation
that delivery is preconditioned on payment, PAYMENT OF INTEREST:
then buyer has no right of inspection until he Buyer is liable for interest when: (SFD)
has paid. [Art.1584] (1) Interest is Stipulated;
(2) Thing sold produces Fruits or income;
Exception: in case such right of inspection is (3) Buyer is in Default - interest accrues from the
permitted by agreement or usage of trade. time of judicial or extrajudicial demand for
payment
Acceptance
Accept Delivery SUSPENSION OF PAYMENTS:
(1) Form Buyer may suspend payment when:
(a) Express: buyer intimates acceptance (1) His ownership or possession of the thing is
(b) Implied: disturbed; OR
(i) Goods are delivered to the buyer (2) He has reasonable grounds to fear such
and he does any act in relation to the disturbance by a vindicatory action or a
goods delivered that is inconsistent foreclosure of mortgage
with the ownership of the seller.
(ii) After the lapse of a reasonable Exceptions: buyer cannot suspend payment
time, the buyer retains the goods when:
without intimating to the seller that (1) Seller gives security for the return of the price
he has rejected them. [Art.1585] in a proper case
(2) It has been stipulated that, notwithstanding
(2) Effect of Refusal to accept any such contingency, the buyer shall be
(a) If buyer refuses to accept goods, bound to pay [Art. 1590]
having the right to do so, he is not (a) Suspension may continue until the seller
bound to return them to the seller, it has caused the disturbance or danger to
being sufficient that he notifies the cease
seller of his refusal to accept (b) However, a mere act of trespass shall not
(i) If he voluntarily constitutes himself a authorize the suspension of the
depositary of the goods, he shall be payment. [Art.1590]
liable as such. [Art.1587]
(ii) Unjust refusal to accept still results SALE OF REAL PROPERTY
to transfer of ownership. In such (1) In the sale of immovable property, buyer may
case, title to the goods passes to the pay even beyond the expiration of the period
buyer from the moment they are agreed upon, as long as no demand for
placed at his disposal, except if rescission of the contract has been made
ownership has been reserved by the upon him either judicially or by a notarial act,
seller [Art.1588] despite a stipulation providing for ipso jure
rescission [Art.1592]
(2) Mere failure to fulfill the contract does not
ipso facto entitle the offended party to
rescind. A judicial or notarial act is necessary
before rescission can take place, whether or
not automatic rescission has been stipulated.
A letter informing the buyer of automatic
rescission is not demand if such letter is not
notarized. [De Leon]
PAGE 233
(3) After demand, court may not grant him a

new term [Heirs of Escanlar, et.al. v. CA, 1997] Warranties
(4) R.A. 6552 (Maceda Law) applies to sale or A statement or representation made by the
financing of real estate on installment [Rillo seller contemporaneously and as part of the
v. Court of Appeals,1997] contract of sale, having reference to the
(a) Buyer is awarded a grace period of 1 character, quality, or title of the goods, and by
month per year of installments paid or which he promises or undertakes to ensure that
60 days, whichever is higher, within certain facts are or shall be as he then
which he may pay without additional represents.
interest
i. May be used once every 5 years of the Not every false representation voids the
life of the contract or any of its contract, only those matters substantially
extensions affecting the buyers interest, not matters of
(b) If contract is to be cancelled, seller must opinion, judgment, probability, or expectation.
first: When the buyer undertakes his own
i. Give a 30-day notice of cancellation, investigation, and the seller does nothing to
and prevent it from being as full as the buyer
ii. Refund cash surrender value to buyer; chooses, the buyer cannot afterwards allege
iii. CSV is equivalent to 50% of total misrepresentations. [Songco v. Sellner (1917)]
payments made including deposits,
options and down-payments plus 5% CONDITION V. WARRANTY
for every year in excess of 5 years of the Condition Warranty
life of the contract or any of its Pertains to and affects Goes into the
extensions. the existence of the performance of an
obligation obligation and may, in
Cancellation of the contract under Section 4 of itself, be an obligation
R.A. 6552 as a two-step process. First, the seller Non-happening does Non-fulfillment
should extend the buyer a grace period of at not amount to breach constitutes breach of
least 60 days from the due date of the of contract contract
installment. Second, at the end of the grace Must be stipulated Stipulation or
period, the seller shall furnish the buyer with a operation of law
notice of cancellation or demand for rescission
May attach either to Always relates to the
through a notarial act, effective 30 days from
the sellers duty to subject matter or the
the buyers receipt thereof. [Jestra Development
deliver thing or some sellers obligations as
v. Pacifico (2007)]
other circumstance to the subject matter
If seller has promised that the condition should

happen or be performed, the buyer may treat
the nonperformance of the condition as a
breach of warranty. [Art.1545]
EXPRESS WARRANTIES
For there to be express warranty, the following
requisites must concur: (APIR)
(1) An affirmation of fact or any promise relating
to the thing sold;
(2) The natural tendency of such affirmation or
promise is to induce the buyer to buy;
(3) The buyer buys the thing relying thereon.
[Art. 1546]
PAGE 234
(4) Made before the sale not upon delivery or Express Warranty False Representation
any other point
Reason: buyers duty
to inspect remains
An express warranty can be made by and also
despite false
be binding on the seller even in the sale of a
representation by the
second hand article. [Moles v. IAC, 1989]
seller; he has the duty
to exercise due
Dealers or Traders
Express Warranty diligence.
Talk
What is specifically (a) Affirmation of the
represented as true in value of the thing or
said document cannot statement of the IMPLIED WARRANTIES
be considered as mere sellers opinion only is An implied warranty is derived by law by
dealer's talk. [Moles v. not a warranty unless: implication or inference from the nature of the
IAC, 1989] i. The seller made transaction or relative situation, or
it as an expert; circumstances of the parties, irrespective of any
ii. It was relied intention of the seller to create it.[De Leon]
upon by the buyer.
[Art.1546] (TODS)
(b) Ordinarily, what (1) Implied Warranty of Title
does not appear on (2)Implied Warranty against Encumbrance/
the face of the written Non-Apparent Servitudes
instrument [Moles v. (3) Implied Warranty against Hidden Defects
IAC, 1989] [Art. 1547]
(a) Implied warranty as to Merchantable
EXPRESS WARRANTY DISTINGUISHED FROM FALSE
Quality and Fitness of Goods
REPRESENTATION
(b) Implied warranty against Redhibitory
Defect in the Sale of Animals [Art. 1572]
Express Warranty False Representation (c) Quality and Fitness of Goods in Sale by
Concealment of facts When concealment of Sample or Description
does not necessarily facts comes with an (4) Other Warranties
amount to false active misstatement of
representation fact or a partial IMPLIED WARRANTY OF TITLE
statement of fact such (1) Implied warranty arises by operation of law
that withholding of and need not be stipulated in the contract of
that unsaid portion sale.
makes that which is (2) Warranty of Sellers Right to Sell: Seller
stated absolutely false warrants his right to sell at the time the
ownership is to pass.
However, buyer who (a) Inapplicable to a sheriff, auctioneer,
fails to inspect mortgagee, pledgee, or other person
condition of property professing to sell by virtue of authority
despite ample in fact or law. [Art. 1547]
opportunity to do so (3) Warranty against Eviction: seller warrants
when there is no that buyer, from the time ownership passes,
opposition on the part shall have and enjoy legal and peaceful
of seller to inspect possession of the thing. Its requisites are:
cannot later on allege (a) Buyer is deprived of the whole or a part of
false representation. the thing sold;
[Phil Mftg Co. v Go (b) Eviction is by final judgment
Jucco, 1926] (c) Final judgment based on a right prior to
the sale or an act imputable to the vendor
PAGE 235
(d) Seller is summoned and made co- IMPLIED WARRANTY AS TO MERCHANTABLE

defendant in the suit for eviction at the QUALITY AND FITNESS OF GOODS
instance of the buyer. [Power Commercial Warranty of merchantability is warranty that
and Industrial Corp. v. CA, 1997] goods are reasonably fit for the general purpose
for which the same are sold. Warranty of fitness
IMPLIED WARRANTY AGAINST is warranty that goods are suitable for the
ENCUMBRANCE/ NON-APPARENT special purpose of the buyer which will not be
SERVITUDES satisfied by mere fitness for general purposes.
Requisites for breach:
(1) Thing sold is an immovable
(2) Burden or servitude encumbering the thing MERCHANTABLE QUALITY:
sold is: (1) Where the goods are brought by description
(a) Non-apparent to the naked eye from a seller who deals in goods of that
(b) Not mentioned in the agreement description [Art.1562]
(c) Of such nature that it must be presumed (2) In a sale by sample, if the seller is a dealer in
that the buyer would not have bought it goods of that kind and the defect is not
had he been aware of it apparent on reasonable examination of the
(d) Not recorded in the Registry of Property sample [Art.1566]
unless there is an express warranty that
the thing is free from all burdens and In a sale by sample, there is implied warranty
encumbrances [Art.1560] that goods are free from defects not apparent
on reasonable examination of sample and
which render goods unmerchantable. [Mendoza
IMPLIED WARRANTY AGAINST HIDDEN
v. David (2004)]
DEFECTS
Requisites for breach:
(1) The defect renders the thing sold unfit for the FITNESS FOR A PARTICULAR PURPOSE:
use for which it was intended OR diminishes Where the buyer expressly or impliedly makes
its fitness for such use to such an extent that known to the seller the particular purpose for
had the buyer been aware thereof, he would which the goods are acquired AND it appears
not have bought it or would have paid a that the buyer relied on the sellers skill or
lower price; judgment [Art.1562(1)]
(2) The defect is not patent or visible;
(3) The buyer is not an expert who, by reason of IMPLIED WARRANTY AGAINST REDHIBITORY
his trade or profession, should have known
the defect DEFECT IN THE SALE OF ANIMALS (ART.
(4) The seller is aware of the hidden fault or 1572)
defect, OR even if he is not aware thereof, if
there is no stipulation to the contrary Redhibitory defect- a hidden defect of animals
[Arts.1561 &1566] of such nature that expert knowledge is not
sufficient to discover it, even in a case where a
The buyer must also give notice of such professional inspection has been made
redhibitory defect within a reasonable time. No warranty in case of [Art. 1574]:
(a) Animals sold at fairs or public auctions
The use contemplated must be that which is (b) Livestock sold as condemned
stipulated, and in absence of stipulation, that
which is adopted to the nature of the thing, and The following sales are void [Art. 1575]:
to the business of the buyer. (a) Sale of animals suffering from contagious
diseases
(b) Sale of animals unfit for the purpose for
which they are acquired as stated in the
contract
PAGE 236
Veterinarian liable if he fails to discover or BUYERS OPTIONS IN CASE OF

disclose the hidden defect through ignorance or
bad faith [Art 1576] BREACH OF WARRANTY
Seller liable if animal dies within 3 days after its EXPRESS WARRANTY
purchase due to a disease that existed at the (1) Prescriptive period: Period specified in express
time of sale. [Art 1578] warranty OR 4 years, if no period is specified
(following the general rule on rescission of
EFFECTS OF WARRANTIES contracts)
(1) Natural tendency is to induce buyer to (2) Remedies:
purchase the subject matter (a) Accept goods + demand diminution/
(2) Buyer purchases subject matter relying extinction of price
thereon (b) Accept goods + damages
(3) Seller liable for damages in case of breach (c) Refuse to accept goods + damages
(d) Rescind (Refuse to accept or return or
offer to return) + recover price paid
EFFECTS OF WAIVERS (3) Rescission not available when buyer:
(a) Knew of breach of warranty when he
Only applicable to waiver of warranty against
accepted the goods without protest
eviction; parties may increase or decrease
(b) Fails to notify the seller about election to
warranty against eviction but the effect depends
rescind within a reasonable period of time
on good/bad faith of the seller:
(c) Fails to return or offer to return the goods
(1) Seller in bad faith and there is warranty
to the seller in substantially a good
against eviction null and void
condition as they were when delivered,
(2) Buyer without knowledge of a particular risk
unless deterioration was due to breach of
and made general renunciation of warranty
warranty
not waiver but merely limits liability of
(4) Measure of damages: Difference between
seller in case of eviction (pay value of
value of goods at the time of delivery and
subject matter at the time of eviction)
the value they would have had if they had
(3) Buyer with knowledge of risk of eviction
answered to the warranty
assumed its consequences and made a
(5) Effects of rescission:
waiver vendor not liable
(a) Buyer no longer liable for price
(4) Waiver to a specific case of eviction wipes
i. Entitled to the return of any part of
out warranty as to that specific risk but not
price paid, concurrently with or
as to eviction caused by other reasons
immediately after an offer to return
the goods
One who purchases real estate with knowledge
of defect or lack of title cannot claim he (b) If seller refuses to accept offer to return
goods: buyer deemed as bailee for seller
acquired title thereto in good faith, as against
and has right of lien to secure payment
true owner of land or of interest therein. [J.M.
of part of price paid
Tuason v. CA (1979)]
The same rule must be applied to one who has

knowledge of facts which should have put him
upon such inquiry and investigation as might be
necessary to acquaint him with the defects in
the title of his vendor. A purchaser cannot close
his eyes to facts which should put a reasonable
man upon his guard and then claim that he
acted in good faith under the belief that there
was no defect in the title of the vendor.
PAGE 237
IMPLIED WARRANTY AGAINST EVICTION [Arts. (b) Buyer made waiver without knowledge of
1555, 1556] risks of eviction: Seller liable only for the
value of the thing sold at time of eviction
(c) Buyer made waiver with knowledge of risks:
Total Eviction Partial Eviction Seller not liable; buyer assumed the
Enforce liability for Enforce liability consequences
eviction (demandVICED)
OR IMPLIED WARRANTY AGAINST
Demand from seller: Rescind
ENCUMBRANCES[Art. 1560]
(VICED) (a) If he would not
(1) Rescission: Within 1 year from execution of
(a) Value of thing have bought the
deed of sale OR
sold at time of thing sold
(2) Damages: Within 1 year from execution of
eviction without the part
deed of sale or discovery of the burden or
(b) Income or fruits, if lost;
servitude
he has been (b) BUT he must
ordered to deliver return the thing
them to the party without other IMPLIED WARRANTY AGAINST HIDDEN
who won the encumbrances DEFECTS[Arts. 1567-1571]
eviction suit than those which (1) If thing is not lost:
(c) Costs of eviction it had when he (a)Withdraw from contract
suit and in a acquired it (accionredhibitoria) + damages
proper case, suit (b) Demand a proportionate reduction of the
against seller for price (accionquantiminoris) + damages
warranty
(d) Expenses of the (2) If thing is lost:
contract, if buyer Due to fortuitous event
Due to hidden fault
has paid them or fault of buyer
(e) Damages and If seller aware of Demand:
interests, and defect, buyer may (a) Price paid minus
ornamental demand: value of thing
expenses, IF sale (a) Return of price when it was lost
was made in bad (b) Refund of (b) Damages, if seller
faith expenses acted in bad faith
(c) Damages
(1) Rules: If seller not aware of
(a) Buyer need not appeal from decision to defect:
hold seller liable for eviction (a) Buyer may demand
(b) When adverse possession commenced price and expenses
before sale, but prescription period BUT NOT damages
completed after transfer: seller is not
liable Prescriptive period: 6 months from delivery
(c) If property sold for nonpayment of taxes
due and not made known to the buyer Nature of animal feeds makes it necessarily
before the sale: seller liable difficult for private respondent to prove the
(d) Judgment debtor also responsible for defect existing when the feeds were bought
eviction in judicial sales, unless it is from petitioner. Facts allege that when feeds
otherwise decreed in the judgment were delivered, rat poison was contained
therein, but strange since the animals died only
(2) If there is waiver of warranty: 3 months after. Within such time, the feeds
(a) Seller acted in bad faith: Waiver is void, could have been contaminated by other factors.
seller liable for eviction [Nutrimix Feeds v. CA (2004)]
PAGE 238
One of the express warranties stipulated was Breach of Contract

that the stockholdings are on a clean balance
sheet. An important sense of a deed of sale is GENERAL REMEDIES
the transfer of ownership over the subject The following remedies arise from the bilateral
properties to the buyer. The failure of the seller nature of the contract of sale:
to effect a change in ownership of the subject (1) Specific performance
properties amounts to a hidden defect. [PNB v. (2) Rescission
Mega Prime Realty and Holdings (2008)] General rule: Rescission of a contract will not
be permitted for a slight or casual breach,
but only for such substantial and
IMPLIED WARRANTY AGAINST REDHIBITORY fundamental breach as would defeat the very
DEFECTS OF ANIMALS object of the parties in making the
(1) Remedies agreement. [Song Fo& Co. vs. Hawaiian-
(a) Withdraw from contract + damages Philippine Co., 1925]
(b) Demand a proportionate reduction of the (3) Damages
price + damages Neither party incurs in delay if the other does
not comply or is not ready to comply in a
(2) If sale is rescinded: proper manner with what is incumbent upon
(a) Buyer must return animal in the condition him [Art 1169, CC]
in which it was sold and delivered
(b) Buyer shall be liable for injury due to his Prescriptive periods
negligence. (1) 10 years if based on written contract
(2) 6 years if based on oral contract
(3) Prescriptive period: 40 days from delivery
REMEDIES OF THE SELLER
WARRANTY IN SALE OF CONSUMER GOODS [ARTS. 1636, 1594]
[RA 7394, SEC.68]
If implied warranty accompanies express (1) SALE OF MOVABLES
warranty, both will be of equal duration. Extrajudicial or Self-Help Remedies- No need
to resort to the courts as long as possession
Express Warranty Implied Warranty of the goods has not yet passed to the buyer
(1) Demand repair (1) Retain the goods
(a) Possessory lien over the goods
within 30 days and recover
(a) Extendible for damages Right to retain possession of goods until
causes beyond the OR payment or tender of the whole price, or
control of the (2) Reject the goods, unless he agrees to sell on credit [Arts.
warrantor cancel contract 1526-1529, 1503, 1535]
(2) Demand refund of and recover from
price minus seller so much of When available:
amount directly the purchase price (1) Goods are sold without stipulation as
attributable to the as has been paid + to credit
use of the damages (2) Goods are sold on credit, but term of
consumer prior to credit has expired
the discovery of (3) Buyer becomes INSOLVENT
the non-
conformity When lost:
(1) Seller delivers goods to carrier or other
bailee for transmission to the buyer
under a straight or non-negotiable bill
of lading
PAGE 239
(2) Buyer/his agent lawfully obtains When are goods in transit?

possession of goods (1) From the time of delivery to the carrier
(3) Seller waives it or other bailee by the seller, for the
(a) But it is not lost with respect to the purpose of transmission to the buyer,
remainder of the goods when only until the buyer or his agent takes such
partial delivery is made (unless such delivery from the carrier.
is symbolic delivery of the whole) (2) Even when goods have reached their
(b) It is not lost by the mere fact that ultimate destination, if buyer rejects
seller obtained a judgment for the them and carrier retains possession
price (a) To terminate transit by delivery to a
middleman, delivery must be to
Instances where the lien can be revived after keep, not to transport.
delivery:
When are goods no longer in transit?
(1) If the buyer refuses to receive the goods (1) Buyer obtained delivery of the goods
after the same are delivered to the before they have reached their
carrier or other bailee on his behalf, ultimate destination
though the seller has parted with both (2) Goods have arrived at ultimate
ownership and possession. Here, the destination, but carrier refuses to
seller may reclaim the goods and revest deliver
the lien. (3) Carrier enters into a new contract with
(2) If the buyer returns the goods in the buyer upon arrival of the goods at
wrongful repudiation of the sale, then their ultimate destination
the lien is revived.
How exercised?
(b) Right of stoppage in transitu (1) By obtaining actual possession of the
An extension of the lien for the price; goods
entitles unpaid seller to resume (2) By giving notice of his claim to the
possession of the goods while they are in carrier/other bailee who has
transit before the goods come in possession of the goods
possession of the vendee [Arts. 1530-1532, (a) Carrier must redeliver goods to
1535, 1636[2]] seller, or according to his
instructions
Requisites for the exercise of the right of (b) Carrier not obliged to redeliver until
stoppage in transitu: the negotiable document of title, if
any, has been surrendered for
(1) The seller is unpaid cancellation
(2) The buyer is insolvent
(3) The goods are in transit Sellers right to stoppage in transitu is not
(4) The seller either takes actual possession, affected even if buyer has sold or disposed
or gives notice of claim to the carrier or of the goods unless the seller has given
other person possessing the goods his assent thereto.
(5) The seller must surrender the negotiable
instrument or title, if any, issued by the (c) Special right of resale
carrier/bailee Available to unpaid seller who has a right
(6) The seller must bear the expenses of the of lien or who has stopped the goods in
delivery of the goods after exercise of transitu [Art. 1533]
such right.
Available when: Vendee becomes

INSOLVENT
PAGE 240
Art. 1533 applies only where: When available:

(1) The goods are perishable in nature (1) Seller expressly reserved his right to
(2) The right to resell is expressly reserved in rescind in case buyer defaults
case the buyer should default, and (2) Buyer has been in default in payment
(3) The buyer delays in paying the price for for an unreasonable time
an unreasonable time.
Transfer of title shall not be held to have
The right to resell the goods is not mandatory, been rescinded by the unpaid seller until
but permissive. he manifests by notice to the buyer or
some other overt act an intention to
Purpose: For seller to liquidate his rescind.
damages
(1) He must do so within a reasonable Election by seller to rescind may be maintained
time and in such manner as to obtain by giving notice to the buyer or by some other
the best price possible. overt act showing intention to rescind.
(2) Resale is deemed to be a fair sale if it Communication to buyer is not always
is undertaken in accordance with necessary. But giving/failure to give notice is
established business practices, with relevant in determining reasonableness of time
no attempt to take advantage of the given to the buyer to make good his obligation
original buyer. under contract. [De Leon]
(3) Resale may be in a private or public
sale, but seller cannot buy directly or (a) When the whole of the price has not been
indirectly. paid or tendered;
(4) For resale to be valid, buyer need not
be notified of an intention to resell or (b) When a bill of exchange or other
the time and place of the resale. negotiable instrument has been received
as conditional payment and the condition
Effects: on which it was received has been broken
(1) Seller is no longer liable to the by reason of the dishonor of the
original buyer upon the contract of instrument, the insolvency of the buyer, or
sale or for any profit made by the otherwise.
resale
(2) Buyer at resale acquires good title as RECTO LAW: SALE OF MOVABLES ON
against the original owner INSTALLMENT [ARTS. 1484-1486]
(3) In case resale is at a loss, seller is
entitled to recover the difference Applies in cases of:
from the original buyer (1) Sale of movables in installment
(4) Seller may recover damages from (a) The rule is intended to apply to sales of
original buyer for breach of contract movables, the price of which is payable
in 2 or more installments, but not to
(d) Special right to rescind: straight-term sales where the price is
RETURN of the title over the undelivered payable in full, after making a down
goods to the seller, and right to recover payment because the law aims to protect
DAMAGES for breach of contract [Art. improvident buyers who may be tempted
1534] to buy beyond their means. [Levy
Hermanos vs. Gervacio, 1939]
Available to unpaid seller who has a right (2) Lease of personal property with option to buy
of lien or who has stopped the goods in (a) When lessor has deprived the lessee of
transitu the possession or enjoyment of the thing
(Ex.: When lessor files a complaint for
replevin against lessee)
PAGE 241
(b) Also applies when seller assigns his credit exercise of the others. [Nonato vs. IAC,
to someone else 1985]
ALTERNATIVE REMEDIES OF THE UNPAID SALE OF IMMOVABLES

SELLER UNDER RECTO LAW (a) PD 957, sec. 23, 24
(1) Specific Performance Non-forfeiture of payments
(2) Cancellation of sale: If vendee fails to pay 2 (1) No installment payment made by the
or more installments buyer shall be forfeited in favor of the
(a) When the seller cancels the sale by owner or developer of the condominium
repossessing the property sold, he is or subdivision project, after due notice,
barred from exacting payment for its when the buyer desists from paying due
price. to the failure of the developer or owner
(3) Foreclosure of Chattel Mortgage: If vendee to develop the project according to the
fails to pay 2 or more installments approved plans or within the time limit
(a) If seller chooses this remedy, he shall stated.
have no further action to recover any (2) Buyers Remedy: At his option, he may
unpaid balance, and any stipulation to reimburse the total amount paid
the contrary shall be void including amortization interest with
(b) What Art 1484 (3) prohibits is further interest thereon at the legal rate
action against the purchaser to recover (3) If the buyer fails to pay the installments
any unpaid balance of the price; and for reasons other than the failure of the
although this Court has construed the owner or developer to develop the
word action to mean any judicial or project, his rights shall be governed by
extrajudicial proceeding by virtue of RA 6552.
which the vendor may lawfully be
enabled to exact recovery of the (b) Maceda Law: Sale of Immovables on
supposed unsatisfied balance of the Installment
purchase price from the purchaser or his
privy, there is no occasion at this stage RA 6552: An Act To Provide Protection for
to apply the restrictive provision of the Buyers of Real Estate on Installment
said article because there has not yet Payments
been a foreclosure sale resulting in a
deficiency. The payment of the sum of DOES not apply to:
P1,250 of Sapinoso was a voluntary act (1) Industrial lots
on his part and did not result from a (2) Commercial buildings
further action instituted by Northern (3) Sale to tenants under Agricultural
Motors. [Motors vs. Sapinoso, 1970] Reform Code [RA 3844]
(c) The purpose of the law is to remedy the
abuses committed in foreclosure of Imposes ADDITIONAL REQUIREMENTS FOR
chattel mortgages. It prevents A VALID RESCISSION:
mortgagees from seizing the mortgaged (1) If buyer has paid at least 2 years of
property, buying it at foreclosure sale for installments: (GRN)
a low price and then bringing the suit (a) Grace period: 1 month per year of
against the mortgagor for a deficiency installment payments made. BUT
judgment. The almost invariable result buyer may only avail of it only once in
of this procedure was that the mortgagor every 5 years
found himself minus the property and (b) Refund of Cash Surrender Value (CSV):
still owing practically the full amount of 50% of total amount paid + 5% for
his original indebtedness. [Bachrach every year after the 1st 5 years of
Motor Co., Inc. v. Millan, 1935] installments
(d) Remedies are ALTERNATIVE, not (i) BUT not greater than 90% of total
cumulative, i.e. exercise of one bars amount paid
PAGE 242
(c) Notice of cancellation of demand for (b) Court has discretion, for a just cause,
rescission by notarial act is effective to give the buyer more time to pay
30 days from the buyers receipt even if the seller chooses rescission
thereof and upon full payment of CSV (3) Rescission + Damages [Art. 1191]
(2) If buyer has paid less than 2 years: (GN) (a) If seller chose specific performance,
(a) Grace period: at least 60 days and such becomes impossible, he
(b) Notice of cancellation or demand for may still avail of rescission
rescission by notarial act, effective 30 (b) If absolute sale, seller must make a
days upon receipt thereof demand for rescission
(3) Down payments, deposits, or options on (i) Judicially, OR
the contract shall be included in the total (ii) By a notarial act
number of installments made (c) Necessary even if automatic rescission
(4) Seller may go to court for judicial is stipulated
rescission in lieu of a notarial act of (d) Effect of lack of demand: Buyer can still
rescission pay
(5) During the grace period, buyer shall have (e) Effect of demand: Court may not grant
the right: buyer a new term
(a) To sell or assign his rights, to be
evidenced in a notarial instrument REMEDIES OF THE BUYER
(b) To update his account
(c) To pay in advance any installment, or General rule: Courts will refuse to decree
the full unpaid balance of the price, specific performance with respect to chattels,
without any interest because damages are a sufficient remedy
Cancellation pertains to extrajudicial Exception: Buyer is entitled to the specific thing
cancellation. Absence of notice does not bar which to him has special value and which he
filing of an action to cancel the contract. cannot readily obtain in the market OR where
damages would not furnish a complete and
A decision in an ejectment case can operate as adequate remedy [Baviera]
notice of cancellation required by RA6552. But
mere filing of an unlawful detainer suit by the SALE OF MOVABLE
seller is not such notice. [De Leon] (1) Remedy for breach of obligation to preserve
If thing is lost
In the sale of immovables (a) Without fault of seller: No breach;
(1) Rescission for Anticipatory Breach [Art. Obligation is extinguished
1591] (b) Through fault of seller (or through
(a) Available when seller has reasonable fortuitous event, if seller is liable):
grounds to fear the loss of the Damages
immovable property sold and its price
Example: Buyer destroys the building A thing is lost when it
sold, there being no security therefor, and (a) Perishes
buyer becomes insolvent (b) Goes out of commerce
(b) Court has no discretion to compel the (c) Disappears in such a way that its
seller to wait for the expiration of the existence is unknown or it cannot be
period to pay, or to grant the buyer recovered
more time to pay
(2) Specific Performance + Damages [Art.
1191]
(a) Seller may choose between specific
performance and rescission, with
damages in either case
PAGE 243
If thing deteriorates Less (in area or quality)

Without fault of seller Through fault of seller than what was agreed More
upon:
NO BREACH. Rescission + damages
Proportional reduction
Impairment shall be OR
of price
borne by buyer Specific performance
OR
+ damages
Rescission, if:
(a) Lack in area is at
(2) Remedy for breach of obligation to deliver
least 1/10 of what
is stated, or Reject the excess
Delivery of wrong quantity [Art. 1522]
inferior value of OR
Goods are less than
More thing sold exceeds Accept the whole and
what was contracted
1/10 of price pay at contract rate
Reject the goods Reject the excess (Or (b) Buyer would not
OR the whole, if have bought the
Accept and pay indivisible) property has he
(a) At contract rate if OR been aware of the
buyer accepts Accept the whole and inferior quality or
knowing that pay at contract rate smaller area
seller wont
perform in full This rule also applies to judicial sales [Art. 1541]
(b) At fair value: If
goods were used (b) If for a lump sum:
before knowing Everything is within
that seller wont boundaries, even if less Not everything is within
be able to perform or more than stated boundaries
in full area
No remedy Proportional reduction
Art. 1464. Civil Code. In the sale of an undivided Where both the area in price
share of a specific mass of fungible goods, if the and the boundaries of OR
mass contains less than the number, weight, or the immovable are Rescission
measure bought, the buyer becomes the owner declared, the area
of the whole mass and the seller is bound to covered within the
make good the deficiency from goods of the boundaries of the
same kind and quality, UNLESS a contrary immovable prevails
intent appears. over the stated area.
(Rudolf Lietz, Inc. v.
SALE OF IMMOVABLES CA, 2005)
Real Estate [Arts. 1539-1543]
(a) If at the rate of a certain price per unit of Prescriptive period: 6 months, counted from date
measure or number: of delivery
PAGE 244
Extinguishment of Sale (4) Co-owners of an immovable, if they sold

their interests to the same person, may only
redeem their respective shares
CAUSES (a) Vendee cannot be compelled to agree to
Generally, extinguished by the same causes as a partial redemption
all other obligations [Arts.1600, 1231] (b) If the co-owners sold their interest to the
same person who previously bought the
(P-PLAN-C3-R3) share of a co-owner subject to a right of
(1) Payment/performance redemption, then the latter may be
(2) Prescription compelled to redeem the whole property
(3) Loss of thing due
(4) Annulment FROM WHOM TO REDEEM
(5) Novation (1) Vendee a retro
(6) Condonation/remission (2) His heirs, assigns or agents
(7) Confusion/merger (3) Subsequent purchaser of property, even if
(8) Compensation the right to redeem was not mentioned in the
(9) Rescission subsequent contract; except if registered
(10) Resolutory condition fulfilled land, where the right to redeem must be
(11) Redemption (Conventional or Legal) annotated on the title
(4) If several heirs, then the right of redemption
can be exercised against each heir for his
CONVENTIONAL REDEMPTION share of the property
DEFINITION HOW EXERCISED

(1) Vendor reserves the right to repurchase the (1) By returning the ff. to the buyer: (PEN)
thing sold, with the obligation to comply with (a) Price of the sale;
the provisions of Article 1616 and other (b) Expenses of the contract and other
stipulations which may have been agreed legitimate payments made by reason of the
upon. [Art 1601,CC] sale;
(2) Available when the seller reserves the right (c) Necessary and useful expenses made on
to repurchase the thing sold in the same the thing sold
instrument of sale as one of the stipulations (2) Complying with any other stipulation agreed
of the contract [Villarica v CA, 1968] upon, if any.
PERIOD The general rule in redemption is that it is not

General Rule: Follow period stipulated in sufficient that a person offering to redeem
contract, but should not exceed 10 years. manifests his desire to do so. The statement of
(1) If no period stipulated, then it shall be four intention must be accompanied by an actual
years from the execution of the contract and simultaneous tender of payment for the full
(2) But vendor may still exercise the right to amount of the repurchase price. [BPI Family
repurchase within thirty days from the time Savings Bank, Inc. v. Veloso, 2004]
final judgment was rendered in a civil action
on the basis that the contract was a true sale Tender of payment is enough (i.e., consignation
with right to repurchase is not necessary), if made on time, as a basis for
action against the buyer to compel him to resell.
BY WHOM EXERCISED But that tender does not in itself relieve the
(1) Vendor buyer from his obligation to pay the price when
(2) His heirs, assigns or agents redemption is allowed by the court. [Paez v.
(3) Creditor, if he has exhausted the property of Magno, 1949]
the vendor
PAGE 245
EFFECT OF REDEMPTION Right to Redeem Option to Purchase

(1) The seller shall receive the thing free from all
The maximum period The period of the
charges or mortgages constituted by the
for the exercise of the option contract may
buyer BUT he shall respect leases executed
right to repurchase be beyond the 10-year
by the buyer in good faith and in accordance
cannot exceed 10 period
with local custom.
years
(2) If there are growing fruits at the time of sale
and at the time of redemption: no Requires in addition a May be exercised by
reimbursement or prorating if the buyer did tender of payment of notice of its exercise to
not pay indemnity at the time of sale the amount required the offeror
(3) If there were no growing fruits at the time of by law, including
sale, but some exist at the time of redemption: consignment thereof if
fruits prorated (buyer entitled to part tender of payment
corresponding to time he possessed the land cannot be made
in the last year, counted from the anniversary effectively on the
of the date of sale) buyer
EFFECT OF NON-REDEMPTION EQUITABLE MORTGAGE

Ownership is consolidated in the buyer BUT the Definition: An equitable mortgage is defined as
consolidation shall not be recorded in the one which, although lacking in some formality,
Registry of property without a judicial order, or form or words, or other requisites demanded
after the vendor has been duly heard. by a statute, nevertheless reveals the intention
of the parties to charge real property as security
Stipulation that installments paid shall not be for a debt, and contains nothing impossible or
returned is valid insofar as the same may not be contrary to law. [Molina v. CA, 2003]
unconscionable under Art. 1486. Since the
defendant admitted using the units, this means The Valdehuezas having remained in possession
they did not pay the monthly installments, using of the land and the realty taxes having been
units free to prejudice of petitioner. Under the paid by them, the contracts which purported to
circumstances, the treatment of the installment be pacto de retro transactions are presumed to
payments as rentals cannot be said to be be equitable mortgages, whether registered or
unconscionable. [Delta Motor Sales v. Niu Kim not, there being no third parties involved. [Tan v.
Duan (1992)] Valdehueza, 2003]
RIGHT TO REDEEM VS. OPTION TO PURCHASE A pactum commissorium is a stipulation

(VILLANUEVA) enabling the mortgagee to acquire ownership of
Right to Redeem Option to Purchase the mortgaged properties without need of
foreclosure proceedings which is a nullity being
Not a separate Generally a principal contrary to the provisions of Article 2088 of the
contract but part of a contract and may be Civil Code. The inclusion of such stipulation in
main contract of sale, created independent the deed shows the intention to mortgage
and cannot exist of another contract rather than to sell. [Legaspi v. Spouses Ong,
unless reserved at the 2005]
time of the perfection
of the main contract of A pactumcommissoriumis contrary to the nature
sale of a true pacto de retro sale since ownership of
Does not need its Must have a the property sold is immediately transferred to
separate consideration consideration separate the vendee a retro upon execution of the sale,
to be valid and and distinct from the subject only to the repurchase of a vendor a
effective purchase price to be retro within the stipulated period.
valid and effective
[Arts. 1324 and 1479]
PAGE 246
DISTINGUISHED FROM OPTION TO

BUY REMEDIES OF APPARENT VENDOR
(1) If the instrument does not reflect the true
PRESUMPTION THAT A CONTRACT IS AN agreement: remedy is reformation
EQUITABLE MORTGAGE ARISES WHEN (5P- (2) If decreed to be an equitable mortgage: any
R)[ART. 1602] money, fruits or other benefit to be received
(1) Price unusually inadequate; by the buyer as rent or otherwise considered
(2) Possession retained by the seller as lessee or as interest.
otherwise; (3) If decreed as a true sale with right to purchase:
(3) Period of redemption extended (or granted seller may redeem within 30 days from
anew) upon or after the expiration of the finality of judgment, even if the period for
right to repurchase; redemption has expired.
(4) Part of the purchase price retained by the
seller; PERIOD OF REDEMPTION
(5) Payment of taxes on the thing sold borne by Art. 1606. The right referred to in Article 1601, in
the seller; the absence of an express agreement, shall last
(6) Any other case where it may be fairly inferred four years from the date of the contract.
that the Real intention of the parties is for
the transaction to secure a debt or other Should there be an agreement, the period
obligation. cannot exceed ten years.
The right of repurchase is not a right granted to However, the vendor may still exercise the right
the seller by the buyer in a subsequent to repurchase within thirty days from the time
instrument, but one reserved by the seller in the final judgment was rendered in a civil action on
same instrument as the sale contract. Any right the basis that the contract was a true sale with
granted after the execution of the sale right to repurchase.
instrument is not a right to repurchase, but
some other right like an option to buy. [Roberts
v. Papio (2007)]
Period of Redemption
(1) No stipulation: 4 years from the date of
contract
FOR THE PRESUMPTION OF AN EQUITABLE
(2) When there is agreement: Period not to
MORTGAGE TO ARISE UNDER ART. 1602, 2
exceed 10 years
REQUISITES MUST CONCUR (MOLINA V. CA, 2003)
(3) General Rule: Period starts to run from the
(1) That the parties entered into a contract
date of the execution of the contract
denominated as a contract of sale, and
(4) Exception: When the efficacy of the sale is
(2) That their intention was to secure an existing
subject to a suspensive condition, period
debt by way of a mortgage.
should be counted not from the date
appearing on the instrument, but from the
In case of doubt, a contract purporting to be a
date when the condition is fulfilled,
sale with right to repurchase shall be construed
marking the consummation of the sale
as an equitable mortgage [Art. 1603] [Tolentino citing Manresa].
RATIONALE BEHIND PROVISION ON EQUITABLE Additional 30 days for Repurchase
MORTGAGE The last paragraph of Art. 1606 giving the
(1) Circumvention of usury law vendor the right to repurchase within 30 days
(2) Circumvention of prohibition against pactum from the time of the rendition of final judgment
commissorium creditor cannot appropriate applies only where the nature and the character
the things given by way of pledge or of the transaction, whether as a pacto de retro
mortgage since remedy is foreclosure. or an equitable mortgage, was put in issue
PAGE 247
before the court [Gonzales v. De Leon, 4 SCRA or make judicial deposit of the repurchase
332]. price [Rosales v. Reyes, 25 Phil 495].
When an unrecorded pacto de retro sale was The seller a retro is given no option to require
construed as an equitable mortgage, the the buyer a retro to remove the useful
plaintiff had the right to enforce his lien in a improvements on the land subject of the sale a
separate proceeding notwithstanding the fact retro, unlike that granted the owner of a land
that he had failed to obtain judgment declaring under Arts. 546 and 547.Under Art.1616, the
him the sole and absolute owner of the land. seller a retro must pay for useful improvements
[Heirs of Arches v. Diaz (1973)] introduced by the buyer a retro; otherwise, the
latter may retain possession of the land until
Where the petition of the buyer in a pacto de reimbursement is made. [Gargollo v. Duero
retro sale is for a judicial orders pursuant Art. (1961)]
1607, so that there may be consolidation of
ownership since there was failure to redeem LEGAL REDEMPTION
during the redemption period, the right of
DEFINITION
action to foreclose or to collect the
(1) Right to be subrogated:
indebtedness arises from the court judgment
(a) upon the same terms and conditions
declaring the contract an equitable mortgage.
stipulated in the contract,
(b) in the place of one who acquires a thing
EXERCISE OF THE RIGHT TO by purchase or dation in payment, or by
REDEEM any other transaction whereby ownership
The seller can avail himself of the right of is transmitted by onerous title [Art 1619,
repurchase by returning to the buyer: CC]
(a) the price of the sale (2) Applies to transfers of ownership by onerous
(b) the expenses of the contract and any other title where subrogation is possible. Hence, it
legitimate payments made by reason of cannot apply to barter or to transfer by
the sale gratuitous title or hereditary succession.
(c) the necessary and useful expenses made (3) Applies to sales with pacto de retro [Baviera
on the thing sold [Art.1616]. citing MANRESA]
How redemption is exercised MANNER

(a) The vendor de retro must complete the (1) a formal offer to redeem or
repurchase before the expiration of the (2) filing of an action in court together with the
redemption period [Panganiban v. Cuevas, consignation of the redemption price within
7 Phil 477]. the reglementary period
(b) A sincere or genuine tender of payment is
enough. The deposit of the amount of the PERIOD TO REDEEM
repurchase money with the Clerk of Court To whom granted Period
was simply and additional security
[Legazpi v. Court of Appeals, 1986] (a) Co-owner [Art 30 days from notice
(c) When tender of payment cannot be validly 1620] (a) In writing
made because the buyer cannot be (b) By the seller
located, it becomes imperative for the (b) Adjoining owner of (c) Of the actual
seller a retro to file a suit for consignation Rural Land [Art execution and
with the courts of the redemption price 1621] delivery of the deed
[Catangcatang v. Legayada, 1978]. of sale
(d) If the offer or tender of payment for (c) Adjoining owner of
repurchase is refused, it is not necessary urban land [Art.
for the vendor a retro to consign in court 1622]
PAGE 248
To whom granted Period To whom granted Period

Actual knowledge of Debtor-mortgagor in 90 days from finality
the sale is immaterial , case of judicial of judgment
absent any showing foreclosure of real
that the co-owner has estate mortgage IF the
been shown a copy of mortgagee is a bank
the deed of sale or a banking
through a written institution. [The
communication. General Banking Law
[Doromal v. CA, 1975] of 2000]
Agricultural lessee 2 years from the
The law did not w/o knowledge of sale registration of the sale
provide for a particular of landholding
mode of written [Agrarian Land
notice, thus any Reform Code, Sec.12]
compliance with
written notice The notice required in Art. 1623 must be given
should suffice, by the seller, because the seller is in a better
including the giving of position to identify who his co-owners are. Said
a copy of the deed of provision is clear. [Francisco v. Boiser (2000)]
sale. [[Cronejero v. CA,
1966]] INSTANCES OF LEGAL REDEMPTION
Debtor in case a credit 30 days from the date
or the assignee demands (1) Redemption by Co-owners [Art. 1621]
incorporeal right in payment from debtor A co-owner of a thing may exercise the right
litigation is sold of redemption in case the shares of all the
[Art.1634] co-owners or any of them are sold to a third
Taxpayer in case of tax 1 year from date of person
sale [Sec. 215, NIRC] forfeiture (a) Third person refers to all persons who
Judgment debtor, 1 year from the date of are not heirs of the vendor, by will or
successorin- interest, registration of the intestate succession
or creditor with certificate of sale (b) The right is available not only to original
subsequent lien, in co-owners, but to those who had later
case of execution sale acquired the share of the co-owner
[Rule 39, Sec.27, ROC] (c) But the right of redemption may be
Debtor-mortgagor, 1 year from the date of exercised by a co-owner only when part of
successors-in- the sale the community property is sold to a
interest, stranger. When the portion is sold to
judicial/judgment another co-owner, the right does not arise
creditor, any person because a new participant is not added to
having a lien on the the co-ownership [Fernandez v. Tarun,
property, in case of 2002]
extrajudicial
foreclosure of If the price of the alienation is grossly
mortgage [Act No. excessive, the redemptioner shall pay only a
3135. Sec. 6.] reasonable one.
Should two or more co-owners desire to
exercise the right, they may also do so in
proportion to the share they may respectively
have in the thing owned in common.
PAGE 249
Rationale: Public Policy, since co-ownership Right of Pre-emption Right of Redemption

is a hindrance to the development and
Arises before sale Arises after sale
administration of the property. [Baviera]
No rescission because There can be
no sale exists yet rescission of the
(2) Redemption by Adjoining Land-owners of
original sale
rural land [Art. 1621]
The action is directed Action is directed
The ff. Requisites must concur: against prospective against buyer
(a) A piece of rural land is alienated seller
(b) Area does not exceed one hectare
(4) Redemption of Credit
Available when it is sold while in litigation
When not applicable:
(From the time the complaint is answered)
(a) The grantee does not own any rural land
(b) Adjacent lands are separated by brooks,
NOT available when the assignment is in
drains, roads and other apparent
favor of:
servitudes for the benefit of other estates
(a) Co-heir/co-owner of right assigned
(b) Creditor in payment of his credit
Order of preference if two or more wishes to
(c) Possessor of a tenement or piece of land
exercise the right:
which is subject to the right assigned
(a) Owner with smaller land area
(b) If same land area, then the one who first
How exercised: reimburse the assignee for
requested the redemption
the:
(a) Price paid
What constitutes rural or urban is to be
(b) Judicial expenses incurred
determined from the character of the
(c) Interest on the price from date of payment
community or vicinity in which it is found, and
NOT from the nature of the land itself nor
(5) Under the Public Land Act
the purpose to which it is devoted. [Ortega v.
Coverage:
Orcine, 1971]
(a) Every conveyance of land acquired under
a free patent or homestead
(3) Redemption by adjoining land-owners of
(b) The ownership of the land must have
urban land (applies only to small portions of
been transferred to another. If the
urban land) [Art. 1621]
transaction is a mere promise to sell,
there is no right yet to redeem
Right of Pre-emption Right of Redemption (c) This refers to conveyances made after the
Owner of any If the resale has been prohibited 5 years from the issuance of
adjoining land has a perfected, the owner the patent or grant
right of pre-emption at of the adjoining land
a reasonable price shall have a right of Period:
when: redemption, also at a (a) Within 5 years from the date of
(a) Urban land is so reasonable price conveyance
small and so (b) If pacto de retro sale, the period to
situated that a Priority if 2 or more redeem cannot be less than 5 years
major portion of it adjoining owners want
cannot be used for to redeem: owner Who may redeem:
any practical whose intended use of (a) General Rule: Applicant, widow, or heirs
purpose w/in a the land appears to be (b)Exception: land is sold to another member
reasonable time; best justified of the family of the applicant, or his direct
(b) Was bought merely descendant or heir
for speculation; (c) From whom: Subsequent purchasers
(c) Was resold
PAGE 250
The right to redeem can be exercised against i. The landholding must be pre-empted
any subsequent purchaser even if the land is by the DAR
registered under the Torrens System ii. When two or more lessees, each shall
becausethe fact that it was acquired through a have preferential right only to the
homestead or free patent can be seen from the extent of the area cultivated by him
description of the property in the certificate of (c) Period: 180 days from notice in writing
title.
Lessees right of redemption
(6) Redemption in Foreclosure and Execution (a) Sec. 12 RA 3844: In case landholding is
Sales sold to 3rd person without the
knowledge of the lessee, the latter shall
Who may redeem have the right to redeem the same at a
reasonable price and consideration
In extra judicial In execution sales
(b) Period: within 180 days from notice in
foreclosure (a) Judgment debtor
writing
(a) Debtor (b) Successor in
(b)Successor in interest
interest (c) Creditor having a AGE REDEMPTION
(c)Judicial or judgment lien on the property
creditor of said sold by attachment, Art. 1619. Legal redemption is the right to be
debtor judgment or subrogated, upon the same terms and
(d)Junior mortgage on the conditions stipulated in the contract, in the
encumbrancer property place of one who acquires a thing by purchase
subsequent to the or dation in payment, or by any other
judgment transaction whereby ownership is transmitted
Period to redeem by onerous title.
Extra judicial Execution sale If land is
foreclosure (a) within 12 mortgaged in
(a) within 1 months favor of a bank
year from after the (a) within 1
the date of sale year after The Law on Sale of
the sale the sale
(not Subdivision and
available in
case of a
Condominium (PD 957)
corporate
mortgagor) DEFINITIONS
Amount of redemption
DEFINITION OF "SALE" OR "SELL"
(a) Amount of the purchase
(a) include every disposition, or attempt to
(b) Interest at 1% per month from the time of
dispose, for a valuable consideration, of a
the sale up to the time of redemption
subdivision lot, including the building and
(c) Any assessment or taxes which the
other improvements thereof, if any, in a
purchaser may have paid
subdivision project or a condominium unit in
a condominium project.
(7) Under the Agrarian Land Reform Code (b) also include a contract to sell, a contract of
Lessees right of pre-emption purchase and sale, an exchange, an attempt
(a) The agricultural lessee shall have the to sell, an option of sale or purchase, a
preferential right to buy under the same
solicitation of a sale, or an offer to sell,
reasonable terms and conditions, in case directly or by an agent, or by a circular, letter,
the lessor decides to hold the advertisement or otherwise.
landholding (c) privilege given to a member of a cooperative,
(b) Conditions: corporation, partnership, or any association
PAGE 251
and/or the issuance of a certificate or receipt REGISTRATION OF PROJECTS [SECTION 4,

evidencing or giving the right of participation PD 957]
in, or right to, any land in consideration of The registered owner of a parcel of land who
payment of the membership fee or dues, wishes to convert the same into a subdivision
shall be deemed a sale within the meaning project shall submit his subdivision plan to the
of this definition. National Housing Authority. The same
procedure shall be followed in the case of a plan
DEFINITION OF "BUY" OR "PURCHASE" for a condominium project except that NHA also
(a) include any contract to buy, purchase, or approves the building thereon in accordance
otherwise acquire for a valuable with the National Building Code.
consideration a subdivision lot, including
the building and other improvements, if any, REGISTRATION OF OWNER [SECTION 4, PD
in a subdivision project or a condominium
957]
unit in a condominium project.
The owner or the real estate dealer interested in
the sale of lots or units, respectively, in such
"Owner" shall refer to the registered owner of
subdivision project or condominium project
the land subject of a subdivision or a
shall register the project with the Authority by
condominium project.
filing therewith a sworn registration statement.
"Developer" shall mean the person who
develops or improves the subdivision project or PUBLICATION AND ISSUANCE OF
condominium project for and in behalf of the REGISTRATION CERTIFICATE [SECTION 4, PD
owner thereof. 957]
A notice of the filing of the registration
"Dealer" shall mean any person directly statement at the expense of the applicant-
engaged as principal in the business of buying, owner or dealer, in two newspapers general
selling or exchanging real estate whether on a circulation, one published in English and
full-time or part-time basis. another in Pilipino, once a week for two
consecutive weeks. Notice shall state that
"Broker" shall mean any person who, for subdivision lots or condominium units are open
commission or other compensation, undertakes to inspection during business hours by
to sell or negotiate the sale of a real estate interested parties. The project shall be deemed
belonging to another. registered upon completion of the publication
requirement. The fact of registration shall be
"Salesman" shall refer to the person regularly evidenced by a registration certificate issued to
employed by a broker to perform, for and in his the applicant-owner or dealer.
behalf, any or all functions of a real estate
broker. LICENSE TO SELL [SECTION 5, PD 957]
The registration certificate does NOT authorize
REQUIREMENTS FOR OWNERS AND the owner or dealer to sell any unit. They must
DEVELOPERS first obtain a license to sell within two weeks
(1)Registration of projects from the registration of the project. The license
(subdivision/condominium) with the NHA to sell is issued upon examination of the
(2) Registration of the owner registration statement filed by the owner or
(3) License to sell of owner or dealer with dealer showing that:
performance bond [PB, exceptions in Section (1) the owner or dealer is of good repute
7] (2) that his business is financially stable
(3) that the proposed sale of subdivision lots or
condominium units to the public would not
be fraudulent
PAGE 252
PERFORMANCE BOND [SECTION 6, PD 957] (4) Misrepresentation in any prospectus,

A license to sell can only be issued by the NHA if brochure, circular or other literature about
the owner or dealer files a performance bond the subdivision project or condominium
guaranteeing the construction and project that has been distributed to
maintenance of the roads, gutters, drainage, prospective buyers
sewerage, water system, lighting systems, and (5) Bad business repute of owner/dealer
full development of the subdivision project or (6) Does not conduct his business in accordance
the condominium project and the compliance with law or sound business principles
by the owner or dealer with the applicable laws
and rules and regulations. The bond shall be REQUIREMENT FOR DEALERS, BROKERS,
executed in favor of the Republic of the AND SALESMEN (DBS)
Philippines and shall authorize the Authority to
use the proceeds thereof for the purposes of its Registration
undertaking in case of forfeiture as provided in
this Decree. Dealers, brokers, and salesmen (DBS) must be
registered (Section 11, PD 957)
WHEN LICENSE TO SELL AND PERFORMANCE Requisites of registration:
BOND NOT REQUIRED [SECTION 7, PD 957] (1) Good reputation and compliance with NHA
A license to sell and performance bond shall not rules
be required in any of the following transactions: (2) Payment of prescribed fee
(a) Sale of a subdivision lot resulting from the (3) Filing of bond or other security (amount fixed
partition of land among co-owners and co- by NHA) conditioned upon his faithful
heirs. compliance with provisions of PD 957
(b) Sale or transfer of a subdivision lot by the
original purchaser thereof and any When registration of DBS terminates
subsequent sale of the same lot. (1) Termination of employment with dealer or
(c) Sale of a subdivision lot or a condominium broker
unit by or for the account of a mortgagee in (2) Expiration (31st day of Dec each year)
the ordinary course of business when
necessary to liquidate a bona fide debt. Registration of DBS may be renewed not less
than 30 nor more than 60 days before Jan 1 and
GROUNDS FOR SUSPENSION OF LICENSE TO by payment of fee. If renewal is not within said
period, it shall be treated as an original
SELL [SECTION 8, PD 957]
application.
(1) misleading, incorrect, inadequate, or
incomplete information in registration
Revocation of registration as DBS [Section 12, PD
statement
957]
(2) fraud upon prospective buyers on the sale or
Grounds
offering for a sale
(1) Has violated any provision of this Decree or
Note: suspension is confidential unless orer of
any rule or regulation made hereunder; or
suspension has been violated.
(2) Has made a material false statement in his
application for registration; or
GROUNDS FOR REVOCATION OF (3) Has been guilty of a fraudulent act in
REGISTRATION CERTIFICATE AND LICENSE TO connection with any sale of a subdivision lot
SELL [SECTION 9, PD 957] or condominium unit; or
(1) Insolvency of owner/dealer (4) Has demonstrated his unworthiness to
(2) Violation of owner of PD 957 or its IRR or any transact the business of dealer, broker, or
undertaking of his/its performance bond salesman, as the case may be.
(3) Has been or is engaged or is about to The NHA may suspend the DBS' registration
engage in fraudulent transactions pending hearing of the case. The suspension or
revocation of the registration of a dealer or
PAGE 253
broker (DB) shall carry with it all the suspension Advertisements by the owner or developer
or revocation of the registration of all his [Section 19, PD 957]
salesmen (S). (a) Must reflect real facts, must not mislead or
deceive public
Characteristics of sale of a condominium or (b) Owner or developer shall be liable for any
subdivision unit and similar contracts misrepresentation as to facilities, etc.
(1) Contracts to sell, deeds of sale, and other (c) Advertisements shall form part of the sales
similar instruments must be registered with warranties enforceable against the owner or
the Register of Deeds developer
(2) Mortgages on unit or lot by owner/developer (d) Failure to comply with sales warranties is
needs prior written approval by NHA for the punishable under PD 957
protection of buyers
(3) Advertisements by owner of developer Non-forfeiture of payments (Section 23, PD 957)
become part of sales warranties enforceable No installment payment made by a buyer in a
against owner or developer subdivision or condominium project for the lot
(4) No forfeiture of installments already paid by or unit he contracted to buy shall be forfeited in
buyer if buyer stops paying because of failure favor of the owner or developer when the buyer,
by owner or developer to develop subdivision after due notice to the owner or developer,
or condominium desists from further payment due to the failure
(5) Failure to pay installments governed by of the owner or developer to develop the
Maceda Law [RA 6552] subdivision or condominium project according
(6) Title is issued to the buyer upon full payment to the approved plans and within the time limit
(7) Realty tax is paid by owner or developer for complying with the same. Such buyer may,
while not fully paid; but if the buyer occupies at his option, be reimbursed the total amount
the unit/lot, the owner/developer may paid including amortization interests but
recover the taxes from the buyer excluding delinquency interests, with interest
(8) Owner or developer cannot demand any thereon at the legal rate.
other charges allegedly for community
benefit (may be done by homeowner's Section 23 does not require that a notice be
association) given first by the buyer to the seller before a
demand for refund can be made, as the notice
Registration of sale, etc [Section 17, PD 957] and demand can be made in the same letter or
All contracts to sell, deeds of sale and other communication. This is designed to stem the
similar instruments relative to the sale or tide of fraudulent manipulations perpetrated by
conveyance of the subdivision lots and unscrupulous subdivision and condominium
condominium units, whether or not the sellers and operators.
purchase price is paid in full, shall be registered
by the seller in the Office of the Register of Section 23 vests upon the buyer to either
Deeds of the province or city where the property demand reimbursement, or wait for further
is situated. development.
Mortgages on unit or lot by owner or Failure to pay installments [Section 24, PD 957]
developer [Section 18, PD 957] The rights of the buyer in the event of this
(a) Need prior written approval of the NHA failure to pay the installments due for reasons
(b) Must show that proceeds of mortgage will other than the failure of the owner or developer
be used for development of the to develop the project shall be governed by
condominium or subdivision Republic Act No. 6552 [Maceda Law].
(c) Value of each lot or unit determined by the
buyer (if there is one) and the buyer shall be Issuance of title [Section 25, PD 957]
notified before release of loan The owner or developer shall deliver the title of
(d) Buyer may pay directly to mortgagee the lot or unit to the buyer upon full payment of
the lot or unit. No fee, except those required for
PAGE 254
the registration of the deed of sale in the which the holders of separate interest shall
Registry of Deeds, shall be collected for the automatically be members or shareholders, to
issuance of such title. In the event a mortgage the exclusion of others, in proportion to the
over the lot or unit is outstanding at the time of appurtenant interest of their respective units in
the issuance of the title to the buyer, the owner the common areas.
or developer shall redeem the mortgage or the
corresponding portion thereof within six months (a) separate interest in a unit in a residential,
from such issuance in order that the title over industrial or commercial building
any fully paid lot or unit may be secured and (b) undivided interest in the land on which the
delivered to the buyer in accordance herewith. building is located and other common areas
i. common areas may not be partitioned
Realty tax [Section 26, PD 957] even by judicial decree [Section 7]
Real estate tax and assessment on a lot or unit (c) title to land and common areas held by
shall de paid by the owner or developer without condominium corporation - owners of
recourse to the buyer for as long as the title has separate interest are automatically
not passed the buyer; Provided, however, that if members/shareholders, exclusively.
the buyer has actually taken possession of and
occupied the lot or unit, he shall be liable to the OTHER DEFINITIONS
owner or developer for such tax and assessment Sec. 3. As used in this Act, unless the context
effective the year following such taking of otherwise requires:
possession and occupancy. (a) "Condominium" means a condominium as
defined in Section 2.
No other charges [Section 27, PD 957] (b) "Unit" means a part of the condominium
No owner or developer shall levy upon any lot or project intended for any type of
buyer a fee for an alleged community benefit. independent use or ownership, including
Fees to finance services for common comfort, one or more rooms or spaces located in one
security and sanitation may be collected only by or more floors (or part or parts of floors) in a
a properly organized homeowners association building or buildings and such accessories
and only with the consent of a majority of the lot as may be appended thereto.
or unit buyers actually residing in the (c) "Project" means the entire parcel of real
subdivision or condominium project. property divided or to be divided in
condominiums, including all structures
thereon,
The Condominium Act (d) "Common areas" means the entire project
excepting all units separately granted or
(RA 4726) held or reserved.
(e) "To divide" real property means to divide the
ownership thereof or other interest therein
DEFINITION OF A CONDOMINIUM by conveying one or more condominiums
Sec. 2. A condominium is an interest in real therein but less than the whole thereof.
property consisting of separate interest in a unit
in a residential, industrial or commercial
TRANSFERS OR CONVEYANCES OF A
building and an undivided interest in common,
directly or indirectly, in the land on which it is UNIT OR AN APARTMENT, OFFICE
located and in other common areas of the OR STORE, OR OTHER SPACE
building. A condominium may include, in THEREIN [SECTION 5, RA 4726]
addition, a separate interest in other portions of Transfer or conveyance of a unit or a space
such real property. Title to the common areas, therein includes the transfer or conveyance of
including the land, or the appurtenant interests the
in such areas, may be held by a corporation (i) undivided interests in common areas
specially formed for the purpose (hereinafter (ii) membership or shareholding in the
known as the "condominium corporation") in condominium corporation
PAGE 255
Proviso: only Filipino citizens or corporations at project has not been rebuilt or repaired
least 60% of the capital stock are owned by substantially to its state prior to its damage
Filipino citizens may be the transferee of or destruction
common areas in cases where the common areas (2) That damage or destruction to the project
are owned by the owners of separate units as co- has rendered one-half or more of the units
owners (not by condominium corporation) therein untenantable and that condominium
owners holding in aggregate more than
Exception to proviso: hereditary succession. thirty percent interest in the common areas
are opposed to repair or restoration of the
Shareholdings in a condominium corporation project
may be conveyed only in a proper case. Not (3) That the project has been in existence in
every purchaser of a condominium unit is a excess of fifty years, that it is obsolete and
shareholder of a condominium corporation. The uneconomic, and that condominium owners
Condominium Act leaves to the Master Deed holding in aggregate more than fifty percent
the determination of when the shareholding will interest in the common areas are opposed to
be transferred the buyer of the unit. But repair or restoration or remodeling or
ownership of a unit is an indispensable requisite modernizing of the project
to being a shareholder in the corporation. (4) That the project or a material part thereof
[Sunset View Condominium Corporation v. has been condemned or expropriated and
Campos (1981)] that the project is no longer viable, or that
the condominium owners holding in
RIGHTS OF A CONDOMINIUM UNIT aggregate more than seventy percent
OWNER (ASIDE FROM RIGHTS interest in the common areas are opposed to
ARISING FROM OWNERSHIP) continuation of the condominium regime
after expropriation or condemnation of a
[SECTION 6] material portion thereof
(1) Absolute right to sell or dispose of his (5) That the conditions for such partition by sale
condominium unless the master deed set forth in the declaration of restrictions,
unless there is a right of first refusal in favor duly registered in accordance with the terms
of condominium owners of the Condominium Act, have been met
(2) Exclusive right to mortgage, pledge or
encumber his condominium and to have the DECLARATION OF RESTRICTIONS BY
same appraised independently of the other
condominiums but any obligation incurred OWNER OF PROJECT -
by such condominium owner is personal to PRECONDITION TO CONVEYANCE
him [SECTION 9]
(a) The owner must register with the Register of
PARTITION BY SALE [SECTION 8] Deeds a declaration of restrictions before the
This is an action that may be brought by one or conveyance of any condominium in the
more persons owning condominiums in a project
condominium project for the partition of the (b) The restrictions constitute a lien upon each
project by the sale thereof. The effect is as if the condominium in the project and shall insure
owners of all the condominiums in such project to and bind all condominium owners in the
were co-owners of the entire project in the same project
proportion as their interests as their interests in (c) The lien may be enforced by any
the common areas. condominium owner or by the management
body of the project
A partition by sale can only be done upon
showing any of the following:
(1) That three years after damage or destruction
to the project which renders material part
thereof unfit for its use prior thereto, the
PAGE 256
ASSESSMENT IN ACCORDANCE INVOLUNTARY DISSOLUTION OF

WITH DECLARATION OF THE CONDOMINIUM CORPORATION
RESTRICTIONS [SECTION 20] [SECTION 12]
This is the "tax imposition power" of the In case of involuntary dissolution, the common
condominium corporation. If unpaid, the areas held by the corporation shall be
management body may cause a notice of transferred pro-indiviso and in proportion to
assessment to be registered with the Register of their interest to the members/stockholders of
Deeds, which may be released only upon the corporation, subject to the rights of creditors
payment of the assessed fees. This lien is of the corporation. The common areas remain in
superior to all other subsequent liens except undivided co-ownership.
real property taxes liens and other liens
provided for in the declaration of restrictions. POWER OF ATTORNEY HELD BY
CORPORATION IN CASE OF
HOW LIEN ENFORCED AFTER NON- VOLUNTARY DISSOLUTION OF
PAYMENT OF ASSESSED FEES CONDOMINIUM CORPORATION
[SECTION 20] [SECTION 15]
Judicial or extra-judicial foreclosure of real The condominium corporation is deemed to
property mortgages, where the management hold a power of attorney from all
body may bid unless disallowed by the members/stockholders to sell and dispose of
declaration of restrictions. their separate interests in the project. To
liquidate, the condominium corporation will sell
CONTENTS OF A DECLARATION OF the entire project as if it owned the whole
RESTRICTIONS [SECTION 9] project itself, subject to the corporate and
(1) Provisions for the management of the project individual condominium creditors.
by any of the ff bodies:
(a) Condominium corporation SALE, EXCHANGE, LEASE, OR
(b) Association of condominium owners DISPOSITION BY CORPORATION OF
(c) Board of governors elected by
condominium owners
THE COMMON AREAS [SECTION 16]
Generally not allowed unless authorized by
(d) Management agent elected by the
owners or by the board named in the affirmative vote of all of the
stockholders/members.
declaration
(2) Provisions for voting majorities quorums,
notices, meeting date, and other rules STOCKHOLDER/MEMBER
governing such body or bodies DEMANDING PAYMENT FOR SHARES
(3) Powers of the management body OR INTEREST AKA APPRAISAL
(4) Maintenance of insurance policies (fire, RIGHT [SECTION 17]
casualty, workmen's compensation, etc) By-laws of the condominium corporation shall
(5) Maintenance, utility, gardening and other provide that any shareholder/member
services for the common areas demanding payment for his share or interest
(6) Amendment of the restrictions must also consent to sell his separate interest in
(7) Reasonable assessment to meet the project to the corporation or any buyer of
expenditures the corporation's choice.
(8) And many other provisions - the common
thread is the management and
maintenance of the common areas and the
manner of exercise of the management
body's powers
PAGE 257
REQUIREMENTS FOR
REGISTRATION OF CONVEYANCE
WITH THE REGISTER OF DEEDS
[SECTION 18]
Certificate of the management body of the
project that the conveyance is in accordance
with the declaration of restrictions
REALTY TAX ON CONDOMINIUMS

[SECTION 25]
Each condominium separately owned shall be
separately assessed, for purposes of real
property taxation and other tax purposes to the
owners thereof and the tax on each such
condominium shall constitute a lien solely
thereon.
PAGE 258
PAGE 259
UP LAW BOC SUCCESSION CIVIL LAW
General Provisions Exception: Property acquired after the making of

a will shall not pass to the heirs unless it should
expressly appear in the will that such was the
DEFINITION intention of the testator. [Art. 793, CC]
Succession a mode of acquisition by virtue of
which the property, rights and obligations to the RULES ON THE OPENING OF SUCCESSION
extent of the value of the inheritance, of a person (1) The rights to succession are transmitted from
are transmitted through his death to another or the moment of the death of the decedent.
others either by his will or by operation of law. [Art. 777, CC]
[Art. 774, CC]
Implications of this principle:
KINDS OF SUCCESSION (a) The law in effect at the time of death of
(1) Testamentary that which results from the the decedent governs the succession.
designation of an heir, made in a will [Art. 2236, CC]
executed in the form prescribed by law. [Art. (b) The heir becomes the owner of his share
779, CC] as well as all fruits which accrue after the
(2) Legal or Intestate that which takes place by death of the decedent.
operation of law in the absence of a valid (c) Upon death of the decedent, heirs may
will. immediately possess, administer and
(3) Mixed that which is effected partly by will dispose of their shares in the estate (in
and partly by operation of law. [Art. 780, CC] the absence of existing debts/claims
(4) Compulsory succession to the legitime and against the estate).
prevails over all other kinds of succession. (d) The possession of hereditary property is
(Balane, 2010) deemed transmitted to the heir without
interruption and from the moment of
death of the decedent, in case the
OBJECT OF SUCCESSION AND inheritance is accepted. [Art. 533, CC]
TRANSMISSION (e) Estate taxes accrue upon death of the
Inheritance includes: decedent, even if the heirs come into
All the property, rights and obligations of a possession only later.
person which are not extinguished by his
death. [Art. 776, CC] (2) A person may be presumed dead for the
Not only the property and the transmissible purpose of opening his succession. In this
rights and obligations existing at the time of case, succession is only of provisional
his death, but also those which have accrued character because there is always a chance
thereto since the opening of the succession. that the absentee may still be alive. [Arts.
[Art. 781, CC] 390-391, CC].
What are transmitted? SUBJECTS OF SUCCESSION

Rights and obligations which are not strictly Decedent person whose property is transmitted
personal (intuit personae). through succession, whether or not he left a will.
Money debts of the decedent are not [Art. 775, CC]
transmitted to the heirs nor paid by them. The
estate pays them. [Balane, 2010) Testator a decedent who left a will. [Art. 775,
CC]
RULE ON TRANSMISSION
General rule: All property rights which have KINDS OF SUCCESSORS
accrued to the hereditary estate since the Heirs those who are called to the whole or an
opening of succession are transmitted to the aliquot portion of the inheritance either by will or
heirs. by operation of law. [Art. 782, CC]
PAGE 260
Devisees persons to whom gifts of real property CHARACTERISTICS OF WILLS

are given by virtue of a will (1) Purely personal will-making is non-
delegable
Legatees persons to whom gifts of personal Making of a will cannot be left in whole or
property are given by virtue of a will in part of the discretion of a third person, or
accomplished through the instrumentality
Note: The distinction is significant in case of of an agent or attorney. [Art. 784, CC]
preterition. Testator may not make a testamentary
disposition in such manner that another
KINDS OF HEIRS person has to determine whether or not it
(1) Compulsory Heirs those who succeed by is to be operative. [Art. 787, CC]
force of law to some portion of the
inheritance, in an amount predetermined by What cannot be What may be
law known as the legitime, of which they delegated to third entrusted to third
cannot be deprived by the testator, except by persons persons
a valid disinheritance. They succeed (1) Designation of
regardless of a will. person/institutio
(2) Voluntary or Testamentary Heirs those who n falling under a
are instituted by the testator in his will, to (1) Designation of
class specified by
succeed to the portion of the inheritance of heirs, devisees
testator;
which the testator can freely dispose. They and legatees;
(2) Manner of
succeed by reason of a will. (2) Duration/efficacy
distribution of
(3) Legal or Intestate Heirs those who succeed of designation;
property specified
to the estate of the decedent who dies (3) Determination of
by testator. [Art.
without a valid will, or to the portion of such portions, when
786, CC]
estate not disposed of by will, or when referred to by
certain grounds are met. name. [Art. 785,
Note: testator must
CC]
first specify the class
Testamentary Succession and amount
property for proper
of
delegation.
WILLS
(2) Free and intelligent [Art. 839, CC]
IN GENERAL (3) Solemn and formal if the form is defective,
Will an act whereby a person is permitted, with the will is void.
the formalities prescribed by law to control to a (4) Revocable and ambulatory will can be
certain degree the disposition of his estate to revoked at any time before the testators
take effect after his death. [Art. 783, CC] death. [Art. 828, CC]
(5) Mortis causa takes effect upon the
KINDS OF WILLS testators death.
(1) Notarial an ordinary or attested will, which (6) Individual prohibition against joint wills.
must comply with the requirements of the [Art. 818, CC]
law. [Arts. 804-808, CC] (7) Executed with animus testandi intent to
(2) Holographic a will entirely written, dated dispose of the property.
and signed by the hand of the testator. [Art. (8) Executed with testamentary capacity
810, CC] (9) Unilateral act does not involve an exchange
of values or depend on simultaneous offer
and acceptance.
(10) Dispositive disposes of property.
General rule: Wills contain disposition of the

testators estate mortis causa.
PAGE 261
Exceptions: (non-dispositive wills) Kinds of Ambiguities

Will recognizing an illegitimate child;
Will disinheriting a compulsory heir. Patent or Extrinsic Latent or Intrinsic
Ambiguity Ambiguity
(11) Statutory grant permitted only by law, not One which cannot be
a constitutional right seen from the reading
of the will but which
One which appears
As it is a statutory grant, a will must be made appears only upon
upon the face of the
in accordance with the formalities consideration of
instrument.
prescribed. by the law [Art. 783, CC] [Balane extrinsic
(2004)] circumstances.
RULES OF CONSTRUCTION AND

INTERPRETATION [Arts. 788-795) There is no distinction between patent and latent
ambiguities insofar as the admissibility of parol
Main rule: All rules are designed to ascertain and or extrinsic evidence to aid testamentary
give effect to the intention of the testator. disposition is concerned.
Rationale: Testamentary succession is preferred GOVERNING LAWS, IN GENERAL

to intestacy.
Aspect of the Will Governing Law
(1) Different interpretations, in case of doubt, Law in force at the time
that which would make the will operative. Formal Validity the will was executed. [Art.
[Art. 788, CC] 795, CC]
(2) Words to be taken in their ordinary and Law of decedents
grammatical sense unless there is a clear nationality at the time of
intention to use them in another sense. [Art. Intrinsic Validity
his death. [Art. 16 and
790, CC] 2263, CC]
(3) Technical words are to be taken in their
technical sense unless there is a contrary Aspects of the Will Governed by the National
intention or when testator was unacquainted Law of the Decedent
with such technical sense. [Art. 790, CC] (1) Order of succession;
(4) Words must be of an interpretation to give (2) Amount of successional rights;
effect to every expression. To make it (3) Intrinsic validity of testamentary
operative rather than inoperative; that which provisions; and
will prevent intestacy. [Art. 791, CC] (4) Capacity to succeed.
(5) Invalidity of one of several dispositions does
not result in invalidity of others unless the TESTAMENTARY CAPACITY AND
testator would not have made such INTENT
dispositions if the first invalid disposition had Testamentary capacity must exist at the time of
not been made. [Art. 792, CC] the execution of the will
(6) Every devise and legacy shall convey all the
interest unless it clearly appears the intention Supervening incapacity does not invalidate an
was to convey a less interest. [Art. 794, CC] effective will nor is the will of an incapable
(7) Where there are ambiguities (i.e. imperfect validated by a supervening of capacity [Art. 801,
description or no person or property exactly CC]
answers to the description, mistakes,
omissions), intrinsic or extrinsic evidence may Requisites:
be used to ascertain the intention of the He must not be expressly prohibited by law to
testator. make a will [Art. 796, CC]
Oral declarations of the testator as to his
intention must be excluded. [Art. 789, CC]
PAGE 262
(a) Age Requirement (2) A will was made in a foreign country by an

alien [Art. 816, CC]
The testator must not be under 18 years of (3) A will was made in the Philippines by an
age [Art. 797, CC] alien [Art. 817, CC]
Year shall be understood to be 12 calendar GOVERNING LAW AS TO PLACE OF

months [Sec 31, Book 1, Admin Code] EXECUTION OF WILL
(b) Soundness of Mind of the Testator Place of
Execution of Governing Law
The testator is of sound mind at the time of Testator
Will
execution [Art. 798, CC] Philippine Law [Art.
Philippines
16, CC]
Sanity is negatively stated in Art. 799: (1) Law of the
Not necessary that the testator be in full country in which
possession of reasoning faculties. Filipino Outside of
it is executed
Not necessary that the testators mind be the
[Art. 17, CC]; or
wholly unbroken, unimpaired, unshattered by Philippines
(2)Philippine Law.
disease, injury or other cause. [Art. 799, CC] [Art. 815, CC]
(1) Philippine Law;
To be of sound mind, the testator must know: or
The nature of the estate to be disposed of; (2) Law of the
The proper objects of his bounty; country of which
Philippines
The character of the testamentary act. [Art. testator is a
799, CC] citizen or
subject. [Art.
General rule: Soundness of mind is presumed. 817, CC]
[Art. 800, CC] (1) Law of the place
where the will is
Exception: When the testator, one month or less executed [Art. 17,
Alien
before the execution of the will, was publicly CC]; or
known to be insane. (2)Law of the place
where the
Outside of
FORM testator resides;
the
or
Philippines
IN GENERAL [Art. 804, CC] (3) Law of the
(1) The will must be in writing. testators
(2) It must be in a language or dialect known to country; or
the testator. (4) Philippine
Law. [Art. 816,
APPLICABLE LAWS AS TO FORMAL VALIDITY CC]
Formal validity is governed by the law in force
at the time the will was executed. [Art. 795, CC] ATTESTED OR NOTARIAL WILLS
As to the place, forms and solemnities of a will
are governed by the law of the country in which Specific Requirements for Notarial Wills
the will was executed. [Art. 17, CC] (1) Subscribed at the end;
(2) Attestation clause;
Arts. 815-817 (summarized in the table below)
(3) Marginal signatures;
provide for the various governing laws in these
(4) Page numbers;
instances:
(5) Acknowledged by a notary public;
(1) A will was made in a foreign country by a
(6) Additional requirements for handicapped
Filipino [Art. 815, CC]
testators;
PAGE 263
(7) Subscribed by 3 or more witnesses in the (3) MARGINAL SIGNATURES

presence of the testator and of one another. General rule: Testator or his representative shall
write his name, and the witnesses shall sign each
(1) SUBSCRIPTION: Subscribed to, at the end of and every page except the last page [Art. 805,
the will [Art. 805, CC] CC]
(a) By the testator himself; or
(b) By the testators name written by a Exceptions:
representative in his presence and under (1) When the will consists of only one page;
his express direction. (2) When the will consists of only two pages, the
first of which contains all dispositions and is
(2) ATTESTATION: Attested and subscribed by 3 signed at the bottom by the testator and the
or more credible witnesses in the presence of the witnesses, and the second page contains
testator and of one another [Art. 805, CC] only the attestation clause duly signed at the
bottom by the witnesses. [Abangan vs.
Attestation Subscription Abangan (1919)]
Mental act (act of the Mechanical (act of the
senses) hand) Matias v. Salud (1957)
Purpose is to render The use of thumbprint was allowed.
available proof during
probate of will, not Purpose of Icasiano v. Icasiano (1964)
only of the authenticity identification The inadvertent failure of one witness to affix his
of the will but also of signature to one page of a testament, due to the
its due execution simultaneous lifting of two pages in the course of
signing, is not per se sufficient to justify denial of
The attestation clause shall state the following: probate.
(1) Number of pages;
(2) The fact that the testator or his (4) PAGE NUMBERINGS: Numbered correlatively
representative under his express direction in letters placed on the upper part of each page.
signed the will and every page in the [Art. 805, CC]
presence of instrumental witnesses; i.e., Page One of Five
(3) That the witnesses signed the will and all its Mandatory part: pagination by means of a
pages in the presence of the testator and of conventional system.
one another. Directory part: pagination in letters on the
upper part of each page. [Balane (2010)]
Cagro v. Cagro (1953)
The signatures of the witnesses must be at the (5) ACKNOWLEDGED before a notary public by
bottom of the attestation clause. the testator and the witnesses. [Art. 806, CC]
Cruz v. Villasor (1973) Cruz v. Villasor (1973)

The notary public cannot be counted as an Notary public cannot be considered a third
attesting witness. witness. He cannot acknowledge before himself
his having signed the will. To allow such would
Test of presence have the effect of having only two attesting
witnesses to the will.
Jaboneta v. Gustilo (1906)
Not whether they actually saw each other sign, Javellana v. Ledesma (1955)
but whether they might have seen each other The certification of acknowledgement need not
sign had they chosen to do so considering their be signed by the notary in the presence of the
mental and physical condition and position with testator and the witnesses.
relation to each other at the moment of
inscription of each signature. (6) FOR HANDICAPPED Testators, additional
rules:
PAGE 264
(a) Deaf Mute [Art. 807, CC]

Testator must personally read the will; or Examples:
Testator shall personally designate two (1) Whether all pages are consecutively
persons to read the contents and numbered;
communicate it to him in some practicable (2) Whether the signatures appear in each and
manner. every page;
(b) Blind [Art. 808, CC] (3) Whether the subscribing witnesses are
The will shall be read to the testator three;
twiceby one of the subscribing witnesses (4) Whether the will was notarized. [Caneda v.
and by the notary public acknowledging CA (1993)]
the will.
A testator suffering from glaucoma is Omissions which cannot be supplied except by
considered as legally blind. [Garcia v. extrinsic evidence or evidence aliunde are fatal
Vasquez (1970)] and would result in the invalidation of the will.
(7) WITNESSES Example: Whether the testator signed in the

Qualifications [Art. 820, CC] presence of the witnesses, or the witnesses
(1) Of sound mind; signed in the presence of the testator and of
(2) Aged 18 years or over; one another.
(3) Not blind, deaf or dumb;
(4) Able to read and write. HOLOGRAPHIC WILLS
Disqualifications [Art. 821, CC] Requisites:

(1) Person not domiciled in the Philippines; (1) In writing [Art. 804, CC];
(2) Those who have been convicted of (2) In a language known to the testator [Art.
falsification, perjury, or false testimony. 804, CC];
(3) Entirely written, dated and signed in the
Rules on Interested witness [Art. 823, CC] hand of the testator himself. [Art. 810, CC]
General Rule Exception Advantages Disadvantages

If there are three other No guarantee as to
Devises or legacies in
competent witnesses, the capacity of the
favor of a spouse, Simple and easy to
the device or legacy testator.
parent or child who make.
shall be valid and the No protection
also attests to the will Induces foreigners in
interested witness against violence,
as a witness shall be this jurisdiction to
shall be treated as a intimidation or undue
void set down their last
mere surplusage influence.
wishes.
May not faithfully
Creditors are not incompetent to be witnesses. Guarantees the
express the will of
[Art. 824, CC] absolute secrecy of
the testator due to
Supervening incompetency shall not prevent the testamentary
faulty expressions.
the allowance of the will. [Art. 822, CC] dispositions.
Can be easily falsified
and concealed.
Substantial Compliance Rule
Substantial compliance rule applies only in Witnesses Required for Probate [Art. 811, CC]
cases when such defects and imperfections can At least one witness who knows the
be supplied by an examination of the will itself. handwriting and signature of the testator;
There must be no bad faith, forgery, fraud, or explicitly declare that it is the testators;
undue and improper pressure and influence for If contested at least 3 of such witnesses;
substantial compliance to be allowed. [Art. In the absence of a competent witness, expert
809, CC] testimony may be resorted to.
PAGE 265
General rule: The holographic will itself must be (3) Jointly executed by them,
presented for probate. [Gan v. Yap (1958)] (4) Either for their reciprocal benefit or for the
benefit of a third person.
Exception: If there is a photostatic copy or xerox
copy of the holographic will, it may be presented MUTUAL WILLS
for probate. [Rodelas v. Aranza (1982)] (1) Executed pursuant to an agreement between
two or more persons,
Additional Dispositions (2) Jointly executed by them,
In holographic wills, the dispositions of the (3) Either for their reciprocal benefit or for the
testator written below his signature must be benefit of a third person.
dated and signed by him in order to make them
valid as testamentary dispositions. [Art. 812, RECIPROCAL WILLS
CC] (1) Testators name each other as beneficiaries in
When a number of dispositions appearing in a their own wills,
holographic will are signed without being (2) Under similar testamentary plans.
dated, and the last disposition has a signature
and date, such date validates the dispositions Note: A will that is both joint and mutual is one
preceding it, whatever be the time of prior executed jointly by two or more persons, the
dispositions. [Art. 813, CC] provisions of which are reciprocal and which
shows on its face the devises are made in
Insertion, Cancellation, Erasure or Alteration consideration of each other. Such is prohibited
[Art. 814, CC] under Art. 819, CC. Prohibition is applicable only
Testator must authenticate by his FULL to joint wills executed by Filipinos, even if
SIGNATURE. execution is made in a foreign country which
Full signature does not necessarily mean the allows joint wills.
testators full name; it rather means his usual
and customary signature. [Balane (2010)] CODICILS
Effect of insertion written by another person CODICIL

on the validity of a holographic will (1) It is a supplement or addition to a will,
(2) Made after the execution of a will,
When made Effect (3) And annexed to be taken as a part of the will,
Insertion considered (4) By which any disposition made in the original
After the execution, not written. Validity will is explained, added to, or altered.
without consent of cannot be defeated by (5) In order that it may be effective, it shall be
testator. the malice or caprice of executed as in the case of a will. [Arts. 825-
a third person 826, CC]
After execution, with Will is valid, insertion is
consent. void. INCORPORATION BY REFERENCE
Insertion becomes part
After execution, of the will. Entire will Requisites [Art. 827, CC]:
validated by testators becomes void because (1) The document or paper referred to in the will
signature. it is not wholly written must be in existence at the time of the
by the testator. execution of the will;
Contemporaneous to Will is void because it is (2) The will must clearly describe and identify
the execution of the not written entirely by the same, stating among other things the
will. the testator. number of pages thereof;
(3) It must be identified by clear and satisfactory
JOINT WILLS proof as the document or paper referred to
(1) A single testamentary instrument, therein; and
(2) Which contains the wills of two or more (4) It must be signed by the testator and the
persons, witnesses on each and every page, except in
PAGE 266
case of voluminous books of account or of the new disposition; and if for any reason, the
inventories. new will intended to be made as a substitute is
inoperative, the revocation fails and the original
REVOCATION will remain in full force.
The failure of the new testamentary disposition
MODES OF REVOCATION [Art. 830, CC] upon whose validity the revocation depends is
(1) By implication of law; or equivalent to the non-fulfillment of a
(2) By the execution of a will, codicil or other suspensive condition and hence prevents the
writing executed as provided in the case of revocation of the original will.
wills; or
(3) By burning, tearing, canceling, or obliterating REVOCATION VS. NULLITY
the will with the intention of revoking it, by Revocation Nullity
the testator himself, or by some other person Proceeds from law.
in his presence, and by his express direction.
By the act of the Inherent in the
testator. testament, be it an
The act contemplating revocation must be done intrinsic or an
at any time before the death of the testator. The Presupposes a valid
extrinsic defect.
right of revocation cannot be waived or act.
Invoked after the
restricted. [Art. 828, CC] Takes place during
testators death by
the lifetime of the
LAW GOVERNING REVOCATION [Art. 829, his heirs.
testator.
CC] Nullity of a will can
Testator cannot
be disregarded by
renounce the right to
Place of Testators the heirs through
Governing Law revoke.
Revocation Domicile voluntary compliance
Philippines, or therewith.
Philippine some other Philippine Law
s country REPUBLICATION AND REVIVAL
Philippines Philippine Law The execution of a codicil referring to a
(1) Law of the previous will has the effect of republishing the
place where will as modified by the codicil. [Art. 836, CC]
the will was The testator cannot republish without
made; or reproducing in a subsequent will, the
(2) Law of the dispositions contained in a previous one which
place in which is void as to its form. [Art. 835, CC]
Outside Foreign the testator Reproduction in the codicil is required only
the Country had his when the original will is void as to it form; in all
Philippine domicile at the other cases, reference to the original will
s time of suffices to republish it through the codicil.
revocation. [Tolentino]
DOCTRINE OF DEPENDENT RELATIVE If after making a will, the testator makes a
REVOCATION second will expressly revoking the first, the
revocation of the second will does not revive
Molo v. Molo (1951) the first will, which can be revived only by
The rule that where the act of destruction is another will or codicil. [Art. 837, CC]
connected with the making of another will so Principle of instanter Revoking clause in the
as to fairly raise the inference that the testator 2nd will is not testamentary in character but
meant the revocation of the old to depend operates to revoke the prior will INSTANTER
upon the efficacy of the new disposition upon the execution of the will containing it.
intended to be substituted, the revocation will The revocation of the 2nd will does not revive
be conditional and dependent upon the efficacy the 1st will which has already become a
NULLITY.
PAGE 267
REPUBLICATION VS. REVIVAL Pastor v. CA (1983)

Probate court may pass upon the title to a
Republication Revival property, but such determination is provisional
Takes place by an and not conclusive, and is subject to the final
Takes place by decision in a separate action to resolve title.
act of the testator.
operation of law.
Corrects extrinsic
Restores a revoked Revocation vs. Disallowance
and intrinsic
will.
defects.
Revocation Disallowance
Voluntary act of the Given by judicial
ALLOWANCE AND DISALLOWANCE testator. decree.
OF WILLS Must always be for a
With or without cause.
legal cause.
Always total, except
PROBATE REQUIREMENT when the ground of
Probate a Special Proceeding required to fraud or influence for
establish the validity of a will and in order to pass May be partial or total.
example affects only
real or personal property. [Art. 838, CC] certain portions of the
will.
Matters to be proved in probate
(1) Identity Whether the instrument which is Effect of final decree of probate, res judicata
offered for probate is the last will and on formal validity
testament of the decedent.
(2) Due Execution Whether the will has been Mercado v. Santos (1938)
executed in accordance with the formalities The probate of a will by the probate court having
prescribed by law. jurisdiction thereof is usually considered as
(3) Capacity Whether the testator had conclusive as to its due execution and validity,
testamentary capacity at the time of and is also conclusive that the testator was of
execution of the will. sound and disposing mind at the time when he
executed the will, and was not acting under
Scope of probate proceedings [Art. 839, CC] duress, menace, fraud, or undue influence, and
that the will is genuine and not a forgery.
General rule: The probate court cannot inquire
into the intrinsic validity of testamentary GROUNDS FOR DENYING PROBATE
provisions. Only the extrinsic validity of such wills (1) If the signature of the testator was procured
may be examined. by fraud;
(2) If it was procured by undue and improper
Exception: When practical considerations pressure and influence, on the part of the
demand that the intrinsic validity of the will be beneficiary or some other person;
resolved. (3) If the testator acted by mistake or did not
intend that the instrument he signed should
Acain v. Diongson (1987) be his will at the time affixing his signature
When the will is intrinsically void on its face (e.g., thereto;
when there is clearly a preterition) such that to (4) If the testator was insane or otherwise
rule on its formal validity would be a futile mentally incapable of making a will at the
exercise. time of its execution;
(5) If the formalities required by law have not
Valera v. Inserto (1987) been complied with; or
Claimants are all heirs and they consent, either (6) If it was executed through force or under
expressly or impliedly, to the submission of the duress, or the influence of fear, or threats.
question of intrinsic validity to the court. [Art. 839, CC]
PAGE 268
INSTITUTION OF HEIRS The heir shall be designated by name or

surname.
Institution of Heirs an act by virtue of which the If there are two or more persons with the same
testator designates in his will the person or names, indicate some circumstance by which
persons who are to succeed him in his property the heir may be known.
and transmissible rights and obligations. [Art. Even though the name may have been omitted
840, CC] but there can be no doubt as to who has been
instituted, the institution is valid.
A will shall be VALID even though it: If there is error in the name but identity can still
(1) Should not contain an institution of an heir be identified through other proof, institution is
or still valid.
(2) Such institution should not comprise the If heir is unidentifiable, none is deemed
entire estate or instituted.
(3) The person so instituted should not accept
the inheritance or be incapacitated to MANNER OF DISTRIBUTION
succeed. Heirs instituted without designation of shares
shall inherit in equal parts. [Art. 846)
In such cases, the testamentary dispositions If the institution pertains to some heirs
made in accordance with law shall be complied individually and others collectively, the
with and the remainder of the estate shall pass presumption is that all are individually
to the legal heirs [Art. 841, CC]. instituted. [Art. 847, CC]
If siblings are instituted (whether full or half-
EXTENT OF GRANT [Art. 842, CC] blood), the presumption is that the inheritance
Freedom of disposition depends upon the is to be distributed equally [Art. 848, CC]. This
existence, kind and number of compulsory heirs. is different from the rules of distribution in
No compulsory heirs Testator has full power intestate succession.
of disposition. If parents and children are instituted, they are
One with compulsory heirs cannot disregard presumed to have been instituted
the rights of the latter (i.e. legitime). simultaneously and not successively. [Art.
849,CC]
EFFECT OF PREDECEASE OF HEIR
[Art. 856, CC] INTENT OF THE TESTATOR
Any heir who dies before the testator or is
incapacitated to succeed or renounces the FALSE CAUSE [Art. 850, CC]
inheritance transmits no rights of the testator to The statement of a false cause for the
his own heirs. This is without prejudice to the institution of an heir shall be considered as not
rights of representation. [Tolentino] written,
UNLESS it appears from the will that the
MANNER OF INSTITUTION testator would not have made such institution
if he had known the falsity of such cause.
RULES ON IDENTITY OF HEIRS [Arts. 843-
849, CC] Austria v. Reyes (1973)
Falsity of stated cause for institution will set
The heir must be designated with sufficient aside or annul the institution if the following are
clarity. present:
If an unknown person is instituted, the (1) The cause for the institution is stated in the
disposition is void (UNLESS by some event, the will;
identity becomes certain). (2) The cause is shown to be false; and
If a definite class or group of persons is (3) It appears on the face of the will that the
instituted, institution is valid. testator would not have made such
PAGE 269
institution if he had known the falsity of the Compulsory Heirs in the Direct Line
cause. A direct line is that constituted by the series of
degrees among ascendants and descendants
SCOPE OF INSTITUTION [Arts. 852- (ascending and descending). [Art. 964 par.2, CC]
853, CC]
(1) There are more than one instituted heirs; Dispositions Less Than Legitime But No
(2) The testator intended them to get the whole Preterition [Balane]
estate or the whole disposable portion If the heir in question is instituted in the will
(3) The testator has designated a definite but the portion given to him by the will is less
portion for each heir than his legitimethere is no preterition.
(4) Under Art. 852: the total of all portions is less [Reyes v. Barretto-Datu (1967)]
than the whole estate (or free portion) If the heir is given a legacy or devisethere is
Therefore, a proportionate increase is no preterition. [Aznar v. Duncan (1966)]
necessary If the heir had received a donation inter vivos
The difference cannot pass by intestacy from the testatorthe better view is that there
because the intention of the testator is is no preterition. The donation inter vivos is
clearto give the instituted heirs the entire treated as an advance on the legitime under
amount Articles 906, 909, 910 and 1062.
(5) Under Art. 853: The total exceeds the whole o The remedy, if the value of inheritance,
estate (or free portion) legacy or devise, or donation inter vivos is
Therefore, a proportionate reduction must only for completion of his legitime under
be made on the remaining part of the Articles 906 and 907.
estate.
Distinguished from Disinheritance
PRETERITION
Preterition Disinheritance
The preterition or omission of one, some, or all
of the compulsory heirs in the direct line, Tacit deprivation of
whether living at the time of the execution of a compulsory heir of
the will or born after the death of the testator, his legitime. Express deprivation
shall annul the institution of heir; but the May be voluntary of a compulsory heir
devises and legacies shall be valid insofar as but the presumption of his legitime.
they are not inofficious. of law is that it is Always voluntary.
If the omitted compulsory heirs should die involuntary. For some legal
before the testator, the institution shall be Law presumes there cause.
effectual, without prejudice to the right of has been merely If the disinheritance
representation. [Art. 854, CC] oversight or mistake is valid, the
on the part of the compulsory heir
CONCEPT [Art. 854, CC] testator. disinherited is totally
(1) There must be a total omission of one, some Since preterition excluded from the
or all of the heir/s from the inheritance. annuls the inheritance. In case
[Seangio v Reyes (2006)] institution of heirs, of invalid
(2) The omission must be that of a compulsory the omitted heir disinheritance, the
heir. gets not only his compulsory heir is
(3) The compulsory heir omitted must be of the legitime but also his merely restored to
direct line. share in the free his legitime.
(4) The omitted compulsory heir must be living portion not disposed
at the time of the testators death or must at of by way of legacies
least have been conceived before the and devises.
testators death.
PAGE 270
Effects of Preterition [Art. 854, CC] before the testator, renounces or turns out to
(1) The institution of the heir is annulled. be incapacitated, then the other two will get
(2) Devises and legacies shall remain valid as his shares in the same proportion as in the
long as they are not inofficious. institution. A will get twice as much as B
(3) If the omitted compulsory heir should die (because his share of 1/3 in the institution is
before the testator, the institution shall be twice the size of Bs share of 1/6)
effective, without prejudice to the right of
representation. SIMPLE SUBSTITUTION [Art. 859, CC]
The testator may designate one or more persons
Neri v. Akutin (1941) to substitute the heir/s instituted in case the
When there are no devises and legacies, heirs should:
preterition will result in the annulment of the will (1) Die before him (predecease),
and give rise to intestate succession. (2) Should not wish to accept the inheritance
(repudiation), or
SUBSTITUTION OF HEIRS (3) Should be incapacitated to accept the
inheritance (incapacitated).
Substitution the appointment of another heir,
so that he may enter into the inheritance in FIDEICOMMISSARY SUBSTITUTION
default of the heir originally instituted. [Art. 857, The testator institutes an heir with an obligation
CC] to preserve and to deliver to another the property
so inherited. The heir instituted to such condition
KINDS is called the First Heir or the Fiduciary Heir; the
one to receive the property is the
(1) Brief or Compendious
Fideicommissary or the Second Heir. [Art. 863,
(2) Reciprocal
CC]
(3) Simple or Common
(4) Fideicommissary
Requisites of a Fideicommisary Substitution
[Arts. 863-865, CC]
BRIEF OR COMPENDIOUS [Art. 860, CC]
(1) A Fiduciary or First Heir instituted is
Brief Two or more persons were designated by
entrusted with the obligation to preserve and
the testator to substitute for only one heir.
to transmit to a Fideicommissary Substitute
or Second Heir the whole or part of the
Compendious One person is designated to take
inheritance.
the place of two or more heirs.
(2) The substitution must not go beyond one
RECIPROCAL [Art. 861, CC] degree from the heir originally instituted.
(3) The Fiduciary Heir and the Fideicommissary
If the heirs instituted in unequal shares should
are living at the time of the death of the
be reciprocally substituted, the substitute shall
testator.
acquire the share of the heir who dies,
(4) The fideicommissary substitution must be
renounces, or is incapacitated, unless it clearly
expressly made.
appears that the intention of the testator was
(5) The fideicommissary substitution is imposed
otherwise. If there is more than one substitute,
on the free portion of the estate and never on
they shall have the same share in the
the legitime.
substitution as the institution.
Example (only 1 substitute): If two heirs are Palacios v. Ramirez (1982)
reciprocally substituted, then if one of them Degree refers to degree of relationship.
dies before the testator dies, renounces, or
turns out to be incapacitated, the other will get PCIB v. Escolin (1974)
his share, regardless of whether or not their In the absence of an obligation on the part of the
shares are equal. first heir to preserve the property for the second
Example (more than 1 substitute): A is heir, there is no fideicommissary substitution.
instituted to 1/3, B to 1/6, and C to . If C dies
PAGE 271
Effects of predecease of the first heir/fiduciary Scriptura Captatoria/ Legacy-hunting

or the second heir/fideicommisary Dispositions
Situation 1: If the first heir dies followed by the
second heir, then the testator dies, who will Reasons for prohibition:
inherit? The legal heirs. There is no (1) The captatoria converts the testamentary
fideicommissary substitution because first and grants into contractual transactions;
second heirs are not living at the time of the (2) It deprives the heirs of testamentary
testators death. [Art. 863, CC] freedom;
Situation 2: The testator dies first followed by (3) It gives the testator the power to dispose
the second heir. The first heir survived them mortis causa not only of his property but also
but subsequently dies, who will inherit? The SH of his heirs.
and his heirs under Art. 866, CC. This is
because the SH passes his rights to his own Effect: Entire disposition is void.
heirs when he dies before FH.
Situation 3: If the first heir dies, followed by the POTESTATIVE, CASUAL AND MIXED
testator, then the second heir, who will inherit? CONDITIONS
No specific provision in law, but SH inherits
because the T intended him to inherit. Potestative conditions
General rule: Must be fulfilled as soon as the heir
learns of the testators death.
TESTAMENTARY DISPOSITIONS
WITH A CONDITION, A TERM, Exception: If the condition was already complied
AND A MODE with at the time the heir learns of the testators
death; or if the condition is of such a nature that
it cannot be fulfilled again.
3 KINDS OF TESTAMENTARY
DISPOSITIONS Constructive Compliance: deemed fulfilled.
(1) Conditional (obliquely defined in Article 1179,
par. 1) Casual or mixed
(2) Dispositions with a term (obliquely defined in General rule: May be fulfilled at any time (before
Article 1193, pars. 1 and 3) or after testators death), unless testator provides
(3) Dispositions with a mode/modal dispositions otherwise.
(obliquely defined in Article 882)
Exception: If already fulfilled at the time of
CONDITIONAL DISPOSITIONS execution of will:
Basis of testators right to impose conditions, (1) If testator unaware of the fact of fulfillment
terms or modes: Testamentary freedom deemed fulfilled
(2) If testator aware:
PROHIBITED CONDITIONS: (CONSIDERED AS Can no longer be fulfilled again: deemed
NOT IMPOSED) fulfilled.
(1) Any charge, condition or substitution Can be fulfilled again: must be fulfilled
whatsoever upon the legitimes. [Art. 872) again.
(2) Impossible and illegal conditions. [Art. 873)
(3) Absolute condition not to contract a first Constructive Compliance:
marriage. [Art. 874) If casual not applicable.
(4) Absolute condition not to contract a If mixed applicable only if dependent partly
subsequent marriage unless imposed on the on the will of a third party not interested.
widow or widower by the deceased spouse,
or by the latters ascendants or descendants.
[Art. 874)
(5) Scriptura captatoria or legacy-hunting
dispositions [Art. 875)
PAGE 272
DISPOSITIONS WITH A TERM LEGITIME

A term may either be suspensive or resolutory. It is that part of the testators property which
he cannot dispose of,
IF THE TERM IS SUSPENSIVE: Because the law has reserved it for his
Before the arrival of the term, the property compulsory heirs. [Art. 886, CC]
should be delivered to the legal or intestate
heirs. COMPULSORY HEIRS AND VARIOUS
A caucin muciana has to be posted by the
heirs.
COMBINATIONS
CLASSES OF COMPULSORY HEIRS [Art. 887,
IF THE TERM IS RESOLUTORY:
CC]
Before the arrival of the term, the property
should be delivered to the instituted heir. Primary those who have precedence over and
No caucin muciana required as the heir has a exclude other compulsory heirs:
right over the property during the period. Legitimate Children and Legitimate
Descendants with respect to their Legitimate
MODAL DISPOSITIONS Parents and Ascendants.
Dispositions with an obligation imposed upon
the heir, without suspending the effectivity of Secondary those who succeed only in the
the institution, as a condition does. absence of the Primary compulsory heirs:
Must be clearly imposed as an obligation in (1) Legitimate Parents and Legitimate
order to be considered as one. Mere Ascendants, with respect to their Legitimate
preferences or wishes expressed by the testator Children and Descendants. (They will inherit
are not modes. only in default of legitimate children and
A mode functions similarly to a resolutory their descendants)
condition. (2) Illegitimate Parents with respect to their
Illegitimate Children. (They will inherit only in
Rabadilla v. CA (2000) default of the illegitimate and legitimate
In modal institutions, the testator states (1) the children and their respective descendants).
object of the institution, (2) the purpose or Note that other illegitimate ascendants are
application of the property left by the testator, or not included.
(3) the charge imposed by the testator upon the
heir. Concurring those who succeed together with
the primary or the secondary compulsory heirs:
CAUCIN MUCIANA (1) Widow or Widower / Surviving Spouse
A security to guarantee the return of the value of (Legitimate).
property, fruits, and interests, in case of (2) Illegitimate Children and Illegitimate
contravention of condition, term or mode. Descendants.
Instances when it is needed: If the testator is a If the testator is an

(1) Suspensive term [Art. 885) LEGITIMATE CHILD: ILLEGITIMATE CHILD:
(2) Negative potestative condition when the (1) LC and
(1) LC and
condition imposed upon the heir is negative, descendants;
descendants;
or consists in not doing or not giving (2) In default of No. 1,
(2) ILC and
something. [Art. 879) LP and
descendants;
(3) Mode [Art. 882, par. 2, CC] ascendants;
(3) In default of Nos.
(3) SS;
12, ILP only;
(4) IC and
(4) SS.
descendants.
PAGE 273
SPECIFIC RULES ON LEGITIMES (c) If all the Legitimate Children repudiate

(1) Direct Descending Line their legitime, the next generation of
(a) Rule of Preference between lines [Art. Legitimate Descendants may succeed in
978 and 985, CC] their own right.
Those in the direct descending line shall
exclude those in the direct ascending and (2) Direct Ascending Line
collateral lines; and (a) Rule of division between lines
Those in the direct ascending line shall, in The father and the mother shall inherit
turn, exclude those in the collateral line. equally if both living. One parent
Rule of Proximity [Art. 926, CC] The succeeds to the entire estate of the
relative nearest in degree excludes the child if the other parent is dead. [Art.
farther one. 986, CC]
(b) Right of representation ad infinitum in In default of the mother and the father,
case of predecease, incapacity, or the ascendants nearest in degree will
disinheritance [Art. 972 and 992, CC] inherit. [Art. 987, CC]
For decedents who are Legitimate If there is more than one relative of the
Children, only the Legitimate same degree but of different lines, one
Descendants are entitled to right of half will go to the paternal ascendants
representation. and the other half to the maternal
For decedents who are Illegitimate ascendants. [Art. 987, CC]
Children, both the Legitimate and the (b) Rule of equal division
Illegitimate Descendants can The relatives who are in the same
represent, only with respect to the degree shall inherit in equal shares.
decedents illegitimate parents. [Art. 987, CC]
PAGE 274
SUMMARY OF LEGITIMES OF COMPULSORY HEIRS
Legend:
LC Legitimate Children
SS Surviving Spouse
LP Legitimate Parents
ILP Illegitimate Parents
LP &
Surviving Relatives LC & Descendants SS ILC ILP
Ascendants
1/2 of the estate
1 LC alone
in equal portions
2 1 LC, SS 1/2 1/4
1/2 in equal Same portion as 1
3 LC, SS
portions LC
1/2 in equal 1/2 share of 1 LC (for
4 LC, ILC
portions each ILC)
1/2 share of 1 LC (for
each child)
N.B. The share of the

5 1 LC, SS, ILC 1/2 1/4 (preferred)
ILC may suffer
reduction pro rata
because spouse is
given preference
2 or more LC, SS, 1/2 in equal Same as share of 1 1/2 share of 1 LC (for
6
ILC portions LC each child)
7 LP alone 1/2
8 LP, ILC 1/4 in equal portions 1/2
9 LP, SS 1/4 1/2
10 LP, SS, ILC 1/8 1/4 1/2

11 ILC alone 1/2 in equal portions
12 ILC, SS 1/3 1/3 in equal portions
1/2
*SS alone where

marriage is in
articulo mortis and
testator dies within
3 months from
13 SS alone marriage 1/3
But if they have

been living
together as
husband and wife
for more than 5
years 1/2
14 ILP alone 1/2
15 ILP, SS 1/4 1/4
PAGE 275
UP COLLEGE OF LAW SUCCESSION BAR OPERATIONS COMMISSION
STEPS IN DETERMINING THE LEGITIME OF (3) 1 adopted child =

COMPULSORY HEIRS 4 illegitimate children =
(1) Determine the gross value of the estate at
the time of the death of the testator. (4) surviving spouse =
(2) Determine all debts and charges which are 6 legitimate children =
chargeable against the estate.
(3) Determine the net value of the estate by (5) 5 legitimate children =
deducting all the debts and charges from 1 illegitimate child =
the gross value of the estate.
(4) Collate or add the value of all donations (6) 2 legitimate children =
inter vivos to the net value of the estate. 4 illegitimate children =
(5) Determine the amount of the legitime from surviving spouse =
the total thus found.
(6) Impute the value of all donations inter vivos RESERVA TRONCAL
made to strangers against the disposable
free portion and restore it to the estate if the Art. 891, CC. The ascendant who inherits from
donation is inofficious. his descendant any property which the latter
(7) Distribute the residue of the estate in may have acquired by gratuitous title from
accordance with the will of the testator. another ascendant, or a brother or sister, is
obliged to reserve such property as he may have
acquired by operation of law for the benefit of
REMEDY OF A COMPULSORY HEIR IN CASE relatives who are within the third degree and
OF IMPAIRMENT OF LEGITIME who belong to the line from which said property
came.
Extent and Nature of
Remedy
Impairment Concept of Reserva Troncal
Annulment of (1) A descendant (prepositus) inherits or
Total omission of a
institution and acquires property from an ascendant or
compulsory heir who is
reduction of legacies from a brother or sister (origin or mediate
a direct descendant or
and devises [Art. 854, source) by gratuitous title.
ascendant (preterition)
CC] (2) The same property is inherited by another
Reduction of the ascendant (reservista) or is otherwise
Testamentary
disposition insofar as acquired by him by operation of law from
dispositions impairing
they may be inofficious the said descendant (prepositus).
or diminishing the
or excessive [Art. 907, (3) The said ascendant (reservista) must reserve
legitime
CC] the property for the benefit of the relatives
Completion of the of the deceased descendant within the third
Partial impairment
legitime [Art. 906, CC] civil degree and who belong to the line from
Collation reduction which the said property came (reservatarios).
Impairment by
of donations [Arts. 771
inofficious donations
and 911, CC] Parties: [Balane]
(1) Origin or Mediate Source either an
Legitimes Quiz: Lets test your knowledge of the ascendant of any degree of ascent or a
Legitime system. Please answer the items in 3 brother or sister of the Prepositus;
minutes (without looking at the combinations). responsible for the 1st transfer.
(2) Prepositus the first transferee of the
(1) 1 legitimate child = reserved property.
1 adopted child = (3) Reservista an ascendant of the Prepositus
other than the Origin or Mediate Source; the
(2) 2 adopted children = one obligated to reserve the property.
legitimate parents = (4) Reservatarios within the 3rd degree of
consanguinity from the Prepositus [Cabardo
PAGE 276
v. Villanueva (1922)] belonging to the line The right is alienable but subject to the same
from which the property came. suspensive condition.
The right is registrable.
Requisites for Reserva Troncal
Chua v. CFI (1977): Reserva Minima vs. Reserva Maxima
(1) That the property was acquired by a (1) The prepositus acquired property
descendant (Prepositus) from an ascendant gratuitously from an ascendant, a brother or
or from a brother or sister (Origin or Mediate sister.
Source) by gratuitous title, (2) In his will, he institutes as his heir his
(2) That the Prepositus died without ascendant (who is also a compulsory heir)
(legitimate*) issue, such that the ascendant receives half of the
(3) That the property is inherited by another estate by operation of law as legitime and
ascendant (Reservista) by operation of law, the other half by testamentary disposition.
and
(4) That there are relatives within the 3rd degree Two Views
(Reservatarios) belonging to the line from Reserva Maxima: The entire property will be
which said property came. considered acquired as legitime and therefore
wholly reservable.
Only legitimate descendants will prevent the Reserva Minima: One half is reservable, the
property from being inherited by the legitimate other half is not subject to reserva troncal.
ascending line by operation of law [Balane] [Tolentino, p. 284]
3 transmissions involved: Extinguishment of the Reserva
1st transfer by gratuitous title, from a (1) Loss of the reservable property
person to his descendant, brother or sister. (2) Death of the reservista
2nd transfer by operation of law, from the (3) Death of all the relatives within the third
transferee in the 1st transfer to another degree belonging to the line from which the
ascendant. This creates the reserva. property came
3rd transfer from the transferee in the (4) Renunciation by the reservatarios
second transfer to the relatives. [Balane] (5) Registration of the reservable property
under the Torrens system as free
Juridical Nature of Rights (6) Prescription, when the reservista holds the
property adversely against the reservatarios,
Nature of the reservistas right: [Balane citing as free from reservation
Edroso v. Sablan]
The reservistas right over the reserved
property is one of ownership DISINHERITANCE
The right of ownership is subject to a
resolutory condition, i.e. the existence of DEFINITION [Art. 915, CC]
reservatarios at the time (1) It is the act by which the testator,
The right of ownership is alienable, but (2) For just cause,
subject to the same resolutory condition. (3) Deprives a compulsory heir of his right to
The reservistas right of ownership is the legitime.
registrable.
REQUISITES OF A VALID
Nature of reservatarios right: [Sienes v. Esparcia] DISINHERITANCE
The reservatarios have a right of expectancy (1) Heir disinherited must be designated by
over the property. name or in such a manner as to leave no
The right is subject to a suspensive condition, room for doubt as to who is intended to be
i.e. the expectancy ripens into ownership if the disinherited.
reservatarios survive the reservistas. (2) It must be for a cause designated by law.
PAGE 277
(3) It must be made in a valid will. (3) When the parent or ascendant has accused
(4) It must be made expressly, stating the the testator of a crime for which the law
cause in the will itself. prescribes imprisonment for six years or
(5) The cause must be certain and true, and more, if the accusation has been found to
must be proved by the interested heir if the be false;
person should deny it. (4) When the parent or ascendant has been
(6) It must be unconditional. convicted of adultery or concubinage with
(7) It must be total. the spouse of the testator;
(5) When the parent or ascendant by fraud,
DISINHERITANCE OF CHILDREN AND violence, intimidation, or undue influence
DESCENDANTS [Art. 919, CC] causes the testator to make a will or to
(1) When a child or descendant has been found change one already made;
guilty of an attempt against the life of the (6) The loss of parental authority for causes
testator, his or her spouse, descendants, or specified in this Code;
ascendants; (7) The refusal to support the children or
(2) When a child or descendant has been descendants without justifiable cause;
convicted of adultery or concubinage with (8) An attempt by one of the parents against
the spouse of the testator; the life of the other, unless there has been a
(3) When a child or descendant by fraud, reconciliation between them.
violence, intimidation, or undue influence
causes the testator to make a will or to DISINHERITANCE OF A SPOUSE [Art.
change one already made; 921, CC]
(4) A refusal without justifiable cause to (1) When the spouse has been convicted of an
support the parent or ascendant who attempt against the life of the testator, his
disinherits such child or descendant; or her descendants, or ascendants;
(5) Maltreatment of the testator by word or (2) When the spouse has accused the testator
deed, by the child or descendant; of a crime for which the law prescribes
(6) When a child or descendant leads a imprisonment of six years or more, and the
dishonorable or disgraceful life; accusation has been found to be false;
(7) Conviction of a crime which carries with it (3) When the spouse by fraud, violence,
the penalty of civil interdiction. intimidation, or undue influence cause the
testator to make a will or to change one
DISINHERITANCE OF PARENTS AND already made;
ASCENDANTS [Art. 920, CC] (4) When the spouse has given cause for legal
(1) When the parents have abandoned their separation;
children or induced their daughters to live a (5) When the spouse has given grounds for the
corrupt or immoral life, or attempted loss of parental authority;
against their virtue; (6) Unjustifiable refusal to support the children
(2) When the parent or ascendant has been or the other spouse.
convicted of an attempt against the life of
the testator, his or her spouse, descendants,
or ascendants;
PAGE 278
SUMMARY OF CAUSES OF DISINHERITANCE
CC 919 CC 920 CC 1032

CC 921
Grounds for Disinheritance Children & Parents & Unworthi-
Spouse
Descendants Ascendants ness
Guilty or Convicted of Attempt Against the
1 Life of the Testator, Spouse, Ascendant or

Descendant
Accused Testator or Decedent of Crime
2 Punishable by Imprisonment of 6 years or

more, and Found Groundless or False
Causes testator or decedent to Make a
3 Will or Change one by Fraud, Violence,

Intimidation, or Undue Influence
4 Unjustified Refusal to Support Testator
Convicted of Adultery or Concubinage
5
with Spouse of Testator or Decedent
Maltreatment of testator by Word and
6
Deed
Leading a Dishonorable or Disgraceful
7
Life
Conviction of Crime which carries the
8
penalty of Civil Interdiction
Abandonment of Children or Inducing
9 Children to Live Corrupt and Immoral Life
or Against Attempted Virtue
10 Loss of Parental Authority
Attempt by One Parent Against the Life of
11 the Other UNLESS there is Reconciliation
Between Parents
Spouse Has Given Cause for Legal
12
Separation
Failure to Report Violent Death of
13 Decedent Within One Month UNLESS
Authorities Have Already Taken Action
Force, Violence, Intimidation, or Undue
Influence to Prevent Another from Making
14
a Will or Revoking One Already Made or
Who Supplants or Alters the Latters Will
Falsifies or Forges Supposed Will of
15
Decedent
PAGE 279
MODES OF REVOCATION OF EFFECT OF INEFFECTIVE DISINHERITANCE

DISINHERITANCE If the disinheritance lacks one or other of the
(1) Reconciliation [Art. 922, CC] requisites mentioned in this article, the heir in
(2) Subsequent institution of the disinherited question gets his legitime. [Balane]
heir
(3) Nullity of the will which contains the Ineffective
Preterition
disinheritance. Disinheritance
Person disinherited Person omitted must
Note: The moment that testator uses one of the may be any compulsory be a compulsory heir
acts of unworthiness as a cause for heir in the direct line
disinheritance; he thereby submits it to the rules Only annuls the
on disinheritance. Thus, reconciliation renders institution in so far as it Annuls the entire
the disinheritance ineffective. prejudices the person institution of heirs
disinherited
RECONCILIATION [Art. 922, CC]
LEGACIES AND DEVISES
EFFECT OF RECONCILIATION BETWEEN
OFFENDER AND OFFENDED PERSON: PERSONS CHARGED WITH THE DUTY
If no disinheritance has been made yet: the TO GIVE LEGACIES AND DEVISES IN
offended person will be deprived of his right A WILL
to disinherit.
If disinheritance has been effected: it will be (1) Compulsory heir, provided, their legitimes
rendered ineffectual. are not impaired [Art. 925, CC]
(2) Voluntary heir
RIGHTS OF DESCENDANTS OF PERSON (3) Legatee or devisee can be charged with the
DISINHERITED [Art. 923, CC] duty of giving a sub-legacy or sub-devise
Disinheritance gives rise to the right of but only to the extent of the value of the
representation in favor of the children and legacy or devise given him [Art. 925, CC]
descendants of the disinherited person with (4) The estate represented by the executor or
respect to his legitime. administrator, if no one is charged with this
This is inconsistent with Art. 1033. In duty to pay or deliver the legacy or devise in
disinheritance, reconciliation is sufficient. It the will
need not be in writing. In unworthiness, If there is an administration proceeding, it
however, it needs to be in writing. [Balane] constitutes a charge upon the estate.
If there is no administration proceeding, it
INEFFECTIVE DISINHERITANCE [Art. is a charge upon the heirs.
918, CC]
INSTANCES OF INEFFECTIVE
DISINHERITANCE:
(1) There is no specification of the cause.
(2) The cause is not proved.
(3) The cause is not among those specified in
the provisions.
PAGE 280
VALIDITY AND EFFECT OF LEGACY

OR DEVISE
Legacy or devise of a thing belonging to another
[Art. 930, CC]
Testator erroneously
believed that the
Void
property belonged to
him
The thing bequeathed
afterwards becomes Effective
his by whatever title
Legacy or devise of thing already belonging to the
legatee or devisee
The thing already
belongs to the legatee
or devisee at the time Ineffective
of the execution of the
will [Art. 932, CC]
The thing is subject to
Valid only as to the
an encumbrance or
interest or
interest of another
encumbrance
person [Art. 932, CC]
Legatee or devisee
subsequently
Ineffective
alienates the thing
[Art. 933,CC]
After alienating the
thing, the legatee or
devisee subsequently
Ineffective
reacquires it
gratuitously [Art. 933,
CC]
After alienating the
Legatee or devisee can
thing, the legatee or
demand
devisee acquires it by
reimbursement from
onerous title [Art. 933,
the heir or estate
CC]
PAGE 281
DIFFERENT OBJECTS OF LEGACIES AND DEVISES [Art. 934-944, CC]
OBJECTS OF LEGACY OR
EFFECT
DEVISE
Thing pledged or mortgaged Estate is obliged to pay the debt
to secure a debt Other charges pass to the legatee or devisee
Effective only as regards the credit or debt existing at the time of the testators
Credit or remission or release death
of a debt Legacy lapses if the testator later brings action against the debtor
If generic, comprises all credits/debts existing at time of execution of will
Thing pledged by debtor Only the pledge is extinguished; the debt remains
To a creditor Shall not be applied to his credit unless the testator so declares
If testator does not really owe the debt, the disposition is void
Order of payment of a debt If the order is to pay more than the debt, the excess is not due
This is without prejudice to the payment of natural obligations
The choice is with the heir, or the executor or administrator
Alternative legacies and
If the heir, legatee or devisee dies, the right passes to their heirs
devises
Once made, the choice is irrevocable
Legacy is valid even if there are no things of the same kind in the estate
Legacy of generic personal Devise of indeterminate real property valid only if there are immovable property
property or indeterminate of the same kind in the estate
real property The choice belongs to the heir, legatee or devisee or the executor or
administrator
Lasts until the legatee is of age or beyond the age of majority in order that he
may finish some professional, vocational or general course provided he pursues
Legacy of education his course diligently
If testator did not fix the amount, it is fixed in accordance with the social
standing and circumstances of the legatee and the value of the estate
Lasts during lifetime of legatee
If the testator used to give the legatee a sum of money for support, give the
Legacy of support same amount unless it is markedly disproportionate to the estate
If testator did not fix the amount, it is fixed in accordance with the social
standing and circumstances of the legatee and the value of the estate
ORDER OF PAYMENT IN CASE THE ESTATE IS NOT SUFFICIENT TO COVER ALL THE LEGACIES
AND DEVISES
ART. 911 ART. 950
ORDER OF PREFERENCE
Remuneratory legacy/devise
Preferential legacy/devise
Legitime of compulsory heirs
Legacy for Support
Donations Inter vivos
Legacy for Education
Preferential legacies or devises
Legacy/devise of Specific, determinate thing which forms a part
All Other legacies or devises pro rata
of the estate
All Others pro rata
APPLICATION
When the reduction is necessary to preserve the legitime of
When there are no compulsory heirs and the entire estate is
compulsory heirs from impairment whether there are donations
distributed by the testator as legacies or devises; or
inter vivos or not; or
When there are compulsory heirs but their legitime has already
been provided for by the testator and there are no donations inter
When, although, the legitime has been preserved by the testator
vivos.
himself there are donations inter vivos.
Art. 950, CC governs when the question of reduction is exclusively
Art. 911, CC governs when there is a conflict between compulsory
among legatees and devisees themselves.
heirs and the devisees and legatees.
PAGE 282
DELIVERY OF LEGACY/DEVISE [Art. Legal or Intestate

951, CC]
(1) The very thing bequeathed shall be Succession
delivered and not its value,
(2) With all its accessions and accessories, GENERAL PROVISIONS
(3) In the condition in which it may be upon the
death of the testator. Intestacy that which takes place by operation
(4) Legacies of money must be paid in cash. of law in default of compulsory and
testamentary succession. Not defined in the
EFFECT OF INEFFECTIVE LEGACIES Civil Code.
OR DEVISES [Art. 956, CC]
In case of repudiation, revocation or incapacity INSTANCES WHEN LEGAL OR
of the legatee or devisee, the legacy or devise INTESTATE SUCCESSION OPERATES
shall be merged with the mass of the hereditary
estate, except in cases of substitution or
[Art. 960, CC]
accretion. (1) If a person dies without a will, or with a void
will, or one which has subsequently lost its
validity.
REVOCATION OF LEGACIES AND (2) When the will does not institute an heir.
DEVISES [Art. 957, CC] (3) Upon the expiration of term, or period of
(1) Testator transforms the thing such that it institution of heir. [Balane, 426]
does not retain its original form or (4) Upon fulfillment of a resolutory condition
denomination. attached to the institution of heir, rendering
(2) Testator alienates the thing by any title or the will ineffective. [Balane, 426]
for any cause. Reacquisition of the thing by (5) When the will does not dispose of all the
the testator does not make the legacy or property belonging to the testator. Legal
devise valid, unless it is effected by right of succession shall take place only with
repurchase. respect to the property which the testator
(3) Thing is totally lost during the lifetime or has not disposed (mixed succession).
after the death of the testator. (6) If the suspensive condition attached to the
(4) Other causes: nullity of will, non- institution of the heir does not happen or is
compliance with suspensive condition, sale not fulfilled.
of the thing to pay the debts of the (7) If the heir dies before the testator.
deceased during the settlement of his (8) If the heir repudiates the inheritance, there
estate. being no substitution, and no right of
accretion takes place.
(9) When the heir instituted is incapable of
succeeding, except in cases provided in the
Civil Code.
(10) Preterition Intestacy may be total or
partial depending on whether or not there
are legacies or devises. [Balane, 426]
Note: In all cases where there has been an

institution of heirs, follow the ISRAI order:
(a) If the Institution fails, Substitution occurs.
(b) If there is no substitute, the right of
Representation applies in the direct
descending line to the legitime if the
vacancy is caused by predecease, incapacity,
or disinheritance.
PAGE 283
(c) The right of Accretion applies to the free present law is 2:1. [Art. 983, in relation to
portion when the requisites in Art. 1016 are Article 895 as amended by Article. 176, FC)
present. (c) Rule of division by line in the ascending
(d) If there is no substitute, and the right of line. [Art. 987 [2], CC]
Representation or Accretion are not proper, (d) Distinction between full-blood and half-
the rules on Intestate succession shall apply. blood relationship among brothers and
sisters, as well as nephews and nieces.
THE INTESTATE OR LEGAL HEIRS [Art. 1006 and 1008, CC]
(1) Relatives (e) Right of representation.
(a) Legitimate ascendants
(b) Illegitimate parents RULE OF BARRIER BETWEEN THE
(c) Legitimate children LEGITIMATE FAMILY AND THE
(d) Illegitimate children ILLEGITIMATE FAMILY (THE IRON-CURTAIN
(e) Surviving Spouse RULE)
(f) Brothers, sisters, nephews and nieces The illegitimate family cannot inherit by
(BSNN) intestate succession from the legitimate family
(g) Other collateral relatives and vice-versa. [Art. 992, CC]
(2) Surviving spouse
(3) State (through escheat proceedings) RULE OF DOUBLE SHARE FOR FULL BLOOD
COLLATERALS
Intestate succession is based on the presumed When full and half-blood brothers or sisters,
will of the decedent. That is, to distribute the nephews or nieces, survive, the full blood shall
estate in accordance with the love and affection take a portion in the inheritance double that of
he has for his family, and in default of these the half-blood. [Arts. 895 and 983, CC]
persons, the presumed desire to promote
charitable and humanitarian activities [Balane]. Note:
If one of the legitimate ascendants,
FUNDAMENTAL PRINCIPLES IN illegitimate parents, legitimate children or
illegitimate children survives, the brother,
INTESTATE SUCCESSION
sisters, nephews, and nieces (BSNN) are
excluded.
RULE OF PREFERENCE BETWEEN LINES
If one of the legitimate ascendants,
Those in the direct descending line shall
illegitimate parents, legitimate children,
exclude those in the direct ascending and
illegitimate children or surviving spouse
collateral lines;
survives, the other collateral relatives and the
Those in the direct ascending line shall, in
state are excluded.
turn, exclude those in the collateral line.
If any of the heirs concur in legitimes, then
RULE OF PROXIMITY they also concur in intestacy.
The relative nearest in degree excludes the
RELATIONSHIP
farther one. [Art. 962[1], CC], saving the right
The number of generations determines the
of representation when it properly takes place.
proximity of the relationship. Each generation
forms one degree. [Art. 963, CC]
RULE OF EQUAL DIVISION
The relatives who are in the same degree shall A series of degrees forms a line. This line may
inherit in equal shares. [Arts. 962[2], 987 and either be direct or collateral. [Art. 964, CC]
1006, CC]
A direct line is that constituted by the series of
degrees among ascendants and descendants.
Exceptions: [Balane, 427-428]
(a) Rule of preference between lines. The direct line is either ascending (brings a
(b) Distinction between legitimate and person with those from whom he descends)
illegitimate filiation. The ratio under and descending (connecting the head of the
PAGE 284
family with those who descend from him). inheritance, those of the following degree shall
[Art. 965, CC] inherit in their own right.
A collateral line is that constituted by the
series of degrees among persons who are not In case of repudiation by all in the same degree,
ascendants or descendants, but who come the right of succession passes on the heirs in
from a common ancestor. succeeding degrees: descending line first,
ascending line next, and collateral line next.
Note: It is important to distinguish between [Balane]
direct and collateral as the direct has preference
over the collateral. Adoption [Art. 189, FC]
In adoption, the legal filiation is personal and
In a line, as many degrees are counted as there exists only between the adopter and the
are generations. [Art. 966, CC] adopted. The adopted is deemed a legitimate
In the direct line, ascent is made up to the child of the adopter, but still remains as an
common ancestor or progenitor. intestate heir of his natural parents and other
In the collateral line, ascent is made to the blood relatives. (Note, however, Section 16 of
common ancestor. Then descent to the the Domestic Adoption Act [RA 8552], which
person with whom the computation is to be provides that all legal ties between the
made. biological parent(s) and the adoptee shall be
severed and the same shall then be vested on
Note: Descending line is preferred over the adopter(s).
ascending.
RIGHT OF REPRESENTATION
Blood relationship is either full or half-blood. Representation right created by fiction of law,
[Art. 967, CC] by virtue of which the representative is raised to
the place and the degree of the person
Note: As among brothers and sisters and represented, and acquires the rights which the
nephews and nieces, there is a 2:1 ratio for full- latter would have if he were living or if he could
blood and half-blood relatives. Direct relatives have inherited [Art. 970, CC]
are preferred. But this distinction does not apply
with respect to other collateral relatives. Effect of Representation
The representative heir acquires the rights
Incapacity [Art. 968, CC] which the person represented would have if he
General rule: If there are several relatives of the were living or if he could have inherited.
same degree, and one or some of them are
unwilling or incapacitated to succeed, his When it occurs
portion shall accrue to the others of the same Representation is allowed with respect to
degree. inheritance conferred by law (legitime and
intestate based on Art. 923).
Exception: When the right of representation
should take place. It occurs only in the following instances: (DIP)
(1) Predecease of an heir
Note: This accretion in intestacy takes place in (2) Incapacity or unworthiness
case of predecease, incapacity, or renunciation (3) Disinheritance [Art. 923, CC]
among heirs of the same degree. The relatives
must be in the same relationship because of the There is no representation in testamentary
Rule of Preference of Lines. succession. [Art. 856, CC]
Repudiation [Arts. 968-969, CC] There is no representation in repudiation.

There is no right of representation in repudiation.
If the nearest relative/s repudiates the A renouncer can represent, but cannot be
represented. Rationale is found in Art. 971 which
PAGE 285
states that The representative does not between legitimate and illegitimate, if
succeed the person represented but the one applicable.
whom the person represented would have
succeeded. The Double Heirship Test
In determining whether or not representation
Representation in the Direct Descending Line is proper, it is necessary that the
Representation takes place ad infinitum in the representative must be a legal heir of both the
direct descending line but never in the direct person he is representing and the decedent.
ascending line. [Art. 972, CC] [Art. 973, CC]
BUT the representative need not be qualified
General rule: Grandchildren inherit from the to succeed the person represented. [Art. 971,
grandparents by right of representation, if CC] In the same manner, the person
proper. represented need not be qualified to succeed
the decedent, as it is his disqualification which
Exception: Whenever all the children repudiate, gives rise for representation to apply.
the grandchildren inherit in their own right o Legitimate children may not be represented
because representation is not proper. [Art. 969, by their illegitimate descendants (because
CC] of the bar in Art. 992). In contrast,
illegitimate children may be represented by
Representation in Collateral Line their legitimate and illegitimate
In the collateral line, representation takes place descendants [Art. 902, CC].
only in favor of the children of the brothers or o Illustration: A has legitimate son J and
sisters (i.e., nephews and nieces) whether of the illegitimate son K. J has an illegitimate son
full or half-blood [Art. 972, CC] and only if they J-1 while K also has an illegitimate son K-1.
concur with at least one uncle or aunt. In this K-1 may inherit from A by representation of
case, they share in the inheritance per stirpes. K (under Art. 902), but J-1 may not inherit
from A (because of the barrier under Art.
If the children survive alone, they inherit in their 992).
own right and share in equal proportions or per
capita. [Art. 975, CC] Representation in Adoption
If the adopting parent should die before the
Right of representation in the collateral line is adopted child, the latter cannot represent the
only possible in INTESTATE succession. It former in the inheritance of the parents or
cannot take place in testamentary succession. ascendants of the adopter. The adopted child is
not related to the deceased in that case,
Per stirpes because filiation created by fiction of law is
Inheritance per stirpes means that the exclusively between the adopter and the
representative/s shall receive only what the adopted. [Tolentino, 448-449]
person represented would have received, if he
were living or could inherit. [Art. 975, CC]
If there are more than one representative in
the same degree, then it shall be divided
equally, without prejudice to the distinction
PAGE 286
ORDER OF INTESTATE SUCCESSION

Decedent is a Legitimate Child Decedent is an Illegitimate Child Decedent is an Adopted Child
Legitimate children or Legitimate children or Legitimate children or
1
descendants (LCD) descendants (LCD) descendants (LCD)
Legitimate parents or ascendants Illegitimate children or Illegitimate children or
2
(LPA) descendants (LPA) descendants (ICD)
Legitimate or illegitimate
Illegitimate children or
3 Illegitimate parents (IP) parents, or legitimate
descendants (ICD)
ascendants, adoptive parents
4 Surviving spouse (SS) Surviving spouse (SS) Surviving spouse (SS)
Brothers and sisters, Illegitimate brothers and sisters, Brothers and sisters, nephews,
5
nephews, nieces (BS/NN) nephews, nieces (IBS/NN) nieces (BS/NN)
Legitimate collateral relatives
6 th State State
within the 5 degree (C5)
7 State
RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE SHARES
INTESTATE HEIRS Excludes Excluded By Concurs With

Ascendants,
LC + LD Collaterals and No one SS + ILC
State
ILP,
ILC + D Collaterals and No one SS, LC, LP
State
Collaterals and
LP + LA LC ILC + SS
State
Collaterals and
ILP LC and ILC SS
State
LC, ILC, LP, ILP
Collaterals other than
Siblings
SS siblings, nephews and nieces, No one
Nephews
State
Nieces
Siblings,
All other collaterals and
Nephews LC, ILC, LP, ILP SS
State
Nieces
th Collateral more remote in
Other collaterals within 5 LC, ILC, LP, ILP and Collaterals in the same
degree and
degree SS degree
State
State No one Everyone No one
PAGE 287
OUTLINE OF INTESTATE LEGITIMATE PARENTS AND

SHARES ILLEGITIMATE CHILDREN
Legitimate parents get of the estate,
LEGITIMATE CHILDREN ONLY illegitimate children get the other . [Art. 991,
CC]
Divide entire estate equally among all
legitimate children [Art. 979, CC]
Legitimate children include an adopted child.
LEGITIMATE PARENTS AND
SURVIVING SPOUSE
LEGITIMATE CHILDREN AND Legitimate parents get of the estate; The
surviving spouse gets the other . [Art.
ILLEGITIMATE CHILDREN
997,CC]
Divide entire estate such that each
illegitimate child gets of what a legitimate
child gets [Art. 983, CC and Art. 176, FC]
LEGITIMATE PARENTS, SURVIVING
Ensure that the legitime of the legitimate SPOUSE AND ILLEGITIMATE
children are first satisfied. CHILDREN
Legitimate parents get of the estate;
LEGITIMATE CHILDREN AND surviving spouse and the illegitimate child
SURVIVING SPOUSE each get each, the latter to share among
themselves if more than one. [Art. 1000, CC]
Divide entire estate equally between the
legitimate children and the surviving spouse,
the latter deemed as one child. The same rule ILLEGITIMATE CHILDREN ONLY
holds where there is only one child. Divide the entire estate equally. [Art. 988, CC]
Children as used in Art. 996 is interpreted to
include a situation where there is only one ILLEGITIMATE CHILDREN AND
child. SURVIVING SPOUSE
Illegitimate children get of the estate; the
LEGITIMATE CHILDREN, SURVIVING surviving spouse gets the other . [Art. 998,
SPOUSE, AND ILLEGITIMATE CC]
CHILDREN
Divide the entire estate such that the surviving SURVIVING SPOUSE ONLY
spouse is deemed one legitimate child and Entire estate goes to the surviving spouse.
each illegitimate child getting of what the [Art. 994/995, CC]
legitimate child gets. [Art. 996, CC and Art.
176, FC] SURVIVING SPOUSE AND
Ensure that the legitime of the legitimate ILLEGITIMATE PARENTS
children and the spouse are first satisfied. Illegitimate parents get and the spouse
gets the other . (by analogy with Art. 997,
LEGITIMATE PARENTS ONLY CC)
Divide the entire estate equally. [Art. 985, CC]
SURVIVING SPOUSE AND
LEGITIMATE ASCENDANTS ONLY LEGITIMATE BROTHERS AND
(EXCLUDING PARENTS) SISTERS, NEPHEWS AND NIECES
Divide the entire estate equally but with the Surviving spouse gets of the estate, while
observance of the rule of division by line. [Art. the rest gets the other with the nephews
987, CC] and nieces inheriting by representation if
proper. [Art. 1001, CC]
PAGE 288
SURVIVING SPOUSE AND Note: the nearer relative excludes the more
ILLEGITIMATE BROTHERS AND remote relatives.
SISTERS, NEPHEWS AND NIECES
STATE
Surviving spouse gets of the estate while
the rest gets the other with the nephews If there are no other intestate heirs, the State
and nieces inheriting by representation, if inherits the entire estate through escheat
proper; Note that all the other relatives proceedings. [Art. 1011, CC]
should be illegitimate because of the iron-
curtain rule. [Art. 994, CC]
Provisions Common to
ILLEGITIMATE PARENTS ONLY
Entire estate goes to the illegitimate parents. Testate and Intestate
[Art. 993, CC]
Succession
ILLEGITIMATE PARENTS AND
CHILDREN OF ANY KIND (WHETHER RIGHT OF ACCRETION
LEGITIMATE OR ILLEGITIMATE
CHILD) DEFINITION OF ACCRETION [Art.
Illegitimate parents are excluded and do not 1015, CC]
inherit; For the rule on the respective shares of It is a right by virtue of which, when two or more
the children, see numbers 1, 2 or 10, whichever persons are called to the same inheritance,
is applicable. devise or legacy, the part assigned to one who
renounces or cannot receive his share or who
died before the testator is added or
LEGITIMATE BROTHERS AND incorporated to that of his co-heirs, co-devisees,
SISTERS ONLY or co-legatees.
Divide the entire estate such that full-blood
brothers/sisters gets a share double the REQUISITES (TOLENTINO P. 497-
amount of a half-blood brother or sister. [Art.
1004 and 1006, CC]
499):
(1) Unity of object and plurality of subjects (two
or more persons are called to the same
LEGITIMATE BROTHERS AND inheritance or same portion thereof).
SISTERS, NEPHEWS AND NIECES (2) Vacancy of share (one of the heirs dies
Divide the entire estate observing the 2 is to 1 before the testator, or renounces the
ratio for full and half-blood relationships with inheritance, or is incapacitated).
respect to the brothers and sisters, with the
nephews and nieces inheriting by WHEN ACCRETION OCCURS
representation, if proper. [Art. 1005 & 1008, Accretion happens when there is
CC] repudiation, incapacity, or predecease of an
heir.
NEPHEWS AND NIECES ONLY It is the mechanism where the share of an
Divide the entire estate per capita, observing heir is increased by vacant shares vacated
the 2 is to 1 ratio. [Arts. 975 and 1008, CC] by heirs who cannot inherit for various
reasons. (RATIONALE: the decedent
OTHER COLLATERALS [Arts. 1009 intended to give the property to nobody but
AND 1010) the co-heirs.)
Divide entire estate per capita. Collateral There can only be accretion if there is an
relatives must be with the 5th degree of institution of heirs with respect to specific
consanguinity. properties. [Art. 1016, CC]
PAGE 289
Among compulsory heirs, there can only be CAPACITY TO SUCCEED BY WILL

accretion with respect to the free portion.
There can be no accretion with respect to OR INTESTACY
the legitimes. [Arts. 1021 and 1018, CC] REQUISITES FOR CAPACITY TO
The heirs to whom the portion goes by the
right of accretion take it in the same
SUCCEED BY WILL OR BY INTESTACY
proportion that they inherit. [Art. 1019, CC] [Art. 1024 1025, CC]
(1) The heir, legatee or devisee must be living
EXCEPTIONS [Balane] or in existence at the moment the
(1) In testamentary succession, if the testator succession opens; [Art. 1025, CC] and
provides otherwise. (2) He must not be incapacitated or disqualified
(2) If the obligation is purely personal, and by law to succeed. [Art. 1024, par.1, CC]
hence intransmissible.
PERSONS INCAPABLE OF
The heirs to whom the inheritance accrues shall SUCCEEDING [Arts. 1027, 739, 1032]
succeed to all the rights and obligations which
the heir who renounced or could not receive it BASED ON UNDUE INFLUENCE OR
would have had. [Art. 1020, CC] INTEREST [Art. 1027, CC]
(1) Priest who heard the last confession of the
In testamentary succession, when the right of testator during his last illness, or the
accretion does not take place, the vacant minister of the gospel who extended
portion of the instituted heirs, if no substitute spiritual aid to him during the same period;
has been designated, shall pass to the legal (2) Individuals, associations and corporations
heirs of the testator, who shall receive it with the not permitted by law to inherit;
same charges and obligations. [Art. 1022, CC] (3) Guardian with respect to testamentary
dispositions given by a ward in his favor
Accretion shall also take place among devisees, before the final accounts of the
legatees and usufructuaries under the same guardianship have been approved, even if
conditions established for heirs. [Art. 1023, CC] the testator should die after the approval
thereof; except if the guardian is his
EFFECT OF PREDECEASE, INCAPACITY, ascendant, descendant, brother, sister, or
DISINHERITANCE OR REPUDIATION spouse;
(4) Relatives of the priest or minister of the
TESTAMENTARY gospel within the fourth degree, the church,
CAUSE OF SUCCESSION INTESTATE
VACANCY FREE SUCCESSION order, chapter, community, organization, or
LEGITIME institution to which such priest or minister
PORTION
Representati
Accretion
Representatio may belong;
on n (5) Attesting witness to the execution of a will,
Predecease Intestate
Intestate Intestate the spouse, parents, or children, or any one
Succession
Succession Succession
Representati claiming under such witness, spouse,
Representatio parents, or children;
on Accretion
n
Incapacity Intestate Intestate
Intestate
(6) Physician, surgeon, nurse, health officer or
Succession Succession druggist who took care of the testator
Succession
Representati
during his last illness.
on
Disinheritance - - BASED ON MORALITY OR PUBLIC POLICY
Intestate
Succession [Arts. 739 AND 1028, CC]
Intestate (1) Those made in favor of a person with whom
Repudiation Accretion Accretion
Succession
the testator was guilty of adultery or
concubinage at the time of the making of
the will.
PAGE 290
(2) Those made in consideration of a crime of UNWORTHINESS VS. DISINHERITANCE

which both the testator and the beneficiary
have been found guilty. Unworthiness Disinheritance
(3) Those made in favor of a public officer or his Disinheritance is the
Unworthiness renders
spouse, descendants and ascendants, by act by which a
a person incapable of
reason of his public office. testator, for just cause,
succeeding to the
deprives a compulsory
BASED ON ACTS OF UNWORTHINESS [Art. succession, whether
heir of his right to the
1032, CC] testate or intestate
legitime [Art. 815, CC]
(1) Parents who have abandoned their children
or induced their daughters to lead a corrupt DETERMINATION OF CAPACITY
or immoral life, or attempted against their
virtue; [TOLENTINO, p. 539]
(2) Any person who has been convicted of an
attempt against the life of the testator, his General rule: At the death of the decedent [Art.
or her spouse, descendants, or ascendants; 1034, CC]
(3) Any person who has accused the testator of
a crime for which the law prescribes Exceptions:
imprisonment for six years or more, if the (1) Those falling under 2, 3, and 5 of Art. 1032
accusation has been found groundless; when the final judgment is rendered.
(4) Any heir of full age who, having knowledge (2) Those falling under 4 of Art. 1032 when
of the violent death of the testator, should the month allowed for the report expired.
fail to report it to an officer of the law within (3) If the institution is conditional when the
a month, unless the authorities have already condition is complied with.
taken action; this prohibition shall not apply
to cases wherein, according to law, there is ACCEPTANCE AND
no obligation to make an accusation; REPUDIATION OF THE
(5) Any person convicted of adultery or
concubinage with the spouse of the INHERITANCE
testator;
(6) Any person who by fraud, violence, CHARACTERISTICS [Arts. 1041
intimidation, or undue influence should 1042, 1056, CC]
cause the testator to make a will or to (1) Acceptance and repudiation must be
change one already made; voluntary and free [Art. 1041, CC];
(7) Any person who by the same means (2) They are irrevocable except if there is
prevents another from making a will, or vitiation of consent or an unknown will
from revoking one already made, or who appears [Art. 1056, CC];
supplants, conceals, or alters the latter's (3) They have a retroactive effect [Art. 1042,
will; CC].
(8) Any person who falsifies or forges a
supposed will of the decedent. REQUISITES [Art. 1043, CC]
PARDON OF ACTS OF UNWORTHINESS (1) Certainty of death of the decedent.
Express Implied (2) Certainty of the right to the inheritance.
Effected when the
Made by the execution
testator makes a will
of a document or any
instituting the
writing in which the
unworthy heir with
decedent condones
knowledge of the
the cause of incapacity
cause of incapacity
Revoked when the
Cannot be revoked testator revokes the
will or the institution
PAGE 291
Acceptance Repudiation (c) If the heir renounces it for a price in

Renders the favor of all his co-heirs indiscriminately;
transmission of
successional rights This is actually an onerous disposition.
ineffective The heir must first accept the
Involves the Equivalent to an inheritance before he can dispose of it.
confirmation of act of disposition or
Note: But if the renunciation should be
transmission of alienation
gratuitous, and in favor of all the co-heirs (to
successional rights Publicity
whom the portion renounced should devolve by
requirement is accretion), the inheritance shall not be deemed
necessary for the as accepted. [Art. 1050, CC] This is a true case
protection of other of renunciation.
heirs and creditors
FORMS OF REPUDIATION [Art. 1051,
FORMS OF ACCEPTANCE [Arts. 1049
CC]
1050, CC] (1) In a public instrument acknowledged before
(1) Express Acceptance one made in a public a notary public; or
or private document. [Art. 1049 par. 1) (2) In an authentic document equivalent of an
(2) Tacit Acceptance one resulting from acts indubitable writing or a writing whose
by which the intention to accept is authenticity is admitted or proved; or
necessarily implied or from acts which one (3) By petition presented to the court having
would have no right to do except in the jurisdiction over the testamentary or
capacity of an heir. intestate proceeding.
(3) Implied Acceptance Within thirty days
after the court has issued an order for the
distribution of the estate in accordance with
HEIRS IN TWO CAPACITIES [Art.
the Rules of Court, the heirs, devisees and 1055, CC]
legatees shall signify to the court having (1) If a person is called to the same inheritance
jurisdiction whether they accept or as an heir by will and by law and he
repudiate the inheritance; if they do not do repudiates the inheritance in his capacity as
so within that time, they are deemed to a testamentary heir, he will be considered to
have accepted the inheritance. [Art. 1057, have also repudiated the inheritance as a
CC] legal heir.
(2) If he repudiates it as a legal heir, without
An inheritance is deemed accepted: knowledge of his being a testamentary heir,
(a) If the heir sells, donates, or assigns his he may still accept it in the latter capacity.
right to a stranger, or to his co-heirs, or
to any of them; COLLATION
The heir must first accept the CONCEPT OF COLLATION
inheritance before he can dispose of it. To collate is to bring back or to return to the
hereditary mass in fact or by fiction property
(b) If the heir renounces the same, even which came from the estate of the decedent,
though gratuitously, for the benefit of during his lifetime by donation or other
one or more of his co-heirs; gratuitous title but which the law considers as
an advance from the inheritance. [Art. 1061,
This is actually a donation. The heir CC]
must first accept the inheritance before It is the act by virtue of which, the compulsory
he can donate it. heir who concurs with other compulsory heirs
in the inheritance brings back to the common
hereditary mass the property which they may
PAGE 292
have received from the testator so that a WHAT TO COLLATE

division may be effected according to law and (1) Any property or right received by gratuitous
the will of the testator. title during the testators lifetime. [Art. 1061,
In reducing inofficious donations, the last to CC]
be donated should be the first to be reduced. (2) All that they may have received from the
RATIONALE FOR COLLATION: If donations decedent during his lifetime. [Art. 1061, CC]
inter vivos will not be collated, then the rule on (3) Expenses incurred by the parents in giving
legitimes shall be circumvented or their children a professional, vocational or
disregarded. other career shall not be brought to
collation unless the parents so provide, or
OPERATIONS RELATED TO unless they impair the legitime; but when
COLLATION their collation is required, the sum which
(1) Collation adding to the mass of the the child would have spent if he had lived in
hereditary estate the value of the donation the house and company of his parents shall
or gratuitous disposition. be deducted therefrom. [Art. 1068, CC]
(2) Imputing or Charging crediting the (4) Any sums paid by a parent in satisfaction of
donation as an advance on the legitime (if the debts of his children, election expenses,
the donee is a compulsory heir) or on the fines, and similar expenses shall be brought
free portion (if the donee is a stranger, i.e., to collation. [Art. 1069, CC]
not a compulsory heir). [Balane, p522]
(3) Reduction determining to what extent the Note: Only the value of the thing donated shall
donation will remain and to what extent it is be brought to collation.
excessive or inofficious.
(4) Restitution returning or the act of PROPERTIES NOT SUBJECT TO
payment of the excess to the mass of COLLATION
hereditary estate.
ABSOLUTELY NO COLLATION
PERSONS OBLIGED TO COLLATE Expenses for support, education (only
General rule: Compulsory heirs elementary and secondary), medical
Exceptions: attendance, even in extraordinary illness,
(1) When the testator should have so expressly apprenticeship, ordinary equipment, or
provided [Art. 1062, CC]; customary gifts. [Art. 1067, CC]
(2) When the compulsory heir should have
repudiated his inheritance. [Art. 1062, CC] GENERALLY NOT IMPUTABLE TO
LEGITIME/ CANNOT BE COLLATED,
Grandchildren who survive with their uncles, SUBJECT TO EXCEPTIONS
aunts, or first cousins and inherit by right of (1) Expenses incurred by parents in giving their
representation [Art. 1064, CC] children professional, vocational or other
career unless the parents so provide, or
Note: Grandchildren may inherit from their unless they impair the legitime. [Art. 1067,
grandparents in their own right, i.e., as heirs CC]
next in degree, and not by right of (2) Wedding gifts by parents and ascendants,
representation if their parent repudiates the consisting jewelry, clothing and outfit,
inheritance of the grandparent, as no living except when they exceed 1/10 of the sum
person can be represented except in cases of disposable by will. [Art. 1070, CC]
disinheritance and incapacity. In this case, the (3) Neither shall donations to the spouse of the
grandchildren are not obliged to bring to child be brought to collation; but if they
collation what their parent has received have been given by the parent to the
gratuitously from their grandparent. spouses jointly, the child shall be obliged to
bring to collation one-half of the thing
Surviving spouse is NOT obliged to collate. donated. [Art. 1066, CC]
PAGE 293
Note: Parents are not obliged to bring to WHO MAY EFFECT PARTITION
collation in the inheritance of their ascendants (1) The Decedent, during his lifetime by an act
any property which may have been donated by inter vivos or by will [Art.1080, CC];
the latter to their children. [Art. 1065, CC] (2) The decedents heirs [Art.1083, CC];
(3) A competent court [Art. 1083, CC];
(4) A third person not an heir designated by the
PARTITION AND DISTRIBUTION decedent. [Art. 1081, CC]
OF ESTATE
WHO CAN DEMAND PARTITION
IN GENERAL (1) Compulsory heir;
Separate, Divide, Assign. Partition is the (2) Voluntary heir upon fulfillment of condition
separation, division and assignment of a thing if any [Art. 1084, CC];
held in common among those to whom it may (3) Legatee or devisee;
belong. The thing itself or its value may be (4) Any person who has acquired interest in the
divided. [Art. 1079, CC] estate.
Owned in common. Before partition, the whole
WHEN PARTITION CANNOT BE DEMANDED
estate of the decedent is owned in common
(1) When expressly prohibited by the testator
by the heirs. [Art. 1078, CC]
for a period not exceeding 20 years. [Art.
Thing or value may be divided. [Art. 1079) 1083, CC]
Acts deemed partition. Every act which is (2) When the co-heirs agreed that the estate
intended to put an end to indivision among shall not be divided for a period not
heirs and legatees or devisees is deemed a exceeding 10 years, renewable for another
parition, although it should purport to be a 10 years.
sale, an exchange, a compromise, or any other (3) When prohibited by law.
transaction. [Art. 1082, CC] (4) When to partition the estate would render it
unserviceable for the use for which it is
A VOID PARTITION MAY BE VALID IF: intended.
(1) The will was in fact a partition;
(2) The beneficiaries of the void will were legal PROHIBITION TO PARTITION
heirs. The prohibition to partition for a period not
exceeding 20 years can be imposed even on
The titles of acquisition or ownership of each
the legitime.
property shall be delivered to the co-heir to
If the prohibition to the partition is for more
whom said property has been adjudicated. [Art.
than 20 years, the excess is void.
1089 CC]
Even if a prohibition is imposed, the heirs by
JUDICIAL VS. EXTRAJUDICIAL PARTITION mutual agreement can still make the
partition.
Judicial Partition done by Court pursuant to an
Order of Distribution which may or may not be EFFECTS OF INCLUSION OF INTRUDER IN
based on a project of partition. PARTITION [Art. 1108, CC]
(1) Between a true heir and several mistaken
Extra-judicial partition made by the decedent heirs partition is void.
himself by an act inter vivos or by will or by a (2) Between several true heirs and a mistaken
third person entrusted by the decedent or by the heir transmission to mistaken heir is void.
heirs themselves. (Paras) (3) Through error or mistake, share of true heir
is allotted to mistaken heir partition shall
Partition inter vivos: It is one that merely
not be rescinded unless there is bad faith or
allocates specific items or pieces of property
fraud on the part of the other persons
on the basis of the pro-indiviso shares fixed by
interested, but the latter shall be
law or given under the will to heirs or
proportionately obliged to pay the true heir
successors. [Art. 1080, CC]
PAGE 294
of his share. The partition with respect to The warranty of the solvency of the debtor can
the mistaken heir is void. [Sempio-Dy] only be enforced during the five years
following the partition.
RIGHT OF REDEMPTION IN PARTITION Co-heirs do not warrant bad debts, if so
Should any of the heirs sell his hereditary rights known to, and accepted by the distributee.
to a stranger before the partition, any or all of But if such debts are not assigned to a co-heir,
the co-heirs may be subrogated to the rights of and should be collected, in whole or in part,
the purchaser by reimbursing him for the price the amount collected shall be distributed
of the sale, provided they do so within the proportionately among the heirs. [Art. 1095
period of one month from the time they were CC]
notified in writing of the sale by the vendor [Art.
1088, CC] END OF WARRANTY
The obligation of warranty among co-heirs shall
Strangers those who are not heirs on the cease in the following cases:
succession. (1) The testator himself has made the partition
Unless it appears, or it may be reasonably
EFFECTS OF PARTITION presumed, that his intention was
otherwise, but the legitime shall always
EFFECT remain unimpaired.
A partition legally made confers upon each heir (2) When it has been so expressly stipulated in
the exclusive ownership of the property the agreement of partition
adjudicated to him [Art. 1091, CC] Unless there has been bad faith.
(3) When the eviction is due to a cause
WARRANTY subsequent to the partition, or has been
After the partition has been made, the co- caused by the fault of the distributee of the
heirs shall be reciprocally bound to warrant property. [Art. 1096, CC]
the title to, and the quality of, each property
adjudicated [Art. 1092 CC] RESCISSION AND NULLIFICATION OF
The reciprocal obligation of warranty shall be
PARTITION
proportionate to the respective hereditary
shares of the co-heirs;
CAUSES FOR RESCISSION OR ANNULMENT
If any one of them should be insolvent, the (1) A partition may be rescinded or annulled for
other co-heirs shall be liable for his part in the the same causes as contracts. [Art. 1097, CC]
same proportion, deducting the part (2) A partition, judicial or extra-judicial, may
corresponding to the one who should be also be rescinded on account of lesion,
indemnified. when any one of the co-heirs received
Those who pay for the insolvent heir shall things whose value is less by at least one-
have a right of action against him for fourth, than the share to which he is
reimbursement, should his financial condition entitled, considering the value of the things
improve [Art. 1093 CC] at the time they were adjudicated [Art. 1098,
An action to enforce the warranty among the CC]
co-heirs must be brought within ten years This article applies only to cases of
from the date the right of action accrues. [Art. partition among co-heirs.
1094 CC] Lesion is the injury suffered in
If a credit should be assigned as collectible, consequence of inequality of situation by
the co-heirs shall not be liable for the one party who does not receive the full
subsequent insolvency of the debtor of the equivalent for what she gives in a sale or
estate, but only for his insolvency at the time any commutative contract.
the partition is made. [Art. 1095, CC] (3) The partition made by the testator cannot
be impugned on the ground of lesion,
except when the legitime of the compulsory
PAGE 295
heirs is thereby prejudiced, or when it DIFFERENCE OF NULLITY FROM

appears or may be reasonably be presumed, RESCISSION
that the intention of the testator was
otherwise. [Art. 1099, CC] Nullity the act is supposed to never have
(4) Preterition of a compulsory heir in the existed.
partition [Art. 1104, CC]:
Partition shall not be rescinded unless Rescission the act is valid at the origin though
bad faith or fraud on the part of other it afterwards became ineffective.
heirs is proved.
The culpable heirs shall share in the IMPORTANT PERIODS IN PARTITION
damages of the prejudiced compulsory
heir proportionately. Testator, if publicly known to
1 month or less
(5) A partition which includes a person believed be insane, burden of proof is
before making
to be an heir, but who is not, shall be void on the one claiming validity of
a will
only with respect to such person. [Art. 1105, the will
CC] Maximum period testator can
20 years prohibit alienation of
The action for rescission on account of lesion dispositions
shall prescribe after four years from the time 5 years from
To claim property escheated
the partition was made. [Art. 1100, CC] delivery to the
to the State
The heir who is sued shall have the option of State
indemnifying the plaintiff for the loss, or To report knowledge of
consenting to a new partition. 1 month violent death of decedent lest
Indemnity may be made: he be considered unworthy
o By payment in cash; or 5 years from
Action for declaration of
o By the delivery of a thing of the same kind the time
incapacity & for recovery of
and quality as that awarded to the plaintiff. disqualified
the inheritance, devise or
If a new partition is made, it shall affect person took
legacy
neither those who have not been prejudiced possession
nor those who have not received more than 30 days from
Must signify
their just share. [Art. 1101, CC] issuance of
acceptance/repudiation
An heir who has alienated the whole or a order of
otherwise, deemed accepted
distribution
considerable part of the real property
adjudicated to him cannot maintain an action 1 month form Right to repurchase
for rescission on the ground of lesion, but he written notice hereditary rights sold to a
shall have a right to be indemnified in cash. of sale stranger by a co-heir
[Art. 1102, CC] To enforce warranty of
title/quality of property
The omission of one or more objects or
10 years adjudicated to co-heir from
securities of the inheritance shall not cause
the time right of action
the rescission of the partition on the ground of
accrues
lesion, but the partition shall be completed by
the distribution of the objects or securities To enforce warranty of
which have been omitted. [Art. 1103, CC] 5 years from solvency of debtor of the
partition estate at the time partition is
made
4 years form Action for rescission of
partition partition on account of lesion
PAGE 296
[Type text] [Type text] [Type text]
PAGE 297
UP LAW BOC AGENCY AND PARTNERSHIP CIVIL LAW
PARTNERSHIP (1) Those who are prohibited from giving each

other any donation or advantage cannot
enter into a universal partnership [Art. 1782];
Contract of Partnership (2) A corporation cannot enter into a
partnership in the absence of express
DEFINITION authorization by statute or charter.
By the contract of partnership: Although a corporation cannot enter into a
(1) Two or more persons; partnership contract, it may, however, engage in
(2) Bind themselves to contribute money, a joint venture with others [Auerbach vs.
property, or industry to a common fund; Sanitary Wares Manufacturing Corp (1989)]. On
(3) With the intention of dividing the profits the other hand, there is no prohibition against a
among themselves [Art. 1767] partnership being a partner in another
partnership [De Leon (2010)]
Article 1767 defines partnership from the
viewpoint of a contract. From the contract arises OBJECT
the partnership relation [De Leon (2010)]
OBJECT OF UNIVERSAL
ESSENTIAL FEATURES PARTNERSHIP
(1) There must be a valid contract;
A universal partnership may refer to:
(2) The parties must have legal capacity;
(1) All present property :
(3) There must be a mutual contribution of
money, property, or industry to a common (a) The partners contribute all the property
fund; which belongs to them to a common
(4) The object must be lawful; fund, with the intention of dividing the
(5) The primary purpose must be to obtain same among themselves, as well as the
profits and to divide the same among the profits they may acquire therewith [Art.
parties; 1778].
(6) The partnership has a juridical personality (b) The property contributed includes all
separate from individual partners [Art. those belonging to the partners at the
1768]. time of the constitution of the
partnership.
As such, any immovable property or an interest (c) A stipulation for the common
therein may be acquired in the partnership enjoyment of any other profits may also
name. Title so acquired can be conveyed only in be made. However, the property which
the partnership name [Art. 1774]. the partners may acquire subsequently
by inheritance, legacy or donation
cannot be included in such stipulation,
PARTIES except the fruits thereof [Art. 1779].
General rule: Any person capacitated to contract (2) All the profits:
may enter into a contract of partnership.
(a) It comprises all that the partners may
As such, the following persons cannot enter into
acquire by their industry or work during
a contract of partnership:
the existence of the partnership.
(1) Those suffering from civil interdiction;
(2) Minors;
(b) Only the usufruct over the property
(3) Insane or demented persons; of the partners passes to the
(4) Deaf-mutes who do not know how to write; partnership [Art. 1780].
(5) Incompetents who are under guardianship.
Art. 1781. When the articles of universal
Exceptions : The capacity of the following partnership does not specify its nature (all
persons to enter into a contract of partnership, present property or all the profits), the
though capacitated to contract generally, are partnership will be considered as one only of all
limited: the profits.
PAGE 298
OBJECT OF PARTICULAR DURATION

PARTNERSHIP
COMMENCEMENT
Art. 1783. A particular partnership has for its
object determinate things, their use or fruits, or Art. 1784. A partnership begins from the
a specific undertaking, or the exercise of a moment of the execution of the contract, unless
profession or vocation. otherwise stipulated.
EFFECT OF UNLAWFUL OBJECT TERM

If the partnership has an unlawful object or As to period, a partnership may either be:
purpose: (1) For a fixed term or particular undertaking;
(1) The contract is void ab initio [Art. 1409, par. or
1]. (2) At will, the formation and dissolution of
(2) Once dissolved by judicial decree: which depend on the mutual desire and
(a) The profits shall be confiscated by favor consent of the parties. Any one of the
of the State; partners may, at his sole pleasure, dictate
(b) The instruments or tools and proceeds the dissolution of the partnership, even in
of the crime shall also be forfeited in bad faith, subject to liability for damages
favor of the State [Art. 1770]. [Ortega v. CA (1995)].
(3) The contributions of partners shall not be
confiscated unless they are instruments or
tools of the crime [De Leon (2010)]. EXTENSION
A partnership term may be extended by:
(1) Express renewal; or
FORM (2) Implied renewal, when these requisites
General rule: The contract may be constituted in concur:
any form [Art. 1771]. (a) The partnership is for a fixed term or
particular undertaking;
Exceptions: (b) It is continued after the termination of
(1) Where immovable property or real rights the fixed term or particular undertaking
are contributed: without any express agreement [Art.
(a) The contract must appear in a public 1785].
instrument; and
(b) Attached to such instrument must be
an inventory, signed by the parties, of
RULES TO DETERMINE
the property contributed [Arts. 1771 and EXISTENCE
1773]; When the intent of the parties is clear, such
(2) Where the capital is at least P3,000, in intent shall govern. When it does not clearly
money or property: appear, the following rules apply:
(a) The contract must appear in a public (1) Persons who are not partners to each other
instrument; and are not partners as to third persons, subject
(b) It must be recorded in the Office of the to the provisions on partnership by
Securities and Exchange Commission estoppel.
(SEC). (2) Co-ownership or co-possession does not of
itself establish a partnership, even when
As to the second, failure to comply with these there is sharing of profits in the use of the
requirements, however, does not affect the property.
liability of the partnership and the partners to (3) Sharing of gross returns does not of itself
third persons [Arts. 1768 and 1772]. establish a partnership, even when the
parties have joint or common interest in any
property from which the returns are derived.
PAGE 299
(4) The receipt by a person of a share in the (6) As to its purpose:

profits of a business is prima facie evidence (a) Commercial or trading partnership, for
that he is a partner. transaction of business;
(b) Professional or non-trading partnership,
As to the fourth, no such inference is drawn if for the exercise of profession.
the profits are received in payment:
(1) As a debt by installments or otherwise; A profession has been defined as a group of
(2) As wages of an employee of rent to a men pursuing a learned art as a common
landlord; calling in the spirit of public service no less a
(3) As an annuity to a widow or representative public service because it may incidentally be a
of a deceased partner; means of livelihood [In the Matter of the Petition
(4) As interest on a loan, though the amount of for Authority to Continue Use of Firm name
payment vary with the profits of the Sycip, Salazar, etc./Ozaeta, Romulo, etc.
business; (1979)]. A professional partnership is a particular
(5) As the consideration for the sale of a partnership [Art. 1783].
goodwill of a business or other property by
installments or otherwise [Art. 1769].
KINDS OF PARTNERS
(1) Capitalist partner, whose contribution is
KINDS money or property;
(1) As to the legality of its existence: (2) Industrial partner, contribution is only his
(a) Partnership de jure is one which has industry;
complied with all the requisites for its (3) General partner, whose liability to third
lawful establishment; persons extends to his separate property;
(b) Partnership de facto is one which failed (4) Limited partner, whose liability to third
to so comply. persons is limited to his capital contribution;
(2) As to its object: (5) Managing partner, who was designated to
(a) Universal partnership: manage the affairs or business of the
(i) Of all present property; partnership;
(ii) Of profits; (6) Liquidating partner, who takes charge of the
(b) Particular partnership. winding up of partnership affairs;
(3) As to its duration: (7) Partner by estoppel, who is not really a
(a) For a fixed term or particular partner but is liable as such for the
undertaking; protection of innocent third persons;
(b) At will. (8) Continuing partner, who continues the
(4) As to the liability of the partners: business after dissolution of the partnership
(a) General partnership, consisting of by admission of a new partner, or
general partners only, who are liable retirement, death or expulsion of existing
pro rata for partnership obligations with partners;
all their after exhaustion of partnership (9) Surviving partner, who remains a partner
assets; after dissolution by death of any partner;
(b) Limited partnership, includes, aside (10) Subpartner, who is not a member of the
from general partner/s, limited partnership but contracts with a partner
partners, who are not personally liable with regard to the share of the latter in the
for partnership obligations. partnership;
(5) As to its publicity: (11) Ostensible partner, who takes active part in
(a) Secret partnership, where the existence the business of the partnership and is
of certain persons as partners is not known by the public;
made known by the partners; (12) Secret partner, who takes active part in the
(b) Open or notorious partnership, the business, but is unknown to the third
existence of which is made known to the persons as a partner;
public by the partners.
PAGE 300
(13) Silent partner, who does not take active part PARTNERSHIP AND OTHER
in the business, but may be known to be a
partner by third persons; CONTRACTS DISTINGUISHED
(14) Dormant partner, who does not take active
part in the business and is not known or Partnership Joint venture
held out as a partner; Operates with firm Operates without firm
(15) Original partner, who has been a partner name and legal name and legal
since the constitution of the partnership; personality personality
(16) Incoming partner, who is about to be taken
Generally relates to a Usually limited to a
as a member into an existing partnership;
continuing business of single transaction
(17) Retiring partner, who is withdrawing from various transactions of
the partnership. a certain kind
Corporations may not Corporations may
Industrial Capitalist
enter into a enter into joint
partner partner
partnership ventures
Form of contribution
Industry Money or property Under Philippine law, a joint venture is a form of
Share in profits partnership and should thus be governed by the
laws of partnership [Auerbach vs. Sanitary Wares
Just and equitable According to Manufacturing Corp. (1989)].
share agreement; if none, in
proportion to
Partnership Co-ownership
contribution
Generally created by Generally created by
Share in losses
either express or law and may exist
Exempted as to losses According to implied contract even without a
as between partners, agreement; if none, in contract
but liable to third the same proportion
Has a separate Has no separate
persons, without as the agreed share in
juridical personality juridical personality
prejudice to profits; if none, in
reimbursement from proportion to Generally, the purpose The purpose is the
capitalist partners contribution is to obtain profits common enjoyment of
a thing or right
Engagement in business
Duration has no An agreement to keep
Cannot engage in Cannot engage, for his
limitation a thing undivided for
business for himself, own account, in the
more than ten years is
unless the partnership same kind of business
not allowed, but may
expressly permits him as that of the
be extended
to do so; should he do partnership, unless
so without permission, there is a stipulation There is mutual There is no mutual
the capitalist partners to the contrary; should agency between representation among
may: (1) exclude him he do so, he shall partners co-owners
from the firm; or (2) bring to the common Death or incapacity of Death or incapacity of
avail themselves of fund any profits a partner dissolves the a co-owner does not
the benefits obtained accruing to him from partnership dissolve the co-
in violation of the his transactions and ownership
prohibition, with right shall personally bear
to damages in either all the losses [Art. A partner cannot A co-owner can
case [Art. 1789] 1808] dispose of his interest, dispose of his share
so as to make the without consent of
assignee a partner, others
without consent of
others
PAGE 301
Partnership Corporation Conjugal Partnership of

Partnership
Has juridical personality separate and distinct Gains
from its individual members Created by voluntary Arises in case the
Can only act through agents agreement of two or spouses, of opposite
more partners of either sex, agree before
Composed of an aggregate of individuals sex marriage
Distributes its profits to those who contributed Governed by Governed by law
capital to the business agreement
Can only be organized where there is a law Has juridical Has no juridical
authorizing its organization personality personality
Taxable as in a corporation Commencement date Commencement is on
Created by agreement Created by operation may be stipulated the date of the
of law celebration of the
marriage and any
Involves at least two Except for corporation stipulation to the
persons sole, requires at least contrary is void
five incorporators
Share in profits may be Share in profits is equal
Personality Personality stipulated; otherwise,
commences from the commences from the in proportion to
moment of execution issuance of certificate contribution
of the contract of incorporation
Management shared by Administration belongs
Can exercise any Can exercise only all partners, unless to the spouses jointly,
power authorized by powers conferred by otherwise agreed upon but decision of
partners the Corporation Code husband prevails in
or by its articles of case of disagreement
incorporation, and
such as are necessary Partner can dispose of Spouse cannot dispose
or incidental to the interest even without of interest during
exercise of such consent of others marriage, even with
powers consent
When management is Management is vested Partnership Association
not agreed upon, in the board of
every partner may act directors or trustees Has juridical Has no juridical
for the partnership personality personality
Partners are generally Stockholders are Organized for profit Not always organized
liable for partnership liable only to the for profit
debts extent of their shares Capital is contributed Capital is not
A partner cannot A stockholder has the contributed, although
dispose of his interest, right to transfer his fees are collected from
so as to make the shares without members
assignee a partner, consent of others The partnership is The members are liable
without consent of primarily liable; the individually for debts
others partners are liable only which they authorized
Duration has no The term limit is 50 subsidiarily or ratified
limitation years, but may be Share in profits may be Share in profits is equal
extended stipulated; otherwise,
May be dissolved at May only be dissolved in proportion to
any time by one or all with the consent of contribution
of the partners the state
PAGE 302
Rights and Obligations of (2) The majority of the capitalist partners are of
the opinion that an additional contribution
the Partnership to the common fund would save the
business;
(3) The capitalist partner refuses deliberately
RIGHT TO CONTRIBUTION (not because of financial inability) to
The partnership has a right to the contribution contribute an additional share to the
(or the partners are obliged to contribute). The capital; and
money or property thus contributed, or their use (4) There is no agreement that even in case of
or fruits, become the property of the imminent loss of the business, the partners
partnership. are not obliged to contribute.
CONTRIBUTION OF MONEY OR Any partner who refuses to contribute an

PROPERTY additional share to the capital, except an
With respect to contribution of property, a industrial partner, to save the venture, shall be
partner is obliged to: obliged to sell his interest to the other partners,
(1) To contribute, at the beginning of the unless there is an agreement to the contrary
partnership or at the stipulated time, the [Art. 1791].
money, property or industry which he
undertook to contribute; CONTRIBUTION OF INDUSTRY
(2) In case a specific and determinate thing is An industrial partner is obliged to contribute his
to be contributed: industry at the stipulated time.
(a) To warrant against eviction in the same
manner as a vendor; and General rule: An industrial partner cannot
(b) To deliver to the partnership the fruits engage in business for himself. Should he do so,
of the property promised to be the capitalist partners, as well as industrial
contributed, from the time they should partners [De Leon (2010)] may either:
have been delivered, without need of (1) Exclude him from the firm; or
demand [Art. 1786]; (2) Avail themselves of the benefit which he
(3) In case a sum of money is to be contributed, may have obtained.
or in case he took any amount from the
partnership coffers, to indemnify the Exception: He may engage in business for
partnership for: himself when the partnership expressly permits
(a) Interest; and him to do so [Art. 1789].
(b) Damages, from the time he should have
complied with his obligation, or from RIGHT TO APPLY PAYMENT
the time he converted the amount to his
own use, respectively [Art. 1788]. RECEIVED TO PARTNERSHIP
CREDIT
AMOUNT OF CONTRIBUTION
General rule: Partners are to contribute equal General rule: A partner authorized to manage,
shares to the capital of the partnership. who collects a demandable sum owed to him in
his own name from a person who also owes the
Exception: When there is an agreement to the partnership a demandable sum, is obliged to
contrary, the contribution shall follow such apply the sum collected to both credits pro rata,
agreement [Art. 1790]. even if he issued a receipt for his own credit
only.
ADDITIONAL CAPITAL CONTRIBUTION
Requisites: Requisites:
(1) There is an imminent loss of the business of (1) There exist at least two debts, one where
the partnership; the collecting partner is creditor, and the
other, where the partnership is the creditor;
PAGE 303
(2) Both debts are demandable; and

(3) The partner who collects is authorized to Exception : The court may equitably lessen the
manage and actually manages the liability if, through his extraordinary efforts in
partnership. other activities of the partnership, unusual
profits were realized [Art. 1794]. Note, however,
Exceptions: that there is still no compensation in this case.
(1) In case the receipt was issued for the
account of the partnership credit only, SUIT FOR DAMAGES
however, the sum shall be applied to the Before a partner may sue another for alleged
partnership credit alone. fraudulent management and resultant
(2) When the debtor declares, pursuant to damages, liquidation must first be effected to
Article 1252, at the time of making the determine the extent of the damage. Without
payment, to which debt the sum must be liquidation of partnership affairs, a partner
applied, it shall be so applied [Art. 1792]. cannot claim damages [Soncuya v. De Luna
(1939)].
RIGHT TO RETURN OF CREDIT
RECEIVED RESPONSIBILITY TO PARTNERS
In the absence of any stipulation to the contrary,
A partner, authorized to manage or not, who every partner is an agent of the partnership for
already received, in whole or in part, his share of the purpose of its business. As such, it is
a partnership credit, is obliged to bring to the responsible to every partner:
partnership capital what he received when: (1) For amounts, and the corresponding
(1) The other partners have not collected their interest from the time the expenses were
shares; and made, which he may have disbursed on
(2) The partnership debtor has become behalf of the partnership;
insolvent. (2) For obligations he may have contracted in
good faith in the interest of the partnership
This obligation exists even when he issued a
business; and
receipt for his share only [Art. 1793].
(3) For risks in consequence of the
management of the partnership [Art. 1796].
Ratio: In this case, the debt becomes a bad
debt. It would be unfair for the partner who
already collected not to share in the loss of the
other partners. Rights and Obligations of
RIGHT TO INDEMNITY FOR Partners Inter Se
DAMAGES RIGHT TO ASSOCIATE
Every partner is responsible to the partnership ANOTHER IN SHARE
for damages suffered by it through his fault.
Every partner may associate another person
SET-OFF OF LIABILITY with him in his share. The admission of the
General rule: The liability for damages cannot associate to the partnership, however, requires
be set-off or compensated by profits or benefits consent of all the other partners even if the
which the partner may have earned for the partner having an associate is a managing
partnership by his industry. partner [Art. 1804].
Ratio: The partner has the obligation to secure This arrangement refers to a contract of
the benefits for the partnership. As such, the subpartnership, which is a partnership within a
requirement for compensation, that the partner partnership, distinct and separate from the
be both a creditor and a debtor of the main partnership. It is considered a modification
partnership at the same time, is not complied of the original contract [De Leon (2010)].
with [Art. 1278; De Leon (2010)].
PAGE 304
RIGHT TO INSPECT PROPERTY AND CAPITAL

PARTNERSHIP BOOKS DISTINGUISHED
The partnership books shall be kept: Partnership capital Partnership property
(1) At a place agreed upon by the partners; With constant value Value varies with
(2) When there is no such agreement, at the market conditions
principal place of business of the
Includes only actually Includes the
partnership. contributed and contributions and
promised capital property acquired by
Every partner shall, at any reasonable hour, the partnership
have access to and may inspect and copy any of
them.
OWNERSHIP OF CERTAIN
Any reasonable hour means reasonable hours PROPERTIES
on business days throughout the year [Pardo v. (1) The ownership of property used by the
Lumber Co. (1925)]. partnership depends on the intention of the
parties, which may be drawn from an
RIGHT TO FORMAL ACCOUNT express agreement or their conduct.
General rule: The right to a formal account of (a) A partner may allow the property to be
partnership affairs accrues only when the used by the partnership without transfer
partnership is dissolved. of ownership, contributing only the use
or enjoyment thereof.
Exceptions: In the special and unusual cases (b) He may also hold title to partnership
mentioned in Article 1809, formal accounting property, without acquiring ownership
may be demanded by any partner even before thereof [Art. 1819].
dissolution: (2) Property acquired by a partner with
(1) If he is wrongfully excluded from the partnership funds is presumed to be
partnership business or possession of its partnership property.
property by his co-partners; (3) The same presumption also arises when the
(2) If the right exists under the terms of any property is indicated in the partnership
agreement; books as partnership asset.
(3) If, without his consent, a partner has derived (4) Other factors may be considered to
profits from any transaction connected with determine ownership of the property.
the formation, conduct, or liquidation of the
partnership or from any use of partnership RIGHTS IN SPECIFIC PROPERTY
property; (1) The partners have equal rights to possess
(4) Whenever other circumstances render it just partnership property for partnership
and reasonable [Art. 1809]. purposes.
(2) For other purposes, the consent of his
PROPERTY RIGHTS OF partners is necessary.
PARTNERS (3) If the partner is excluded, he may ask for:
(a) Formal accounting [Art. 1809]; or
(b) Dissolution by judicial decree [Art. 1831].
IN GENERAL (4) A partners right in such property is not
The property rights of a partner are: assignable, except when all the partners
(1) Rights in specific partnership property; assign their rights in the same property;
(2) Interest in the partnership; and (5) The right is not subject to attachment or
(3) Right to participate in the management execution, except on claim against the
[Art. 1810]. partnership. In case of such attachment, the
partners, or any of them, or the
representatives of a deceased partner,
PAGE 305
cannot claim any right under the court, may be purchased without causing
homestead or exemption laws. dissolution:
(6) The right is not subject to legal support (1) With separate property, by one or more of
under Article 291 [Art. 1811]. the partners; or
(2) With partnership property, by one or more
INTEREST IN PARTNERSHIP of the partners, will consent of all, except
A partners interest in the partnership is his the debtor partner [Art. 1814].
share of the profits and surplus [Art. 1812].
RIGHT TO PARTICIPATE IN
ASSIGNMENT OF INTEREST MANAGEMENT
Assignment by a partner of his whole interest in Management of the partnership is primarily
the partnership, of itself: governed by the agreement of the partners in
(1) Does not dissolve the partnership; or the articles of partnership. It may be stipulated
(2) Does not entitle the assignee to: that the partnership will be managed by:
(a) Interfere in the management or (1) All the partners; or
administration of the partnership (2) A number of partners appointed as
business or affairs; managers, which may be appointed:
(b) Require information or account of (a) In the articles of partnership; or
partnership; or (b) After constitution of the partnership.
(c) Inspect the partnership books.
POWERS OF A MANAGING PARTNER
It merely entitles the assignee to:
General rule: The partner designated as
(1) Receive the profits to which the assigning
manager in the articles may execute all acts of
partner was entitled;
administration despite opposition by the other
(2) In case of fraud in management, avail
partners.
himself of the usual remedies;
(3) In case of dissolution:
Exception: He cannot do so when he acts in bad
(a) Receive his assignors interest; and
faith.
(b) Require an accounting from the date
only of the last account agreed to by all
the partners [Art. 1813]. REVOCATION OF POWER BY
MANAGING PARTNER
INTEREST BY PERSONAL CREDITORS The powers of the managing partner may be
General rule: Partnership creditors are preferred revoked:
over the personal creditors of the partners as (1) If appointed in the articles of partnership,
regards partnership property. when:
(a) There is just or lawful cause for
Exception: On due application by any judgment revocation; and
creditor of a partner, a competent court may: (b) The partners representing the
(1) Charge the interest of the partner for the controlling interest revoke such power.
satisfaction of the judgment debt; (2) If appointed after the constitution of the
(2) Appoint a receiver of the share of the profits partnership, at any time and for any cause
and of any other money due or to fall due to [Art. 1800].
the partner; and
(3) Make all other orders, directions, accounts MANAGING BY TWO OR MORE
and inquiries, which the debtor partner PARTNERS
might have made, or which the When there are two or more managing partners
circumstances may require. appointed, without specification of their duties
or without a stipulation on how each one will
The interest charged may be redeemed before act:
foreclosure or, in case of sale directed by the
PAGE 306
(1) Each one may separately execute all acts of MUTUAL AGENCY
administration. In addition to the Article 1801, there is effectively
(2) If any of them opposes the acts of the a mutual agency in the following cases:
others, the decision of the majority prevails. (1) Partners can dispose of partnership
(3) In case of a tie, the partners owning the property even when in partnership name
controlling interest will decide [Art. 1801]. [Art. 1819].
(2) An admission or representation made by
Requisites: any partner concerning partnership affairs is
(1) Two or more partners have been appointed evidence against the partnership [Art. 1820].
as managers; (3) Notice to any partner of any matter relating
(2) There is no specification of their respective to partnership affairs is notice to the
duties; and partnership [Art. 1821].
(3) There is no stipulation that one of them (4) Wrongful act or omission of any partner
shall not act without the consent of all the acting for partnership affairs makes the
others. partnership liable [Art. 1822].
(5) Partnership is bound to make good losses
STIPULATION OF UNANIMITY for wrongful acts or misapplications of
partners [Art. 1823].
Art. 1802. In case there is a stipulation that none
of the managing partners shall act without the RIGHT TO PROFITS AND
consent of others, the concurrence of all is OBLIGATIONS FOR LOSSES
necessary for the validity of the acts, and the
absence or disability of one cannot be alleged,
unless there is imminent danger of grave or RULES FOR DISTRIBUTION OF
irreparable injury to the partnership. PROFITS AND LOSSES
The distribution of profits and losses shall be in
MANAGEMENT WHEN MANNER NOT accordance with the following rules:
AGREED UPON (1) They shall be distributed in conformity with
the agreement.
When there is no agreement as to the manner (2) If only the share in profits has been
of management, the following rules apply: stipulated, the share in the losses shall be in
(1) All the partners are considered agents the same proportion.
(mutual agency). Whatever any one does (3) In the absence of any stipulation:
alone binds the partnership, unless there is (a) The share in the profits of the capitalist
a timely opposition to the act, under Article partners shall be in proportion to their
1801. contributions.
(2) Any important alteration in the immovable (b) The losses shall be borne by the
property of the partnership, even if useful to capitalist partners, also in proportion to
the partnership, requires unanimity. If the the contributions.
alteration is necessary for the preservation (c) The share of the industrial partners in
of the property, however, consent of the the profits is that share as may be just
others is not required [De Leon (2010)]. and equitable. If he also contributed
capital, he will receive a share of the
If the refusal is manifestly prejudicial to the profits in proportion to his contribution;
partnership, court intervention may be sought and
[Art. 1803]. (d) The industrial partner, who did not
contribute capital, is not liable for losses
[Art. 1797].
PAGE 307
EXCLUSION OF PARTNER FROM

SHARE
Obligations of the
General rule: A stipulation excluding one or Partnership/Partners to
more partners from any share in the profits or
losses is void [Art. 1799]. Third Persons
Exception: A stipulation exempting an industrial OBLIGATION TO OPERATE
partner from losses is valid, since, if the
partnership fails to realize profits, he can no UNDER A FIRM NAME
longer withdraw his work or labor [De Leon
(2010)]. Art. 1815. Every partnership shall operate under
a firm name, which may or may not include the
OBLIGATION TO RENDER name of one or more of the partners.
INFORMATION Those who, not being members of the
Partners shall render on demand true and full partnership, include their names in the firm
information of all things affecting the name, shall be subject to the liability of a
partnership to: partner.
(1) Any partner;
(2) The legal representative of any deceased
General rule: The partners may adopt any firm
partner; or
name desired.
(3) The legal representative of any partner
under legal disability [Art. 1806].
Exceptions:
(1) They cannot use a name which is identical
OBLIGATION TO ACCOUNT AND or deceptively or confusingly similar to an
ACT AS TRUSTEE existing or corporation [or partnership] or to
Every partner must (1) account to the any other name already protected by law or
partnership for any benefit and (2) hold as is patently deceptive, confusing or contrary
trustee for it any profits derived by him without to existing laws [Sec. 18, Corporation Code].
the consent of the other partners: (2) Use of names of deceased partner in law
(1) From any transaction connected with the firms is permissible provided that the firm
formation, conduct, or liquidation of the indicates in all its communications that said
partnership; or partner is deceased [Rule 3.02, Code of
(2) From any use by him of its property [Art. Professional Responsibility].
1807].
LIABILITY OF PARTNERS FOR
PARTNERSHIP CONTRACTS
The partnership is primarily liable for contracts
entered into:
(1) In its name and for its account;
(2) Under its signature; and
(3) By a person authorized to act for it.
Upon exhaustion of its assets, all partners are

liable pro rata with all their property.
Any partner may enter into a separate
obligation to perform a partnership contract
[Art. 1816].
PAGE 308
NATURE OF INDIVIDUAL LIABILITY LIABILITY OF PARTNERS FOR

PARTNERSHIP CONTRACTS
SUBSIDIARY
General rule: The partners are liable subsidiarily.
It only arises upon exhaustion of partnership ACTS APPARENTLY FOR THE
assets [Cia. Maritima v. Muoz (1907)]. CARRYING ON OF USUAL BUSINESS
General rule: Any act of a partner which is
Exceptions: apparently for the carrying on of the usual
(1) A third person who transacted with the business of the partnership binds the latter,
partnership can hold the partners solidarily including the execution of any instrument in the
(rather than subsidiarily) liable for the whole partnership name.
obligation if the case falls under Articles
1822 or 1823 [Muasque v. CA (1985)]. The Exception: The partnership is not bound when
provisions refer to wrongful acts or omission the following concur:
and misapplication of money or property by (1) The partner has in fact no authority to act;
a partner in the ordinary course of business. and
(2) A person admitted as a partner into an (2) The person with whom he deals has
existing partnership is liable for all the knowledge of such fact [Art. 1818, par. 1].
obligations of the partnership arising before
his admission, except that his liability shall ACTS NOT APPARENTLY FOR
be satisfied only out of partnership property, CARRYING ON OF THE USUAL
unless there is a stipulation to the contrary BUSINESS
[Art. 1826]. In other words, he is not General rule: Acts of a partner which is not
personally liable. apparently for carrying on of the usual business
does not bind the partnership.
PRO RATA
The partners are liable pro rata. Exception: The partnership is bound if the other
This liability is not increased even when a partners authorized him to do the act [Art. 1818,
partner: par. 2].
(1) Has left the country and the payment of his
share of the liability cannot be enforced [Co- ACTS OF STRICT DOMINION
Pitco v. Yulo (1907)]; or General Rule: One or some of the partners have
(2) His liability is condoned by the creditor no authority to do the following acts of strict
[Island Sales v. United Pioneers (1975)]. dominion:
(1) Assign the partnership property in trust for
creditors or on the assignees promise to
LIABILITY OF AN INDUSTRIAL pay the debts of the partnership;
PARTNER (2) Dispose of the goodwill of the business;
An industrial partner, who is not liable for (3) Do any other act which makes it impossible
losses, is not exempt from this liability. to carry on the ordinary business of the
However, he can recover the amount he has partnership;
paid from the capitalist partners, unless there is (4) Confess a judgment;
a stipulation to the contrary [Cia. Maritima v. (5) Enter into a compromise concerning a
Muoz (1907)]. partnership claim or liability;
(6) Submit a partnership claim or liability to
STIPULATION AGAINST INDIVIDUAL arbitration;
LIABILITY (7) Renounce a claim of the partnership.
Any stipulation against this liability is: Exceptions: They may do so if:
(1) Void against third persons; but (1) Authorized by all the partners; or
(2) Valid among the partners [Art. 1817]. (2) The other partners have abandoned the
business [Art. 1818, par. 3].
PAGE 309
ACTS IN CONTRAVENTION OF A Where the title is in the names of all the

RESTRICTION partners, a conveyance executed by all of them
Any act of a partner in contravention of a passes all the rights to the property [Art. 1819,
restriction on authority does not bind the par. 5].
partnership to persons having knowledge of the
restriction [Art. 1818, par. 4]. LIABILITY OF PARTNERSHIP
FOR ADMISSION BY A PARTNER
CONVEYANCE OF An admission or representation by any partner
PARTNERSHIP REAL PROPERTY may be used as evidence against the
partnership when:
(1) It concerns partnership affairs;
TITLE IN PARTNERSHIP NAME (2) Such affairs are within the scope of his
Any partner may convey the real property in the
authority [Art. 1820].
name of the partnership.
The partnership can recover it, except when:
(1) The act of the partner binds the partnership, LIABILITY OF PARTNERSHIP
when he has authority to carry out the usual FOR WRONGFUL ACTS OF A
business of the partnership, under Article
1818, 1st par.; or
PARTNER
The partnership is solidarily liable with the
(2) If not so authorized, the property has been
partner who causes loss or injury to any person
conveyed by the grantee, or a person
not a partner, or incurs any penalty through any
claiming under him, to a holder for value
wrongful act or omission:
and without knowledge that the partner
(1) In the ordinary course of the business of the
exceeded his authority [Art. 1819, par. 1].
partnership; or
(2) Not in such ordinary course of business, but
A partner authorized to carry out the usual
with the authority of his co-partners [Art.
business may convey, in his own name, the
1822].
equitable interest of the partnership [Art. 1819,
par. 2].
LIABILITY OF THE
TITLE IN THE NAME OF OTHER PARTNERSHIP FOR
PERSONS MISAPPLICATION OF MONEY
Where the title is in the name of one or more
but not all the partners, and the record does not OR PROPERTY
disclose the right of the partnership: The partnership is liable for losses suffered by a
(1) The partners having title may convey title. third person whose money or property was:
(2) The partnership may recover it when the (1) Received by a partner:
partners conveying title have no authority to (a) Acting within the scope of his apparent
carry on the usual business of the authority; and
partnership, unless the purchaser or his (b) Misapplied it;
assignee is: (2) Received by the partnership:
(a) A holder for value; and (a) In the course of its business; and
(b) Without knowledge that the act (b) Misapplied by any partner while it is in
exceeded authority [Art. 1819, par. 4]. the custody of the partnership [Art.
1823].
Where the title is in the name of one or more or
all the partners, or in a third person in trust for
the partnership a partner authorized to carry on
the usual business may convey equitable title in
the partnership name or in his own name [Art.
1819, par. 4].
PAGE 310
LIABILITY OF THE OTHER consenting to the contract or

representation.
PARTNERS UNDER ART. 1822 (3) When there are no such other persons, he is
AND 1823 separately liable [Art. 1825, par. 1].
All partners are solidarily liable with the
partnership for its liabilities under Articles 1822 EFFECT ON EXISTING PARTNERSHIP
and 1823 [Art. 1824]. OR OTHER PERSONS NOT ACTUAL
PARTNERS
This is without prejudice to the guilty partner (1) When a person has been represented to be
being liable to the other partners. However, as a partner (a) in an existing partnership, or
far as third persons are concerned, the (b) with one or more persons not actual
partnership is answerable [De Leon (2010)]. partners, he is an agent of the persons
consenting to such representation to bind
LIABILITY IN CASE OF them to the same extent and in the same
PARTNERSHIP BY ESTOPPEL manner as though he were a partner in fact,
with respect to persons who rely upon the
representation.
PARTNER BY ESTOPPEL (2) When all the members of the existing
A partner by estoppel is a person who, by words partnership consent to the representation, a
spoken or written or by conduct (1) represents partnership act or obligation results.
himself as a partner or (2) consents to another (3) In all other cases, it is the joint act or
representing him to anyone as a partner: obligation of the person acting and the
(1) In an existing partnership; or persons consenting to the representation
(2) With one or more persons not actual [Art. 1825, par. 2].
partners [Art. 1825, par. 1].
NATURE OF LIABILITY
LIABILITY OF A PARTNER BY Summarizing Article 1825, a partner by estoppel
ESTOPPEL is liable in the following manner:
(1) He is liable as though he were a partner
PERSONAL REPRESENTATION when:
A partner by estoppel is liable to any such (a) There is an existing partnership;
persons: (b) All the partners consented to the
(1) To whom such representation has been representation; and
made; and (c) A partnership liability results.
(2) Who has, on the faith of such (2) He is liable jointly and pro rata (as though
representation, given credit to the actual or he were a partner in fact) with those who
apparent partnership [Art. 1825, par. 1]. consented to the representation when:
(a) There is an existing partnership but not
PUBLIC REPRESENTATION all the partners consented; or
If he has made such representation or (b) There is no existing partnership and all
consented to its being made in a public manner, those represented as partners
whether the representation has or has not been consented to the representation.
(personally) made or communicated to such (3) He is liable separately when:
persons so giving credit by or with his (a) There is an existing partnership but
knowledge, and: none of the partners consented; or
(1) Partnership liability results, he is liable as (b) There is no existing partnership and not
though he were an actual member of the all of those represented as partners
partnership. consented to the representation.
(2) No partnership liability results, he is liable
pro rata with the other persons, if any, so
PAGE 311
LIABILITY OF AN INCOMING Dissolution and Winding

PARTNER
A person admitted as a partner is liable: Up
(1) For obligations incurred subsequent to his
admission as the other partners are liable; CONCEPTS
(2) For obligations incurred before his Dissolution is the change in the relation of the
admission, but will be satisfied only out of partners caused by any partner ceasing to be
the partnership property, unless otherwise associated in the carrying on of the business. It
stipulated that he fully assumes such is different from the winding-up of the business
obligations. [Art. 1828]. It does not terminate the
partnership, which continues until the winding
Ratio: up of partnership affairs is completed [Art.
(1) The new partner partakes of the benefits of 1829].
the partnership property and an already
established business. Winding up is the actual process of settling the
(2) He has every means of obtaining full partnership business or affairs after dissolution.
knowledge of the debts of the partnership It involves collection and distribution of
and remedies that amply protect his partnership assets, payment of debts, and
interest [De Leon (2010)]. determination of the value of the interest of the
partners in the partnership.
NOTICE TO OR KNOWLEDGE OF
THE PARTNERSHIP Termination is the point in time when all
partnership affairs are completely wound up
The following operate as notice to or knowledge
and finally settled. It signifies the end of the
of the partnership:
partnership life [De Leon (2010)].
(1) Notice to any partner of any matter relating
to partnership affairs;
(2) Knowledge of the partner acting in the CAUSES OF DISSOLUTION
particular matter acquired while a partner;
(3) Knowledge of the partner acting in the WITHOUT VIOLATION OF THE
particular matter then present to his mind; AGREEMENT
or (1) By the termination of the definite term or
(4) Knowledge of any other partner who particular undertaking specified in the
reasonably could and should have agreement;
communicated it to the acting partner. (2) By the express will of any partner, who must
act in good faith, when no definite term or
These do not apply in case of fraud on the particular is specified.
partnership committed by or with the consent of (3) By the express will of all the partners who
the partner [Art. 1821]. have not assigned their interests or suffered
them to be charged for their separate debts,
either before or after the termination of any
specified term or particular undertaking;
(4) By the expulsion of any partner from the
business bona fide in accordance with such
a power conferred by the agreement
between the partners [Art. 1830, par. 1].
PAGE 312
If, after the expiration of the definite term or BY DECREE OF A COURT

particular undertaking, the partners continue A partner may apply for dissolution in court
the partnership without making a new when:
agreement, the firm becomes a partnership at (1) A partner has been declared insane in any
will [Art. 1785]. judicial proceeding or is shown to be of
unsound mind;
Any one of the partners may, at his sole (2) A partner becomes in any other way
pleasure, dictate a dissolution of the incapable of performing his part of the
partnership at will. He must, however, act in partnership contract;
good faith, not that the attendance of bad faith (3) A partner has been guilty of such conduct
can prevent the dissolution of the partnership as tends to affect prejudicially the carrying
but that it can result in a liability for damages on of the business;
[Ortega v. CA (1995)]. (4) A partner willfully or persistently commits a
breach of the partnership agreement, or
IN CONTRAVENTION OF THE otherwise so conducts himself in matters
AGREEMENT relating to the partnership business that it is
Where circumstances do not permit not reasonably practicable to carry on the
dissolution under any other provision of Article business in partnership with him;
1830, it may also be dissolved by the express (5) The business of the partnership can only be
will of any partner at any time. carried on at a loss;
(6) Other circumstances render a dissolution
Thus, even if there is a specified term, one equitable.
partner can cause its dissolution by expressly
withdrawing even before the expiration of the A person who acquires the interest of a partner
period, with or without justifiable cause. If the may likewise apply:
cause is not justified or no cause was given, the (1) After the termination of the specified term
withdrawing partner is liable for damages but in or particular undertaking;
no case can he be compelled to remain in the (2) At any time if the partnership was a
firm [Rojas v. Maglana (1990)]. partnership at will when the interest was
assigned or when the charging order was
issued
BY OPERATION OF LAW
(1) By any event which makes it unlawful for
the business of the partnership to be carried OTHER CAUSES
on or for the members to carry it on in (1) When a new partner is admitted into an
partnership; existing partnership;
(2) When a specific thing which a partner had (2) When any partner retires;
promised to contribute, perishes before (3) When the other partners assign their
delivery, or by the loss of the thing, only the rights to the sole remaining partner;
use or enjoyment of which has been (4) When all the partners assign their rights
contributed; the loss of a specific thing, in the partnership property to third
however, does not dissolve the corporation persons [Art. 1840].
after its ownership has already been
transferred to the partnership; The statutory enumeration of the causes of
(3) By the death of any partner; dissolution is exclusive [De Leon (2010)].
(4) By the insolvency of any partner or of the
partnership;
(5) By the civil interdiction of any partner;
PAGE 313
EFFECTS OF DISSOLUTION Note the character of the notice required:

(1) As to persons who extended credit to the
partnership prior to dissolution, notice must
ON AUTHORITY OF THE PARTNERS be actual.
In general, upon dissolution, the authority of the
(2) As to persons who merely knew of the
partners to represent the partnership is
existence of the partnership, publication in a
confined only to acts necessary to:
newspaper of general circulation in the
(1) Wind up partnership affairs; or
place of business of the partnership is
(2) Complete transactions begun but not then
sufficient.
finished [Art. 1832, par. 1].
WITH RESPECT TO PARTNERS ON LIABILITY FOR TRANSACTIONS

The authority of partners to act for the AFTER DISSOLUTION
partnership is terminated, with respect to The liability of a partner, in general, is the same
partners: as in ordinary contracts (pro rata and
(1) When the dissolution is not by the act, subsidiary).
insolvency or death of a partner; or
(2) When the dissolution is by such act, In the following cases, however, the liability
insolvency or death, when the partner shall be satisfied out of the partnership assets
acting for the partnership has knowledge or alone (i.e., there is no subsidiary liability):
notice of the cause [Arts. 1832 and 1833]. (1) When the partner had been, prior to the
dissolution, unknown as a partner to the
In other cases, each partner is still liable for his person with whom the contract is made;
share in the liability created by the partner (2) When the partner had been, prior to the
acting for the partnership [Art. 1833]. dissolution, so far unknown or inactive in
partnership affairs that the business
WITH RESPECT TO THIRD PERSONS reputation of the partnership could not be
With respect to persons not partners: said to have been in any degree due to his
(1) After dissolution, a partner can bind the connection with it [Art. 1834].
partnership by any act appropriate for:
(a) Winding up partnership affairs; or Any act of a partner after dissolution in no case
(b) Completing transactions unfinished at binds the partnership in the following cases:
dissolution. (1) Where the partnership is dissolved because
(2) He can also bind it by any transaction which it is unlawful to carry on the business,
would bind the partnership as if dissolution unless the act is appropriate for winding up
had not taken place, provided the other partnership affairs;
party to the transaction: (2) Where the partner has become insolvent; or
(a) Had extended credit to the partnership (3) Where the partner has no authority to wind
prior to dissolution and had no up partnership affairs, except by a
knowledge or notice thereof; or transaction with one who:
(b) Had not so extended credit but had (a) Had extended credit to the partnership
known of the partnership prior to prior to dissolution and had no
dissolution, and having no knowledge knowledge or notice of his want of
or notice of dissolution, the fact had not authority; or
been advertised in a newspaper of (b) Had not extended credit to the
general circulation in the place (or in partnership prior to dissolution, and,
each place if more than one) at which having no knowledge or notice of his
the partnership business was regularly want of authority, the fact of his want of
carried on [Art. 1834, par. 1]. authority has not been advertised [Art.
1834].
PAGE 314
Article 1834 does not affect the liability under WINDING UP PARTNERS
Article 1825 of any person who, after
dissolution, represents himself or consents to
another representing him as a partner in a
WHO MAY WIND UP
The following partners have the right to wind up
partnership engaged in carrying on business
the partnership affairs:
[Art. 1834].
(1) Those designated in an agreement;
(2) Those who have not wrongfully dissolved
ON LIABILITY FOR CONTRACTS the partnership; or
AFTER DISSOLUTION BY SPECIFIC (3) The legal representative of the last surviving
CAUSES partner, who was not insolvent.
General rule: A contract entered into by a
partner acting for the partnership after Any partner or his legal representative or
dissolution by act, death or insolvency of a assignee may obtain winding up by the court,
partner binds the other partners. upon cause shown [Art. 1836].
Exceptions: MANNER OF WINDING UP

(1) The dissolution being by act of any partner, (1) Extrajudicial, by the partners themselves; or
the partner acting for the partnership had (2) Judicial, under the control and direction of
knowledge of the dissolution; or the proper court.
(2) The dissolution being by death or insolvency
of a partner, the partner acting for the The action for liquidation of the partnership is
partnership had knowledge or notice of the personal. The fact that sale of assets, including
death or insolvency [Art. 1833]. real property, is involved does not change its
character, such sale being merely a necessary
ON EXISTING LAIBILITY OF incident of the liquidation of the partnership,
PARTNERS which should precede and/or is part of its
General rule: Dissolution does not of itself process of dissolution [Claridades v. Mercader
discharge the existing liability of any partner. (1966)].
Exception: A partner may be relieved when there RIGHTS OF PARTNERS IN CASE

is an agreement to that effect between: OF DISSOLUTION
(1) Himself;
(2) The partnership creditor; and DISSOLUTION WITHOUT VIOLATION
(3) The person or partnership continuing the
business. OF THE AGREEMENT
Each partner may have:
Such agreement may be inferred from the (1) The partnership property applied to
course of dealing between the creditor having discharge the partnership liabilities; and
knowledge of the dissolution and the person or (2) The surplus applied in cash to the net
partnership continuing the business. amount owing to the respective partners.
In case of dissolution by death, the individual This is a right as against his co-partners and all
property of a deceased partner is liable for partners claiming through them in respect of
obligations of the partnership incurred while he their interests in the partnership. It cannot be
was a partner, after payment of his separate availed if there is an agreement to the contrary
debts [Art. 1835]. [Art. 1837, par. 1].
PAGE 315
DISSOLUTION IN CONTRAVENTION The goodwill of a business may be defined to be

OF THE AGREEMENT the advantage which it has from its
establishment or from the patronage of its
PARTNER WHO DID NOT CAUSE THE customers, over and above the mere value of its
DISSOLUTION property and capital. The goodwill (which
The partners who did not cause the dissolution includes the firm name) is part of the
wrongfully has the following rights: partnership assets and may be subject of sale
(1) To demand the right under Article 1837, 1st [De Leon (2010)].
par.;
(2) To be indemnified for damages for breach RIGHTS OF PARTNERS IN CASE
of the agreement against the partner who OF RECISSION
caused the dissolution wrongfully [Art. A partner, who is induced by fraud or
1837(1)]; misrepresentation to become such partner, may
(3) To continue the business: rescind the contract. Without prejudice to any
(a) In the same name; other right, he is entitled:
(b) By themselves or jointly with others; (1) To a lien on, or right of retention of, the
(c) During the agreed term for the surplus of the partnership property after
partnership. satisfying the partnership liabilities to third
persons for any sum of money paid by him
For the purpose of continuing the business, the for the purchase of an interest in the
said partners may possess the partnership partnership and for any capital or advances
property provided: contributed by him;
(1) They secure the payment by bond approved (2) To stand, after all liabilities to third persons
by the court; or have been satisfied, in the place of the
(2) They pay any partner who has caused the creditors of the partnership for any
dissolution wrongfully the value of his payments made by him in respect of the
interest in the partnership, less any partnership liabilities; and
damages recoverable, and indemnity (3) To be indemnified by the person guilty of
against all present or future partnership the fraud or making the representation
liabilities [Art. 1837(2)]. against all debts and liabilities of the
partnership [Art. 1838].
PARTNER WHO CAUSED THE DISSOLUTION
The partner who caused the dissolution
wrongfully has the following rights: SETTLING OF ACCOUNTS
(1) If the business is not continued, all the BETWEEN PARTNERS
rights Article 1837, par. 1, subject to liability Subject to any agreement to the contrary, the
for damages; following rules shall be observed in settling
(2) If the business is continued, the right, as accounts between partners after dissolution.
against his co-partners and all claiming
through them, to: COMPOSITION OF PARTNERSHIP
(a) Ascertainment, without considering the ASSETS
value of the goodwill of the business, (1) The partnership property; and
and payment to him in cash the value of (2) The contributions of the partners necessary
his partnership interest, less any for the payment of all the liabilities [Art.
damage, or have the payment secured 1839(1)].
by a bond approved by the court; and
(b) Be released from all existing liabilities In accordance with the subsidiary liability of the
of the partnership [Art. 1837(3)]. partners, the partnership property shall be
applied first to satisfy any liability of the
partnership [Art. 1839(3)].
PAGE 316
AMOUNT OF CONTRIBUTION FOR (3) Anything left from either shall be applied to
LIABILITIES satisfy the other [Art. 1839(8)].
The rules for distribution of losses shall
determine the contributions of the partners [Art. DISTRIBUTION OF PROPERTY OF
1839(4)]. As such: INSOLVENT PARTNER
(1) The contribution shall be in conformity with Where a partner has become insolvent or his
the agreement. estate is insolvent, the claims against his
(2) If only the share in profits has been separate property shall rank in the following
stipulated, the contribution shall be in the order:
same proportion. (1) Those owing to separate creditors;
(3) In the absence of any stipulation, the (2) Those owing to partnership creditors;
contribution shall be in proportion to the (3) Those owing to partners by way of
capital contribution [Art. 1797]. contribution [Art. 1839(9)].
ENFORCEMENT OF CONTRIBUTION RIGHTS OF CREDITORS OF

The following persons have the right to enforce
the contributions: DISSOLVED PARTNERSHIP
(1) An assignee for the benefit of creditors;
(2) Any person appointed by the court; or AS CREDITORS OF THE NEW
(3) To the extent of the amount which he has PARTNERSHIP
paid in excess of his share of the partnership In the following cases, creditors of the dissolved
liability, any partner or his legal partnership are also creditors of the person or
representative [Art. 1839(5) and (6)]. partnership continuing the business:
(1) When the business is continued without
The individual property of a deceased partner liquidation, and the cause of dissolution is:
shall be liable for the contributions [Art. (a) Admission of a new partner into the
1839(7)]. existing partnership;
(b) Retirement or death of any partner, and
ORDER OF APPLICATION OF ASSETS his rights to partnership property are
The partnership liabilities shall rank, in order of assigned to (1) two or more of the
payment, as follows: partners, or (2) one or more of the
(1) Those owing to creditors other than partners and one or more third persons;
partners; (c) Retirement of all but one partner, and
(2) Those owing to partners other than for their rights to partnership property are
capital and profits; assigned to the remaining partner, who
(3) Those owing to partners in respect of continues the business, either alone or
capital; with others;
(4) Those owing to partners in respect of profits (d) Wrongful dissolution by any partner,
[Art. 1839(2)]. and the remaining partners continue
the business, either alone or with
DOCTRINE OF MARSHALLING OF others;
ASSETS (e) Expulsion of a partner, and the
When partnership property and the individual remaining partners continue the
properties of the partners are in possession of a business, either alone or with others.
court for distribution: (2) When the cause of dissolution is the
(1) Partnership creditors have priority on retirement or death of any partner, and
partnership property; business is continued with the consent of
(2) Separate creditors have priority on the retired partner or the representative of
individual property, saving the rights of lien the deceased partner, without assignment
of secured creditors. of their rights to partnership property.
PAGE 317
(3) When the cause of dissolution is the right in the property of the dissolved
assignment by all the partners or their partnership [Art. 1841].
representatives of their rights in partnership
property to one or more third persons who RIGHT TO AN ACCOUNT
promise to pay the debts and who continue In the absence of any agreement to the
the business of the partnership [Art. 1840, contrary, the right to an account of his interest
par. 1]. shall accrue to any partner, or his legal
representative at the date of dissolution, as
LIABILITY OF A NEW PARTNER against:
The liability to the creditors of the dissolved (1) The winding up partners;
partnership of a new partner in the partnership (2) The surviving partners; or
continuing the business shall be satisfied out of (3) The person or partnership continuing the
the partnership property alone. However, he business [Art. 1842].
may, through agreement, assume individual
liability [Art. 1840, par. 2].
PRIORITY OF CREDITORS OF Limited Partnership

DISSOLVED PARTNERSHIP
Creditors of the dissolved partnership have prior DEFINITION
right to any claim of the retired partner or the A limited partnership is:
representative of the deceased partner against (1) A partnership;
the person or partnership continuing the (2) Formed by two or more persons;
business [Art. 1840, par. 3]. (3) Having as members:
(a) One or more general partners; and
This is without prejudice to the right of creditors (b) One or more limited partners.
to set aside any assignment on the ground of
fraud [Art. 1840, par. 4]. The limited partners as such shall not be bound
by the obligations of the partnership [Art. 1843].
RIGHTS OF A RETIRED
PARTNER OR A CHARACTERISTICS
(1) A limited partnership is formed by
REPRESENTATIVE OF compliance with the statutory requirements
DECEASED PARTNER [Art. 1844].
Unless otherwise agreed upon, when any (2) The business is controlled or managed by
partner retires or dies, and the business is one or more general partners, who are
continued without any settlement of accounts personally liable to creditors [Arts. 1848 and
as between him or his estate and the person or 1850].
partnership continuing the business, he or his (3) One or more limited partners contribute to
legal representative, as against such person or the capital and share in the profits but do
partnership, subject to the prior rights of not manage the business and are not
creditors of the dissolved partnership: personally liable for partnership obligations
(1) May have the value of his interest at the beyond their capital contributions [Arts.
date of dissolution ascertained; and 1845, 1848 and 1856].
(2) Shall receive as an ordinary creditor: (4) Obligations or debts are paid out of the
(a) An amount equal to the value of his partnership assets and the individual
interest in the dissolved partnership property of the general partners [Art. 1843].
with interest; or (5) The limited partners may have their
(b) At his option or at the option of his legal contributions back subject to conditions
representative, in lieu of interest, the prescribed by law [Arts. 1844 and 1957].
profits attributable to the use of his
PAGE 318
A limited partnership has the following General partner Limited partner

advantages:
Effect of retirement, death, insanity
(1) For general partners, to secure capital from
or insolvency
others while retaining control and
supervision for the business; Dissolves partnership Does not dissolve
(2) For limited partners, to have a share in the partnership; rights
profits without risk of personal liability. transferred to
executor or
administrator for
GENERAL AND LIMITED selling his estate
PARTNERS DISTINGUISHED Assignability of interest
General partner Limited partner
Not assignable Assignable
Extent of liability
Personally, but Liable only to the GENERAL AND LIMITED
subsidiarily, liable for extent of his capital
obligations of the contributions PARTNERSHIP DISTINGUISHED
partnership General Limited
Right to participate in management partnership partnership
Unless otherwise No right to participate Creation
agreed upon, all in management May be constituted in Partners must: (1) sign
general partners have any form, subject to and swear to a
an equal right to exceptions certificate in
manage the compliance with
partnership Article 1844; and (2)
Nature of contribution file the certificate for
record in the SEC
Cash, property or Cash or property only,
industry not industry Composition
Proper party in proceedings by Only general partners One or more general,
or against partnership and one or more
limited partners
Proper party Not proper party,
unless (1) he is Firm name
also a general partner; Must contain the word Must include the word
or (2) where the object Company [SEC Limited [SEC Memo.
of the proceedings is Memo Circ No. 14-00], Circ. No. 14-00]
to enforce his right except for professional
against or liability to partnerships Must not include
the partnership name of limited
Firm name May or may not partners, unless: (1) it
include the name of is also the surname of
Name may appear in Name must not one or more of the a general partner, or
the firm name appear in the firm partners (2) prior to the time
name when the limited
Prohibition to engage in other business partner became such,
Prohibited (subject to Not prohibited the business has been
qualifications) carried on under a
name in which his
surname appeared
Rules governing dissolution
Articles 1828-1842 Articles 1860-1863
PAGE 319
FORMATION FALSE STATEMENT IN THE

CERTIFICATE
GENERAL REQUIREMENTS If the certificate contains a false statement, one
Two or more persons desiring to form a limited who suffers loss by reliance thereon may hold
partnership shall: liable any party to the certificate who knew the
(1) Sign and swear to a certificate stating the statement to be false:
items in Article 1844; and (1) At the time he signed the certificate; or
(2) File for record the certificate in the SEC [Art. (2) Subsequently, but within a sufficient time
1844]. before the statement was relied upon to
enable him to cancel or amend the
A limited partnership is formed if there is certificate, or to file a petition for its
substantial compliance in good faith with the cancellation or amendment [Art. 1847].
requirements. When there is failure to
substantially comply with the requirements: Requisites:
(1) In relation to third persons, the partnership (1) The partner knew the statement to be false:
is general, unless they recognized that the (a) At the time he signed the certificate; or
firm is a limited partnership; and (b) Subsequently, but having sufficient time
(2) As between the partners, the partnership to cancel or amend it, or file a petition
remains limited, since they are bound by for its cancellation or amendment, and
their agreement [De Leon (2010)]. he failed to do so;
(2) The person seeking to enforce liability has
PURPOSE OF FILING relied upon the false statement in
The purpose of filing the certificate in the SEC transacting business with the partnership;
is: and
(1) To give actual or constructive notice to (3) The person suffered loss as a result of
potential creditors or persons dealing with reliance upon such false statement.
the partnership; and
(2) To acquaint them with its essential features, GENERAL AND LIMITED PARTNER
including the limited liability of limited AT THE SAME TIME
partners [De Leon (2010)].
Art. 1853. A person may be a general and a
FIRM NAME limited partner in the same partnership at the
General rule: The surname of a limited partner same time. This fact must be stated in the
shall not appear in the partnership name. certificate.
Exceptions: A person who is a general, and also at the same

(1) It is also the surname of a general partner; time a limited partner, shall have all the rights
or and powers, and be subject to all the
(2) Prior to the time when the limited partner restrictions of a general partner, except that, in
became such, the business had been carried respect to his contribution as a limited partner,
on under a name in which his surname he shall have the rights against the other
appeared. members which he would have had if he were
not also a general partner.
A limited partner whose surname appears in a
partnership name contrary to this prohibition is
liable as a general partner to partnership
MANAGEMENT
creditors who extend credit without actual Only general partners have the right to manage
knowledge that he is not a general partner. the partnership. If a limited partner takes part in
the control of the business, he becomes liable
as a general partner [Art. 1848].
PAGE 320
A general partner shall have the rights and He holds as trustee for the partnership:
powers and be subject to all restrictions and (1) Specific property stated in the certificate as
liabilities of a partner in a partnership without contributed by him, but which was not
limited partners. Thus, he has general authority contributed or which has been wrongfully
over the business. returned; and
(2) Money or other property wrongfully paid or
However, written consent or ratification by all conveyed to him on account of his
limited partners is necessary to authorize the contribution [Art. 1858, par. 2].
general partners to:
(1) Do any act in contravention of the These liabilities can be waived or compromised
certificate; only by the consent of all members. Such waiver
(2) Do any act which would make it impossible or compromise, however, shall not affect the
to carry on the ordinary business of the right to enforce said liabilities of a creditor:
partnership; (1) Who extended credit; or
(3) Confess a judgment against the (2) Whose claim arose, after the filing or before
partnership; a cancellation or amendment of the
(4) Possess partnership property, or assign certificate, to enforce such liabilities [Art.
their rights in specific property, for other 1858, par. 3].
than a partnership purpose;
(5) Admit a person as a general partner; Even after a limited partner has rightfully
(6) Admit a person as a limited partner, unless received the return in whole or in part of his
the right to do so is given in the certificate; capital contribution, he is still liable to the
(7) Continue the business with partnership partnership for any sum, not in excess of such
property on the death, retirement, insanity, return with interest, necessary to discharge its
civil interdiction or insolvency of a general liabilities to all creditors:
partner, unless the right so to do is given in (1) Who extended credit; or
the certificate. (2) Whose claims arose before such return [Art.
1858, par. 4].
OBLIGATIONS OF A LIMITED
A person who has contributed capital to a
PARTNER partnership, erroneously believing that he has
become a limited partner, but his name appears
OBLIGATIONS RELATED TO in the certificate as a general partner or he is
CONTRIBUTION not designated as a limited partner, is not
The contributions of a limited partner may be personally liable as a general partner by reason
cash or other property, but not services [Art. of his exercise of the rights of a limited partner,
1845]. provided:
(1) On ascertaining the mistake, he promptly
A limited partner is liable for partnership renounces his interest in the profits of the
obligations when he contributes services business or other compensation by way of
instead of only money or property to the income [Art. 1852];
partnership [De Leon (2010)]. (2) He does not participate in the management
of the business [Art. 1848]; and
A limited partner is liable to the partnership: (3) His surname does not appear in the
(1) For the difference between his actual partnership name [Art. 1846].
contribution and that stated in the
certificate as having been made; and LIABLITY TO PARTNERSHIP
(2) For any unpaid contribution which he CREDITORS
agreed in the certificate to make in the General rule: A limited partner is not liable as a
future at the time and on the conditions general partner. His liability is limited to the
stated in the certificate [Art. 1858, par. 1]. extent of his contributions [Art. 1843].
PAGE 321
Exceptions: The limited partner is liable as a RIGHT TO TRANSACT BUSINESS

general partner when: WITH THE PARTNERSHIP
(1) His surname appears in the partnership A limited partner may:
name, with certain exceptions [Art. 1846, (1) Loan money to the partnership;
par. 2]. (2) Transact other business with the
(2) He takes part in the control of the business partnership; and
[Art. 1848]. (3) Receive a pro rata share of the partnership
assets with general creditors if he is not also
LIABILITY TO SEPARATE CREDITORS a general partner [Art. 1854, par. 1].
On due application to a court of competent
jurisdiction by any separate creditor of a limited Limitations: A limited partner, with respect to
partner, the court may: his transactions with the partnership, cannot:
(1) Charge his interest with payment of the (1) Receive or hold as collateral security any
unsatisfied amount of such claim; partnership property; or
(2) Appoint a receiver; and (2) Receive any payment, conveyance, or
(3) Make all other orders, directions and release from liability if it will prejudice the
inquiries which the circumstances of the right of third persons [Art. 1854, par. 1].
case may require.
Violation of the prohibition is considered a fraud
The interest so charged may be redeemed with on the creditors of the partnership [Art. 1854,
the separate property of any general partner, par. 2].
but may not be redeemed with partnership
property [Art. 1862]. RIGHT TO SHARE IN PROFITS
A limited partner may receive from the
Note: In a general partnership, the interest may partnership the share of the profits or the
be redeemed with partnership property with the compensation by way of income stipulated for in
consent of all the partners whose interests are the certificate.
not charged [Art. 1814].
This right is subject to the condition that
RIGHTS OF A LIMITED PARTNER partnership assets will still be in excess of
partnership liabilities after such payment [Art.
IN GENERAL 1856] The partnership liabilities being referred
A limited partner shall have the same rights as to exclude the liabilities to the limited and
a general partner to: general partners.
(1) Require that the partnership books be kept
at the principal place of business of the Ratio: Otherwise, he will receive a share to the
partnership; prejudice of third-party creditors.
(2) To inspect and copy any of them at a
reasonable hour; RIGHT TO RETURN OF
(3) To demand true and full information of all CONTRIBUTION
things affecting the partnership; A limited partner may have his contributions
(4) To demand a formal account of partnership withdrawn or reduced when:
affairs whenever circumstances render it (1) All the liabilities of the partnership, except
just and reasonable; liabilities to general partners and to limited
(5) To ask for dissolution and winding up by partners on account of their contributions,
decree of court; have been paid or there remains property of
(6) To receive a share of the profits or other the partnership sufficient to pay them;
compensation by way of income; and (2) The consent of all members is had, unless
(7) To receive the return of his contribution the return may be demanded as a matter of
provided the partnership assets are in right; and
excess of all its liabilities [Art. 1851].
PAGE 322
(3) The certificate is cancelled or so amended who has died or has assigned his interest in a
as to set forth the withdrawal or reduction partnership. He has all the rights and powers,
[Art. 1857, par. 1]. and is subject to all the restrictions and
liabilities of his assignor, except those liabilities
The return of his contributions may be which:
demanded, as a matter of right (i.e., even when (1) The assignee was ignorant of; and
not all the other partners consent), when (1) and (2) Cannot be ascertained from the certificate
(2) above are complied with: [Art. 1859, pars. 2 and 6].
(1) On the dissolution of the partnership;
(2) Upon the arrival of the date specified in the An assignee is only entitled to receive the share
certificate for the return; or of the profits or other compensation by way of
(3) After the expiration of a 6-month notice in income, or the return of contribution, to which
writing given by him to the other partners, if the assignor would otherwise be entitled. He
no time is fixed in the certificate for: has no right:
(a) The return of the contribution; or (1) To require any information or account of the
(b) The dissolution of the partnership [Art. partnership transactions;
1857, par. 2]. (2) To inspect the partnership books [Art. 1859,
par. 3].
General rule: A limited partner, irrespective of
the nature of his contribution has only the right An assignee has the right to become a
to demand and receive cash in return for his substituted limited partner if:
contribution. (1) All the partners consent thereto; or
(2) The assignor, being empowered to do so by
Exceptions: He may receive his contribution in a the certificate, gives him that right [Art.
form other than cash when: 1859, par. 4].
(1) There is a statement in the certificate to the
contrary; or An assignee becomes a substituted limited
(2) All the members of the partnership consent partner when the certificate is appropriately
[Art. 1857, par. 3]. amended [Art. 1859, par. 5].
PREFERENCE OF LIMITED RIGHT TO ASK FOR DISSOLUTION

PARTNERS A limited partner may have the partnership
General rule: The limited partners stand on dissolved and its affairs wound up when:
equal footing. (1) He rightfully but unsuccessfully demands
the return of his contribution; or
Exception: By an agreement of all the partners (2) He has a right to contribution but his
(general and limited) in the certificate, priority or contribution is not paid because the
preference may be given to some limited partnership property is insufficient to pay its
partners over others with respect to: liabilities [Art. 1857, par. 4].
(1) The return of contributions;
(2) Their compensation by way of income; or DISSOLUTION
(3) Any other matter [Art. 1855]. A limited partnership is dissolved in much the
same way and causes as an ordinary
RIGHT TO ASSIGN INTEREST partnership [De Leon (2010)].
The interest of a limited partner is assignable.
The assignee may become: General rule: The retirement, death, insolvency,
(1) A substituted limited partner; or insanity or civil interdiction of a general partner
(2) A mere assignee. dissolves the partnership.
A substituted limited partner is a person Exception: It is not so dissolved when the

admitted to all the rights of a limited partner business is continued by the remaining general
partners:
PAGE 323
(1) Under a right to do so stated in the (2) There is a subsequent agreement fixing
certificate; or their share [Art. 1863].
(2) With the consent of all members [Art. 1860].
AMENDMENT OR
Upon the death of a limited partner, his
executor or administrator shall have: CANCELLATION OF
(1) All the rights of a limited partner for the CERTIFICATE
purpose of settling his estate; and
(2) The power to constitute an assignee as a CANCELLATION OF CERTIFICATE
substituted limited partner, if the deceased The certificate shall be cancelled when:
was so empowered in the certificate. (1) The partnership is dissolved; or
(2) All limited partners cease to be such limited
The estate of a deceased limited partner shall partners.
be liable for all his liabilities as a limited partner
[Art. 1861].
AMENDMENT OF CERTIFICATE
A certificate shall be amended when:
SETTLEMENT OF ACCOUNTS (1) There is a change in the name of the
partnership or in the amount or character of
ORDER OF PAYMENT the contribution of any limited partner;
In settling accounts after dissolution, the (2) A person is substituted as a limited partner;
liabilities of the partnership shall be entitled to (3) An additional limited partner is admitted;
payment in the following order: (4) A person is admitted as a general partner;
(1) Those to creditors, including limited (5) A general partner retires, dies, becomes
partners except those on account of their insolvent or insane, or is sentenced to civil
contributions, in the order of priority as interdiction and the business is continued;
provided by law; (6) There is a change in the character of the
(2) Those to limited partners in respect to their business of the partnership;
share of the profits and other compensation (7) There is a false or erroneous statement in
by way of income in their contributions; the certificate;
(3) Those to limited partners in respect to the (8) There is a change in the time as stated in
capital of their contributions; the certificate for the dissolution of the
(4) Those to general partners other than for partnership or for the return of a
capital and profits; contribution;
(5) Those to general partners in respect to (9) A time is fixed for the dissolution of the
profits; partnership, or the return of a contribution,
(6) Those to general partners in respect to no time having been specified in the
capital [Art. 1863, par. 1]. certificate; or
(10) The members desire to make a change in
Note: In settling accounts of a general any other statement in the certificate in
partnership, those owing to partners in respect order that it shall accurately represent the
to capital enjoy preference over those in respect agreement among them [Art. 1864].
to profits.
REQUIREMENTS FOR AMENDMENT
SHARE IN PARTNERSHIP ASSETS OR CANCELLATION
The share of limited partners in respect to their To amend or cancel a certificate:
claims for capital, profits, or for compensation (1) The amendment or cancellation must be in
by way of income, is in proportion of their writing;
contribution, unless: (2) It must be signed and sworn to by all the
(1) There is a statement in the certificate as to members including the new members, and
their share in the profits; or the assigning limited partner in case of
PAGE 324
substitution or addition of a limited or (5) Bilateral, if for compensation, giving rise to

general partner; and reciprocal rights and obligations, but
(3) The writing to amend (with the certificate, unilateral, if gratuitous, creating obligations
as amended) or to cancel must be filed for only for the agent.
record in the SEC.
FORMATION
When a person required to sign the writing, a
person desiring the cancellation or amendment
ESSENTIAL ELEMENTS
may petition the court to order cancellation or
(1) There is consent, express or implied, of the
amendment. The court shall order the SEC to
parties to establish the relationship;
record the cancellation or amendment if it finds
(2) The object is the execution of a juridical act
that the petitioner has a right to have the
in relation to third persons;
writing executed.
(3) The agent acts as a representative and not
for himself; and
From the moment the amended
(4) The agent acts within the scope of his
certificate/writing or a certified copy of a court
authority [Rallos v. Felix Go Chan (1978)].
order granting the petition for amendment has
been filed, such amended certificate shall
thereafter be the certificate of partnership [Art. PARTIES
1865]. (1) Principal, one whom the agent represents
and from whom he derives his authority;
and
AGENCY (2) Agent, who acts for and represents the
principal, having derivative authority in
Contract of Agency carrying out the business of the latter.
DEFINITION Juridical persons such as corporations and

By the contract of agency: partnerships can be principals and agents [Art.
(1) A person binds himself to render some 1919(4)].
service or to do something;
(2) In representation or on behalf of another; CAPACITY
(3) With the consent or authority of the latter (1) A principal must have legal capacity to
[Art. 1868]. enter into contract in his own right.
(2) An agent must have legal capacity to enter
Agency may refer to both a contract, as defined into the contract of agency, although he
in the provision, and the representative relation may not have capacity to enter into the
created. As a relationship, it is fiduciary (based particular contract subject of agency.
on trust and confidence), where the agent is
empowered to contract with a third person on Ratio: One who acts through an agent in law
behalf of a principal [De Leon (2010)]. does the act himself. As such, the capacity to
act by an agent depends in general on the
The basis of agency is representation [Victorias capacity of the principal to do the act himself as
Milling v. CA (2000)]. if he were present.
INTENT
CHARACTERISTICS (1) On the part of the principal, there must be
The contract of agency is: an actual intention to appoint or an
(1) Consensual, perfected by mere consent; intention naturally inferable from his words
(2) Nominate, has its own name; or actions; and
(3) Preparatory, entered into as a means to (2) On the part of the agent, there must be an
enter into other contracts; intention to accept the appointment and act
(4) Principal, does not depend on another on it [Victorias Milling v. CA (2000)].
contract for existence and validity;
PAGE 325
General rule: In the absence of such intent, there POWER OF ATTORNEY

is no agency. A power of attorney is an instrument in writing
by which one person, as principal, appoints
Exceptions: another as his agent and confers upon him the
(1) Agency by estoppel; and authority to perform certain specified acts of
(2) Agency by operation of law. kinds of acts on his behalf [De Leon (2010)].
CONSENT FORM OF CONTRACT

An agency, both on the part of the principal and
General rule: There are no formal requirements
the agent, is either express or implied. It does
governing the appointment of an agent.
not require express appointment and
acceptance.
Exceptions: The law imposes formal
requirements on certain types of agency [Art.
As to the principal, the appointment of an agent
1869, par. 2]:
may be implied:
(1) When a sale of piece of land or any interest
(1) From his acts;
therein is through an agent, in which case
(2) From his silence or lack of action; or
the authority shall be in writing; otherwise
(3) From his failure to repudiate the agency,
the sale is void [Art. 1874];
knowing that another person is acting on his
(2) When the law requires a special power of
behalf without authority.
attorney [Art. 1878].
The manner by which the parties designate the
The appointment may be oral, unless the law
relationship is not controlling. The use of this
requires a specific form [Art. 1869].
term (agent) in one clause of the contract
cannot dominate the real nature of the
As to the agent, acceptance may also be
agreement as revealed in other clauses, no less
implied:
than in the caption (agency agreement) of the
(1) From his acts which carry out the agency;
agreement itself [Albadejo y Cia. v. Phil. Refining
(2) From his silence or inaction according to the
(1923)].
circumstances [Art. 1870];
(3) When both the principal and the agent
being present if: ACTS DELEGATED
(a) The principal delivers his power of General rule: What a person may do in person,
attorney to the agent; and he may do through another.
(b) The agent receives it without any
objection [Art. 1871]; Exceptions:
(4) When both the principal and the agent (1) Personal acts, which the law or public policy
being absent if: requires to be performed personally (e.g., to
(a) The principal transmits his power of vote, make a will, make statements under
attorney to the agent, who receives it oath, or attend board meetings as director
without any objection; or or trustee of a corporation);
(b) The principal entrusts to him by letter or (2) Criminal acts;
telegram a power of attorney with (3) Acts not allowed by law to be done by the
respect to the business in which he is principal.
habitually engaged as an agent, and he
did not reply to the letter or telegram. PRESUMPTION OF EXISTENCE
General rule: Agency must exist as a fact. The
In other cases between persons who are absent, law makes no presumption thereof. The person
acceptance cannot be implied from the silence alleging it has the burden of proof to show, not
of the agent [Art. 1872]. only the fact of its existence, but also its nature
and extent [People v. Yabut (1977)].
PAGE 326
Exceptions: A presumption of agency may arise: Requisites:

(1) Where an agency may arise by operation of (1) Actual notice to the agent;
law (e.g., all the partners being considered (2) Notice must pertain to a matter of fact and
agents of the partnership when the manner not of law;
of management has not been agreed upon); (3) The fact must be within the scope of the
or agents authority.
(2) To prevent unjust enrichment [De Leon
(2010)]. Exceptions:
(1) Where the agents interests are adverse to
COMMUNICATION OF EXISTENCE those of the principal;
There are two ways of giving notice of agency (2) Where the agents duty is not to disclose the
with different effects: information (e.g., he is informed by way of
(1) If a person specially informs another (e.g., confidential information);
by letter), the person appointed is (3) Where the person claiming the benefit of
considered an agent with respect to the the rule colludes with the agent to defraud
person specially informed; the principal [De Leon (2010)].
(2) If a person states by public advertisement,
the person appointed is considered an AGENCY AND OTHER
agent with regard to any person. CONTRACTS DISTINGUISHED
One factor which most clearly distinguishes
In either case, the power of the agent continues agency from other legal concepts is control; one
in full force until the notice is rescinded in the person the agent agrees to act under the
same manner in which it was given [Art. 1873]. control or direction of another the principal
[Victorias Milling v. CA (2000)].
DUTY OF THIRD PERSONS
The person dealing with the agent must act Agency Partnership
with ordinary prudence and reasonable
diligence. Obviously, if he knows or has good Representation
reason to believe that the agent is exceeding his An agent acts only for A partner acts for the
authority, he cannot claim protection [Keeler the principal other partners, the
Electric v. Rodriguez (1922)]. partnership and
himself
EFFECT Control
An agents power to A partners power to
EXTENSION OF PERSONALITY bind the principal is bind his co-partners is
In an agent-principal relationship, the subject to the latters not subject to their
personality of the principal is extended through control control
the facility of the agent. The agent, by legal
Personal liability
fiction, becomes the principal, authorized to
perform all acts which the latter would have An agent does not A partner is personally
him do [Litonjua v. Eternit Corp. (2006)]. assume personal liable with all his
liability, if he acts property, after
THEORY OF IMPUTED KNOWLEDGE within the scope of his exhaustion of the
General rule: Notice to the agent constitutes authority partnership properties
notice to the principal [Air France v. CA (1983)]. Share in profits
Thus, knowledge of the agent is ascribed to the An agent is not A partner is entitled to
principal [Rovels Enterprises v. Ocampo (2002)]. entitled to profits, only a share in the profits
compensation of the partnership
PAGE 327
Independent Agency Lease of property

Agency
contractor Control
Control An agent acts under A lessee is not subject
An agent acts under An independent the control and to the control of the
the control and contractor is not instruction of the lessor
instruction of the subject to control, principal
principal except insofar as the Things involved
result of the work is
concerned Agency may involve Lease of property
things other than involves property only
Liability for tort property
Principal is liable for Employer is not liable Authority to bind
torts committed by for torts committed by
the agent with the the independent An agent can bind the Lessee cannot bind
scope of his authority contractor principal the lessor
Sub-agents
Agency to sell Sale
Agents of the agent is Employees of
still subject to the independent Ownership of goods
control of the principal contractor are not Principal retains Buyer acquires
subject to control of ownership ownership
his employer
Payment
Agency Lease of service An agent delivers the A buyer pays the
proceeds of the sale to purchase price
Basis the principal
Representation Employment Return of goods
Purpose Generally, an agent Generally, a buyer
Execution of juridical Execution of piece of can return goods cannot return the
acts in relation to third work or rendition of unsold goods bought
persons service Dealing with the goods
Authorized acts An agent deals with A buyer, being the
Juridical acts Material acts only the goods according owner, can deal with
(creation, to the instructions of the goods as he
modification, the principal pleases
extinction of relations
with third parties) Agency to buy Sale
Discretion Ownership of goods
An agent is authorized Ordinarily, lessor Ownership is acquired Ownership is
to exercise discretion performs only in behalf of the transferred to the
ministerial functions principal buyer
Parties Change in price
Three parties are Two parties are Generally, any change A buyer cannot adjust
involved (principal- involved (employer- in the price is borne by the price already
agent-third party) employee) the principal agreed upon
Payment
Price is paid in behalf Price is paid by the
of the principal buyer
PAGE 328
Agency Guardianship Note: Agency is presumed to be for a

compensation, unless there is proof to the
Person represented contrary [Art. 1875].
An agent represents a A guardian represents
capacitated person an incapacitated As to the extent of business covered:
person (1) Universal;
Source of authority (2) General;
(3) Special.
An agent is appointed A guardian is
by the principal appointed by the court
As to the authority conferred:
Control (1) Couched in general terms;
An agent is subject to A guardian is not (2) Couched in specific terms.
the control of the subject to the control
principal of the ward As to nature and effect:
(1) Ostensible or representative, where the
Authority to bind
agent acts in the name and representation
An agent can make A guardian has no of the principal [Art. 1868];
the principal power to impose (2) Simple or commission, where the agent acts
principally liable personal liability on in his own name but for the account of the
the ward principal.
Agency Trust As to the kinds of principal:

(1) With a disclosed principal, where, at the
Title to property
time the transaction was contracted by the
Title retained by Title passes to the agent, the other party thereto has known:
principal trustee (a) That the agent is acting for a principal;
Control and
(b) The principals identity;
An agent is subject to A trustee is only (2) Partially disclosed, where the other party
the control of the subject to the knows or has reason to know that the agent
principal stipulated guidance of
is or may be acting for a principal but is
the trustor
unaware of the principals identity;
Termination (3) Undisclosed, where the party has no notice
In general, an agency In general, a trust may of the fact that the agent is acting as such
may be revoked at any be terminated only for a principal.
time when its purpose is
fulfilled AS TO MANNER OF CREATION
EXPRESS AGENCY
Kinds of Agency An express agency is one where the agent has
been actually authorized by the principal, either:
(1) Orally; or
IN GENERAL (2) In writing [Art. 1869].
As to manner of creation:
(1) Express; IMPLIED AGENCY
(2) Implied. The appointment and acceptance are implied:
(1) As to the appointment of an agent by the
As to cause or consideration: principal:
(1) Gratuitous; (a) From his acts;
(2) Compensated or onerous. (b) From his silence or lack of action; or
PAGE 329
(c) From his failure to repudiate the agency AS TO AUTHORITY CONFERRED

knowing that another person is acting
on his behalf without authority [Art.
1869].
COUCHED IN GENERAL TERMS
An agency couched in general terms is one
(2) As to the acceptance of the agency by the
created in general terms and is deemed to
agent:
comprise only acts of administration, even if:
(a) From his acts which carry out the
(1) The principal should state that he withholds
agency;
no power;
(b) From his silence or inaction according
(2) He should state that the agent may execute
to the circumstances (i.e., presence or
such acts as he may consider appropriate;
absence of the parties) [Arts. 1870, 1871
or
and 1872].
(3) Even though the agency should authorize a
general and unlimited management [Art.
AS TO EXTENT OF BUSINESS 1877].
COVERED
(1) Universal agency comprises all acts which COUCHED IN SPECIFIC TERMS
the principal can lawfully delegate to an An agency couched in specific terms
agent; authorizes only the performance of specific acts.
(2) General agency comprises all the business Certain specific acts, however, require special
of the principal. powers of attorney.
(3) Special agency comprises one or more
specific transactions [Art. 1876]. A special power of attorney is an instrument in
writing by which one person, as principal,
General agency Special agency appoints another as his agent and confers upon
Scope of authority him the authority to perform certain specified
acts or kinds of acts on behalf of the principal.
All acts connected Only specific
with the business or authorized acts or The following acts of strict dominion require
employment in which those necessarily special powers of attorney:
agent is engaged implied (1) To make such payments as are not usually
Nature of service authorized considered as acts of administration;
Involves continuous Usually involves a (2) To effect novations which put an end to
service single transaction obligations already in existence at the time
the agency was constituted;
Authority to bind (3) To compromise, to submit questions to
Acts within the scope Acts beyond authority arbitration, to renounce the right to appeal
of authority, even in given cannot bind from a judgment, to waive objections to the
conflict with special principal venue of an action or to abandon a
instructions, may bind prescription already acquired;
principal (4) To waive any obligation gratuitously;
Termination of authority (5) To enter into any contract by which the
ownership of an immovable is transmitted
Notice to third No notice required, or acquired either gratuitously or for a
persons required to since third parties are valuable consideration;
terminate apparent required to inquire as (6) To make gifts, except customary ones for
authority to authority charity or those made to employees in the
Instructions business managed by the agent;
Notice to third The instructions, in so (7) To loan or borrow money, unless the latter
persons required far as they grant act be urgent and indispensable for the
authority, are strictly preservation of the things which are under
construed administration;
PAGE 330
(8) To lease any real property to another person accurate nor correct to conclude that its
for more than one year; absence renders the compromise agreement
(9) To bind the principal to render some service void. In such a case, the compromise is merely
without compensation; unenforceable [Dugo v. Lopena (1962)].
(10) To bind the principal in a contract of
partnership; SPECIAL KINDS
(11) To obligate the principal as a guarantor or
surety;
(12) To create or convey real rights over AGENCY BY ESTOPPEL
immovable property; Through estoppel:
(13) To accept or repudiate an inheritance; (1) An admission or representation;
(14) To ratify or recognize obligations contracted (2) Is rendered conclusive upon the person
before the agency; making it; and
(15) Any other act of strict dominion (3) Cannot be denied or disproved as against
the person relying thereon [Art. 1431].
The requirement of special power of attorney
refers to the nature of the authorization, not to Ratification Estoppel
its form. Thus, even if a document is titled as a Rests on intention Rests on prejudice
general power of attorney, the requirement of a Retroacts as if Affects only relevant
special power of attorney is met if there is a originally authorized parts of the
clear mandate from the principal specifically transaction
authorizing the performance of the act [Bravo-
Guerrero v. Bravo (2005)]. Substance is Substance is the
confirmation of principals
A special power of attorney can be included in unauthorized acts inducement for third
the general power when it is specified therein after it has been done party to act to his
the act or transaction for which the special prejudice
power is required [Veloso v. CA (1996)].
For an agency by estoppel to exist, the following
must be established:
Art. 1879. A special power to sell excludes the
(1) The principal manifested a representation
power to mortgage; and a special power to
of the agents authority or knowingly
mortgage does not include the power to sell.
allowed the agent to assume such
authority;
Art. 1879. A special power to compromise does (2) The third person, in good faith, relied upon
not authorize submission to arbitration. such representation;
(3) Relying upon such representation, such
The power to exact the payment of sums of third person has changed his position to his
money by legal means includes the power to detriment [De Leon (2010)].
institute suits for their recovery [Germann & Co.,
v. Donaldson, Sim & Co. (1901)]. In agency by estoppel, there is no agency. The
alleged agent seemed to have apparent or
A power of attorney to loan and borrow ostensible authority, but not real authority to
money and to mortgage the principals represent another.
property does not carry with it or imply that that
the agent has a legal right to make the principal An agency by estoppel, which is similar to the
liable for the personal debts of the agent [BPI v. doctrine of apparent authority, requires proof of
De Coster (1925)]. reliance upon the representations, and that, in
turn, needs proof that the representations
Although the Civil Code expressly requires a predated the action taken in reliance [Litonjua v.
special power of attorney in order that one may Eternit Corp. (2006)].
compromise an interest of another, it is neither
PAGE 331
As to liability, implied agency and agency by Qualification: The exception only applies if the
estoppel are different in that, in the former, the agent contracts with the properties of the
principal is liable, while in the latter, the person principal within the scope of his authority [PNB
who acts in bad faith is liable. v. Agudelo (1933)].
Article 1911 states that: Even when the agent AGENCY BY OPERATION OF LAW
has exceeded his authority, the principal is An agency may exist by operation of law, such
solidarily liable with the agent if the former as in the following cases:
allowed the latter to act as though he had full (1) Every partner is an agent of the partnership
powers. In this case, there is a duly formed for the purpose of its business [Art. 1818];
agency and estoppel only applies to the excess (2) When the principals actions would
of authority. This is an application of the reasonably lead a third person to conclude
doctrine of apparent authority. that an agency exists, an agency by
estoppel is created by operation law [Blacks
The doctrine of apparent authority is to the Law Dictionary (9th)];
effect that: One who clothes another with (3) In case of certain necessity or emergency, an
apparent authority as his agent, and holds him agency by necessity may arise.
out to the public as such, cannot be permitted
to deny the authority of such person to act as his
agent, to the prejudice of innocent third parties
IRREVOCABLE AGENCY
Article 1927 (on agency coupled with an
dealing with such person in good faith.
interest) mentions three instances where the
sole will of the principal cannot terminate an
Under the doctrine of apparent authority, the
agency:
question in every case is whether the principal
(1) A bilateral contract depends upon it;
has, by his voluntary act, placed the agent in
(2) It is the means of fulfilling an obligation
such a situation that a person of ordinary
already contracted; or
prudence, conversant with business usages and
(3) A partner is appointed manager of a
the nature of the particular business, is justified
partnership in the contract of partnership
in presuming that such agent has authority to
and his removal from the management is
perform the particular act in question
unjustifiable.
[Professional Services v. Agana (2008)].
Qualifications:
AGENCY WITH UNDISCLOSED (1) Coupled with interest or not, the authority
PRINCIPAL certainly can be revoked for a just cause,
General Rule: If an agent acts in his own name such as when the attorney-in-fact betrays
(the principal is undisclosed), the agent is the interest of the principal. It is not open to
directly bound in favor of the person with whom serious doubt that the irrevocability of the
he has contracted as if the transaction were his power of attorney may not be used to shield
own. the perpetration of acts in bad faith, breach
of confidence, or betrayal of trust, by the
Ratio: There is no representation of the principal agent for that would amount to holding
when the agent acts in his own name. The third that a power coupled with an interest
person cannot allege that he was misled by any authorizes the agent to commit frauds
representation since he did not know of the against the principal [Coleongco v. Claparols
existence of the undisclosed principal. (1964)].
(2) A mere statement in the power of attorney
Exception: The principal is bound when the that it is coupled with an interest is not
contract involves things belonging to him [Art. enough. In what does such interest consist
1883]. In this case, the contract is considered as must be stated in the power of attorney [Del
one between the principal and the third person. Rosario v. Abad (1958)].
PAGE 332
(3) An agency couple with an interest cannot possession of the goods involved in the
affect third persons. They are obligatory transaction.
only on the principal who executed the (5) Cashier in bank is one whose business is to
agency [New Manila Lumber v. Republic represent a banking institution in its
(1960)]. financial transactions;
(6) Attorney-in-fact is one who is given
KINDS OF AGENTS authority by his principal to do a particular
act not of a legal character. In its strict legal
AS TO NATURE AND EXTENT OF sense, it means an agent having a special
authority.
AUTHORITY
According to the nature and extent of their Attorneys have authority to bind their clients in
authority, agents have been classified into: any case by any agreement in relation thereto
(1) Universal agents are authorized to do all made in writing, and in taking appeals, and in
acts for his principal which can lawfully be all matters of ordinary judicial procedure. But
delegated to an agent. So far as such a they cannot, without special authority,
condition is possible, such an agent may be compromise their clients litigation, or receive
said to have universal authority. anything in discharge of a clients claim but the
(2) General agents are authorized to do all acts full amount in cash [Sec. 23, Rule 138, Rules of
pertaining to a business of a certain kind or Court].
at a particular place, or all acts pertaining to
a business of a particular class or series. He
has usually authority either expressly
conferred in general terms or in effect made Powers of the Agent
general by the usages, customs or nature of
the business which he is authorized to AUTHORITY OF AN AGENT
transact. An agent, therefore, who is Authority is the power of the agent to affect the
empowered to transact all the business of legal relations of his principal by acts done in
his principal of a particular kind or in a accordance with the principals manifestations
particular place, would, for this reason, be of consent. An agent can make the principal
ordinarily deemed a general agent. legally responsible only when he is authorized
(3) Special agents are authorized to do some by the principal to act the way he did [De Leon
particular act or to act upon some particular (2010)].
occasion (i.e., acts usually in accordance
with specific instructions or under
limitations necessarily implied from the KINDS OF AUTHORITY
nature of the act to be done) [Siasat v. IAC (1) Actual, when it is actually granted, and it
(1985)]. may be express or implied. It is the authority
that the agent does, in fact, have. It results
from what the principal indicates to the
SPECIAL TYPES OF AGENTS agent;
(1) Attorney-at-law is one whose business is to (2) Express, when it is directly conferred by
represent clients in legal proceedings; words;
(2) Auctioneer is one whose business is to sell (3) Implied, when it is incidental to the
property for others to the highest bidder at transaction or reasonably necessary to
a public sale; accomplish the main purpose of the agency;
(3) Broker is one whose business is to act as (4) Apparent or ostensible, when it arises by the
intermediary between two other parties acts or conduct of the principal giving rise to
such as insurance broker and real estate an appearance of authority. It makes the
broker; principal responsible to third persons for
(4) Factor or commission merchant is one certain actions of the agent that were not
whose business is to receive and sell goods really authorized;
for a commission, being entrusted with the
PAGE 333
(5) General, when it refers to all the business of POWER TO BIND THE
the principal;
(6) Special, when it is limited only to one or PRINCIPAL
more specific transactions; Requisites:
(7) By necessity or by operation of law, when it (1) The agent must act within the scope of his
is demanded by necessity or by virtue of the authority; and
existence of an emergency. The agency (2) The agent must act in behalf of the
terminates when the emergency passes. principal.
SCOPE OF AUTHORITY Even when the agent acts in his own name the
principal is still bound in the following
General rule: The scope of the authority of instances:
the agent is what appears in the terms of the (1) When the contract involves things
power of attorney [Siredy Enterprises v. CA belonging to the principal [Art. 1883]; or
(2002)]. (2) When the principal ratifies the contract,
expressly or tacitly [Art. 1910].
Exceptions: An agent is considered acting within
the scope of his authority when:
(1) He performs acts which are conducive to the EFFECTS OF THE ACTS OF AN
accomplishment of the purpose of the AGENT
agency [Art. 1881]; When the agent acts:
(2) He performed the agency in a manner more (1) With authority of the principal:
advantageous to the principal than that (a) If done in the name of the principal, the
specified by said principal [Art. 1881]; principal is bound to comply with the
(3) The principal ratifies the act, expressly or obligations contracted [Art. 1910] and
tacitly [Art. 1910]. the agent is not personally liable to the
party with whom he contracts [Art.
Art. 1900. So far as third persons are concerned, 1897];
an act is deemed to have been performed within (b) If done in the name of the agent, the
the scope of the agents authority, if such act is agent is directly bound in favor of the
within the terms of the power of attorney, as person with whom he has contracted,
written, even if the agent has in fact exceeded except when the contract involves
the limits of his authority according to an things belonging to the principal;
understanding between the principal and the (2) Without authority or beyond the authority
agent. granted by the principal:
(a) If done in the name of the principal, it is
While third persons are bound to inquire into unenforceable against him, unless he
the extent or scope of the agents authority, they ratifies it expressly or tacitly [Art. 1910];
are not required to go beyond the terms of the (b) If done in the name of the agent, the is
written power of attorney. Third persons cannot personally liable.
be adversely affected by an understanding
between the principal and his agent as to the
limits of the latters authority. Third persons
need not concern themselves with instructions
given by the principal to his agent outside of the
written power of attorney [Siredy Enterprises v.
CA (2002)].
PAGE 334
Obligations of Agent Exception: An agent shall not carry out an

agency if its execution would manifestly result in
loss or damage to the principal [Art. 1888].
IN GENERAL
OBLIGATION WHEN AGENT
GOOD FAITH AND LOYALTY TO HIS DECLINES
TRUST In case a person declines an agency, he is bound
The duty of good faith is also called the fiduciary to observe the diligence of a good father of a
duty, which imposes upon the agent the family in the custody and preservation of the
obligation of faithful service. The duty to be goods forwarded to him.
loyal to the principal demands that the agent
look out for the best interests of the principal as The obligation lasts until the owner, as soon as
against his own or those of third parties (see Art. practicable:
1889). (1) Appoints an agent; or
(2) Takes charge of the goods [Art. 1885].
General rule: Until proven otherwise, the
presumption arises that an agent has Declining an agency is different from
performed his duty in good faith, and the withdrawal. In the former, no agency was
principal, until notice is received of a breach of formed. Withdrawal, on the other hand,
relational duties, may rely upon his agents presupposes an existing agency.
faithfulness.
The obligation of the agent, in case of
Exception: The presumption does not arise withdrawal, is to continue to act as such agent
when there is no relation of trust or confidence until the principal has had reasonable
between the parties (e.g., the agent is bound opportunity to take the necessary steps to meet
merely as an instrument/servant, or there is no the situation [Art. 1929].
agency relationship) [De Leon (2010)].
EXERCISE OF REASONABLE CARE

OBLIGATION TO ADVANCE
By accepting an employment whose NECESSARY FUNDS
requirements he knows, without stipulating General rule: The agent is not bound to advance
otherwise the agent impliedly undertakes that: the necessary funds. The principal is obliged to
(1) He possesses a degree of skill reasonably advance to the agent, should the latter so
and ordinarily competent for the request, the sums necessary for the execution of
performance of the service; and the agency.
(2) In performing his undertaking, he will
exercise reasonable care, skill and diligence. Exception: He shall be bound to do so should
there be a stipulation to that effect, subject to
the obligation of the principal to reimburse the
OBLIGATION TO CARRY OUT agent.
AGENCY
General rule: The agent is: Exception to the Exception: He is not bound to
(1) Bound by his acceptance to carry out the do so, even when there is a stipulation, when
agency; the principal is insolvent [Art. 1886].
(2) Liable for damages, which the principal may
suffer, in case of non-performance; Note: Insolvency of the principal is also a ground
(3) Bound to finish the business already begun for extinguishment.
on the death of the principal should delay
entail danger [Art. 1884].
PAGE 335
OBLIGATION TO ACT IN A specific application of this subordination of

interests is found in Article 1890:
ACCORDANCE WITH (1) If the agent has been empowered to borrow
INSTRUCTIONS money, he may himself be the lender at the
In the execution of the agency: current rate of interest.
(1) The agent shall act in accordance with the (2) If he has been authorized to lend money at
instructions of the principal; or interest, he cannot borrow it without the
(2) In default thereof, he shall do all that a consent of the principal.
good father of a family would do, as
required by the nature of the business [Art. OBLIGATION FOR THINGS
1887].
RECEIVED
Note: The limits of the agents authority shall Every agent is bound to:
not be considered exceeded should it have been (1) Render an account of his transactions; and
performed in a manner more advantageous to (2) Deliver to the principal whatever he may
the principal than that specified by him [Art. have received by virtue of the agency, even
1882]. though it may not be owing to the principal.
Every stipulation exempting the agent to render

Authority Instructions
an account shall be void [Art. 1891].
Sum total of the Private rule of
powers committed or guidance to the agent WHAT TO DELIVER
permitted to the agent The agent has to deliver all money and property
Relates to the Refers to the manner which may have come into his hands or in that
transaction or or mode of agents of a sub-agent. This includes gifts from third
business with which action with respect to parties in connection with the agency. It is
the agent is matters within the immaterial whether such money or property is
empowered to act permitted scope of the result of the performance or violation of the
authority agents duty, if it be the fruit of the agency.
Binds third parties Does not bind third
parties If the agent fails to deliver and instead converts
or appropriates for his own use the money or
property belonging to the principal, he is liable
OBLIGATION TO PREFER for estafa.
INTEREST OF PRINCIPAL
General rule: The agent shall be liable for WHEN OBLIGATION IS NOT
damages if, there being a conflict between his APPLICABLE
interest and those of the principal, he should (1) If the agent or broker acted only as a
prefer his own [Art. 1889]. middleman with the task of merely bringing
together the vendor and the vendee
Exceptions: The agent is not liable for giving [Domingo v. Domingo (1971)].
preference to his own when: (2) If the agent had informed the principal of
(1) The principal waives the benefit of this rule, the gift or bonus or profit he received from
with full knowledge of the facts; or the purchaser and the principal did not
(2) When the interest of the agent is superior. object thereto;
(3) When a right of lien exists in favor of the
An example of the latter is where the agent has agent.
security interest in goods of the principal in his
possession, he may protect his interest even if in
doing so, he disobeys the principals orders or
injures his interest [De Leon (2010)].
PAGE 336
RESPONSIBILITY FOR ACTS OF created between and among the principal,

agent, and sub-agent. Neither the agent
SUBSTITUTE nor the substitute can be held personally
The agent may appoint a substitute if the liable so long as they act within the scope of
principal has not prohibited him from doing so. their authority [Macias & Co. v. Warner,
Barnes & Co. (1922)].
The agent is responsible for the acts of the
substitute: EFFECTS OF SUBSTITUTION
(1) When he was not given the power to
(1) When substitution was prohibited by the
appoint one;
principal, appointment by the agent is an
(2) When he was given such power, but:
act in excess of the limits of his authority.
(a) Without designating the person; and
All acts of the substitute are void.
(b) The person appointed was notoriously
(2) When substitution was authorized, the
incompetent or insolvent.
agent is only liable when he appointed one
who is notoriously incompetent or insolvent,
All acts of the substitute appointed against the
unless the person was designated by the
prohibition of the principal shall be void [Art.
principal.
1892].
(3) When substitution was not authorized, but
also not prohibited, the appointment is
The principal may bring an action against the
valid, but the agent is liable for damage
substitute with respect to the obligations which
caused by the substitution to the principal.
the latter contracted under the substitution [Art.
(4) When substitution was authorized and the
1893].
sub-agent was designated by the principal,
the agent is released from any liability for
SUB-AGENCY the acts of the sub-agent [Art. 1892].
A sub-agent or substitute is a person employed
or appointed by an agent as his agent, to assist
him in the performance of an act for the RESPONSIBILITY OF TWO OR
principal, which the agent has been empowered MORE AGENTS
to perform. The agent is a principal with respect General rule: The responsibility of two or more
to the sub-agent. agents is not solidary, even though they have
been appointed simultaneously. They are liable
General rule: The agent may appoint a sub- jointly.
agent.
Exception: They are solidarily liable if solidarity
Ratio: The law allows such substitution for has been expressly stipulated [Art. 1894].
reasons of convenience and practicality.
If solidarity has been thus agreed upon, each of
Exceptions: the agents is responsible for:
(1) The appointment is prohibited by the (1) The non-fulfillment of agency, even when
principal [Art. 1892]; the fellow agents acted beyond the scope of
(2) The work entrusted to the agent requires their authority; and
special knowledge, skill, or competence, (2) The fault or negligence of his fellow agents,
unless authorized to do so by the principal except when the fellow agents acted
[De Leon (2010)]. beyond their authority.
RELATIONS AMONG THE PARTIES OBLIGATION FOR SUMS

(1) When the sub-agent has been employed for
own account of the agent, to assist him, the APPLIED TO HIS OWN USE
sub-agent is a stranger to the principal. The agent owes interest:
(2) When the appointment was authorized by (1) On the sums applied to his own use from
the principal a fiduciary relationship is the day on which he did so; and
PAGE 337
(2) On the sums which he still owes after the PRESENTATION OF POWER OF
agency is extinguished [Art. 1896]. ATTORNEY
A third person, with whom the agent wishes to
The liability of the agent for interest for sums contract on behalf of the principal may require
converted to his own use is without prejudice to the presentation of:
a criminal action that may be brought against (1) The power of attorney; or
him [De Leon (2010)]. (2) The instructions as regards the agency.
The sums referred to as still owing to the Private or secret orders and instructions of the
principal after extinguishment of the agency are principal do not prejudice third persons who
those which were not misapplied by the agent, have relied upon the power of attorney or
but were found to be owing to the principal after instructions shown them [Art. 1902].
such extinguishment.
Art. 1900. So far as third persons are concerned,

OBLIGATIONS TO THIRD an act is deemed to have been performed within
PERSONS the scope of the agents authority, if such act is
within the terms of the power of attorney, as
LIABILITY OF AGENT FOR written, even if the agent has in fact exceeded
OBLIGATIONS CONTRACTED the limits of his authority according to an
General rule: The agent who acts as such is not understanding between the principal and the
personally liable to the party with whom he agent.
contracts. The principal is responsible for such
acts done within the scope of the authority RATIFICATION OF ACTS OF AGENT
granted to the agent, and should bear any A third person, who contracts with the agent
damage caused to third persons [Art. 1910]. (thereby recognizing the authority of the agent),
cannot later disaffirm his contract based on the
Exceptions: He is personally liable when: fact that the agent has exceeded his powers, if
(1) He acts in his own name [Art. 1883]; the principal has:
(2) He expressly binds himself; or (1) Ratified the acts of the agent; or
(3) He exceeds the limits of his authority (2) Signified his willingness to ratify said acts
without giving such party sufficient notice of [Art. 1901].
his powers [Art. 1897].
The ratification has retroactive effect, relating
VOID CONTRACTS back to the time of the act or contract ratified
The contract entered into by an agent on behalf and is equivalent to original authority [Board of
of the principal shall be void when: Liquidators v. Kalaw (1967)].
(1) The agent contracts in the name of the
principal; A principal may not accept the benefits of a
(2) He exceeded the scope of his authority; transaction and repudiate its burdens. Thus, a
(3) The principal does not ratify the contract; principal who seeks to enforce a sale made by
and the agent cannot ordinarily allege that the
(4) The party with whom the agent contracted agent exceeded his authority.
is aware of the limits of the powers granted Before ratification, however, the third person
by the principal. may repudiate the contract.
The agent, however, is liable if he undertook to IGNORANCE OF AGENT

secure the principals ratification. If a duly authorized agent acts in accordance
with the orders of the principal, the principal
cannot set up the ignorance of the agent as to
PAGE 338
circumstances whereof he himself was, or ought damage and deterioration suffered by the
to have been, aware [Art. 1899]. same [Art. 1903].
(2) The commission agent who handles goods
Ratio: If the principal appoints an agent who is of the same kind and mark, which belong to
ignorant, the fault is his alone. He is bound by different owners, shall:
the acts of the agent. The agent is not liable to (a) Distinguish them by countermarks; and
third persons in this case. (b) Designate the merchandise respectively
belonging to each principal [Art. 1904].
OBLIGATIONS OF A
COMMISSION AGENT SALE OF GOODS ON CREDIT
WITHOUT AUTHORITY
FACTOR OR COMMISSION AGENT General rule: The commission agent cannot sell
A factor or commission agent is one whose on credit. Should he do so, the principal may:
business is to receive and sell goods for a (1) Demand from him payment in cash, in
commission (also called factorage) and who is which case the commission agent shall be
entrusted by the principal with the possession of entitled to any interest or benefit, which
goods to be sold, and usually selling in his own may result from such sale [Art. 1905]; or
name. He may act in his own name or in that of (2) Ratify the sale on credit, in which case the
the principal. principal will have all the risks and
advantages to him [De Leon (2010)].
An ordinary agent need not have possession of
the goods of the principal, while the commission Exception: The commission agent can sell on
agent must be in possession [De Leon (2010)]. credit with the express or implied consent of the
principal.
Ordinary agent Commission agent
SALE OF GOODS ON CREDIT WITH
Acts for and in behalf Acts in his own name
of the principal or that of his principal
AUTHORITY
If the commission agent was authorized to sell
Need not have Must have possession on credit and should he so sell on credit, he
possession of the of the goods shall inform the principal of such sale, with a
goods statement of the names of the buyers. Should
he fail to inform the principal, the sale is
Broker Commission agent deemed to have been made for cash as far as
the principal is concerned [Art. 1906].
Has no custody of the Has custody or
thing to be disposed possession of the
of, only acts as things to be sold The commission agent is obliged to collect the
intermediary between credits of his principal when they become due
seller and buyer and demandable [Art. 1908].
Maintains no relations Maintains relations General rule: Failing to so collect, the agent
with things to be with the thing, the shall be liable for damages.
sold/bought buyer and the seller
Exception: He is not liable if he proves that he
RESPONSIBILITY FOR GOODS exercised due diligence for that purpose.
RECEIVED
(1) The commission agent shall be responsible Should the commission agent receive a
for goods received by him in the terms and guarantee commission (del credere
conditions and as described in the commission) on a sale, in addition to the
consignment, unless upon receiving them ordinary commission, he shall:
he should make a written statement of the (1) Bear the risk of collection; and
PAGE 339
(2) Pay the principal the proceeds of the sale on entered into between the principal and the third
the terms agreed upon with the purchaser person [Sy-Juco and Viardo v. Sy-Juco (1920)].
[Art. 1907].
RATIFICATION
RESPONSIBILITY FOR FRAUD Ratification is the adoption or affirmance by a
AND NEGLIGENCE person of a prior act which did not bind him, but
In the fulfillment of his obligation, the agent is which was done or professed to be done on his
responsible for: account, thus giving effect to the acts as if
(1) Fraud; and originally authorized.
(2) Negligence.
Aside from the intent to ratify, the following
The circumstance that the agency is or is not conditions must be fulfilled for ratification to be
gratuitous will be considered by the courts in effective:
fixing the liability for negligence only [Art. 1909]. (1) The principal must have the capacity and
The liability may be to the principal or to third power to ratify;
persons. (2) He must have had knowledge or had reason
to know of material or essential facts about
the transaction;
Obligations of the (3) He must ratify the acts entirely;
(4) The act must be capable of ratification; and
Principal (5) The act must be done in behalf of the
principal [De Leon (2010)].
IN GENERAL
In addition to his duties specified under the Ratification has the following effects:
contract itself, the principal is under obligation (1) With respect to the agent, it relieves him of
to deal fairly and in good faith with his agent, liability. He may thus recover compensation
who owes the same to his principal. from the principal.
(2) With respect to the principal, he assumes
responsibility for the unauthorized act as
OBLIGATION TO COMPLY WITH fully as if the agent had acted under an
CONTRACTS original authority. But he is not liable for
General rule: The principal must comply with all acts outside the authority affirmed by his
the obligations which the agent may have ratification.
contracted within the scope of his authority [Art. (3) With respect to third persons, they are
1910, par. 1]. As for any obligation where in the bound by the ratification and cannot set up
agent has exceeded his power, the principal is the fact that the agent has exceeded his
not bound. powers [Art. 1901].
Exceptions: The principal is: SEPARATE CONTRACTS WITH

(1) Bound by the obligation entered into by the PRINCIPAL AND AGENT
agent in excess of his power, when he When (1) two persons contract with regard to
ratifies it expressly or tacitly [Art. 1910, par. the same thing, one with the agent and the
2]; other with the principal, and (2) the two
(2) Solidarily liable with the agent if the contracts are incompatible with each other, that
principal allowed the agent to act as though of prior date shall be preferred, subject to the
he had full powers [Art. 1911]. rules on double sales [Art. 1916].
Note: If the agent acts in his own name, but the The rules on double sales [Art. 1544] provide:
contract involves things belonging to the (1) If the same movable property is sold to
principal, the contract must be considered as different persons, ownership is transferred
PAGE 340
to whoever first took possession in good COMPENSATION OF BROKER

faith. A broker is entitled to the usual commissions
(2) If it be an immovable: whenever he brings to his principal a party who
(a) Ownership belongs to the person who is able and willing to take the property and
in good faith first recorded it in the enter into a valid contract upon the terms
Registry of Property. named by the principal. A broker is never
(b) If there is no inscription, ownership shall entitled to commission for unsuccessful efforts.
belong to the person who, in good faith
was first in possession; and in the He must prove that he was the procuring cause
absence of such, to the one who of the transaction. Otherwise, he is not entitled
presents the oldest title, provided there to the stipulated brokers commission [Inland
is good faith. Realty v. CA (1997)].
The liability for damages suffered by the third Procuring cause refers to a cause originating a
person whose contract must be rejected shall series of events which, without break in their
be borne by: continuity, result in the accomplishment of the
(1) The principal, if the agent acted in good prime objective of the employment of the broker
faith; or producing a purchaser ready, willing and able
(2) The agent, if he acted in bad faith [Art. 1918]. to buy on the owners terms.
WHEN PRINCIPAL IS NOT LIABLE, IN Since the brokers only job is to bring together
SUMMARY the parties to a transaction, it follows that if the
(1) Void or inexistent contracts [Art. 1409]; broker does not succeed in bringing the mind of
(2) Sale of a piece of land or any interest the purchaser and the vendor to an agreement
therein when the authority of the agent is with reference to the terms of a sale, he is not
not in writing [Art. 1874]; entitled to a commission [Rocha v. Prats (1922)].
(3) Acts of the substitute appointed against the
prohibition of the principal [Art. 1892]; If the principal breaks off from negotiations with
(4) Acts done in excess of the scope of the a buyer brought by the agent in order to
agents authority [Art. 1898 and 1910]; deliberately deal later with the buyer personally,
(5) When the agent acts in his own name, this is evident bad faith. In such case, justice
except when the contract involves things demands compensation for the agent [Infante v.
belonging to the principal [Art. 1883]; Cunanan (1953)].
(6) Unenforceable contracts [Art. 1403].
LIABILITY FOR EXPENSES AND
OBLIGATION FOR DAMAGES
COMPENSATION OF AGENT
NECESSARY FUNDS
Art. 1875. Agency is presumed to be for a (1) The principal must advance to the agent,
compensation, unless there is proof to the should the latter so request, the sums
contrary. necessary for the execution of the agency.
(2) In case the agent already advanced them,
the principal must reimburse him therefor:
AMOUNT (a) Even if the business or undertaking was
The principal must pay the agent:
not successful;
(1) The compensation agreed upon; or (b) Provided that the agent is free from all
(2) The reasonable value of the agent's services fault [Art. 1912].
if no compensation was specified.
The reimbursement shall include the interest on
the sums advanced from the day the advances
were made.
PAGE 341
WHEN THE PRINCIPAL IS NOT (3) The agent is appointed for a common
LIABLE FOR EXPENSES transaction or undertaking.
The principal is not liable for the expenses
incurred by the agent in the following cases: LIABILITY FOR QUASI-DELICT BY AN
(1) If the agent acted in contravention of the AGENT
principals instructions, unless the latter The principal is solidarily liable to third persons
should wish to avail himself of the benefits for torts of an agent committed:
derived from the contract; (1) At the principals direction; or
(2) When the expenses were due to the fault of (2) In the course and within the scope of the
the agent; agents employment.
(3) When the agent incurred them with
knowledge that an unfavorable result would
ensue, if the principal was not aware
thereof; Modes of Extinguishment
(4) When it was stipulated that:
(a) The expenses would be borne by the IN GENERAL
agent; or Agency is extinguished:
(b) That the latter would be allowed only a (1) By its revocation;
certain sum [Art. 1918]. (2) By the withdrawal of the agent;
DAMAGES insolvency of the principal or of the agent;
(4) By the dissolution of the firm or corporation
Art. 1913. The principal must also indemnify the which entrusted or accepted the agency;
agent for all the damages which the execution (5) By the accomplishment of the object or
of the agency may have caused the latter, purpose of the agency;
without fault or negligence or his part. (6) By the expiration of the period for which the
agency was constituted [Art. 1919].
RIGHT OF RETENTION BY AN AGENT The provision enumerates only those which are
The agent may retain in pledge the things which peculiar to agency and is, therefore, not
are the object of the agency until the principal exclusive. Agency may also be extinguished by
effects: the modes of extinguishment of obligations in
(1) Reimbursement of necessary funds general [De Leon (2010)].
advanced; and
(2) Payment of indemnity for damages [Art. The modes of extinguishment may be classified
1914]. into three:
(1) By agreement (Nos. 5 and 6);
This is a case of legal pledge. However, the (2) By subsequent acts of the parties:
agent is not entitled to the excess in case the (a) By the act of both parties or by mutual
things are sold to satisfy his claims. consent; or
(b) By the unilateral act of one of them
MULTIPLE PRINCIPALS (Nos. 1 and 2);
If there are two or more principals who (3) By operation of law (Nos. 3 and 4).
appointed the agent for a common transaction
or undertaking, they shall be solidarily liable for REVOCATION BY PRINCIPAL
all the consequences of the agency [Art. 1915].
General rule: The principal may:
(1) Revoke the agency at will; and
Requisites:
(2) Compel the agent to return the document
(1) There are two or more principals;
evidencing the agency.
(2) The principals have all concurred in the
appointment of the same agent; and
PAGE 342
Qualifications: The right of the principal to There is implied revocation only where the new
terminate the authority of his agent is absolute appointment is incompatible with the previous
and unrestricted, except that he is liable for one.
damages in case:
(1) He revokes the agency in bad faith [Danon EFFECT OF REVOCATION IN
v. Brimo (1921)]; or RELATION TO THIRD PARTIES
(2) He revokes the agency before the expiration
of the period stipulated in the agency
contract. Art. 1921. If the agency has been entrusted for
the purpose of contracting with specified
Exception: Agency cannot be revoked if it is persons, its revocation shall not prejudice the
coupled with an interest, such that: latter if they were not given notice thereof.
(1) A bilateral contract depends upon it;
(2) It is the means of fulfilling an obligation If the agent had general powers, revocation of
already contracted; or the agency does not prejudice third persons who
(3) A partner is appointed manager of a acted:
partnership in the contract of partnership (1) In good faith; and
and his removal from the management is (2) Without knowledge of the revocation.
unjustifiable.
Notice of the revocation in a newspaper of
general circulation is a sufficient warning to
Art. 1925. When two or more principals have third persons [Art. 1922].
granted a power of attorney for a common
transaction, any one of them may revoke the
same without the consent of the others. WITHDRAWAL BY AGENT
The agent may withdraw from the agency by
giving due notice to the principal.
MANNER
Revocation may be express or implied.
General rule: If the principal should suffer any
damage by reason of the withdrawal, the agent
There is express revocation when the principal
must indemnify him therefor.
clearly and directly makes a cancellation of the
authority of the agent orally or in writing. Exception: The agent is not liable for damages if
he should base his withdrawal upon the
There is implied revocation in the following impossibility of continuing the performance of
cases: the agency without grave detriment to himself
(1) The appointment of a new agent for the [Art. 1928].
same business or transaction revokes the
previous agency from the day on which
notice thereof was given to the former Art. 1929. The agent, even if he should withdraw
agent, without prejudice to the requirement from the agency for a valid reason, must
of notice to third persons [Art. 1923]. continue to act until the principal has had
(2) The agency is revoked if the principal reasonable opportunity to take the necessary
directly manages the business entrusted to steps to meet the situation.
the agent, dealing directly with third
persons [Art. 1924].
(3) A general power of attorney is revoked by a
special one granted to another agent, as
regards the special matter involved in the
latter [Art. 1926].
PAGE 343
DEATH, CIVIL INTERDICTION, EXPIRATION OF TERM

INSANITY OR INSOLVENCY (1) If created for fixed period, expiration of the
period extinguishes agency even if the
purpose was not accomplished.
DEATH OF PRINCIPAL
(2) If no time is specified, the courts may fix the
General rule: Death extinguishes agency.
period as under the circumstances have
been probably contemplated by the parties
Exceptions:
[Art. 1197]. Otherwise, the agency terminates
(1) The agency remains in full force and effect
at the end of a reasonable period of time.
even after the death of the principal, if it has
Either party can terminate the relationship
been constituted:
at will by giving notice to the other [De Leon
(a) In the common interest of the principal
(2010)].
and agent; or
(b) In the interest of a third person who has
The period contemplated may be implied from
accepted the stipulation in his favor
terms of agreement, purpose of agency, and the
[Art. 1930].
circumstances of the parties.
(2) Anything done by the agent, without
knowledge of the death of the principal or of
any other cause which extinguishes the
agency, is valid and shall be fully effective
with respect to third persons who may have
contracted with him in good faith [Art. 1931].
(3) The agent must finish business already
begun on the death of the principal, should
delay entail any danger [Art. 1884].
DEATH OF AGENT
If the agent dies, his heirs must:
(1) Notify the principal thereof; and
(2) In the meantime adopt such measures as
the circumstances may demand in the
interest of the latter [Art. 1932].
ACCOMPLISHMENT OF OBJECT
OR PURPOSE
The fulfillment of the purpose for which agency
was created ipso facto terminates agency even
though it was expressly made irrevocable. If the
purpose has not been accomplished, the agency
continues indefinitely for as long as the intent to
continue is manifested through words or actions
of the parties.
DISSOLUTION OF FIRM OR
CORPORATION
The dissolution of a partnership or corporation
which entrusted (principal) or accepted (agent)
the agency extinguishes its juridical existence,
except for the purpose of winding up its affairs.
It is equivalent to death.
PAGE 344
[Type text] [Type text] [Type text]
PAGE 345
UP LAW BOC CREDIT TRANSACTIONS CIVIL LAW
Credit Transactions In a contract of loan, the cause is, as to the

borrower, the acquisition of the thing, and as to
Refers to all transactions involving the purchase the lender, the right to demand its return or its
or loan of goods, services or money in the equivalent. [Monte de Piedad v. Javier, 36 O.G.
present with a promise to pay or deliver in the 2176]
future (contract of security)
Upon delivery of the object of the contract of
SECURITY loan (in this case the money received by the
A transaction by which a creditor mitigates the debtor when the checks were encashed) the
risk of non-payment of debt by equating a sum debtor acquires ownership of such money or
of money owed with property or another loan proceeds and is bound to pay the creditor
persons undertaking to pay [Somera, Notes and an equal amount. [Garcia v. Thio, G.R. No.
Cases in Credit Transactions] 154878, March 16, 2007]
TYPES OF CONTRACTS OF CONTRACT OF LOAN VS. CONTRACT

SECURITY TO LOAN
(1) Secured transactions those supported by a Contract of Loan Contract to Loan
collateral or an encumbrance of property Real Contract: Consensual Contract:
(2) Unsecured transactions those supported perfected, not by mere perfected by mere
only by a promise to pay or the personal
consent, but the consent
commitment of another such as a guarantor
or surety delivery of the contract
SIMPLE LOAN VS. BARTER

Loan In simple loan, the primary purpose of the
contract is the permissive use of the money or
consumable property. Ownership is
CONTRACTS OF LOAN transferred as a necessary consequence of the
(1) Commodatum - A contract where one party permissive use of the property loan
delivers to another something not consumable In barter, the primary purpose of the contract
so that the latter may use the same for a certain is the transfer of ownership of a non-fungible
sum and return it [Art. 1933] property, and payment is made by giving
(2) Mutuum (Simple Loan)- A contract where some thing of the same kind, quantity and
one party delivers to another money or other quality
consumable thing, upon the condition that the
same amount of the same kind and quality shall
be paid [Art. 1933]
COMMODATUM VS. MUTUUM
Commodatum Mutuum
CHARACTERISTICS OF A LOAN Ordinarily involves Involves money or
(1) Real contract something not other consumable
(a) Delivery is essential for perfection of the consumable* [Art.1936] thing
contract of loan.
(b) An accepted promise to loan, is Ownership of the thing Ownership is
nevertheless binding on the parties, it loaned is retained by transferred to the
being a consensual contract. lender [Art.1933] borrower
Essentially gratuitous May be gratuitous or
(2) Unilateral contract [Art.1933] onerous, i.e. with
(a) creates obligations on only one party, i.e., stipulated interest
the borrower
PAGE 346
Commodatum Mutuum But the bailee himself may not lend nor lease
the thing loaned to him to a third person [Art
Borrower must return Borrower need only pay 1939(2)]
the same thing loaned an equal amount of the
[Art.1933] same kind and quality
[Art. 1953]
KINDS OF COMMODATUM
(1) Ordinary commodatum the use of the thing
May involve real or Refers only to personal by the bailee is for a certain period of time
personal property property [Art. 1933]
[Art.1937] (2) Precarium one where the bailor may
Loan for use or Loan for consumption demand the thing loaned at will; if any one of
temporary possession the following is present
[Art.1935] (a) The duration and purpose of the contract
is not stipulated
Bailor may demand the Lender may not (b) The use of the thing is merely tolerated by
return of the thing demand its return the owner [Art. 1947]
loaned before the before the lapse of the
expiration of the term term agreed upon
in case of urgent need
OBLIGATIONS OF A BAILOR IN
[Art.1946] COMMODATUM
(1) To allow the bailee the use of the thing
Bailor suffers the loss Borrower suffers the loaned for the duration of period stipulated
of the subject matter loss even if caused or until the accomplishment of the purpose
since he is the owner exclusively by a for which commodatum was constituted.
[Art.1942; Art.1174] fortuitous event and he
is not, therefore, Exceptions:
discharged from his (a) Urgent need of the thing, during which
duty to pay time he may demand its return or
Purely personal in Not purely personal in temporary use [Art.1946]
character [Art. 1939] character (b) Precarium [Art.1947]
If duration of the contract has not been
CONSUMABLES ARE ONLY FOR stipulated
EXHIBITION, OR TO BE RETURNED AT THE If use or purpose of the thing has not
END OF PERIOD been stipulated
If the consumable goods are loaned only for If use of thing is merely tolerated by the
purposes of exhibition, or when the intention of bailor
the parties is to lend consumable goods and to (c) Bailee commits an act of ingratitude
have the very same goods returned at the end of specified in Art. 765 [Art.1948]:
the period agreed upon, the loan is a Commission of offenses against the
commodatum and not a mutuum. [Producers person, the honor, or the property of the
Bank v. CA (2003)] bailor, or of his wife or children under
his parental authority
COMMODATUM [NCC 1935-1952] Imputing to the bailor any criminal
offense, or any act involving moral
PARTIES TO THE COMMODATUM turpitude, even though he should prove
The Civil code refers to the parties in a it, unless the crime or the act has been
commodatum as the bailor (or creditor) or committed against the bailee himself,
bailee (or debtor) his wife, or children under his authority
Undue refusal to give the bailor support
WHO MAY BE A BAILOR IN COMMODATUM? when the bailee is legally or morally
Anyone. The bailor in commodatum need not bound to do so
be the owner of the thing loaned. [Art.1938]
PAGE 347
Note: Article 765 is applicable, because like LIABILITY FOR LOSS

donation, commodatum is essentially General Rule: Bailee is not liable for loss or
gratuitous. [Art.1933, par.2] damage due to a fortuitous event [Art.1174],
since the bailor retains ownership of the thing
(2) To refund extraordinary expenses for the
preservation of the thing loaned provided Exceptions: Bailee is liable for loss even if due to
bailor is notified before the expenses were a fortuitous event when [Art 1942]
incurred. [Art.1949] (1) He devotes the thing to any purpose different
from that for which it was loaned
Exception: Urgent need such that reply to (2) He keeps it longer than the period
the notification cannot be awaited without stipulated, or after the accomplishment of
danger, hence no notice is necessary. the use for which the commodatum has been
constituted
(3) To bear 50% of the extraordinary expenses (3) The thing loaned has been delivered with
arising from actual use of bailee of the thing appraisal of its value, unless there is
loaned [Art.1949] stipulation exempting the bailee from
responsibility in case of a fortuitous event
Exception: Contrary stipulation (4) He lends or leases the thing to a third person
who is a not a member of his household
(4) To pay damages to bailee for known hidden (5) Being able to save either the thing borrowed
flaws in the thing loaned [Art. 1951] or his own thing, he chose to save the latter.
Note: Bailor has no right of abandonment; he LIABILITY FOR DETERIORATION

cannot exempt himself from payment of General Rule: Bailee is liable for deterioration of
expenses or damages to the bailee by thing loaned.
abandoning the thing to the latter. [Art.
1952] Exception: The deterioration of the thing is due
only to the use thereof and without his fault
OBLIGATIONS OF A BAILEE IN [Art.1943]
COMMODATUM
(1) Obligation to pay for the ordinary expenses RIGHT OF RETENTION
for the use and preservation of the thing General Rule: Bailee has no right of retention of
loaned [Art.1941] the thing loaned, on the ground that the bailor
(2) Obligation to take good care of the thing owes him something. [Art. 1944]
with the diligence of a good father of a family
[Art.1163] Exception: Bailee has a right of retention for
(3) Liability for loss, even if loss through damages for known hidden flaws mentioned in
fortuitous event, under certain circumstances Art 1951. [Art.1944]
[Art.1942]
(4) Liability for deterioration of thing loaned,
except under certain circumstances
INTEREST AND SUSPENSION
[Art.1943] OF USURY LAW
(5) Obligation to return the thing upon Interest is the compensation allowed by law or
expiration of term or upon demand in case of fixed by the parties for the loan or forbearance
urgent need [Art. 1946] of money, goods or credits
(6) Solidary obligation where there are 2 or
more bailees to whom a thing was loaned in KINDS OF INTEREST
the same contract [Art.1945] (1) 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.
PAGE 348
(3) Legal Interest that which the law directs to demand under and subject to the provisions
be charged in the absence of any agreement of Article 1169 of the Civil Code.
as to the rate between the parties. (2) When an obligation, not constituting a loan
(4) Lawful Interest that which the laws allow or forbearance of money, is breached, an
or do not prohibit. interest on the amount of damages awarded
(5) Unlawful or Usurious Interest paid or may be imposed at the discretion of the court
stipulated to be paid beyond the maximum at the rate of 6% per annum. No interest,
fixed by law. However, by virtue of CB however, shall be adjudged on unliquidated
Circular 905, usury has become legally claims or damages, except when or until the
inexistent. demand can be established with reasonable
certainty. Accordingly, where the demand is
WHEN IS COMPOUND INTEREST established with reasonable certainty, the
ALLOWED? interest shall begin to run from the time the
(1) When there is an express written stipulation claim is made judicially or extrajudicially [Art.
to that effect [Art.1956] 1169, Civil Code], but when such certainty
(2) Upon judicial demand. HOWEVER, debtor is cannot be so reasonably established at the
not liable to pay compound interest even time the demand is made, the interest shall
after judicial demand when there is no begin to run only from the date the judgment
stipulation for payment of interest. [Art.2212] of the court is made (at which time the
quantification of damages may be deemed
to have been reasonably ascertained). The
REQUISITES FOR INTEREST TO BE actual base for the computation of legal
CHARGEABLE interest shall, in any case, be on the amount
(1) Must be expressly stipulated [Art. 1956] finally adjudged.
Exceptions: (3) When the judgment of the court awarding a
(a) The debtor in delay is liable to pay legal sum of money becomes final and executory,
interest (6% or 12% per annum) as the rate of legal interest, whether the case
indemnity for damages [Art.2209] falls under paragraph 1 or paragraph 2,
(b) Interest accruing from unpaid interest above, shall be 6% per annum from such
Interest demanded shall earn interest finality until its satisfaction, this interim
from the time it is judicially demanded period being deemed to be by then an
[Art.2212] or where there is an express equivalent to a forbearance of credit.
stipulation [Art.1959]
(2) Agreement must be in writing [Art.1956] Forbearance is defined, within the context of
(3) Must be lawful usury law, as a contractual obligation of lender
or creditor to refrain, during given period of
RULES FOR AWARD OF INTEREST IN time, from requiring borrower or debtor to repay
THE CONCEPT OF ACTUAL AND loan or debt then due and payable [Bataan
COMPENSATORY DAMAGES [Nacar v. Seedling v. Republic, 383 SCRA 590]
Gallery Frames, G.R. No. 189871 (2013) modifying
Eastern Shipping Lines vs. CA, (1994) in light of THE USURY LAW [Act No.2566] is an act fixing
BSP-MB Circular No. 799] rates of interests upon loans and declaring the
(1) When the obligation is breached, and it effect of receiving or taking usurious rates and
consists in the payment of a sum of money, for other purposes. [Arevalo v. Dimayuga, 1927]
i.e., a loan or forbearance of money, the
interest due should be that which may have CB Circular No. 905 abolished interest rate
been stipulated in writing. Furthermore, the ceilings. With the promulgation of such circular,
interest due shall itself earn legal interest usury has become legally inexistent as the
from the time it is judicially demanded. In the parties can now legally agree on any interest
absence of stipulation, the rate of interest that may be charged on the loan.
shall be 6% per annum to be computed from
default, i.e., from judicial or extrajudicial
PAGE 349
ELEMENTS OF USURY (A) VOLUNTARY DEPOSIT

(1) A loan or forbearance of money
(2) An understanding between parties that the GENERAL CONCEPTS
loan shall and may be returned An agreement to constitute a deposit is binding,
(3) An unlawful intent to take more than the but the deposit itself is a real contract, as it is
legal rate for the use of money or its not perfected until the delivery of the thing. [Art.
equivalent 1963]
(4) The taking or agreeing to take for the use of HOW ENTERED INTO: Orally or in writing [Art.
the loan of something in excess of what is 1969]
allowed by law.
HOW PERFECTED: The deposit is perfected
A usurious loan transaction is not a complete upon delivery, which is made by the will of the
nullity but defective only with respect to the depositor. [Arts. 1963, 1968]
agreed interest. [Carpo v. Chua, G.R. Nos.
150773 and 153599, September 30, 2005] A deposit may be made by two or more persons
(who believe that they are entitled to the thing
deposited with a third person). Said person is to
Deposit deliver the thing to the one to whom it belongs.
[NCC 1968]
A deposit is constituted from the moment a
person receives a thing belonging to another,
with the obligation of safely keeping it and of EXTINGUISHMENT
returning the same. [Art. 1962] (1) Loss or destruction of thing deposited, or
(2) In case of a gratuitous deposit, upon the
OBJECT OF DEPOSIT death of either the depositor or depositary
[Art. 1995]. The depositary is not obliged to
Art. 1966 provides that only movable things may
continue with the contract of deposit
be the object of a deposit. However, Art. 2006
(3) By other modes provided in the Civil Code,
provides that movable as well as immovable
e.g. novation, merger, etc. [See Art.1231]
property may be the object of sequestration or
judicial deposit.
OBLIGATIONS OF DEPOSITOR
PRINCIPAL PURPOSE (1) Depositor is obliged to reimburse the
depositary for expenses incurred for
Safekeeping of the thing; if NOT, there is NO
preservation if deposit is gratuitous.
DEPOSIT but some other contract. [Art. 1962]
[Art.1992]
(2) Depositor is obliged to pay losses incurred
CONSIDERATION due to character of thing deposited. [Art.
A deposit is generally GRATUITOUS, except: 1993]
(a) If there is an agreement to the contrary
(b) Unless the depositary is engaged in the General Rule: The depositor shall reimburse the
business of storing goods [Art. 1965] depositary for any loss arising from the
character of the thing deposited [Art. 1993]
KINDS OF DEPOSIT
(1) Extrajudicial Exceptions
(a) Voluntary Obligation arises as a 1. Depositor was not aware of the danger;
consequence of contract 2. Depositor was not expected to know the
(b) Necessary Obligation arises as a dangerous character of the thing;
consequence of law or quasi-contract 3. Depositor notified the depositary of
(2) Judicial Obligation arises as a such dangerous character;
consequence of a law allowing the issuance 4. Depositary was aware of the danger
of a judicial order constituting a deposit without advice from the depositor.
PAGE 350
(B) NECESSARY DEPOSIT (2) The loss is caused by the act of a thief or
Made in compliance with a legal obligation, or robber done without the use of arms and
on the occasion of any calamity, or by travelers irresistible force. [Art. 2001]
in hotels and inns [Arts.1996-2004] or by
travelers with common carriers [Arts.1734-1735] WHEN HOTEL-KEEPER NOT LIABLE
(1) The loss or injury is caused by force majeure,
KINDS OF NECESSARY DEPOSIT like flood, fire, [Art.2000] theft or robbery by
(1) It is made in compliance with a legal a strangernot the hotel-keepers servant or
obligation, in which case it is governed by the employeewith the use of firearms or
law establishing it, and in case of deficiency, irresistible force [Art.2001]
the rules on voluntary deposit e.g. Arts. 538, Exception: Hotel-keeper is guilty of fault or
586 and 2104 negligence in failing to provide against the
(2) It takes place on the occasion of any loss or injury from his cause. [Arts.1170 and
calamity, such as fire, storm, flood, pillage, 1174]
shipwreck, or other similar events. There (2) The loss is due to the acts of the guests, his
must be a causal relation between the family, servants, visitors [Art.2002]
calamity and the constitution of the deposit. (3) The loss arises from the character of the
In this case the deposit is governed by the things brought into the hotel [Ibid.]
rules on voluntary deposit and Art. 2168
(3) Made by passengers with common carriers. The hotel-keeper cannot free himself from
[Art.1754] responsibility by posting notices to the effect
($) Made by travelers in hotels or inns. [Art. that he is not liable for the articles brought by
1998] the guest. Such kind of stipulation shall be
VOID. [Art. 2003]
DEPOSIT BY TRAVELERS IN HOTELS
Regarding the legal deposit of a vehicle that
AND INNS was stolen while parked with Saisaki restaurant,
Before keepers of hotels or inns may be held the depositary may not exempt itself from
responsible as depositaries with regard to the responsibility for loss or damage of the thing
effects of their guests, the following must deposited with it, by exclusionary stipulation.
concur: Such stipulations are void for being contrary to
(1) They have been previously informed about law. [Triple-V Food Services v. Filipino
the effects brought by the guests; and Merchants Insurance Company, February 21,
(2) The latter have taken the precautions 2005]
prescribed regarding their safekeeping.
HOTEL-KEEPERS RIGHT TO
EXTENT OF LIABILITY UNDER
RETENTION
ART.1998 The hotel-keeper has a right to retain the things
(1) Those in hotel rooms which come under the brought into the hotel by the guest, as a security
term baggage or articles such as clothing for credits on account of
as are ordinarily used by travelers (a) lodging, and
(2) Include those lost or damaged in hotel (b) supplies usually furnished to hotel guests
annexes such as vehicles in the hotels [Art. 2004]
garage.
The right of retention recognized in this article is
WHEN HOTEL-KEEPER LIABLE in the nature of a pledge created by operation of
Regardless of the amount of care exercised the law.
hotel-keeper is liable when
(1) The loss or injury to personal property is
caused by his servants or employees as well
as by strangers [Art. 2000].
PAGE 351
(C) JUDICIAL DEPOSIT bound, the one rather than the other should
Takes place when an attachment or seizure of perform.
property in litigation is ordered [Arts. 2005- If a person binds himself solidarily with the
2009] principal debtor, the contract is called
suretyship and the guarantor is called a
NATURE AND PURPOSE surety.
It is auxiliary to a case pending in court. The
purpose is to maintain the status quo during GUARANTY DISTINGUISHED
pendency of the litigation or to insure the right of FROM SURETYSHIP [ZOBEL,
the parties to the property in case of a favorable
judgment. INC. VS. CA, 1998]
Surety Guaranty
DEPOSITARY OF SEQUESTERED An accessory promise A collateral
PROPERTY by which a person undertaking to pay the
A person is appointed by the court [Art. 2007] binds himself for debt of another in case
with the obligations another already bound, the latter does not pay
(1) To take care of the property with the and agrees with the the debt.
diligence of a good father of the family. [Art. creditor to satisfy the
2008] obligation if the debtor
(2) To continue in his responsibility until the does not
controversy which give rise thereto is ended
A surety is usually The contract of
unless the court so orders. [Art. 2007]
bound with his guaranty is the
principal by the same guarantor's own
APPLICABLE LAW instrument, executed separate undertaking,
The law on judicial deposit is remedial or at the same time, and in which the principal
procedural in nature. on the same does not join. It is
Rules of Court shall govern matters not consideration. He is an usually entered into
provided for in the Civil Code. [Art. 2009] original promissor and before or after that of
debtor from the the principal, and is
beginning, and is held, often supported on a
Guaranty and Suretyship ordinarily, to know
every default of his
separate consideration
from that supporting
principal. the contract of the
GUARANTY principal. The original
A contract whereby a person, called the contract of his principal
guarantor, binds himself to the creditor to is not his contract, and
fulfill the obligation of the principal debtor in he is not bound to take
case the latter should fail to do so. [Art. 2047] notice of its non-
While a surety undertakes to pay if the performance
principal does not pay, the guarantor only
binds himself to pay if the principal cannot A surety will not be A guarantor is often
pay (See benefit of excussion, Art. 2058). discharged, either by discharged by the mere
the mere indulgence of indulgence of the
the creditor to the creditor to the
SURETYSHIP principal, or by want of principal, and is usually
A relation which exists where one person notice of the default of not liable unless
(principal) has undertaken an obligation and the principal, no matter notified of the default
another person (surety) is also under a direct how much he may be of the principal
and primary obligation or other duty to a third injured thereby
person (oblige), who is entitled to but one
performance, and as between the two who are
PAGE 352
Surety Guaranty A GUARANTY NEED NOT BE

A surety is the insurer A guarantor is the UNDERTAKEN WITH THE
of the debt, and he insurer of the solvency KNOWLEDGE OF THE DEBTOR [ART.
obligates himself to of the debtor and thus 2050]
pay if the principal does binds himself to pay if Guaranty is unilateral. It exists for the benefit of
not pay the principal is unable the creditor and not for the benefit of the
to pay principal debtor
Creditor has every right to take all possible
NATURE AND EXTENT OF measures to secure payment of his credit
GUARANTY guaranty can be constituted even against the
will of the principal debtor
A GUARANTY IS GENERALLY
GRATUITOUS [ART. 2048] However, as regards payment made by a third
General Rule: Guaranty is gratuitous person
Exception: When there is a stipulation to the (1) If payment is without the knowledge or
contrary against the will of the debtor
(a) Guarantor can recover only insofar as the
ON THE CAUSE OF A GUARANTY payment has been beneficial to the
CONTRACT debtor [Art. 1236]
A guarantor or surety is bound by the same (b) Guarantor cannot compel the creditor to
consideration that makes the contract subrogate him in his rights [Art. 1237]
effective between the principal parties (2) If payment is with knowledge or consent of
thereto. [Severino v. Severino, 1931] the debtor: Subrogated to all the rights
Presence of cause which supports principal which the creditor had against the debtor
obligation: Cause of the contract is the same THE GUARANTY MUST BE FOUNDED
cause which supports the obligation as to the ON A VALID PRINCIPAL OBLIGATION
principal debtor. The consideration which
supports the obligation as to the principal [ART. 2052(1)]
debtor is a sufficient consideration to support Guaranty is an accessory contract: It is an
the obligation of a guarantor or surety. indispensable condition for its existence that
Absence of direct consideration or benefit to there must be a principal obligation. Hence, if
guarantor: Guaranty or surety agreement is the principal obligation is void, it is also void.
regarded valid despite the absence of any A GUARANTY MAY SECURE THE
direct consideration received by the guarantor PERFORMANCE OF A VOIDABLE,
or surety, such consideration need not pass
directly to the guarantor or surety; a UNENFORCEABLE, AND NATURAL
consideration moving to the principal will OBLIGATION [ART. 2052(2)]
suffice. A guaranty may secure the performance of a:
(a) Voidable contract such contract is binding,
A MARRIED WOMAN WHO IS A unless it is annulled by a proper court action
(b) Unenforceable contract because such
GUARANTOR BINDS ONLY HER contract is not void
SEPARATE PROPERTY, GENERALLY (c) Natural obligation the creditor may
[ART. 2049] proceed against the guarantor although he
Exceptions: has no right of action against the principal
(1) With her husbands consent, bind the debtor for the reason that the latters
community or conjugal partnership property obligation is not civilly enforceable. When
(2) Without husbands consent, in cases the debtor himself offers a guaranty for his
provided by law, such as when the guaranty natural obligation, he impliedly recognizes
has redounded to the benefit of the family. his liability, thereby transforming the
obligation from a natural into a civil one.
PAGE 353
A GUARANTY MAY SECURE A A GUARANTY MAY SECURE THE

FUTURE DEBT [ART. 2053] PERFORMANCE OF A CONDITIONAL
OBLIGATION [ART. 2053]
CONTINUING GUARANTY (a) Principal obligation subject to a suspensive
(1) Not limited to a single transaction but which condition the guarantor is liable only after
contemplates a future course of dealings, the fulfillment of the condition.
covering a series of transactions generally for (b) Principal obligation subject to a resolutory
an indefinite time or until revoked. condition the happening of the condition
(2) It is prospective in its operation and is extinguishes both the principal obligation
generally intended to provide security with and the guaranty
respect to future transactions.
(3) Future debts, even if the amount is not yet A GUARANTORS LIABILITY CANNOT
known, may be guaranteed but there can be
no claim against the guarantor until the
EXCEED THE PRINCIPAL
amount of the debt is ascertained or fixed OBLIGATION [ART. 2054]
and demandable. General Rule: Guaranty is a subsidiary and
accessory contract guarantor cannot bind
RATIONALE: A CONTRACT OF GUARANTY IS himself for more than the principal debtor and
SUBSIDIARY even if he does, his liability shall be reduced to
(a) To secure the payment of a loan at maturity the limits of that of the debtor. But the
surety binds himself to guarantee the guarantor may bind himself for less than that of
punctual payment of a loan at maturity and the principal.
all other obligations of indebtedness which
may become due or owing to the principal by Exceptions
the borrower. (a) Interest, judicial costs, and attorneys fees as
(b) To secure payment of any debt to be part of damages may be recovered
subsequently incurred a guaranty shall be creditors suing on a suretyship bond may
construed as continuing when by the terms recover from the surety as part of their
thereof it is evident that the object is to give a damages, interest at the legal rate, judicial
standing credit to the principal debtor to be costs, and attorneys fees when appropriate,
used from time to time either indefinitely or even without stipulation and even if the
until a certain period, especially if the right to surety would thereby become liable to pay
recall the guaranty is expressly reserved. more than the total amount stipulated in the
(c) To secure existing unliquidated debts bond.
refers to debts existing at the time of the
constitution of the guaranty but the amount Interest runs from:
thereof is unknown and not to debts not yet Filing of the complaint (upon judicial
incurred and existing at that time. demand); or
(d) The surety agreement itself is valid and The time demand was made upon the
binding even before the principal obligation surety until the principal obligation is fully
intended to be secured thereby is born, just paid (upon extra-judicial demand)
like obligations which are subject to a
condition precedent are valid and binding Rationale: Surety is made to pay, not by
before the occurrence of the condition reason of the contract, but by reason of his
precedent. failure to pay when demanded and for
having compelled the creditor to resort to
the courts to obtain payment.
(b) Penalty may be provided a surety may be

held liable for the penalty provided for in a
bond for violation of the condition therein.
PAGE 354
PRINCIPALS LIABILITY MAY EXCEED even though he was not a party to the
GUARANTORS OBLIGATIONS proceedings;
The amount specified in a surety bond as the (b) The creditor may sue, separately or together,
suretys obligation does not limit the extent of the principal debtor and the surety;
the damages that may be recovered from the (c) A demand or notice of default is not required
principal, the latters liability being governed by to fix the suretys liability
the obligations he assumed under his contract Exception: Where required by the provisions
of the contract of suretyship
THE EXISTENCE OF A GUARANTY IS (d) A surety bond is void where there is no
NOT PRESUMED [Art. 2055] principal debtor because such an
Guaranty requires the expression of consent on undertaking presupposes that the obligation
the part of the guarantor to be bound. It cannot is to be enforceable against someone else
be presumed because of the existence of a besides the surety, and the latter can always
contract or principal obligation. claim that it was never his intention to be the
sole person obligated thereby.
Rationale:
(a) There be assurance that the guarantor had Note: Surety is not entitled to exhaustion
the true intention to bind himself;
(b) To make certain that on making it, the THE UNDERTAKING IS TO THE
guarantor proceeded with consciousness of CREDITOR, NOT THE DEBTOR
what he was doing. The surety makes no covenant or agreement
with the principal that it will fulfill the
CONTRACT OF GUARANTY IS obligation guaranteed for the benefit of the
COVERED BY THE STATUTE OF principal. The suretys undertaking is that the
FRAUDS [SEE ART. 1403(2(B))] principal shall fulfill his obligation and that
the surety shall be relieved of liability when
Guaranty must not only be expressed but must
the obligation secured is performed.
so be reduced into writing. Hence, it shall be
unenforceable by action, unless the same or UNLESS otherwise expressly provided.
some note or memorandum thereof be in
writing, and subscribed by the party charged, or PRIOR DEMAND BY THE CREDITOR
by his agent; evidence, therefore, of the UPON PRINCIPAL NOT REQUIRED.
agreement cannot be received without the SURETY IS NOT EXONERATED BY
writing, or a secondary evidence of its contents. NEGLECT OF CREDITOR TO SUE
However, it need not appear in a public
document
PRINCIPAL.
Strictissimi juris rule is applicable only to
accommodation surety.
NATURE AND EXTENT OF
SURETYSHIP Reason: An accommodation surety acts without
motive of pecuniary gain and hence, should be
LIABILITY IS CONTRACTUAL AND protected against unjust pecuniary
impoverishment by imposing on the principal,
ACCESSORY BUT DIRECT duties akin to those of a fiduciary. This rule will
apply only after it has been definitely
LIABILITY IS LIMITED BY THE TERMS ascertained that the contract is one of
OF THE CONTRACT suretyship or guaranty.
LIABILITY ARISES ONLY IF Strictissimi juris rule is NOT applicable to

compensated sureties
PRINCIPAL DEBTOR IS HELD LIABLE
(a) In the absence of collusion, the surety is
bound by a judgment against the principal
PAGE 355
Reasons: debtor cannot fulfill his obligation

(1) Compensated corporate sureties are (iv) When the debtor has absconded, or
business associations organized for the cannot be sued within the Philippines
purpose of assuming classified risks in large the creditor is not required to go after a
numbers, for profit and on an impersonal debtor who is hiding or cannot be sued in
basis. our courts, and to incur the delays and
(2) They are secured from all possible loss by expenses incident thereto.
adequate counter-bonds or indemnity Exception: When the debtor has left a
agreements. manager or representative
(v) If it may be presumed that an execution
Such corporations are in fact insurers and in on the property of the principal debtor
determining their rights and liabilities, the rules would not result in the satisfaction of the
peculiar to suretyship do not apply. obligation If such judicial action
including execution would not satisfy the
The stipulation in the indemnity agreement obligation, the guarantor can no longer
allowing the surety to recover even before it require the creditor to resort to all such
paid the creditor is enforceable. In accordance remedies against the debtor as the same
therewith, the surety may demand from the would be but a useless formality. It is not
indemnitors even before paying the creditors. necessary that the debtor be judicially
[Mercantile Insurance Company v. Ysmael, 169 declared insolvent.
SCRA 66, 1989]
The right of guarantorsto demand exhaustion
EFFECT OF GUARANTY of the property of the principal debtor, exists
only when a pledge or a mortgage has not been
given as special security for the payment of the
EFFECTS OF GUARANTY BETWEEN principal obligation. [Southern Motors, Inc. v.
THE GUARANTOR AND THE Barbosa, 1956]
CREDITOR
(1) THE GUARANTOR HAS THE RIGHT TO The surety in the present case bound itself
BENEFIT FROM EXCUSSION/ EXHAUSTION "jointly and severally" (in solidum) with the
[2058] defendant; and excussion (previous exhaustion
The guarantor cannot be compelled to pay the of the property of the debtor) shall not take
creditor unless the latter has: place "if he (the guarantor) has bound himself
(a) Exhausted all of the property of the debtor; solidarily with the debtor." [Luzon Steel Corp. v.
and Sia, 1969]
(b) Resorted to all the legal remedies against
the debtor. (b) If he does not comply with Article 2060
In order that the guarantor may make use of
Exceptions to the benefit of excussion [Art. 2059] the benefit of excussion, he must:
(a) As provided in Art. 2059: (i) Set it up against the creditor upon the
(i) If the guarantor has expressly renounced latters demand for payment from him;
it. (ii) Point out to the creditor:
(ii) If he has bound himself solidarily with the (a) Available property of the debtor the
debtor. Here, the liability assumed is that guarantor should facilitate the
of a surety. The guarantor becomes realization of the excussion since he is
primarily liable as a solidary co- debtor. In the most interested in its benefit.
effect, he renounces in the contract itself (b) Within the Philippine territory
the benefit of exhaustion. excussion of property located abroad
(iii) In case of insolvency of the debtor would be a lengthy and extremely
guarantor guarantees the solvency of the difficult proceeding and would not
debtor. If the debtor becomes insolvent, conform with the purpose of the
the liability of the guarantor arises as the guaranty to provide the creditor with
PAGE 356
the means of obtaining the fulfillment (b) If he fails to do so, he shall suffer the loss for
of the obligation. the insolvency of the debtor, but only to the
(c) Sufficient to cover the amount of the extent of the value of the said property
debt
(c) If he is a judicial bondsman and sub- surety (6) THE CREDITOR HAS THE DUTY TO
[Art. 2084] NOTIFY THE GUARANTOR IN THE ACTION
(d) Where a pledge or mortgage has been given AGAINST THE DEBTOR [ART. 2062]
by him as a special security Notice to the guarantor is mandatory in the
(e) If he fails to interpose it as a defense before action against the principal debtor. The
judgment is rendered against him. guarantor, however, is not duty bound to appear
in the case, and his non- appearance shall not
(2) THE CREDITOR HAS THE RIGHT TO constitute default, w/ its consequential effects.
SECURE A JUDGMENT AGAINST THE
GUARANTOR PRIOR TO THE EXCUSSION Rationale: To give the guarantor the opportunity
General Rule: An ordinary personal guarantor to allege and substantiate whatever defenses
(NOT a pledgor or mortgagor), may demand he may have against the principal obligation,
exhaustion of all the property of the debtor and chances to set up such defenses as are
before he can be compelled to pay. afforded him by law
Exception: The creditor may, prior thereto,
secure a judgment against the guarantor, who (7) A COMPROMISE SHALL NOT PREJUDICE
shall be entitled, however, to a deferment of THE PERSON NOT PARTY TO IT [ART. 2063]
the execution of said judgment against him, A compromise between creditor and principal
until after the properties of the principal debtor benefits the guarantor but does not
debtor shall have been exhausted, to satisfy prejudice him.
the latters obligation. A compromise between guarantor and the
creditor benefits but does not prejudice the
(3) THE CREDITOR HAS THE DUTY TO MAKE principal debtor.
PRIOR DEMAND FOR PAYMENT FROM THE
(8) CO-GUARANTORS ARE ENTITLED TO
GUARANTOR [ART. 2060]
THE BENEFIT OF DIVISION [ART. 2065]
The demand is to be made only after
The benefit of division applies only when there
judgment on the debt are several guarantors and one debtor for a
Joining the guarantor in the suit against the single debt. Except when solidarity has been
principal debtor is not the demand intended stipulated, a co-guarantor is liable only to the
by law. Actual demand has to be made. extent of his share in the obligation as divided
among all the co-guarantors.
(4) THE GUARANTOR HAS THE DUTY TO
SET UP THE BENEFIT OF EXCUSSION [ART.
2060]
EFFECTS OF GUARANTY BETWEEN
As soon as he is required to pay, guarantor must THE DEBTOR AND THE GUARANTOR
also point out to the creditor available property (1) THE GUARANTOR WHO PAYS HAS THE
(not in litigation or encumbered) of the debtor RIGHT TO BE SUBROGATED TO THE RIGHTS
within the Philippines. OF THE CREDITOR [ART. 2067]
A guarantor who pays the debt is entitled to
(5) THE CREDITOR HAS THE DUTY TO every remedy which the creditor has against
RESORT TO ALL LEGAL REMEDIES [ARTS. the principal debtor, to enforce every security
2058, 2061] and all means of payments; to stand in the
After the guarantor has fulfilled the conditions place of the creditor not only through the
required for making use of the benefit of medium of the contract, but even by means of
excussion, it becomes the duty of the creditor to: the securities entered into w/out the
(a) Exhaust all the property of the debtor knowledge of the surety; having the right to
pointed out by the guarantor; have those securities transferred to him
though there was no stipulation for it, and to
PAGE 357
avail himself of all securities against the reason of the expiration of the period for
debtor payment;
The need to enforce the provisions on (e) After the lapse of 10 years, when the
indemnity in Article 2066 forms the basis for principal obligation has no fixed period for its
the subrogation clause of Article 2067. The maturity, unless it be of such nature that it
assumption, however, is that the guarantor cannot be extinguished except within a
who is subrogated to the rights of the creditor, period longer than 10 years;
has the right to be reimbursed for his (f) If there are reasonable grounds to fear that
answering for the obligation of the debtor. the principal debtor intends to abscond;
Absent this right of reimbursement, (g) If the principal debtor is in imminent danger
subrogation will not be proper. of becoming insolvent.
(2) THE GUARANTOR HAS THE DUTY TO Rationale: To enable the guarantor to take
NOTIFY THE DEBTOR BEFORE PAYING THE measures for the protection of his interest in
CREDITOR [ART. 2068] view of the probability that he would be called
Should payment be made without notification, upon to pay the debt. As such, he may, in the
and supposing the debtor has already made a alternative, obtain release from the guaranty; or
prior payment, the debtor would be justified in demand security that shall protect him from any
setting up the defense that the obligation has proceeding by the creditor, and against the
already been extinguished by the time the insolvency of the debtor.
guarantor made the payment. The guarantor
will then lose the right of reimbursement and ART. 2066 AND 2071 DISTINGUISHED
consequently the right of subrogation. Art. 2066 Art. 2071
(3) THE GUARANTOR CANNOT DEMAND Provides for the Provides for the
REIMBURSEMENT FOR PAYMENT MADE BY enforcement of the protection before he
HIM BEFORE THE OBLIGATION HAS guaranty/surety has paid but after he
BECOME DUE [ART. 2069] against the debtor has become liable
General Rule: Since a contract of guaranty is after he has paid the
only subsidiary, the guarantor cannot be debt
liable for the obligation before the period on Gives a right of action Protective remedy
which the debtors liability will accrue. Any after payment before payment
payment made by the guarantor before the
obligation is due cannot be indemnified by the Substantive Right Preliminary remedy
debtor.
Exception: Prior consent or subsequent EFFECTS OF GUARANTY AS
ratification by the debtor BETWEEN CO-GUARANTORS
When there are two or more guarantors, one
(4) THE GUARANTOR MAY PROCEED debtor and one debt:
AGAINST THE DEBTOR EVEN BEFORE (a) The one who pays may demand from each of
PAYMENT HAS BEEN MADE [ART. 2071] the others the share proportionally owing to
General Rule: Guarantor has no cause of action him
against the debtor until after the former has (b) If any of the guarantors is insolvent, his share
paid the obligation. shall be borne by the others, including the
payer, in the same proportion [Art. 2073]
Exceptions [Art. 2071] For purposes of proportionate reimbursement,
(a) When he is sued for the payment; the other guarantors may interpose such
(b) In case of insolvency of the principal debtor; defenses against the paying guarantor as are
(c) When the debtor has bound himself to available to the debtor against the creditor,
relieve him from the guaranty within a except those that are personal to the debtor
specified period, and this period has expired; [Art. 2074]
(d) When the debt has become demandable, by
PAGE 358
REQUISITES FOR THE APPLICABILITY OF LEGAL AND JUDICIAL BONDS

ART. 2073 Bond an undertaking that is sufficiently
(1) Payment has been made by one guarantor; secured, and not cash or currency.
(2) The payment was made because
(a) Of the insolvency of the debtor, or Bondsman a surety offered in virtue of a
(b) By judicial demand provision of law or a judicial order.
(3) The paying guarantor seeks to be
indemnified only to the extent of his QUALIFICATIONS OF PERSONAL
proportionate share in the total obligation. BONDSMAN [2082 IN RELATION TO ART.
2056]
EXTINGUISHMENT OF (1) He possesses integrity;
(2) He has capacity to bind himself;
GUARANTY (3) He has sufficient property to answer for the
Once the obligation of the debtor is obligation which he guarantees.
extinguished in any manner provided in the
Civil Code, the obligation of the guarantor is PLEDGE OR MORTGAGE IN LIEU OF BOND
also extinguished [Art. 2076]. However, there [ART. 2083]
may be instances when, after the Guaranty or suretyship is a personal security.
extinguishment of the guarantors obligation
Pledge or mortgage is a property or real
(as in the case of a release from the guaranty),
security. If the person required to give a legal
the obligation of the debtor still subsists.
or judicial bond should not be able to do so, a
Although the guarantor generally has to
pledge or mortgage sufficient to cover the
make payment in money, any other thing of
obligation shall be admitted in lieu thereof.
value, if accepted by the creditor, is valid
payment and therefore releases the guarantor
BONDSMAN NOT ENTITLED TO EXCUSSION
[dacion en pago] [Art. 2077].
[ART. 2084]
If one guarantor is released without the A judicial bondsman and the sub-surety are not
consent of the others, the release would entitled to the benefit of excussion.
benefit the co-guarantors to the extent of the
proportionate share of the guarantor released Reason: They are not mere guarantors, but
[Art. 2078]. sureties whose liability is primary and solidary.
A guarantor is released if the creditor, without
the guarantors consent, extends the time EFFECT OF NEGLIGENCE OF CREDITOR
within which the debtor may perform his Mere negligence on the part of the creditor in
obligation [Art. 2079]. This is to protect the collecting from the debtor will not relieve the
interest of the guarantor should the debtor be surety from liability.
insolvent during the period of extension and
deprive the guarantor of his right to
reimbursement.
The guarantors are released if by some act of Pledge
the creditor they cannot be subrogated to the A contract by virtue of which the debtor
rights, mortgages and preferences of the delivers to the creditor or to a third person a
latter. [Art. 2080] movable or document evidencing incorporeal
In order to constitute an extension rights for the purpose of securing the
discharging the surety, it should appear that fulfillment of a principal obligation with the
the extension was for (1) a definite period, (2) understanding that when the obligation is
pursuant to an enforceable agreement fulfilled, the thing delivered shall be returned
between the principal and the creditor, and (3) with all its fruits and accessions. [Art.2085 in
that it was made without the consent of the relation to 2093]
surety or with a reservation of rights with The pledgor must be the absolute owner of
respect to him. [Filipinas Textile Mills v. CA, the collateral, and he must have either free
November 12, 2003]
PAGE 359
disposal of the property or he must be legally essential [Art. 2093].

authorized to constitute the pledge; (a) Actual delivery is important.
otherwise, the pledge is void [Gomez-Somera]. (b) Constructive or symbolic delivery of the key
The pledger remains to be the owner of the to the warehouse is sufficient to show that
collateral. Although the pledge is regarded as the depositary appointed by common
a lien, it passes no title to the creditor. The consent of the parties was legally placed
delivery of the collateral is only to secure the in possession.
fulfillment of the principal obligation, and it (2) All movables within the commerce of man
does not give the creditor the right to convey may be pledged as long as they are
said collateral in favor of a third person susceptible of possession [Art. 2094].
[Gomez-Somera]. (3) Incorporeal rights may be pledged. The
instruments representing the pledged rights
CHARACTERISTICS shall be delivered to the creditor; if
negotiable, they must be indorsed [Art.
(1) Real perfected upon delivery of thing
2095].
pledged
(4) Pledge shall take effect against 3rd persons
(2) Accessory cannot exist independently
only if the following appear in a public
(3) Unilateral obligation on the part of the
instrument:
creditor to return the thing pledged upon the
(a) Description of the thing pledged.
fulfillment of the principal obligation
(b) Date of the pledge [Art. 2096].
(4) Subsidiary obligation incurred does not
(5) The thing pledged may be alienated by the
arise until the fulfillment of the secured
pledgor or owner only with the consent of the
principal obligation
pledgee. Ownership of the thing pledged is
transmitted to the vendee or transferee as
KINDS soon as the pledgee consents to the
(1) Voluntary or conventional Created by alienation, but the latter shall continue to
agreement of parties have possession [Art. 2097].
(2) Legal Created by operation of law (6) Creditor has the right to retain the thing in
his possession or in that of a third person to
ESSENTIAL REQUISITES whom it has been delivered, until the debt is
Common to pledge and mortgage [Art. 2085] paid [Art. 2098].
(1) Constituted to secure the fulfillment of a (7) Special Laws apply to pawnshops and
principal obligation. establishments engaged in making loans
(2) Pledgor or mortgagor must be the absolute secured by pledges. Provisions of the Civil
owner of the thing pledged or mortgaged. Code shall apply subsidiarily to them.
(3) The persons constituting the pledge or
mortgage have the free disposal of their In case of doubt as to whether a transaction is a
property, and in the absence thereof, that pledge or a dation in payment, the presumption
they be legally authorized for the purpose. is in favor of pledge, the latter being the lesser
(4) Cannot exist without a valid obligation. transmission of rights and interests. [Manila
(5) Debtor retains the ownership of the thing Banking Corp. v. Teodoro, 1989]
given as a security.
(6) When the principal obligation becomes due, OBLIGATIONS OF PLEDGEE
the thing pledged or mortgaged may be (1) The pledgee cannot deposit the thing
alienated for the payment to the creditor. pledged with a 3rd person, unless there is a
[Art. 2087] contrary stipulation [Art. 2100].
(2) Is responsible for the acts of his agents or
PROVISIONS APPLICABLE ONLY employees with respect to the thing pledged
[Art. 2100].
TO PLEDGE (3) Has no right to use the thing or to
(1) Transfer of possession to the creditor or to
appropriate its fruits without authority from
third person by common agreement is
the owner [Art. 2104]
PAGE 360
(4) May cause the public sale of the thing FORECLOSURE [NCC 2112, 2115]
pledged if, without fault on his part, there is Requirements in sale of the thing pledged by a
danger of destruction, impairment or creditor, if credit is not paid on time [NCC 2112]
diminution in value of the thing. The (1) Debt is due and unpaid.
proceeds of the auction shall be a security for (2) Sale must be at a public auction.
the principal obligation [Art. 2108]. (3) Notice to the pledgor and owner, stating the
amount due.
RIGHTS OF PLEDGOR (4) Sale must be made with the intervention of a
(1) Takes responsibility for the flaws of the thing notary public.
pledged [Art. 2101 in relation to Art. 1951. (5) If at the first auction the thing is not sold, a
(2) Cannot ask for the return of the thing second one with the same formalities shall
against the will of the creditor, unless and be held.
until he has paid the debt and its interest, (6) If at the second auction, there is no sale
with expenses in a proper case [Art. 2105]. either, the creditor may appropriate the thing
(3) Subject to the right of the pledgee under pledged but he shall give an acquittance
article 2108, pledgor is allowed to substitute (release) for his entire claim.
the thing which is in danger of destruction or
impairment without any fault on the part of EFFECT OF THE SALE OF THE
the pledgee with another thing of the same
kind and quality [Art. 2107]. THING PLEDGED [ART. 2115]
(4) May require that the thing be deposited with (1) Extinguishes the principal obligation,
a 3rd person, if through the negligence or whether the proceeds of the sale is more or
willful act of the pledgee the thing is in less than the amount due.
danger of being lost or impaired [Art. 2106]. (2) If the price of sale is more than amount due,
the debtor is not entitled to the excess unless
The pledgee can temporarily entrust the the contrary is provided.
physical possession of the chattels pledged to (3) If the price of sale is less, the creditor is not
the pledgor without invalidating the pledge. The entitled to recover the deficiency. A contrary
pledgor is regarded as holding the pledged stipulation is void.
property merely as trustee for the pledgee. The
type of delivery will depend upon the nature and LEGAL PLEDGE / PLEDGE BY
the peculiar circumstances of each case. OPERATION OF LAW (ARTS.
[Yuliongsiu v. PNB (1968)] 2121-2122)
(1) Necessary expenses shall be refunded to
A pledgee cannot become the owner of, nor every possessor, but only a possessor in good
appropriate to himself, the thing given in faith may retain the thing until he has been
pledge. If by the contract of pledge the pledgor reimbursed.
continues to be the owner of the thing pledged Useful expenses shall be refunded only to
during the pendency of the obligation, it stands the possessor in good faith with the same
to reason that in case of loss of the property, the right of retention, the person who has
loss should be borne by the pledgor. [PNB v. defeated him in the possession having the
Atendido (1954)] option of refunding the amount of the
expenses or of paying the increase in value
REQUISITES FOR PERFECTION which the thing may have acquired and by
[ARTS. 2093, 2096] reason thereof [Art. 546]
(1) The thing pledged is placed in the possession (2) He who has executed work upon a movable
of the creditor or a third person [Art. 2093] has a right to retain it by way of pledge until
(2) For the pledge to take effect as against third he is paid. This is called the mechanics lien.
persons, a description of the thing pledged [Art. 1731]
and the date of the pledge should appear in (3) The agent may retain the things which are
a public instrument [Art. 2096] the objects of agency until the principal
PAGE 361
effects the reimbursement and pays the The provisions of the Civil Code on pledge,
indemnity. This is called the agents lien. [Art. insofar as they are not in conflict with the
1914] Chattel Mortgage Law shall be applicable to
(4) The laborers wages shall be a lien on the chattel mortgages [Art. 2141]
goods manufactured or the work done. [Art.
1707] PACTUM COMMISSORIUM
Note: It is a stipulation that allows the creditor to
(1) In legal pledges, the remainder of the price of appropriate the collateral, or dispose of it, in
the sale shall be delivered to the obligor. contravention of the provisions on foreclosure,
(2) Public auction of legal pledges may only be and as such, is considered null and void
executed after demand of the amount for [Gomez-Somera].
which the thing is retained. It shall take place
within one month after the demand,
otherwise the pledgor may demand the
ELEMENTS
(1) There is property pledged (collateral) by way
return of the thing pledged, provided s/he is
of security for the payment of the principal
able to show that the creditor did not cause
obligation
the public sale without justifiable grounds.
(2) There is a stipulation for automatic
[Article 2122]
appropriation by the creditor in case of non-
payment of the principal obligation within
PLEDGE AS DISTINGUISHED the stipulated period
FROM CHATTEL MORTGAGE
[ARTS. 2140, 1484] EFFECT ON PLEDGE
The nullity of the pactum commissorium does
Chattel
Pledge not affect the validity of the contract of pledge.
Mortgage
The creditor may recover the credit from the
Not required Delivery is proceeds of a foreclosure sale effected in
Delivery of
required for the accordance with law [Gomez-Somera].
Personal
validity of the
Property
pledge EQUITABLE MORTGAGE
Registratio Necessary for Not necessary; It is a contract that reveals the intention of the
n in the validity of the Public document parties to charge property as security for a debt,
Chattel CM against third is enough to bind but contains nothing impossible or contrary to
Mortgage persons third persons law [Gomez-Somera].
Register
The excess goes The excess goes ESSENTIAL REQUISITES
Right to (1) Parties entered into a contract denominated
to the debtor/ to the
Excess of as a contract of sale
mortgagor pledgee/creditor,
Proceeds of (2) The true intention is to secure an existing
unless otherwise
Sale debt by way of mortgage
stipulated
Creditor/ Creditor/
mortgagee can mortgagee is not
recover from the entitled to
debtor/ recover any
Right to
mortgagor, deficiency after
Recover
except if covered the property is
Deficiency
by Recto Law sold,
notwithstanding
contrary
stipulation
PAGE 362
Real Mortgage (b) To exclude them, there must be an

express stipulation, or the fruits must be
collected before the obligation becomes
MORTGAGE due.
A contract whereby the debtor secures to the (c)Third persons who introduce
creditor the fulfillment of a principal obligation, improvements upon the mortgaged
immediately making immovable property or real property may remove them at any time
rights answerable to the principal obligation in
case it is not complied with at the time KINDS
stipulated. (1) Voluntary constituted by the will of the
owner of the property on which it is created
OBJECTS OF REAL MORTGAGE [ART. (2) Legal required by law to be executed in
2124] favor of certain persons:
(1) Immovables (a) Persons in whose favor the law
(2) Alienable real rights over immovables. establishes a mortgage have no other
Future property cannot be an object of right than to demand the execution and
mortgage; however, a stipulation subjecting to recording of the document in which the
the mortgage improvements which the mortgage is formalized [Article 2125]
mortgagor may subsequently acquire, install or (b) The bondsman who is to be offered in
use in connection with real property already virtue of a provision of law or of a judicial
mortgaged belonging to the mortgagor is valid. order shall have the qualifications
prescribed in Art 2056 (integrity, capacity
to bind himself, and sufficient property to
CHARACTERISTICS answer for the obligation), and in other
(1) As a general rule, the mortgagor retains
laws [Article 2082]
possession of the property. He may deliver
(c) If the person bound to give a bond should
said property to the mortgagee without
not be able to do so, a pledge or
altering the nature of the contract of
mortgage considered sufficient to recover
mortgage.
his obligation shall be admitted in lieu
(2) It is not an essential requisite that the thereof [Article 2083]
principal of the credit bears interest, or that
(3) Equitable One which, although lacking the
the interest as compensation for the use of
proper formalities of a mortgage, shows the
the principal and the enjoyment of its fruits
intention of the parties to make the property
be in the form of a certain percentage
a security for the debt.
thereof.
(a) lien created through equitable mortgage
(3) Mortgage creates an encumbrance over the
ought not to be defeated by requiring
property, but ownership of the property is not
compliance with formalities necessary to
parted with. It merely restricts the the validity of a voluntary real estate
mortgagors jus disponendi over the property.
mortgage. Ex.: Pacto de retro
The mortgagor may still sell the property,
(b) provisions governing equitable mortgage:
and any stipulation to the contrary is void
Arts. 1365, 1450, 1454, 1602, 1603, 1604
[Art. 2130]
and 1607.
(4) Mortgage extends to the natural accessions,
to the improvements of growing fruits and
the rents or income NOT YET RECEIVED PRINCIPLE OF INDIVISIBILITY OF
when the obligation becomes DUE, including PLEDGE/MORTGAGE [ARTS. 2089
indemnity from insurance, and/or amount TO 2090]
received from expropriation for public use A mortgage directly and immediately subjects
[Art. 2127] the property upon which it is imposed. It is
(a) Applies only when the accessions and indivisible even though the debt may be
accessories subsequently introduced divided, and such indivisibility is likewise
belongs to the mortgagor.
PAGE 363
unaffected by the fact that the debtors are not alienated for the payment to the creditor.
solidarity liable. [Dayrit v. CA] [Art. 2087]
Where only a portion of the loan is released, (7) Must be recorded in the Registry of Property
the mortgage becomes enforceable only as to in order to be validly constituted.
the proportionate value of the loan [Central
Note: The mortgage would still be binding
Bank v. CA]
between the parties even if the instrument is not
Indivisibility applies only as to recorded.
pledgors/mortgagors who are themselves
debtors in the principal obligation, and not to FORECLOSURE OF MORTGAGE
accommodation pledgors/ mortgagors It is the remedy available to the mortgagee by
"When several things are pledged or which he subjects the mortgaged property to
mortgaged, each thing for a determinate the satisfaction of the obligation secured by
portion of the debt, the pledges or mortgage, the mortgage.
are considered separate from each other. But In general, an action for foreclosure of a
when the several things are given to secure mortgage is limited to the amount mentioned
the same debt in its entirety, all of them are in the mortgage, EXCEPT when the mortgage
liable for the debt, and the creditor does not contract intends to secure future loans or
have to divide his action by distributing the advancements
debt among the various things pledged or
mortgaged. Even when only a part of the debt Blanket Mortgage/Dragnet mortgage that
remains unpaid, all the things are still liable subsumes all debts of past or future origin
for such balance." [Tolentino]
The question is whether or not the written Mortgage may be used as a continuing
instrument in controversy was a mortgage OR security which secures future advancements
a conditional sale. The correct test, where it and is not discharged by the repayment of the
can be applied, is the continued existence of a amount in the mortgage
debt or liability between the parties. If such
exists, the conveyance may be held to be Alienation or assignment of mortgage credit is
merely a security for the debt or an indemnity valid even if it is not registered
against the liability. [Reyes v. Sierra, 93 SCRA
473] ACCELERATION CLAUSE ALLOWED
Acceleration clause, or the stipulation stating
ESSENTIAL REQUISITES COMMON that on the occasion of the mortgagors default,
TO PLEDGE AND MORTGAGE the whole sum remaining unpaid automatically
(1) Constituted to secure the fulfillment of a becomes due and demandable, is ALLOWED
principal obligation.
(2) Pledgor or mortgagor must be the absolute KINDS OF FORECLOSURE
owner of the thing pledged or mortgaged. 1. Judicial Foreclosure
(3) The persons constituting the pledge or 2. Extrajudicial Foreclosure
mortgage have the free disposal of their
property, and in the absence thereof, that JUDICIAL FORECLOSURE VS.
they be legally authorized for the purpose. EXTRAJUDICIAL FORECLOSURE
Note: Third persons who are not parties to
Judicial Extrajudicial
the principal obligation may secure the
latter by pledging or mortgaging their own Court intervenes No court intervention
property. [Art. 2085]
(4) Cannot exist without a valid obligation. There is equity of There is right of
(5) Debtor retains the ownership of the thing redemption period redemption period
given as a security. starts from the finality start from date of
(6) When the principal obligation becomes due, of the judgment until registration of
the thing pledged or mortgaged may be order of confirmation certificate of sale
PAGE 364
Judicial Extrajudicial NATURE OF JUDICIAL

Decisions are Not appealable FORECLOSURE PROCEEDINGS
appealable (1) Quasi in rem action. Hence, jurisdiction may
be acquired through publication.
No need for a special Special power of (2) Foreclosure is only the result or incident of
power of attorney in attorney in favor of the the failure to pay debt.
the contract of mortgage is required in (3) Survives death of mortgagor.
mortgage the contract
EXTRAJUDICIAL FORECLOSURE
JUDICIAL FORECLOSURE [ACT NO. 3135]
Rule 68, ROC: (1) Applies to mortgages where the authority to
(a) May be availed of by bringing an action in foreclose is granted to the mortgagee.
the proper court which has jurisdiction over (2) Authority is not extinguished by death of
the area wherein the real property involved mortgagor or mortgagee. This is an agency
or a portion thereof is situated coupled with interest.
(b) If the court finds the complaint to be well- (3) Public sale should be made after proper
founded, it shall order the mortgagor to pay notice to the public, otherwise it is a
the amount due with interest and other jurisdictional defect which could render the
charges within a period of not less than 90 sale voidable.
days nor more than 120 days from the entry (4) There is no need to notify the mortgagor,
of judgment where there is no contractual stipulation
(c) If the mortgagor fails to pay at time directed, therefor.
the court, upon motion, shall order the Proper notice consists of:
property to be sold to the highest bidder at a (a) posting notice in three public places
public auction. and/or
(d) Upon confirmation of the sale by the court, (b) publication in newspaper of general
also upon motion, it shall operate to divest circulation
the rights of all parties to the action and to Purpose of notice is to obtain the best bid
vest their rights to the purchaser subject to for the foreclosed property
such rights of redemption as may be allowed (5) Surplus proceeds of foreclosure sale belong
by law to the mortgagor.
(e) Before the confirmation, the court retains (6) Debtor (who must be a NATURAL PERSON)
control of the proceedings; execution on has the right to redeem the property sold
judgment within 1 year from and after the date of sale.
(f) The proceeds of the sale shall be applied to (a)If the mortgagee is a bank and the debtor
the payment of the: is a juridical person, then there is no right
(i) costs of the sale; of redemption. However, it may redeem
(ii) amount due the mortgagee; the property BEFORE the registration of
(iii) claims of junior encumbrancers or the TCT to the buyer, which is similar to
persons holding subsequent mortgages in the equity of redemption. The TCT must
the order of their priority; and be registered within THREE MONTHS
(iv) the balance, if any shall be paid to the after the foreclosure.
mortgagor (b) The mortgagor can only legally transfer
(g)Sheriffs certificate is executed, the right to redeem and the use of the
acknowledged and recorded to complete the property during the period of redemption.
foreclosure (7) Remedy of party aggrieved by foreclosure is
a petition to set aside sale and the
cancellation of writ of possession. However,
if the mortgagee is a bank, the mortgagor is
required to post a bond equal to the value of
the mortgagees claim.
PAGE 365
(8) Republication of the notice of sale is bearing on the bid price at the public
necessary for the validity of the postponed auction, provided that the public auction was
extrajudicial sale regularly and honestly conducted.
(9) In foreclosure of real estate mortgage under
Act 3135, the buyer at auction may petition A suit for the recovery of the deficiency after the
the land registration court for a writ of foreclosure of a mortgage is in the nature of a
possession pending the one-year period of mortgage action because its purpose is
redemption of the foreclosed property. precisely to enforce the mortgage contract.
[Caltex v. IAC, 176 SCRA 741]
NATURE OF POWER OF
FORECLOSURE BY EXTRAJUDICIAL WAIVER OF SECURITY BY CREDITOR
SALE (1) Mortgagee may waive the right to foreclose
(1) Conferred for mortgagees protection. his mortgage and maintain a personal action
(2) An ancillary stipulation. for recovery of the indebtedness.
(3) A prerogative of the mortgagee. (2) Mortgagee cannot have both remedies. This
is because he only has one cause of action,
Note: the non-payment of the mortgage debt.
(a) Both should be distinguished from execution
sale governed by Rule 39, ROC.
REDEMPTION
(1) It is a transaction by which the mortgagor
(b) Foreclosure retroacts to the date of
reacquires the property which may have
registration of mortgage.
passed under the mortgage or divests the
(c) A stipulation of upset price, or the minimum
property of the lien which the mortgage may
price at which the property shall be sold to
have created
become operative in the event of a
(2) Kinds:
foreclosure sale at public auction, is null and
(a) Equity of redemption: in judicial
void.
foreclosure of real estate mortgage under
the ROC, it is the right of the mortgagor
RIGHT OF MORTGAGEE TO RECOVER to redeem the mortgaged property by
DEFICIENCY paying the secured debt within the 120
(1) Mortgagee is entitled to recover deficiency. day period from entry of judgment or after
(2) If the deficiency is embodied in a judgment, the foreclosure sale, but before the sale of
it is referred to as deficiency judgment. the mortgaged property or confirmation
(3) Action for recovery of deficiency may be filed of sale
even during redemption period. formal offer to redeem preserves the
(4) Action to recover prescribes after 10 years right of redemption, e.g., by filing an
from the time the right of action accrues. action to enforce the right to redeem
(b) Right of redemption: in extrajudicial
EFFECT OF INADEQUACY OF PRICE foreclosure of real estate mortgage, the
IN FORECLOSURE SALE right of the mortgagor to redeem the
(1) Where there is right to redeem, inadequacy of property within a certain period after it was
price is immaterial because the judgment sold for the satisfaction of the debt. [if the
debtor may redeem the property. mortgagee is a bank, the redemption
Exception: Where the price is so inadequate period expires after registration of the
as to shock the conscience of the court, sale.]
taking into consideration the peculiar (i) For natural persons one year from the
circumstances. registration of the TCT
(2) Property may be sold for less than its fair (ii) For juridical persons three months
market value, upon the theory that the lesser from the foreclosure
the price the easier it is for the owner to (iii) Formal offer to redeem must be with
redeem. tender of redemption price to preserve
(3) The value of the mortgaged property has no right of redemption
PAGE 366
Note: There is no right of redemption in pledge AS DISTINGUISHED FROM

and chattel mortgage.
OTHER CONTRACTS
The rule up to now is that the right of a Antichresis Pledge
purchaser at a foreclosure sale is merely
inchoate until after the period of redemption Kind of Real property Personal property
has expired without the right being exercised. property
The title to land sold under mortgage Perfection Mere consent Delivery of thing
foreclosure remains, in the mortgagor or his pledged
grantee until the expiration of the redemption
period and conveyance by the master's deed
Antichresis Real mortgage
[Medida v. CA]
Delivered to Retained by
Possession
creditor debtor
Antichresis Creditor
acquires only
Creditor does not
have the right to
A real security transaction that arises by
contract, with the antichretic creditor acquiring Right to the right to receive fruits, but
the right to receive the fruits of an immovable of the fruits receive fruits a real right over
the antichretic debtor, and the obligation to the property is
apply them to the payment of the interest, if created
owing, and thereafter to the principal. [Art. 2132] Payment of Creditor is Creditor has no
taxes and generally obligation to pay
CHARACTERISTICS charges obliged to pay
(1) Accessory contract it secures the First applied to Mortgagee has
performance of a principal obligation Application the payment of no such
(2) Formal contract it must be in a specified of fruits interest, and obligation
form to be valid [Art. 2134] then to principal
SPECIAL REQUISITES OBLIGATIONS OF ANTICHRETIC

(1) It can cover only the fruits of an immovable
property
CREDITOR
(2) Delivery of the immovable is necessary for (1) To pay taxes and charges on the estate,
the creditor to receive the fruits, not to make including necessary expenses (NCC 2135)
the contract binding The creditor may avoid said obligation by:
(3) Amount of principal and interest must be (a) Compelling the debtor to reacquire
specified in writing; otherwise, the contract of enjoyment of the property
antichresis shall be void [NCC 2134] (b) By stipulation to the contrary
(4) Express agreement that debtor will give (2) To apply all the fruits, after receiving them,
possession of the property to creditor and to the payment of interest, if owing, and
that the latter will apply the fruits to the thereafter to the principal
interest, if any, then to the principal of his (3) To render an account of the fruits to the
credit debtor
(4) To bear the expenses necessary for its
Note: The obligation to pay interest is not the preservation and repair
essence of the contract of antichresis; there
being nothing in the Code to show that
antichresis is only applicable to securing the
payment of interest-bearing loans. On the
contrary, antichresis is susceptible of
guaranteeing all kinds of obligations, pure or
conditional.
PAGE 367
REMEDIES OF CREDITOR IN for its validity (but only as against third

persons)
CASE OF NON-PAYMENT OF (3) It is a unilateral contract because it produces
DEBT only obligations on the part of the creditor to
(1) Action for specific performance free the thing from the encumbrance on
(2) Petition for the sale of the real property as in fulfillment of the obligation.
a foreclosure of mortgage under Rule 68 of (4) The excess of the proceeds of the sale goes
the Rules of Court [NCC 2137] to the debtor or mortgagor
(a) The parties, however, may agree on an (5) Creditor or mortgagee can recover deficiency
extrajudicial foreclosure in the same from the debtor or mortgagor, except if
manner as they are allowed in contracts covered by the Recto Law
of mortgage and pledge Tavera v. El
Hogar Filipino, Inc. [1939] OBLIGATIONS SECURED
(b) A stipulation authorizing the antichretic A chattel mortgage can only cover obligations
creditor to appropriate the property upon existing at the time the mortgage is
the non-payment of the debt within the constituted. It cannot secure after-incurred
agreed period is void [NCC 2088] obligations even if these future debts are
accurately described.
Because of the right of the creditor to judicially An increase or extension of the chattel
foreclose, antichresis is generally viewed as a
mortgage obligation becomes a new chattel
species of real estate mortgage, in which the
mortgage in itself. Although a contract TO
mortgagee retains possession of the collateral
mortgage that includes future debts is a
and takes the fruits of the property in lieu of
binding commitment, the contract OF chattel
interest on the debt. [Gomez-Somera]
mortgage itself is not perfected until after an
agreement covering the newly contracted
debt is executed. [Gomez-Somera]
Chattel Mortgage
PROPERTY COVERED
CHATTEL MORTGAGE Generally, only personal or movable property
A conditional sale of personal property as can be covered by a chattel mortgage. However,
the parties may agree to treat real property as
security for the payment of a debt, or the
personal property for purposes of executing a
performance of some other obligation
chattel mortgage. There must be a description
specified therein, the condition being that the
of the property as would enable the parties or
sale shall be void upon the seller paying to
the purchaser a sum of money or doing some other persons to identify the same after
reasonable investigation and inquiry.
other act named. If the condition is performed
according to its terms, the mortgage and sale
immediately become void, and the mortgagee VALIDITY OF CHATTEL
is thereby divested of his title. [Section 3, Act MORTGAGE
1508] Chattel mortgage shall not be valid against any
It is a contract by virtue of which personal person except the mortgagor, his executors or
property is recorded in the Chattel Mortgage administrators unless:
Register as a security for the performance of (1) The possession of the property is delivered to
an obligation. [Art. 2140] and retained by the mortgagee or
(2) The mortgage is recorded. [Sec. 4, Act 1508]
CHARACTERISTICS
(1) It is an accessory contract because it secures FORMAL REQUISITES
performance of a principal obligation (1) It should substantially comply with the form
(2) It is a formal contract because it requires prescribed by law
registration in the Chattel Mortgage Register
PAGE 368
(2) It should be signed by the person/s (ii) The principal obligation is a just and valid
executing the same in the presence of two obligation, and one not entered into for the
witnesses who shall sign the mortgage as purpose of fraud
witnesses to the execution thereof and
(3) Each mortgagor and mortgagee or, in the The effect of absence of affidavit of good faith is
absence of the mortgagee, his agent or that the chattel mortgage is vitiated only as
attorney, shall make and subscribe an against third persons without notice
affidavit in the form prescribed by law, which
affidavit, signed by the parties to the EFFECT OF FAILURE TO REGISTER IN
mortgage and the two witnesses and the THE CHATTEL MORTGAGE REGISTRY
certificate of the oath signed by the person The mortgage is binding between the parties.
authorized to administer an oath shall be However, the right of the person in whose favor
appended to such mortgage and recorded the law establishes a mortgage is to demand
therewith. [Sec. 5, Act 1508] the execution and the recording of the
instrument.
REGISTRATION OF CHATTEL
MORTGAGE REGISTRATION OF ASSIGNMENT OF
PERIOD MORTGAGE NOT REQUIRED
There is substantial and sufficient compliance A chattel mortgage may be alienated or
with the law when registration is made by the assigned to a third person
mortgagee before the mortgagor has complied The debtor is protected if he pays his creditor
with his principal obligation, and no right of without actual knowledge that the debt has
innocent third persons is prejudiced. been assigned
VENUE FAILURE OF MORTGAGEE TO

If the mortgagor resides in the Philippines in DISCHARGE THE MORTGAGE
the office of the register of deeds of the province If the mortgagee, assign, administrator,
in which the mortgagor resides at the time of executor, or either of them,
the making of the chattel mortgage (1) After performance of the condition before
or after the breach thereof, or
If the mortgagor does not reside in the (2) After tender of the performance of the
Philippines in the province in which the condition, at or after the time fixed for the
property is situated performance,
does not within ten days after being requested
If the property is located in a different province thereto by any person entitled to redeem,
registration in both provinces is required discharge the mortgage in the manner provided
by law, the person entitled to redeem may
Effect recover of the person whose duty it is to
Creates real rights which follows the chattel discharge the same, twenty pesos for his
It is an effective and binding notice to other neglect and all damages occasioned thereby in
creditors an action in any court having jurisdiction of the
Registration gives the mortgagee symbolical subject-matter thereof. [Sec. 8]
possession
When the condition of the chattel mortgage is
Affidavit of good faith is required, and it states broken, a mortgagor or person holding a
that the chattel mortgage is subsequent mortgage, or a subsequent
(i) Made solely for the purpose of securing the attaching creditor may redeem the same by
obligation specified in the chattel mortgage, paying or delivering to the mortgagee the
and amount due on such mortgage and the
reasonable costs and expenses incurred by such
breach of condition before the sale thereof. An
PAGE 369
attaching creditor who so redeems shall be

subrogated to the rights of the mortgagee and Quasi-Contracts
entitled to foreclose the mortgage in the same A quasi-contract is that juridical relation
manner that the mortgagee could foreclose it resulting from a lawful, voluntary and unilateral
act, and which has for its purpose the payment
of indemnity to the end that no one shall be
FORECLOSURE unjustly enriched or benefited at the expense of
The mortgagee, his executor, administrator or
another [Art. 2142]
assign may cause the mortgaged property or
any part thereof to be sold at a public auction by
a public officer: (A) NEGOTIORUM GESTIO
(1) After 30 days from the time of condition (UNAUTHORIZED
broken
(2) At a public place in the municipality where
MANAGEMENT)
This takes place when a person voluntarily takes
the mortgagor resides, or where the property
charge of anothers abandoned business or
is situated
(3) Provided at least 10 day-notice of the time, property without the owners authority [Art.
2144]. Reimbursement must be made to the
place, and purpose of such sale has been
gestor (i.e. one who carried out the business) for
posted at 2 or more public places in such
necessary and useful expenses, as a rule.
municipality, and
(4) The mortgagee, his executor, administrator,
or assign shall notify the mortgagor or THE OBLIGATION DOES NOT ARISE:
person holding under him and the persons (1) When the property or business is not
holding subsequent mortgages of the time neglected or abandoned;
and place of sale at least 10 days previous to (2) If in fact the manager has been tacitly
the sale: authorized by the owner.
(a) Either by notice in writing directed to him
or left at his abode, if within the In the first case, the provisions of Articles 1317,
municipality, or 1403, No. 1, and 1404 regarding unauthorized
(b) Sent by mail if he does not reside in such contracts shall govern.
municipality
In the second case, the rules on agency in Title X
DISPOSITION OF PROCEEDS of this Book shall be applicable. [Art. 2144]
The proceeds of the sale shall be applied to the
payment: OBLIGATIONS OF A GESTOR
(1) Costs and expenses of keeping and sale (1) Perform his duties with all the diligence of a
(2) Payment of the obligation secured by the good father of a family
mortgage (2) Pay the damages which through his fault
(3) The residue shall be paid to persons holding and negligence may be suffered by the
subsequent mortgages in their order owner of the property/business under his
(4) The balance shall be paid to the mortgagor management [Art. 2145]
or person holding under him on demand (3) Be liable for the acts of the persons to whom
he delegated all or some of his duties. This is
without prejudice to the direct obligation of
the delegate to the owner of the business.
[Art. 2146]
(4) Be liable for any fortuitous event under the
following conditions:
(a) If he undertakes risky operations which
the owner was not accustomed to embark
upon
(b) If he has preferred his own interest to that
of the owner
PAGE 370
(c) If he fails to return the property or property or business, the owner would still be
business after demand of the owner liable for the abovementioned obligations and
(d) If he assumed management in bad faith expenses, provided:
[Art. 2147] (1) The gestor has acted in good faith; AND
(e) If he is manifestly unfit to carry on the (2) The property or business is intact, ready to
management be returned to the owner. [Art. 2151]
(f) If by his intervention he prevented a more
competent person from taking up the EFFECT OF RATIFICATION
management. [Art. 2148] The ratification of the management by the
owner of the business produces the effects of an
Note: The gestor shall not be liable for e and express agency, even if the business may not
f if the management was assumed to save the have been successful. [Art. 2149]
property or business from imminent danger.
EXTINGUISHMENT OF
(5) Be personally liable for contracts which he
entered into with third persons, even though
MANAGEMENT
(1) When the owner repudiates or puts an end
he acted in the name of the owner, and there
thereto
shall be no right of action between the owner
(2) When the gestor withdraws from the
and third persons.
management, subject to Art. 2144
The gestor shall not be personally liable for
such contracts, provided:
insolvency of the owner or the gestor. [Art.
(a) The owner has expressly or tacitly ratified
2153]
the management, or
(b) When the contract refers to things
pertaining to the owner of the business. (B) SOLUTIO INDEBITI (UNDUE
[Art. 2152] PAYMENT)
This takes place when something is received
Note: The responsibility of two or more gestors when there is no right to demand it, and it was
shall be solidary, unless the management was unduly delivered through mistake. The
assumed to save the thing or business from recipient has the duty to return it [Art. 2154].
imminent danger.
This situation covers payment by reason of a
mistake in the construction or application of a
OBLIGATIONS OF THE OWNER OF doubtful or difficult question of law [Art. 2155]
THE PROPERTY OR BUSINESS
Although the management was not expressly WHEN DEBT NOT YET DUE
ratified, the owner who enjoys the advantages of If the payer was in doubt whether the debt was
the same shall: due, he may recover if he proves that it was not
(a) Be liable for the obligations incurred in his due. [Art. 2156]
interest
(b) Reimburse the gestor for the necessary and RESPONSIBILITY OF TWO OR MORE
useful expenses and for the damages the
latter may have suffered in the performance PAYEES
of his duties When there has been payment of what is not
due, their responsibility is solidary.
The above obligations shall be incumbent upon
the owner if the management had for its WHEN MONEY OR THING DELIVERED
purpose the prevention of an imminent and IS OWNED BY THIRD PERSON
manifest loss, although no benefit may have The payee cannot demand that the payor
been derived. [Art. 2150] prove his ownership of the thing delivered.
If the owner did not derive any benefit and there

was no imminent and manifest danger to the
PAGE 371
Nevertheless, should he discover that the PRESUMPTION OF PAYMENT BY

thing has been stolen and who its true owner MISTAKE, DEFENSE
is, he must advise the latter. The presumption arises if something which had
If the owner, in spite of such information, does never been due or had already been paid was
not claim it within the period of one month, delivered; but he from whom the return is
the payee shall be relieved of all responsibility claimed may prove that the delivery was made
by returning the thing deposited to the payor. out of liberality or for any other just cause.
If the payee has reasonable grounds to
believe that the thing has not been lawfully (C) OTHER QUASI-CONTRACTS
acquired by the payor, the former may return (1) When, without the knowledge of the person
the same. [Art. 2158] obliged to give support, it is given by a
stranger, the latter shall have a right to claim
LIABILITY OF PAYEE the same from the former, unless it appears
If in bad faith, he shall be liable: that he gave it out of piety and without
(1) For legal interest if a sum of money is intention of being repaid. [Art. 2164]
involved, or (2) When funeral expenses are borne by a third
(2) For the fruits received or which should have person, without the knowledge of those
been received if the thing produces fruits relatives who were obliged to give support to
AND the deceased, said relatives shall reimburse
(3) For any loss or impairment of the thing for the third person, should the latter claim
any cause, and reimbursement. [Art. 2165]
(4) For damages to the person who delivered (3) When the person obliged to support an
the thing, until it is recovered. [Art. 2159] orphan, or an insane or other indigent person
unjustly refuses to give support to the latter,
If in good faith, he shall be liable: any third person may furnish support to the
(1) For the impairment or loss of the thing needy individual, with right of
certain and determinable or its accessories reimbursement from the person obliged to
and accessions insofar as he has thereby give support. The provisions of this article
been benefited. apply when the father or mother of a child
(2) For the return of the price or assign the under eighteen years of age unjustly refuses
action to collect the sum if he has alienated to support him. [Art. 2166]
the same. [Art. 2160] (4) When through an accident or other cause a
person is injured or becomes seriously ill, and
EXEMPTION FROM THE OBLIGATION he is treated or helped while he is not in a
TO RESTORE THE PAYMENT UNDULY condition to give consent to a contract, he
MADE shall be liable to pay for the services of the
A person who, believing in good faith that the physician or other person aiding him, unless
payment was being made of a legitimate and the service has been rendered out of pure
subsisting claim, generosity. [Art. 2167]
(1) destroyed the document, or (5) When during a fire, flood, storm, or other
(2) allowed the action to prescribe, or calamity, property is saved from destruction
(3) gave up the pledges, or by another person without the knowledge of
(4) cancelled the guaranties for his right the owner, the latter is bound to pay the
shall be exempt from the obligation to restore. former just compensation. [Art. 2168]
(6) When the government, upon the failure of
The person who paid unduly may proceed only any person to comply with health or safety
against the true debtor or the guarantors with regulations concerning property, undertakes
regard to whom the action is still effective. [Art. to do the necessary work, even over his
2162] objection, he shall be liable to pay the
expenses. [Art. 2169]
PAGE 372
(7) When by accident or other fortuitous event, WHEN RULES ON PREFERENCE

movables separately pertaining to two or
more persons are commingled or confused, ARE APPLICABLE
the rules on co-ownership shall be (1) There are two or more creditors
applicable. [Art. 2170] (2) With separate and distinct claims
(8) The rights and obligations of the finder of (3) Against the same debtor
lost personal property shall be governed by (4) Who has insufficient property AND
Articles 719 and 720. [Art. 2171] (5) Is insolvent
(9) The right of every possessor in good faith to
reimbursement for necessary and useful CLASSIFICATION OF CREDITS
expenses is governed by Article 546. [Art. (1) Special Preferred Credits
2172] (a) These are considered as mortgages or
(10) When a third person, without the pledges of real or personal property, or
knowledge of the debtor, pays the debt, the liens within the purview of legal provisions
rights of the former are governed by Articles governing insolvency. [NCC 2243]
1236 and 1237. [Art. 2173] (b) Taxes in NCC 2241 and 2242 shall first be
(11) When in a small community a nationality of satisfied. [NCC 2243] Only taxes enjoy a
the inhabitants of age decide upon a preference; for all other claims, there is
measure for protection against lawlessness, only a concurrence of credits. [Gomez-
fire, flood, storm or other calamity, any one Somera]
who objects to the plan and refuses to (c) They exclude all other claims to the extent
contribute to the expenses but is benefited of the value of the affected property.
by the project as executed shall be liable to (d) These take precedence over ordinary
pay his share of said expenses. [Art. 2174] preferred credits insofar as the property,
(12) Any person who is constrained to pay the to which the liens attach, is concerned.
taxes of another shall be entitled to [Gomez-Somera]
reimbursement from the latter. [Art. 2175] (e) Pro-rating:
TOTAL AMOUNT TO BE PAID is equal to:
Credit
Concurrence and ------------------ x value of property
Total amount of
Preference of Credits concurring
debts
Concurrence of credits implies possession by
two or more creditors of equal rights or
(2) Ordinary Preferred Credits
privileges over the same property or all of the
(a) These enjoy a preference, excluding the
property of the debtor.
credits that are later in order, but only as
against the value of the property not
Preference of credits is the right held by a
otherwise subjected to any special
creditor to be preferred in the payment of his
preferred credit. [Gomez-Somera]
claim above others out of the debtors assets. (b) NCC 2244 does not create a lien on
specific property; rather, it create rights in
Preference is merely a method adopted to
favor of certain creditors to have the free
determine and specify the order in which credits
property of the debtor applied in
should be paid, as opposed to a lien, which
accordance with an order of preference.
creates a charge on a particular property. [DBP
(3) Common Credits
v. NLRC (1990)]
These enjoy no preference, and there is only a
concurrence of credits, which must be paid pro
rata regardless of dates [NCC 2245, 2251].
PAGE 373
SPECIAL PREFERRED CREDITS as such movables are in the hotel, but not for
money loaned to the guests;
ON SPECIFIC MOVABLE (11) Credits for seeds and expenses for
PROPERTY [ART. 2241] cultivation and harvest advanced to the
With reference to specific movable property of debtor, upon the fruits harvested;
the debtor, the following claims or liens shall be (12) Credits for rent for one year, upon the
preferred: personal property of the lessee existing on
(1) Duties, taxes and fees due thereon to the the immovable leased and on the fruits of
State or any subdivision thereof; the same, but not on money or instruments
(2) Claims arising from misappropriation, of credit;
breach of trust, or malfeasance by public (13) Claims in favor of the depositor if the
officials committed in the performance of depositary has wrongfully sold the thing
their duties, on the movables, money or deposited, upon the price of the sale.
securities obtained by them;
(3) Claims for the unpaid price of movables sold, In the foregoing cases, if the movables to which
on said movables, so long as they are in the the lien or preference attaches have been
possession of the debtor, up to the value of wrongfully taken, the creditor may demand
the same; and if the movable has been them from any possessor, within thirty days
resold by the debtor and the price is still from the unlawful seizure.
unpaid, the lien may be enforced on the
price; this right is not lost by the SPECIAL PREFERRED CREDITS
immobilization of the thing by destination,
provided it has not lost its form, substance ON SPECIFIC IMMOVABLE
and identity; neither is the right lost by the PROPERTY AND REAL RIGHTS
sale of the thing together with other property [ART. 2242]
for a lump sum, when the price thereof can With reference to specific immovable property
be determined proportionally; and real rights of the debtor, the following
(4) Credits guaranteed with a pledge so long as claims, mortgages and liens shall be preferred,
the things pledged are in the hands of the and shall constitute an encumbrance on the
creditor, or those guaranteed by a chattel immovable or real right:
mortgage, upon the things pledged or (1) Taxes due upon the land or building;
mortgaged, up to the value thereof; (2) For the unpaid price of real property sold,
(5) Credits for the making, repair, safekeeping or upon the immovable sold;
preservation of personal property, on the (3) Claims of laborers, masons, mechanics and
movable thus made, repaired, kept or other workmen, as well as of architects,
possessed; engineers and contractors, engaged in the
(6) Claims for laborers' wages, on the goods construction, reconstruction or repair of
manufactured or the work done; buildings, canals or other works, upon said
(7) For expenses of salvage, upon the goods buildings, canals or other works;
salvaged; (4) Claims of furnishers of materials used in the
(8) Credits between the landlord and the construction, reconstruction, or repair of
tenant, arising from the contract of tenancy buildings, canals or other works, upon said
on shares, on the share of each in the fruits buildings, canals or other works;
or harvest; (5) Mortgage credits recorded in the Registry of
(9) Credits for transportation, upon the goods Property, upon the real estate mortgaged;
carried, for the price of the contract and (6) Expenses for the preservation or
incidental expenses, until their delivery and improvement of real property when the law
for thirty days thereafter; authorizes reimbursement, upon the
(10) Credits for lodging and supplies usually immovable preserved or improved;
furnished to travellers by hotel keepers, on (7) Credits annotated in the Registry of Property,
the movables belonging to the guest as long in virtue of a judicial order, by attachments or
PAGE 374
executions, upon the property affected, and (10) Taxes and assessments due any province,
only as to later credits; other than those referred to in Articles 2241,
(8) Claims of co-heirs for warranty in the No. 1, and 2242, No. 1;
partition of an immovable among them, (11) Taxes and assessments due any city or
upon the real property thus divided; municipality, other than those indicated in
(9) Claims of donors or real property for Articles 2241, No. 1, and 2242, No. 1;
pecuniary charges or other conditions (12) Damages for death or personal injuries
imposed upon the donee, upon the caused by a quasi-delict;
immovable donated; (13) Gifts due to public and private institutions of
(10) Credits of insurers, upon the property charity or beneficence;
insured, for the insurance premium for two (14) Credits which, without special privilege,
years. [1923a] appear in (a) a public instrument; or (b) in a
final judgment, if they have been the subject
ORDINARY PREFERRED of litigation. These credits shall have
preference among themselves in the order of
CREDITS [ART. 2244] priority of the dates of the instruments and of
With reference to other property, real and the judgments, respectively. [1924a]
personal, of the debtor, the following claims or
credits shall be preferred in the order named:
PD 442 (Labor Code, as amended), Art. 110.
(1) Proper funeral expenses for the debtor, or
Worker preference in case of bankruptcy
children under his or her parental authority
In the event of bankruptcy or liquidation of an
who have no property of their own, when
employers business, his workers shall enjoy first
approved by the court;
preference as regards their wages and other
(2) Credits for services rendered the insolvent by
monetary claims, any provisions of law to the
employees, laborers, or household helpers
contrary notwithstanding. Such unpaid wages
for one year preceding the commencement
and monetary claims shall be paid in full before
of the proceedings in insolvency;
claims of the government and other creditors
(3) Expenses during the last illness of the debtor
may be paid.
or of his or her spouse and children under his
or her parental authority, if they have no
property of their own; COMMON CREDITS [ART. 2245]
(4) Compensation due the laborers or their Credits of any other kind or class, or by any
dependents under laws providing for other right or title not comprised in the four
indemnity for damages in cases of labor preceding articles, shall enjoy no preference.
accident, or illness resulting from the nature
of the employment; ORDER OF PREFERENCE OF CREDITS
(5) Credits and advancements made to the (1) Credits which enjoy preference with respect
debtor for support of himself or herself, and to specific movables exclude all others to the
family, during the last year preceding the extent of the value of the personal property
insolvency; to which the preference refers [NCC 2246].
(6) Support during the insolvency proceedings, (2) If there are two or more credits with respect
and for three months thereafter; to the same specific movable property, they
(7) Fines and civil indemnification arising from a shall be satisfied pro rata, after the payment
criminal offense; of duties, taxes and fees due the State or any
(8) Legal expenses, and expenses incurred in subdivision thereof [NCC 2247]
the administration of the insolvent's estate (3) Those credits which enjoy preference in
for the common interest of the creditors, relation to specific real property or real rights
when properly authorized and approved by exclude all others to the extent of the value
the court; of the immovable or real right to which the
(9) Taxes and assessments due the national preference refers [NCC 2248].
government, other than those mentioned in (4) If there are two or more credits with respect
Articles 2241, No. 1, and 2242, No. 1; to the same specific real property or real
PAGE 375
rights, they shall be satisfied pro rata, after

the payment of the taxes and assessment of
the taxes and assessments upon the
immovable property or real right [NCC 2249].
(5) The excess, if any, after the payment of the
credits which enjoy preference with respect
to specific property, real or personal, shall be
added to the free property which the debtor
may have, for the payment of other credits
[NCC 2250].
(6) Those credits which do not enjoy any
preference with respect to specific property,
and those which enjoy preference, as to the
amount not paid, shall be satisfied according
to the following rules:
(a) Order established by NCC 2244
(b) Common credits referred to in NCC 2245
shall be paid pro rata regardless of dates
[NCC 2251].
EXEMPT PROPERTY
(1) Present property
(a) Family home [NCC 152, 153 and 155]
(b) Right to receive support, as well as money
or property obtained by such support,
shall not be levied upon on attachment or
execution. [NCC 205]
(c) Rule 39, Sec. 13
(d) Sec 118, Public Land Act [CA 141, as
amended]
(2) Future property:
(a) A debtor who obtains a discharge from
his debts on account of insolvency, is not
liable for the unsatisfied claims of his
creditors with said property [Sec. 68 and
69, Insolvency Law, Act 1956]
(3) Property in custodia legis and of public
dominion
PAGE 376
PAGE 377
UP LAW BOC LAND TITLES AND DEEDS CIVIL LAW
Land Title (2) Less-than-Freehold Estate Signifies some

sort of right short of title
(a) Estate for Years In the nature of a
CONCEPT lease; grantee or lessee takes over
It is the evidence of the right of the owner or the possession of the land for a period
extent of his interest, by which he can maintain agreed upon but the grantor retains the
control, and as a rule, assert right to exclusive legal title to the property
possession and enjoyment of the property. (b) Tenancy from Period to Period Also in
[Pena] the nature of a lease which may run
from month to month or from year to
year, with the peculiarity of automatic
Deed renewal from time to time, unless
expressly terminated by either party
CONCEPT (c) Tenancy at Will Another form of lease
A written instrument executed in accordance agreement where a person is permitted
with law, wherein a person grants or conveys to to occupy the land of another without
another certain land, tenements or any stipulation as to period, but either
hereditaments. party reserves the right to terminate the
occupation at will or at any time
ELEMENTS OF A DEED
(a) Grantor Land Registration
(b) Grantee
(c) Words of Grant CONCEPT
(d) Description of the property involved
A judicial or administrative proceeding whereby
(e) Signature of the grantor
a persons claim of ownership over a particular
(f) At least 2 witnesses
land is determined and confirmed or recognized
(g) Notarial acknowledgment
so that such land and the ownership thereof
may be recorded in a public registry.
Estate
NATURE OF LAND
CONCEPT REGISTRATION
An estate, strictly speaking, represents the
nature, extent, degree, and quantity of a Judicial proceedings for the registration of lands
persons interest in land. throughout the Philippines shall be in Rem and
shall be based on the generally accepted
TYPES OF ESTATE principles underlying the Torrens system [Sec. 2,
(1) Freehold Estate Indicates title of par. 1, PD 1529]
ownership
(a) Fee Simple An absolute title in It is therefore binding on the whole world
perpetuity; Title to land is conferred because by the description in the notice (of
upon a man and his heirs absolutely initial hearing of the application for registration)
and without any limitation imposed To Whom It May Concern, all world are made
upon the estate parties defendant. [Aquino, citing Esconde v.
(b) Fee Tail One designed to pass title Borlongay,( 1987)]
from grantee to his heirs, in the intent of
the grantor being to keep the property
in the grantees line of issue
(c) Life Estate One held for the duration
of the life of the grantee; In some cases,
it may terminate earlier as by forfeiture
PAGE 378
LAWS IMPLEMENTING LAND (b) To facilitate transactions relative

thereto by giving the public the right to
REGISTRATION rely upon the face of the Torrents
(1) Property Registration Decree [PD 1529, as certificate of title and to dispense with
amended] the need of inquiring further
(2) Cadastral Act [Act 2259, as amended]
(3) Public Land Act [CA 141, as amended]
(4) Emancipation Decree [PD 27, as amended] OBJECT OF REGISTRATION
(5) Comprehensive Agrarian Reform Law of Only real property or real rights may be the
1988 [RA 6657, as amended] object of registration under the existing land
(6) Indigenous Peoples Rights Act of 1997 [RA registration laws.
8371]
CLASSIFICATION OF LANDS
To simplify and streamline land registration (1) Private or public
proceedings, Presidential Decree No. 1529 was (2) Alienable or inalienable
issued on June 11, 1978, otherwise known as the (3) Registered or unregistered
Property Registration Decree, governing (4) Registrable or Non-registrable
registration of lands under the Torrens system
as well as the recording of transactions relating REGISTRABLE LANDS
to unregistered lands, including chattel (1) Alienable public agricultural lands - If in the
mortgages. This Decree consolidates, in effect, public domain, the land must be classified
all pre-existing laws on property registration as alienable and disposable. It must be
with such appropriate modifications as are classified as such at the time of filing the
called for by existing circumstances. [Pena] application for registration. [Republic vs. CA
and Naguit (2005)]
PURPOSES OF LAND (2) Private Lands
REGISTRATION
(1) To notify and protect the interests of NON-REGISTRABLE LANDS
strangers to a given transaction, who may Those found in the Civil Code dealing with non-
be ignorant thereof [Sapto, et al. v. Fabiana registrable properties (e.g. property of public
(1958)] dominion)
(2) As held in Legarda v. Saleeby (1915)
(a) To quiet title to the land and to stop
forever any question as to the legality of
Torrens System
said title
(b) To relieve the land of unknown claims CONCEPT
(c) To guarantee the integrity of land titles A system for registration of land under which,
and to protect their indefeasibility once upon landowners application, the court may,
the claim of ownership is established after appropriate proceedings, direct the
and recognized issuance of a certificate of title. [Blacks Law
(d) To give every registered owner complete Dictionary]
peace of mind
(e) To issue a certificate of title to the By Torrens system generally are meant those
owner which shall be the best evidence systems of registration of transactions with
of his ownership of the land interest in land whose declared object is, under
(f) To avoid conflicts of title in and to real governmental authority, to establish and certify
estate and to facilitate transactions to the ownership of an absolute and
(3) As held in Capitol Subdivisions, Inc. v. indefeasible title to realty, and to simplify its
Province of Negros Occidental (1963) transfer. [Grey-Alba v. Dela Cruz (GR No. L-524)]
(a) To avoid possible conflicts of title in and
to real property, and
PAGE 379
HISTORY registration, in the certificate, or which may arise

The boldest effort to grapple with the problem subsequent thereto. [Pena]
of simplification of title to land was made by Mr.
(afterwards Sir Robert) Torrens, a layman, in ADMINISTRATION OF THE
South Australia in 1857. In the Torrens system TORRENS SYSTEM
title by registration takes the place of "title by (1) Land Registration Authority
deeds" of the system under the "general" law. A The agency charged with the efficient
sale of land, for example, is effected by a execution of the laws relative to the
registered transfer, upon which a certificate of registration of lands
title is issued. The certificate is guaranteed by Under the executive supervision of the
statute, and, with certain exceptions, constitutes DOJ
indefeasible title to the land mentioned therein. Consists of an Administrator assisted by 2
The object of the Torrens system, them, is to do Deputy Administrators
away with the delay, uncertainty, and expense of (2) Register of Deeds
the old conveyancing system. Constitutes a public repository of records
of instruments affecting registered or
The Torrens system was introduced in the unregistered lands and chattel mortgages
Philippines by Act No. 496, which took effect on in the province or city wherein such office
Jan. 1, 1903. This was later amended and is situated
superseded by PD 1529 which took effect on Headed by the Register of Deeds, assisted
June 11, 1978. by a Deputy
The underlying principle of the Torrens system
is security with facility in dealing with land. This CERTIFICATE OF TITLE
is made possible by defining the absolute status
of a given property in a certificate of title with a THE TORRENS TITLE
governmental and universal guaranty. This Certificate of ownership issued by the Register
certificate of title should better be known as of Deeds naming and declaring the owner of the
certificate of title and encumbrances. In the real property described therein free from all
words of Torrens himself the main objects are liens and encumbrances, except such as may be
to simplify, quicken, and cheapen the transfer expressly noted thereon or otherwise reserved
of real estate and to render title safe and by law.
indefeasible. [Ponce (1964)] (1) Original Certificate of Title (OCT) it is the
first certificate of title issued in the name of
ADVANTAGES [Legarda v Saleeby (1915)] the registered owner by the Register of
(1) Secures title Deeds covering a parcel of land which had
been registered under the Torrens System,
(2) Protection against fraud
by virtue of judicial or administrative
(3) Simplified dealings
proceedings
(4) Restoration of the estates to its just value,
(2) Transfer Certificate of Title (TCT) the
whose depreciation is caused by some blur,
subsequent certificate of title pursuant to
technical defect
any deed of transfer or conveyance to
(5) Barred the recurrence of faults in the title
another person. The Register of Deeds shall
make a new certificate of title and give the
NATURE registrant an owners duplicate certificate.
Judicial in Nature The previous certificate shall be stamped
cancelled.
PURPOSE (3) Patents Whenever public land is by the
The real purpose of the Torrens system of Government alienated, granted or conveyed
registration is to quiet title to land; to put a stop to any person, the same shall be brought
forever to any question of the legality of the forthwith under the operation of this Decree
[Sec. 103, par. 1, PD 1529]
PAGE 380
(a) Patents only involve public lands which Exceptions:

are alienated by the Government (a) Those claims noted on the certificate
pursuant to the Public Land Act [CA 141, (b) Liens, claims, or rights arising or
as amended] existing under the laws and the
(b) The patent (even if denominated as Constitution, which are not by law
deed of conveyance) is not really a required to appear on record in the
conveyance but a contract between the Register in order to be valid
grantee and the Government and (c) Unpaid real estate taxes levied and
evidence of authority to the Register of assessed within 2 years immediately
Deeds to make registration. preceding the acquisition of any right
(c) The act of registration is the operative over the land by an innocent purchaser
act to affect and convey the land. for value
PROBATIVE VALUE (3) Title to the land becomes non-prescriptible

A Torrens Certificate of Title is valid and (a) Even adverse, notorious, and continuous
enforceable against the whole world. It may be possession under claim of ownership for
received in evidence in all courts of the the period fixed by law is ineffective
Philippines, and shall be conclusive as to all against a Torrens title [JM Tuason and
matters contained therein, principally the Co. Inc. v. CA (1979)]
identity of the owner of the covered land (b) The fact that the title to the land was
thereby and identity of the land. lost does not mean that the land ceased
to be registered land before the
A Torrens title, once registered, cannot be reconstitution of its title. It cannot
defeated, even by adverse, open and notorious perforce be acquired by prescription.
possession. A registered title under the Torrens [Ruiz v. CA (1977)]
system cannot be defeated by prescription. The (4) Land becomes incontrovertible and
title, once registered, is notice to the whole indefeasible. A decree of registration and
world. All persons must take notice. No one can registered title cannot be impugned,
plead ignorance of the registration. [Egao vs. CA enlarged, altered, modified, or diminished
(1989)] either in collateral or direct proceeding after
the lapse of the 1-year period prescribed by
the law.
EFFECT OF REGISTRATION
UNDER THE TORRENS SYSTEM Exceptions:
(1) Land is placed under the operation of the (1) If previous valid title of the same land
Torrens system exists
(2) Claims and liens of whatever character (2) When the land covered is not capable of
existing against the land prior to the registration
issuance of the certificate of title are cut off (3) When acquisition of certificate is
by such certificate and the certificate so attended by fraud
issued binds the whole world, including the
government (5) Torrens certificate is presumed valid and
devoid of flaws.
General rule: It is an elemental rule that a
decree of registration bars all claims and NOTE:
rights which arose or may have existed prior Under the Torrens system, registration only
to the decree of registration. By the gives validity to the transaction or creates a lien
issuance of the decree, the land is bound upon the land. It merely confirms, but does not
and title thereto quieted, subject only to confer, ownership [Lu v. Manipon, (2002)]
certain exceptions under the property
registration decree. [Heirs of Alejandra Delfin
v. Avelina Rabadon (2013)]
PAGE 381
EFFECT OF NON- registrant has already subdivided the land and

sold the same to innocent third parties. A
REGISTRATION partys long inaction or passivity in asserting his
General rule: If a purchaser, mortgagee or rights over disputed property precludes him
grantee should fail to register his deed the from recovering the same. [Heirs of Teodoro dela
conveyance, in light of our existing registration Cruz vs. CA (1998); Aurora Ignacio vs. Valeriano
laws, shall not be valid against any person Basilio, et al. (2001)].
unless registered.
Exceptions:
(1) The grantor, Regalian Doctrine
(2) His heirs and devisees, and
(3) Third persons having actual notice or
knowledge thereof. CONCEPT
A western legal concept that was first
It is a settled rule that lands under a Torrens introduced by the Spaniards into the country
title cannot be acquired by prescription or through the laws of the Indies and the Royal
adverse possession. Section 47 of P.D. No. 1529, Cedulas. Whereby the Philippines passed to
the Property Registration Decree, expressly Spain by virtue of discovery and conquest.
provides that no title to registered land in Consequently, all lands became the exclusive
derogation of the title of the registered owner patrimony and dominion of the Spanish Crown.
shall be acquired by prescription or adverse [Agcaoli]
possession. [Dream Village Neighborhood
Association, Inc. v. Bases Conversion Enshrined in the Constitution [Art XII, Sec 2 & 3],
Development Authority (2013)] it states that all lands of public domain belong
to the state, thus private title to land must be
traced to some grant, express or implied, from
DEALINGS IN LAND BEFORE the state, i.e. The Spanish Crown or its
ISSUANCE OF DECREE successors, the American Colonial government
With the filing of an application for registration, and thereafter the Philippine Republic
the land described therein does not cease to
become open to any lawful transaction. If the It does not negate native title to lands held in
transaction takes place before the issuance of private ownership since time immemorial [Cruz
the decree of registration, Section 22 of PD 1529 vs. Sec. of Environment and Natural
provides that the instrument is to be presented Resources(2000)]
to the RTC, together with a motion praying that
the same be considered in relation with the It recognized ownership of land by Filipinos
pending application. independent of any grant from the Spanish
crown on the basis of possession since time
However, if the motion is filed after the decision immemorial (cf: Carino v Insular Government), it
of adjudication has become final but before the is presumed to have been held prior the Spanish
issuance of the decree by the Administrator of conquest and never to have been public land.
Land Registration Authority, the court shall
require the interested party to pay the fees EFFECTS
prescribed as if such instrument had been (1) All lands of public domain belong to the
presented for registration in the office of the state, and that the State is the source of any
Register of Deeds. [Pena] asserted right to ownership in land and
charged with the conservation of such
LACHES patrimony [Republic v IAC (GR No. 71285)]
Laches sets in if it would take 18 years for a (2) All lands not otherwise appearing to be
person to file an action to annul the land clearly within private ownership are
registration proceedings, especially so if the
PAGE 382
presumed to belong to the State [Dir. Of categorically declares ancestral lands and
Lands v. IAC (1993)] domains held by native title as never to have
(3) Any applicant for judicial confirmation of an been public land. [Cruz v. Sec. of Environment
imperfect title has the burden of proving, by and Natural Resources (2000]]
incontrovertible evidence, that the (a) land
applied for is alienable and disposable
public land; and, (b) the applicant, by Citizenship Requirement
himself or through his predecessors-in-
interest had occupied and possessed the INDIVIDUALS
land, in the concept of owner, openly,
continuously, exclusively, and adversely
since June 12, 1945, or earlier. [Pelbel CONSTITUTIONAL REQUIREMENTS
Manufacturing Corp. v. CA (GR No. 141325)] AND LIMITATIONS
Art. XII, Sec. 3, Constitution. Lands of the public
CONCEPT OF NATIVE TITLE, domain are classified into agricultural, forest or timber,
mineral lands and national parks. Agricultural lands of
TIME IMMEMORIAL the public domain may be further classified by law
POSSESSION according to the uses to which they may be devoted.
A recognized exception to the theory of jura Alienable lands of the public domain shall be limited
to agricultural lands. Private corporations or
regalia, the ruling in Carino v Insular Government
associations may not hold such alienable lands of the
institutionalized the recognition of the existence public domain except by lease, for a period not
of native title to land, or ownership of land by exceeding twenty-five years, renewable for not more
Filipinos by virtue of possession under a claim of than twenty-five years, and not to exceed one
ownership since time immemorial and thousand hectares in area. Citizens of the Philippines
independent of any grant from the Spanish may lease not more than five hundred hectares, or
Crown [Agcaoli] acquire not more than twelve hectares thereof, by
purchase, homestead, or grant.
Lands under native title are not part of public
domain, lands possessed by an occupant and KRIVENKO DOCTRINE
his predecessors since time immemorial, such The capacity to acquire private land is made
possession would justify the presumption that dependent upon the capacity to acquire or hold
the land had never been part of the public lands of public domain. Private land may be
domain or that it had been private property transferred or conveyed only to individuals or
even before the Spanish conquest [Republic v entities qualified to acquire lands of public
CA (GR No. 130174)] domain [Bernas]
CERTIFICATE OF ANCESTRAL The 1935 Constitution reserved the right xxx for
DOMAIN TITLE Filipino citizens or corporations at least sixty
A formal recognition, when solicited by percent of the capital of which was owned by
Indigenous Cultural Communities/ Indigenous Filipinos. Aliens, whether individuals or
People (ICCs/IPs) concerned, shall be embodied corporations, have been disqualified from
in a Certificate of Ancestral Domain Title acquiring public lands; hence they have also
(CADT), which shall recognize the title of the been disqualified from acquiring private lands.
concerned ICCs/IPs over the territories [Krivenko v ROD (GR No. L-630); Ong Ching Po v
identified and delineated [Sec. 11, RA 8371] CA (GR. No. 113427)]
Like a Torrens title, a CADT is evidence of General rule: Non-Filipinos cannot acquire or
private ownership of land by native title. Native hold title to private lands of public domain,
title, however, is a right of private ownership except only by way of legal succession [Halili v
particularly granted to ICCs/IPs over their CA (GR No. 113539)]
ancestral lands and domains. The IPRA *Based on Art. XII, Sec. 2, 5, Constitution
PAGE 383
Exceptions: (2) For patrimonial property of the State [Art.

(1) Aliens by way of hereditary succession XII, Sec. 3, Constitution]
(2) Natural born citizens who have lost their (a) Lease only for a limited period of 25
citizenship- limited to 5,000 sq. m. for years; cannot own land of the public
urban land and 3 hectares for rural land [RA domain
No. 7042 as amended by RA No. 8179] (b) Limited to 1,000 hectares
(3) Aliens, although disqualified to acquire (c) Applies to both Filipino and Foreign
lands of public domain, may lease private Corporations
land for a reasonable period provided, that
such lease does not amount to a virtual CORPORATION SOLE
transfer of ownership. They may also be A corporation sole may acquire and register
given an option to buy property on the private agricultural land [RC Apostolic
condition that he is granted Philippine Administrator of Davao v LRC (GR No. L-8415)].
citizenship. [Llantino v Co liong Chong (GR A corporation sole, which consists of one person
No. 29663)] only, is vested with the right to purchase and
(4) Lands acquired by an American citizen prior hold real estate and register the same in trust
the proclamation of Philippine for the faithful or members of the religious
Independence on July 4, 1946 but after the society or church for which the corporation was
passage of the 1935 Constitution may be organized.
registered, based on the ordinance
appended to the 1935 Constitution [Moss v
Director of Lands (GR No. L-27170)] Original Registration
(5) Land sold to an alien which is now in the
hands of a naturalized citizen can no longer CONCEPT
be annulled [De Castro v Tan (GR No. L- This is a proceeding brought before the land
31956)]. The litigated property is now in the registration court to determine title or
hands of a naturalized Filipino. It is no ownership of land on the basis of an application
longer owned by a disqualified vendee. The for registration or answer by a claimant in a
purpose of the prohibition ceases to be cadastral registration.
applicable. [Barsobia v Cuenco (GR No. L-
33048)]
Original Registration Subsequent Registration
CORPORATIONS When right of ownership Any transaction affecting

Private corporations may not hold alienable or title to land is for the such originally registered
lands of the public domain except by lease for a first time made of public land, if in order, may be
record registered in the Office of
period not exceeding twenty-five years, the Register of Deeds
renewable for not more than twenty-five years, concerned
and not to exceed one thousand hectares in
area. (Art. XII, Sec. 3, Constitution)
KINDS OF ORIGINAL
LIMITATIONS TO OWNERSHIP OF REGISTRATION
LANDS (1) Voluntary by filing with the proper court
(1) For private lands under:
(a) At least 60% Filipino [Art. XII, Sec. 7, (a) PD 1529, Property Registration Decree
Constitution] (b) CA 141, Public Land Act
(b) Restricted as to extent reasonably (c) RA 8371, IPRA
necessary to enable it to carry out the (2) Involuntary as in Cadastral Proceedings
purpose for which it was created This is compulsory registration initiated by
(c) If engaged in agriculture, it is restricted the government to adjudicate ownership
to 1,024 hectares of the land
PAGE 384
Involuntary on the part of the claimant the occupation of the Philippines by the
but they are compelled to substantiate United States
their claim or interest *Note: They may enter a homestead of not
exceeding 24 hectares of agricultural land
WHO MAY APPLY of the public domain
(1) Under Sec. 14, PD 1529 (3) Under RA 8371
(a) Those who by themselves or through (a) Sec. 11 Formal recognition of ancestral
their predecessors-in-interest, have domains by virtue of Native Title may be
been in open, continuous, exclusive and solicited by ICCs/IPs concerned
notorious possession and occupation of (b) Sec. 12 Option to secure certificate of
alienable and disposable lands of the title under CA 141 or Land Registration
public domain under a bona fide claim Act 496
of ownership since June 12, 1945, or (i) Individual members of cultural
earlier. communities with respect to
(b) Those who have acquired ownership of individually-owned ancestral lands
private lands by prescription under the who, by themselves or through their
provisions of existing laws. predecessors-in -interest, have
(c) Those who have acquired ownership of been in continuous possession and
private lands or abandoned river beds occupation of the same in the
by right or accession or accretion under concept of owner since time
the existing laws. immemorial or for a period of not
(d) Those who have acquired ownership of less than thirty (30) years
land in any other manner provided for immediately preceding the approval
by law. of this Act and uncontested by the
(i) If land is owned in common, all co- members of the same ICCs/IPs
owners shall file the application shall have the option to secure title
jointly to their ancestral lands
(ii) If land has been sold under pacto (ii) Option granted shall be exercised
de retro, the vendor a retro may file within 20 years from the approval of
an application for the original RA 8371
registration of the land, provided,
however that should the period for WHERE TO FILE
redemption expire during the The court that should take cognizance of a
pendency of the registration registration case is that which has territorial
proceedings and ownership to the jurisdiction over the property.
property consolidated in the vendee
a retro, the latter shall be General rule: RTC of the province, city, or
substituted for the applicant and municipality where the property is situated. The
may continue the proceedings. RTC shall have exclusive jurisdiction over all
(iii) A trustee on behalf of his principal applications original for registration of title, with
may apply for original registration power to hear and determine all questions
of any land held in trust by him, arising upon such applications or petition. [Sec.
unless prohibited by the instrument 2, par. 2, P.D. No. 1529]
creating the trust.
(2) Under Sec. 12, CA 141; Any person who: Exception: Delegated jurisdiction to the MTC,
(a) Is a citizen of the Philippines over the MeTC, and MCTC by the Supreme Court in
age of 18, or the head of a family cadastral and land registration cases if:
(b) Does not own more than 24 hectares of (1) There is no controversy over the land, or
land in the Philippines, or has not had (2) Its value is less than P100,000 [Sec. 34, BP
the benefit of any gratuitous allotment 129]
of more than 24 hectares of land since
PAGE 385
PROCEDURE IN ORDINARY (d) All original muniments of title in the

possession of the applicant which prove
LAND REGISTRATION his rights, to the title he prays for or to
the land he claims; and
STEP 1: Survey of the land by the Bureau of (e) Certificate in quadruplicate of the city or
Lands or a duly registered private surveyor provincial treasurer of the assessed
Note: No plan of such survey, whether it be value of the land, at its last assessment
original or subdivision, may be admitted in land for taxation, or, in the absence thereof,
registration proceedings until approved by the that of the next preceding year.
Director of lands [Sec. 1858, Administrative However, in case the land has not been
Code] assessed, the application may be
accompanied with an affidavit in
STEP 2: Filing of application for registration by quadruplicate of the fair market value of
the applicant: the land, signed by three disinterested
(1) Form of the application persons.
(a) In writing (4) Amendments to the Application
(b) Signed by the applicant/s or person Sec. 19, PD 1529 permits the applicants to
duly authorized in his behalf amend the application at any stage of the
(c) Sworn before any officer authorized to proceedings upon such just and
administer oath for the province or city reasonable terms as the court may order;
where the application was actually However, Sec. 23, PD 1529 mandates that
signed there is a need to comply with the
(d) Application is presented in duplicate required publication and notice as in an
(2) Contents of the application: original application if the amendment is
(a) A description of the land substantial as in:
(b) The citizenship and civil status of the (a) A change in the boundaries
applicant, whether single or married, (b) An increase in the area of the land
and, if married, the name of the wife or applied for; or
husband, and, if the marriage has been (c) The inclusion of an additional land
legally dissolved, when and how the (5) Special Cases:
marriage relation terminated. It shall If the land bounded by a road, the
also state applicant must state in his application if
(c) The full names and addresses of all he claims any portion of the land within
occupants of the land and those of the the limits of the road, or if he likes to have
adjoining owners, if known, and, if not the boundaries determined. [Sec. 20, PD
known, it shall state the extent of the 1529]
search to find them. If the applicant is a non-resident, he shall
(d) Whether the property is conjugal, appoint an agent or representative who is
paraphernal or exclusively owned by the a Philippine resident. [Sec. 16, PD 1529]
applicant. Intestate Estate of Don Mariano San
(3) Documents to accompany the application Pedro vs. CA (1996): A person claiming
(from Regulations in Ordinary Land ownership of real property must clearly
Registration Cases) identify the land claimed by him.
(a) Tracing-cloth plan duly approved by the In re: Application for Land Registration vs.
Director of Lands, together with two Republic (2008): An applicant in a land
blueprint or photographic copies registration case must prove the facts and
thereof; circumstances evidencing the alleged
(b) Three copies of the corresponding ownership of the land applied for.
technical descriptions; General statements which are mere
(c) Three copies of the surveyors conclusions of law and not factual proof
certificate; of possession are unavailing. The deeds
in its favor only proved possession of its
PAGE 386
predecessors-in-interest as early as 1948. that jurisdiction attaches to the land or

(The law now stands that a mere showing lands mentioned and described in the
of possession for 30 years is not sufficient. application. If it is later shown that the
OCEN possession must be shown to have decree of registration had included land or
stated on June 12, 1945 or earlier.) lands not included in the original
application as published, then the
STEP 3: Setting of the date for the initial hearing registration proceedings and the decree of
of the application by the Court; registration must be declared null and void
(1) The court shall issue an order setting the insofar but only insofar as the land not
date and hour of the initial hearing within 5 included in the publication is concerned.
days from filing of the application [Benin v. Tuason]
(2) The initial hearing shall be 45 90 days
from the date of the order [Sec. 23, PD 1529] STEP 6: Service of notice upon contiguous
owners, occupants and those known to have
STEP 4: Transmittal to the LRA interest in the property by the Sheriff;
The application and the date of initial hearing (1) Mailing:
together with all the documents or other Within 7 days from publication, the CLR
evidences attached thereto are transmitted by shall mail a copy of the notice
the Clerk of Court to the Land Registration Copies of the notice shall be mailed to:
Authority (LRA) (a) Every person named in the notice
whose address is known.
STEP 5: Publication of a notice of the filing of (b) The Secretary of Public Highways, to
the application and date and place of hearing the Provincial Governor, and to the
(1) Publication shall be sufficient to confer Mayor of the municipality or city, in
jurisdiction upon the court. [Sec. 23, PD which the land lies, if the applicant
1529] requests to have the line of a public
(2) Form and contents of the notice: way or road determined
(a) Addressed to all persons appearing to (c) Secretary of Agrarian Reform, the
have an interest in the land involved Solicitor General, the Director of
(b) Requires all persons concerned to Lands, the Director of Mines and/or
appear in court on the date and time the Director of Fisheries and Aquatic
indicated to show cause why the Resources, (as appropriate) if the land
application for registration should not borders on a river, navigable stream
be granted or shore, or on an arm of the sea
(3) The public shall be given notice of the initial where a river or harbor line has been
hearing of the application by publication established, or on a lake, or if it
The Commissioner of Land Registration otherwise appears from the
(CLR) shall cause it to be published once application or the proceedings that a
in the Official gazette AND once in a tenant-farmer or the national
newspaper of general circulation government may have a claim
This is sufficient to confer jurisdiction to adverse to that of the applicant
the court (2) Posting:
(3) It is not necessary to give personal notice to CLR shall cause the sheriff or his deputy
the owners or claimants of the land sought to post the notice at least 14 days before
to be registered to vest the court with the hearing:
authority over the res. Land registration In a conspicuous place on each parcel of
proceedings are actions in rem. [Dir. Of land included in the application and in a
Lands v. CA] conspicuous place on the bulletin board
(4) Once the registration court had acquired of the municipal building of the
jurisdiction over a certain parcel, or parcels, municipality or city in which the land or
of land in the registration proceedings in portion thereof is situated.
virtue of the publication of the application,
PAGE 387
The court may also cause notice to be (b) With respect to those covered by the
served to such other persons and in such default order they have no legal
manner as it may deem proper. standing in court; therefore, they are no
(3) Notice of application and initial hearing by longer allowed to participate and no
publication is sufficient and the mere fact opportunity to present evidence
that a person purporting to have a (7) For relief from an order of default, see Sec.
legitimate claim in the property did not 3, Rule 18, Rules of Court
receive personal notice is not a sufficient
ground to invalidate the proceedings STEP 8: Hearing of the case by the court
although he may ask for the review of the (1) Applicable procedural law:
judgment or the reopening of the decree of Reception of evidence is governed by PD
registration, if he was made the victim of 1529
actual fraud. [Republic v. Abadilla, CA (1951)] Rules of Court shall, insofar as not
inconsistent with the provisions of the
STEP 7: Filing of answer or opposition to the Decree, be applicable to land registration
application by any person whether named in the and cadastral cases by analogy or in a
notice or not; suppletory character and whenever
(1) Who may file? Any person claiming an practicable and convenient [Sec. 34, PD
interest, whether named in the notice or not 1529]
(2) When to file? On or before the date of initial (2) Sec. 27, PD 1529: Court may either:
hearing, or within such further time as may (a) Hear the parties and their evidence, or
be allowed by the court. (b) Refer the case or any part thereof to a
(3) What shall it contain? It shall state all the referee
objections and the interest claimed by the (i) Referee shall hear the parties,
party the remedy desired. receive their evidence, and submit
(4) How shall it be made? It shall be signed and his report thereon to the Court
sworn to by him or by some other duly within 15 days after termination of
authorized person. Sec. 25, PD 1529 such hearing
provides for the requisites of an opposition: (ii) Hearing before a referee may be
(a) It shall set forth all the objections to held at any convenient place within
the application and the province or city as may be fixed
(b) It shall state the interest claimed by by him and after reasonable notice
the party filing the same thereof shall have been served to
(5) Effect of Failure to Answer: the parties concerned
If no one appears/files an answer, upon (iii) Upon receipt of the report the Court
motion, the court shall order a default to may:
be recorded. (1) Adopt the same
By the description in the notice "To all (2) Set aside the report
Whom It May Concern", all the world are (3) Modify the report
made parties defendant and shall be (4) Refer back or recommit the
concluded by the default order. case to the referee for
Where an appearance has been entered presentation of evidence
and an answer filed, a default order shall
be entered against persons who did not STEP 9: Promulgation of judgment by the
appear and answer. Court;
Absence of opposition does not justify (1) This is the adjudication, determination, and
outright registration. [Director of Lands resolution of the issue of ownership
vs. Agustin (1921)] (2) Forms of Judgment:
(6) Effects of Default: (a) Dismissal of the application with
(a) With respect to the Applicant he has prejudice or without prejudice
the right to present or adduce evidence (b) Partial Judgment in a case where only
ex parte a portion of the land subject of
PAGE 388
registration is contested, the court may

render partial judgment provided that a STEP 11: Entry of the decree of registration
subdivision plan showing the contested (1) Decree is entered in the LRA
and uncontested portions approved by (2) Every decree of registration shall:
the Director of Land is previously (a) Bear the day of the year, hour, and
submitted to said court. [Sec. 28, PD minute of its entry,
1529] (b) Be signed by the Administrator of the
(3) Judgment Confirming Title - Judgment may Land Registration Authority in his ex
be rendered confirming the title of the officio capacity as Clerk of Court in land
applicant, or the oppositor as the case may registration matters
be, to the land or portions thereof upon (c) State whether the owner is:
finding that the party concerned has (i) Married or unmarried, and if
sufficient title proper for registration. [Sec. married, the name of the husband
29, PD 1529] or wife, provided that if the land
(4) Finality of Judgment: Sec. 30, par. 1, PD adjudicated is conjugal property, it
1529 provides that the judgment becomes shall be issued in the names of both
final upon the expiration of 30 days counted spouses.
from receipt of notice of judgment. (ii) If the owner is under disability, it
Note however that this has been modified shall state the nature of the
to the lapse of 15 days counted from disability,
receipt of notice of judgment as per Sec. (iii) If the owner is a minor, his age
39, BP 129 (d) Contain a description of the land as
finally determined by the court,
STEP 10: Issuance of the decree (e) Set forth the estate of the owner, and
(1) If the court finds after hearing that the also, in such manner as to show their
applicant or adverse claimant has title as relative priority, all particular estates,
stated in his application or adverse claim mortgages, easements, liens,
and proper for registration, a decree of attachments and other encumbrances,
confirmation and registration shall be including rights of tenant-farmer, if any,
entered to which the land or owners estate is
(2) The Court declares the decision final and subject,
instructs the LRA to issue a decree of (f) Contain any other matter properly to be
confirmation and registration within 15 days determined
from entry of judgment
NOTE it is not the court that issues the STEP 12: Sending of copy of the decree of
decree, but the LRA registration to the corresponding Register of
Deeds (Registrar of Land Titles and Deeds)
(2) One year after issuance of the decree, it
becomes incontrovertible and amendments STEP 13: Transcription of the decree of
of the same will not be allowed except in registration
cases of clerical errors (1) It is transcribed in the registration book of
Court retains jurisdiction over the case the Registrar of Land Titles and Deeds
until after the expiration of 1 year from the (2) Registrar issues owners duplicate OCT of
issuance of the decree of registration. the applicant by the Registrar of Land Titles
[Gomez v. CA (1988)] and Deeds, upon payment of the prescribed
NOTE: While a decision in land fees.
registration proceeding becomes final
after the expiration of thirty days from the
date of service of its notice, the decree of
registration does not become final until
after the lapse of one year from the date
of its issuance and entry.
PAGE 389
EVIDENCE NECESSARY Unlike ordinary civil actions, the adjudication of

land in a cadastral or land registration
proceeding does not become final in the sense
PROOFS NECESSARY IN LAND of incontrovertibility until after the expiration of
REGISTRATION one (1) year after the entry of the final decree of
(1) Proofs that land has been declassified from registration. As long as a final decree has not
the forest zone, is alienable or disposable, been entered by the LRA and the period of 1
and is registrable (e.g. Presidential year has not elapsed from date of such decree,
proclamation, legislative acts) the title is not finally adjudicated and the
(2) Identity of the land (e.g. survey plan) decision in the registration proceeding
(3) Possession and occupation of the land for continues to be under the control and sound
the length of time and in the manner discretion of the court rendering it. [Gomez v. CA
required by law [Sec. 4, PD 1073 amending (1988)]
Sec. 48(b) and (c) of Public Land Act]
(4) If he claims private ownership not because ACTION FOR RECONVEYANCE
of his possession, he must prove the basis of
(1) When to file:
such claim by submitting muniments of
(a) Before issuance of decree, or
title.
within/after 1 year from entry
(b) If based on implied trust, 10 years;
PROVING PRIVATE OWNERSHIP (c) If based on expressed trust and void
(1) Spanish titles are inadmissible and contract, imprescriptible
ineffective proof of ownership in land (d) If based on fraud, 4 years from the
registration proceedings filed AFTER Aug. discovery
16, 1976 [PD 892 as discussed in Santiago v. (2) Not available if the property has already
SBMA (2006)] been transferred to an innocent purchaser
(2) Tax declaration and receipts are not for value.
conclusive but have strong probative value (3) It does not reopen proceedings but a mere
when accompanied by proof of actual transfer of the land from registered owner
possession. [Municipality of Santiago vs. CA, to the rightful owner [Esconde v. Barlongay
1983] (1987)]
(3) Other proofs such as testimonial evidence
ACTION FOR DAMAGES
REMEDIES It can be availed of when reconveyance is no
An aggrieved party in a registration proceeding longer possible as when the land has been
may avail himself of the following remedies: transferred to an innocent purchaser for value
(1) Motion for New Trial (see Rule 37, ROC) [Ching v. CA (1990)]
(2) Appeal
(3) Relief from Judgment (see Rule 38, ROC) REVERSION
(4) Annulment of Judgment (see Rule 47, ROC) Instituted by the government, thru Solicitor
(5) Reconveyance General in all cases where lands of public
(6) Recovery of Damages domain are held in violation of the Constitution
(7) Reversion or were fraudulently conveyed. Indefeasibility of
(8) Review of Decree of Registration title, prescription, laches, and estoppel do not
bar reversion suits.
APPEAL [Sec. 30, PD 1529 as amended
by BP 129] PETITION TO REOPEN OR REVIEW
An appeal may be taken from the judgment of DECREE OF REGISTRATION [Sec. 32,
the court as in ordinary civil cases. PD 1529]
*Note: Period in Sec. 30, PD 1529 has been
(1) To whom available: Only to an aggrieved
modified to 15 days as per Sec. 39, BP 129
party who has been deprived of land or any
PAGE 390
estate or interest therein by decree of Court will order issuance of new title after
registration due notice and hearing, with
(2) When to file: Within 1 year from entry of memorandum that it is issued in place of
decree of registration a lost certificate
Upon expiration of the 1 year period, every (2) Petition seeking surrender of duplicate title
decree becomes incontrovertible In voluntary and involuntary conveyances;
The Court held that the petition may be when the duplicate cannot be produced,
filed at any time after rendition of the the party must petition the court to
courts decision (no need to wait for actual compel surrender of duplicate certificate
entry in the LRA) and before expiration of of title to Register of Deeds
one year from entry of the final decree of After hearing, court may order issuance of
registration. [Rivera v. Moran; Director of a new certificate and annul the old
Lands v. Aba, et al.] certificate
(3) Sole and only ground: Actual Fraud (3) Amendment and alteration of certificate of
Actual fraud proceeds from an intentional title
deception practiced by means of A certificate of title cannot be altered or
misrepresentation or concealment of amended except in a direct proceeding in
material fact court which is summary in nature
The fraud must consist in an intentional Grounds:
omission of fact required by law to be (a) New interest that does not appear on
stated in the application or a willful the instrument have been created
statement of a claim against the truth (b) Interest have been terminated or
(4) Requisites for Petition to Reopen or Review ceased
(a) That the plaintiff is the owner of the (c) Omission or error was made in
land ordered registered in the name of entering certificate
the defendant, or that the plaintiffs lien (d) Name of person on certificate has
or interest in said property does not been changed
appear in the decree or title issued in (e) Registered owner has married
the defendants name; (f) Marriage has terminated
(b) That the registration was procured (g) Corporation has dissolved and has
through actual fraud, or that the not conveyed the property within 3
omission of the lien or interest was years after its dissolution
fraudulent; (h) Allowable corrections as long as the
(c) That the property has not been rights or interest of persons are not
transferred to an innocent purchaser for impaired
value; and (4) Reconstitution of Certificate of title
(d) That the action is fi led within one year The restoration of the instrument which is
from the issuance and entry of the supposed to have been lost or destroyed
decree of registration. [Cruz v. Navarro in its original form and condition, under
(1973)] the custody of the Register of Deeds
To have the same reproduced after proper
PETITIONS AND MOTIONS proceedings in the same form they were
when the loss or destruction orccurred
AFTER ORIGINAL [Heirs of Pedro Pinote v. Dulay (1990)]
REGISTRATION Kinds:
(1) Lost Duplicate Certificate (a) Judicial
Person in interest must file a sworn (i) A petition is filed before the RTC
statement that the certificate is lost (ii) Petition is published in the Official
before the Register of Deeds Gazette for 2 consecutive issues
A petition will then be filed for the and posted on main entrance of
issuance of new title municipality for at least 30 days
before hearing
PAGE 391
(iii) Hearing is then conducted say, forest land, is released in an official

(iv) Court may then order proclamation to that effect so that if may form
reconstitution if meritorious part of the disposable agricultural lands of the
(b) Administrative, which may be availed public domain. [Bracewell vs. CA (2000)]
only in case of:
(i) Substantial loss or destruction of The law, as presently phrased, requires that
original land titles due to fire, possession of lands of the public domain must
flood, or other force majeure as be from June 12, 1945 or earlier, for the same to
determined by the LRA be acquired through judicial confirmation of
(ii) Number of certificates of title lost imperfect title [Republic v. Doldol (1998)]
or damaged should be at least
10% of the total number in WHO MAY APPLY
possession of the Register of
Deeds
(iii) In no case shall the number of
INDIVIDUALS
(1) Filipino citizens who by themselves or
certificates of title lost or
through their predecessors-in-interest have
damaged be less than 500;
been in open, continuous, exclusive, and
(iv) Petitioner must have the
notorious possession and occupation of
duplicate copy of the certificate of
alienable and disposable lands of public
title [RA 6732]
domain under a bona fide claim of
acquisition since June 12, 1945 or prior
thereto since time immemorial [Sec. 48, CA
Judicial Confirmation of 141, as amended by Sec. 4, PD 1073]
Imperfect or Incomplete (2) Filipino citizens who by themselves or their

predecessors-in-interest have been, prior to
Titles effectivity of PD 1073 on Jan. 25, 1977, in
open, continuous, exclusive, and notorious
CONCEPT possession and occupation of agricultural
No title or right to, or equity in, any lands of the lands of the public domain, under a bona
public domain may be acquired by prescription fide claim of acquisition of ownership for at
or by adverse possession or occupancy except as least 30 years, or at least since Jan. 24, 1947
expressly provided by law. [CA 141, Sec 57] [RA 1942]
The Public Land Act recognizes the concept of (3) Natural born citizens of the Philippines who
ownership under the civil law. This ownership is have lost their citizenship and who has legal
based on adverse possession and the right of capacity to enter into a contract under
acquisition is governed by the Chapter on Philippine laws may be a transferee of
judicial confirmation of imperfect or incomplete private land up to a maximum area of
titles. 5,000sqm, in case of urban land, or 3
hectares in case of rural land to be used by
him for business or other purposes [Sec. 5,
WHEN APPLICABLE RA 8179]
This applies only to alienable and disposable
agricultural lands of the public domain. Under (4) Natural-born citizens of the Philippines,
Sec. 6 of CA 141, the classification of public who have lost their Philippine citizenship,
lands into alienable and disposable forest who have acquired disposable and alienable
lands, or mineral lands is the prerogative of the lands of the public domain from Filipino
Executive Department. citizens who had possessed the same in the
same manner and for the length of time
The rule on confirmation of imperfect title does indicated in numbers (1) and (2) above.
not apply unless and until the land classified as,
PAGE 392
CORPORATIONS domain or claiming to own any such lands or an

Private domestic corporations or associations interest therein, but whose titles have not been
which had acquired lands from Filipino citizens perfected or completed, may apply to the Court
who had possessed the same in the manner and of First Instance of the province where the land
for the length of time indicated in numbers (1) is located for confirmation of their claims and
and (2) above. the issuance of a certificate of title therefor
under the Land Registration Act
Notwithstanding the prohibition in the 1973 and
1987 Constitutions against private corporations Hence, the procedure in original registration
holding lands of the public domain except by discussed in the previous section is also
lease not exceeding 1000 hectares, still a followed in judicial confirmation of imperfect or
private corporation may institute confirmation incomplete title.
proceedings under Sec. 48, (b) of the Public
Land Act if, at the time of institution of the EVIDENCE NECESSARY TO
registration proceedings, the land was already
private land. On the other hand, if the land was
SUBSTANTIATE APPLICATION
still part of the public domain, then a private
The applicant must prove:
corporation cannot institute such proceedings.
(1) That the land applied for has been
[Dir. Of Lands v. IAC and ACME, 146 SCRA 509,
declassified and is a public agricultural
1986]
land, is alienable and disposable, or
otherwise capable of registration.
FILING OF THE APPLICATION Specifically, the following may be
presented:
EXTENSION OF FILING PERIOD (a) Presidential proclamation
RA No. 9176 extended the period to file an (b) Executive Order
application for judicial confirmation of imperfect (c) Administrative Order issued by the
or incomplete title to December 31, 2020. Prior DENR Secretary
to RA 9176 the deadline for filing was on Dec. (d) Bureau of Forest Development Land
31, 1987. Classification Map
(e) Certification by the Director of Forestry
SCOPE OF APPLICATION (f) Investigation reports of Bureau of Lands
RA 9176 also limited the area subject of the Investigator
application to 12 hectares. Prior to RA 9176, the (g) Legislative act or statute
maximum area applied for was 144 hectares. (2) The identity of the land; the following may
be submitted:
WHAT APPLICANT MUST PROVE (a) Survey plan
(1) The land is alienable and disposable land of (b) Tracing cloth plan and blue print copies
public domain; and of plan
(2) They have been in open, continuous, (c) Technical description of the land
exclusive, and notorious possession and (d) Tax declarations
occupation of the land for the length of time (e) Boundaries and area
and in the manner and concept provided by (3) Possession and occupation of the land for
law [Dir. Of Lands v. Buyco (1992)] the length of time and in the manner
required by law
PROCEDURE IN JUDICIAL
CONFIRMATION
Sec. 48, par. 1, of CA 141 as amended provides,
The following-described citizens of the
Philippines, occupying lands of the public
PAGE 393
Cadastral Registration then orders the Director of Lands to conduct

cadastral survey
CONCEPT STEP 2: Director of lands shall make a cadastral

It is a proceeding in rem, initiated by the filing survey
of a petition for registration by the government,
not by the persons claiming ownership of the STEP 3: Director of Lands gives notice to
land subject thereof, and the latter are, on the interested persons
pain of losing their claim thereto, in effect Contents of the Notice:
compelled to go to court to make known their (1) Day on which the survey will begin
claim or interest therein, and to substantiate (2) Full and accurate description of the lands to
such claim or interest. be surveyed
Unlike other kinds of registration, this is STEP 4: Publication of notice

compulsory as it is initiated by the government. (1) Published once in the Official Gazette
(2) A copy of the notice in English or the
The government does not seek the registration national language shall be posted in a
of land in its name. The objective of the conspicuous place on the bulletin board of
proceeding is the adjudication of title to the the municipal building of the municipality in
lands or lots involved in said proceeding. which the lands or any portion thereof is
situated
Ordinary Registration Cadastral Registration
STEP 5: A copy of the notice shall also be sent
Voluntary Compulsory to:
Applicant is a person Applicant is the Director (1) Mayor of the municipality
claiming title to the land of Lands (2) Barangay captain
(3) Sangguniang Panlalawigan and
Usually involves land; it All classes of land are
may also refer to public covered Sangguniang Bayan concerned
agricultural lands if the
object of the action is STEP 6: Geodetic engineers or other Bureau of
judicial confirmation of Land employees in charge of the survey shall
imperfect or incomplete give notice reasonably in advance of the date of
title (in which case CA 141 the survey. They shall also mark the boundaries
applies) of the lands with monuments
Applicant comes to court Government asks the
to confirm his title and court to settle and STEP 7: Interested persons should communicate
seek registration of the adjudicate the title of the with the geodetic engineer if he requests for any
land in his name land information about the land
If the applicant fails to
prove his title, application STEP 8: Actual survey and plotting of the land
may be dismissed without
prejudice STEP 9: Director of Lands represented by
Solicitor General shall institute original
PROCEDURE IN CADASTRAL registration proceedings
(1) Petition is filed in the appropriate RTC
REGISTRATION [Sec. 35 and 36, where the land is situated
PD 1529] (2) Contents of the Petition:
(a) That public interest requires that the
STEP 1: Determination of the President that title to such lands be settled and
public interest requires title to unregistered adjudicated and praying that such titles
lands be settled and adjudicated. President be so settled and adjudicated
(b) Description of the lands
PAGE 394
(c) Accompanied by a plan thereof NECESSITY AND EFFECTS OF

(d) Such other data as may serve to furnish
full notice to the occupants of the lands REGISTRATION [Sec. 51 and 52,
and to all persons who may claim any PD 1529]
right or interest therein The deed, mortgage, lease, or other voluntary
instrument, except a will shall ONLY operate as:
STEP 10: Publication, mailing posting (1) A contract between the parties and
(2) Evidence of authority to the Register of
STEP 11: Hearing Deeds to make registration.
Jurisdiction of the Cadastral Court:
(1) Adjudicate title to any claimant thereto The act of registration shall be the operative act
(2) Declare land as a public land to convey or affect the land insofar as third
(3) Order correction of technical description persons are concerned.
(4) Order the issuance of new title in place of
the title issued under voluntary registration Also, by registration, it creates constructive
proceedings notice to the world.
(5) Determine the priority of overlapping title
(6) Order the partition of the property General rule: A forged deed is an absolute
nullity and conveys no title.
STEP 12: Decision
Exception: If there is good faith, a TCT has
STEP 13: Issuance of the decree and certificate already been issued to the purchaser, the latter
of title being an innocent purchaser for value according
to Sec. 39, PD 1529, then the title is good.
DISALLOWANCE OF
General rule: A person dealing with registered
REOPENING CADASTRAL property need not go beyond, but only has to
CASES rely on, the title. [Campillo v. PNB (1969)]
RA 931, effective June 20, 1953 for 5 years, He is charged with notice only of such burdens
authorizing the reopening of cadastral cases and claims which are annotated on the title, for
under certain conditions and which had been registration is the operative act that binds the
extended until Dec. 31, 1968, is no longer in property.
force.
Exception: When should a purchaser
Courts are thus without jurisdiction or authority investigate?
to reopen a cadastral proceeding since Dec. 31, (1) Banks are required to exercise more care
1968. [Aquino citing Republic v. Estenzo (1988)] and prudence in dealing with registered
lands for their business is one affected with
public interest. The general rule does not
Subsequent Registration apply.
(2) When party concerned has actual
knowledge of facts and circumstances that
CONCEPT would impel a reasonably cautious man to
Subsequent registration is a proceeding where make inquiry. [Leung Yee vs. Strong
incidental matters AFTER original registration Machinery (1918)]
may be brought before the land registration (3) When purchaser is in bad faith; e.g. he had
court by way of motion or petition filed by the full knowledge of a previous sale. [Jamoc vs.
registered owner or a party in interest CA (1991)]
(4) When a person buys land from one whose
rights over the land is evidenced only by a
deed of sale and an annotation in the
PAGE 395
certificate of title but no TCT. [Quiniano vs. Voluntary Dealings Involuntary Dealings
CA (1971)]
Spouses Labayen vs. AFP Mutual Benefit
TWO TYPES OF DEALINGS Leonardo Serafica Association vs.
(2008,): At the time of Santiago (2008): Entry
(1) Voluntary Dealings these are deeds,
the filing of the petition of the attachment in
instruments, documents which are the
for cancellation of the books is sufficient
results of free and voluntary acts of parties
encumbrance, the notice to all persons.
thereto.
lease contract already Hence, the fact that the
(2) Involuntary Dealings these refer to writ,
lost its efficacy. Thus, deed of sale was
order, or process issued by the court of
there is no basis to save already annotated is of
record affecting registered land, also other
its annotation on no moment with regard
instruments which are not willful acts of the
defendants title. The to third persons. The
registered owner, executed without his
fact that the preference created by
knowledge or consent.
cancellation of the the levy on attachment
lease contract was is not diminished by
Voluntary Dealings Involuntary Dealings forged is of no the subsequent
Presentation of the Entry in the day book is moment, for there was registration of the deed
owners duplicate sufficient notice to all no violation of a right. of sale.
certificate of title is persons
required to notify;
mere entry insufficient
VOLUNTARY DEALINGS
An innocent purchaser Lenin vs. Bass (1952): PROCESS OF REGISTRATION OF
for value of registered Entry thereof in the day
land becomes the book of the ROD is
VOLUNTARY INSTRUMENTS IN
registered owner the sufficient notice to all GENERAL [Sec. 55, PD 1529]
moment he presents persons even if the (1) The deed or other voluntary instrument
and files a duly owners duplicate must contain:
notarized and valid certificate of title is not (a) The following details of the grantee or
deed of sale and the presented to the ROD. other person acquiring or claiming
same is entered in the interest:
day book and at the (i) Full name
same time he (ii) Nationality
surrenders or presents (iii) Residence
the owners duplicate (iv) Postal address
certificate of title (v) Civil status (if married, include
covering the land sold name in full of spouse)
and pays the (b) If grantee is a corporation:
registration fees. It must contain a recital showing that
such corporation or association is
Villasor vs. Camon Dir. Of Lands vs. Reyes legally qualified to acquire private lands
(1951): It is necessary to (1976): Entry in the day (2) File instrument creating or transferring
register the deed or book is sufficient notice interest and certificate of title with Register
instrument in the entry to all persons of an of Deeds together with:
book and a adverse claim without (a) Owners duplicate
memorandum thereof the same being The issuance of a new transfer
shall also be made in annotated at the back certificate without presentation of an
the owners duplicate of the certificate of title owners duplicate is unwarranted and
certificate and its confers no right on the purchaser (PNB
original v. Fernandez, 1935)
(b) Payment of fees & documentary stamp
tax
PAGE 396
(c) Evidence of full payment of real estate (2) A new certificate of title is issued and
tax Register of Deeds prepares and delivers to
(d) Document of transfer 1 copy grantee his owner's duplicate certificate
additional for city/provincial assessor (3) Register of Deeds notes upon the OCT and
(3) Payment of fees and DST the duplicate certificate the date of transfer,
(a) After payment of entry fee the Register the volume and page of the registration
of Deeds shall the instruments in a book where the new certificate is registered
primary entry book (Sec. 56, PD 1529) (4) The original and the owner's duplicate of
(b) The national, provincial and city the grantor's certificate shall be stamped
governments are exempted from cancelled.
payment of entry fees (5) The deed of conveyance shall be filed and
(c) RA 456 prohibits registration of indorsed with the number and the place of
documents affecting real property registration of the certificate of title of the
which is delinquent in the payment of land conveyed.
real estate taxes. Further, if evidence of
such payment is not presented with 15 IF ONLY A PORTION OF THE PROPERTY IS
days from the date of entry of said SUBJECT
document in the primary entry book of [Sec. 58, PD 1529]
the register of deeds the entry shall be (1) Include a plan which shows all the portions
deemed cancelled. already subdivided with verified and
(4) Entry of the Instrument in the Primary Entry approved technical description.
Book (2) That plan with the certified copy of the
Instruments are regarded as registered from technical descriptions shall be filed with the
the time the Register of Deeds enters them Register of Deeds for annotation in the TCT.
in the book (3) Register of Deeds shall issue a TCT and
(5) TCT shall then be issued cancel the grantor's certificate partially OR
it may be cancelled totally and a new one
PROCESS OF REGISTRATION OF issued describing therein the remaining
DEALINGS LESS THAN OWNERSHIP portion.
[Sec. 54, PD 1529] IF THERE ARE SUBSISTING
*Note: If an instrument does not divest
ENCUMBRANCES AND ANNOTATIONS
ownership or title from owner or from transferee
They shall be carried over in the new certificate
of the registered owners, then no new certificate
or certificates; except when they have been
shall be entered or issued.
simultaneously discharged.
(1) Filing of the instrument with the Register of
Deeds
(2) A brief memorandum thereof is made: REGISTRATION OF MORTGAGES
(a) On the certificate of title by the Register AND LEASES [Sec. 60, PD 1529]
of Deeds and signed by him, and Sec. 60, PD 1529 provides that mortgages and
(b) On the owners duplicate leases shall be registered in the manner
provided in Sec. 54 (Dealings less than
Cancellation or extinguishment of such interests ownership)
shall be registered in the same manner.
The deed shall take effect upon the title only
REGISTRATION OF DEEDS OF SALE from the time of registration.
AND TRANSFERS
When a deed of mortgage is presented, the
IF THE ENTIRE PROPERTY IS SUBJECT [Sec. Register of Deeds will enter upon the OCT and
57, PD 1529] upon the owners duplicate a memorandum
(1) Owner executes and registers the deed thereof and shall sign said memorandum.
which must be sufficient in form.
PAGE 397
REGISTRATION OF POWERS OF REGISTRATION OF ATTACHMENT

ATTORNEY [Sec. 64, PD 1529] Attachment is a writ issued at the institution or
Powers of attorney and revocations shall be during progress of an action commanding the
registered with the Register of Deeds of the sheriff to attach the property, rights, credits or
province or city where the land lies. effects of the defendant to satisfy demands of
the plaintiff.
Any instrument revoking such power shall be
registered in like manner. KINDS
(1) Preliminary
REGISTRATION OF TRUSTS (2) Garnishment
Registration is by memorandum: (3) Levy on execution
(1) A memorandum by the words in trust or
upon condition or other apt words is made PROCESS OF REGISTRATION
if a deed or other instrument is filed in order (1) Copy of writ in order to preserve any lien,
to: right or attachment upon registered land
(a) Transfer registered land in trust, or shall be filed with the Register of Deeds
upon any equitable condition or where the land lies, containing number of
limitation expressed therein, or certificate of title of land to be affected or
(b) Create or declare a trust or other description of land (PD 1529, Sec 69)
equitable interests in such land without (2) Register of Deeds to index attachment in
transfer [Sec. 65, PD 1529] names of both plaintiff & defendant or
(2) A memorandum by the words with power name of person whom property is held or in
to sell, or power to mortgage or other apt whose name stands in the records
words is made when: (a) If duplicate of certificate of title is not
presented:
The instrument creating or declaring a trust (i) Register of Deeds shall within 36
or other equitable interest contains an hours send notice to registered
express power to sell, mortgage, or deal owner by mail stating that there has
with the land in any manner been registration & requesting him
to produce duplicate so that
However, if an implied or constructive trust memorandum be made
is claimed, person claiming such must (ii) If owner neglects or refuses
execute a sworn statement thereof with the Register of Deeds shall report
Register of Deeds, containing a description matter to court.
of the land, the name of the registered (b) Court after notice shall enter an order to
owner and a reference to the number of the owner to surrender certificate at time &
certificate of title. Such claim shall not place to be named therein.
affect the title of a purchaser for value and (3) Although notice of attachment is not noted
in good faith before its registration. [Sec. 68, in duplicate, notation in book of entry of
PD 1529] Register of Deeds produces effect of
registration already
INVOLUNTARY DEALINGS EFFECT OF REGISTRATION OF
The following involuntary dealings affecting
ATTACHMENT
registered land must be registered:
(1) Creates real right
(1) Attachments [Sec. 69, PD 1529] (2) Has priority over execution sale
(2) Sale on execution or for taxes or for any
(3) But between 2 attachments one that is
assessment [Sec. 74, PD 1529]
earlier in registration is preferred
(3) Adverse claim [Sec. 70, PD 1529]
(4) Notice of lis pendens [Sec. 76, PD 1529]
DUTY OF THE REGISTER OF DEEDS Duty is
ministerial but may refuse registration in the
following circumstances:
PAGE 398
(1) Title to land is not in the name of defendant (3) Memorandum shall be entered in the
certificate as an adverse claim or
Exception: If petitioner is an heir encumbrance
(4) After the period of redemption has expired
(2) No evidence is submitted to show that he & no redemption (2 years from registration
has present or possible future interest in of auction sale) is made: cancellation of title
land & issuance of a new one
(5) Before cancellation, notice shall be sent to
REGISTRATION OF EXECUTION AND registered owner: to surrender title & show
TAX DELINQUENCY SALES cause why it shall not be cancelled
EXECUTION SALE *Note: Actual knowledge is equivalent to

(1) To enforce a lien of any description on registration
registered land, any execution or affidavit to
enforce such lien shall be filed with Register REGISTRATION OF NOTICE LIS
of Deeds where the land lies PENDENS
(2) Register in the registration book &
memorandum upon proper certificate of PURPOSE OF NOTICE LIS PENDENS
title as adverse claim or as an encumbrance To keep the subject matter within the power of
(3) To determine preferential rights between 2 the court until the entry of final judgment. It
liens: priority of registration of attachment therefore creates merely a contingency and not
a lien.
TAX SALE
(1) Sale of land for collection of delinquent WHEN NOTICE OF LIS PENDENS IS PROPER
taxes and penalties due the Government (1) To recover possession of real estate
(2) In personam (all persons interested shall be (2) To quiet title
notified so that they are given opportunity (3) To remove clouds upon the title thereof
to be heard) (4) For partition
Notice to be given to delinquent tax payer (5) Other proceedings of any kind in court
at last known address directly affecting the title to land or the use
Publication of notice must also be made or occupation thereof or the buildings
in English, Spanish & local dialect & thereon
posted in a public & conspicuous place in
place wherein property is situated & at the WHEN NOTICE OF LIS PENDENS IS NOT
main entrance of the provincial building PROPER
(3) Sale cannot affect rights of other lien (1) Proceedings for the recovery of money
holders unless they are given the right to judgments
defend their rights: due process must be (2) Attachments
strictly observed (3) Proceedings on the probate of wills
(4) Tax lien superior to attachment (4) Administration of the estate of deceased
persons
*Note: No need to register tax lien because it is (5) Levies on execution
automatically registered once the tax accrues. (6) Foreclosure
However sale of registered land to foreclose a
tax lien needs to be registered. PROCESS OF REGISTRATION: By
Memorandum or Notice stating
PROCESS OF REGISTRATION (1) The institution of the action or proceeding
(1) Officers return shall be submitted to (2) The court wherein the same is pending
Register of Deeds together with duplicate (3) The date of the institution of the action
title (4) Reference to the number of the certificate of
(2) Register in the registration book title
PAGE 399
(5) Adequate description of the land affected REGISTRATION OF ADVERSE CLAIM

and registered owner thereof WHEN A CLAIM IS ADVERSE [Sec. 70, par. 1,
PD 1529]
OTHER PARTIES WHO NEED TO REGISTER (1) Claimants right or interest in registered
(1) Assignee in involuntary proceeding for land is adverse to the registered owner, and
insolvency (2) Such right arose subsequent to date of
Duty of the officer serving notice to file a original registration, and
copy of the notice to the Register of (3) No other provision is made in the Decree for
Deeds where the property of debtor lies the registration of such right or claimant
Assignee elected or appointed by court
shall be entitled to entry of new certificate REQUISITED FOR REGISTRATION OF AN
of registered land upon presentment of ADVERSE CLAIM
copy of assignment with bankrupts (1) The adverse claimant must give a statement
certificate of title (duplicate) of the following in writing:
New certificate shall note that it is entered (a) His alleged right or interest
to him as assignee or trustee in insolvency (b) How and under whom such alleged
proceedings right or interest is acquired
(c) The description of the land in which the
(2) Government in eminent domain right or interest is claimed and
Copy of judgment shall be filed in the (d) The number of the certificate of title
Register of Deeds which states (2) The statement must be:
description of property, certificate (a) Signed by the adverse claimant
number, interest expropriated, nature of (b) Sworn before a notary public
public use (3) The statement must also state his residence
Memorandum shall be made or new or the place to which all notices may be
certificate of title shall be issued served upon him.
EFFECT OF REGISTRATION DURATION OF AN ADVERSE CLAIM

(1) Impossibility of alienating the property in (1) 30 days from the date of registration.
dispute during the pendency of the suit (2) After that the annotation of adverse claim
may be alienated but purchaser is subject to may be cancelled upon filing of a verified
final outcome of pending suit petition by the party in interest. When
(2) Register of Deeds is duty bound to carry cancelled, no second adverse claim based
over notice of lis pendens on all new titles to on the same ground may be registered by
be issued the same claimant.
CANCELLATION OF LIS PENDENS [Sec.

77, PD 1529]
(1) Before final judgment court may order Non-Registrable
cancellation after showing that notice is
only for the purpose of molesting an
Properties
adverse party or it is not necessary to
protect the rights of the party who caused it CONCEPT
to be registered All lands of the public domain, waters, minerals,
(2) Register of Deeds may also cancel upon coal, petroleum, and other mineral oils, all
verified petition of the party who caused forces of potential energy, fisheries, forests or
such registration timber, wildlife, flora and fauna, and other
(3) Deemed cancelled when certificate of clerk natural resources are owned by the State. [Art.
of court stating manner of disposal of XII, Sec. 2, Constitution]
proceeding is registered
PAGE 400
With the exception of agricultural lands, all municipality from the moment they leave
other natural resources shall not be alienated. such lands
[Art. II, Sec. 2 Constitution] (9) The waste waters of fountains, sewers, and
public establishments
The classification of public lands is an exclusive
prerogative of the Executive Department of the SPECIFIC KINDS OF NON-
Government and not of the courts. In the
absence of such classification, the land remains REGISTRABLE PROPERTIES OR
as unclassified land until it is released LANDS
therefrom and rendered open to disposition. (1) Forest or timberland, public forest, forest
[Aquino citing Dir. Of Lands and Dir. Of Forest reserves
Development v. CA (1984)] (2) Mangrove swamps Mangrove swamps or
mangroves should be understood as
CIVIL CODE PROVISIONS comprised within the public forests of the
Philippines as defined in Sec. 1820,
DEALING WITH NON- Administrative Code of 1917. [Dir. Of Forestry
REGISTRABLE PROPERTIES v. Villareal (1980)]
(3) Mineral lands Both under the 1987
PROPERTIES OF PUBLIC DOMINION Constitution and Sec. 2 of the Public Land
[Art. 420, Civil Code] Act, mineral lands are not alienable and
(1) Those intended for public use, such as disposable. [Lepanto Consolidated Mining
roads, canals, rivers, torrents, ports and Co. v. Dumyung (1979)]
bridges constructed by the State, banks, (4) Foreshore land and seashore Seashore,
shores, roadsteads, and others of similar foreshore, and/or portions of territorial
character; waters and beaches, cannot be registered.
(2) Those which belong to the State, without Even alluvial formation along the seashore
being for public use, and are intended for is part of public domain. [Aquino citing
some public service or for the development Dizon v. Rodriguez (1965)]
of the national wealth. (5) Lakes Lakes are part of public dominion.
[Art. 502(4), Civil Code]
(6) Military Reservations The reservation
WATERS UNDER ART. 502, CIVIL made segregates it from the public domain
CODE and no amount of time in whatever nature
(1) Rivers and natural beds of possession could have ripen such
(2) Continuous or intermittent waters of springs possession into private ownership. [Republic
and brooks running in their natural beds v. Marcos (1973)]
and the beds themselves (7) Watershed The Constitution expressly
(3) Waters rising continuously or intermittently mandates the conservation and utilization
on lands of public dominion of natural resources, which includes the
(4) Lakes and lagoons formed by Nature on countrys watershed. [Tan v. Dir. Of Forestry
public lands, and their beds (1983)]
(5) Rain waters running through ravines or (8) Grazing lands While the 1987 Constitution
sand beds, which are also part of public does not specifically prove that grazing
dominion; lands are not disposable, yet if such lands
(6) Subterranean waters on public lands are part of a forest reserve, there can be no
(7) Waters found within the zone of operation doubt that the same are incapable of
of public works, even if constructed by a registration. [Aquino citing Dir. Of Lands v.
contractor Rivas]
(8) Waters rising continuously or intermittently (9) Previously titled land Proceeds from the
on lands belonging to private persons, to indefeasibility of the Torrens title.
the State, to a province, or to a city or (10) Alluvial deposit along river when man-
made Such deposit is really an
PAGE 401
encroachment of a portion of the bed of the (d) Date, hour and minute it was presented
river, classified as property of the public and received
domain under Art. 420, par. 1 and Art. 502 (2) The Registration Book Provides spaces
(1) of the Civil Code, hence not open to whereon the annotation is made after the
registration. [Republic v. CA (1984)] instrument has been entered in the Primary
Entry Book
The land registration court has no jurisdiction
over non-registrable property and cannot validly PROCESS OF REGISTRATION
adjudge the registration of title thereof in favor (1) Registration is by way of annotation
of a private applicant. [Pena] (2) The instrument dealing with unregistered
Thus, where it has so been adjudged, the river land is presented before the Register of
not being capable of private appropriation or Deeds
acquisition by prescription, the title thereto may (3) The Register will then determine if it can be
be attacked, either directly or collaterally, by the registered:
State which is not bound by any prescriptive (a) If, on the face of the instrument, it
period provided by the Statute of Limitation. appears that it is sufficient in law, the
[Pena citing Martinez v. CA (1974)] Register of Deeds shall forthwith record
the instrument
(b) In case the Register of Deeds refuses its
Dealings with administration to record, he shall advise
the party in interest in writing of the
Unregistered Lands ground or grounds for his refusal
(4) The latter may appeal the matter to the
No deed, conveyance, mortgage, lease, or other
Commissioner of Land Registration
voluntary instrument affecting land not
registered under the Torrens system shall be THIRD PARTY WITH A BETTER
valid, except as between the parties thereto,
unless such instrument shall have been RIGHT NOT PREJUDICED
recorded in the manner herein prescribed in the It shall be understood that any recording made
office of the Register of Deeds for the province under this section shall be without prejudice to
or city where the land lies. [Sec. 113, par. 1, PD a third party with a better right. [Sec. 113, PD
1529] 1529]
Better right refers to a right which must have
EFFECTS OF TRANSACTIONS been acquired by a third party independently of
COVERING UNREGISTERED the unregistered deed, such, for instance, as
LAND title by prescription, and that it has no reference
(1) As between the parties The contract is to rights acquired under that unregistered deed
binding and valid even if not registered itself. [Pena]
(2) As among third persons There must be
registration for the transaction to be INVOLUNTARY DEALINGS IN
binding against third persons UNREGISTERED LANDS
PD 1529 now permits the registration of
PRIMARY ENTRY BOOK AND involuntary dealings in unregistered lands.
REGISTRATION BOOK
The Register of Deeds for each province or city Tax sale, attachment and levy, notice of lis
shall keep a Primary Entry Book and a pendens, adverse claim and other instruments
Registration Book. in the nature of involuntary dealings with
(1) The Primary Entry Book shall contain, respect to unregistered lands, if made in the
among other particulars: form sufficient in law, shall likewise be
(a) Entry number admissible to record under Sec. 113. [Sec. 113 (d),
(b) Names of the parties PD 1529]
(c) Nature of the document
PAGE 402
PAGE 403
UP LAW BOC TORTS AND DAMAGES CIVIL LAW
TORTS CASE
LEGAL RIGHT
AND INJURY
DOCTRINE
The dismissal
Principles itself was not
illegal but it
When a right is
exercised in a
was the manner which
ABUSE OF RIGHT manner of does not
dismissal conform with
Art. 19. Every person must, in the exercise of his which was the norms in
rights and in the performance of his duties, act Globe vs. CA
deemed in NCC 19, and
with justice, give everyone his due, and observe (1989):
violation of results in
honesty and good faith.
Article 19, as damage to
such was another, a
Generally, the exercise of any right must be in based on legal wrong is
accordance with the purpose for which it was unfounded thereby
established. It must not be excessive or unduly accusations of committed.
harsh; there must be no intention to injure dishonesty.
another. The conscious
The conscious
indifference of
There is abuse of right when: indifference of
a person to the
(1) The right is exercised for the only purpose of the school in
rights or
prejudicing or injuring another; not informing
welfare of the
University of its student
(2) The objective of the act is illegitimate; others who
the East vs. that he could
(3) There is an absence of good faith. Jader (2000): not graduate
may be
affected by his
formed the
Elements: act or omission
basis for the
(1) There is a legal right or duty; can support a
award of
(2) Which is exercised in bad faith; claim for
damages.
(3) For the sole intent of prejudicing or injuring damages.
another. Article 19,
known to
LEGAL RIGHT contain what is
CASE DOCTRINE commonly
AND INJURY Ruby Lims
referred to as
The transfer throwing out
the principle of
of credit from of complainant
abuse of
Shell Reyes, as a
rights, is not a
Philippines to gatecrasher in
panacea for all
Shell USA a private party,
human hurts
was deemed a was merely in
and social
violation of The standards Nikko Hotel exercise of her
grievances.
Velayo vs. NCC 21 as it in NCC 19 are Manila Garden duties as
The object of
Shell (1959) allowed Shell implemented vs. Reyes Executive
this article is to
to attach by NCC 21. (2005) Secretary of
set certain
the hotel
properties of standards
where the
their creditor which must be
party was held,
CALI to the observed not
and did not
prejudice of only in the
constitute a
its other exercise of
violation of
creditors. ones rights
Article 19.
but also in the
performance
of ones duties.
PAGE 404
ACTS CONTRARY TO LAW cause of the giving of herself unto him in a

Art. 20. Every person who, contrary to law, sexual congress, proof that he had, in reality, no
willfully or negligently causes damage to intention of marrying her and that the promise
another, shall indemnify the latter for the was only a subtle scheme or deceptive device to
same. entice or inveigle her to accept him and to
obtain her consent to the sexual act, could
The provision is intended to provide a remedy in justify the award of damages pursuant to Article
cases where the law declares an act illegal but 21 not because of such promise to marry but
fails to provide for a relief to the party injured. because of the fraud and deceit behind it and
the willful injury to her honor and reputation. It
[Jarencio]
is essential, however, that such injury should
NCC 20 does not distinguish, and the act may have been committed in a manner contrary to
be done willfully or negligently. morals, good customs or public policy. [Baksh
vs. CA (1993)]
Requisites:
However, when for one whole year, the plaintiff,
(1) The act must be willful or negligent;
a woman of legal age, maintained sexual
(2) It must be contrary to law; and
relations with the defendant, with repeated acts
(3) Damages must be suffered by the injured
party. of intercourse, there is here voluntariness. No
case under Article 21 is made. [Tanjanco vs. CA
(1966)]
ACTS CONTRARY TO MORALS
Art. 21. Any person who wilfully causes loss or MALICIOUS PROSECUTION
injury to another in a manner that is contrary to Malicious prosecution is the institution of any
morals, good customs or public policy shall action or proceeding, either civil or criminal,
compensate the latter for the damage. maliciously and without probable cause.
This article is designed to fill in the countless Elements: (Magbanua vs. Junsay [2007])
gaps in the statutes which would otherwise (1) The fact of the prosecution and that the
leave victims of moral wrongs helpless. defendant filed an action ,
(2) That the criminal action was finally
Elements: terminated with an acquittal
(1) Legal action; (3) In bringing the action, the prosecutor acted
(2) Contrary to morals, public policy, good without probable cause
customs; and (4) The prosecutor was impelled by legal
(3) Intent to injure. malice or an improper or sinister motive.
BREACH OF PROMISE TO MARRY, Note: Although elements as enumerated in the

SEDUCTION AND SEXUAL ASSAULT above case indicate that the prosecutor must
Mere breach of promise to marry is not an have acted maliciously, in the case of Industrial
actionable wrong. But to formally set a wedding Insurance vs. Bondad (2000) it was the
and go through all the above-described petitioner Industrial Insurance who was held
preparation and publicity, only to walk out of it liable for malicious prosecution and was made
when the matrimony is about to be solemnized, to pay damages, as they prosecuted a case
is quite different. This is palpably and which was clearly without basis in fact.
unjustifiably contrary to good customs xxx.
[Wassmer vs. Velez (1964)] To constitute malicious prosecution, there must
be proof that the prosecution was prompted by
Where a man's promise to marry is in fact the a sinister design to vex and humiliate a person
proximate cause of the acceptance of his love by and that it was initiated deliberately by the
a woman and his representation to fulfill that defendant knowing that his charges were false
promise thereafter becomes the proximate and groundless. Concededly, the mere act of
PAGE 405
submitting a case to the authorities for appropriated where it is just and equitable that
prosecution does not make one liable for such restitution be made, and where such action
malicious prosecution. [Que vs. IAC (1989)] involves no violation or frustration of law or
opposition to public policy, either directly or
Malicious prosecution involves not only criminal indirectly.
but civil and administrative suits as well. [Drilon
vs. CA (1997)] While neither Art. 22 nor Art. 23 expressly
provides for the effects of unjust enrichment,
PUBLIC HUMILIATION the Chapter on Quasi-Contracts [Art.icles 2159-
It is against morals, good customs and public 2163), which complements or supplements and
policy to humiliate, embarrass and degrade the should be so considered in appropriate cases,
dignity of a person. Everyone must respect the does.
dignity, personality, privacy and peace of mind
of his neighbors and other persons [Art.icle 26, Enrichment at the expense of another is not per
Civil Code). [Grand Union vs. Espino (1979)] se forbidden. It is such enrichment without just
or legal cause that is contemplated here.
UNJUSTIFIED DISMISSAL Just and legal cause is always presumed, and
The right of an employer to dismiss an the plaintiff has the burden of proving its
employee is not to be confused with the manner absence.
in which this right is to be exercised.
The restitution must cover the loss suffered by
When the manner in which the company the plaintiff but it can never exceed the amount
exercised its right to dismiss was abusive, of unjust enrichment of the defendant if it is less
oppressive and malicious, it is liable for than the loss of the plaintiff.
damages.
Requisites:
(1) That the defendant has been enriched;
UNJUST ENRICHMENT (2) That the plaintiff has suffered a loss;
Art. 22. Every person who through an act of (3) That the enrichment of the defendant is
performance by another, or any other means, without just or legal ground; and
acquires or comes into possession of something at (4) That the plaintiff has no other action based
the expense of the latter without just or legal
on contract, crime or quasi-delict.
ground, shall return the same to him.
Art. 23. Even when an act or event causing LIABILITY WITHOUT FAULT
damage to anothers property was not due to the Art. 23. Even when an act or event causing
fault or negligence of the defendant, the latter damage to anothers party was not due to the fault
shall be liable for indemnity if through the act or or negligence of the defendant, the latter shall be
event he was benefited liable for indemnity if through the act or event he
was benefited.
Art. 2142. Certain lawful, voluntary and unilateral
acts give rise to the juridical relation of quasi- BASIS OF LIABILITY
contract to the end that no one shall be unjustly Equity. An involuntary act, because of its
enriched or benefited at the expense of another. character, cannot generally create an
obligation; but when by such act its author has
Art. 2143. The provisions for quasi contracts in this been enriched, it is only just that he should
Chapter do not exclude other quasi-contracts indemnify for the damages caused to the extent
which may come within the purview of the
preceding article.
of this enrichment.
One person should not be permitted to unjustly SCOPE OF LIABILITY

enrich himself at the expense of another, but The indemnity does not include unrealized
should be required to make restitution of, or for profits of the injured party, because the
property or benefits received, retained, or defendants enrichment is the limit of his
liability.
PAGE 406
Classification of Torts The Tortfeasor

Tortfeasor refers to all persons who command,
ACCORDING TO MANNER OF instigate, promote, encourage, advise,
countenance, cooperate in, aid or abet the
COMMISSION commission of a tort, or who approve of it after
it is done, if done for their benefit. [Worcester vs.
NEGLIGENT TORT Ocampo (1958)]
A negligent tort consists in the failure to act
according to the standard of diligence required THE DIRECT TORTFEASOR
under the attendant circumstances. It is a
voluntary act or omission which results in injury Art. 2176. Whoever by act or omission causes
to others, without intending to cause the same. damage to another, there being fault or
negligence, is obliged to pay for the damage done.
xxx
INTENTIONAL TORT
An intentional tort is perpetrated by one who The tortfeasor may be a natural or juridical
intends to do that which the law has declared to person. For natural persons, apply requisites of
be wrong. It is conduct where the actor desires Art. 2176 and for juridical persons, apply
to cause the consequences of the act, or that he vicarious liability provisions.
believes that the consequences are
substantially certain to result therefrom.
PERSONS MADE LIABLE FOR
Note: Article 2176 where it refers to fault or OTHERS
negligence covers not only acts not Art. 2180 (1). The obligation imposed by Article
punishable by law but also acts criminal in 2176 is demandable not only for ones own acts or
character, whether intentional and voluntary or omissions, but also for those of persons for whom
negligent. (Elcano vs. Hill [1977]) one is responsible.
STRICT LIABILITY
One is liable independent of fault or negligence.
PRINCIPLE OF VICARIOUS LIABILITY;
It only requires proof of a certain set of facts. DEFINITION
Liability here is based on the breach of an A person who has not committed the act or
absolute duty to make something safe. It most omission which caused damage or injury to
often applies to ultra-hazardous activities or in another may nevertheless be held civilly liable
product liability cases. It is also known as to the latter either directly or subsidiarily under
absolute liability or liability without fault. certain circumstances.
Strict liability is imposed by articles 1314, 1711, This is also known as the doctrine of imputed
1712, 1723, 2183, 2187, 2189, 2190, 2191, 2192, negligence.
2193.
Art. 2180, par. 8. The responsibility treated of in
ACCORDING TO SCOPE this article shall cease when the persons herein
mentioned prove that they observed all the
diligence of a good father of a family to prevent
GENERAL damage.
Tort liability is based on any of the three
categories: intentional, negligent, strict liability. General rule: Proper defense is the exercise of
the diligence of a good father of a family. (bonus
SPECIFIC paterfamilias)
Includes trespass, assault, battery, negligence,
products liability, and intentional infliction of Exceptions: See discussion on different
emotional distress. standards of diligence in foregoing sections.
PAGE 407
BASIS OF VICARIOUS LIABILITY not conditioned upon the insolvency of or prior

The basis of vicarious liability is NOT respondeat recourse against the negligent tortfeasor.
superior; rather, it is the principle of pater
familias. PERSONS VICARIOUSLY LIABLE [Art.
2180)
Respondeat Under American jurisprudence, it
superior means that the negligence of the WHO ARE LIABLE FOR MINORS?
servant is conclusively the negligence (1) Parents (the father, and in case of his death
of the master. or incapacity, the mother)
(2) Adoptive parents
Bonus pater Under the principle of pater familias,
familias the basis of the masters liability is
(3) Court-appointed guardians
the negligence in the supervision of (4) Substitute Parental Authorities
his subordinates. The master will be (a) Grandparents
freed from liability if he can prove that (b) Oldest qualified sibling over 21 years old
he had observed all the diligence of a (c) Childs actual custodian, provided he is
good father of the family to prevent qualified and over 21 years old.
the damage. (5) Special Parental Authorities
(a) School
LIABILITY OF THE ACTUAL (b) Administrators
(c) Teachers
TORTFEASOR (d) Individual, entity, or institution engaged
The author of the act is not exempted from in child care
personal liability. He may be sued alone or with
the person responsible for him. PARENTS AND ADOPTERS
2 Requisites According to Chironi: Basis of Liability
(1) The duty of supervision; It is based on the presumption of failure on their
(2) The possibility of making such supervision part to properly exercise their parental authority
effective. for the good education of their children and
exert adequate vigilance over them.
PRESUMPTION OF NEGLIGENCE ON
PERSONS INDIRECTLY It is imposed only when children are living with
RESPONSIBLE the parents.
Liability arises by virtue of a presumption juris If there is just cause for separation, the
tantum of negligence on the part of the persons responsibility ceases.
made responsible under the article, derived from
their failure to exercise due care and vigilance Note: The responsibility of the father and
over the acts of the subordinates to prevent mother is not simultaneous but alternate.
them from causing damage.
When Responsibility Ceases
The basis of this vicarious, although primary, When parent is not in the position to exercise
liability is, as in Article 2176, fault or negligence, authority and supervision over the child
which is presumed from that which
accompanied the causative act or omission. The Meaning of Minority
presumption is merely prima facie and may Par. 2 and 3 of Art. 2180 speak of minors.
therefore be rebutted. [Tamargo vs. CA (1992)] Minors here refer to those who are below 21
years of age, NOT below 18 years. The law
NATURE OF LIABILITY reducing the majority age from 21 to 18 years
The liability of the vicarious obligor is PRIMARY old did not amend these pars.
and DIRECT (solidarily liable with the
tortfeasor), not subsidiary. His responsibility is Art. 236, par. 3 of the FC, as amended by RA
6809, provides:
PAGE 408
parents had exercised all the diligence of a

Nothing in this Code shall be construed to good father of a family to prevent the damage.
derogate from the duty or responsibility of [Tamargo vs. CA (1992)]
parents and guardians for children and
wards below 21 years of age mentioned in
Note: Art. 2180, par. 2 of the Civil Code which
the second and third paragraphs of 2180 of
the Civil Code.
holds the father liable for damages has been
modified by the Family Code and PD 603. Art.
Adopted Children 211 of the FC declares joint parental authority of
Judicially adopted children are considered the mother and father over common children.
legitimate children of their adopting parents. The parent(s) exercising parental authority are
Thus, adopters are civilly liable for their liable for the torts of their children.
tortious/ criminal acts if the children live with
them and are below 21 years of age. The parent's liability under 2180 should be
primary and not subsidiary. If it were subsidiary,
Illegitimate Children the parents cannot invoke due diligence as a
Responsibility is with the mother whom the law defense. Such interpretation reconciles 2180
vests with parental authority. with 2194 which calls for solidary liability of joint
tortfeasors. [Libi vs. IAC (1992)]
Reason for Vicarious Liability
The civil liability which the law imposes upon Requisites for liability to attach:
the father and, in case of his death or incapacity, (1) The child is below 21 years old;
the mother, for any damages that may be (2) The child is under the parental authority of
caused by the minor children who live with the parents;
them, is obvious. This is a necessary (3) The child is living in the company of the
consequence of the parental authority they parents.
exercise over them which imposes upon the
Parental authority over foundlings,
parents the duty of supporting them, keeping
abandoned, neglected or abused and other
them in their company, educating them in
similarly situated children
proportion to their means, while, on the other
In case of foundlings, abandoned, neglected or
hand, gives them the right to correct and
abused children and other children similarly
punish them in moderation. [Exconde vs.
situated, parental authority shall be entrusted in
Capuno (1957)]
summary judicial proceedings to heads of
children's homes, orphanages and similar
The basis of parental authority for the torts of a
institutions duly accredited by the proper
minor child is the relationship existing between
government agency. [Art. 217, FC]
the parents and the minor child living with them
and over whom, the law presumes, the parents
GUARDIANS
exercise supervision and control. To hold that
parental authority had been retroactively
Liability of guardians
lodged in the adoptive parents so as to burden
Guardians are liable for damages caused by the
them with the liability for a tortious act that they
minors or incapacitated persons who are under
could not have foreseen and prevented would
their authority and live in their company. [Art.
be unfair.
2180, par. 3]
Parental liability is, in other words, anchored The liability of guardians with respect to their
upon parental authority coupled with presumed wards is governed by the same rule as in the
parental dereliction in the discharge of the liability of parents with respect to their
duties accompanying such authority. The children below 21 years and who live with
parental dereliction is, of course, only presumed them.
and the presumption can be overturned under Incompetent includes those:
Article 2180 of the Civil Code by proof that the (1) suffering the penalty of civil interdiction,
(2) prodigals,
PAGE 409
(3) deaf and dumb who are unable to read Requisites for
and write, Who are liable For whose acts liability to
(4) of unsound mind, even though they have attach
lucid intervals If the
(5) being of sound mind, but by reason of tortfeasor is a
age, disease, weak mind, and other teacher/
similar causes, cannot take care of employee of
themselves or manage their property. the school, it
(Rule 92, ROC) is liable as
employer
Liability of minor or insane tortfeasor without under 2180
a parent or guardian (5) of CC (St.
He shall be answerable with his own property in Francis vs. CA
an action against him where a guardian ad [1991])
litem shall be appointed. [Art. 2182]
If the
School
SCHOOL, TEACHERS AND tortfeasor is a Must be
(generally not
ADMINISTRATORS stranger, it is below 18
held liable)
Teachers or heads of establishments of arts and liable for
trades shall be liable for damages caused by breach of
their pupils and students or apprentices, so long contract since
as they remain in their custody. [Art. 2180, par. the school has
7] the implied
duty to its
Requisites for students to
Who are liable For whose acts liability to maintain
attach peace and
order within
Teacher-in- Pupils and its premises.
charge (the students (PSBA vs. CA
one Pupils and remain in [1992])
designated to students teachers
exercise custody
supervision regardless of Note: Parental Authority of Special Parental
over students) the age Authorities may only be exercised while under
their supervision, instruction, or custody. This
Head of attaches to all authorized activities, whether
establishment Custody inside or outside the school, entity, or
of arts and Apprentices regardless of institution.
trades the age
Custody means the protective and supervisory
If the custody that the school, its head and teachers
tortfeasor is a exercise over the pupils, for as long as they are
School in attendance in school, which includes recess
student of the Must be
(generally not time.
school [Art. below 18
held liable)
218 FC]
There is nothing in the law that requires that for
such liability to attach, the pupil or student who
commits the tortious act must live and board in
the school, as erroneously held by the lower
court, and the dicta in Mercado (as well as in
Exconde) on which it relied, must now be
PAGE 410
deemed to have been set aside by this decision. increasing such vigilance where the school
[Palisoc vs. Brillantes (1971)] is non-academic.
As long as it is shown that the student is in the The case of Ylarde vs. Aquino discusses the
school premises pursuant to a legitimate liability of the PRINCIPAL. Court said that
student objective, in the exercise of a legitimate according to Art. 2180, only the HEAD of ARTS
right, or the enjoyment of a legitimate student AND TRADES schools can be held liable under
privilege, the responsibility of the school such Article. Since the principal was the head of
authorities over the student continues. an academic school, he was still exculpated
[Amadora vs. CA (1988)] from responsibility.
A student not at attendance in the school OWNERS AND MANAGERS OF

cannot be in recess thereat. A recess, as the ESTABLISHMENTS AND ENTERPRISES
concept is embraced in the phrase at The owners and managers of an establishment
attendance in the school, contemplates a or enterprise are likewise responsible for
situation of temporary adjournment of school damages caused by their employees in the
activities where the student still remains within service of the branches in which the latter are
call of his mentor and is not permitted to leave employed or on the occasion of their functions.
the school premises, or the area within which [Art. 2180, par. 4]
the school activity is conducted. Recess by its
nature does not include dismissal. For whose Requisites for
Who are liable
acts liability to attach
Mere fact of being enrolled or being in the The damage
premises of a school without more does not was caused in
constitute attending school or being in the the service of
protective and supervisory custody of the the branches in
Owners and
school, as contemplated by law. [Salvosa vs. IAC which the
managers of
(1988)] Their employees are
an
employees employed
establishment
The principal of the school cannot be held liable -OR-
or enterprise
for the reason that the school he leads is an The damage
academic school and not a school of arts and was caused on
trades. [Ylarde vs. Aquino (1988)] the occasion of
their functions
Note that in Amadora vs. CA (1988) the Court
said: Owners and managers of an establishment or
enterprise does not include a manager of a
There is really no substantial distinction corporation. (Spanish term directores
between the academic and the non- connotes employer. But manager of a
academic schools insofar as torts corporation is not an employer, but rather
committed by their students are concerned. merely an employee of the owner.) [Philippine
The same vigilance is expected from the Rabbit vs. Philam Forwarders (1975)]
teacher over the students under his control
and supervision, whatever the nature of the
EMPLOYERS (in general)
school where he is teaching.
Employers shall be liable for the damages
The Court cannot see why different caused by their employees and household
degrees of vigilance should be exercised by helpers acting within the scope of their assigned
the school authorities on the basis only of tasks, even though the former are not engaged
the nature of their respective schools. There in any business or industry. [Art. 2180, par. 5]
does not seem to be any plausible reason
for relaxing that vigilance simply because
the school is academic in nature and for
PAGE 411
Meaning of employer To make the employer liable, it must be

Art. 97 (b), Labor Code. Employer includes any established that the injurious or tortious act was
person acting directly or indirectly in the interest of committed at the time that the employee was
an employer in relation to an employee and shall performing his functions.
include the government and all its branches,
subdivisions and instrumentalities, all Within the scope of their assigned task in Art.
government-owned or controlled corporations and 2180 includes any act done by an employee in
institutions, as well as non-profit private furtherance of the interests, or for the account
institutions, or organizations. of the employer at the time of the infliction of
the injury or damage. [Filamer vs. IAC (1992)]
This Court still employs the control test to
determine the existence of an employer- Employer need not be riding in the vehicle to
employee relationship between hospital and become liable for a drivers negligence. Article
doctor. Under the control test, an 2184 mandating that the owner is only held
employment relationship exists between a solidarily liable if he is riding in the vehicle at
physician and a hospital if the hospital controls the time of the mishap, only applies to those
both the means and the details of the process owners of vehicles, who do not come within the
by which the physician is to accomplish his task. ambit of Article 2180 (as owners of an
The Court earlier ruled that there was employer- establishment or enterprise.) [De Leon
employee relationship between the doctor and Brokerage vs. CA (1962)]
employee but reversed itself upon motion for
reconsideration. They still held the hospital Basis of liability
liable on the basis of agency and corporate Employers negligence in:
responsibility. [Professional Services vs. CA and (1) The selection of their employees (culpa in
Agana (2010)] eligiendo); and
(2) The supervision over their employees (culpa
Independent contractor in vigilando).
General rule: Master not generally liable for the
fault or negligence of an independent Basis for civil liability of employers is
contractor performing some work for him paterfamilias. [Cuison vs. Norton & Harrison
(1930)]
Exception: One who hires an independent
contractor, but controls the latters work is also Presumption of negligence
responsible for the independent contractors The presentation of proof of the negligence of
negligence upon the finding of an employer- its employee gives rise to the presumption that
employee relationship. the defendant employer did not exercise the
diligence of a good father of a family in the
The existence of the employer-employee selection and supervision of its employees.
relationship must first be established before an
employer may be made vicariously liable under For the employer to avoid the solidary liability
Art. 2180, CC. for a tort committed by his employee, an
employer must rebut the presumption by
Requisites: presenting adequate and convincing proof that
(1) Employee chosen by employer or through in the selection and supervision of his employee,
another; he or she exercised the care and diligence of a
(2) Services rendered in accordance with orders good father of a family. Employers must submit
which employer has authority to give; concrete proof, including documentary
(3) Illicit act of employee was on the occasion evidence, that they complied with everything
or by reason of the functions entrusted to that was incumbent on them. [Ramos vs. C.O.L.
him; Realty Corp. (2009)]
(4) Presumption of negligence.
PAGE 412
Necessity of presumption of negligence interpose the defense of due diligence in the

It is difficult for any person injured to prove the selection and supervision of the employee.
employers negligence as they would be proving [Castilex Industrial Corp. vs. Vasquez (1999)]
negative facts.
Distinction between 4th and 5th paragraph of
EMPLOYER NEED NOT BE ENGAGED 2180
IN BUSINESS OR INDUSTRY
The phrase even though the former are not 4th paragraph 5th paragraph
engaged in any business or industry found in
Employers in
the fifth paragraph should be interpreted to Owners and general,
mean that it is not necessary for the employer to Liable managers of an whether or not
be engaged in any business or industry to be persons establishment or an engaged in
liable for the negligence of his employee who is enterprise business or
acting within the scope of his assigned task. industry
A distinction must be made between the two Negligent acts of

Negligent acts
employees
provisions to determine what is applicable. Both committed either in
of employees
provisions apply to employers: the fourth acting within
Covered acts the service of the
paragraph, to owners and managers of an the scope of
branches or on the
establishment or enterprise; and the fifth their assigned
occasion of their
paragraph, to employers in general, whether or task
functions
not engaged in any business or industry. The
fourth paragraph covers negligent acts of
employees committed either in the service of
DEFENSE OF DILIGENCE IN
the branches or on the occasion of their SELECTION AND SUPERVISION
functions, while the fifth paragraph Metro Manila Transit vs. CA (1993): Due diligence
encompasses negligent acts of employees in the SUPERVISION of employees includes the
acting within the scope of their assigned task. formulation of suitable rules and regulations for
The latter is an expansion of the former in both the guidance of employees and the issuance of
employer coverage and acts included. Negligent proper instructions intended for the protection
acts of employees, whether or not the employer of the public and persons with whom the
is engaged in a business or industry, are covered employer has relations through his or her
so long as they were acting within the scope of employees and the imposition of necessary
their assigned task, even though committed disciplinary measures upon employees in case
neither in the service of the branches nor on the of breach or as may be warranted to ensure
occasion of their functions. For, admittedly, performance of acts as indispensable to the
employees oftentimes wear different hats. They business of and beneficial to their employee.
perform functions which are beyond their office,
title or designation but which, nevertheless, are Due diligence in the SELECTION of employees
still within the call of duty. require that the employer carefully examined
the applicant for employment as to his
Under the fifth paragraph of Article 2180, qualifications, his experience and record of
whether or not engaged in any business or service.
industry, an employer is liable for the torts
committed by employees within the scope of his The responsibility of employers for the
assigned tasks. But it is necessary to establish negligence of their employees in the
the employer-employee relationship; once this performance of their duties is primary, that is,
is done, the plaintiff must show, to hold the the injured party may recover from the
employer liable, that the employee was acting employers directly, regardless of the solvency of
within the scope of his assigned task when the their employees. The rationale for the rule on
tort complained of was committed. It is only vicarious liability of the employer for the torts of
then that the employer may find it necessary to the employees is that this is a required cost of
PAGE 413
doing business. They are placed upon the held responsible so as not to inconvenience
employer because, having engaged in the or prejudice the third party injured.
enterprise, which will on the basis of all past [Cadiente vs. Macas, 2008]The registered
experience involve harm to others through the owner, however, has the right to be
tort of employees, and sought to profit by it, it is indemnified by the real or actual owner of
just that he, rather than the innocent plaintiff, the amount that he may be required to pay
should bear them; and because he is better able as damages for the injury caused to the
to absorb them, through prices, rates or liability plaintiff. [Orix Metro Leasing v. Mangalinan
or insurance, and so to shift them to society, to 2012]
the community at large. [Metro Manila Transit (2) This rule applies even if the vehicle is leased
vs. CA (1998)] to third persons.
NATURE OF EMPLOYERS LIABILITY Remedy of the registered owner

The employer is PRIMARILY and SOLIDARILY His liability is subject to his right of recourse
liable for the tortious act of the employee. The against the transferee or buyer.
employer may recover from the employee, the
THE STATE
amount it will have to pay the offended partys
The State may not be sued without its consent.
claim.
[Sec 3, Art XVI, 1987 Constitution]
Such recovery, however, is NOT for the entire
The State is responsible in like manner when it
amount. To allow such would be as if to say that
acts through a special agent; but not when the
the employer was not negligent.
damage has been caused by the official to
The liability of the registered owner and driver is whom the task done properly pertains, in which
solidary, primary and direct. [Philtranco vs. CA case what is provided in Article 2176 shall be
(1997)] applicable. [Art. 2180, par. 6]
Criminal Negligence A special agent is one who receives a definite

The vicarious liability of the employer for and fixed order or commission, foreign to the
criminal negligence of his employee is governed exercise of the duties of his office if he is a
by Art. 103, RPC. Conviction of the employee special official.
conclusively binds the employer. Defense of due
diligence in the selection and supervision of the This concept does not apply to any executive
employee is NOT available. The employer agent who is an employee of the active
cannot appeal the conviction. [Fernando vs. administration and who on his own
Franco (1971)] responsibility performs the functions which are
inherent in and naturally pertain to his office.
Note: The liability of the employer under Art.
103, RPC is subsidiary. The responsibility of the state is limited to that
which it contracts through a special agent, duly
Liability for illegal or harmful acts committed by empowered by a definite order or commission to
security guards attaches to the employer perform some act or charged with some definite
agency, not to the clients or customers of such purpose which gives rise to the claim. [Merritt vs.
agency [Soliman vs. Tuazon (1992)]. Government of the Philippine Islands (1960)]
Registered Owner Rule General rule: The State cannot be sued.

(1) The registered owner of the vehicle is
primarily responsible to the public for Exceptions:
whatever damage or injury the vehicle may (1) There is express legislative consent;
have caused, even if he had already sold the (2) The State filed the case (because here, it is
same to someone else. The policy is the deemed to have waived its immunity).
easy identification of the owner who can be
PAGE 414
Instances where the State gives its consent to JOINT TORTFEASORS

be sued
(1) Art. 2180 (6) is an example of an express Art. 2194. The responsibility of two or more
persons who are liable for quasi-delict is solidary.
legislative consent. Here, the State assumes
a limited liability for the acts of its special
agents. DEFINITION OF JOINT
(2) Art. 2189 provides for state liability for TORTFEASORS
damages caused by defective condition of They are all persons who command, instigate,
public works. promote, encourage, advise, countenance,
(3) Local Government Code provides for the cooperate in, aid or abet in the commission of a
liability of local government units for tort, or who approve of it after it is done, if done
wrongful exercise of its proprietary (as for their benefit. [Filipinas Broadcasting Network
opposed to its governmental) functions. The vs. AMEC-BCCM (2005)]
latter is the same as that of a private
corporation or individual. [Mendoza vs. De APPLICABILITY OF THE PROVISION
Leon, 1916] The provision applies when there are 2 or more
persons who have participated in the
The State agencies or subdivisions, in the commission of a single quasi-delict.
pursuance of proprietary functions, are akin to
any other private corporation. They may be sued The injury must be indivisible.
for:
(1) Torts committed by them [Art. 2176] or NATURE OF LIABILITY
(2) Torts committed by their employees [Art. Solidary the person injured may sue all of
2180]. them, or any number less than all, and they are
all together solidarily liable for the whole
As long as it is performing proprietary functions, damage.
it can be held liable for the acts of its
employees, both regular and special.
Notes: Acts of Omission and Its

As a governmental entity: Liable only for acts
of its special agents. Modalities
As a corporate entity: May be held liable just Human conduct can be described alternatively
as any other employer for the acts of its as acts or omission. In relation to the existence
employees. of a legal duty, conduct may be described in
Special agent one duly empowered by a terms of action or inaction, or misfeasance or
definite order or commission to perform some nonfeasance.
act or one charged with some definite purpose
which give rise to the claim; if he is a Manresa: Liability for personal acts or omission
government employee or official, he must be is founded on that indisputable principle of
acting under a definite and fixed order or justice recognized by all legislators that when a
commission, foreign to the exercise of the person by his act or omission causes damage or
duties of his office. prejudice to another, a juridical relation is
created by virtue of which the injured person
acquires a right to be indemnified and the
person causing the damage is charged with the
corresponding duty of repairing the damage.
The reason for this is found in the obvious truth
that man should subordinate his acts to the
precepts of prudence and if he fails to observe
them and cause damage to another, he must
repair the damage.
PAGE 415
Proximate Cause injury, even though such injury would not have
happened but for such condition or occasion.
[Manila Electric vs. Remonquillo (1956)]
CONCEPT OF PROXIMATE
Concurrent cause Several causes producing
CAUSE the injury, and each is an efficient cause without
In order that civil liability for negligence may
which the injury would not have happened. The
arise, there must be a direct causal connection injury is attributed to any or all the causes, and
between the damage suffered by the plaintiff
recovery may be had against any or all of those
and the act or omission of the defendant. In
responsible.
other words, the act or omission of the
defendant must be the proximate cause of the Where the concurrent or successive negligent
loss or damage of the plaintiff. acts or omissions of two or more persons,
although acting independently, are in
DEFINITION combination the direct and proximate cause of
Proximate cause that cause, which, in natural a single injury to a third person, it is impossible
and continuous sequence, unbroken by any to determine in what proportion each
efficient intervening cause, produces the injury, contributed to the injury and either of them is
and without which the result would not have responsible for the whole injury. Where their
occurred. concurring negligence resulted in injury or
damage to a third party, they become joint
Proximate legal cause that acting first and tortfeasors and are solidarily liable for the
producing the injury, either immediately or by resulting damage. [Eastern Shipping vs. CA
setting other events in motion, all constituting a (1998)]
natural and continuous chain of events, each
having a close causal connection with its Intervening cause
immediate predecessor, the final event in the If the intervening cause is one which in ordinary
chain immediately effecting the injury as a human experience is reasonably to be
natural and probable result of the cause which anticipated, or one which the defendant has
first acted, under such circumstances that the reason to anticipate under the particular
person responsible for the first event should, as circumstances, the defendant may be negligent,
an ordinary prudent and intelligent person, have among other reasons, because of failure to
reasonable ground to expect at the moment of guard against it.
his act or default that an injury to some person
might probably result therefrom. [Bataclan vs. There is an intervening cause combining with
Medina (1957)] the defendants conduct to produce the result,
and the defendants negligence consists in
Proximate cause is determined from the facts of failure to protect the plaintiff against that very
each case, upon a combined consideration of risk.
logic, common sense, policy or precedent. [
Quezon City vs. Dacara (2005):] Foreseeable intervening forces are within the
scope of the original risk, and hence of the
DIFFERENTIATED FROM: defendants negligence. [Phoenix Construction
vs. IAC (1987)]
Remote cause
A prior and remote cause cannot be made the Efficient intervening cause
basis of an action if such remote cause did The test is not in the number of intervening
nothing more than furnish the condition or give causes, but in their character and in the natural
rise to the occasion by which the injury was and probable connection between the wrong
made possible, if there intervened between such done and the injurious consequence. Teague vs.
prior or remote cause and the injury a distinct, Fernandez (1973)]
successive, unrelated, and efficient cause of the
PAGE 416
TESTS TO DETERMINE prudent and experienced party, fully acquainted

with all the circumstances which in fact exist,
PROXIMATE CAUSE whether they could have been ascertained by
reasonable diligence, or not, would have
CAUSE IN FACT thought at the time of the negligent act as
The first step is to determine whether the reasonably possible to follow, if they had been
defendants conduct, in point of fact, was a suggested to his mind.
factor in causing plaintiffs damage.
ORBIT OF THE RISK TEST
EFFECTIVENESS OF THE CAUSE; If the foreseeable risk to plaintiff created a duty
BUT FOR RULE which the defendant breached, liability is
Whether such negligent conduct is a cause imposed for any resulting injury within the orbit
without which the injury would not have taken or scope of such injury. It is not the unusual
place (sine qua non rule) or is the efficient cause nature of the act resulting in injury to plaintiff
which set in motion the chain of circumstances that is the test of foreseeability, but whether the
leading to the injury. [Bataclan vs. Medina, result of the act is within the ambit of the
supra] hazards covered by the duty imposed upon the
defendant.
SUBSTANTIAL FACTOR TEST
If the actors conduct is a substantial factor in CAUSE vs. CONDITION
bringing about harm to another, the fact that Many courts have sought to distinguish between
the actor neither foresees nor should have the active cause of the harm and the existing
foreseen the harm or the manner in which it conditions upon which that cause operated. If
occurred, does not prevent him from being the defendant has created only a passive, static
liable. [Philippine Rabbit vs. IAC, 1990] condition which made the damage possible, he
is said not to be liable.
FORESEEABILITY TEST
Anticipation of consequence is a necessary The distinction between cause and condition
element in determining not only whether a has already been almost entirely discredited.
particular act or omission was negligent, but Prosser and Keeton: So far as the fact of
also whether the injury complained of was causation is concerned, in the sense of
proximately caused by such act or omission. necessary antecedents which could have played
an important part in producing the result, it is
NATURAL AND PROBABLE quite impossible to distinguish between active
CONSEQUENCE TEST forces and passive situations, particularly since
A natural consequence of an act is the the latter are the result of other active forces
consequence which ordinarily follows it. A which have gone before. Note: active force is the
probable consequence is one that is more likely cause while the passive situation is the
to follow than fail to follow its supposed cause condition.
but it need not be one which necessarily follows
such cause. It is not the distinction which is important but
the nature of the risk and the character of the
intervening cause. [Phoenix Construction vs. IAC
ORDINARY AND NATURAL OR (1987)]
DIRECT CONSEQUENCE TEST
If negligence is a cause in fact of the injury, the
liability of the wrongdoer extends to all the
LEGAL CAUSE
injurious consequences.
NATURAL AND PROBABLE
HINDSIGHT TEST CONSEQUENCES
A party guilty of negligence or omission of duty A natural consequence of an act is the
is responsible for all the consequences which a consequence which ordinarily follows it. A
PAGE 417
probable consequence is one that is more likely impending harm by the exercise of due
to follow than fail to follow its supposed cause diligence. [Consolidated Bank vs. CA (2003)]
but it need not be one which necessarily follows
such cause. If both parties are found to be negligent; but,
their negligence are not contemporaneous, the
FORESEEABILITY person who has the last fair chance to avoid the
Anticipation of consequence is a necessary impending harm and fails to do so is chargeable
element in determining not only whether a with the consequences, without reference to the
particular act or omission was negligent, but prior negligence of the other party. [Picart vs.
also whether the injury complained of was Smith (1918)]
proximately caused by such act or omission.
Elements:
Where the particular harm sustained was (1) Plaintiffs own negligence puts himself in a
reasonably foreseeable at the time of the dangerous situation;
defendants misconduct, his act or omission is (2) Defendant saw or discovered, by exercising
the legal cause thereof [Jarencio] reasonable care, the perilous position of
plaintiff;
Foreseeability is the fundamental basis of the (3) In due time to avoid injuring him
law of negligence. To be negligent, the (4) Despite notice and imminent peril,
defendant must have acted or failed to act in defendant failed to employ care to avoid
such a way that an ordinary reasonable man injury; and
would have realized that certain interests of (5) Injury of plaintiff resulted.
certain persons were reasonably subjected to a
general but definite class of risks. COVERS SUCCESSIVE ACTS OF
NEGLIGENCE
DOCTRINE OF LAST CLEAR
CHANCE
Also known as: doctrine of discovered peril or INAPPLICABLE TO JOINT
doctrine of supervening negligence or TORTFEASORS
humanitarian doctrine However, the doctrine cannot be extended into
the field of joint tortfeasors as a test of whether
The negligence of the plaintiff does not only one of them should be held liable to the
preclude a recovery for the negligence of the injured person by reason of his discovery of the
defendant where it appears that the defendant latters peril, and it cannot be invoked as
by exercising reasonable care and prudence, between defendants concurrently negligent.
might have avoided injurious consequences to
the plaintiff notwithstanding the plaintiffs
(own) negligence. [Sangco, Torts and Damages.] Primary negligence of the defendant
The doctrine of last clear chance states that

where both parties are negligent but the Contributory negligence of the plaintiff
negligent act of one is appreciably later than
that of the other, or where it is impossible to
determine whose fault or negligence caused the
loss, the one who had the last clear opportunity Subsequent negligence of the defendant
to avoid the loss but failed to do so, is in failing to avoid the injury to the plaintiff
chargeable with the loss. The antecedent
negligence of the plaintiff does not preclude Note:
him from recovering damages caused by the If plaintiff is the proximate cause: NO
supervening negligence of the defendant, who RECOVERY can be made.
had the last fair chance to prevent the
PAGE 418
If plaintiff is NOT the proximate cause: merely an element to the damage caused upon
Recovery can be made but such will be him.
mitigated.
If negligence of parties is equal in degree, Not exculpatory but results in reduction of
then each bears his own loss. damages. [MH Rakes vs. Atlantic (1907)]
Last clear chance applies only if the person who WHEN IS IT A BAR TO RECOVERY?
allegedly had the last opportunity to avert the Only when the proximate cause is on the part of
accident was aware of the existence of peril or the plaintiff. Where the plaintiff contributes to
should, with exercise of due care, have been the principal occurrence, as one of its
aware of it. [Pantranco vs. Baesa (1989)] determining factors, he cannot recover. Where,
in conjunction with the occurrence, he
Last clear chance does not apply where the contributes only to his own injury, he may
party charged is required to act instantaneously, recover the amount that the defendant
and if the injury cannot be avoided by the responsible for the event should pay for such
application of all means at hand after the peril injury, less a sum deemed a suitable equivalent
is or should have been discovered. [Ong vs. for his own imprudence.
Metropolitan (1958)]
The doctrine of last clear chance, as enunciated

in Anuran v. Buno, applies in a suit between the Legal Injury
owners and drivers of colliding vehicles. It does
not arise where a passenger demands Injury is the illegal invasion of a legal right.
responsibility from the carrier to enforce its
contractual obligations. It will be inequitable to Legal right a legal claim enforced by
exempt the negligent driver of the jeepney and sanctions.
its owners on the ground that the other driver
was likewise guilty of negligence. [Bustamante Legal duty that which the law requires to be
vs. CA (1991)] done to a determinate person.
Doctrine of last clear chance does not seem to Elements:

have a role to play in a jurisdiction where the (1) Legal right in favor of a person;
common law concept of contributory negligence (2) Correlative legal duty on the part of
as an absolute bar to recovery by the plaintiff, another;
has itself been rejected, as it has been in 2179 of (3) Wrong in the form of an act or omission or
CC. [Phoenix vs. IAC (1987)] violation of said legal right and duty with
consequent injury or damage.
CONTRIBUTORY NEGLIGENCE To warrant recovery of damages, there must be
Conduct on the part of the injured party, which both a right of action for a legal wrong inflicted
contributed as a legal cause to the harm he has by the defendant, and damage resulting to the
suffered, which falls below the standard to plaintiff therefrom.
which he is required to conform for his own
protection. [Valenzuela vs. CA (1996)] The underlying basis for the award of tort
damages is the premise that an individual was
Contributory negligence does not defeat an injured in contemplation of law. The law affords
action if it can be shown that the defendant no remedy for damages resulting from an act
might, by the exercise of reasonable care and which does not amount to a legal injury or
prudence, have avoided the consequences of wrong. The act must not only be hurtful, but
the injured party's negligence. Petitioners wrongful (damnum et injuria). [Custodio vs. CA
negligence contributed only to his own injury (1996)]
and not to the principal occurrenceit was
PAGE 419
The exercise of a right ends when the right Art. 33. In cases of defamation, fraud, and physical
disappears, and it disappears when it is abused, injuries, a civil action for damages, entirely
especially to the prejudice of others. The mask separate and distinct from the criminal action, may
of a right without the spirit of justice which gives be brought by the injured party. Such civil action
it life, is repugnant to the modern concept of shall proceed independently of the criminal
social law. It cannot be said that a person prosecution, and shall require only a
exercises a right when he unnecessarily preponderance of evidence.
prejudices another xxx. Over and above the
specific precepts of positive law are the supreme
norms of justice; and he who violates them
violates the law. For this reason it is not
Intentional Torts
permissible to abuse our rights to prejudice
others. [Amonoy vs. Gutierrez (2001)] CONCEPT
Under Article 2176, a person is also held liable
CLASSES OF INJURY for intentional and malicious acts. The liability is
founded on the indisputable principle of justice
recognized by all legislations that when a
INJURY TO PERSONS person, by his act or omission, causes damage
Art. 19. Every person must, in the exercise of his or prejudice to another, a juridical relation is
rights and in the performance of his duties, act created by virtue of which the injured person
with justice, give everyone his due, and observe acquires a right to be indemnified and the
honesty and good faith.
person causing the damage is charged with the
Art. 20. Every person who, contrary to law, willfully
or negligently causes damage to another shall corresponding duty of repairing the damage.
indemnify the latter for the same.
Art. 21. Any person who willfully causes loss or [NCC 21-36] serve as catch all provisions or
injury to another in a manner that is contrary to dragnet clauses. They cover any imaginable tort
morals, good customs or public policy shall action, because these articles were intended to
compensate the latter for the damage. expand the concept of torts in our jurisdiction. It
grants adequate legal remedies for the
INJURY TO PROPERTY (otherwise) untold number of moral wrongs,
which is impossible for human foresight to
Art. 23. Even when an act or event causing
damage to anothers property was not due to the provide in our statutes. [PNB vs. CA (1978)]
fault or negligence of the defendant, the latter
shall be liable for indemnity if through the act or VIOLATIONS OF A PERSONS
event he was benefited.
SECURITY AND PHYSICAL
INJURY TO RELATIONS INJURIES [ART. 33, CC)
Art. 26. Every person shall respect the dignity,
personality, privacy and peace of mind of his BATTERY (PHYSICAL INJURY)
neighbors and other persons. The following and The actual infliction of any unlawful or
similar acts, though they may not constitute a unauthorized violence on the person of another,
criminal offense, shall produce a cause of action irrespective of its degree.
for damages, prevention and other relief:
(1) Prying into the privacy of anothers residence; The least touching of another in anger, or in any
(2) Meddling with or disturbing the private life or manner which amounts to an unlawful setting
family relations of another; upon his person, may subject one to an action
(3) Intriguing to cause another to be alienated for battery.
from his friends;
(4) Vexing or humiliating another on account
of his religious beliefs, lowly station in life, place of INTERESTS PROTECTED BY LAW:
birth, physical defect, or other personal condition. (1) Interest of the individual in freedom from
bodily harm or any impairment whatever of
the physical integrity of the body;
PAGE 420
(2) Interest in freedom from offensive bodily INTERFERENCE WITH PERSONAL

touching although no actual harm is done. PROPERTY
Defamation and fraud (in Art. 33) are used in TRESPASS TO LAND
their ordinary sense because there are no Any intentional use of anothers real property,
specific provisions in the Revised Penal Code without authorization and without a privilege by
using these terms as names of offenses defined law to do so, is actionable as a trespass without
therein, so that these two terms defamation and regard to harm. [Prosser and Keeton, p. 70]
fraud must have been used not to impart to
them any technical meaning in the laws of the Elements: An invasion
Philippines, but in their generic sense. With (1) which interfered with the right of exclusive
these apparent circumstances in mind, it is possession of the land, and
evident that the term physical injuries could (2) which was a direct result of some act
not have been used in its specific sense as a committed by the defendant. [Prosser and
crime defined in the Revised Penal Code, for it is Keeton, p. 67]
difficult to believe that the Code Commission
would have used terms in same articlesome in TRESPASS TO CHATTELS
this general and others in its technical sense. In Any direct and immediate intentional
other words, the term physical injuries should interference with a chattel in the possession of
be understood to mean bodily injury, not the another. [Prosser and Keeton, p. 85]
crime of physical injuries, because the terms
used with the latter are general terms. Conversion
[Carandang vs. Santiago and Valenton (1955)] Major interferences with the chattel, or with the
plaintiffs rights in it, which are so serious, and
ASSAULT (GRAVE THREAT) so important, as to justify the forced judicial sale
An intentional, unlawful offer of physical injury to the defendant. [Prosser and Keeton, p. 90]
to another by force unlawfully directed toward
the person of another, under such INTENTIONAL NON-PHYSICAL
circumstances as to create a well-founded fear
HARMS
of imminent peril, coupled with the apparent
present ability to effectuate the attempt if not Art. 26. Every person shall respect the dignity,
prevented. personality, privacy and peace of mind of his
neighbors and other persons. The following and
similar acts, though they may not constitute a
The wrong is committed when unreasonable
criminal offense, shall produce a cause of action
fear is inspired in the plaintiff by threatening for damages, prevention and other relief:
gestures, especially when these are connected (1) Prying into the privacy of anothers residence;
with unlawful, sinister, and wicked conduct on (2) Meddling with or disturbing the private life or
the part of the defendant. family relations of another;
(3) Intriguing to cause another to be alienated
FALSE IMPRISONMENT (ILLEGAL from his friends;
(4) Vexing or humiliating another on account of his
DETENTION) religious beliefs, lowly station in life, place of
birth, physical defect, or other personal
Art. 32. Any public officer or employee, or any condition.
private individual, who directly or indirectly
obstructs, defeats, violates or in any manner The principal rights protected under this
impedes or impairs any of the following rights and provision are the following:
liberties of another person shall be liable to the (1) The right to personal dignity
latter for damages: (2) The right to personal security
(1) Freedom from arbitrary or illegal detention; (3) The right to family relations
(4) The right to social intercourse
(5) The right to privacy
(6) The right to peace of mind
PAGE 421
VIOLATION OF PERSONAL DIGNITY who is entitled to peace of mind. [MVRS

In order to be actionable it is not necessary that Publications vs. Islamic Da'wah Council (2003)]
the act constitutes a criminal offense. The
remedy afforded by the law is not only the VIOLATION OF PRIVACY
recovery of damages. Prevention and other It is the right to be let alone, or to be free from
relief is also available. In other words, unwarranted publicity, or to live without
injunction and other appropriate reliefs may unwarranted interference by the public in
also be obtained by the aggrieved party. matters in which the public is not necessarily
concerned.
(Illustration of a similar act): The acts and
omissions of the firm fall under Article 26. Reasonableness of Expectation of Privacy
Persons who know the residence of Doctor (The 2-prong test)
Aramil were confused by the distorted, lingering (1) Whether by ones conduct, the individual
impression that he was renting his residence has exhibited an expectation of privacy;
from Arcadio or that Arcadio had leased it from (2) Whether this expectation is one that society
him. Either way, his private life was mistakenly recognizes and accepts as reasonable.
and unnecessarily exposed.[ St. Louis Realty
Corporation vs. CA (1984)] Note: Coverage of Art. 26 is not limited to those
enumerated therein, the enumeration being
INFLICTION OF EMOTIONAL DISTRESS merely examples of acts violative of a persons
Article 26 specifically applies to intentional acts rights to dignity, personality, privacy and peace
which fall short of being criminal offenses. It of mind. Other similar acts are also covered
itself expressly refers to tortious conduct which within the scope of the article.
may not constitute criminal offenses. The
purpose is precisely to fill a gap or lacuna in the Persons who can invoke privacy
law where a person who suffers injury because General rule: The right to privacy may only be
of a wrongful act not constituting a crime is left invoked by natural persons. Juridical persons
without any redress. Under Article 26, the cannot invoke this because the basis to this
person responsible for such act becomes liable right is an injury to the feelings and sensibilities
for damages, prevention and other relief. In of the injured party, and a corporation has none
short, to preserve peace and harmony in the of those.
family and in the community, Article 26 seeks to
eliminate cases of damnum absque injuria in Exception: The right to privacy may be invoked
human relations. along with the right against unreasonable
searches and seizures.
Consequently, the elements that qualify the
same acts as criminal offenses do not apply in General rule: The right to privacy is purely
determining responsibility for tortious conduct personal in nature:
under Article 26. (1) It can be invoked only by the person actually
injured;
In intentional infliction of mental distress, the (2) It is subject to a proper waiver;
gravamen of the tort is not the injury to plaintiff's (3) It ceases upon death.
reputation, but the harm to plaintiff's mental
and emotional state. In libel, the gist of the Exception: The privilege may be given to the
action is the injury to plaintiff's reputation. heirs of a deceased to protect his memory, but
Reputation is the community's opinion of what a this privilege exists for the benefit of the living.
person is. In intentional infliction of mental It enables the protection of their feelings, and
distress, the opinion of the community is prevents the violation of their own rights
immaterial to the existence of the action regarding the character and memory of the
although the court can consider it in awarding deceased.
damages. What is material is the disturbance on
the mental or emotional state of the plaintiff
PAGE 422
Invasion of Privacy defendants benefit or advantage (ex. it was

used in the defendants advertisement), of
Types: the plaintiffs name or likeness (picture or
portrait).
(1) Publication of embarrassing private facts
the interest here is the right to be free from DISTURBANCE OF PEACE OF MIND
unwarranted publicity, wrongful publicizing The disturbance of the mental and emotional
of private affairs and activities, as these are tranquility of the plaintiff by the defendant is a
outside the ambit of legitimate public legal injury in itself and, therefore, a sufficient
concern. cause of action for damages, injunction, and
other relief.
Public figures enjoy a limited right to privacy
as compared to ordinary individuals. [Ayer v. A person, however, cannot be held liable for
Capulong (1988)] damages for the mental or emotional
disturbance of the plaintiff which was due to the
(2) Intrusion upon plaintiffs private affairs this latters susceptibility to such disturbance, where
is not limited to situations where the the defendant had no knowledge of such
wrongdoer physically trespasses into ones peculiar susceptibility. The tendency of the law
property. is to secure an interest in mental comfort only to
Generally, there is no invasion of privacy the extent of the ordinary sensibilities of men.
when journalists report something that
occurs in the public realm, except when MALICIOUS PROSECUTION
the acts of the journalist are to an extent
that it constitutes harassment. Art. 2219. Moral damages may be recovered in
the following and analogous cases:
RA 4200: It is illegal for any person not
(8) Malicious prosecution;
authorized by both parties to any private
communication to secretly record such
Art. 21. Any person who wilfully causes loss or
communication.
injury to another in manner that is contrary to
Limitations to Right to Information v.
morals, good customs or public policy shall
Right to Privacy: compensate the latter for the damage.
o Must be of public interest.
o Must not be excluded by law.
Malicious prosecution the institution of any
action or proceeding either civil or criminal
(3) Publicity which puts one in a false light in
against another, maliciously and without
the public eye to protect the interest of
probable cause.
one in not being made or forced to appear
before the public in an objectionable false
Elements:
light or position.
(1) That the defendant was himself the
prosecutor or that he instigated its
Tort of putting in false commencement;
Defamation
light (2) That the action was finally terminated with
The embarrassment of a Concerns the an acquittal;
person being portrayed reputational harm to a (3) That in bringing the action, the prosecutor
as something he is not person acted without probable cause;
(4) That he was actuated or impelled by legal
Publication is satisfied malice, that is, by improper and sinister
Statement should be even if communicated to
motives. [Lao vs. CA, 1991]
actually made in public only one specific third
person
Malicious Prosecution defined: An action for
damages brought by one against whom a
(4) Commercial appropriation of likeness of criminal prosecution, civil suit, or other legal
image consists of appropriation, for the
PAGE 423
proceeding has been instituted maliciously and reputation or standing of the person.) [MVRS vs.
without probable cause, after the termination of Islamic Da'wah (2003)]
such prosecution, suit or other proceeding in
favor of the defendant herein. The gist of the In actions for damages for libel, it is axiomatic
action is the putting of legal process in force, that the published work alleged to contain
regularly, for the mere purpose of vexation or libelous material must be examined and viewed
injury. [Drilon vs. CA (1997)] as a whole.
The provisions of the Civil Code in taking The article must be construed in its entirety
reference to malicious prosecutions must including the headlines, as they may enlarge,
necessarily imply that the person to be held explain, or restrict or be enlarged, explained or
liable to pay moral damages should have acted strengthened or restricted by the context.
deliberately and with knowledge that his Whether or not it is libelous, depends upon the
accusation of the person subject to such scope, spirit and motive of the publication taken
malicious prosecution, was false and in its entirety.
groundless.
A publication claimed to be defamatory must be
x x x Proof and motive that the prosecution or read and construed in the sense in which the
institution of the action was prompted by a readers to whom it is addressed would
sinister design to vex and humiliate a person ordinarily understand it. [Arafiles vs. Philippine
and to cast dishonor and disgrace must be Journalists (2004)]
clearly and preponderantly established to
entitle the victims to damages and other rights Defenses:
granted by law; otherwise, there would always (1) Absence of elements
be a civil action for damages after every (2) Privilege
prosecution's failure to prove its cause resulting
in the consequent acquittal of the accused FRAUD OR MISREPRESENTATION
therein. [Buenaventura vs. Domingo and Ignacio (FORMERLY DECEIT)
(1958)] Independent civil actions are permitted to be
filed separately regardless of the result of the
DEFAMATION, FRAUD AND criminal action. [Salta vs. De Veyra (1982]
PHYSICAL INJURIES
Unfair competition under the Intellectual
Art. 33. In case of defamation, fraud, and physical Property Code and fraud under Art. 33 are
injuries, a civil action for damages, entirely independent actions. Art. 33 does not operate
separate and distinct from the criminal action, may
be brought by the injured party. Such civil action
as a prejudicial question to justify the
shall proceed independently of the criminal suspension of the criminal cases at bar.
prosecution, and shall require only a [Samson vs. Daway (2004)]
preponderance of evidence.
SEDUCTION
DEFAMATION Sangco: Seduction is sexual intercourse with an
Separate civil action may be consolidated with unmarried woman of chaste character whose
the criminal action. [Cojuangco vs. CA (1991)] consent was obtained through abuse of
confidence or through deceit.
Defamation is that which tends to injure
Seduction under the RPC (criminal seduction) is
reputation or diminish esteem, respect, good
different from seduction under the NCC (civil
will, or confidence of the plaintiff, or excite
seduction, Art. 21)
derogatory feelings about him. It must be
personal. (What is definitive is not the level of In criminal seduction, either qualified or
hurt, but the effect of the statement on the simple, the offended woman must be less
than 18 years of age.
PAGE 424
In civil seduction, the offended woman may be employment but questions the manner in which
over 18 years of age. said right was exercised and predicates thereon
his claim for moral and exemplary damages, the
The essential feature is seduction, that in law is claim is one for tort under the Civil Code and
more than mere sexual intercourse, or a breach not one arising from employer-employee
of a promise of marriage; it connotes essentially relation under the Labor Code even if he also
the idea of deceit, enticement, superior power or demands in the action therefor payment of
abuse of confidence on the part of the seducer termination pay which unquestionably derives
to which the woman has yielded. from their prior employer-employee relation.
To constitute seduction there must in all cases INTERFERENCE WITH

be some sufficient promise or inducement and
the woman must yield because of the promise RELATIONS
or other inducement. If she consents merely An interference with the continuance of
from carnal lust and the intercourse is from unimpaired interests founded upon the relation
mutual desire, there is no seduction. [Tanjanco in which the plaintiff stands toward one or more
vs. CA (1966)] third persons. [Prosser and Keeton, p. 915]
Kinds:
UNJUST DISMISSAL (1) Family relations
The employers right to dismiss his employee (2) Social relations
differs from, and should not be confused with (3) Economic relations
the manner in which the right is exercised. (4) Political relations
When the manner in which the company
exercised its right to dismiss was abusive, FAMILY RELATIONS
oppressive or malicious, it is liable for damages. The three causes of action enumerated below
are offenses against marital relations.
Although the acts complained of seemingly
appear to constitute matters involving ALIENATION OF AFFECTION
employee-employer relations as Quisaba's This is a cause of action in favor of a husband
dismissal was the severance of a pre-existing against one who wrongfully alienates the
employee-employer relation, his complaint is affection of his wife, depriving him of his
grounded not on his dismissal per se as in fact conjugal rights to her consortium, that is, her
he does not ask for reinstatement or backwages, society, affection, and assistance.
but on the manner of his dismissal and the
consequent effects of such dismissal. Elements:
(1) Wrongful conduct of the defendant:
The case at bar is intrinsically concerned with a intentional and malicious enticing of a
civil (not a labor) dispute; it has to do with an spouse away from the other spouse
alleged violation of Quisaba's rights as a
member of society, and does not involve an Note: Where the alienation or separation of
existing employee-employer relation within the the spouses is caused by the plaintiffs own
meaning of section 2(1) of Presidential Decree conduct and not by reason of the wrongful
No. 21. The complaint is thus properly and conduct of the defendant, there is no
exclusively cognizable by the regular courts of liability on the defendant. However, if the
justice, not by the National Labor Relations defendant interferes and by his wrongful
Commission. [Quisaba vs. Sta. Ines-Melale conduct prevents a reconciliation between
Veneer & Plywood (1974)] the spouses, or destroys the possibility
thereof, the defendant is liable for
Note: The foregoing decision thus states that alienation of affection.
where the employee does not seek
reinstatement or expressly or impliedly accepts
the employers right to terminate the contract of
PAGE 425
(2) Loss of affection or consortium enticed his child away, or does not maliciously
entice or cause him or her to stay away, from his
Note: Complete absence of affection or her spouse. This rule has more frequently
between the spouses is not a defense. been applied in the case of advice given to a
married daughter, but it is equally applicable in
(3) Causal connection between such conduct the case of advice given to a son.
and loss
LOSS OF CONSORTIUM
There is no evidence that the parents of Vicenta, The plaintiff Aleko E. Lilius also seeks to recover
out of improper motives, aided and abetted her the sum of P2,500 for the loss of what is called
original suit for annulment, or her subsequent Anglo-Saxon common law consortium of his
divorce; she appears to have acted wife, that is, her services, society and conjugal
independently, and being of age, she was companionship, as a result of personal injuries
entitled to judge what was best for her and ask which she had received from the accident now
that her decisions be respected. Her parents, in under consideration.
so doing, certainly cannot be charged with
alienation of affections in the absence of malice In the case of Goitia vs. Campos Rueda, this
or unworthy motives, which have not been court, interpreting the provisions of the Civil
shown, good faith being always presumed until Marriage Law of 1870, in force in these Islands
the contrary is proved. [Tenchavez vs. Escao with reference to the mutual rights and
(1965)] obligations of the spouses, contained in articles
44-48 thereof, said as follows:
Liability of Parents, Guardians or Kin
The law distinguishes between the right of a The above quoted provisions of the Law of
parent to interest himself in the marital affairs Civil Marriage and the Civil Code fix the
of his child and the absence of rights in a duties and obligations of the spouses. The
stranger to intermeddle in such affairs. spouses must be faithful to, assist, and
However, such distinction between the liability support each other. The husband must live
with and protect his wife. The wife must
of parents and that of strangers is only in regard obey and live with her husband and follow
to what will justify interference. A parent is him when he changes his domicile or
liable for alienation of affections resulting from residence, except when he removes to a
his own malicious conduct, as where he foreign country
wrongfully entices his son or daughter to leave
his or her spouse, but he is not liable unless he Therefore, under the law and the doctrine of this
acts maliciously, without justification and from court, one of the husband's rights is to count on
unworthy motives. He is not liable where he acts his wife's assistance. This assistance comprises
and advises his child in good faith with respect the management of the home and the
to his child's marital relations in the interest of performance of household duties, including the
his child as he sees it, the marriage of his child care and education of the children and attention
not terminating his right and liberty to interest to the husband upon whom primarily devolves
himself in, and be extremely solicitous for, his the duty of supporting the family of which he is
child's welfare and happiness even where his the head. When the wife's mission was
conduct and advice suggest or result in the circumscribed to the home, it was not difficult to
separation of the spouses or the obtaining of a assume, by virtue of the marriage alone, that
divorce or annulment, or where he acts under she performed all the said tasks and her
mistake or misinformation, or where his advice physical incapacity always redounded to the
or interference are indiscreet or unfortunate, husband's prejudice inasmuch as it deprived
although it has been held that the parent is him of her assistance. However, nowadays when
liable for consequences resulting from women, in their desire to be more useful to
recklessness. He may in good faith take his child society and to the nation, are demanding
into his home and afford him or her protection greater civil rights and are aspiring to become
and support, so long as he has not maliciously man's equal in all the activities of life,
PAGE 426
commercial and industrial, professional and servants] services until there has been a
political, many of them spending their time gradual shift of emphasis away from services
outside the home, engaged in their businesses, and toward a recognition of more intangible
industry, profession and within a short time, in elements in the domestic relations, such as
politics, and entrusting the care of their home to companionship and affection. [Prosser and
a housekeeper, and their children, if not to a Keeton, p. 916]
nursemaid, to public or private institutions
which take charge of young children while their INTRIGUING TO CAUSE ANOTHER TO BE
mothers are at work, marriage has ceased to ALIENATED FROM HIS FRIENDS
create the presumption that a woman complies A person who committed affirmative acts
with the duties to her husband and children, intended to alienate the existing friendship of
which the law imposes upon her, and he who one with his friends is liable for damages. A
seeks to collect indemnity for damages man is a social being and for being so, he needs
resulting from deprivation of her domestic friends to socialize with and to depend upon in
services must prove such services. case of need. To alienate him wrongfully or with
malice from his friends is to cause him suffering
Furthermore, inasmuch as a wife's domestic for which he is entitled to damages.
assistance and conjugal companionship are
purely personal and voluntary acts which ECONOMIC RELATIONS
neither of the spouses may be compelled to
render, it is necessary for the party claiming TORTIOUS INTERFERENCE WITH
indemnity for the loss of such services to prove CONTRACT
that the person obliged to render them had Art 1314. Any third person who induces another to
done so before he was injured and that he violate his contract shall be liable for damages to
would be willing to continue rendering them the other contracting party.
had he not been prevented from so doing. [Lilius
vs. Manila Railroad Company (1934)] Everyone has a right to enjoy the fruits of his
enterprise. He has no right to be protected from
CRIMINAL CONVERSATION (ADULTERY) competition, but he has the right to be free from
Interference with the marital relations by malicious and wanton interference. If the injury
committing adultery with one of the spouses. is a result of competition, it is a case of damnum
This is obvious enough in the case of rape but absque injuria, unless superior right by contract
also applies where the adulterous spouse is interfered with.
consented to or initiated the intercourse.
[Prosser and Keeton, p. 917] Injunction is the proper remedy to prevent
wrongful interference with contracts by
SOCIAL RELATIONS strangers, where other legal remedies are
insufficient and the resulting injury is
MEDDLING WITH OR DISTURBING FAMILY irreparable. [Gilchrist vs. Cuddy (1915)]
RELATIONS
Art. 26. Every person shall respect the dignity, Bad faith/Malice is required to make the
personality, privacy and peace of mind of his defendant liable for DAMAGES in cases of
neighbors and other persons. The following and tortuous interference. [So Ping Bun vs. CA
similar acts, though they may not constitute a (1999)]
criminal offense, shall produce a cause of action
for damages, prevention and other relief: Elements of interference:
(2) Meddling with or disturbing the private (1) Existence of a valid contract;
life or family relations of another;
(2) Knowledge of the third person of the
existence of such contract; and
Developed as an offshoot of the action for
(3) Interference without legal justification or
enticing away a servant and depriving the
excuse.
master of the proprietary interest in [the
PAGE 427
If there is no bad faith, there is no tortious competition under Art. 28 of the Civil Code
interference; actual knowledge of the contract is refers to unfair competition in agricultural,
not required so long as there are facts leading commercial or industrial enterprises or in labor
one to investigate. through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or
Proper business interest provides a legal highhanded method. Unfair competition under
justification to negate the presence of the third the Civil Code covers a broader area than Rep.
element. [Lagon vs. CA (2005)] Act 166.
UNFAIR COMPETITION POLITICAL RELATIONS

Art. 28. Unfair competition in agricultural,
commercial or industrial enterprises or in labor VIOLATION OF RIGHT TO SUFFRAGE [ART.
through the use of force, intimidation, deceit, 32, CC)
machination or any other unjust, oppressive or Art 32. Any public officer or employee, or any
highhanded method shall give rise to a right of private individual, who directly or indirectly
action by the person who thereby suffers damage. obstructs, defeats, violates or in any manner
impedes or impairs any of the following rights and
Free competition in agricultural, commercial or liberties of another person shall be liable to the
industrial enterprises and in labor is essential in latter for damages:
a democracy and should be encouraged. (1) Freedom of religion
Monopolies, generally speaking, are prejudicial (2) Freedom of speech
to public interest. However, the right of free (3) Freedom to write for the press or to maintain a
competition is not unlimited. periodical publication
(4) Freedom from arbitrary or illegal detention
Permissible competition (5) Freedom of suffrage
(6) The right against deprivation of property
There is a privilege to interfere with prospects of
without due process of law
advantageous economic relations of others (7) The right to just compensation when property
when: is taken for public use
(1) The defendants purpose is justifiable, and (8) The right to equal protection of the laws
(2) He employs no means which may be (9) The right to be secure in ones person, house,
regarded as unfair. papers and effects against unreasonable
searches and seizures
Prohibited competition (10) The liberty of abode and of changing the same
In order to qualify as unfair, it must have 2 (11) The right to privacy of communication and
characteristics: correspondence
(1) It must involve an injury to a trade or rival; (12) The right to become a member of associations
and societies for purposes not contrary to law
and (13) The right to take part in a peaceable assembly
(2) It must involve acts which are characterized and petition the government for redress of
as contrary to good conscience, or grievances
shocking to judicial sensibilities, or (14) The right to be free from involuntary servitude
otherwise unlawful. in any form
(15) The right of the accused against excessive bail
Note: (16) The right of the accused to be heard by
Jarencio: Unfair competition dealt with in Art. 28 himself and counsel, to be informed of the
is different from the unfair competition under nature and the cause of the accusation
Sec. 29 of RA 166. Unfair competition under against him, to have a speedy and public trial,
to meet the witnesses face to face, to have
Sec. 29 of Rep. Act 166 consists in giving the
compulsory process to secure the attendance
same general appearance to the goods of witnesses on is behalf;
manufactured or dealt in or the services (17) Freedom from being compelled to be a
rendered by one person as the goods or services witness against ones self, or from being
of another who has already acquired a public forced to confess his guilt, or from being
goodwill for such goods or services. Unfair induced by a promise of immunity or reward
PAGE 428
to make such confession, except when the were not so tainted with malice, as long as there
person confessing becomes a State witness. is a violation of a constitutional right. Its precise
(18) Freedom from excessive fines, or cruel and object is to put an end to official abuse, done on
unusual punishment, unless the same is the plea of good faith.
imposed or inflicted in accordance with a
statute which has not been judicially declared
unconstitutional; Negligence
(19) Freedom of access to the courts
Art. 1173. The fault or negligence of the obligor
consists in the omission of that diligence which is
In any of the cases referred to in this article,
required by the nature of the obligation and
whether or not the defendants act or omission
corresponds with the circumstances of the
constitutes a criminal offense, the aggrieved party
persons, of the time and of the place. When
has a right to commence an entirely separate and
negligence shows bad faith, the provisions of
distinct civil action for damages, and for other
Articles 1171 and 2201, paragraph 2, shall apply.
relief. Such civil action shall proceed
independently of any criminal prosecution (if the
If the law or contract does not state the diligence
latter be instituted) and may be proved by a
which is to be observed in the performance, that
preponderance of evidence.
which is expected of a good father of a family shall
be required.
The indemnity shall include moral damages.
Exemplary damages may also be adjudicated.
Elements:
The responsibility herein set forth is not (1) Legal duty
demandable from a judge unless his act or (2) Breach
omission constitutes a violation of the Penal code (3) Causation
or any other penal statute. (4) Damages
Negligence is the omission to do something

VIOLATION OF OTHER POLITICAL RIGHTS which a reasonable man, guided by those
(FREEDOM OF SPEECH, PRESS, ASSEMBLY considerations which ordinarily regulate the
AND PETITION, ETC.) conduct of human affairs, would do, or the
Article 32 of the Civil Code holds any public doing of something which a prudent and
officer, employee or private individual civilly reasonable man would not do. [Layugan vs. IAC
liable for the violation of civil liberties, political (1988)]
liberties and other basic rights under the
Constitution. The aggrieved party may recover TEST OF NEGLIGENCE
actual, moral and exemplary damages and Did defendant, in doing the alleged negligent
other relief. The civil action is separate and act, use that reasonable care and caution which
distinct and shall proceed independently of a an ordinarily prudent person would have used in
criminal prosecution if one is instituted. Only a the same situation? If not, the person is guilty of
preponderance of evidence is required. If the negligence. The law, in effect, adopts the
violation of the civil or political rights constitutes standard supposed to be supplied by the
a crime and a criminal action is instituted the imaginary conduct of the discreet paterfamilias
civil action is also deemed instituted with the of the Roman law. [Philippine National Railways
criminal action unless the same is reserved. vs. Brunty (2006)]
[Jarencio]
GOOD FATHER OF A FAMILY (BONUS
Cojuangco vs. CA (1999): The purpose of article
32 is to remind us that basic rights are PATERFAMILIAS)
immutable. Thus, absence of bad faith or malice A standard man does not mean an ideal or
is not a defense. perfect man, but an ordinary member of the
community. He is usually spoken of as an
Vinzons-Chato vs. Fortune (2007): A public ordinarily reasonable, careful, and prudent man.
officer may be sued under Art. 32 even if his acts
PAGE 429
WHAT CONSTITUTES THE CONDUCT harm to a bicyclist than vice versa. [Heirs of
OF A PRUDENT MAN IN A GIVEN Redentor Completo vs. Sgt. Albayda (2010)]
SITUATION?
Conduct determined in the light of human BANKS
experience and in view of the facts involved in The law imposes on banks high standards in
the particular case. Abstract speculations view of the fiduciary nature of banking. Section
cannot be of much value here; instead, 2 of Republic Act No. 8791 (RA 8791), which
reasonable men govern their conduct by the took effect on 13 June 2000, declares that the
circumstances which are known before them. State recognizes the fiduciary nature of banking
They are not supposed to be omniscient of the that requires high standards of integrity and
future. [Picart vs. Smith (1918)] performance.
This fiduciary relationship means that the

STANDARD OF CARE banks obligation to observe high standards of
Test: Did the defendant in doing the alleged integrity and performance is deemed written
negligent act use that reasonable care and into every deposit agreement between a bank
caution which an ordinarily prudent man would and its depositor. The fiduciary nature of
have used in the same situation? If not, then he banking requires banks to assume a degree of
is negligent. Negligence in a given case is not diligence higher than that of a good father of a
determined by reference to the personal family. [Consolidated Bank vs. CA (2003)]
judgment of the actor in the situation before
him, but is determined in the light of human
EXPERTS (IN GENERAL)
experience and the facts involved in the
A pilot should have thorough knowledge of
particular case.
general and local regulations and physical
Conduct is said to be negligent when a prudent conditions affecting the vessel in his charge and
man in the position of the tortfeasor would have the general and local regulations and physical
foreseen that an effect harmful to another was conditions affecting the vessel in his charge and
sufficiently probable to warrant his foregoing the waters for which he is licensed, such as a
the conduct or guarding against its particular harbor or river. He is not held to the
consequences. [Picart vs. Smith (1918)] highest possible degree of skill and care but
must have and exercise the ordinary skill and
Note: Only the KIND of injury needs to be diligence demanded by the circumstances, and
foreseen, NOT the actual specific injury. usually shown by an expert in his profession.
Under extraordinary circumstances, a pilot must
exercise extraordinary care. [Far Eastern
STANDARD OF CARE NEEDED Shipping vs. CA (1998)]
IN SPECIFIC CIRCUMSTANCES
When a person holds himself out as being
OPERATORS OF MOTOR VEHICLES competent to do things requiring professional
Article 2185 is a recognition of the need to skill, he will be held liable for negligence if he
segregate motorized vehicles into a separate fails to exhibit the care and skill of one ordinarily
class because they are capable of greater skilled in the particular work which he attempts
speeds and destruction, unlike non-motorized to do. [Culion vs. Philippine Motors (1930)]
vehicles which only depend on the exertion of
man. [Anonuevo vs. CA (2004)] DOCTORS
Whether or not a physician has committed an
Operators of motor vehicles will have a higher inexcusable lack of precaution in the treatment
standard in his duty of care because of the of his patient is to be determined according to
physical advantages of the car versus the the standard of care observed by other
bicycle. The motor vehicle poses a greater members of the profession in good standing
under similar circumstances bearing in mind the
advanced state of the profession at the time of
PAGE 430
treatment of present state of medical science. and capacity only, and this is to be determined
in each case by the circumstances of the case.
It is in this aspect of medical malpractice that [Taylor vs. Manila Railroad (1910)]
expert testimony is essential to establish not
only the standard of care of the profession but No contributory negligence can be imputed to
also that the physicians conduct in the children below 9 years old. [Jarco Marketing vs.
treatment and care falls below such standard. CA (1999)]
[Cruz vs. CA (1997)]
The degree of care required to be exercised
PHARMACISTS must vary with the capacity of the person
The profession of pharmacy, it has been said endangered to care for himself. The standard
again and again, is one demanding care and of conduct to which a child must conform for his
skill. The responsibility of the druggist to use own protection is that degree of care ordinarily
care has been variously qualified as ordinary exercised by children of the same age, capacity,
care, care of a specially high degree, the discretion, knowledge and experience under the
highest degree of care known to practical men. same or similar circumstances. [Ylarde vs.
Even under the first conservative expression, Aquino (1988)]
ordinary care with reference to the business of
a druggistmust be held to signify the highest IN CASE OF INSANE PERSONS
practicable degree of prudence, thoughtfulness, Art. 2180. x x x Guardians are liable for damages
and vigilance, and most exact and reliable caused by the minors or incapacitated persons
safeguards consistent with the reasonable who are under their authority and live in their
conduct of the business in order that human life company x x x
may not constantly be exposed to the danger
flowing from the substitution of deadly poisons Art. 2182. If the minor or insane person causing
for harmless medicine. [US vs. Pineda (1918)] damage has no parents or guardian, the minor or
insane person shall be answerable with his own
Cited the case of US vs. Pineda when imputing a property in an action against him where a
guardian ad litem shall be appointed.
higher degree of diligence upon pharmacists.
[Mercury Drug vs. De Leon (2008)]
A lunatic or insane person who, in spite of his
irresponsibility on account of the deplorable
POSSESSOR OF EXTREMELY condition of his deranged mind, is still
DANGEROUS INSTRUMENTALITIES reasonably and justly liable with his property for
Indeed, a higher degree of care is required of the consequences of his acts. [US vs. Baggay
someone who has in his possession or under his (1911)]
control an instrumentality extremely dangerous
in character, such as dangerous weapons or EMERGENCY RULE OR SUDDEN
substances. Such person in possession or
PERIL DOCTRINE
control of dangerous instrumentalities has the
Valenzuela vs. CA (1996): An individual, who
duty to take exceptional precautions to prevent
suddenly finds himself in a situation of danger
any injury being done thereby. Unlike the
and is required to act without much time to
ordinary affairs of life or business which involve
consider the best means that may be adopted
little or no risk, a business dealing with
to avoid the impending danger, is not guilty of
dangerous weapons requires the exercise of a
negligence if he fails to undertake what
higher degree of care. [Pacis vs. Morales (2010)]
subsequently and upon reflection may appear
to be a better solution, unless the emergency
CHILDREN was brought by his own negligence.
The conduct of an infant of tender years is not
to be judged by the same rule, which governs
that of an adult. The care and caution
required of a child is according to his maturity
PAGE 431
UNREASONABLE RISK OR HARM PRESUMPTION OF NEGLIGENCE

Art 1711. Owners of enterprises and other Art. 2184. In motor vehicle mishaps, x x x [i]t is
employers are obliged to pay compensation for the disputably presumed that the driver was negligent,
death of or injuries to their laborers, workmen, if he had been found guilty of reckless driving or
mechanics or other employees even though the violating traffic regulations at least twice within
event may have been purely accidental or entirely the next preceding two months.
due to fortuitous cause, if the death or personal
injury arose out of and in the course of Art. 2185. Unless there is proof to the contrary, it is
employment. The employer is also liable for presumed that a person driving a motor vehicle
compensation if the employee contracts any has been negligent if at the time of the mishap, he
illness or disease caused by such employment or was violating any traffic regulation.
as a result of the nature of the employment. If the
mishap was due to the employees own notorious Art. 2188. There is prima facie presumption of
negligence, or voluntary act, or drunkenness, the negligence if the death or injury results from his
employer shall not be liable for compensation. possession of dangerous weapons or substances,
When the employees lack of due care contributed such as firearms and poison, except when the use
to his death or injury, the compensation shall be or possession thereof is indispensable in his
equitably reduced. occupation or business.
Art. 1712. If the death or injury is due to the Art. 1735. In all cases other than those mentioned
negligence of a fellow-worker, the latter and the in Nos. 1, 2, 3, 4, and 5 of the preceding article
employer shall be solidarily liable for (calamity, act of public enemy in war, act of owner
compensation. If a fellow-workers intentional or of the goods, character of the goods, order of
malicious act is the only cause of the death or competent public authority), if the goods are lost
injury, the employer shall not be answerable, destroyed or deteriorated, common carriers are
unless it should be shown that the latter did not presumed to have been at fault or to have acted
exercise due diligence in the selection or negligently, unless they prove that they observed
supervision of the plaintiffs fellow-worker. extraordinary diligence as required under Art. 1733.
By jumping into the sea, the employee failed to PRESUMED NEGLIGENCE OR

exercise even slight care and diligence and
displayed a reckless disregard of the safety of
NEGLIGENCE PER SE
his person. His death was caused by his Violation of a statute or ordinance constitutes
negligence as a matter of law or negligence per
notorious negligence. Notorious negligence has
se because non-observance of what the law
been held to be tantamount to gross negligence
provides as a suitable precaution is failure to
which is want of even slight care and diligence.
observe that care which an ordinarily prudent
[Amedo vs. Rio (1954)]
man would observe.
EVIDENCE When the standard of care is fixed by law,
QUANTUM OF PROOF IN QUASI- failure to conform to such standard is
DELICT VS. QUANTUM OF PROOF IN negligence, negligence per se or negligence in
BREACH OF CONTRACT and of itself, in the absence of a legal excuse.
In quasi-delict, the negligence or fault should [Teague vs. Fernandez (1973)]
be clearly established because it is the basis of
action, whereas in breach of contract, the action RES IPSA LOQUITUR
can be prosecuted merely by proving the The doctrine of res ipsa loquitur (the thing
existence of a contract and the fact that the speaks for itself) is a rule of evidence (not of
obligor [breached the contract e.g. in this case, substantive law) peculiar to the law of
a common carrier failed to transport his negligence.
passenger safely to his destination. [Calalas vs.
CA (2000)]
PAGE 432
Elements: DEFENSES
Res ipsa loquitur is applicable when:
(1) The accident is of a kind which ordinarily DUE DILIGENCE
does not occur in the absence of someones
Art. 2180. The obligation imposed by Article 2176
negligence; is demandable not only for ones own acts or
(2) It is caused by an instrumentality within the omissions, but also for those of persons for whom
exclusive control of the defendant or one is responsible.
defendants; and xxx
(3) The possibility of contributing conduct Par. 8. The responsibility treated of in this article
which would make the plaintiff responsible shall cease when the persons herein mentioned
is eliminated. [Ramos vs. CA (1999)] prove that they observed all the diligence of a
good father of a family to prevent damage.
BASIS
The res ipsa loquitur doctrine is based in part The presumption of negligence on the part of
upon the theory that the defendant in charge of the master or employer, either in the selection
the instrumentality which causes the injury of servant/employee or in the supervision, when
either knows the cause of the accident or has an injury is caused by the negligence of a
the best opportunity of ascertaining it and that servant/employee may be rebutted if the
the plaintiff has no such knowledge, and employer shows to the satisfaction of the court
therefore is compelled to allege negligence in that in the selection and supervision, he has
general terms and to rely upon the proof of the exercised the care and diligence of a good
happening of the accident in order to establish father of a family. [Ramos vs. PEPSI (1967)]
negligence. [DM Consunji vs. CA (2001)]
The defense of due diligence is plausible when
EFFECT defendant has presented enough evidence to
The fact of the occurrence of an injury, taken overcome the presumption of negligence. It is
with the surrounding circumstances, raise a not enough that it is alleged. [Metro Manila vs.
presumption of negligence, or make out a CA (1993)]
plaintiffs prima facie case, and present a
question of fact for defendant to meet with an ACTS OF PUBLIC OFFICERS
explanation. When what is involved is a duty owing to the
public in general, an individual cannot have a
In medical malpractice cases, when the doctrine cause of action against the public officer
of res ipsa loquitur is availed by the plaintiff, the although he may have been injured by the
need for expert medical testimony is dispensed action or inaction of the officer, except when the
with because the injury itself provides the proof individual suffers a particular or special injury.
of negligence. The reason is that the general [Vinzons-Chato vs. Fortune (2008)]
rule on the necessity of expert testimony applies
only to such matters clearly within the domain ACCIDENT OR FORTUITOUS EVENT
of medical science, and not to matters that are Art. 1174. Except in cases expressly specified by the
within the common knowledge of mankind law, or when it is otherwise declared by stipulation,
which may be testified to by anyone familiar or when the nature of the obligation requires the
with the facts. [Ramos vs. CA, supra] assumption of risk, no person shall be responsible
for those events which, could not be foreseen, or
which, though foreseen, were inevitable.
Note: For the res ipsa loquitur doctrine to apply,
it must appear that the injured party had no
knowledge as to the cause of the accident, or Elements:
that the party to be charged with negligence The elements of caso fortuito are:
has superior knowledge or opportunity for (1) The cause of the unforeseen and
explanation of the accident. unexpected occurrence, or of the failure of
the debtor to comply with his obligation,
must be independent of the human will;
PAGE 433
(2) It must be impossible to foresee the event Compared to Article 19

or if it can be foreseen, it must be One who made use of his own legal right does
impossible to avoid; no injury, thus, whatever damages are caused to
(3) The occurrence must be such as to render it another should be borne solely by him under
impossible for the debtor to fulfill his the principle of damnum absque injuria. This
obligation in a normal manner; and principle, however, does not apply when there is
(4) The obligor must be free from any an abuse in the exercise of a persons right.
participation in the aggravation of the injury [Amonoy vs. Gutierrez (2001)]
resulting to the creditor. [Juntilla vs.
Fontanar (1985)] AUTHORITY OF LAW
Art. 5. Acts executed against the provisions of
The robbery that happened to him cannot be mandatory or prohibitory laws shall be void, except
said to be the result of his imprudence and when the law itself authorizes their validity.
negligence. This was undoubtedly a fortuitous
event covered by the said provisions, something Art. 11, RPC. The following do not incur any
that could not have been reasonably foreseen criminal liability:
although it could have happened. [Hernandez (5) Any person who acts in the fulfillment of a
vs. COA (1984)] duty or in the lawful exercise of a right or
office;
DAMNUM ABSQUE INJURIA (8) Any person who acts in obedience to an order
Right to recover damages does not arise from issued by a superior for some lawful purpose;
the mere fact that the plaintiff suffered losses.
To warrant the recovery of damages, there must ASSUMPTION OF RISK (VOLENTI NON FIT
be both a right of action for a legal wrong INJURIA)
inflicted by the defendant, and damage General rule: One who voluntarily assumed the
resulting to the plaintiff therefrom. Wrong risk of injury from a known danger is barred
without damage, or damage without wrong, from recovery. A plaintiff who, by his conduct,
does not constitute a cause of action, since brought himself within the operation of the
damages are merely part of the remedy allowed maxim, volenti non fit injuria (that to which a
for the injury caused by a breach or wrong. person assents is not presumed in law an
[Custodio vs. CA (1996)] injury), cannot recover on the basis of the
defendants negligence.
Injury Damage Damages
Illegal Loss, hurt, Recompense or One who knows, appreciates, and deliberately
invasion of a harm resulting compensation exposes himself to a danger assumes the risk
legal right from the injury awarded thereof.
Damnum absque injuria: There can be damage Where the defense of assumption of risk is
without injury in those instances in which the based on this principle, it negates negligence or
loss or harm was not the result of a violation of liability on the part of the defendant, even
a legal duty. though his conduct would otherwise have
constituted actionable negligence, and without
In order that the law will give redress for an act regard to the fact that the plaintiff may have
causing damage, that act must be not only acted with due care.
hurtful, but wrongful. There must be damnum
et injuria. If, as may happen in many cases, a The defense bars recovery without regard to
person sustains actual damage, that is, harm or whether the plaintiffs conduct was reasonable,
loss to his person or property, without because, in theory, the plaintiffs acceptance of
sustaining any legal injury, that is, an act or the risk has wiped out the defendants duty, and
omission which the law does not deem an injury, as to the plaintiff the defendants negligence is
the damage is regarded as damnum absque not a legal wrong.
injuria.
PAGE 434
It is the caretaker's business to try to prevent the PRESCRIPTION [ART. 1144, 1146, AND 1150,
animal from causing injury or damage to CC)
anyone, including himself. It was a risk he Art. 1144. The following actions must be brought
voluntarily assumed. [Afialda vs. Hisole (1958)] within ten years from the time the right of action
accrues:
Requisites: (1) Upon a written contract;
(1) That the plaintiff had actual knowledge of (2) Upon an obligation created by law;
the danger; (3) Upon a judgment.
(2) That he understood and appreciated the
risk from the danger; and Art. 1146. The following actions must be instituted
(3) That he voluntarily exposed himself to such within four years:
(1) Upon an injury to the rights of the plaintiff;
risk. (2) Upon a quasi-delict;
Exception: However, when the action arises from or out of any
A person is excused from the force of the rule act, activity, or conduct of any public officer
(volenti non fit injuria), that when he voluntarily involving the exercise of powers or authority
assents to a known danger he must abide by the arising from Martial Law including the arrest,
consequences, if an emergency is found to exist detention and/or trial of the plaintiff, the same
or if the life or property of another is in peril or must be brought within one (1) year.
when he seeks to rescue his endangered
property. [Ilocos Norte vs. CA (1989)] Art. 1150. The time for prescription for all kinds of
actions, when there is no special provision which
ordains otherwise, shall be counted from the day
LAST CLEAR CHANCE they may be brought.
(For an extended discussion on the doctrine, see
previous sections. Cases included below discuss Last
Clear Chance as a defense against negligence.)
Prescriptive periods:
A negligent defendant is liable to a negligent 4 years for QD
plaintiff, or even to a plaintiff who has been 1 year for defamation
grossly negligent in placing himself in peril, if
the defendant, aware of the plaintiffs peril, had It is clear that the prescriptive period must be
in fact a later opportunity than the plaintiff to counted from the time of the commission of an
avoid the accident. act or omission violative of the right of the
plaintiff, which is the time when the cause of
Bustamante vs. CA (1991): Negligence of the action arises. [Kramer vs. CA (1989)]
plaintiff does not preclude a recovery for the
negligence of the defendant where it appears Relations Back Doctrine (footnote 17 of Allied
that the defendant, by exercising reasonable Banking case): That principle of law by which an
care and prudence, might have avoided act done at one time is considered by a fiction of
injurious consequences to the plaintiff law to have been done at some antecedent
notwithstanding the plaintiffs negligence. period. [Allied Banking vs. CA (1989)]
This is a case of culpa contractual where neither WAIVER

contributory negligence nor last clear chance Art. 6. Rights may be waived, unless the waiver is
will exonerate defendant from liability. contrary to law, public order, public policy, morals,
[Consolidated Bank vs. CA (2003)] or good customs or prejudicial to a third person
with a right recognized by law.
Note: This means that Last Clear Chance is not
a defense in culpa contractual. Art. 1171. Responsibility arising from fraud is
demandable in all obligations. Any waiver of an
action for future fraud is void.
PAGE 435
DOUBLE RECOVERY [ART. 2177, CC) The judgment of acquittal does not necessarily
Art. 2177. Responsibility for fault or negligence extinguish the civil liability of the accused
under the preceding article is entirely separate and EXCEPT:
distinct from the civil liability arising from (1) When it declares that the facts from which
negligence under the Penal Code. But the plaintiff the civil liability might arise did not exist;
cannot recover damages twice for the same act or (2) When it declares that the accused is not the
omission of the defendant. author of the crime;
(3) When the judgment expressly declares that
Art. 100, RPC. Civil liability of a person guilty of the liability is only civil in nature;
felony. Every person criminally liable for a felony (4) Where the civil liability is not derived or
is also civilly liable. based on the criminal act of which the
accused was acquitted;
Art. 2177 distinguishes 2 kinds of negligence: (5) Where the civil action has prescribed.
(1) Civil and
(2) Criminal. No reservation is required in the criminal
The same negligence causing damage may case for the filing of civil action arising from
produce liability arising from crime, if the act or quasi-delict
omission is punished by the RPC, or may create
an action for quasi-delict under the NCC. Rule 111, Sec. 3, ROC. When civil action may
proceed independently. In the cases provided for
Actions available to victims of negligence in Articles 32, 33, 34 and 2176 of the Civil Code of
(1) An action to enforce the civil liability arising the Philippines, the independent civil action may
from culpa criminal under Art. 100 of the be brought by the offended party. It shall proceed
RPC independently of the criminal action and shall
(2) An action for quasi-delict under Art. 2176- require only a preponderance of evidence. In no
2194 of the NCC. case, however, may the offended party recover
damages twice for the same act or omission
charged in the criminal action.
The only limitation is that the injured party
cannot recover twice for the same act or
Question As a result of a collision between a
omission.
taxicab owned by A and another
taxicab owned by B, X, a passenger
Effect of acquittal of the accused on his civil of the first taxicab, was seriously
liability injured. X later filed a criminal
Art. 29. When the accused in a criminal action against both drivers.
prosecution is acquitted on the ground that his
guilt has not been proved beyond reasonable (a) Is it necessary for X to reserve
doubt, a civil action for damages for the same act his right to institute a civil action
or omission may be instituted. Such action for damages against both
requires only a preponderance of evidence. Upon taxicab owners before he can
motion of the defendant, the court may require the file a civil action for damages
plaintiff to file a bond to answer for damages in against them? Why?
case the complaint should be found to be
malicious. (b) May both taxicab owners
raise the defense of due diligence in
The acquittal of the accused in the criminal case the selection and supervision of their
drivers to be absolved from liability
will not necessarily exonerate him from civil
for damages to X? Reason.
liability.
PAGE 436
Suggested
Answer a) It depends. If the separate civil Special Liability in
action is to recover damages
arising from the criminal act, Particular Cases
reservation is necessary. If the In some cases tort law imposes liability on
civil action against the taxicab defendants who are neither negligent nor guilty
owners is based on culpa of intentional wrongdoing. Known as Strict
contractual or on quasi-delict, Liability, or liability without fault, this branch of
there is no need for reservation.
torts seeks to regulate those activities that are
(b) It depends. If the civil action is
useful and necessary but that create abnormally
based on quasi-delict, the dangerous risks to society.
taxicab owners may raise the
defense of diligence of a good PRODUCTS LIABILITY
father of a family in the
selection and supervision of the Art. 2187. Manufacturers and processors of
driver; if the action against them foodstuffs, drinks, toilet articles and similar goods
is based on culpa contractual or shall be liable for death or injuries caused by any
civil liability arising from a crime, noxious or harmful substances used, although no
they cannot raise the defense. contractual relation exists between them and the
consumers.
No such reservation is necessary.
Under Section 1 Rule 111 of the 2000 Under the foregoing provision, liability is not
Alternative Rules on Criminal Procedure, what is made to depend upon fault or negligence of the
Answer deemed instituted with the manufacturer or processor. The provision
criminal action is only the action to likewise dispensed with any contractual relation
recover civil liability arising from the between the manufacturer and the consumer,
crime or ex delicto. All the other civil thereby clearly implying that liability is imposed
actions under Articles 32, 33, 34, by law as a matter of PUBLIC POLICY.
2176 of the New Civil Code are no
longer deemed instituted, and may
be filed separately and prosecuted Proof of negligence under this provision is not
independently even without any necessary; as such, traditional contract and
reservation in the criminal action warranty defenses as (1) lack of privity; (2) lack
(Section 3, Rule 111, 2000 Rules on of reliance on a warranty; (3) lack of notice to
Criminal Procedure). The failure to the defendant of the breach of warranty; and (4)
make a reservation of the criminal disclaimer of implied warranties are
action is not a waiver of the right to INAPPLICABLE.
file a separate and independent civil
action based on these articles of the Requisites of liability:
New Civil Code [Casupanan vs. (1) Defendant is a manufacturer or possessor of
Laroya, G.R. No. 145391, August 26,
2002]
foodstuff, drinks, toilet articles and similar
goods;
(2) He used noxious or harmful substances in
the manufacture or processing of the
foodstuff, drinks or toilet articles consumed
or used by the plaintiff;
(3) Plaintiffs death or injury was caused by the
product so consumed or used; and
(4) The damages sustained and claimed by the
plaintiff and the amount thereof.
PAGE 437
BURDEN OF PROOF formulas and handling and making up,

The burden of proof that the product was in a presentation or packing of their products, as well
defective condition at the time it left the hands as for the insufficient or inadequate information on
of the manufacturer and particular seller is the use and hazards thereof.
upon the INJURED PLAINTIFF.
A product is defective when it does not offer the
safety rightfully expected of it, taking relevant
WHO MAY RECOVER circumstances into consideration, including but
Although the article used the term consumer, not limited to:
such term includes a user and purchaser of (a) presentation of product
the injuriously defective food product or toilet (b) use and hazards reasonably expected of it;
article. The person who may recover NEED NOT (c) the time it was put into circulation.
BE THE PURCHASER of the foodstuff or toilet
article. A product is not considered defective because
another better quality product has been placed in
the market. The manufacturer, builder, producer or
CONSUMER ACT (RA 7394, importer shall not be held liable when it evidences:
SECS. 92-107 [CH. 1]) (a) that it did not place the product on the
market;
Article 4. Definition of Terms. (b) that although it did place the product on the
market such product has no defect;
(n) Consumer means a natural person who is a (c) that the consumer or a third party is solely at
purchaser, lessee, recipient or prospective fault.
purchaser, lessor or recipient of consumer
products, services or credit. Article 98. Liability of Tradesman or Seller. The
tradesman/seller is likewise liable, pursuant to the
(as) Manufacturer means any person who preceding article when:
manufactures, assembles or processes (a) it is not possible to identify the manufacturer,
consumer products, except that if the goods builder, producer or importer;
are manufactured, assembled or processed for (b) the product is supplied, without clear
another person who attaches his own brand identification of the manufacturer, producer,
name to the consumer products, the latter builder or importer;
shall be deemed the manufacturer. In case of (c) he does not adequately preserve perishable
imported products, the manufacturer's goods. The party making payment to the
representatives or, in his absence, the damaged party may exercise the right to
importer, shall be deemed the manufacturer. recover a part of the whole of the payment
made against the other responsible parties, in
Article 92. Exemptions. If the concerned accordance with their part or responsibility in
department finds that for good or sufficient the cause of the damage effected.
reasons, full compliance with the labeling
requirements otherwise applicable under this Act Article 99. Liability for Defective Services. The
is impracticable or is not necessary for the service supplier is liable for redress, independently
adequate protection of public health and safety, it of fault, for damages caused to consumers by
shall promulgate regulations exempting such defects relating to the rendering of the services, as
substances from these requirements to the extent well as for insufficient or inadequate information
it deems consistent with the objective of on the fruition and hazards thereof.
adequately safeguarding public health and safety,
and any hazardous substance which does not bear The service is defective when it does not provide
a label in accordance with such regulations shall the safety the consumer may rightfully expect of it,
be deemed mislabeled hazardous substance. taking the relevant circumstances into
consideration, including but not limited to:
Article 97. Liability for the Defective Products. Any (a) the manner in which it is provided;
Filipino or foreign manufacturer, producer, and (b) the result of hazards which may reasonably be
any importer, shall be liable for redress, expected of it;
independently of fault, for damages caused to (c) the time when it was provided.
consumers by defects resulting from design,
manufacture, construction, assembly and erection, A service is not considered defective because of
PAGE 438
the use or introduction of new techniques. Article 101. Liability for Product Quantity
Imperfection. Suppliers are jointly liable for
The supplier of the services shall not be held liable imperfections in the quantity of the product when,
when it is proven: in due regard for variations inherent thereto, their
(a) that there is no defect in the service rendered; net content is less than that indicated on the
(b) that the consumer or third party is solely at container, packaging, labeling or advertisement,
fault. the consumer having powers to demand,
alternatively, at his own option:
Article 100. Liability for Product and Service (a) the proportionate price
Imperfection. The suppliers of durable or (b) the supplementing of weight or measure
nondurable consumer products are jointly liable differential;
for imperfections in quality that render the (c) the replacement of the product by another of
products unfit or inadequate for consumption for the same kind, mark or model, without said
which they are designed or decrease their value, imperfections;
and for those resulting from inconsistency with the (d) the immediate reimbursement of the amount
information provided on the container, packaging, paid, with monetary updating without
labels or publicity messages/advertisement, with prejudice to losses and damages if any.
due regard to the variations resulting from their
nature, the consumer being able to demand The provisions of the fifth paragraph of Article 99
replacement to the imperfect parts. shall apply to this Article.
If the imperfection is not corrected within thirty The immediate supplier shall be liable if the
(30) days, the consumer may alternatively demand instrument used for weighing or measuring is not
at his option: gauged in accordance with official standards.
(a) the replacement of the product by another of
the same kind, in a perfect state of use; Article 102. Liability for Service Quality Imperfection.
(b) the immediate reimbursement of the amount The service supplier is liable for any quality
paid, with monetary updating, without imperfections that render the services improper for
prejudice to any losses and damages; consumption or decrease their value, and for those
(c) a proportionate price reduction. resulting from inconsistency with the information
contained in the offer or advertisement, the
The parties may agree to reduce or increase the consumer being entitled to demand alternatively
term specified in the immediately preceding at his option:
paragraph; but such shall not be less than seven (a) the performance of the services, without any
(7) nor more than one hundred and eighty (180) additional cost and when applicable;
days. (b) the immediate reimbursement of the amount
paid, with monetary updating without
The consumer may make immediate use of the prejudice to losses and damages, if any;
alternatives under the second paragraph of this (c) a proportionate price reduction.
Article when by virtue of the extent of the
imperfection, the replacement of the imperfect Reperformance of services may be entrusted to
parts may jeopardize the product quality or duly qualified third parties, at the supplier's risk
characteristics, thus decreasing its value. and cost.
If the consumer opts for the alternative under sub- Improper services are those which prove to be
paragraph (a) of the second paragraph of this inadequate for purposes reasonably expected of
Article, and replacement of the product is not them and those that fail to meet the provisions of
possible, it may be replaced by another of a this Act regulating service rendering.
different kind, mark or model: Provided, That any
difference in price may result thereof shall be Article 103. Repair Service Obligation. When
supplemented or reimbursed by the party which services are provided for the repair of any product,
caused the damage, without prejudice to the the supplier shall be considered implicitly bound
provisions of the second, third and fourth to use adequate, new, original replacement parts,
paragraphs of this Article. or those that maintain the manufacturer's
technical specifications unless, otherwise
authorized, as regards to the latter by the
consumer.
PAGE 439
Article 104. Ignorance of Quality Imperfection. The LIABILITY FOR NEGLIGENCE VS.
supplier's ignorance of the quality imperfections LIABILITY FOR NUISANCE
due to inadequacy of the products and services
does not exempt him from any liability. Negligence Nuisance
Article 105. Legal Guarantee of Adequacy. The legal Liability
guarantee of product or service adequacy does not Liability is attaches
require an express instrument or contractual based on lack of regardless of
Basis
exoneration of the supplier being forbidden. proper care and the skill
diligence exercised to
Article 106. Prohibition in Contractual Stipulation. avoid the injury
The stipulation in a contract of a clause There is
preventing, exonerating or reducing the obligation continuing harm
to indemnify for damages effected, as provided for being suffered
in this and in the preceding Articles, is hereby
prohibited, if there is more than one person
Act complained by the aggrieved
responsible for the cause of the damage, they shall of is already party because of
Condition
be jointly liable for the redress established in the done which the
of the act
pertinent provisions of this Act. However, if the caused injury to maintenance of
damage is caused by a component or part the plaintiff the act or thing
incorporated in the product or service, its which
manufacturer, builder or importer and the person constitutes the
who incorporated the component or part are nuisance
jointly liable. Action for
Remedy Abatement
damages
NUISANCE
NUISANCE PER SE
Art. 694. A nuisance is any act, omission,
establishment, business, condition of property, or
It is recognized as a nuisance under any and all
anything else which: circumstances because it constitutes a direct
(1) Injures or endangers the health or safety of menace to public health and safety and, for that
others; or reason, may be abated summarily under the
(2) Annoys or offends the senses; or undefined law of necessity.
(3) Shocks, defies or disregards decency or
morality; or To become a nuisance per se, the thing must, of
(4) Obstructs or interferes with the free passage itself, because of its inherent qualities, without
of any public highway or street, or any body of complement, be productive of injury, or, by
water; or reason of the matter of its use or exposure,
(5) Hinders or impairs the use of property.
threaten or be dangerous to life or property.
Art. 696. Every successive owner or possessor of
property who fails or refuses to abate a nuisance in NUISANCE PER ACCIDENS
that property started by a former owner or It becomes a nuisance depending upon certain
possessor is liable therefor in the same manner as conditions and circumstances, and its existence
the one who created it. being a question of fact, it cannot be abated
without due hearing thereon in a tribunal
Art. 697. The abatement of a nuisance does not authorized to decide whether such a thing does
preclude the right of any person injured to recover in law constitute a nuisance.
damages for its past existence.
Art. 698. Lapse of time cannot legalize any

nuisance, whether public or private.
PAGE 440
PUBLIC NUISANCE assistance of the local police; and

Art. 695. Nuisance is either public or private. A (4) That the value of the destruction does not
public nuisance affects a community or exceed three thousand pesos.
neighborhood or any considerable number of
persons, although the extent of the annoyance, PRIVATE NUISANCE
danger or damage upon individuals may be It is one which violates only private rights and
unequal. A private nuisance is one that is not produces damage to but one or a few persons,
included in the foregoing definition. and cannot be said to be public.
A public nuisance is the doing of or the failure to
Art. 705. The remedies against a private nuisance
do something that injuriously affects safety,
are:
health, or morals of the public, or works some (1) A civil action; or
substantial annoyance, inconvenience or injury (2) Abatement, without judicial proceedings.
to the public. It causes hurt, inconvenience, or
damage to the public generally, or such part of Art. 706. Any person injured by a private nuisance
the public as necessarily comes in contact with may abate it by removing, or if necessary, by
it in the exercise of a public or common right. destroying the thing which constitutes the
nuisance, without committing a breach of the
peace or doing unnecessary injury. However, it is
Art. 699. The remedies against a public nuisance indispensable that the procedure for extrajudicial
are: abatement of a public nuisance by a private
(1) A prosecution under the Penal Code or any
person be followed.
local ordinance: or
(2) A civil action; or Art. 707. A private person or a public official
(3) Abatement, without judicial proceedings. extrajudicially abating a nuisance shall be liable
for damages:
Art. 700. The district health officer shall take care
(1) If he causes unnecessary injury; or
that one or all of the remedies against a public (2) If an alleged nuisance is later declared by the
nuisance are availed of. courts to be not a real nuisance.
Art. 701. If a civil action is brought by reason of the
maintenance of a public nuisance, such action ATTRACTIVE NUISANCE
shall be commenced by the city or municipal General rule: When people come to the lands or
mayor. premises of others for their own purposes,
without right or invitation, they must take the
Art. 702. The district health officer shall determine lands as they see them.
whether or not abatement, without judicial
proceedings, is the best remedy against a public Exception: Attractive Nuisance doctrine.
nuisance.
Art. 703. A private person may file an action on One who maintains on his premises dangerous
account of a public nuisance, if it is specially instrumentalities or appliances of a character
injurious to himself. likely to attract children at play, and who fails to
exercise ordinary care to prevent children from
Art. 704. Any private person may abate a public playing therewith or resorting thereto, is liable
nuisance which is specially injurious to him by to a child of tender years who is injured thereby,
removing, or if necessary, by destroying the thing even if the child is technically a trespasser in the
which constitutes the same, without committing a premises.
breach of the peace, or doing unnecessary injury.
But it is necessary:
The principle reason for the doctrine is that the
(1) That demand be first made upon the owner or
possessor of the property to abate the
condition or appliance in question although its
nuisance; danger is apparent to those of age, is so
(2) That such demand has been rejected; enticing or alluring to children of tender years
(3) That the abatement be approved by the as to induce them to approach, get on or use it,
district health officer and executed with the and this attractiveness is an implied invitation to
PAGE 441
such children. [Hildago Enterprises vs. Balandan is taken for public use
(1952)] (8) The right to equal protection of the laws
(9) The right to be secure in ones person, house,
It is doubtful whether contributory negligence papers and effects against unreasonable
can properly be imputed to the deceased, owing searches and seizures
to his immature years and the natural curiosity (10) The liberty of abode and of changing the same
which a child would feel to do something out of (11) The right to privacy of communication and
the ordinary, and the mere fact that the correspondence
(12) The right to become a member of associations
deceased ignored the caution of a companion of
and societies for purposes not contrary to law
the age of 8 years does not, in our opinion, alter (13) The right to take part in a peaceable assembly
the case. and petition the government for redress of
grievances
Contributory negligence of a minor does not bar (14) The right to be free from involuntary servitude
recovery, where his immaturity and natural in any form
curiosity impelled him to act to his injury; but (15) The right of the accused against excessive bail
discretion shown by the child is the decisive (16) The right of the accused to be heard by
factor. [Del Rosario vs. Manila Electric Co. (1932)] himself and counsel, to be informed of the
nature and the cause of the accusation
WHEN APPLICABLE/NOT APPLICABLE: against him, to have a speedy and public trial,
to meet the witnesses face to face, to have
The danger to the child must be caused by the compulsory process to secure the attendance
attraction itself, or by something with which of witnesses on is behalf;
the attraction brings the child in contact. (17) Freedom from being compelled to be a
Protects a meddling child, but not a danger witness against ones self, or from being
which was created by the child himself. forced to confess his guilt, or from being
Limited to latent dangers, and is no basis for induced by a promise of immunity or reward
recovery where peril is obvious or patent. to make such confession, except when the
person confessing becomes a State witness.
Does not apply to natural dangers. (18) Freedom from excessive fines, or cruel and
The age and maturity of the injured child and unusual punishment, unless the same is
the reason for the childs presence are imposed or inflicted in accordance with a
important considerations in the application of statute which has not been judicially declared
the doctrine. [De Leon on Torts and Damages] unconstitutional;
In any of the cases referred to in this article,

VIOLATION OF whether or not the defendants act or omission
CONSTITUTIONAL RIGHTS constitutes a criminal offense, the aggrieved party
has a right to commence an entirely separate and
VIOLATION OF CIVIL LIBERTIES distinct civil action for damages, and for other
Art 32. Any public officer or employee, or any independently of any criminal prosecution (if the
private individual, who directly or indirectly latter be instituted) and may be proved by a
obstructs, defeats, violates or in any manner preponderance of evidence.
liberties of another person shall be liable to the The indemnity shall include moral damages.
latter for damages: Exemplary damages may also be adjudicated.
(1) Freedom of religion
(2) Freedom of speech The responsibility herein set forth is not
(3) Freedom to write for the press or to maintain a demandable from a judge unless his act or
periodical publication omission constitutes a violation of the Penal code
(4) Freedom from arbitrary or illegal detention or any other penal statute.
(5) Freedom of suffrage
(6) The right against deprivation of property It is obvious that the purpose of the above codal
without due process of law provision [Art. 32) is to provide a sanction to the
(7) The right to just compensation when property
PAGE 442
deeply cherished rights and freedoms enshrined duties of his office, and it is not necessary to
in the Constitution. Its message is clear; no man show that his failure to act was due to malice or
may seek to violate those sacred rights with willfulness.
impunity. In times of great upheaval or of social
and political stress, when the temptation is Art. 34. When a member of a city or municipal
strongest to yieldborrowing the words of Chief police force refuses or fails to render aid or
Justice Claudio Teehankeeto the law of force protection to any person in case of danger to life or
rather than the force of law, it is necessary to property, such peace officer shall be primarily
remind ourselves that certain basic rights and liable for damages, and the city or municipality
liberties are immutable and cannot be sacrificed shall be subsidiarily responsible therefor. The civil
to the transient needs or imperious demands of action herein recognized shall be independent of
the ruling power. The rule of law must prevail, any criminal proceedings, and a preponderance of
evidence shall suffice to support such action.
or else liberty will perish. [Aberca, et al. vs. Ver, et
al. (1988)]
Art. 34 covers a situation where:
(1) There is danger to the life or property of
VIOLATIONS OF RIGHTS COMMITTED person;
BY PUBLIC OFFICERS (2) A member of a city or municipal police force
Art. 27. Any person suffering material or moral loss who is present in the scene refused or failed
because a public servant or employee refuses or to render aid or protection to the person;
neglects, without just cause, to perform his official and
duty may file an action for damages and other (3) Damages are caused whether to the person
relief against the latter, without prejudice to any and/or property of the victim.
disciplinary administrative action that may be
taken. Nature of liability
(1) Of the police officer Primary
Art. 32, supra (2) City or municipality Subsidiary
DERELICTION OF DUTY The defense of having observed the diligence of
Requisites: a good father of a family to prevent the damage
(1) Defendant is a public officer charged with a is not available to the city/municipality.
performance of a duty in favor of the
plaintiff; PROVINCES, CITIES, AND
(2) He refused or neglected without just
cause to perform the duty; MUNICIPALITIES
(3) Plaintiff sustained material or moral loss as Art. 2189. Provinces, cities and municipalities shall
a consequence of such non-performance; be liable for damages for the death of, or injuries
(4) The amount of such damages, if material. suffered by, any person by reason of the defective
[Amaro vs. Samanguit] condition of roads, streets, bridges, public
buildings, and other public works under their
control or supervision.
Coverage
Applies only to acts of nonfeasance or the
nonperformance of some acts which a person is
OWNERSHIP OF ROADS, ETC. IS NOT
obliged or has responsibility to perform.
REQUIRED
The duty of the public servant must be It is not necessary for the liability therein
ministerial in character. If the duty is established to attach that the defective roads or
discretionary, he is not liable unless he acted in streets belong to the province, city or
a notoriously arbitrary manner. municipality. What said article requires is that
the province, city or municipality have either
Defense of good faith is not available control or supervision over said street or road.
The reason of its unavailability is that an officer [City of Manila vs. Teotico (1968)]
is under constant obligation to discharge the
PAGE 443
OWNERS OF MOTOR VEHICLES public and third persons and as such is directly
and primarily responsible for the consequences
Art. 2184. In motor vehicle mishaps, the owner is
solidarily liable with his driver, if the former, who incident to its operation, so that in
was in the vehicle, could have, by the use of the contemplation of law, such owner/operator of
due diligence, prevented the misfortune. It is record is the employer of the driver, the actual
disputably presumed that a driver was negligent, if operator and employer being considered merely
he had been found guilty of reckless driving or as his agent.
violating traffic regulations at least twice within
the next preceding two months. The registered owner of a motor vehicle is
primarily liable for the damage or injury caused
If the owner was not in the motor vehicle, the to another, but he has a right to be indemnified
provisions of article 2180 are applicable. by the real owner of the amount he was
Art. 2185. Unless there is proof to the contrary, it is
required to pay (Tamayo vs. Aquino [1959]) This
presumed that a person driving a motor vehicle rule applies both to private and to common
has been negligent if at the time of the mishap, he carriers with respect to their passengers.
was violating any traffic regulation.
Note: If the owner was NOT inside the vehicle,
Art. 2186. Every owner of a motor vehicle shall file Art. 2180 applies.
with the proper government office a bond
executed by a government-controlled corporation The presumption is AGAINST the owner of the
or office, to answer for damages to third persons. motor vehicle. He has the burden of proving due
The amount of the bond and other terms shall be diligence.
fixed by the competent public official.
Thus, once a driver is proven negligent in
The owner is SOLIDARILY liable with the driver causing damage, the law presumes the vehicle
for motor vehicle mishaps when: owner equally negligent and imposes upon the
(1) The owner was IN the vehicle at the time, latter the burden of proving proper selection
AND and supervision of employee as a defense.
(2) The owner could have, by the use of due
diligence, prevented the misfortune. Summary:
OWNER OF THE VEHICLE Owner PRESENT in the Owner NOT PRESENT in
Owner shall mean the actual legal owner of the Vehicle the Vehicle
motor vehicle, in whose name such vehicle is Owner is liable if he
Owner may be held
duly registered with the LTO. could have prevented
liable under Art. 2180,
the mishap by the
par. 5.
Registration of motor vehicles is required not exercise of due diligence.
because it is the operative act which transfers
ownership in vehicles, but because it is the Car owners are not held to a uniform and
means by which the owner can be identified so inflexible standard of diligence as are
that if any accident occurs, or damage or injury professional drivers. In many cases they refrain
is caused in the operation of the vehicle, from driving their own cars and instead hire
responsibility can be fixed. other persons to drive for them precisely
because they are not trained or endowed with
As held in Vargas vs. Langcay (1962), the sufficient discernment to know the rules of
registered owner/operator of a passenger traffic or to appreciate the relative dangers
vehicle is jointly and severally liable with the posed by the different situations that are
driver for damages incurred by passengers or continually encountered on the road. What
third persons as a consequence of injuries or would be a negligent omission under aforesaid
death sustained in the operation of said Article on the part of a car owner who is in the
vehicles. Regardless of who the actual owner of prime of age and knows how to handle a motor
a vehicle is, the operator of record continues to vehicle is not necessarily so on the part, say, of
be the operator of the vehicle as regards the
PAGE 444
an old and infirm person who is not similarly Art. 2192. If damage referred to in the two preceding
equipped. articles should be the result of any defect in the
construction mentioned in article 1723, the third
The law does not require that a person must person suffering damages may proceed only against
possess a certain measure of skill or proficiency the engineer or architect or contractor in accordance
with said article, within the period therein fixed.
either in the mechanics of driving or in the
observance of traffic rules before he may own a
motor vehicle. The test of his negligence, within Ownership of a building imposes on the
the meaning of Article 2184, is his omission to proprietor thereof the duty to maintain it in
do that which the evidence of his own senses good condition at all times to the end that it
tells him he should do in order to avoid the may not collapse either totally or partially as to
accident. And as far as perception is concerned, cause damage or injury to anothers person or
absent a minimum level imposed by law, a property.
maneuver that appears to be fraught with This duty obtains whether the building is leased
danger to one passenger may appear to be or held in usufruct.
entirely safe and commonplace to another.
Were the law to require a uniform standard of Considering, however, that the lessee or
perceptiveness, employment of professional usufructuary has direct and immediate control
drivers by car owners who, by their very of the building, the law imposes on him the duty
inadequacies, have real need of drivers' services, to notify the proprietor of such urgent or extra-
would be effectively proscribed. [Caedo vs. Yu ordinary repairs AND where the proprietors
Khe Tai (1968)] failure to make the necessary repairs was due to
the failure of the lessee or usufructuary to notify
An owner of a vehicle cannot be held liable for him, the proprietor is entitled to indemnification
an accident involving the said vehicle if the for damages he may have been required to pay
same was driven without his consent or to the parties.
knowledge and by a person not employed by The owner or proprietor of a place of public
him. [Duavit vs. CA (1989)] amusement impliedly warrants that the
premises, appliances and amusement devices
PROPRIETOR OF BUILDING OR are safe for the purpose for which they are
STRUCTURE designed, the doctrine being subject to no other
Art. 2190. The proprietor of a building or structure is exception or qualification than that he does not
responsible for the damages resulting from its total contract against unknown defects not
or partial collapse, if it should be due to the lack of discoverable by ordinary or reasonable means.
necessary repairs. [Gotesco Investment Corp. vs. Chatto (1992)]
Art. 2191. Proprietors shall also be responsible for HEAD OF FAMILY

damages caused: Art 2193. The head of a family that lives in a building
(1) By the explosion of machinery which has not or a part thereof, is responsible for damages caused
been taken care of with due diligence, and the by things thrown or falling from the same.
inflammation of explosive substances which
have not been kept in a safe and adequate PURPOSE OF THE LAW
place; To relieve the injured party of the difficulty of
(2) By excessive smoke, which may be harmful to determining and proving who threw the thing or
persons or property; what caused it to fall, or that either was due to
(3) By the falling of trees situated at or near the fault or negligence of any particular
highways or lanes, if not caused by force
individual.
majeure;
(4) By emanations from tubes, canals, sewers or
Lessee is considered as the head of the family. It
deposits of infectious matter, constructed
is enough that he lives in and has control over it.
without precautions suitable to the place.
[Dingcong vs. Kanaan (1941)]
PAGE 445
Strict Liability It is likewise immaterial that the animal was

tame and was merely provoked by the victim.
The law does not speak only of vicious animals
POSSESSOR AND USER OF AN but covers even tame ones as long as they
cause injury.
ANIMAL
Art. 2183. The possessor of an animal or whoever
may make use of the same is responsible for the
NUISANCE
damage which it may cause, although it may Sangco: A person who creates or maintains a
escape or be lost. This responsibility shall cease nuisance is liable for the resulting injury to
only in case the damage should come from force others regardless of the degree of care or skill
majeure or from the fault of the person who has exercised to avoid the injury. The creation or
suffered damage. maintenance of a nuisance is a violation of an
absolute duty.
APPLICABILITY OF PROVISION
Since the law makes no distinction, this is Nuisance is a condition and not an act or failure
applicable to both wild (in case the wild animal to act, so that if a wrongful condition exists, the
is kept) and domestic animals. It is enough that person responsible for its existence is
defendant is the possessor, owner, or user of the responsible for the resulting damages to others.
animal at the time it caused the damage
complained of, to hold him liable therefor. CLASSES
(1) Nuisance per se; Nuisance per accidens
BASIS (2) Public nuisance; private nuisance
Possession of the animal, not ownership, is
determinative of liability under Art. 2183. The A nuisance is, according to Blackstone, Any
obligation imposed by said article is not based thing that worketh hurt, inconvenience, or
on the negligence or on the presumed lack of damages. They arise from pursuing particular
vigilance of the possessor or user of the animal trades or industries in populous neighborhoods;
causing damage. It is based on natural equity from acts of public indecency, keeping
and on the principle of social interest that he disorderly houses, and houses of ill fame,
who possesses animals for his utility, pleasure, gambling houses, etc. Nuisances have been
or service, must answer for any damage which divided into two classes: Nuisances per se, and
such animal may cause. [Vestil vs. IAC (1989)] nuisances per accidens. To the first belong those
which are unquestionably and under all
POSSIBLE DEFENSES AGAINST THIS circumstances nuisances, such as gambling
houses, houses of ill fame, etc. The number of
LIABILITY such nuisances is necessarily limited, and by far
(1) Force Majeure
the greater number of nuisances are such
(2) Fault of person suffering damage
because of particular facts and circumstances
(3) Act of third persons
surrounding the otherwise harmless cause of
the nuisance. For this reason, it will readily be
SCOPE OF PROVISION seen that whether a particular thing is a
Contention that the defendant could not be nuisance is generally a question of fact, to be
expected to exercise remote control of the determined in the first instance before the term
animal is not acceptable. In fact, Art. 2183 holds nuisance can be applied to it. [Iloilo Ice and Cold
the possessor liable even if the animal should Storage Co. vs. Municipal Council (1913)]
escape or be lost and so be removed from his
control.
PAGE 446
EASEMENT AGAINST NUISANCE PRODUCTS LIABILITY (SUPRA)

Art. 682. Every building or piece of land is subject Art 2187. Manufacturers and processors of
to the easement which prohibits the proprietor or foodstuffs, drinks, toilet articles and similar goods
possessor from committing nuisance through shall be liable for death or injuries caused by any
noise, jarring, offensive odor, smoke, heat, dust, noxious or harmful substances used, although no
water, glare and other causes. contractual relation exists between them and the
consumers.
Art. 683. Subject to zoning, health, police and
other laws and regulations, factories and shops
may be maintained provided the least possible CONSUMER ACT
annoyance is caused to the neighborhood. Consumer Act Provisions, supra
The provisions impose a prohibition upon While it may be true that the pre-existing
owners of buildings of land from committing contract between the parties may, as a general
therein a nuisance or using such buildings or rule, bar the applicability of the law on quasi-
lands in a manner as will constitute a nuisance. delict, the liability may itself be deemed to arise
It is based on the maxim sic utere tuo ut alienum from quasi-delict if the act which breaks the
non laedas (so use your own as not to injure contract is also a quasi-delict. [Coca-Cola vs. CA
anothers property). (1993)]
The general rule is that everyone is bound to

bear the habitual or customary inconveniences
that result from the proximity of others, and so
long as this level is not surpassed, he may not
complain against them. But if the prejudice
exceeds the inconveniences that such proximity
habitually brings, the neighbor who causes such
disturbances is held responsible for the
resulting damage, being guilty of causing
nuisance.
While no previous adjudications on the specific

issue have been made in the Philippines, our
law of nuisances is of American origin, and a
review of authorities clearly indicates the rule to
be that the causing or maintenance of
disturbing noise or sound may constitute an
actionable nuisance.
There can be no doubt that commercial and

industrial activities which are lawful in
themselves may become nuisances if they are
so offensive to the senses that they render the
enjoyment of life and property uncomfortable. It
is no defense that skill and care have been
exercised and the most improved methods and
appliances employed to prevent such result.
[Velasco vs. Manila Electric Co. (1971)]
PAGE 447
SUMMARY OF STRICT LIABILITY
Person Strictly Liable For What Defenses/Exceptions

Possessor of an animal or
Force majeure
whoever makes use of
them even if the animal is
For the damage the animal may cause Fault of the person who
lost or escaped suffered damage
Solidary liability only if the
owner was in the vehicle and if
he could have prevented it thru
Owner of Motor Vehicle Motor vehicle mishaps due diligence
If not in vehicle, apply Art.
2180 for his liability as
employer
Manufacturers and
processors of foodstuffs, Death and injuries caused by any noxious Absence of contractual relation
drinks, toilet articles and or harmful substances used NOT a defense
similar goods
Defendant in possession
Possession or use thereof is
of dangerous weapons/ Death or injury results from such
indispensable in his occupation
substances such as possession
or business
firearms and poison
The death or injuries suffered by any
The defective public work is not
Provinces, Cities and person by reason of the defective
under the LGUs control or
Municipalities condition of roads, streets, bridges,
supervision
public buildings, and other public works
Total or partial collapse of building or
structure if due to lack of
necessary repairs
Explosion of machinery which has not
been taken cared of with due diligence,
and the inflammation of explosive
substances which have not been kept
in a safe and adequate place Responsibility for collapse
Proprietor of building/
By excessive smoke, which may be should be due to the lack of
structure
harmful to persons or property necessary repairs
By falling of trees situated at or near
highways or lanes, if not caused by
force majeure
By emanations from tubes, canals,
sewers or deposits of infectious matter,
constructed without precautions
suitable to the place
If within 15 years from completion of
the structure, the same should
collapse by reason of:
Action not brought within 10
Engineer or Architect o Defects in the plans or specifications;
years from collapse
or
o Defects in the ground.
PAGE 448
Person Strictly Liable For What Defenses/Exceptions

If within the same period, the edifice
falls on account of:
o Defects in the construction;
o Used of materials of inferior quality
furnished by him; or
o Violation of the terms of the contract
AND he supervised the construction.
If within 15 years from the completion
of the structure, the edifice falls on
account of:
Action not brought within 10
Contractor o Defects in the construction;
years from collapse
o Used of materials of inferior quality
furnished by him; or
o Violation of the terms of the contract
Head of the Family that
Liable for damages caused by things
lives in a building or any
thrown or falling from the same
part thereof
PAGE 449
(4) For deterring future violations: Exemplary or

DAMAGES corrective
Definition ACCORDING TO MANNER OF

Damages may be defined as the pecuniary DETERMINATION
compensation, recompense, or satisfaction for (1) Conventional (or liquidated)
an injury sustained, or as otherwise expressed, (2) Non-conventional, which may either be:
the pecuniary consequences which the law (a) Statutory (fixed by law, as in moratory
imposes for the breach of some duty or the interest)
violation of some right. [People vs. Ballesteros (b) Judicial (determined by the courts)
(1998)]
SPECIAL AND ORDINARY
INJURY VS. DAMAGE VS.
DAMAGES GENERAL DAMAGES
Injury is the illegal invasion of a legal right. Those which are the natural and necessary
Damage is the loss, hurt, or harm which results result of the wrongful act or omission asserted
from the injury. Damages are the recompense or as the foundation of liability, and include those
compensation awarded for the damage which follow as a conclusion of law from the
suffered. [Custodio vs. CA (1996)] statement of the facts of the injury.
The obligation to repair the damages exists SPECIAL DAMAGES

whether done intentionally or negligently and Damages that arise from the special
whether or not punishable by law. [Ocena vs. circumstance of the case, which, if properly
Icamina (1990)] pleaded, may be added to the general damages
which the law presumes or implies from the
Elements for recovery of damages: mere invasion of the plaintiffs rights. Special
(1) Right of action damages are the natural, but NOT the
(2) For a wrong inflicted by the defendant necessary result of an injury. These are not
(3) Damage resulting to the plaintiff implied by law.
Classification Actual and Compensatory

Art. 2197. Damages may be:
(1) Actual or compensatory;
Damages
(2) Moral; Compensatory damages are damages in
(3) Nominal; satisfaction of, or in recompense for, loss or
(4) Temperate or moderate; injury sustained. The phrase actual damages
(5) Liquidated; or is sometimes used as synonymous with
(6) Exemplary or corrective. compensatory damages.
ACCORDING TO PURPOSE Requisites:

(1) For adequate reparation of the injury To seek recovery of actual damages, it is
(a) Compensatory (reparation of pecuniary necessary to prove the actual amount of loss
losses) with a reasonable degree of certainty, premised
(b) Moral (reparation for non-pecuniary upon competent proof and on the best evidence
losses: injury to feelings; physical obtainable.[ Asilio, Jr. vs. People and Sps.
suffering, etc.) Bombasi (2011)]
(2) For vindication of the right violated:
Nominal When is a person entitled?
(3) For less than adequate reparation: (1) When there is a pecuniary loss suffered by
Moderate him;
PAGE 450
(2) When he has alleged and prayed for such The requirement of certainty does not prevent
relief [Manchester Devt Corp vs. CA, 1987]; the drawing of reasonable inferences from the
(3) When he has duly proved it; fact and circumstance in evidence.
(4) When provided by law or by stipulation. Events which occur after the wrong
complained of may serve to render the
No proof of pecuniary loss is necessary for: damage sufficiently certain.
moral, nominal, temperate, liquidated or The damages must be susceptible of
exemplary damages. The assessment of such ascertainment in some manner other than by
damages is discretionary upon the court, except mere speculation, conjecture or surmise and
liquidated ones. [Art. 2216] by reference to some fairly definite standard,
such as market value, established experience
ALLEGED AND PROVED WITH or direct inference from known circumstances.
CERTAINTY
Where, however, it is reasonably certain that
Art. 2199. Except as provided by law or by injury consisting of failure to realize otherwise
stipulation, one is entitled to an adequate reasonably expected profits had been incurred,
compensation only for such pecuniary loss
suffered by him as he has duly proved. Such
uncertainty as to the precise amount of such
compensation is referred to as actual or unrealized profits will not prevent recovery or
compensatory damages. the award of damages. [Talisay-Silay vs.
Associacion (1995)]
THE DAMAGES MUST BE PROVEN BY
COMPETENT EVIDENCE (ADMISSIBLE COMPONENTS
OR PROBATIVE) Actual damage covers the following:
(1) Value of loss; unrealized profit
It is necessary to prove with a reasonable degree
(2) Attorneys fees and expenses of litigation
of certainty, premised upon competent proof
(3) Interest
and on the best evidence obtainable by the
injured party, the actual amount of loss.
VALUE OF LOSS; UNREALIZED
Damages must be proved and cannot be PROFIT
presumed. It must be established by clear Art. 2200. Indemnification for damages shall
evidence. [Integrated Packaging Corp. vs. CA comprehend not only the value of the loss
(2000); Fuentes vs. CA (1996)] suffered, but also that of the profits which the
obligee failed to obtain.
Damages must be proved with reasonable
accuracy, even when not denied. [Valencia vs. In other words, indemnification for damages is
Tantoco (1956)] not limited to damnum emergens (actual loss)
but extends to lucrum cessans (a cession of gain
DEGREE OF CERTAINTY REQUIRED or amount of profit lost).
AS TO: FACT, CAUSE AND AMOUNT
OF DAMAGES ATTORNEYS FEES AND EXPENSES
Damages are not rendered uncertain just OF LITIGATION
because they cannot be calculated with Art. 2208. In the absence of stipulation, attorney's
absolute exactness or because the fees and expenses of litigation, other than judicial
consequences of the wrong are not precisely costs, cannot be recovered, except:
definite in pecuniary amount. (1) When exemplary damages are awarded;
(2) When the defendant's act or omission has
The principle which will disallow recovery of compelled the plaintiff to litigate with third
persons or to incur expenses to protect his
damages when their existence rests solely on interest;
speculation applies both to the fact and cause (3) In criminal cases of malicious prosecution
of damages. against the plaintiff;
PAGE 451
(4) In case of a clearly unfounded civil action or Even if expressly stipulated, attorneys fees are
proceeding against the plaintiff; subject to control by the Courts.
(5) Where the defendant acted in gross and
evident bad faith in refusing to satisfy the INTEREST
plaintiff's plainly valid, just and demandable
Art. 2209. If the obligation consists in the payment
claim;
of a sum of money, and the debtor incurs in delay,
(6) In actions for legal support;
the indemnity for damages, there being no
(7) In actions for the recovery of wages of
stipulation to the contrary, shall be the payment of
household helpers, laborers and skilled
the interest agreed upon, and in the absence of
workers;
stipulation, the legal interest, which is six per cent
(8) In actions for indemnity under workmen's
per annum.
compensation and employer's liability laws;
(9) In a separate civil action to recover civil
Art. 2210. Interest may, in the discretion of the
liability arising from a crime;
court, be allowed upon damages awarded for
(10) When at least double judicial costs are
breach of contract.
awarded;
(11) In any other case where the court deems it just
Art. 2211. In crimes and quasi-delicts, interest as a
and equitable that attorney's fees and
part of the damages may, in a proper case, be
expenses of litigation should be recovered.
adjudicated in the discretion of the court.
In all cases, the attorney's fees and expenses of
Art. 2212. Interest due shall earn legal interest
litigation must be reasonable.
from the time it is judicially demanded, although
the obligation may be silent upon this point.
General rule: Attorneys fees and costs of
litigation are recoverable IF stipulated. Art. 2213. Interest cannot be recovered upon
unliquidated claims or damages, except when the
Exceptions: If there is no stipulation, they are demand can be established with reasonable
recoverable only in the following cases: certainty.
(1) By reason of malice or bad faith
(a) When exemplary damages are awarded Interest accrues when:
(b) In case of a clearly unfounded civil (1) The obligation consists in the payment of a
action sum of money
(c) Where defendant acted in gross and (2) Debtor incurs in delay
evident bad faith (3) There being no stipulation to the contrary
(d) When at least double judicial costs are
awarded No interest may be recovered on unliquidated
(2) By reason of plaintiffs indigence in (not fixed in amount) claims or damages, except
(a) Actions for legal support when the demand can be established with
(b) Actions for recovery of wages of reasonable certainty at the Courts discretion.
laborers, etc.
(c) Actions for workmens compensation COMPOUNDING OF INTEREST
(3) By reason of crimes in Interest due shall earn legal interest from the
(a) Criminal cases of malicious prosecution time it is judicially demanded, although the
(b) Separate actions to recover civil liability obligation may be silent on the point.
arising from crime
(4) By reason of equity Note that interest due can earn only at 6%,
(a) Where the defendants act compelled whether the rate of interest of the principal is
plaintiff to litigate with third persons greater than 6%.
(b) Where the Court deems it just and
equitable DETERMINATION OF LEGAL INTEREST
When an obligation, regardless of its source
Note: In all cases, attorneys fees and costs of (i.e., law, contracts, quasi-contracts, delicts or
litigation must be reasonable. quasi-delicts) is breached, the contravenor
can be held liable for damages.
PAGE 452
With regard particularly to an AWARD OF BASE RATE ACCRUAL

INTEREST in the concept of actual and and executory, forbearance of
whether or not credit.
compensatory damages, the RATE of interest,
the case consists
as well as the ACCRUAL thereof, is imposed, in the payment of
as follows [Eastern Shipping Lines vs. CA, a sum of money
[1994] as modified by Nacar vs. Gallery Frames,
G.R. No. 189871, 2013] Note: The new rate of legal interest (6%) in
Nacar does not apply to judgments that have
BASE RATE ACCRUAL become final and executory prior to July 1, 2013.
(a) That
which may
(a) When the
have been Start of Delay:
obligation is To be computed (1) Extrajudicial: Demand letter
stipulated in
breached, and it from default, i.e., (2) Judicial: Filing of complaint
writing.
consists in the from JUDICIAL or
PAYMENT OF A EXTRAJUDICIAL (3) Award
(b) In the
SUM OF MONEY, demand under and
absence of
i.e., a loan or
stipulation,
subject to the EXTENT OR SCOPE OF ACTUAL
forbearance of provisions of
money, the
the rate of
Article 1169 of the DAMAGES
interest Source Extent of Liability
interest due Civil Code.
shall be 6%
should be:
p.a. (legal
If the obligor acted in GOOD
interest) FAITH, he shall be liable for
(b) Furthermore, the From the time it is natural and probable
Legal consequences of the breach,
INTEREST DUE JUDICIALLY
interest which the parties have foreseen
shall itself earn demanded.
If claim or or could have reasonably
Contracts
damages are foreseen at the time the
(c) When an Art. and
LIQUIDATED, from obligation was constituted.
obligation, NOT 2201 Quasi-
default, i.e., from contracts
constituting a If the obligor acted with
judicial or
loan or
extrajudicial FRAUD, BAD FAITH, MALICE or
forbearance of
demand. [Art. 1169, WANTON ATTITUDE, he shall
money, is
Civil Code) be responsible for all damages
breached, an
interest on the which may be reasonably
If UNLIQUIDATED, attributed to the breach.
AMOUNT OF
from the time the Liability extends to all damages
DAMAGES
demand can be which are the natural and
awarded may be
established with probable consequence of the
imposed at the 6% per Crimes
reasonable act or omission complained of.
discretion of the annum.
certainty. Hence, Art. and
court.
the interest shall 2202 Quasi-
begin to run only
WON the damage was foreseen
The actual base delicts
FROM THE DATE or could have been reasonably
for the foreseen by the defendant is
THE JUDGMENT
computation of irrelevant.
OF THE COURT IS
legal interest
MADE (at which
shall be on the
time the IN CONTRACTS AND QUASI-
amount finally
quantification of
adjudged.
damages may be CONTRACTS
deemed to have Art. 2201. In contracts and quasi-contracts, the
been reasonably damages for which the obligor who acted in good
ascertained). faith is liable shall be those that are the natural
(d) When the From FINALITY and probable consequences of the breach of the
JUDGMENT of UNTIL ITS
obligation, and which the parties have foreseen or
the court 6% per SATISFACTION,
could have reasonably foreseen at the time the
awarding a sum annum this period being
of money deemed to be an obligation was constituted.
becomes final equivalent to a
PAGE 453
In case of fraud, bad faith, malice or wanton Contributory negligence of the plaintiff, in case
attitude, the obligor shall be responsible for all of quasi-delicts, shall reduce the damages to
damages which may be reasonably attributed to which he may be entitled. However, in case of
the non-performance of the obligation. crimes, there is no mitigation for contributory
negligence of the plaintiff.
Art. 2214. In quasi-delicts, the contributory
negligence of the plaintiff shall reduce the EARNING CAPACITY, BUSINESS
damages that he may recover.
STANDING
Art. 2215. In contracts, quasi-contracts, and quasi- Art. 2205. Damages may be recovered:
delicts, the court may equitably mitigate the (1) For loss or impairment of earning capacity in
damages under circumstances other than the case cases of temporary or permanent personal
referred to in the preceding article, as in the injury;
following instances: (2) For injury to the plaintiff's business
(1) That the plaintiff himself has contravened the standing or commercial credit.
terms of the contract;
(2) That the plaintiff has derived some benefit as LOSS OR IMPAIRMENT OF EARNING
a result of the contract;
CAPACITY
(3) In cases where exemplary damages are to be
awarded, that the defendant acted upon the The Court did not award actual damages
advice of counsel; because it was found that plaintiffs
(4) That the loss would have resulted in any employment was lost even before the injury
event; upon which she was suing. The Court equated
(5) That since the filing of the action, the loss of employment with loss of earning
defendant has done his best to lessen the capacity. [Gatchalian vs. Delim (1991)]
plaintiff's loss or injury.
INJURY TO BUSINESS STANDING OR
The damages recoverable upon breach of COMMERCIAL CREDIT
contract are, primarily, the ordinary, natural and Loss of goodwill should be proven with the
in a sense the necessary damages resulting same standard of proof as other compensatory
from the breach. Other damages, known as damages. [Tanay Recreation Center vs. Fausto
special damages, are recoverable where it (2005)]
appears that the particular conditions which
made such damages a probable consequence of FORMULA FOR THE NET EARNING
the breach were known to the delinquent party CAPACITY [People vs. Aringue (1997)]
at the time the contract was made. [Daywalt vs.
Recoletos et al. (1919)] Net earning capacity = Life expectancy * (Gross
annual income Reasonable living expenses)
IN CRIMES AND QUASI-DELICTS
Art. 2202. In crimes and quasi-delicts, the
Where:
defendant shall be liable for all damages which Life expectancy = 2/3 * (80 age of victim at
are the natural and probable consequences of the the time of death)
act or omission complained of. It is not necessary
that such damages have been foreseen or could As a rule, documentary evidence should be
have reasonably been foreseen by the defendant. presented to substantiate the claim for loss of
earning capacity.
In case of crimes, damages are to be increased
or decreased according to aggravating or By way of exception, damages for loss of
mitigating circumstances present. earning capacity may be awarded despite the
absence of documentary evidence when: (1) the
Interest, as part of damages, may be deceased is self-employed and earning less
adjudicated in a proper case, in the Courts than the minimum wage under current labor
discretion. laws, in which case, judicial notice may be taken
of the fact that in the deceased's line of work, no
PAGE 454
documentary evidence is available; or (2) the Additional exception found in Pleyto vs. Lomboy
deceased is employed as a daily wage worker (2004):
earning less than the minimum wage under
current labor laws. [Tan, et al. vs. OMC Carriers, Testimonial evidence suffices to establish a
Inc. (2011)] basis for which the court can make a fair and
reasonable estimate of the loss of earning
DEATH BY CRIME OR QUASI-DELICT capacity.
Art. 2206. The amount of damages for death
caused by a crime or quasi-delict shall be at least
Note: Such an exception to documentary proof
three thousand pesos, even though there may requirement only exists as to the loss of earning
have been mitigating circumstances. capacity.
In addition: IN RAPE CASES

(1) The defendant shall be liable for the loss of No statutory basis but in several cases the court
the earning capacity of the deceased, and the awards compensatory damages to victims of
indemnity shall be paid to the heirs of the rape.
latter; such indemnity shall in every case be
assessed and awarded by the court, unless the Civil indemnity, in the nature of actual and
deceased on account of permanent physical
compensatory damages, is mandatory upon the
disability not caused by the defendant, had no
earning capacity at the time of his death; finding of the fact of rape. Awarded P50,000
(2) If the deceased was obliged to give support for simple rape. [People vs. Astrologo (2007)]
according to the provisions of article 291, the
recipient who is not an heir called to the When imposable penalty is death, then the civil
decedent's inheritance by the law of testate or indemnity must be P75,000. [People vs. Apattad
intestate succession, may demand support (2011)]
from the person causing the death, for a
period not exceeding five years, the exact The SC held that it could not be proven that the
duration to be fixed by the court; age of the victim was such that it would support
(3) The spouse, legitimate and illegitimate a penalty of death. Thus, it imposed reclusion
descendants and ascendants of the deceased may
perpetua instead. But SC said that this should
demand moral damages for mental anguish by
reason of the death of the deceased. not affect the civil liability to be imposed, and
maintained the same at P75,000. [People vs.
CIVIL / DEATH INDEMNITY Bartolini (2010]
In cases of rape with homicide, civil indemnity in

Mere commission of the crime shall entitle the
the amount of P100,000 should be awarded to
heirs of the deceased to such damages.
the heirs of the victim. [People vs. Pascual
But there has been inconsistency as to (2009)]
whether indemnity is 50,000 or 75,000. [Prof.
Casis Book on Damages]
AS TO THE LOSS OF EARNING CAPACITY

General rule: shall be awarded in every case,
and that claimant shall present documentary
evidence to substantiate claim for damages.
Exceptions:
(1) If the deceased was self-employed and
earning less than the minimum wage; or
(2) The deceased was a daily wage worker
earning less than the minimum wage.
PAGE 455
Moral Damages Requisites:

(1) There must be an injury, whether physical,
Art. 2217. Moral damages include physical mental or psychological, clearly sustained
suffering, mental anguish, fright, serious anxiety, by the claimant;
besmirched reputation, wounded feelings, moral (2) There must be a culpable act or omission
shock, social humiliation, and similar injury. factually established;
Though incapable of pecuniary computation, (3) The wrongful act or omission of the
moral damages may be recovered if they are the defendant must be the proximate cause of
proximate result of the defendant's wrongful act or
the injury sustained by the claimant; and
omission.
(4) The award of damages is predicated on any
Art. 2218. In the adjudication of moral damages, of the cases stated in Art. 2219. [Villanueva
the sentimental value of property, real or personal, vs. Salvador (2006)]
may be considered.
GENERAL PRINCIPLES OF
Moral damages are emphatically not intended
to enrich a complainant at the expense of the
RECOVERY
defendant. Its award is aimed at the restoration, (1) Moral damages must somehow be
within the limits of the possible, of the spiritual proportional to the suffering inflicted.
status quo ante, and it must be proportional to
the suffering inflicted. [Visayan Sawmill vs. CA (2) In culpa contractual or breach of contract,
(1993)] moral damages may be recovered when the
defendant acted in bad faith or was guilty of
Mental suffering means distress or serious pain gross negligence (amounting to bad faith)
as distinguished from annoyance, regret or or in wanton disregard of his contractual
vexation. obligation and, exceptionally, when the act
of breach of contract itself is constitutive of
Mental anguish is intense mental suffering. tort resulting in physical injuries.
Generally, damages for mental anguish are
limited to cases in which there has been a (3) By special rule in Article 1764, in relation to
personal physical injury or where the defendant Article 2206, moral damages may also be
willfully, wantonly, recklessly, or intentionally awarded in case the death of a passenger
caused the mental anguish. [Bagumbayan Corp. results from a breach of carriage.
vs. IAC (1984)]
(4) In culpa aquiliana or quasi-delict,
(a) when an act or omission causes physical
WHEN AWARDED injuries, or
Awarded when injury consists of: (b) where the defendant is guilty of
(a) Physical suffering intentional tort, moral damages may
(b) Besmirched reputation aptly be recovered. This rule also
(c) Mental anguish applies to contracts when breached by
(d) Fright tort.
(e) Moral shock
(f) Wounded feelings (5) In culpa criminal, moral damages could be
(g) Social humiliation lawfully due when the accused is found
(h) Serious anxiety guilty of physical injuries, lascivious acts,
(i) Similar injury adultery or concubinage, illegal or arbitrary
Though incapable of pecuniary computation, detention, illegal arrest, illegal search, or
If such is the proximate result of defendants defamation.
act or omission.
(6) Malicious prosecution can also give rise to a
claim for moral damages. The term
analogous cases, referred to in Article
PAGE 456
2219, following the ejusdem generis rule, physical suffering and mental anguish, which
must be held similar to those expressly can be experienced only by one having a
enumerated by the law. nervous system. The statement in People vs.
Manero and Mambulao Lumber Co. vs. PNB that
(7) Although the institution of a clearly a corporation may recover moral damages if it
unfounded civil suit can at times be a legal has a good reputation that is debased,
justification for an award of attorney's fees, resulting in social humiliation is an obiter
such filing, however, has almost invariably dictum.
been held not to be a ground for an award
of moral damages. [Expertravel & Tours vs. While it is true that besmirched reputation is
CA,(1999] included in moral damages, it cannot cause
mental anguish to a corporation, unlike in the
(8) The burden rests on the person claiming case of a natural person, for a corporation has
moral damages to show convincing no reputation in the sense that an individual
evidence for good faith is presumed. In a has, and besides, it is inherently impossible for a
case involving simple negligence, moral corporation to suffer mental anguish.
damages cannot be recovered. [Villanueva [NAPOCOR vs. Philipp Brothers (2001)]
vs. Salvador, 2006]
Question Ortillo contracts Fabricato, Inc. to
(9) Failure to use the precise legal terms or supply and install tile materials in a
sacramental phrases of mental anguish, building he is donating to his
province. Ortillo pays 50% of the
fright, serious anxiety, wounded feelings or
contract price as per agreement. It is
moral shock does not justify the denial of also agreed that the balance would
the claim for damages. It is sufficient that be payable periodically after every
these exact terms have been pleaded in the 10% performance until completed.
complaint and evidence has been adduced After performing about 93% of the
[Miranda-Ribaya vs. Bautista (1980)] contract, for which it has been paid
an additional 40% as per
(10) Even if the allegations regarding the agreement, Fabricato, Inc. did not
amount of damages in the complaint are complete the project due to its
not specifically denied in the answer, such sudden cessation of operations.
Instead, Fabricato, Inc. demands
damages are not deemed admitted.
payment of the last 10% of the
[Raagas, et al. vs. Traya et al. (1968)] contract despite its non-completion
of the project. Ortillo refuses to pay,
(11) An appeal in a criminal case opens the invoking the stipulation that
whole case for review and this 'includes the payment of the last amount of 10%
review of the penalty, indemnity and shall be upon completion.
damages. Even if the offended party had Fabricato, Inc. brings suit for the
not appealed from said award, and the only entire 10% plus damages. Ortillo
party who sought a review of the decision of counters with claims for (a) moral
said court was the accused, the court can damages for Fabricato, Inc.s
increase damages awarded. [Sumalpong vs. unfounded suit which has damaged
his reputation as a philanthropist
CA, 1997] and respected businessman in his
community, and (b) attorneys fees.
(12) It can only be awarded to natural persons.
(a) Does Ortillo have a legal basis for
ABS-CBN vs. CA (1999): The award of moral his claim for moral damages?
damages cannot be granted in favor of a
corporation because, being an artificial person (b) How about his claim for
and having existence only in legal attorneys fees, having hired a lawyer
contemplation, it has no feelings, no emotions, to defend him?
no senses, It cannot, therefore, experience
PAGE 457
Suggested because it is assumed that a rape victim has

Answer (a) There is no legal basis to actually suffered moral injuries entitling the
Ortillos claim for moral victim to such award. If without factual and legal
damages. It does not fall under bases, no award of exemplary damages should
the coverage of Article 2219 of
be allowed. [People vs. Calongui (2006)]
the New Civil Code.
(b) Ortillo is entitled to attorneys Note: Recovery may be had by the offended
fees because Fabricatos party and also by her parents.
complaint is a case of malicious
prosecution or a clearly IN ACTS REFERRED TO IN ARTS. 21,
unfounded civil action [Art. 26, 27, 28, 29, 32, 34 AND 35
2208 [4] and [11], NCC).
Art. 21. Any person who wilfully causes loss or

injury to another in a manner that is contrary to
morals, good customs or public policy shall
WHEN RECOVERABLE compensate the latter for the damage.
Art. 2219. Moral damages may be recovered in the
following and analogous cases: Art. 26. Every person shall respect the dignity,
(1) A criminal offense resulting in physical personality, privacy and peace of mind of his
injuries; neighbors and other persons. The following and
(2) Quasi-delicts causing physical injuries; similar acts, though they may not constitute a
(3) Seduction, abduction, rape, or other lascivious criminal offense, shall produce a cause of action
acts; for damages, prevention and other relief:
(4) Adultery or concubinage; (1) Prying into the privacy of anothers residence;
(5) Illegal or arbitrary detention or arrest; (2) Meddling with or disturbing the private life or
(6) Illegal search; family relations of another;
(7) Libel, slander or any other form of defamation; (3) Intriguing to cause another to be alienated
(8) Malicious prosecution; from his friends;
(9) Acts mentioned in article 309; (4) Vexing or humiliating another on account of
(10) Acts and actions referred to in articles 21, 26, his religious beliefs, lowly station in life, place of
27, 28, 29, 30, 32, 34, and 35. birth, physical defect, or other personal condition.
The parents of the female seduced, abducted, Art. 27. Any person suffering material or moral loss
raped, or abused, referred to in No. 3 of this article, because a public servant or employee refuses or
may also recover moral damages. neglects, without just cause, to perform his official
duty may file an action for damages and other
The spouse, descendants, ascendants, and relief against the latter, without prejudice to any
brothers and sisters may bring the action disciplinary administrative action that may be
mentioned in No. 9 of this article, in the order taken.
named.
Art. 28. Unfair competition in agricultural,
Art. 2220. Willful injury to property may be a legal commercial or industrial enterprises or in labor
ground for awarding moral damages if the court through the use of force, intimidation, deceit,
should find that, under the circumstances, such machination or any other unjust, oppressive or
damages are justly due. The same rule applies to highhanded method shall give rise to a right of
breaches of contract where the defendant acted action by the person who thereby suffers damage.
fraudulently or in bad faith.
Art. 29. When the accused in a criminal

IN SEDUCTION, ABDUCTION, RAPE prosecution is acquitted on the ground that his
AND OTHER LASCIVIOUS ACTS guilt has not been proved beyond reasonable
Anent the award of damages, civil indemnity ex doubt, a civil action for damages for the same act
delicto is mandatory upon finding of the fact of or omission may be instituted. Such action
rape while moral damages is awarded upon requires only a preponderance of evidence. Upon
such finding without need of further proof motion of the defendant, the court may require the
PAGE 458
plaintiff to file a bond to answer for damages in imposed or inflicted in accordance with a
case the complaint should be found to be statute which has not been judicially declared
malicious. unconstitutional;
If in a criminal case the judgment of acquittal is
based upon reasonable doubt, the court shall so In any of the cases referred to in this article,
declare. In the absence of any declaration to that whether or not the defendants act or omission
effect, it may be inferred from the text of the constitutes a criminal offense, the aggrieved party
decision whether or not the acquittal is due to that has a right to commence an entirely separate and
ground. distinct civil action for damages, and for other
Art. 32. Any public officer or employee, or any independently of any criminal prosecution (if the
private individual, who directly or indirectly latter be instituted) and may be proved by a
obstructs, defeats, violates or in any manner preponderance of evidence.
liberties of another person shall be liable to the The indemnity shall include moral damages.
latter for damages: Exemplary damages may also be adjudicated.
(1) Freedom of religion
(2) Freedom of speech The responsibility herein set forth is not
(3) Freedom to write for the press or to maintain a demandable from a judge unless his act or
periodical publication omission constitutes a violation of the Penal code
(4) Freedom from arbitrary or illegal detention or any other penal statute.
(5) Freedom of suffrage
(6) The right against deprivation of property Art. 34. When a member of a city or municipal
without due process of law police force refuses or fails to render aid or
(7) The right to just compensation when property protection to any person in case of danger to life or
is taken for public use property, such peace officer shall be primarily
(8) The right to equal protection of the laws liable for damages, and the city or municipality
(9) The right to be secure in ones person, house, shall be subsidiarily responsible therefor. The civil
papers and effects against unreasonable action herein recognized shall be independent of
searches and seizures any criminal proceedings, and a preponderance of
(10) The liberty of abode and of changing the same evidence shall suffice to support such action.
(11) The right to privacy of communication and
correspondence Art. 35. When a person, claiming to be injured by a
(12) The right to become a member of associations criminal offense, charges another with the same,
and societies for purposes not contrary to law for which no independent civil action is granted in
(13) The right to take part in a peaceable assembly this Code or any special law, but the justice of the
and petition the government for redress of peace finds no reasonable grounds to believe that
grievances a crime has been committed, or the prosecuting
(14) The right to be free from involuntary servitude attorney refuses or fails to institute criminal
in any form proceedings, the complaint may bring a civil action
(15) The right of the accused against excessive bail for damages against the alleged offender. Such
(16) The right of the accused to be heard by civil action may be supported by a preponderance
himself and counsel, to be informed of the of evidence. Upon the defendant's motion, the
nature and the cause of the accusation court may require the plaintiff to file a bond to
against him, to have a speedy and public trial, indemnify the defendant in case the complaint
to meet the witnesses face to face, to have should be found to be malicious.
compulsory process to secure the attendance
of witnesses on is behalf; If during the pendency of the civil action, an
(17) Freedom from being compelled to be a information should be presented by the
witness against ones self, or from being prosecuting attorney, the civil action shall be
forced to confess his guilt, or from being suspended until the termination of the criminal
induced by a promise of immunity or reward proceedings.
to make such confession, except when the
person confessing becomes a State witness. Please refer to previous discussions on the
(18) Freedom from excessive fines, or cruel and provisions.
unusual punishment, unless the same is
PAGE 459
IN CASES OF MALICIOUS Nominal damages are incompatible with actual,

PROSECUTION temperate and exemplary damages.
Moral damages cannot be recovered from a
person who has filed a complaint against Nominal damages cannot co-exist with actual
another in good faith, or without malice or bad or compensatory damages. [Armovit vs. CA
faith. If damage results from the filing of the (1990)]
complaint, it is damnum absque injuria. [Mijares
vs. CA (1997)] No moral or exemplary damages was awarded.
Nevertheless, when confronted with their failure
The adverse result of an action does not per se to deliver on the wedding day the wedding cake
make the act wrongful and subject the actor to ordered and paid for, petitioners gave the lame
the payment of moral damages. The law could excuse that delivery was probably delayed
not have meant to impose a penalty on the right because of the traffic, when in truth, no cake
to litigate; such right is so precious that moral could be delivered because the order slip got
damages may not be charged on those who lost. For such prevarication, petitioners must be
may exercise it erroneously. [Barreto vs. Arevalo held liable for nominal damages for
(1956)] insensitivity, inadvertence or inattention to their
customer's anxiety and need of the hour.
[Francisco vs. Ferrer (2001)]
Nominal Damages
Nominal damages consist in damages awarded,
not for purposes of indemnifying the plaintiff for
Temperate Damages
any loss suffered, but for the vindication or Art. 2224. Temperate or moderate damages,
recognition of a right violated by the defendant. which are more than nominal but less than
compensatory damages, may be recovered when
Requisites and characteristics: the court finds that some pecuniary loss has been
(1) Invasion or violation of any legal or property suffered but its amount cannot, from the nature of
the case, be provided with certainty.
right.
(2) No proof of loss is required. Art. 2225. Temperate damages must be
(3) The award is to vindicate the right violated. reasonable under the circumstances.
WHEN AWARDED These damages are awarded for pecuniary loss,

Art. 2221. Nominal damages are adjudicated in in an amount that, from the nature of the case,
order that a right of the plaintiff, which has been cannot be proved with certainty.
violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose Requisites:
of indemnifying the plaintiff for any loss suffered (1) Actual existence of pecuniary loss.
by him. (2) The nature and circumstances of the loss
prevents proof of the exact amount.
Art. 2222. The court may award nominal damages (3) They are more than nominal and less than
in every obligation arising from any source
compensatory.
enumerated in article 1157, or in every case where
any property right has been invaded.
(4) Causal connection between the loss and the
defendants act or omission.
Art. 2223. The adjudication of nominal damages (5) Amount must be reasonable.
shall preclude further contest upon the right
involved and all accessory questions, as between In cases where the resulting injury might be
the parties to the suit, or their respective heirs and continuing and possible future complications
assigns. directly arising from the injury, while certain to
occur are difficult to predict, temperate
One does not ask for nominal damages, and it is damages can and should be awarded on top of
in lieu of the actual, moral, temperate, or actual or compensatory damages; in such cases
liquidated damages. there is no incompatibility between actual and
PAGE 460
temperate damages as they cover two distinct RULES GOVERNING BREACH OF

phases. [Ramos vs. CA (2002)]
CONTRACT
Temperate damages are incompatible with Art. 2228. When the breach of the contract
nominal damages hence, cannot be granted committed by the defendant is not the one
concurrently. [Citytrust Bank vs. IAC (1994)] contemplated by the parties in agreeing upon the
liquidated damages, the law shall determine the
Temperate damages are included within the measure of damages, and not the stipulation.
context of compensatory damages.
The amount can be reduced if:
There are cases where from the nature of the (1) It is unconscionable as determined by the
case, definite proof of pecuniary loss cannot be court
offered, although the court is convinced that (2) There is partial or irregular performance.
there has been such loss. For instance, injury to
one's commercial credit or to the goodwill of a General rule: The penalty shall substitute the
business firm is often hard to show certainty in indemnity for damages and the payment of the
terms of money. (Note: In this case actual and interests in case of breach.
temperate damages were awarded. It is
postulated that the actual damages is for the Exceptions:
car while the temperate damages is for the lost (1) When there is a stipulation to the contrary.
actual income not sufficiently proved.) [Pleno vs. (2) When the obligor is sued for refusal to pay
CA (1988)] the agreed penalty.
(3) When the obligor is guilty of fraud.
Liquidated Damages Exemplary or Corrective

Art. 2227. Liquidated damages, whether intended
as an indemnity or a penalty, shall be equitably Damages
reduced if they are iniquitous or unconscionable.
Art. 2229. Exemplary or corrective damages are
imposed, by way of example or correction for the
Liquidated damages are those damages agreed
public good, in addition to the moral, temperate,
upon by the parties to a contract to be paid in liquidated or compensatory damages.
case of breach thereof.
In common law, these damages were termed
It differs from a penal clause in that in the latter punitive.
case the amount agreed to be paid may bear no
relation to the probable damages resulting from However, the award of P1,000,000 exemplary
the breach. Basically, a penalty is ad terrorem, damages is also far too excessive and should
while liquidated damages are ad likewise be reduced to an equitable level.
reparationem. Exemplary damages are imposed not to enrich
one party or impoverish another but to serve as
Requisites and characteristics: a deterrent against or as a negative incentive to
(1) Liquidated damages must be validly curb socially deleterious actions. [PNB vs. CA
stipulated. (1996)]
(2) There is no need to prove the amount of
actual damages.
(3) Breach of the principal contract must be
proved.
PAGE 461
WHEN RECOVERABLE REQUISITES TO RECOVER EXEMPLARY

DAMAGES AND LIQUIDATED DAMAGES
AGREED UPON
IN CRIMINAL OFFENSES [ART. 2230)
The plaintiff must show that he/she is entitled
Art. 2230. In criminal offenses, exemplary to moral, temperate or compensatory damages:
damages as a part of the civil liability may be
imposed when the crime was committed with one When exemplary
or more aggravating circumstances. Such If arising from
damages are granted
damages are separate and distinct from fines and The crime was
shall be paid to the offended party. Art. committed with an
Crimes
2230 aggravating
Award of exemplary damages is part of the civil circumstance/s
liability, not of the penalty. Art. Defendant acted with
Quasi-delicts
2231 gross negligence
Damages are paid to the offended party Defendant acted in a
separately from the fines. Art. Contracts and wanton, fraudulent,
2232 Quasi- contracts reckless, oppressive, or
malevolent manner
IN QUASI-DELICTS [ART. 2231)
Art. 2231. In quasi-delicts, exemplary damages
may be granted if the defendant acted with gross GENERAL PRINCIPLES
negligence. (1) Exemplary damages cannot be awarded
alone: they must be awarded IN ADDITION
IN CONTRACTS AND QUASI- to moral, temperate, liquidated or
compensatory damages.
CONTRACTS [ART. 2232) (2) The purpose of the award is to deter the
Art. 2232. In contracts and quasi-contracts, the defendant (and others in a similar
court may award exemplary damages if the condition) from a repetition of the acts for
defendant acted in a wanton, fraudulent, reckless, which exemplary damages were awarded;
oppressive, or malevolent manner. hence, they are not recoverable as a matter
of right.
REQUISITES [ART.S. 2233 AND 2234) (3) The defendant must be guilty of other
Art. 2234. While the amount of the exemplary malice or else negligence above the
damages need not be proved, the plaintiff must ordinary.
show that he is entitled to moral, temperate or (4) Plaintiff is not required to prove the amount
compensatory damages before the court may of exemplary damages.
consider the question of whether or not exemplary (a) But plaintiff must show that he is
damages should be awarded. In case liquidated entitled to moral, temperate, or
damages have been agreed upon, although no
proof of loss is necessary in order that such
compensatory damage; that is,
liquidated damages may be recovered, substantial damages, not purely
nevertheless, before the court may consider the nominal ones. This requirement applies
question of granting exemplary in addition to the even if the contract stipulates liquidated
liquidated damages, the plaintiff must show that damages.
he would be entitled to moral, temperate or (b) The amount of exemplary damage need
compensatory damages were it not for the not be pleaded in the complaint
stipulation for liquidated damages. because the same cannot be proved. It
is merely incidental or dependent upon
Art. 2235. A stipulation whereby exemplary what the court may award as
damages are renounced in advance shall be null
and void.
compensatory damages.
PAGE 462
DAMAGES IN CASE OF DEATH support from the accused for not more than
five years, the exact duration to be fixed by
CAUSED BY CRIMES AND the court.
QUASI-DELICTS (3) As moral damages for mental anguish,
Art. 2206. The amount of damages for death an amount to be fixed by the court. This
caused by a crime or quasi-delict shall be at least may be recovered even by the illegitimate
three thousand pesos, even though there may descendants and ascendants of the
have been mitigating circumstances. In addition: deceased.
(1) The defendant shall be liable for the loss of (4) As exemplary damages, when the crime is
the earning capacity of the deceased, and the attended by one or more aggravating
indemnity shall be paid to the heirs of the circumstances, an amount to be fixed in
latter; such indemnity shall in every case be the discretion of the court, the same to be
assessed and awarded by the court, unless the considered separate from fines.
deceased on account of permanent physical
(5) As attorney's fees and expresses of
disability not caused by the defendant, had no
earning capacity at the time of his death; litigation, the actual amount thereof, (but
(2) If the deceased was obliged to give support only when a separate civil action to recover
according to the provisions of article 291, the civil liability has been filed or when
recipient who is not an heir called to the exemplary damages are awarded).
decedent's inheritance by the law of testate or (6) Interests in the proper cases.
intestate succession, may demand support (7) It must be emphasized that the indemnities
from the person causing the death, for a for loss of earning capacity of the deceased
period not exceeding five years, the exact and for moral damages are recoverable
duration to be fixed by the court; separately from and in addition to the fixed
(3) The spouse, legitimate and illegitimate
sum of P12,000.00 corresponding to the
descendants and ascendants of the deceased may
demand moral damages for mental anguish by indemnity for the sole fact of death, and
reason of the death of the deceased. that these damages may, however, be
respectively increased or lessened according
IN DEATH CAUSED BY BREACH OF to the mitigating or aggravating
circumstances, except items 1 and 4 above,
CONDUCT BY A COMMON CRIME for obvious reasons. [Heirs of Raymundo
When death occurs as a result of a crime, the Castro vs. Bustos (1969)]
heirs of the deceased are entitled to the
following items of damages: At present, the SC allows civil indemnity of
(1) As indemnity for the death of the victim of P50,000 in cases of homicide (De Villa vs.
the offense P12,000.00, without the need People [2012]) and P75,000 in cases of muder
of any evidence or proof of damages, and [People vs. Camat [2012)]
even though there may have been
mitigating circumstances attending the
commission of the offense.
(2) As indemnity for loss of earning capacity of Graduation of Damages
the deceased an amount to be fixed by
the Court according to the circumstances of DUTY OF THE INJURED PARTY
the deceased related to his actual income at
the time of death and his probable life Art. 2203. The party suffering loss or injury must
expectancy, the said indemnity to be exercise the diligence of a good father of a family
assessed and awarded by the court as a to minimize the damages resulting from the act or
omission in question.
matter of duty, unless the deceased had no
earning capacity at said time on account of
Article 2203 of the Civil Code exhorts parties
permanent disability not caused by the
suffering from loss or injury to exercise the
accused. If the deceased was obliged to give
diligence of a good father of a family to
support, under Art. 291, Civil Code, the
minimize the damages resulting from the act or
recipient who is not an heir, may demand
omission in question. One who is injured then by
PAGE 463
the wrongful or negligent act of another should from liability, but it led to the reduction of
exercise reasonable care and diligence to damages awarded to the plaintiff.) [Rakes vs.
minimize the resulting damage. Anyway, he can Atlantic (1907)]
recover from the wrongdoer money lost in
reasonable efforts to preserve the property In determining the question of contributory
injured and for injuries incurred in attempting to negligence in performing such actthat is to
prevent damage to it. [Lim and Gunnaban vs. CA say, whether the passenger acted prudently or
(2002)] recklesslythe age, sex, and physical condition
of the passenger are circumstances necessarily
BURDEN OF PROOF affecting the safety of the passenger, and
The DEFENDANT has the burden of proof to should be considered. [Cangco vs. Manila
establish that the victim, by the exercise of the Railroad Co. (1918)]
diligence of a good father of a family, could
have mitigated the damages. In the absence of PLAINTIFFS NEGLIGENCE
such proof, the amount of damages cannot be Even if Manila Electric is negligent, in order that
reduced. it may be held liable, its negligence must be the
proximate and direct cause of the accident.
Note: The victim is required only to take such [Manila Electric vs. Remonquillo (1956)]
steps as an ordinary prudent man would
reasonably adopt for his own interest. Both of the parties contributed to the proximate
cause; hence, they cannot recover from one
another. [Bernardo vs. Legaspi (1914)]
RULES
IN CRIMES IN CONTRACTS, QUASI-CONTRACTS
AND QUASI-DELICTS
Art. 2204. In crimes, the damages to be
adjudicated may be respectively increased or Art. 2215 In contracts, quasi-contracts, and quasi-
lessened according to the aggravating or delicts, the court may equitably mitigate the
mitigating circumstances. damages under circumstances other than the case
referred to in the preceding article, as in the
following instances:
IN QUASI-DELICTS (1) That the plaintiff himself has contravened the
Art. 2214. In quasi-delicts, the contributory terms of the contract;
negligence of the plaintiff shall reduce the (2) That the plaintiff has derived some benefit as
damages that he may recover. a result of the contract;
(3) In cases where exemplary damages are to be
awarded, that the defendant acted upon the
CONTRIBUTORY NEGLIGENCE
advice of counsel;
The alleged contributory negligence of the (4) That the loss would have resulted in any
victim, if any, does not exonerate the accused in event;
criminal cases committed through reckless (5) That since the filing of the action, the
imprudence, since one cannot allege the defendant has done his best to lessen the
negligence of another to evade the effects of his plaintiff's loss or injury.
own negligence. [Genobiagon vs. CA (1989)]
GROUNDS FOR MITIGATION OF
If so, the disobedience of the plaintiff in placing
himself in danger contributed in some degree to DAMAGES
the injury as a proximate, although not as its
primary cause. FOR CONTRACTS
(1) Violation of terms of the contract by the
(Supreme Court in this case cited numerous plaintiff himself;
foreign precedents, mostly leaning towards the (2) Obtention or enjoyment of benefit under the
doctrine that contributory negligence on the contract by the plaintiff himself;
part of the plaintiff did not exonerate defendant
PAGE 464
(3) Defendant acted upon advice of counsel in (d) the incapacitated party if the interest of
cases where exemplary damages are to be justice so demands [Art. 1415, Civil Code);
awarded such as under Articles 2230, 2231, (e) the party for whose protection the
and 2232; prohibition by law is intended if the
(4) Defendant has done his best to lessen the agreement is not illegal per se but merely
plaintiffs injury or loss. prohibited and if public policy would be
enhanced by permitting recovery [Art. 1416,
FOR QUASI-CONTRACTS Civil Code); and
(1) In cases where exemplary damages are to (f) the party for whose benefit the law has been
be awarded such as in Art. 2232; intended such as in price ceiling laws [Art.
(2) Defendant has done his best to lessen the 1417, Civil Code) and labor laws [Art.s. 1418-
plaintiffs injury or loss. 1419, Civil Code).
FOR QUASI-DELICTS: LIQUIDATED DAMAGES

(1) That the loss would have resulted in any Art. 2227. Liquidated damages, whether intended
event because of the negligence or omission as an indemnity or a penalty, shall be equitably
of another, and where such negligence or reduced if they are iniquitous or unconscionable.
omission is the immediate and proximate
cause of the damage or injury; COMPROMISE
(2) Defendant has done his best to lessen Art. 2031. The courts may mitigate the damages to
the plaintiffs injury or loss. be paid by the losing party who has shown a
sincere desire for a compromise.
RULE WHEN CONTRACTING PARTIES
ARE IN PARI DELICTO
Generally, parties to a void agreement cannot
expect the aid of the law; the courts leave them
Miscellaneous Rules
as they are, because they are deemed in pari
delicto or in equal fault. In pari delicto is a DAMAGES THAT CANNOT CO-
universal doctrine which holds that no action EXIST
arises, in equity or at law, from an illegal
contract; no suit can be maintained for its
specific performance, or to recover the property
NOMINAL WITH OTHER DAMAGES
agreed to be sold or delivered, or the money Art. 2223. The adjudication of nominal damages
agreed to be paid, or damages for its violation; shall preclude further contest upon the right
and where the parties are in pari delicto, no involved and all accessory questions, as between
the parties to the suit, or their respective heirs and
affirmative relief of any kind will be given to one
assigns.
against the other.
The propriety of the damages awarded has not
This rule, however, is subject to exceptions that
been questioned, Nevertheless, it is patent upon
permit the return of that which may have been
the record that the award of P10,000 by way of
given under a void contract to:
nominal damages is untenable as a matter of
(a) the innocent party [Art.s. 1411-1412, Civil
law, since nominal damages cannot co-exist
Code);
with compensatory damages. The purpose of
(b) the debtor who pays usurious interest [Art.
nominal damages is to vindicate or recognize a
1413, Civil Code);
right that has been violated, in order to preclude
(c) the party repudiating the void contract
further contest thereon; and not for the
before the illegal purpose is accomplished
purpose of indemnifying the Plaintiff for any
or before damage is caused to a third
loss suffered by him [Art.icles 2221, 2223, new
person and if public interest is subserved by
Civil Code.) Since the court below has already
allowing recovery [Art. 1414, Civil Code);
awarded compensatory and exemplary
damages that are in themselves a judicial
PAGE 465
recognition that Plaintiffs right was violated,

the award of nominal damages is unnecessary
and improper. Anyway, ten thousand pesos
cannot, in common sense, be deemed
nominal. [Vda. De Medina vs. Cresencia (1956)]
ACTUAL AND LIQUIDATED

Art. 2226. Liquidated damages are those agreed
upon by the parties to a contract, to be paid in
case of breach thereof.
DAMAGES THAT MUST CO-

EXIST
EXEMPLARY WITH MORAL,
TEMPERATE, LIQUIDATED OR
COMPENSATORY
There is no basis for awarding exemplary
damages either, because this species of
damages is only allowed in addition to moral,
temperate, liquidated, or compensatory
damages, none of which have been allowed in
this case, for reasons herein before discussed.
[Francisco vs. GSIS (1963)]
There was, therefore, no legal basis for the

award of exemplary damages since the private
respondent was not entitled to moral,
temperate, or compensatory damages and
there was no agreement on stipulated
damages. [Scott Consultants & Resource
Development Corp. vs. CA (1995)]
DAMAGES THAT MUST STAND

ALONE
NOMINAL DAMAGES
Art. 2223. The adjudication of nominal damages
shall preclude further contest upon the right
involved and all accessory questions, as between the
parties to the suit, or their respective heirs and
assigns.
PAGE 466

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TABLE OF CONTENT

FAMILY DOMICILE ...................................... 33

Use of Surnames .............................. 74 Quieting of Title .............................. 101

Possession ...................................... 108 NO PRESCRIPTION APPLICABLE ............. 157

Subject Matter .................................213 Remedies of an Unpaid Seller...... 230

Obligations of the Seller to Transfer Performance of Contract ............... 232

Transfer of Ownership ....................222 Extinguishment of Sale................. 245

Documents of Title ........................ 228

TESTAMENTARY DISPOSITIONS WITH A RIGHT TO RETURN OF CREDIT RECEIVED

AGENCY ......................................... 298 Obligations of the

LIABILITY OF AN INCOMING PARTNER .. 312 Kinds of Agency ..............................329

Contract of Agency .........................325 Obligations of the Principal .......... 340

Modes of Extinguishment ..............342 FORECLOSURE [NCC 2112, 2115] ............. 361

SPECIAL PREFERRED CREDITS ON SPECIFIC Regalian Doctrine ..........................382

LAND TITLES AND DEEDS Original Registration......................384

Estate .............................................. 378 Judicial Confirmation of Imperfect or

CIVIL CODE PROVISIONS DEALING WITH LEGAL CAUSE ........................................... 417

Negligence ..................................... 429

Strict Liability ................................. 446

Acts of Omission and Its Modalities DAMAGES ................................... 450

Actual and Compensatory Damages

Moral Damages ............................. 456

Nominal Damages ........................ 460

Temperate Damages .................... 460

Liquidated Damages...................... 461

Exemplary or Corrective Damages 461

Graduation of Damages ................463

Miscellaneous Rules ..................... 465

Effect and Application of RETROACTIVITY OF LAWS

REPEAL OF LAWS Exception:

But the Courts interpretation of a statute POLICY ON LAST DAY BEING A

EXEMPTIONS UNDER It is the nationality or citizenship of the

(2) Contracts where Real Property Offered as RULE ON SUCCESSION

RULE RE: JOINT WILLS

Wills Proved and Allowed in a Foreign RULE ON EXTRINSIC VALIDITY OF

CONTRACTS BEFORE unless there are cogent reasons for not

DIVORCE AND SEPARATION obtained abroad by the alien spouse of a

GOVERNING LAW The conduct of a woman of adult age,

PRESUMPTION OF SURVIVORSHIP IN THE MINORITY

Age Presumed Survivor Effects on Contracts

Effect on Crimes or otherwise communicated to him by 2 persons

Exceptions: marriages unless either or both parties

its inexistence, rendering the marriage VOID.

A divorce decree obtained by the foreign spouse

VOID MARRIAGES Molina Guidelines:

There is no requirement that the respondent be Void subsequent marriages

Under the Civil Code (superseded by the Family

Can be instituted by Although 7 years is required for the presumption

(4) Insurance benefits innocent spouse may VOIDABLE OR ANNULLABLE

Action to Annul Law presumes sanity, burden of proof on party

Reason: danger to the health of spouse &

WHO MAY FILE, PRESCRIPTION, RATIFICATION

Ground Who can file Prescription Ratification

Marriages Not Subject to Ratification/ EFFECTS OF NULLITY

JURISDICTION legal separation. [People v. Zapata and Bondoc

The death of one party in a legal separation case

(a) Threatening to deprive or actually DEFENSES

EFFECTS OF FILING PETITION RECONCILIATION

ANNEX TO VOID AND VOIDABLE MARRIAGES

Void Marriages Voidable Marriages Legal Separation

EFFECTS OF FILING / PENDING DECREE

Void/Voidable Marriages Legal Separation

EFFECTS OF AFFIDAVIT OF REAPPEARANCE, JUDICIAL DECLARATION OF

Void Marriages Terminated Marriage Voidable Legal Separation